Cisco President Jeetu Patel contends that artificial intelligence has the potential to dramatically alter this dynamic.
Patel suggests that AI could enable companies to continuously upgrade their software, potentially eliminating one of the main disadvantages that has historically set established firms apart from startups.
What causes companies to become ‘legacy’ businesses?
Companies don’t become “legacy” firms solely due to their age. They transition into legacy status when the systems that fueled their growth start to hinder them.
A major factor is technical debt — the buildup of outdated software and code that grows increasingly hard to maintain. Over the years, and in some cases decades, companies add features and products atop existing systems, leading to convoluted technology stacks that are costly and labor-intensive to refresh.
This scenario often benefits startups. With fewer clients, more straightforward systems, and modern software architectures, newer companies are typically able to develop and launch products much more swiftly.
How does AI alter this dynamic?
Patel asserts that AI-driven coding tools and agents could transform software development into a much more agile process.
Rather than relying on legacy code for years, firms can continuously rewrite, streamline, and enhance their systems. AI can automate many repetitive coding duties, allowing developers to concentrate on architecture and product design.
Cisco has already started integrating AI into its operations. In a special interview with CNBC-TV18, Patel revealed that one of their security products was streamlined from about eight million lines of code to below 1.5 million lines in just weeks. He noted that these changes boosted performance, decreased vulnerabilities, and simplified future updates.
The capacity to perpetually refactor software could assist companies in avoiding the burdens of long-standing technical debt.
Why might scale once again be an advantage?
Traditionally, size has often worked against large corporations. Managing vast product lines and serving millions of consumers made swift innovation challenging.
Patel maintains that AI flips this perspective.
Established companies already have significant advantages, including existing customer relationships, distribution networks, data, and brand recognition. If AI allows them to continuously modernize their software, these benefits could become more valuable instead of being burdensome.
In this way, established firms might innovate at rates much closer to those of startups while enjoying the benefits that come from their size.
Why software is just part of the hurdle
Nonetheless, outdated code isn’t the only reason firms become legacy organizations.
Large companies frequently encounter organizational challenges, such as delayed decision-making, bureaucratic frameworks, regulatory stipulations, and resistance to change. Even if AI speeds up software development, firms will still need to transform their cultures and operational models.
Technology alone can’t ensure agility.
Why this has broader implications beyond Cisco
The emergence of generative AI has sparked a wider discussion in the tech industry about whether software development itself is experiencing a fundamental change.
If AI facilitates gradual rewriting and modernization of systems, the traditional divide between startups and established firms may begin to diminish. Rather than being defined by age, companies might increasingly be assessed on how quickly they can respond to evolving technologies and customer demands.
This is why Patel believes the concept of a “legacy company” may ultimately lose its significance.
Whether AI can not only overcome technical debt but also organizational inertia is still an unresolved issue. However, if successful, one of the oldest disadvantages of being large could convert into a competitive advantage.
Watch the full conversation here
