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Insights / Empowering Innovation: How Our Enterprise Software Portfolio Is Thinking About AI

Empowering Innovation: How Our Enterprise Software Portfolio Is Thinking About AI

We believe generative artificial intelligence (AI) is the most meaningful technological shift since the development of the internet. The rapid proliferation of generative AI capabilities has already begun transforming businesses across many industries, and enterprise software is no exception. As AI continues to evolve, it is poised to revolutionize the way software companies develop, deliver and optimize their products and services. At Vista Equity Partners (Vista), we recognize the immense potential of generative AI and are committed to helping our portfolio companies navigate this new landscape.

While many companies used 2023 as a year of exploration and experimentation with this fast-moving technology, 2024 can present an opportunity for widespread adoption and value creation from generative AI. Now is the time for enterprise software companies to run pilots and deploy new solutions to ultimately drive impact for their customers. There are three key facets where AI presents opportunity for enterprise software:

1. Product Improvement: By integrating AI into their products, software businesses can leverage their proprietary data to unlock additional customer value, resulting in more powerful and efficient solutions for users and increased return on investment for customers. Data is the foundation of enterprise software, and generative AI can help software companies harness large swaths of unique information to provide intelligent insights, automate repetitive tasks, improve user experience and optimize processes.

We are partnering with our portfolio companies to build generative AI into their commercial features and products and are aiming to further enable their success by establishing technology alliances across key Cloud and AI partners. Whether they are leveraging AI to automate recommendations, develop personalized customer experiences, streamline customer insights or customize solutions based on user needs, Vista companies are roadmapping, adopting and implementing AI features to evolve with the rapid pace of change.

2. Code Generation: Developer productivity can increase substantially by leveraging AI code generation to improve efficiency. With coding assistants, AI-powered tools can now generate high-quality code based on natural language inputs, dramatically accelerating development cycles and reducing the time and resources required to bring new features and products to market. Other code security solutions can identify code vulnerabilities to improve quality and optimize application performance. We believe generative AI will not replace developers; instead, it will assist them in being more productive and allow them to focus on complex, high-value tasks.

Vista portfolio companies integrating AI into their code generation processes are seeing significant increases in developer productivity. To tap into this potential, enterprise software companies must set a culture of adoption and convey the benefits to engineering teams. By providing the necessary resources and training to set teams up for success, establishing commercial-friendly guidelines to address risk concerns and defining and tracking key performance indicators to measure improvement and ROI, they can work toward a successful roll out of code generation practices.

3. Process Optimization: Beyond the realm of product development, AI can also streamline and optimize various business operations by augmenting and automating tasks across the enterprise. For example, within the go-to-market funnel, generative AI can be used to create and refine collateral, qualify prospects, gather insights from sales interactions and synthesize responses for customer service. From intelligent automation of routine tasks to predictive maintenance of critical systems, AI has the potential to drive significant efficiency gains and cost savings across the organization.

We believe now is the time to begin deploying AI applications. By starting with initial deployments while simultaneously preparing for future advancements, companies can gain momentum and derive value more quickly. AI is rapidly improving with models getting faster, safer and more stable and we should anticipate that new models will be released often. Building to support this approach involves taking calculated risks and understanding that leveraging exponential technological growth requires proactive deployment strategies.

As we look to the future, AI will continue to shape the enterprise software landscape in profound ways. By embracing AI and investing in the right people, processes and technologies, we believe that enterprise software companies can thrive in the age of AI. As an investor, we continue to enable our companies to accelerate their AI adoption while driving meaningful results for their customers.

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