Vertical Enterprise software will likely not be replaced with AI but I think software business model / pricing model will evolve. Deterministic software with domain knowledge will be tough to break. As AI gets better and faster, the ARR will go down due to number of people using it or seats going down. The bigger question is whether the usage based or tokenized model will have the same economics as a cloud SAAS models.
there is already a development from subscription based pricing to paying per prompt. Some companies have implemented it, some will do it in the near future. It makes sense because company headcounts will most likely decrease, hence the amount of subscriptions.
Nice work here, appreciate you compiling this. I don't really understand why the wipeout scenario assumes 2% organic growth for the next three years. Isn't there a more bearish scenario than that? VMS starts shedding seats in 2027 and 2028?
Don't get me wrong, I think $CSU is very compelling here. I just don't fully understand why there isn't a worse outcome in the short term.
Vertical Enterprise software will likely not be replaced with AI but I think software business model / pricing model will evolve. Deterministic software with domain knowledge will be tough to break. As AI gets better and faster, the ARR will go down due to number of people using it or seats going down. The bigger question is whether the usage based or tokenized model will have the same economics as a cloud SAAS models.
there is already a development from subscription based pricing to paying per prompt. Some companies have implemented it, some will do it in the near future. It makes sense because company headcounts will most likely decrease, hence the amount of subscriptions.
Nice work here, appreciate you compiling this. I don't really understand why the wipeout scenario assumes 2% organic growth for the next three years. Isn't there a more bearish scenario than that? VMS starts shedding seats in 2027 and 2028?
Don't get me wrong, I think $CSU is very compelling here. I just don't fully understand why there isn't a worse outcome in the short term.
Their clients work on multi year contracts. So unless they declare bankruptcy there won't be any massive changes in the short term.
Where can I see the full RBC report ??
Great analysis!
Is the full report available somewhere? Thanks
Is this report publicly available?
Pretty funny. Only bank-affiliated equity research analysts could put out a report like this.