The software paradigm is shifting beyond SaaS. The new era is 'software as a worker,' where autonomous 'agentic' solutions are embedded in workflows to perform tasks, driving value beyond human-led productivity enhancements and creating new economic advantages.
Vista CEO Robert Smith classifies enterprise software's future into three paths. Companies will either become 'agentic' (creating new value with AI), 'AI-powered operators' (massively boosting efficiency), or 'fail to thrive' if they lack proprietary data and workflows.
The compute power required for AI agents to operate ('inference') is a significant new cost. Without an optimized infrastructure to manage these costs, companies risk spending all their AI-driven productivity gains on 'feeding' their digital workers, making the initiative unprofitable.
The long-standing 'Rule of 40' (Revenue Growth % + EBITDA Margin %) is no longer ambitious enough. By leveraging AI for efficiency in coding, support, and sales, Vista sees enterprise software companies achieving a 'Rule of 70,' dramatically increasing profitability.
Strategic acquirers are prioritizing M&A targets that have already implemented agentic AI. The goal isn't just to buy technology, but to acquire the culture and processes to catalyze AI transformation across their broader, slower-moving organizations.
Sending proprietary enterprise data to external foundational models is a critical mistake that 'leeches' value and intellectual property. The correct, secure approach is to bring AI models into a company's own air-gapped or on-premise environment to maintain data sovereignty and control.
Just as the shift from on-premise to SaaS created a major valuation rerating for software companies, the move to 'agentic AI' will do the same. Companies that successfully become 'agentic' will capture more economic rent, potentially leading to exit multiples higher than the 6-8x revenue seen today.