How B2B software companies will gain from Generative AI?

B2B software companies will likely gain from Generative AI, offering significant room for growth. 

Three areas of benefit are showing early promise:

• Software development is becoming faster and more efficient, with initial indications of 20-30% efficiency increase via developer tools using AI. This enables software businesses to deliver greater innovation and value to end-customers, without scaling cost proportionately.
• Operations of B2B software companies benefit from the greater automation enabled by GenAI. For example, we are seeing improved efficiency of customer support – a cost that otherwise scales relatively linearly with customer numbers. With GenAI this will likely scale sublinearly in the future.
• New product opportunities are revealed – improving the user experience and the value proposition. Preliminary evidence from major industry players suggests that GenAI-enabled software products will achieve 30-50% price premia due to the much greater value that such products create for customers. See e.g. how Microsoft integrated ChatGPT in their Office suite.
  

Although we think one should be very careful in overstating the effect of GenAI on future growth, it is likely that B2B software will benefit.