Vista Equity CEO Says Enterprise Software Set For Third Wave Of AI Revolution

In Brief:

Robert Smith, founder and CEO of Vista Equity Partners, shared his perspective on the future of enterprise software during a CNBC "Closing Bell" interview. With $100 billion in assets under management across 90 companies, Smith explained how enterprise software firms will capitalize on AI transformation despite current market volatility and trade tensions. He predicts a "new equilibrium" through bilateral trade agreements that will create massive opportunities for AI-enabled businesses, while emphasizing that software companies—not hardware or infrastructure providers—will capture the most profitable third wave of technological advancement.

Big Picture Drivers:

• Enterprise Software: Mission-critical technology with proven resilience across economic cycles

• Trade Relations: Moving toward bilateral agreements establishing a new global market equilibrium

• AI Revolution: Creating multi-trillion dollar investment opportunities across business operations

• Private Markets: Capitalizing on public market devaluations to acquire companies for AI transformation

Key Topics Covered:

• Vista's Growth: 25-year journey to 90 portfolio companies and $100B in assets under management

• Economic Resilience: How enterprise software thrives through different market conditions

• Technology Adoption: How AI implementation requires "evangelical fervor" to overcome resistance

• Investment Strategy: Identifying undervalued companies poised for AI transformation

Key Insights:

• Adoption Challenge: "It takes an evangelical type of fervor to get people to adopt this technology"

• Value Creation: Enterprise software delivers over 625% ROI, which will increase "exponentially" with AI

• Cyclical Gains: Hardware vendors capture first economic benefits, then infrastructure providers, with software reaping the most profitable third wave

• Competitive Landscape: Companies failing to adopt AI capabilities quickly "will not have a right to exist"

By The Numbers:

• Portfolio Scale: Vista manages 90 companies with $100 billion in assets under management

• Transaction Value: Over $315 billion across 600+ transactions in Vista's 25-year history

• ROI Performance: Average Vista portfolio company delivers 625% ROI to their customers

• AI Adoption: 100% of Vista portfolio companies now using code generation tools

Memorable Quotes:

• "Enterprise software has been the most productive tool in our business economy over the last 50 years, and likely will be for the next 50." - Robert Smith

• "Certain companies will not have a right to exist because they will not have adopted and evolved properly and fast enough." - Robert Smith

• "There can be many winners, but there are going to be losers in this market." - Robert Smith

The Wrap: 

As markets adjust to new trade realities, Smith positions Vista to capitalize on the AI revolution by identifying undervalued enterprise software companies. His strategy of acquiring and transforming these businesses reveals how technology firms that embrace AI quickly will deliver exponential returns, while those slow to adapt face extinction in an increasingly competitive landscape where AI-enabled software becomes the ultimate competitive advantage.