Q: What effects do you see Artificial Intelligence having on Vertical Market Software companies , and specifically to CSU and its divisions? Is AI more or less of a threat to VMS than to horizontal software? How is CSU positioned for this massive technological transition?
5i Research Answer:
AI would certainly be a huge productivity improvement for the software industry in general, as most repetitive tasks now could be delegated to AI. VMS companies could improve customers’ experience over time which may enhance their pricing power. Having said that, we do not think AI would fundamentally change the economics of the VMS industry because of high switching costs, and limited competition. Therefore, it may not affect VMS companies too much in the near term.