Vista Equity Partners' Robert F. Smith - on who will benefit from AI

Welcome back to the Alt Goes Mainstream podcast. Today’s episode welcomes a pioneer and visionary in enterprise software investing to Alt Goes Mainstream. Robert F. Smith is the Founder, Chairman, and CEO of $100B AUM Vista Equity Partners. He sits on the firm’s Investment Committees for Vista’s Flagship, Foundation, Endeavor, and Perennial Funds and serves as a member of Vista’s Executive committee. Vista’s portfolio spans 90 enterprise software, data, and technology-enabled companies that employ over 100,000 people worldwide. He’s also heavily involved and committed to the firm’s wealth channel efforts, serving as the Chairman and Investment Committee member for VistaOne, the firm’s evergreen private equity vehicle. Since Vista’s founding, Robert has supervised on over 600 completed transactions that represent more than $330B in aggregate transaction value. Robert founded Vista after a career at Goldman Sachs in tech investment banking, where he was Co-Head of Enterprise Systems and Storage, executing and advising on over $50B in M&A activity with companies that were foundational players in the early days of the internet and technology, including Apple, Microsoft, Texas Instruments, eBay, and Yahoo. Robert has an innate understanding of technology and the trends that are shaping the way that companies and people interact with the world and conduct business. It’s no surprise that he was early in seeing the rise and impact of AI because he was early in seeing the dawn of the internet in the 1990s. Robert and I had a fascinating and thought-provoking conversation about the evolution of both enterprise software and Vista as a firm. We covered:The early days of enterprise software and what Robert saw then that gave him conviction to focus on enterprise software as a banker and then as an investor building Vista.The investment characteristics of enterprise software.The power of product superiority in enterprise software.Why “sovereignty and dominion of data” are so important — and why it matters for AI.Can the “Rule of 40” become the “Rule of 50, 60, 70” with AI?What aspect of AI is most impactful for companies.How Vista approaches value creation.What it took to scale Vista to a $100B investment platform.Why the wealth channel is core to Vista’s business and the firm’s DNA. Thanks Robert for coming on the show to share your expertise, wisdom, and passion for enterprise software and building businesses. Show Notes 00:00 Introduction to Ultimus, Our Sponsor 01:20 Welcome to the Alt Goes Mainstream Podcast 02:05 Robert F. Smith's Background and Career 04:33 Robert's Engineering Background 04:58 Chemical Engineering and Business Management 05:25 Early Career Projects and Productivity 06:42 Vista's Systemic Process Improvement 07:08 Enterprise Software Investment Strategy 11:11 Product Superiority and Execution Excellence 16:03 AI's Impact on Enterprise Software 22:58 Cultural Importance in Enterprise Software 28:05 Enterprise Software Investment Profile 28:45 Founding Vista and Early Market Insights 29:08 Mission Criticality in Enterprise Software 29:57 Economic Rent Capture Opportunities 30:36 Transitioning to Hosted Environments 31:37 Rule of 40 and Gen AI Efficiency 32:56 Cost Dynamics and Gen AI 33:35 Customer Support and Sales Efficiency 35:04 Agentic AI and Exponential Opportunities 36:37 Challenges in Enterprise AI Implementation 39:08 Internal Use of AI at Vista 43:49 Managing Agents vs. Human Interaction 44:31 Creative Uses of AI 45:00 Defining Gen AI and Agentic AI 46:28 Enterprise Software and Agentic AI 47:30 Impact of AI on Companies 50:17 Evolution of Vista and New Investors 50:42 Democratizing Investment Opportunities 51:47 AI in Wealth Management 52:55 Conclusion and Final Thoughts Editing and post-production work for this episode was provided by The Podcast Consultant. A word from AGM podcast sponsor, Ultimus Fund Solutions This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency. 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Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com. We thank Ultimus for their support of alts going mainstream.