Dry Powder: The Private Equity Podcast
Game Changers in Generative AI with Hg’s David Toms
In part two of our interview series, we explore how generative AI is forcing a radical reconsideration of how software is priced and deployed at scale.
Previously on Dry Powder, David Toms, the head of research at Hg, took us inside the firm’s early experiments with generative AI. Today on the show, we’ll see how generative AI fits into Hg’s investment model and how the firm is fundamentally rethinking the way it prices and packages software.
You can listen to this episode of Dry Powder and catch future episodes by subscribing on Apple Podcasts, Google Podcasts, Spotify, or wherever you may listen.
“At our software leadership event,” David says, “we had one of the largest software and service companies in the world, a C-suite speaker from there, who stood up and said, ‘Per user, per month pricing is dead.’”
Software has been priced on a usage model—how many seats and how intensively are you using it?—pretty much since the inception of the industry. But if you can measure the value that a customer is going to get from software, David argues, you can radically rethink the pricing model.
“The real game changer is when it’s results-based payment,” he says.
In addition to pricing, David explains how Hg decides to scale AI-driven products and features across the European continent, and how the firm spurs a friendly competition between its management teams.
The Private Equity Podcast
In our podcast series, Bain's Hugh MacArthur interviews leading experts on the trends and opportunities that will redefine the private equity industry.
Published in December 2024