AI is going to save software companies’ dreams of growth

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It appears emerging price points for AI-powered software products will boost the total addressable market (TAM) for technology products and help reaccelerate growth at tech companies big and small.

In late 2023, Battery Ventures noted that the pullback of revenue growth at software startups had reached its nadir, and growth levels were starting to stabilize in the fourth quarter. Around the same time, Scale Venture Partners reported that after several years of deceleration, early-stage software companies were expected to renew momentum in 2024. Taken together, it seemed that tech companies were all but out of the woods.

Today, we’re seeing early indications that those optimistic takes were in tune with how 2024 would at least start to unfold. Companies are reporting their Q4 2023 results, and Big Tech companies have posted better-than-expected revenue and profit so far. Microsoft did well, Meta blew the doors off, and Amazon had a great quarter as well. We’re still waiting on a host of smaller SaaS companies to report, but it does appear that 2023 ended on a better note than earlier in the year.

There’s good reason to expect more of the same in 2024. It appears that the market is willing to accept that software imbued with new AI capabilities will cost more. So, yes, software companies of all sizes will have something new to upsell existing customers and potentially land new accounts, and it means that the TAM of software companies is widening.

A business can grow faster for longer in a larger market than it can in a smaller market. AI is therefore serving as a near-term growth boost for tech companies while raising the ceiling for how big they can become over time.



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Lisa Holden
Lisa Holden
Lisa Holden is a news writer for LinkDaddy News. She writes health, sport, tech, and more. Some of her favorite topics include the latest trends in fitness and wellness, the best ways to use technology to improve your life, and the latest developments in medical research.

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