The Next Wave Of B2B Software Innovation Lies In The Physical World
Eric Yan is the Senior Director of Business Strategy and Chief of Staff at MaintainX.
getty
I've spent the last decade investing in or operating at B2B software companies, and a trend I've observed is that B2B software innovation up until this point has centered overwhelmingly on a narrow slice of the workforce: desk-based jobs. This focus led to some of the world's largest companies—CRM systems like Salesforce and HubSpot, project management tools like Asana and Monday.com, and workflow automation platforms like Atlassian and ServiceNow. Companies like these have driven exponential productivity improvements for knowledge workers—and created trillions of dollars in shareholder value in the process—but their success hinges on an increasingly fragile premise: that the human-centric workflows they support will remain relevant in a world of AI.
Now, as AI advances, these software providers face an existential threat. If AI automates sales outreach, autonomously generates reports or manages projects with little human input, the software tailored to enable those digitally native, desk-based workflows risks becoming collateral damage, whether it be through price erosion or displacement altogether—a dynamic unique to sectors where work exists primarily in the digital realm.
The next wave of B2B software innovation will empower the workers who keep the physical world running and operate in a realm where outcomes are tied to physical actions. These physical workers, such as those working in manufacturing plants, hospitals, construction sites or warehouses, represent 80% of the global workforce. Yet, they've been underserved by software, receiving only 1% of global venture funding.
As AI matures, a seismic shift is underway: The future of enterprise software will belong to platforms that bridge the gap between digital intelligence and physical execution, like repairing machinery, administering patient care and stocking shelves. This creates a durable market for B2B software that enhances (rather than replaces) human labor. AI here isn't an existential threat, but a force multiplier that can equip front-line workers with superhuman intelligence. In my opinion, the next B2B software decacorns and centicorns will be the ones that successfully bridge AI with real-world execution.
Deskless industries are grappling with an expertise exodus as seasoned workers retire. According to the Bureau of Labor Statistics, 24% of production workers are over 55 and the median age of U.S. farmers is 55. This threatens operational continuity, but AI offers a solution: Machine learning models can now codify decades of institutional knowledge into real-time decision support. For example, an AI assistant can guide a junior technician through complex repairs by analyzing the corpus of historical maintenance data and OEM manuals, or warn a new construction crew about site-specific safety risks learned from past incidents.
I've seen how early enterprise software struggled to interface with the messy, dynamic realities of deskless environments. However, advances in AI have unlocked tools suited to physical workflows. For example, alwaysAI leverages computer vision to enable defect detection on assembly lines with superhuman accuracy; our company uses generative AI to simplify complex and lengthy OEM manuals into standardized work orders and procedures for technicians via a mobile app; and several venture-backed machine health AI companies are working on predictive analytics to synthesize vast amounts of IoT sensor data into actionable alerts (e.g., 'replace this bearing within the next week to avoid machine failure').
I've found that digital transformation in deskless industries often stalls due to adoption inertia, typically from lengthy and costly time-to-value. But AI is rewriting the rules of engagement. Intuitive interfaces like voice-to-text, augmented reality overlays and natural language queries eliminate the need for typing or training. Mobile-first presentation layers in a world where the vast majority of deskless workers already carry smartphones make AI-powered mobile applications a natural extension of their routines. And AI is streamlining setup processes that once deterred adoption (e.g., auto-creating maintenance work orders based on IoT sensor data). The result? Deskless workers no longer have to adapt to software—the software adapts to them.
Input data in deskless environments is highly fragmented—from handwritten logs to printed OEM manuals to sensor and operational data on unnetworked machines. Aggregating the corpus of relevant input data will be a key challenge for software companies to navigate, but those who succeed at it will build defensible data moats.
Deskless industries, such as retail, manufacturing and logistics, typically operate on razor-thin margins—often less than 15% EBITDA margins—compared to the 30%-plus EBITDA margins common in desk-based sectors. This means that ROI is often highly scrutinized and must be measurable to justify adoption. Solutions that demonstrate direct cost savings (e.g., reduce unplanned downtime) or revenue uplift will win.
Many AI-driven software platforms for deskless industries sell bundled hardware to deliver a turnkey solution. For example, Samsara sells IoT sensors, dashcams and GPS trackers with its fleet management software. Selling hardware introduces operational and financial challenges that desk-based SaaS companies often don't have to navigate, like supply chain management (including manufacturing), inventory and warehousing, logistics and distribution, and reverse logistics (returns, repairs and refurbishments). Collectively, these challenges can erode margins and are capital-intensive, so it's critical that bundled hardware-software solutions can sell based on value (rather than cost).
The deskless workforce represents the final untapped frontier for B2B software—a vast market where AI's value isn't about replacing humans, but elevating them. As these industries confront an aging workforce, labor shortages and cost pressures, the companies that thrive will be those delivering AI-powered software that works with humans—not around them—becoming the operating system for entire industries. In B2B software, the greatest opportunity lies where bits meet atoms.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Wire
3 hours ago
- Business Wire
Deluxe and Chargent Partner to Power Integrated Payments in Salesforce
MINNEAPOLIS--(BUSINESS WIRE)--Deluxe (NYSE: DLX), a trusted Payments and Data company, and Chargent, the leading payment solution built natively on Salesforce, today announced a strategic partnership to deliver seamless, end-to-end payment integration within Salesforce. This collaboration allows businesses to automate billing, accept payments, and gain real-time transaction insights—all without leaving the Salesforce environment. By combining Chargent's powerful, Salesforce-native tools with the secure and scalable merchant processing infrastructure at Deluxe, the new offering helps businesses accelerate cash flow, reduce manual work, and improve financial visibility. 'This partnership enhances the way our customers manage payments—simplifying operations and supporting revenue growth,' said Bryan Van Meter, Head of GTM at Chargent. 'Deluxe brings credibility, scale, and decades of payments expertise that our customers can trust.' 'Partnering with Chargent allows us to bring the robust payment infrastructure at Deluxe directly into the Salesforce ecosystem,' said Brian Mahony, President of Merchant Services at Deluxe. 'This integration gives businesses a secure, efficient way to manage payments within the platform they already rely on—helping them streamline operations, improve cash flow, and support long-term growth.' The joint solution is available now, offering a better way for businesses on Salesforce to manage payments, streamline customer experiences, and grow with confidence. About Deluxe Deluxe, a Trusted Payments and Data Company, champions business so communities thrive. Our solutions help businesses pay, get paid, and grow. For more than 100 years, Deluxe customers have relied on our solutions and platforms at all stages of their lifecycle, from start-up to maturity. Our powerful scale supports millions of small businesses, thousands of vital financial institutions and hundreds of the world's largest consumer brands, while processing more than $2 trillion in annual payment volume. Our reach, scale and distribution channels position Deluxe to be our customers' most trusted business partner. To learn how we can help your business, visit us at About Chargent Chargent is the leading payments solution on the Salesforce AppExchange, enabling organizations to manage their payment processing directly within their Salesforce environment. Chargent's suite of flexible payment tools, including a comprehensive REST API, facilitates top-of-class payment functionality in any workflow. These streamlined, automated tools - as well as Chargent's world-class support - empower their customers to collect more revenue and bolster bottom-line results.
Yahoo
3 hours ago
- Yahoo
HUBS Q1 Earnings Call: AI Momentum, Platform Expansion, and New Monetization Models
Sales and marketing software maker HubSpot (NYSE:HUBS) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 15.7% year on year to $714.1 million. Guidance for next quarter's revenue was better than expected at $739 million at the midpoint, 2% above analysts' estimates. Its non-GAAP profit of $1.78 per share was 1% above analysts' consensus estimates. Is now the time to buy HUBS? Find out in our full research report (it's free). Revenue: $714.1 million vs analyst estimates of $699.9 million (15.7% year-on-year growth, 2% beat) Adjusted EPS: $1.78 vs analyst estimates of $1.76 (1% beat) The company lifted its revenue guidance for the full year to $3.04 billion at the midpoint from $2.99 billion, a 1.7% increase Management raised its full-year Adjusted EPS guidance to $9.33 at the midpoint, a 2% increase Operating Margin: -3.8%, in line with the same quarter last year Customers: 258,258, up from 247,939 in the previous quarter Billings: $766.8 million at quarter end, up 19.6% year on year Market Capitalization: $31.96 billion HubSpot's first quarter results reflected the company's focus on platform consolidation, upmarket expansion, and customer acquisition in the small and mid-sized business segment. CEO Yamini Rangan attributed recent growth to more customers choosing HubSpot's unified platform for cost savings and AI capabilities, with over 37% of Pro+ customers now using four or more hubs. Management also highlighted strong performance in landing large enterprise deals, aided by product innovation such as journey orchestration and enhanced sandbox features. The company's ongoing shift to seat-based pricing and improvements in onboarding contributed to a notable increase in customer additions. Looking forward, HubSpot's updated guidance is underpinned by its AI-first strategy and the planned rollout of credit-based pricing for Customer Agent, a move designed to make AI adoption more predictable and accessible for customers. CFO Kate Bueker commented on the company's approach to monetizing new AI features, stating, 'Our philosophy is to deliver value, and once we see consistent repeat value, we begin to add monetization levers.' Management emphasized that while the broader macro environment remains uncertain, the company's diversified customer base and embedded AI solutions are expected to sustain momentum across multiple segments. The expansion of Customer Agent across all hubs and the development of agent-to-agent orchestration are central to HubSpot's growth outlook. Management pointed to several operational and strategic factors supporting HubSpot's performance, including rapid AI feature adoption, expansion into new customer segments, and enhancements to its core platform. AI adoption accelerates: The rapid increase in usage of HubSpot's Copilot and Customer Agent tools was a major highlight, with Copilot users more than doubling quarter-over-quarter and Customer Agent now serving over 2,500 clients. These AI features are integrated to support both marketing and sales teams, and are credited with speeding up ticket resolution and improving customer outcomes. Platform consolidation trend: Management noted that more customers are consolidating their tech stacks onto HubSpot's platform, reducing complexity and cost. This trend was particularly evident among Pro+ customers, with a growing proportion adopting four or more modules (hubs) and more new customers starting with the full platform. Upmarket and enterprise traction: The company reported strong momentum in landing larger deals, supported by new enterprise-grade features such as journey orchestration, multi-account management, and enhanced security. These capabilities have helped HubSpot win business from larger organizations seeking unified solutions. Credit-based AI monetization: HubSpot is expanding its credit-based pricing model to Customer Agent, giving customers a monthly allotment of credits included in their subscription and the option to purchase more as needed. This approach is designed to provide flexibility and predictability for customers, aligning spend with usage and value delivered. Internal AI use for efficiency: Management shared that AI is being used internally to improve support, sales, and marketing productivity. For example, up to 41% of support tickets are now resolved using AI, and AI-driven prospecting booked nearly 11,000 meetings for the sales team in Q1, contributing to operational efficiency gains. HubSpot's guidance emphasizes continued investment in AI capabilities, further adoption of its credit-based pricing model, and sustained customer acquisition across segments. AI feature expansion: Management plans to further embed AI into every hub, with Customer Agent set to be available across all Pro and Enterprise customers. This expansion is expected to drive additional customer engagement and provide new avenues for monetization, though significant revenue impact is anticipated over a longer time horizon. Platform and pricing model evolution: The shift to a seat-based and credit-based pricing structure is expected to support net revenue retention, as existing customers migrate and adopt more features. Management highlighted that these changes are designed to make adoption easier and better match customer needs, with seat upgrades and credit pack purchases contributing to predictable revenue streams. Macroeconomic uncertainty: While HubSpot has not seen significant demand changes across industries or regions, management acknowledged a continued focus on value among customers and higher economic uncertainty. The company's broad customer base and recurring revenue model are cited as sources of resilience, but management remains cautious in its outlook given the external environment. Over the coming quarters, the StockStory team will be monitoring (1) adoption rates of Customer Agent and other AI-driven features across various customer segments, (2) the impact of credit-based pricing on customer expansion and retention, and (3) the pace of migration to seat-based models. Continued progress in multi-agent orchestration and execution on product innovation will also be key indicators of HubSpot's ability to sustain growth. HubSpot currently trades at a forward price-to-sales ratio of 10×. Should you double down or take your chips? The answer lies in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
3 hours ago
- Yahoo
SPT Q1 Earnings Call: Enterprise Pipeline and AI-Driven Product Enhancements Take Focus
Social media management software company Sprout (NASDAQ:SPT) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 12.9% year on year to $109.3 million. Guidance for next quarter's revenue was better than expected at $110.8 million at the midpoint, 0.7% above analysts' estimates. Its non-GAAP profit of $0.22 per share was 48.4% above analysts' consensus estimates. Is now the time to buy SPT? Find out in our full research report (it's free). Revenue: $109.3 million vs analyst estimates of $107.6 million (12.9% year-on-year growth, 1.6% beat) Adjusted EPS: $0.22 vs analyst estimates of $0.15 (48.4% beat) Adjusted Operating Income: $12.54 million vs analyst estimates of $9.01 million (11.5% margin, 39.1% beat) The company slightly lifted its revenue guidance for the full year to $451.4 million at the midpoint from $450.6 million Management raised its full-year Adjusted EPS guidance to $0.73 at the midpoint, a 5% increase Operating Margin: -10.2%, up from -13.7% in the same quarter last year Customers: 9,381 Market Capitalization: $1.27 billion Sprout Social's first quarter results reflected increased enterprise adoption and focused product development as key drivers. CEO Ryan Barretto emphasized the company's momentum with large-scale brands, citing new strategic wins in industries such as medical devices, food and beverage, and hospitality. Management attributed growth to robust execution in its go-to-market team, with particular strength in expanding relationships with high-value customers. Notably, Sprout Social's updated influencer marketing platform and integrations with Salesforce and LinkedIn were highlighted as meaningful product advances. The leadership team also discussed continued resilience in customer retention, crediting improvements in onboarding, support, and a newly implemented customer success platform aimed at proactively identifying renewal risks and expansion opportunities. Looking ahead, Sprout Social's management outlined a measured but optimistic outlook, centered on continued enterprise expansion, multi-product adoption, and deeper integration with global partners. Barretto explained, "We're expanding our sales capacity this year and will continue to throughout the first half, which we believe will drive further momentum in our pipeline generation and enterprise coverage." The company expects elongated sales cycles and stable demand trends to persist through the year, but sees opportunities in cross-selling influencer marketing and customer care modules to both existing and new customers. CFO Joe Del Preto noted, 'We remain committed to growing operating leverage on a year-over-year basis, and will continue to evaluate our ability to drive greater profitability as the year progresses,' underscoring a focus on operational discipline as the company invests in its enterprise go-to-market strategy. Management credited the quarter's performance to targeted enterprise wins, expansion of AI-powered solutions, and enhancements in customer care and partnerships, despite a stable but cautious demand environment. Enterprise customer growth: Sprout Social secured several strategic deals with Fortune 500 companies across diverse sectors, leveraging its ability to consolidate social media management for large organizations. The expansion of $50,000+ annual recurring revenue (ARR) customers was driven by tailored solutions addressing complex enterprise needs. Influencer marketing platform rebrand: The company relaunched its influencer marketing product, incorporating AI-powered natural language discovery and advanced creator vetting features. This update was positioned to help brands quickly identify and engage creators, reflecting the company's response to the shift in consumer discovery trends toward social platforms. AI and automation enhancements: Recent releases included AI Assist for content generation, customer care features like Agentforce integration with Salesforce, and accessibility tools such as AI-driven alt text for images. These tools were designed to streamline workflows and improve inclusivity for both customers and end-users. Go-to-market and sales investments: Management increased sales capacity and implemented a new customer success platform, aiming to proactively manage renewals and expansion opportunities. The sales organization's focus on multi-product selling was supported by new compensation plans and account intent signals. Partnership and ecosystem expansion: The company made progress in global partnerships, particularly with Salesforce and AWS, and began building a network of international resellers to boost its presence in Europe and Asia-Pacific. These efforts were seen as long-term accelerators for pipeline growth and market access. Sprout Social's outlook is shaped by enterprise sales momentum, multi-product expansion, and ongoing investment in strategic partnerships, all while navigating a cautious macro environment. Enterprise pipeline expansion: Management anticipates that growing enterprise pipeline coverage, combined with increased sales capacity, will sustain revenue growth. The company is targeting higher-value customers and larger deals, with the expectation that enterprise adoption will drive average contract value upward. Product cross-sell and adoption: The company's push for multi-product adoption, particularly influencer marketing and customer care modules, is expected to increase both customer retention and wallet share. Leadership sees significant room to deepen penetration within the existing customer base and to upsell new customers at the point of sale. Macro stability and operational discipline: While Sprout Social does not expect the demand environment to improve in the near term, management is focused on maintaining operational flexibility and margin improvement through disciplined hiring and expense management. The company is also monitoring risks related to tariffs and federal spending cuts that could affect customer budgets. In the coming quarters, our analysts will focus on (1) continued growth in enterprise pipeline and conversion rates, (2) adoption rates of new AI-powered influencer and customer care products, and (3) the expansion of global partnerships, especially through new reseller channels in Europe and Asia-Pacific. Execution on multi-product cross-sell and sustained operational discipline will also be important markers. Sprout Social currently trades at a forward price-to-sales ratio of 2.7×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
