Company Interview / TechnologyOne bets on AI assistant

Key points:

Launch of Guide, an AI-powered assistant transforming council and university servicesTechnologyOne’s embedded vertical model and cybersecurity standards seen as competitive advantagesShift to rateable property and student-based revenue models, plus a value share systemStrong profit and revenue guidance driven by visibility and AI-led growth

CEO Edward Chung of TechnologyOne highlights the recent launch of the company’s new AI-powered product, Guide AI, marking a significant milestone in digitising services for both residents and students. Guide is described as an ‘authentic AI’ digital assistant, facilitating effortless interactions through conversational interfaces, eliminating the need for screens or clicks. This AI-driven solution is seen as the world’s first by an ERP provider, aiming to offer councils and universities a one-stop shop experience, streamlining processes such as course applications, payments, and support requests.

Chung points out that although TNE shares have come under pressure in line with broader SaaS and software sectors, TechnologyOne’s deeply embedded, vertical software model offers a robust moat, further strengthened by integrating advanced AI capabilities. The view is that the market’s broad-brush concern over AI disruption does not account for the company’s mission-critical role and high-level cybersecurity credentials, with AI enhancing customer efficiency and deepening TechnologyOne’s value proposition.

Furthermore, Chung explains the move away from a seat-based revenue model to one based on rateable properties and student numbers, offering scalability as clients grow. The addition of a value share revenue model, charging per token and including advertising revenue sharing, is intended to provide customers with greater certainty and drive adoption. Strong forward guidance reflects increased visibility in the pipeline and confidence in new AI-enabled revenue streams.