{"id":525685,"date":"2026-03-10T00:50:08","date_gmt":"2026-03-10T00:50:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/525685\/"},"modified":"2026-03-10T00:50:08","modified_gmt":"2026-03-10T00:50:08","slug":"constellation-well-positioned-to-tackle-ai-disruption-in-software-industry-company-president-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/525685\/","title":{"rendered":"Constellation \u2018well-positioned\u2019 to tackle AI disruption in software industry, company president says"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Constellation Software Inc. is one of Canada\u2019s largest technology companies.Timon Schneider \/ SOPA Images\/Reuters<\/p>\n

Constellation Software Inc. CSU-T<\/a>, one of the country\u2019s largest technology companies, said it can weather the disruption caused by artificial intelligence as it seeks to allay investor fears that AI will erode the value of traditional software products. The company also said it will acquire minority stakes in technology companies, in addition to its historical practice of purchasing them outright. <\/p>\n

Company president Mark Miller said on an earnings call Monday that Constellation\u2019s many subsidiaries have deep relationships with customers, allowing the conglomerate to continue to build products that meet client needs. \u201cThere\u2019s real noise in the market now about AI disrupting software businesses,\u201d he said. \u201cWe\u2019re well-positioned, although we\u2019re staying very disciplined about how we approach it.\u201d<\/p>\n

Constellation\u2019s share price was up 0.39 per cent on the Toronto Stock Exchange at the end of trading on Monday.<\/p>\n

The Toronto-based company has bought hundreds of smaller businesses<\/a> around the world that make \u201cmission-critical\u201d software for niche sectors, such as golf courses and public transit providers. <\/p>\n

U.S. travel software firm adopts poison pill, thwarting further investment by Constellation<\/a><\/p>\n

Founded in 1995, Constellation has long been considered a steady, reliable bet. But its share price has fallen about 38 per cent in the past 12 months. Its performance since 2023 reflects the degree to which the market is trying to understand the implications of AI. Constellation initially benefited from the advancements, as investors believed that developers could write software faster and more efficiently with the new technology. <\/p>\n

But now, the market is worried that AI will upend the traditional software-as-a-service business model. If companies are able to increase productivity with AI, that might mean they purchase fewer software licenses for employees. Using AI to quickly create software also lowers the barrier to entry for nimble startups to unseat incumbents, while allowing customers to be more independent and build their own tools.<\/p>\n

As a result, software companies have been on a wild ride. Thomson Reuters Corp., International Business Machines Corp., Adobe Inc. and Salesforce Inc. have seen their shares fall between 14 per cent and 25 per cent so far this year, for example.<\/p>\n

Mr. Miller pushed back in the earnings call against the pessimistic narrative as it concerns Constellation. \u201cBuilding products and features faster will not be what differentiates us,\u201d he said. \u201cWhat will matter is what our businesses have spent many years developing \u2013 deep, vertical knowledge, a genuine understanding of customer workflows and processes, the data inside their solutions and the trusted relationships they built.\u201d<\/p>\n

Constellation Software is up, up and away. Maybe?<\/a><\/p>\n

Constellation and its subsidiaries are adopting AI and sharing best practices, too. \u201cThe productivity returns are real, and they\u2019re still growing,\u201d Mr. Miller said, even if these gains have not affected the bottom line. \u201cWe haven\u2019t really seen a lot of new revenues from that,\u201d he continued, adding that the company hasn\u2019t seen revenue drop because of AI, either.<\/p>\n

Constellation now scores potential acquisition targets for how they will be affected by AI, and is piloting new tools to help rank prospects. \u201cThe jury is still out on whether it will prove its value over time,\u201d Mr. Miller said. <\/p>\n

He acknowledged that some companies in Constellation\u2019s broad portfolio will deal with disruption better than others. \u201cAs a good conglomerate, we want to make sure we\u2019re putting the capital behind the people who are winning. If you\u2019re losing, we\u2019ll take your capital and put it elsewhere,\u201d he said. <\/p>\n

Analysts still view Constellation favourably, even with the confusion caused by AI. \u201cWe view the depth of the sell-off as overdone,\u201d CIBC analyst Stephanie Price wrote in a note earlier this year. The drop in share price shows that the market is implying a steep reduction in Constellation\u2019s growth prospects. \u201cWe see this level of decline as unlikely given Constellation\u2019s diversified software offerings and continued M&A execution,\u201d she wrote.<\/p>\n

Mr. Miller, who has served as Constellation\u2019s chief operating officer since 2001, became president last September when founder Mark Leonard stepped down for health reasons.<\/a> Mr. Leonard took a unique approach to Constellation. He was a firm believer in decentralization and staunchly avoided media attention. On a rare public conference call last year<\/a>, he introduced a handful of Constellation AI experts, but only identified them by their first names so they wouldn\u2019t be contacted by competitors.<\/p>\n

By appearing on an earnings call, Mr. Miller may be taking a more open approach. Constellation reported that its fourth-quarter revenue grew 18 per cent to US$3.2-billion compared to the same period in 2024. Revenue for the full year rose 15 per cent to US$11.6-billion.<\/p>\n

Organic growth, however, slowed to 2 per cent from 3 per cent. \u201cWe believe an acceleration would have helped reassure investors amid the turmoil in software valuations,\u201d wrote Desjardins analyst J\u00e9rome Dubreuil in a note on Monday.<\/p>\n

Constellation typically buys companies outright, but Mr. Miller said it will now take minority stakes in large companies on a selective basis. The first such example is Constellation\u2019s agreement with U.S. travel technology company Sabre Corp., he said.<\/p>\n

Constellation owns a 12.7-per-cent stake and struck a governance agreement that saw one of its executives appointed to Sabre\u2019s board. (Sabre adopted a shareholder rights plan<\/a> earlier this month to prevent anyone from acquiring more than 15 per cent of its shares.)<\/p>\n

Analysts on the Monday call questioned the approach, with some expressing concern that Constellation may not have much influence through minority stakes.<\/p>\n

\u201cIt\u2019s another way to deploy capital, and we\u2019ll do it rationally,\u201d Mr. Miller said. \u201cWe won\u2019t allow it to distract us.\u201d<\/p>\n

With a report from Sean Silcoff<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Constellation Software Inc. is one of Canada\u2019s largest technology companies.Timon Schneider \/ SOPA…\n","protected":false},"author":2,"featured_media":442144,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,276,277,49,48,49174,61],"class_list":["post-525685","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-ca","tag-canada","tag-streetwise","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/525685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=525685"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/525685\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/442144"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=525685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=525685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=525685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}