Glossary

Software that performs work rather than assisting a person through it — priced against the labor budget it replaces, not per-seat access. Its value rests on how much work it performs and how defensibly, not on user counts.

The compound moat of incumbent service providers in regulated, high-stakes workflows: longstanding customer relationships (permission to deploy), proprietary data that can’t be bought, and domain expertise that turns both into defensible AI systems.

The deployment pattern where AI amplifies expert workers rather than replacing them — the lawyer, compliance officer, or analyst becomes dramatically more capable, and the most defensible AI systems are built around that amplification.

The organizational shift AI forces on professional-services firms: the wide junior base of the traditional pyramid dissolves as routine work is automated, leaving a diamond-shaped firm concentrated in experienced, judgment-bearing roles.

Contractually committed revenue (recurring) versus revenue that merely tends to repeat (reoccurring). Two companies with identical growth can trade at very different multiples on this distinction alone.

Lateral’s thesis that in the AI era the durable assets are trust, proprietary data, and domain expertise — held by embedded services businesses — rather than models or horizontal platforms. Developed across a twelve-part analysis series.

A distinction between software that coordinates human effort (systems of workflow) and software that performs the task itself (systems of work). The market increasingly prices the two differently — coordination is what AI agents now do for free.

Grading AI adoption by consumption metrics — tokens burned, prompts issued — rather than outcomes delivered. A spending pattern that collides with ROI scrutiny as token budgets formalize.

The valuation gap between vertical and horizontal application software — the amount by which the market now values industry-specific SaaS above general-purpose platforms, measured as the spread between median EV/Revenue (or EV/EBITDA) multiples. Tracked monthly in Lateral’s Vertical Premium Monitor.