Five Tech Trends Driving the Next Phase of Enterprise Growth — DC Advisory's Future of Tech Report
AI / AI Tech Trends | 4 min read
The next phase of enterprise growth will be driven by companies that can operationalise AI across the full stack — including software and data infrastructure, hardware, automation, and national security — and translate innovation into real-world impact. DC Advisory's The Future of Tech report has identified five key themes where capital, innovation, and deal activity are converging in technology and software: the transformation of SaaS through AI, the convergence of software and the physical world, AI's role in the public sector, AI's impact on authenticity and cybersecurity, and Japan's emerging position in global tech investment.
1. Transforming SaaS — AI Is Doubling the Market
AI is effectively doubling the SaaS market, according to the report. Software companies that embrace AI-first strategies are succeeding faster financially — with faster revenue growth, improved unit economics, and more favourable cost structures. The report's analysis distinguishes between companies that incrementally add AI to existing products and those that fully rebuild their architectures around AI. The latter are positioned to capture significantly stronger growth.
"Long term we believe that AI adoption will significantly expand the market for software, essentially doubling the total addressable market. Software companies that fully commit to AI will also see stronger revenue growth, better unit economics and more scalable cost structures. Whilst it requires some brave decision making, the strongest growth will likely come from businesses that fully rebuild around AI, rather than just adding it incrementally."
— Oliver Parker, Managing Director, DC Advisory
2. When Software Meets the Physical World — Physical AI at Scale
Physical AI deployment is entering a scale-up phase across global industry. The sectors seeing the strongest early pull are those where the combination of labour shortage, repetitive task structure, and economic urgency are most acute — chiefly manufacturing, logistics, and industrial services. The report frames physical AI not as a future technology but as a present deployment reality, with capital flowing into companies that can bridge software intelligence and physical-world execution at operational scale.
3. AI's Role in the Public Sector — From Policing to Medical Devices
Public sector organisations are developing software and AI solutions specifically designed to help people uphold the law rather than circumvent it. AI is improving efficiency and responsiveness, particularly in public safety — with technologies ranging from licence plate reading cameras to drones being deployed to help police departments identify criminals, speed up arrests, and resolve cases more efficiently. The report also highlights a dramatic surge in AI-enabled medical device authorisations by the US Food and Drug Administration: from just 6 in 2015 to 1,394 in 2025 — a transformation that underscores how deeply AI has penetrated regulated, high-stakes healthcare environments over the past decade.
"AI is improving efficiency and responsiveness, particularly in public safety. Tech ranging from licence plate reading cameras to drones are being deployed to help police departments identify criminals, speed up arrests and resolve cases more efficiently."
— Oliver Parker, Managing Director, DC Advisory
4. Considering Security — Deepfakes, Authenticity, and the Detection Gap
AI's impact on authenticity and cybersecurity is one of the report's most urgent themes. 43% of security professionals experience a deepfake incident every year — yet organisations broadly lack the detection infrastructure to identify these incidents. The incidents reported span a wide range of attack vectors: identity verification bypass, contact centre fraud, executive impersonation, and hiring fraud. The convergence of increasingly accessible AI generation tools with inadequate detection capabilities is creating a structural vulnerability that the report identifies as a major capital allocation opportunity for security-focused founders and investors.
5. Japan's Hardware and AI Investment Focus — Engineering Depth Meets Global Capital
The combination of Japan's hardware expertise and the US's leadership in software and AI is creating fresh opportunities for founders and investors. DC Advisory surveyed 100 Japanese organisations on their investment intentions over the next three years — and found that 60% expect to undertake more overseas mergers and acquisitions, targeting US and European firms. Japan retains extraordinary engineering depth in the physical technology domains now at the centre of the AI investment thesis: semiconductors, sensors, precision manufacturing, industrial automation, and robotics components. The report notes that the technology inside Tesla's vehicles — including programmable logic boards, battery systems, and semiconductor components — is substantially Japanese. DC Advisory expects Japanese investors to play a significantly larger role in global tech investment, particularly where AI, robotics, and hardware converge.
Key Takeaways
- • DC Advisory's The Future of Tech report (authored by Oliver Parker, Managing Director) identifies five themes where capital, innovation, and deal activity are converging: AI-first SaaS transformation, physical AI scale-up, public sector AI, authenticity and cybersecurity, and Japan's hardware-driven investment push. The central thesis: the next enterprise growth phase belongs to companies that can operationalise AI across the full stack — software, hardware, automation, and national security — and translate it into real-world impact.
- • SaaS and AI: AI is doubling the total addressable market for software. Companies that fully rebuild around AI — rather than adding it incrementally — will see stronger revenue growth, better unit economics, and more scalable cost structures. The report distinguishes two camps: AI-augmented incumbents and AI-native rebuilds, with the latter expected to capture disproportionate long-term growth.
- • Physical AI and public sector: Physical AI is entering a scale-up phase in manufacturing, logistics, and industrial services — driven by labour shortages, repetitive task structure, and economic urgency. In the public sector, AI is being deployed in law enforcement (licence plate cameras, drones) and healthcare, where FDA AI-enabled medical device authorisations grew from 6 in 2015 to 1,394 in 2025 — a 232× increase in a decade.
- • Deepfakes and the security gap: 43% of security professionals experience a deepfake incident annually, yet most organisations lack detection infrastructure. Attack vectors include identity verification bypass, contact centre fraud, executive impersonation, and hiring fraud. The detection gap between AI generation capability and enterprise defence is the defining cybersecurity investment opportunity highlighted in the report.
- • Japan's investment push: 60% of 100 Japanese organisations surveyed expect to increase overseas M&A and investment activity, targeting US and European firms. Japan's engineering depth in semiconductors, sensors, precision manufacturing, industrial automation, and robotics — foundational to AI hardware — positions it as an increasingly significant force in global tech capital flows. DC Advisory expects Japanese investors to play a larger role where AI, robotics, and hardware converge.