We obviously have the knowledge and the content and the data. And that’s only half the question. The other half the problem. The other half of the problem, though, is we are so — we compete on intimate so we actually know what questions to answer. So we have the content, the data and the question and now the Generative AI, it’s just another tool, the tool kit about how to solve those problems. So we like our long-term competitive positions.
Joe Giordano: Just on that, if I could just sneak in a follow-up on that. Like — is this an area — I know generally, once you acquire a business that kind of runs on its own, but is this an area where like the corporate can flex a little bit because these solutions tend to be expensive to deploy. So is this an area where like Roper corporate could be like all we are making a decision to kind of allocate capital to the businesses that need this specifically outside of the natural free cash flow dynamics of that specific firm?
Neil Hunn: So these tools are not free, but they are substantially less expensive than these large language models that have to be developed, right? And so there is the research and development part of the application of the LLM and what we’re doing, and then there’s the operational costs. Jason did a teach-in a couple of months ago about the ROI case studies and all of this stuff. So far, we’ve not seen an ROI case study that’s been challenged in any meaningful way on this front. I’m sure that will happen as you start to work down the curve of opportunities. But we’re not — at the moment, we’re not going to try to do a one-size-fits-all Roper generative AI solution because it would just not work because of the 28 different applications. Jason, anything you want to add.
Jason Conley: Yes. No, that’s right. I mean we do have benefits and scale with some of the agreements with our large cloud service providers. So that’s been beneficial for companies to do some experimentation at a very low cost. And then we’re just allocating a lot of mind share towards that, so we can collectively get better. But in terms of like allocating capital that just hasn’t been front-centered out. The company has a really compelling value proposition. We’re always going to entertain that, but that’s not what we’re seeing today.
Joe Giordano: Thank you, guys.
Neil Hunn: Thank you.
Jason Conley: Thanks.
Operator: Your next question comes from Joe Ritchie with Goldman Sachs. Your line is now open.
Joe Ritchie: Hey, guys. Good morning.
Neil Hunn: Good morning.
Jason Conley: Good morning.
Joe Ritchie: Hey, so in your prepared comments, Neil, you referenced how some of your new SaaS-based offerings were helping certain businesses. I’m just curious as you kind of think a look at the portfolio as a whole, like how far along are you in terms of rolling out additional new platforms? And how much room is there to go from here? And if there are any examples that you want to highlight, that would be great across the portfolio.
Neil Hunn: So I just want to make sure we understand it or answering the question you’re asking is that essentially how far along are we on our SaaS journey? And what’s that look like?
Joe Ritchie: Yes, that’s exactly right. And if there are examples across the portfolio where you think you’re — you have like additional opportunity, I’d love to just hear about some of those examples.
Neil Hunn: So Jason why don’t you take on the first part, I’ll take the second part.
Jason Conley: Yes. At the macro level, we’re a little over $900 million of maintenance today, maintenance revenue and if you go back maybe in the last five years, we’ve converted the base of maintenance probably like in the mid- to high single-digit area. So we still have a lot of room left, and we convert that maintenance revenue at 2 times to 2.5 times when we go to SaaS. And so that’s kind of where we’re at today. And there’s a — Neil can talk about the specific businesses. There’s a handful of businesses that are transitioning. I’d say Aderant is one that’s probably had the biggest migration over the last three or four years, which happened right at Co. That was an industry that was reluctant to move to the cloud and then all of a sudden, once a few firms when they all win. So they’re right in the in the thick of things in terms of that cloud migration. But Neil, do you want to talk about some other.
Neil Hunn: Sure. Happy to do it. So as Jason said, I mean, it is this $900 million of on-premise maintenance is concentrated in a handful of businesses. The examples we give would start with Deltek. It’s both on the cost point, which is our government contracting core product and Vantage Point, which is their private sector, their engineering, architecture product. You might have seen, for instance, on cost point, this quarter, Deltek achieved FedRAMP Moderate ready status. So there is a requirement the government puts on for security. It’s a meaningful checkpoint for cost point in the cloud, almost all net new for the private sector part of Deltek’s book is Sol and Vantage Point, which is in the cloud and SaaS enabled. Jason talked about Aderant, 80-plus percent of all of Aderant bookings today are in the cloud, talked about power plan, power plan, has one of — a handful of core applications.
I would say their number two application is cloud-enabled and being deployed today. So we’re definitively rolling through the that book, in that product set and building into this long-term SaaS business.
Joe Ritchie: Got it. That’s super helpful. I’ll just leave it there. Thank you.
Neil Hunn: Thank you.
Jason Conley: Thanks.
Operator: Your next question comes from Brad Hewitt with Wolfe Research. Your line is now open.
Brad Hewitt: Hi, good morning. Thanks for taking my questions.
Neil Hunn: Good morning, Brad.
Jason Conley: Good morning.
