Improving profitability of software portfolio investments used to be about headcount reduction and product rationalization. Not anymore. Tech-focused PE funds are increasingly focusing on growing portfolio profitability using a combination of key product hires, product functionality enhancement and investing in sales. This "VC type" mindset is appropriate given the significant growth in key software markets, adoption of cloud and artificial intelligence and availability of several disruptive technologies.

Obviously one size does not fit all, and there are many tech funds who continue to focus on cost optimization, product portfolio rationalization and rightsizing. However, these types of profitability growth opportunities exist mostly within large software companies.