Shift Happens - 2024 Report - Grove Ventures

Shift Happens Report 2024

1. GROVE

Grove Ventures

SHIFT HAPPENS - 2024 REPORT

The Second Coming of Al in the Software Development Lifecycle

2. The Second Wave of GROVE
Gen Al Tools for Developers is Coming

« Inthe last 2 years, Gen Al has transformed many processes - especially for
software engineers, with the revolution started by GitHub Copilot.

Our research suggests code generation is just the beginning, pointing to a
O future where Gen Al tools will greatly transform all aspects of software
organizations, across the entire software development life cycle.

© We believe the SDLC market is ready for more solutions, and that
now is the time to build them.

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3. GROVE
Code Assistant Tools Are on the Rise |

In the last two years, startups with Gen Al coding assistant offerings
have raised over $2.1 billion

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Al is now in code assistant tools, but could it soon reshape the entire SDLC?

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4. | Who did we talk to? RE

We interviewed +50 industry leaders to Tech Executives Across

examine the impact of Gen Al on engineering Different Organizations

teams, and to understand its inevitable

impact in areas like DevOps, Product

Management, and Data Science. Oo CTOs, VPs of Engineering, Heads
ED of DevOps and Infrastructure

Employing 35,000 employees &
15,000 engineers

Local and global, growth-stage
and public enterprises

ai

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5. GROVE

PART 01

THE CURRENT STATE

(v) We asked respondents about the current usage of Gen Al tools within their engineering
team, in order to learn more about their day-to-day practices

| Part Ii: The Second Coming of Al in the SDLC os

6. | First Steps Beyond Code Generation

(5 The Shift Happens report from September
2023 showed a 56% adoption rate of code
generation tools. Today, less than a year
later, it has surged to 92%.

- Early adopters of Gen Al are
© ) already exploring its use in
infrastructure and knowledge
management, and this trend is
expected to grow.

| Part ll: The Second Coming of Al in the SDLC

92%

Code Generation

10%
Project
Management

Al Adoption

Across
the SDLC

29%

Infrastructure
&Devops

06

7. | Who Said Size Doesn't Matter? venrunes

Gen Al adoption is spreading across Monthly Budget Per User Increases
Ó engineering organizations, with small With Organizational Size

companies allocating $35 per user

monthly and large enterprises up to $70.

Large corporations’ readiness
© to adopt Gen Al tools is a vital
e insight for startups’ GTM and
pricing plans.

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8. | Popular Knowledge Tools Lose Their Fame

GROVE

< Many respondents have decreased their use of search and education tools like Google and Stack Overflow

since Gen Al.

This opens up opportunities for the

© next generation of Altools,
particularly in internal knowledge
management within organizations,
where information is harder to
obtain and structure.

Ó As habits of finding and accessing
knowledge evolve, these changing dynamics
create even greater opportunities for
innovative solutions.

| Part It: The Second Coming of Al in the SDLC

Tools Reduced in Usage
Due to the Rise of Gen Al

Internal knowledge I didn’t reduce usage
in any tool

Search and
Education

08

9. | Dedicated Teams Emerging GROVE

« 23% of organizations have dedicated teams, procurement processes, and budgets for Gen Al, an
impressive jump from the 9% of organizations that had similar ‘gatekeeper’ teams for all software
development tools, as reported in our 2023 Shift Happens report.

These teams, whether organization-wide or
© department-specific, underscore a strong commitment
to Gen Al, laying the groundwork for the next wave of
23% SDLC tools.

Founders in this space should target these teams as
potential buyers and understand their wishlist and
budget.

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10. | New Practices Take Time anton

© Gen Al has transformed software engineering, but only 16% of organizations 16%
have updated processes such as code reviews, employee onboarding, or
team management.

of engineering executives are

dissatisfied with the quality
and accuracy of current code
assistant tools.

© We expect this to rise as 58%
Dec

dí

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11. 2
. OVE
| Necessary Guardrails VENTURES
Our survey identified the key guardrails Critical Guardrails for
© needed to scale Gen Al adoption effectively, Gen Al Success

from top to bottom:

Data
ED ri

‘Quality

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12. GROVE

PART 02

THE FUTURE IS NOW

(v) We asked respondents to envision the future of Gen Al in the software
development life cycle.

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13. | Gen Al Will Affect All Personas

Since code generation is the primary use case within the SDLC for Gen Al products, it's expected
6 that respondents believe engineering managers and software engineers will be the most impacted
by Gen Al in the future.

Least impacted by Gen Al . Most impacted by Gen Al
y = uy
y
Product Technical Data SW Architects SWDevelopers Engineering
Managers Operations Scientists Managers.

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14. Key Data Sources for Maximizing
Al Impact on SDLC

6 Respondents’ focus on DevOps, infrastructure, and 18%
documentation highlights the next wave of Gen Al in
software development. Engineering executives’ desire
for customer-centricity reveals a gap between
engineering and business teams that Al could bridge.

Infrastructure ©
& Operations Development &
Data Source Control

He Data
34% f 1

Integrating diverse data sources beyond code
© promises Al-driven enhancements in operational
efficiency and customer satisfaction across the

SDLC.

| Part I: The Second Coming of Al in the SDLC u

15. Key Takeaways

© TheGen Al revolution will not stop at the code generation stage.

© We envision a future where Gen Al will be integrated across all stages of development,
starting with DevOps.

© New Gen Al tools will necessitate process changes that many organizations have
yet to implement.

© Adoption of these next-gen tools will be quick and swift, and it will be difficult to imagine engineering
without it.

@ Corporations already set up budgets and have a unique buyer persona for Gen Al integrations, and if
the ROL is right - they will eagerly buy new tools.

© The adoption rate among organizations will increase due to new companies emerging to solve
challenges such as data privacy, security, and code quality.

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16. GROVE

| THANK YOU!

@® Disagree with us? Have any feedback? Let's
keep the conversation going.

And if you are a founder building in this space -
we are excited to meet you.

Send your thoughts to
[email protected] | [email protected] | [email protected]

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