Results

C3 AI Q1 solid, outlook slightly light

C3 AI Q1 solid, outlook slightly light

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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C3 AI's revenue growth in its first quarter checked in at 21% as the company continued to land enterprise use cases. C3 AI's outlook for the second quarter was light.

The company reported a first quarter net loss of 50 cents a share on revenue of $87.2 million, up 21% from a year ago. Non-GAAP loss for the quarter was 5 cents a share. Subscription revenue was 84% of total revenue. 

Wall Street was expecting C3 AI to report a fiscal first quarter loss of 13 cents a share on revenue of $86.94.

As for the outlook, C3 AI projected second-quarter revenue of $88.6 million to $93.6 million with a non-GAAP loss from operations of $26.7 million to $34.7 million. Wall Street was expecting second quarter revenue of $91.3 million. For the fiscal year, C3 AI projected revenue between $370 million to $395 million with the midpoint slightly below estimates of $383.9 million.

Speaking on the earnings call, CEO Tom Siebel said:

"C3 AI's customer base continues to expand, both within and across industries, while maintaining exceptional levels of customer satisfaction by by our continued focus on delivering measurable, significant enterprise value. Our bookings continue to be increasingly diverse. Our generative AI business is surprisingly diverse, with many candidly unanticipated use cases across the board in a wide range of industries."

By the numbers:

  • C3 AI closed 71 agreements in the first quarter including 52 pilots.
  • The company closed 25 agreements with municipal, county and state agents.
  • C3 AI’s federal business was 30% of bookings in the first quarter.
  • Electrobras, US Marine Corps. And Nucor were among the named customer additions.
  • Partners represented 72% of total agreements in the first quarter and Google Cloud and C3 closed 40 deals.
  • C3 AI closed 17 C3 AI Generative AI pilots in the quarter.
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HPE posts Q3 revenue growth on AI systems

HPE posts Q3 revenue growth on AI systems

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Hewlett Packard Enterprise said its third quarter was driven by AI systems as revenue was up 10% from a year ago.

The company reported third quarter net income of 38 cents a share on revenue of $7.7 billion, up 10% from a year ago. Non-GAAP earnings in the quarter were 50 cents a share.

Wall Street was expecting HPE to report third quarter earnings of 47 cents a share on revenue of $7.66 billion.

CEO Antonio Neri said the third quarter was strong with growth due to AI system sales. HPE noted that it was well positioned to gain market share in AI infrastructure.

In a blog post, Neri noted:

"Our AI leadership is built on decades of large-scale infrastructure expertise including technologies like direct liquid cooling that are powering our largest AI systems for model builders, service providers, and supercomputing users. Interest in our HPE AI solutions, particularly from enterprise and sovereign customers, continues to grow. AI systems orders climbed $1.6 billion in the quarter to a cumulative $6.2 billion since Q1 2023 – an increase of approximately $3.5 billion over the last year."

Server revenue in the quarter was $4.3 billion, up 35% from a year ago. Intelligent edge revenue was $1.1 billion, down 23% from a year ago. That business is mostly Aruba.

Hybrid cloud revenue was $1.3 billion, down 7% from a year ago.

As for the outlook, HPE projected fourth-quarter revenue between $8.1 billion and $8.4 billion with non-GAAP earnings of 52 cents a share to 57 cents a share. The non-GAAP figure excludes an after-tax net gain due to H3C income of $2.1 billion due to a partial sale and various adjustments. For fiscal 2024, HPE projected revenue growth of 1% to 3% with non-GAAP earnings of $1.92 a share to $1.87 a share.

Speaking on the earnings call, Neri said:

"We saw sequential and year over year orders growth, but with some geographic variation, demand was strong in North America, Asia Pacific, Japan and India, as Europe and the Middle East lacked. We are aggressively going after the opportunities presented by better market conditions, and are well positioned in a competitive and dynamic environment. 

We have accelerated innovation across all pillars of our strategy, networking, hybrid cloud and AI delivered through a unified cloud, native and AI driven experience as a part of our HP Greenlake Cloud Platform. Today, almost 37,000 unique customers use our HP Greenlake cloud to manage their hybrid IT estate."

Neri also addressed AI use cases:

"We continue to pursue profitable deals within our target server margin range, underscoring stability in our operating profit profile. In AI our momentum is very clear. Customer demand for HPE AI systems rolls sequentially, with opportunities increasing in both enterprise and sovereign AI clouds. 

Customers are exploring new ways to use AI, adding to our already robust pipeline and creating even more runway for our broad AI offerings. Enterprise interest in generative AI is high, and while adoption is still in the initial stages, it is accelerated. Customers tell us that they see the possibilities in building the business cases."

Data to Decisions Tech Optimization HPE Chief Information Officer

Quantum Brilliance, Oak Ridge National Laboratory aims to meld quantum computing, HPC

Quantum Brilliance, Oak Ridge National Laboratory aims to meld quantum computing, HPC

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Quantum Brilliance and Oak Ridge National Laboratory (ORNL) said they will collaborate on a platform that couples quantum computing with high-performance computing (HPC).

Under the partnership, Quantum Brilliance's on-premise quantum computing cluster will integrated into ORNL's HPC systems. Specifically, Quantum Brilliance's room-temperature diamond quantum accelerators and ORNL's infrastructure will be combined to solve problems traditional computing can't.

Constellation Research analyst Holger Mueller said:

"The foreseeable performance of quantum systems is not sufficient to solve many of the real-world quantum problems. One solution is the combination of quantum with HPC, where part of the process is offloaded to tried and tested HPC architectures and platforms. The partnership between Quantum Brilliance and Oak Ridge Laboratory brings on some formidable players in the field – so we will see what comes out of this partnership – hopefully soon."

More quantum computing:

Melding quantum computing and HPC has become a common theme in the industry. Quantum Brilliance and ORNL said they will focus on hybrid and parallel quantum computing. The goal is to leverage CPUs, GPUs and quantum processors to solve problems.

In a statement, the companies said the collaboration plans to "co-develop new computational methods that exploit parallel and hybrid computing and new software tools that will enable users to implement those methods and develop their own."

Data to Decisions Innovation & Product-led Growth Tech Optimization Quantum Computing Chief Information Officer

Anthropic launches Claude Enterprise with 500K context window, GitHub integration, enterprise security

Anthropic launches Claude Enterprise with 500K context window, GitHub integration, enterprise security

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Anthropic launched Claude Enterprise, which offers an expanded 500K context window, more usage capacity and GitHub integration as well as single sign-on, role-based permissions and admin tooling.

With the move, Anthropic is building out a suite of enterprise plans powered by its Claude large language model (LLM). Anthropic is also available on the hyperscale cloud providers such as AWS used by enterprises.

Here's a look at Anthropic's steady cadence of enterprise tools:

With that backdrop, Anthropic's Claude Enterprise is aimed at companies that want to use their proprietary data with Claude for competitive advantage with enterprise-grade security. Claude Enterprise's default is that it doesn't train models on user data. Anthropic is also leveraging Claude Enterprise to popularize its collaboration features for multiple use cases.

On the security front, Claude Enterprise has single sign-on and domain capture, role-based access with fine-grained permissions, audit logs and system for cross-domain identity management, which will be available in the weeks ahead.

Early customers of Claude Enterprise include GitLab, BCG and North Highlander.

Other key points:

  • The 500k context window equates to hundreds of sales transcripts, dozens of 100 page documents and 200,000 lines of code to give Claude company-specific knowledge.
  • GitHub integration is designed for engineering teams looking to sync code repositories with Claude.
  • Projects and Artifacts are designed team-based use cases for marketing and product and engineering.
  • Target use cases for Claude Enterprise include marketing, engineering, sales, product management, human resources and legal.

Anthropic's Claude Enterprise competes with ChatGPT Enterprise, which launched a year ago.


Constellation Research's take

Constellation Research analyst Andy Thurai said:

"As the LLM wars heat up, and the delta of data used to train these models starts to narrow, a lot of LLM providers are trying to offer differentiation in other ways. LLM offerings can add larger context windows, prompt caching, platform capabilities, bias removal of input date, ethical training of models, green/carbon neutral trained models, enterprise capabilities, and massive price reductions in their API-based pricing.

Anthropic is no exception. Some of the additions released this week are in those categories. The context window of 500K while not the largest (that honor currently goes to Gemini 1.5 Pro with a 2 million context window size) is among the largest.  The additional features of GitHub integration, admin controls, enterprise identity settings, single sign-on and other perks matter.

This launch should allow enterprise users to consider using these models to unleash their enterprise data where data privacy and security are major concerns.

Essentially, Anthropic Enterprise is aimed to compete squarely against ChatGPT enterprise launched a year ago."

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Zscaler CEO upbeat on fiscal 2025, but outlook falls short

Zscaler CEO upbeat on fiscal 2025, but outlook falls short

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Zscaler had a strong fourth quarter, but its outlook for fiscal 2025 fell well short of estimates.

The company, known for its Zero Trust Exchange platform, is among the cybersecurity leaders and in the middle of the platformization debate that has been dented by the CrowdStrike outage.

Zscaler reported a fourth quarter net loss of $14.9 million, or 10 cents a share, on revenue of $592.9 million. Non-GAAP earnings in the quarter were 88 cents a share. Wall Street was expecting Zscaler to report non-GAAP earnings of 69 cents a share on revenue of $567.61 million.

For fiscal 2024, Zscaler reported a net loss of $57.7 million, or 39 cents a share, on revenue of $2.17 billion, up 34% from a year ago. Non-GAAP earnings for the year were $3.19 a share.

CEO Jay Chaudhry said customer adoption was "stronger than ever" and that fiscal 2025 would feature a "strong go-to-market machine and a high pace of innovation."

Yet the outlook for the fiscal year fell short of expectations. Zscaler projected first quarter revenue of $604 million to $606 million with non-GAAP earnings of 62 cents a share to 63 cents a share. Wall Street was expecting first quarter earnings of 72 cents a share.

For fiscal 2025, Zscaler said it would post non-GAAP earnings of $2.81 a share to $2.87 a share on revenue of $2.6 billion to $2.62 billion. Wall Street was looking for fiscal 2025 non-GAAP earnings of $3.36 a share on revenue of $2.63 billion.

Zscaler CFO Remo Canessa said the first half of fiscal 2025 will see billings growth of about 13% and accelerate to 23% in the second. Canessa said sales productivity will improve over the year and the pipeline supports second-half acceleration.

Canessa added that Zscaler will continue to invest for long-term growth at the expense of profits to some degree.

Chaudhry remained upbeat about Zscaler's prospects and took a few shots at CrowdStrike. Key quotes from Chaudhury include:

  • "When customers rely on a mission critical cyber security service, there is no room for service interruptions. From inception, Zscaler has built a cloud security platform that has been seamlessly scaling with high reliability and resilience. Operating such a service is no trivial task and it requires years of experience. Unproven vendors, including new entrants and legacy firewall companies, do not have this experience. By operating the world’s largest security cloud with superior resilience for over a decade, we have earned the trust of the largest enterprises.
  •  "The importance of mission criticality has gone up significantly since the outage that was caused by CrowdStrike. While our customers want resilience, they also do want consolidation, but they do not want consolidation such that it makes them dependent on a single vendor."
  • "The increasing use of AI is creating new avenues of growth for us. For example, the rising adoption of GenAI is exposing new gaps in organizations’ security posture."
  • "The cyber threat environment continues to worsen as the limitations of firewall and VPN based architecture are exploited by threat actors to launch an increasing volume of sophisticated attacks. Over the last year, we saw an 18% increase in ransomware attacks blocked by the Zscaler cloud."
  • "In addition to landing new logo platform purchases, we are also upselling our platform. Our land-and-expand motion creates a flywheel of continuous engagement and upsells."
  • "Most of the CIO I talk to have been standardizing in-line access to three providers, one for EDR (endpoint detection and response), one for identity, and one for Zero Trust actions. I think that's a good combination because you end up getting a couple of extra layers, but you still have separation. So in this environment, our customers aren't really pushing back on us because we tell them don't buy everything through Zscaler. You've got an EDR provider, you've got an identity provider and we'll do the rest of Zero Trust on activity." 
Digital Safety, Privacy & Cybersecurity I am Team Leader at the Nominee Organization (no vendor self nominations) Distillation Aftershots Security Zero Trust Chief Information Security Officer Chief Privacy Officer

Intel launches Lunar Lake laptops, aims to scale AI PCs, spur upgrade cycle

Intel launches Lunar Lake laptops, aims to scale AI PCs, spur upgrade cycle

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Intel joined the AI PC parade with its Intel Core Ultra 200V series, code named Lunar Lake, with a launch designed to show that x86 architecture can compete with Arm in Copilot+ PCs.

PC makers are already betting that AI PCs will create an upgrade cycle for long-in-the-tooth devices purchased in the COVID-19 pandemic.

To date, the Qualcomm vs. AMD AI PC debate revolves around battery life vs. graphics performance. Intel's Core Ultra 200V series is designed to do both with performance improvements up to 50%.

With Intel now in the AI PC race, there will be a bevy of laptops scaling. Intel said in a statement that there will be more than 95 consumer designs from more than 25 PC makers including Dell Technologies, HP, Lenovo and others. Preorders start today with systems available Sept. 24.

What remains to be seen is whether Intel's AI PC processors and accelerators can turn around the company. Intel reported a disastrous second quarter. Speaking at a recent investment conference, CEO Pat Gelsinger acknowledged the challenges.

"It's been a difficult few weeks. And with that we've been working hard to address the issues and at earnings we were determined to lay out a clear view, right, of where we were, but also some of the next steps that we needed to address for the next phase of our strategy. And obviously, the market didn't respond positively. We understand that, and we're taking seriously what the market's telling us, and hearing that clearly. But we're also staying very focused on delivering and executing on the large number of the things that we laid out."

Key points about Intel Core Ultra 200V:

  • Intel claims its Intel Core Ultra 200V series processors have up to 50% lower package power and 120 TOPS (tera operations per second) across central processing unit (CPU), graphic processing unit (GPU) and neural processing unit (NPU).
  • The fourth-generation NPU is more than 4x powerful than its previous generation.
  • Intel said it worked with more than 100 integrated software vendors to optimize performance. Intel also noted that its Core Ultra platform is compatible with all applications.
  • Intel Core Ultra 200V features the company's Xe2 graphics microarchitecture .
  • Laptops will have up to 20 hours of battery life in productivity use cases with the ability to support more than 500 optimized AI models.

Here's a look at the SKUs available for Intel-powered Lunar Lake laptops.

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The generative AI Price Wars: What CXOs Need to Know About the Shifting Generative AI Landscape

The generative AI Price Wars: What CXOs Need to Know About the Shifting Generative AI Landscape

Andy Thurai
Andy Thurai
Vice President and Principal Analyst
Constellation Research

About Andy Thurai Andy Thurai is an accomplished IT executive, strategist, advisor, enterprise architect and evangelist with more than 25 years of experience in executive, technical, and architectural leadership positions at companies such as IBM, Intel, BMC, Nortel, and Oracle. Andy has written more than 100 articles on emerging technology topics for publications such as Forbes, The New Stack, AI World, VentureBeat, DevOps.com, GigaOm and Wired. Andy’s fields of interest and expertise include AIOps, ITOps, Observability, Artificial Intelligence, Machine Learning, Cloud, Edge, and other enterprise software. His strength is selling technology to the CxO audience with a value proposition rather than the usual technology sales pitch. Find more details and samples of Andy’s work on his…...

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In the fast-paced world of generative AI, a new battle is brewing – and this time, it's all about pricing. Let's cut through the hype and examine what's really happening in the market, and more importantly, what it means for your business. Pricing for generative AI APIs, services from Google, Anthropic and OpenAI among others, receiving deep discounts this year and generally trending downward. There are many factors that are contributing to this trend. The reasons include the commoditization of LLM and other generative AI solutions, competitive pressure, procurement negotiation by large enterprises, and failure to gain traction in the market among others.

Here are five key takeaways every CXO needs to understand:

  1. The Great AI Discount Bonanza Remember when generative AI was the hottest ticket in town, commanding premium prices? Those days are fading fast. Major players like Google, Anthropic, and OpenAI are slashing prices faster than a Black Friday sale. But why? It's a perfect storm of commoditization, fierce competition, and large enterprises flexing their procurement muscles.
  2. The Commoditization Conundrum Let's be clear: unless you've got a truly unique offering, your AI model is becoming a commodity. The gap between closed-source leaders and open-source alternatives is narrowing by the day. This means one thing for providers: differentiate or die. For CXOs, it's a buyer's market – but choosing wisely is more crucial than ever.
  3. The Edge Revolution Here's a shocker: enterprises are getting sticker shock when deploying AI models in production. The solution? Cheaper Edge inferencing. By offering smaller, distilled models for edge deployment, providers can dramatically cut costs. Smart CXOs are already exploring this option to make AI economically viable at scale.
  4. The Platform Play The standalone model is dead – long live the platform. Major players like AWS, IBM, and Google are bundling models with governance, security, and compliance features. It's no longer just about the model; it's about the ecosystem. For CXOs, this means evaluating not just the AI, but the entire stack it comes with.
  5. The Vertical Advantage While general-purpose models are locked in a race to the bottom, specialized models for finance (BLOOM) or healthcare (MedPALM) still command a premium. The lesson? In AI, as in business, niches matter. CXOs should be looking at how AI can solve industry-specific problems, not just general tasks.

The Bottom Line: The AI pricing landscape is shifting faster than a quantum particle. For providers, the message is clear: cost-cutting alone is a losing game. The real winners will be those who can offer unique value – be it through industry specialization, edge solutions, or comprehensive platforms.

For CXOs, this price war presents both opportunities and pitfalls. Yes, AI is becoming more affordable, but choosing based on price alone is short-sighted. The real questions to ask are:

  • How well does this AI solution integrate with our existing systems?
  • Can it scale to edge deployment for cost-effective production use?
  • Does it offer the governance and compliance features we need?
  • Is it solving our specific industry challenges, or just offering generic capabilities?

Remember, in the world of AI, today's bargain could be tomorrow's technical debt. The smartest move isn't just to buy cheap – it's to buy smart. Look for providers who are innovating beyond the model, offering comprehensive solutions that align with your long-term strategy.

As the dust settles on this price war, one thing is clear: AI is no longer just a novelty – it's becoming a utility. And like any utility, the winners will be those who can offer reliability, scalability, and value beyond the basic service.

So, CXOs, are you ready to navigate the new AI landscape? The game has changed, and the stakes have never been higher. It's time to look beyond the price tag and focus on the true value AI can bring to your organization. The future belongs to those who can harness AI not just as a tool, but as a transformative force in their industry. Are you ready to lead the charge?

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Big software deals closing on AWS Marketplace, rival efforts

Big software deals closing on AWS Marketplace, rival efforts

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Enterprise software giants have spent heavily on sales teams, channel strategies and cross-selling playbooks, but it increasingly looks like sales are going to run through AWS Marketplace and similar efforts from other cloud giants.

This week featured a round of enterprise heavy hitters all reporting earnings at once, but a trend that's easy to overlook is the growing importance of cloud marketplaces.

Salesforce Brian Millham, President and Chief Operating Officer, said during the company's second quarter earnings conference call: "Our channel diversification has big upside for us. AWS Marketplace is a driver going forward. Three of our top 10 deals went through the marketplace."

Meanwhile, CrowdStrike CEO George Kurtz said a customer doubled spend on its Falcon platform via AWS Marketplace.

"Through Falcon Flex, this customer accelerated consolidation. They contracted for every Falcon module displacing seven technologies. And through the AWS Marketplace, their spend with CrowdStrike will grow from $2.2 million in ARR to more than $5 million in ARR over the subscription," said Kurtz.

This post first appeared in the Constellation Insight newsletter, which features bespoke content weekly and is brought to you by Hitachi Vantara.

CrowdStrike sees AWS Marketplace and Google Cloud's marketplace as a more frictionless way to sell software. CrowdStrike is that fastest growing Google Cloud vendor in its marketplace.

Kurtz said that selling software through cloud marketplaces makes sense since "customers of all sizes are increasingly looking to utilize their committed hyperscaler spend."

For good measure, Nutanix also noted it was landing deals via marketplaces on Microsoft Azure and AWS. Rajiv Ramaswami, CEO of Nutanix, said the company landed significant wins for its Nutanix Cloud Clusters or NC2 via marketplaces.

Ramaswami said one customer was already committed to Microsoft Azure and purchased Nutanix licenses via the Azure marketplace. Nutanix saw similar deals via AWS Marketplace.

What is notable from these examples isn't that sales went through marketplaces as much as big deals ran through them. The enterprise software sales playbook typically revolves around complicated contracts, negotiations, and friction due to lawyers, salespeople, project leaders and procurement departments.

Given the possibilities, it is not surprising that enterprise software players such as ServiceNow, Informatica, Snowflake, Databricks and MongoDB are hooking up with AWS Marketplace.

I'd rank the hyperscale cloud marketplace trends as another disruptive thing facing enterprise software--as if there aren't enough already. To recap:

The numbers behind AWS Marketplace are hard to ignore for enterprise software vendors. AWS has more than 5,000 sellers across more than 70 categories. Google Cloud offers more than 1,700 SaaS and API products. Azure Marketplace covers 19 product categories.

In July at the AWS Analyst Forum in New York, I had a briefing on AWS Marketplace with Karthik Balakrishnan, GM, AWS Marketplace Core.

Key takeaways from the conversation were the following:

  • AWS Marketplace is scaling quickly as vendors realize it's easier to discover products, start small and scale.
  • The ability to consolidate invoices, charges, and contracts on one platform is appealing.
  • AWS can leverage Amazon's know-how in frictionless commerce.
  • And procurement departments are fans of marketplaces due to standard contracts, easier expense tracking and efficient processes.

The win for enterprise vendors is also clear: Marketplaces from cloud giants give them more opportunities to land and expand. There is also something to be said for using standard contracts on the vendor side too and potentially fewer sales headcount.

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Welldoc Chief AI Officer Anand Iyer on AI, data and healthcare transformation

Welldoc Chief AI Officer Anand Iyer on AI, data and healthcare transformation

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Artificial intelligence in all of its forms--not just generative AI--is going to transform healthcare, but the sector needs to be judicious about how it integrates AI, machine learning, deep learning and generative AI to lower costs and improve patient outcomes.

That broad takeaway was delivered by Anand Iyer, Chief AI Officer at Welldoc, in a DisrupTV interview. Iyer will be a speaker at Constellation Research's AI Forum Sept. 23 in New York.

Here are the takeaways from the Iyer chat with Constellation Research CEO Ray Wang.

Healthcare's intersection with technology and AI. Iyer said rising costs for healthcare and worsening outcomes are driving the need for innovation and technologies that can improve care and lower costs. Iyer said:

"Healthcare is becoming very expensive at the individual level, at the corporate level, and certainly at the macroeconomic level. It's such a large portion of the entire country's GDP. At a high level, healthcare is looking to do two simple things. Innovate. And move the continuum to focus efforts on management and prevention. Can I use data insights? Can I use modeling? Can I use the vast data from sensors to focus the attention on prevention? There are also inefficiencies throughout the healthcare systems. I think AI has the ability to actually have your cake and eat it too."

The noise around AI and machine learning vs. generative AI. Iyer explained:

"There's so much excitement, which is a very positive thing. But with excitement, of course, comes the misunderstanding of AI. AI is oftentimes synonymous with generative AI. AI is actually a much bigger thing. And it starts with what we call the rules-based engine. So, teach a machine to do what a human would otherwise do, and that can be accomplished with a simple set of rules or complex set of rules. There's even the gradation of the complexity of a rules engine. But the pluses of those types of AI approaches, of course, is that they're traceable. For a given rule, the output is known. And by the way, the regulatory agencies love that since they can trace a patient safety all the way back to a set of rules.

The next level of AI is using machine learning so is not fixed anymore. You're feeding data to an algorithm and it is adapting and changing. It's optimizing itself for different conditions, situations and patients. After that it is deep learning and that works well on large data sets, neural network models and then generative AI where it comes back with new content.

I think the reality is all four of these forms of AI, not just generative AI work their way into healthcare."

AI risk assessment in healthcare. Iyer said healthcare organizations need to integrate AI based on risk and intent. There's efficiency and then there's outcomes and risk. There are low risk categories like prevention and education and high-risk areas like mediation dosing. "You have to make sure you have the controls, the safety and the traceability to evidence-based guidelines," said Iyer.

Will AI replace a doctor? Iyer said:

"People ask us all the time, will AI replace a doctor? Hell no, absolutely not. But a doctor who uses AI may very well replace one who doesn't. The analogy that comes to my mind is when you look up in the nighttime sky and you see a point of light, you look up and say, 'oh, it's a star.' The more astute will say it's a planet. But then you look at that same point of light through the Webb telescope, and you see seven galaxies. The Webb telescope is to the astronomer, what AI and digital health is to the doctor. It lets the doctor see things that can't be seen by the naked eye alone. It lets them look deeper than what they can see in a five- or 10-minute office visit."

"There's no blame here. Especially primary care that's the front line for everything. Doctors are being bombarded and in many cases the evidence-based guidelines are changing rapidly and you can't keep up. Patients want the guidance so they don't want AI to be the doctor. But if I could have something that helps my doctor understand what's actually happening with me personally then AI is a transformation agent."

Simply put, Iyer is betting that AI can be like turn-by-turn instructions on Google Maps for physicians.

Personal electronic health records and data sharing. Today, patient records are locked into systems. "At the end of the day if I'm generating all this data as the patient I own the data," said Iyer, who noted that patients will want precise guidance, but also contribute to a larger model.

"I think the future is going to be one where there's going to be more collaboration with sharing data--anonymized of course and protected," he said. "Within those constraints, there's so much we can do by merging data sets."

 

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PC upgrade cycle to be driven by AI, but calling timing has been difficult

PC upgrade cycle to be driven by AI, but calling timing has been difficult

Larry Dignan
Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Personal computers powered by artificial intelligence haven't surged ahead just yet, but demand appears to be strong enough to spur an upgrade cycle. That's a key takeaway from earnings results from Best Buy, Dell and Hewlett-Packard.

During Best Buy's second quarter earnings call, CEO Corie Barry said the company saw solid growth in tablets, computing and services, but those gains were offset by other categories.

"In Q2, we believe the growth in laptop sales continued to be largely driven by customers’ desire to replace and upgrade their products. The performance of Copilot+ in the quarter was in line with our expectations, but at this early point, a small part of the total revenue," said Barry. "We believe we are just at the beginning of the impact of AI on tech innovation and customer demand. For example, the June introduction of the Copilot+ laptops was one of the first launches with an important AI capability. In addition, Apple Intelligence has been announced with capabilities and features across devices. We believe AI inspired capabilities and innovation will continue to spread across categories and devices over the next few years."

PC industry's big dream: AI enabled PCs spur upgrade cycle

Barry added that Copilot+ PCs have higher price points but create a halo effect for PC upgrades overall. She added that PC upgrades will be driven more by evolution than revolution. "We've been really clear in saying we never expected everyone to be lined up at the door waiting for their AI devices. It's more that this continues to proliferate across screens," she said.

In other words, there is definitely an upgrade cycle looming for PCs bought during the COVID-19 pandemic. It remains to be seen how much AI drives those upgrades.

HP's fiscal third quarter results also featured a heavy dose of Copilot+ PC chatter. HP CEO Enrique Lores said the company saw good demand for its PC unit with a "strong recovery" in commercial PCs.

Lores said:

"In the AI PC category, we are charging ahead. Our next-gen AI PCs are empowering everyone from knowledge workers to data scientists to unlock the power of AI. In May, we launched our first generation using the latest Qualcomm processor. As the world's thinnest next-gen AI PCs with the longest battery life, they are made for mobility. And in July, we introduced a new premium model powered by the latest AMD processor. It is the most powerful AI PC in the industry with up to 55 TOPS of NPU performance. It delivers personalized experiences like real-time translation, personal communication coaching, and quick professional video creation and to help protect against AI-assisted cyber-attacks."

Lores also noted that HP's AI Studio workstation is designed for data scientists and AI developers. Going forward, HP said it expects commercial PC strength with consumer market weakness. "We had said that we expected sales to be around 10% during the second half and we think we're going to be slightly above that number. So, they are performing well. Where we really are also focused on what we call next-generation AI PCs that we have just started to launch," said Lores. "We expect next-generation AI PCs to represent around 50% of shipments in 2027, three years after launch, and they drive an average selling price increase between 5% and 10%."

As for Dell Technologies, the company said its PC unit saw "modest commercial PC demand growth in the quarter with healthy operating profitability."

Dell Technologies said that it expects PC revenue growth in the second half in the year, led by the fourth quarter. Over time, PC upgrades will be driven by the long-term impacts of AI.

Jeff Clarke, Chief Operating Officer of Dell Technologies, said: 

"We remain optimistic about the refresh. I think it's reflected in our guidance that we think the refresh is shifting more towards the end of the year than we thought, maybe at the middle of the year. The refresh is heading towards end of '24 into '25. What's important about that is, as the refresh takes longer it snaps back faster because the Windows 10 end of life date. We have an aging install base of machine bought during the Covid era all mounting to be refreshed with exciting new products built around AI. More AI applications are coming. Calling the timing has been difficult. 

Applications to help productivity with end users is around the corner. And if you think about the extension of AI up to the edge, and what inferencing will be done on the edge on PCs that opportunity is immense as well. When you think about running these small language models with larger memory footprints on the edge your PC will do amazing things."

My take: For the next 12 months, AI PCs will get folks interested in upgrading. I can't necessarily figure out the value proposition for Copilot+ PCs yet, but if you have to upgrade (and many of us do) there is something to be said for future proofing.

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