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. ...
Five9 said it will acquire Acqueon, a revenue execution company, to round out its Intelligent CX Platform.
The company is aiming to be "the orchestration engine for every interaction across the entire customer journey, including marketing, e-commerce, sales and customer service."
Five9 CEO Mike Burkland said the plan is to leverage Acqueon to combine customer preferences with omnichannel outreach. The data from Acqueon will also bolster Five9's Genius AI Suite. Five9 also fleshed out its Genius AI Suite with Five9 AI Knowledge.
Separately, Five9 reported a second quarter net loss of $12.8 billion, or 17 cents a share, on revenue of $252.1 million, up 13% from a year ago. Non-GAAP second quarter earnings were 52 cents a share, 8 cents a share better than Wall Street estimates.
As for the outlook, Five9 projected third quarter revenue between $254.5 million and $255.5 million with non-GAAP earnings of 57 cents a share to 59 cents a share. For 2024, Five9 is projecting revenue of $1.013 billion and $1.017 billion with non-GAAP earnings of $2.25 a share to $2.29 a share.
For the third quarter, Wall Street was looking for revenue of $267.2 million. For 2024, Wall Street was looking for revenue of $1.06 billion. "As we look to the remainder of the year, we are reducing our annual revenue guidance by 3.8%, reflecting recent bookings trends and the uncertain economic conditions," said Burkland.
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. ...
Enterprises are beginning to leverage data centers for generative AI workloads, but it's more of a progression in conjunction with hybrid cloud deployments.
That's one of the high-level takeaways from recent earnings from Equinix and Digital Realty, which have a broad footprint of co-location facilities used by cloud service providers as well as enterprises.
Constellation Research analyst Holger Mueller said:
"AI is moving workloads to the cloud and Equinix and Digital Realty benefit from that demand. We are a critical juncture though, as the next generation of AI requires liquid cooling and there is substantial CAPEX needed. When looking at the cloud growth rates of the top 3 - and their dozen or so liquid cooled data centers - they are doing better than the co-location vendors. We will see in the next quarter where the workloads go. It is clear that the next-gen of AI computing architecture will also follow the rules of data gravity - so critical amounts of data will determine where the AI workloads - and with that revenue will flow."
Speaking on Equinix's second quarter earnings call, CEO Adaire Fox-Martin outlined how AI workloads--training and inference--will work out for the company.
"When I think about our demand and the customer needs, it is actually much broader than the AI portfolio. Many of our customers have made a very significant commitment to hybrid and to multi-cloud. And as customers become more at ease with cloud as a technology paradigm, we can see many more workload-based decisions beginning to occur," said Fox-Martin.
He added that short-term demand is coming from cloud service providers using Equinix's xScale platform. These are mostly model training workloads today, but inference will be a big market too, said Fox-Martin.
"Many CIOs, like in the early days of cloud, are looking to ensure they have an AI strategy. We are beginning to see enterprise training and a funnel as we look at customers evolving from proof-of-concept into working production systems," said Fox-Martin.
Equinix is seeing strong backlog for AI workloads as well as strength in the enterprise mid-market retail business. "We absolutely have AI-ready data centers ready to take workloads," said Fox-Martin. "We are working with many of our CIOs to support their AI strategy."
Digital Realty Trust last month on its second quarter earnings call outlined a top customer list that was heavy on cloud service providers and social media companies. JPMorgan Chase was one of the few named enterprises on the list.
Andrew Power, CEO of Digital Realty Trust, said "demand for data center capacity remains as strong as we've ever seen" and noted that the company has "a robust land bank and shell capacity that could support 3 gigawatts plus of incremental development."
It's not hard to figure out who is gobbling up Digital Realty Trust data centers based on its top 10 customers.
Power said the company is seeing strong demand from digital transformation, cloud and AI workloads. Power said:
"Traditional data centers were already being pushed to their limits on demand for cloud and digital transformation. Whereas demand for AI-oriented data center infrastructure is being accommodated in upgraded suites in our existing facilities and in newly built facilities. These AI workloads are taking place on specialized hardware with massive parallel processing capabilities and lighting fast data transfer speeds.
Fortunately, Digital Realty's modular data center design can accommodate these evolving requirements."
The biggest wild cards for this data center boom are power, construction, easements and a concentration of facilities in one area like Northern Virginia, said Power, who added sustainability concerns are critical too.
Principal Analyst and Founder
Constellation Research
R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg.
Short Bio
R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...
Former Vice President and Principal Analyst
Constellation Research
Steve Wilson is former VP and Principal Analyst at Constellation Research, leading the business theme Digital Safety and Privacy. His coverage includes digital identity, data protection, data privacy, cryptography, and trust. His advisory services to CIOs, CISOs, CPOs and IT architects include identity product strategy, security practice benchmarking, Privacy by Design (PbD), privacy engineering and Privacy [or Data Protection] Impact Assessments (PIA, DPIA).
Coverage Areas:
- Identity management, frameworks & governance- Digital identity technologies- Privacy by Design
- Big Data; “Big Privacy”- Identity & privacy innovation
Previous experience:
Wilson has worked in ICT innovation, research, development and analysis for over 25 years. With double…...
In the following interview, we're peeling back the curtain on the complex world of content moderation. Hear industry experts from Constellation Research, Tremau, and Cognizant unpack the complexities of content moderation in today's digital age, including the challenges of balancing global regulations with local sensitivities, the rise of content moderation as a service, and the future of trust and safety online.
R "Ray" Wang and Steve Wilson were joined by Kanti Kopalle, VP, Intuitive Operations and Automation at Cognizant, and Louis-Victor de Franssu, Co-Founder of Tremau. Together they explored:
📌 The impact of national sovereignty on content control
📌 The role of technology in addressing content moderation challenges, and
📌 The importance of global approaches to trust and safety.
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. ...
Under the Palantir and Microsoft partnership, the two companies will offer an integrated suite that combines Microsoft LLMs with Palantir AIP within Azure's government and classified cloud environments.
Palantir will deploy its Foundry, Gotham, Apollo and AI offerings within Microsoft Azure Government and Azure Government Secret and Top Secret clouds. Palantir will also be an early adopter of Azure OpenAI Service in Microsoft's Secret and Top Secret environments.
According to the companies the combined offering will be able to build out AIP use cases across the defense and intelligence industries. Shyam Sankar, CTO of Palantir, said the company is the first industry partner to deploy Microsoft Azure OpenAI Service in classified environments.
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. ...
Box said it has acquired Alphamoon Technology in a move that will enable it to combine large language models (LLMs) and document processing technology to its platform.
The purchase complements Box's recent move to acquire Crooze. Box is building out its Box Intelligent Content Management platform to use AI to automate document-related tasks and extract metadata from business content.
Box said Alphamoon Technology will complement its Intelligent Document Processing with the ability to use optical character recognition (OCR) to understand complex documents, extract metadata and integrate third party LLMs securely. Alphamoon Technology can read and automate the processes attached to invoices, deeds and receipts.
Alphamoon Technology will also be integrated with external applications via Box's partnership with Salesforce.
Constellation Research analyst Liz Miller said the Box acquisition of Alphamoon Technology makes a lot of sense. She said:
"This is a smart move by Box, an application that has long been part of the content supply chain, often straddling the gaps between content management systems designed for enterprise content storage and use and those content management systems built for experience centric applications including digital asset management.
Adding this capacity to quickly (and at scale) process documents and extract data from them adds a new intelligence stream to transform a trove of documents into a stream of intelligence and insight. This is a move we have seen from other asset, content and document players as the worlds of CMS and ECMS align and, in some cases, converge. The question (and test) for Box will be how they take the next step: will they stay isolated as a repository for these assets and documents or will they engineer smarter pathways to send this data outside their walls?"
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. ...
HubSpot reported better-than-expected second quarter results as customers of the CRM vendor decided to consolidate on its unified platform.
The company reported a second quarter net loss of $14.4 million, or 28 cents a share, on revenue of $637.2 million, up 20% from a year ago. Non-GAAP second quarter earnings were $1.94 a share. The company improved non-GAAP operating margins in the quarter to 17.2% from 14.5% a year ago.
Wall Street was expecting HubSpot to report second quarter earnings of $1.64 a share on revenue of $619 million. HubSpot was reportedly a buyout target for Google Cloud, but talks broke down.
Speaking on an earnings conference call, HubSpot CEO Yamini Rangan said customers are buying multiple hubs and leveraging the common data platform for insights. "We're going to build best-in-class engagement hubs, but most importantly, we're going to build a platform that unifies data insights across all of those hubs," she said. "If I were to point to one thing that we're seeing in the last few quarters, it is the multi hub momentum."
Rangan said HubSpot had multi-hub wins for marketing, sales and service as well as content. "Our customers acquired a bunch of point solutions, and they are struggling to integrate all of those data points into actionable insights and to control the cost, and they're looking for much better ways to be able to get all of that information into a single platform," said Rangan.
In addition, HubSpot layers commerce data, transaction data and payments data into its CRM platform.
HubSpot's earnings are notable given an uncertain macro environment. Rangan said customers are slowing to make decisions and using committees to approve purchases. Sales cycles are now longer.
However, HubSpot is winning wallet share. "When we talk to customers even when they are not ready to make a decision it's mostly not now for HubSpot and not a no," said Rangan.
Constellation Research analyst Liz Miller said:
“What Hubspot proves, time and again, is that easy wins the day. The reality is that establishing a hub for engagement across Sales, Service and Marketing functions can be exceedingly difficult…painful in fact. One minute you are deploying a point solution, the next you have given rise to a frankenstack. Hubspot is easy to navigate, easy to acquire, easy to adopt and easy to integrate and use. Hubspot no longer meet your needs? Hubspot makes it easy to transition while still leaving the door open to return and possibly expand. With a vibrant community of excited users, the Hubspot-vibe is one of success and positive growth. Customers are happy to consolidate around something that just works for their business and stage of growth.”
As for the outlook, HubSpot said its third quarter revenue will be between $646 million to $647 million with non-GAAP earnings between $1.89 a share to $1.91 a share.
For 2024, HubSpot is projecting revenue between $2.567 billion and $2.573 billion. Non-GAAP earnings will be between $7.64 a share to $7.70 a share.
Vice President and Principal Analyst
Constellation Research
Martin Schneider has had a unique career that has spanned both analyst and marketing practitioner roles, focused on high technology and related industries. The unifying factor has always been both a keen analysis of go-to-market trends, while also having achieved success as a marketing leader.
Schneider started his career as a journalist covering B2B technologies, and quickly transitioned into a leading analyst covering application software for the 451 Group in NYC, where he specialized in CRM, marketing automation, and business intelligence/analytics technologies. After analyzing various go-to-market strategies of dozens of technology vendors, Schneider made the move to the vendor side, where he led successful go-to-market teams for several startups and established tech providers,…...
The Copilot is what you would expect: taking the most relevant buying signals — intent spikes, key hires and personnel moves, insights from our partner ecosystem, and the B2B company and contact data ZoomInfo has been known for - and pushing that insight to sellers. These alerts can be shared across multiple channels, allowing teams to quickly triage emerging opportunities and act decisively on high-quality intent signals.
The Copilot can be used by marketing teams as well. According to ZoomInfo marketers can access a ranked and prioritized list of the companies and buyers in-market, based on the high volume of signals analyzed and prioritized by ZoomInfo Copilot’s AI every day. The gen AI capabilities allow for typical Gen AI use cases for sellers: account and opportunity summaries, suggested accounts to engage that might be overlooked, etc.
The new Copilot integrates with Salesforce and Hubspot, and can link to other CRM systems as well - but the integration with Gong is eyebrow raising on a few levels. The combination of call records and other interaction data meshed with ZoomInfo’s large data set - attacked by AI - can offer up even more timely recommendations, prioritized outreach plans, uncover buying committee members that might be present on calls but NOT in the CRM, etc.
As go-to-market teams look to be more data-centric, and leverage AI, the good news is that a lot of revenue platform tools are coalescing to create a type of Customer Data Value chain, breaking down the silos (so you don’t have to!) to get at a richer, wider set of customer data in order to show value through AI.
We are getting to a tipping point, where AI is both so embedded in common go-to-market tools, and the need to stay competitive are both so high that nearly all B2B firms must be at least dipping their toes in the water in terms of AI and creating far more expansive customer views. Again, the good news is the “heavy lifting” to get to a Customer Data Value Chain model is becoming less and less arduous.
Of course, with all AI tools, building out an internal usage policy and governance team is essential. But the implementation side of things is becoming less of a burden, with more impetus to act rather than sit on the wayside in strategy, rather than action mode.
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. ...
Fortinet appears to be setting itself up to be more of a rival to Palo Alto Networks with the acquisitions of Next DLP and Lacework as well as better-than-expected second quarter results.
Ahead of its second quarter results, Fortinet announced the acquisition of Next DLP, which is focused on insider risk and data protection. Fortinet said the purchase of Next DLP will improve its position in the standalone enterprise data lost prevention (DLP) market and complement its endpoint and secure access service edge (SASE) businesses.
In addition, Fortinet completed its purchase of Lacework, a cloud-native application protection platform (CNAPP) provider. Fortinet plans to integrate Lacework with its Fortinet Security Fabric.
Here's how the technologies fit into the Fortinet stack.
Ultimately, Fortinet is piecing together a broad cybersecurity platform that covers secure networking, unified SASE and AI-driven SecOps. In other words, Fortinet's billings trend highlight how it'll look more like Palo Alto Networks.
Speaking on Fortinet's second quarter earnings conference call, CEO Ken Xie said:
"We continue to build our own SASE delivery infrastructure, including leverage of FortiGate technologies, providing us with a competitive long-term cost advantage. We acquired Next DLP, a next-generation cloud-native SaaS data protection platform, extending from endpoint to cloud. This will allow us to enter the stand-alone enterprise DLP market as well as the market for the SASE solution."
Xie also said that the Lacework purchase will give it "one of the most comprehensive full-stack cloud security solutions available from a single vendor." The Lacework AI-driven platform will be combined with Fortinet's security platform to cover network, cloud and endpoint.
Constellation Research analyst Chirag Mehta outlined how Fortinet's approach can make it formidable.
"In today’s complex multicloud and hybrid world, where remote work is the norm, traditional perimeter security is becoming obsolete. As more organizations move to the cloud and seek to enhance their security posture, Secure Access Service Edge (SASE) solutions are increasingly in demand. Fortinet is addressing these needs by bolstering its portfolio to meet customer requirements for networking and cloud security.
Fortinet's recent acquisition of Lacework significantly strengthened its cloud security portfolio by incorporating Cloud Native Application Protection Platform (CNAPP) capabilities. This acquisition also provided Fortinet with access to Lacework's advancements in DevSecOps, enhancing its overall security offerings.
Now, with the acquisition of Next DLP, Fortinet has further fortified its SASE portfolio. AI-led Data Loss Prevention (DLP) solutions are crucial as data security remains a significant concern for customers adopting AI technologies. CxOs often struggle with visibility into “shadow AI” systems and the associated data movement, which expands their attack surface. Next DLP's capabilities address these critical issues, ensuring better data security and compliance.
With steady organic growth and strategic acquisitions, Fortinet is positioning itself as a formidable competitor to Palo Alto Networks, which has pursued a similar strategy of acquisitions and organic investments. However, while Palo Alto Networks' push for platformization has raised concerns about vendor lock-in, Fortinet's approach offers customers more flexibility and options, addressing their diverse needs in the evolving cybersecurity landscape."
Fortinet is clearly looking to expand wallet share with large enterprises as well as mid-sized businesses. Fortinet touted a series of 7-figure deal wins due to its ability to use FortiOS to consolidate security functions into one platform.
The company reported second-quarter earnings that were well ahead of expectations. Fortinet reported second-quarter earnings of $379.8 million, or 49 cents a share, on revenue of $1.43 billion, up 11% from a year ago. Non-GAAP earnings were 57 cents a share.
Wall Street was expecting Fortinet to report earnings of 41 cents a share on revenue of $1.4 billion.
As for the outlook, Fortinet projected third quarter revenue between $1.445 billion and $1.505 billion with non-GAAP earnings of 56 cents a share to 58 cents a share. For fiscal 2024, Fortinet projected revenue between $5.8 billion to $5.9 billion with non-GAAP earnings of $2.13 a share to $2.19 a share.
Xie added that Fortinet can expand beyond IT security to operational technology. The general theme for Fortinet is that it has a cybersecurity stack and unified operating system that can make it a platformization player over time.
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. ...
Airbnb CEO Brian Chesky said the generative AI is improving at a rapid rate and boosting efficiency, but its impact on applications will take a lot longer than expected.
Speaking on Airbnb's second quarter earnings call, Chesky was asked about how generative AI is changing experiences.
Chesky said the enthusiasm for generative AI has surged since OpenAI launched ChatGPT in November 2022. "When it was launched you had a feeling that everything was going to change. I think that's still true. But I think one of the things we’ve learned over the last say 18 months or nearly two years since ChatGPT launched is that that’s going to take a lot longer than people think for applications to change," said Chesky.
The Airbnb CEO outlined how the AI boom has revolved around infrastructure as well as large language models. The application layer has largely been untouched by genAI.
"There has been a lot of innovation on the chips. There has been a lot of innovation in the models. We have a lot of new models and there's a prolific rate of improvement in these models.
But if you look at your home screen which of your apps are fundamentally different because of the AI? I think it's just going to take time to develop new AI paradigm. ChatGPT is an interface that could have existed before AI.
All of our paradigms are pre-AI paradigms. There has not been one app that I'm aware of at the top 50 app in the app stores in the United States that is a fundamentally new paradigm and as fundamentally different as multi-touch was to the iPhone in 2008. We need that interface change. So that's one of the things that we're working on."
Chesky said that Airbnb will be more than a search box where you type destination, dates and find a destination. Airbnb's app in the future will be much of a travel concierge that has conversations and can adapt to you.
"It's going to take a number of years to develop this," said Chesky. "It won't be in the next year and it's going to just take a bit more time. A new interface paradigm would allow us to attach new businesses."
An index of the world's communities and planning for a trip end-to-end would enable Airbnb to cross-sell inventory including hotels. "There are opportunities down the road with this new interface," said Chesky.
Airbnb's third quarter outlook was light following second quarter earnings. The company forecast revenue to be between $3.67 billion to $3.7 billion, compared to Wall Street estimates of $3.84 billion. Airbnb said it is seeing slowing demand from US customers and shorter booking times globally.
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. ...
Supermicro said it expects fiscal 2025 revenue between $26 billion and $30 billion, well above expectations, as the company sees the genAI building boom continuing.
The outlook from Supermicro landed along with mixed fourth quarter results. The company reported net income of $353 million, or $5.51 a share. Adjusted fourth quarter earnings were $6.25 a share on revenue of $5.31 billion, up more than 100% from a year ago. Wall Street was looking for earnings of $8.14 a share on $5.3 billion in revenue.
For fiscal 2024, Supermicro reported net income of $1.21 billion, or $20.09 a share, on revenue of $14.94 billion, up 110% from a year ago.
As for the outlook, Supermicro projected first quarter revenue of $6 billion to $7 billion with non-GAAP earnings per share of $6.69 to $8.27. For the fiscal year, Supermicro sees sales of $26 billion to $30 billion.
Charles Liang, CEO of Supermicro, said the company saw component shortages in the fourth quarter. That revenue will shift to the first quarter. The shortages cost Supermicro about $800 million in revenue in the fourth quarter.
Liang said Supermicro is transitioning to become a complete data center provider to address "record demand of new AI infrastructures." He said Supermicro will grow due to rack-scale DLC liquid cooling expertise and its new Datacenter Building Block Solutions. Liang also said it is expanding its footprint in Malaysia and Silicon Valley as well as its supply chain.
Speaking on a conference call, Liang said the company saw component shortages in parts needed for hyperscale data center buildouts.
"Supermicro is powering the largest AI factories around the world today," said Liang, who said the company is targeting 25% to 30% of new global center deployments with liquid cooling.
Supermicro has 5,000 racks in production per month now and more than 2,000 direct liquid cooled racks.
Liang said the company is "seeing a lot of customer engagement" increasingly from enterprises. Supermicro also will have capacity starting in Malaysia and is improving its manufacturing efficiency.
"We will continue to grow with large customers. At the same time, we also continue to enhance our enterprise customer base," said Liang. He noted that Supermicro can gain share in liquid cooling systems and that component shortages were the norm when new technologies are introduced.
Key items of note from the Supermicro fourth quarter:
70% of revenue across enterprise and cloud service providers were next-gen air cooled and direct liquid cooled systems for AI infrastructure.
Shipments may continue to be constrained in the short term by supply chain bottlenecks for key new components.
Supermicro is scaling up production in Malaysia and Taiwan and expanding in Americas and Europe.
61% of revenue in the quarter was attributed to the US.
