| Constellation Research

Nvidia's Q3 stellar as data center revenue up 66%

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. ...

Demand for Nvidia's GPUs shows no sign of slowing down as the company's data center unit delivered fiscal third quarter growth of 66%.

The company reported third quarter net income of $31.91 billion, or $1.30 a share, on revenue of $57 billion, up 66% from a year ago. Non-GAP earnings were $1.30 a share.

Wall Street was expecting non-GAAP earnings of $1.26 a share on revenue of $55.09 billion.

Nvidia CEO Jensen Huang said, "Blackwell sales are off the charts, and cloud GPUs are sold out" and that the "AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries."

The quarter was driven by the data center unit, which delivered third quarter revenue of $51.21 billion, up 66% from a year ago. Compute revenue was $43.03 billion, up 56% from a year ago, and networking, which had revenue growth of 162% to $8.19 billion.

Gaming revenue was up 30%, professional visualization revenue was up 56% and automotive revenue was up 32%.

CFO Collette Kress said the data center unit was powered by AI agent workloads. "Blackwell Ultra is now our leading architecture across all customer categories while our prior Blackwell architecture saw continued strong demand. H20 sales were insignificant in the third quarter," said Kress. "Networking revenue was a record $8.2 billion, up 162% from a year ago from the introduction and continued growth of NVLink compute fabric for GB200 and GB300 systems."

As for the outlook, Nvidia projected fourth quarter revenue of $65 billion, give or take 2%, and gross margins of about 75%.

Constellation Research CEO R “Ray” Wang said on Fox Business that Nvidia is the “poster child” for AI and there’s not a bubble. “There's a trillion dollars of cross sell, joint investments, balance of trade, if you want to call it that. But at the end of the day, these are real profits and quality revenue. And unlike the internet age, what's happening here is, these are real profits being spent on capex,” said Wang.

Speaking on a conference call, Kress said:

"We currently have visibility to a half a trillion dollars in Blackwell and Rubin revenue from the start of this year through the end of calendar year 2026."
"We see the transition to accelerated computing and generative AI across current hyper scale workloads contributing toward roughly half of our long term opportunity. Another growth pillar is the ongoing increase in compute driven by foundation model builders."
"Enterprises broadly are leveraging AI to boost productivity, increase efficiency and reduce cost."
"We announced AI factory and infrastructure projects amounting to an aggregate of 5 million GPUs. This demand spans every market, CSPs, sovereigns, modern builders, enterprises and supercomputing centers."

Kress also addressed concerns that have been circulating on Wall Street. Regarding GPU depreciation, Kress argued that Nvidia's software stack stretches out the lifespan of GPUs due to optimization. She said:

"The long useful life of Nvidia's CUDA GPUs is a significant TCO advantage over accelerators. CUDA's compatibility and our massive installed base extend the life in our systems well beyond their original estimated useful life. For more than two decades, we have optimized the CUDA ecosystem, improving existing workloads, accelerating new ones, and increasing throughput with every software release. Most accelerators without CUDA and Nvidia's time tested and versatile architecture became obsolete within a few years. The A100 GPUs we shipped six years ago, are still running at full utilization today, powered by vastly improved software stack."

She also defended Nvidia's investments in other AI companies that are also customers. "Our strategic investments represent partnerships that grow the Nvidia CUDA AI ecosystem and enable every model to run optimally on Nvidia everywhere. We will continue to invest strategically while preserving our disciplined approach to cash flow management," she said.

Huang took on the AI bubble concerns.

"There's been a lot of talk about an AI bubble. From our vantage point, we see something very different. As a reminder, Nvidia is unlike any other accelerator in that we excel at every phase of AI, from pre training and post training to inference. We are also exceptional at science and engineering simulations, computer graphics, structured data processing to classical machine learning.

The world is going is undergoing three massive platform shifts at once. The first transition is from CPU general purpose computing to GPU accelerated computing. Secondly, AI is also reached a tipping point and is transforming existing applications while enabling entirely new ones for existing applications. The transition to agentic and physical AI will be revolutionary."

Constellation Research analyst Holger Mueller said:

"Nvidia achieved something remarkable in the quarter. Its data center revenue growth matched the profitability growth of overall Nvidia, a rare feat. It shows that Jensen Huang and team - despite all the growth - are still managing cost. The other key takeaway is that networking is now Nvidia second largest business having solidly overtaken former #1 Gaming."

Huang said on the conference call:

"Performance per watt, the efficiency of your architecture is incredibly important. And the efficiency of your architecture can't be brute force. There is no brute forcing about it. Your performance per watt translates directly absolutely directly to your revenues, which is the reason why choosing the right architecture matters so much now. The world doesn't have an excess of anything to squander. And so each generation, our economic contribution will be greater. Our value delivered will be greater but the most important thing is our energy efficiency per watt is going to be extraordinary, every single generation."
"One of the areas that is really misunderstood about the hyperscalers is that the investment on Nvidia GPUs not only improves their scale, speed and cost for -- from general purpose computing."
"Each country will fund their own infrastructure. And you have multiple countries, you have multiple industries. Most of the world's industries haven't really engaged agentic AI yet, and they're about to. All of those different industries are now getting engaged, and they're going to do their own fundraising. And so don't just look at the hyperscalers as a way to build out for the future. You got to look at the world, you got to look at all the different industries and enterprise computing is going to fund their own industry."

nvidia

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Palo Alto Networks acquires Chronosphere for $3.35 billion, reports strong Q1

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Palo Alto Networks reported better-than-expected first quarter results and said the company landed total platform customers. Palo Alto Networks also said it will acquire Chronosphere, an observability platform, for $3.35 billion.

The security company reported first quarter earnings of $334 million, or 47 cents a share, on revenue of $2.5 billion. Non-GAAP earnings for the first quarter were 93 cents a share. Wall Street was expecting Palo Alto Networks to report non-GAAP earnings of 89 cents a share on revenue of $2.46 billion.

Ahead of the earnings, Palo Alto Networks and IBM said they will launch a joint offering focused on quantum-safe security. The companies will combine IBM's Quantum Safe Transformation services with the network-level, cryptographic intelligence from Palo Alto Network's platform.

CEO Nikesh Arora said the first quarter was marked by "significant platformization wins." Palo Alto has been beefing up via acquisitions with Chronosphere as well as CyberArk. Chronosphere has annual recurring revenue of $160 million as of Sept. 30.

Palo Alto Networks buys CyberArk in $25 billion bet on identity

As for the outlook, Palo Alto Networks said revenue will be between $2.57 billion to $2.59 billion, up 14% to 15%. Non-GAAP earnings will be between 93 cents a share to 95 cents a share.

For fiscal 2026, Palo Alto Networks is projecting non-GAAP earnings of $3.80 a share to $3.90 a share with revenue of $10.5 billion to $10.54 billion, up 14%.

On a conference call, Arora said:

"AI is exposing the cracks in our enterprise architectures, which do not have robust security. Patches are incomplete, platforms are missing. There is a plethora of point products across the enterprise. This gap is exactly where attackers thrive. They're testing how far they can exploit the model. They're running prompt injections, jail breaks, model manipulation. And now we're seeing the next phase, autonomous AI agents being leveraged into the attack chain."
"Our messages to customers is clear, real-time visibility and security are essential for infrastructure. This reality necessitates a paradigm shift in the industry."
"Quantum computing has seen significant innovation over the last year. We're getting more and more optimistic on the arrival of quantum and expect it to be commercialized by 2029. As is widely known, quantum computing has the ability to break current encryption across technology stacks. Enterprises have less than 5 years to get their states to quantum readiness. There is a fear that some nation-states will have quantum compute capability sooner than 2029."

Data to Decisions Digital Safety, Privacy & Cybersecurity Innovation & Product-led Growth Future of Work Tech Optimization Next-Generation Customer Experience AI GenerativeAI ML Machine Learning LLMs Agentic AI Analytics Automation Disruptive Technology cybersecurity Chief Information Officer Chief Information Security Officer Chief Privacy Officer Chief AI Officer Chief Experience Officer

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Target cuts deal with OpenAI as it plans customer experience overhaul

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Target's comeback plan revolves around improving customer experience, plowing more money into capital expenditures and technology partnerships with the likes of OpenAI.

The retailer's third quarter results were mixed as the company beat earnings estimates, missed on revenue and narrowed its outlook. Target's third quarter same store sales were down 2.7% from a year ago.

Michael Fiddelke, Target Chief Operating Officer, will become CEO and he spent much of the company's third quarter earnings call talking about experience improvements. "We need to offer a more consistently elevated experience across our stores and digital platforms," he said. "And we need to more fully use technology to improve our speed, guest experience and efficiency throughout the business."

Target gets new CEO, continuity in tech, AI strategy

Target cut 1,800 jobs or 8% of its workforce in a move that was aimed at simplifying the company's structure and becoming more agile, said Fiddelke, who also sees technology as a way to improve merchandising at stores.

The turnaround plans for Target revolve around new AI-driven tools as well as an extra $1 billion in capital expenditures to improve the experience in stores. Target sees 2026 capital spending at about $5 billion.

Here's a look at Target's plan to leverage technology to improve experiences.

Merchandising. Target has equipped its teams with AI-driven consumer insights. "Our merchants now have real-time access to advanced data from what is currently trending on social media to which products and styles are resonating with consumers at Target and across the industry today, to what future trends our guests are most likely to care about, helping our team forecast needs, anticipate trends and buy both smarter and faster," said Fiddelke.

Trend tracking. Target recently launched Target Trend Brain, an internal platform that uses genAI to help teams identify and react to emerging trends and predict what's ahead.

Fiddelke added that Target is using synthetic audiences, AI-driven models to simulate consumer segments, to preview how groups will respond to campaigns and products before they launch.

Improving experiences. "Both in stores and digital, a great guest experience means a lot of things, but it starts with a warm, friendly and helpful team. In stores, we're making changes to give our team members more time to focus on what matters most, spending time helping our guests," said Fiddelke. "Through enhanced digital tools, we're reducing time devoted to backroom tasks through more efficient truck unloading and stocking. Every hour we save is being reinvested to allow more guest interaction with a focus on friendliness and service."

Target has also launched a new genAI powered gift finder on the web site and app. The goal is to use technology to ask questions to help guests narrow down choices.

Inventory. Fiddelke said Target is investing in machine learning to optimize inventory processes to improve in-stocks. In the third quarter, Target improved the on-shelf availability of its top 5,000 items by more than 150 basis points compared to a year ago.

The OpenAI partnership. Fiddelke said Target will build ChatGPT in its apps to curate conversational shopping experiences. Customers will tell the app what they're trying to do and OpenAI will make personalized recommendations. "Through this partnership, we expect to be one of the first retailers on OpenAI platforms to offer the purchase of multiple items in a single transaction, offer fresh food products on the platform and the ability to choose drive up and pickup fulfillment options in addition to the conventional shipping options offered by others," said Fiddelke.

Target's customer experience turnaround is a work in progress. The company said an investor day March 3 will lay out the broader strategy.

Data to Decisions Matrix Commerce Next-Generation Customer Experience Innovation & Product-led Growth B2B B2C CX Customer Experience EX Employee Experience business Marketing eCommerce Supply Chain Growth Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP Leadership finance Social Customer Service Content Management Collaboration M&A Enterprise Service AI Analytics Automation Machine Learning Generative AI Chief Information Officer Chief Customer Officer Chief Data Officer Chief Digital Officer Chief Executive Officer Chief Financial Officer Chief Growth Officer Chief Marketing Officer Chief Product Officer Chief Revenue Officer Chief Technology Officer Chief Supply Chain Officer

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Adobe acquires Semrush in $1.9 billion deal

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Adobe said it will acquire Semrush in a deal valued at $1.9 billion as the company plans to meld search engine optimization and generative engine optimization in its marketing stack.

The deal values Semrush at $12 a share.

Adobe has been adding brand visibility tools into its marketing platform as well Adobe Experience Manager, Adobe Analytics and Adobe Brand Concierge. Enterprises are well versed in search engine optimization and need to optimized for large language models.

For marketing chiefs, maintaining visibility in LLMs is critical given the models are becoming the interface for consumers looking to make purchase decisions.

According to Adobe and Semrush, the companies will look to provide a holistic view into how brands are performing across multiple channels.

“With Semrush, we're unlocking GEO for marketers as a new growth channel alongside their SEO, driving more visibility, customer engagement and conversions across the ecosystem," said Anil Chakravarthy, president of Adobe’s Digital Experience Business.

For 2025, Semrush was projecting revenue between $443.5 million and $445.5 million, up 18% from a year ago. Semrush CEO Bill Wagner said during the company's third quarter earnings report that LLMs are additive to search engines. Semrush has pivoted to targeting enterprise customers.

"The search landscape is shape-shifting before our eyes, and we're giving marketers the power to have a full picture of their visibility, act quickly and improve their position to win," said Wagner. "AI search isn’t replacing the SEO opportunity; it’s compounding it."

Data to Decisions Marketing Transformation Matrix Commerce Next-Generation Customer Experience adobe Chief Information Officer Chief Marketing Officer

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Workday acquires Pipedream, launches midmarket focused Workday GO

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Workday said it will acquire Pipedream, an integration platform for AI agents that features more than 3,000 pre-built connectors. The acquisition complements the purchases of Sana and Flowise as Workday builds out its AI agent infrastructure.

The purchase, outlined at Workday Rising EMEA, lands along with a set of Workday announcements. For instance, Workday launched Workday GO, which provides a HR, payroll and financials suite for midsized businesses.

Workday's purchase of Pipedream is part of the company's plan to build an AI agent ecosystem and become a platform that can orchestrate and manage its own AI agents as well as third party agents.

Pipedream has more than 3,000 pre-built connectors to enterprise apps such as Asana, HubSpot and Atlassian applications. Pipedream has more than 5,000 customers. Workday's plan is to combine Pipedream, Sana and Flowise to create an end-to-end AI agent platform. "To deliver on the vision of creating the future of work front end built on Sana, Workday needs connectors and more agents. That is what Pipedream delivers, and it is good to see Workday working on making its radically different vision than traditional HCM a little more tangible," said Constellation Research analyst Holger Mueller.

Terms of the deal weren't disclosed.

At Workday Rising EMEA, the company also announced the following:

Workday GO, an offering designed to target midsized enterprises. Workday GO aims to simplify and combine HR and financial applications in one unified package. Workday also rolled out Workday GO Global Payroll, a partner network and a deployment AI assistant to go along with the launch.
Workday launched a sovereign cloud for EU that designed to keep the company's HR and finance applications in country along with customer data.
A partnership with Google Cloud BigQuery to provide zero-copy access into Workday Data Cloud.

Data to Decisions Future of Work Tech Optimization workday AI Analytics Automation CX EX Employee Experience HCM Machine Learning ML SaaS PaaS Cloud Digital Transformation Enterprise Software Enterprise IT Leadership HR Chief Information Officer Chief Customer Officer Chief People Officer Chief Human Resources Officer

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Intuit, OpenAI forge integration pact: Why it could be a $100 million win win

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Intuit and OpenAI announced a multi-year $100 million contract that will integrate ChatGPT with Intuit TurboTax, Credit Karma, QuickBooks and Mailchimp. Intuit will also expand its use of OpenAI models in its genAI operating system called GenOS for use with its AI agents.

The partnership is a win for OpenAI in that it will expose ChatGPT's integrations to Intuit's 100 million users. OpenAI outlined its plans to leverage ChatGPT as a front-door to multiple applications with an initial focus on consumer apps, but including business software. For its part, Intuit can expose its platform to ChatGPT's 800 million consumer and business users.

Under the terms of the deal:

ChatGPT users will be able to take financial actions via Intuit applications directly within the ChatGPT experience.
ChatGPT users often ask financial questions and now can be connected with Intuit's platform and features.
Intuit's AI-driven expert platform will also be available within ChatGPT.
With permission, Intuit can execute personalized financial actions within ChatGPT for mortgages, taxes and loans. Customers can also schedule time with Intuit's local tax experts.
The Intuit-OpenAI partnership also covers businesses for queries about revenue, profitability and accounting.

Intuit CEO Sasan Goodarzi said the partnership will combine "Intuit's proprietary financial data, credit models and AI platform capabilities with OpenAI's scale and frontier models."

For Fidji Simo, CEO of Applications at OpenAI, the Intuit deal will be a good proof point for the AI company's overall application strategy. OpenAI can also expand its footprint at Intuit, which at last check leveraged at least 15 different models to deliver its experience. Intuit also had 2 million customers on its business platform interacting with AI agents just a few months after a July launch.

Intuit has been scaling its AI efforts and has been ahead of both the data and AI curves.

At Intuit's investor day in September, Goodarzi outlined the company's AI strategy. He said:

"We believe that every SaaS company, anybody that makes software is either going to get disrupted or they're going to be the disruptors. And that's because of what's possible with AI. We believe that SaaS players must become the system of intelligence, which means you have to be great at data, data models, data ingestion and AI capabilities to ultimately architect learning systems that learn from customers and deliver the experiences that they are looking for, which means business logic, workflows and the app layer will completely get disrupted."

The partnership with OpenAI is part of Intuit's plan to be a disruptor and meet customers--current and prospective--where they are. Goodarzi outlined the following:

Intuit is combining with AI and human intelligence (HI) via its expert network. "Whatever you want to engage with the platform on our data, AI and human capabilities can deliver that experience," said Goodarzi. "That is our system of intelligence. That is our strategy."
"The 3 bets are: shifting and accelerating, delivering done-for-you experiences. Marketing is done-for-you. Customer management is done-for-you. Cash flow management is done-for-you. Payroll is done-for-you. Your books are done-for-you. Your accounting is done-for-you. Your taxes are done-for-you, all of which never has a dead end because it's AI plus HI, with the massive amount of data we have and the capabilities to ingest data. That's the done-for-you experiences across the entire platform," he said.
Money is everything. "People don't do taxes because they love taxes. They want the money. Businesses follow their passion, but cash flow matters. And so we're accelerating all of our investments around money, helping you get immediate access to your refund, helping you with how to grow your refund, helping you with how to grow your savings," said Goodarzi.
Long-tail data. "To win in the era of AI, data matters. And I'm talking about long tail of data. When you see here that we have 625,000 data points per business or over 70,000 data points for consumers," said Goodarzi. "Data is our advantage. We have incredible data, but more importantly, we have built data services that can ingest the data from anywhere."

Data to Decisions Next-Generation Customer Experience Innovation & Product-led Growth Future of Work Tech Optimization Digital Safety, Privacy & Cybersecurity openai ML Machine Learning LLMs Agentic AI Generative AI Robotics AI Analytics Automation Quantum Computing Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain Leadership VR Chief Information Officer Chief Executive Officer Chief Technology Officer Chief AI Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Product Officer

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Anthropic, Microsoft Azure, Nvidia ink $30 billion compute pact

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Anthropic will continue to diversify its cloud infrastructure for its Claude workloads with an agreement to purchase $30 billion in Azure compute. In addition, Nvidia will invest up to $10 billion in Anthropic and Microsoft can invest up to $5 billion.

The latest deal for Anthropic, which also expands its Claude model distribution via distribution in Microsoft Foundry. Customers of Microsoft Foundry will get access to Anthropic's Claude Sonnet 4.5, Claude Opus 4.1, and Claude Haiku 4.5. For Anthropic, its Azure deal means Claude is the only top model on the big three cloud hyperscale cloud providers.

Microsoft announced the Anthropic and Nvidia deal as it kicked off its Ignite conference, where it launched Agent 365 and a parade of AI agents along with data fabric updates.

Anthropic has expanded its infrastructure of late and now has deals to build its own data centers and agreements with the big three cloud hyperscalers.

This latest agreement with Anthropic and Microsoft along with Nvidia highlights the circular economy that dominates AI. Anthropic will buy Nvidia GPUs via Microsoft Azure, which will expand model choices with an expanded deal with the LLM provider. In addition, Microsoft and Nvidia will invest in Anthropic. Amazon and Google are already Anthropic investors.

According to the companies, Anthropic and Nvidia will collaborate on design and engineering to optimize price performance. Anthropic has expanded its compute with custom processors from AWS and Google Cloud. Those deals could mean Nvidia takes a back seat over time. Now Nvidia is in the mix going forward. Anthropic said its initial commitment of one gigawatt of capacity with Nvidia Grace Blackwell and Vera Rubin.

Data to Decisions nvidia Microsoft Big Data Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer

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Google launches Gemini 3, Google Antigravity, generative UI features

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Google launched Gemini 3, its latest model, across its Gemini app, search services, Gemini API, AI Studio and Google Cloud's Vertex AI and Gemini Enterprise. The company also highlighted how Gemini 3 can provide answers with a generative visual user interface.

Gemini 3 has better performance and capabilities compared to Gemini 2.5 Pro. For instance, Gemini 3 scores well ahead of its predecessor on benchmarks such as humanity's last exam, visual reasoning puzzles, scientific knowledge and coding.

In addition, Google launched Google Antigravity, a developer environment for MacOS, Windows and Linux. Google Antigravity is an effort to "push the frontiers of how the model and the IDE can work together," said Koray Kavukcuoglu, CTO of Google DeepMind and Chief AI Architect at Google, on a briefing.

Kavukcuoglu said Google Antigravity aims to do the following:

Offer a dedicated agent interface that give developers the ability to use autonomous agents that can operate through the code editor, terminal or browser.
It can build an application from a single prompt, create subtasks and then execute.
Antigravity creates progress reports, task and verify work inside Chrome. It will also present a walkthrough of how the final product works.
Antigravity will be in public preview and available on Mac, Windows and Linux.

Combined with Gemini 3, Antigravity can "use these models to learn, build and plan anything they want to do."

While Google Antigravity appeals to enterprises and developers, the big takeaway from the Gemini 3 launch is that the Google can deliver new models at scale across its platforms all at once. The Gemini app now has more than 650 million users per month and Gemini has more than 13 million developers.

The main theme from Google isn't just how Gemini 3 performs against benchmark, but its ability to make its answers accessible. Tulsee Doshi, Senior Director of Product Management, Gemini at Google DeepMind, said "Gemini 3 is responding with a level and depth and nuance we haven't seen before" because it can seamlessly transform information from multiple formats.

Doshi also said Google will launch Gemini 3 Deep Think, its enhanced reasoning model to safety testers before broad availability with Google AI Ultra subscribers. The goal for Google is to ensure Gemini 3 evolves from an answering tool to a partner that can help you "learn a new skill, build a creative project or just plan your life."

Here's what stood out for Gemini 3.

Visual Layout. In the Google Labs, Gemini 3 can spin up visual layouts with its answers. If you type in a question like how you plan a three-day trip to Rome, you'll get good UI design instead of just text. Gemini 3 can create interactive widgets, options to go on different scenarios and images, tables and text.

Dynamic View. Gemini 3 can use its coding ability to create interactive experiences on the fly. "When we talk about multi-modality, it's not just about how Gemini 3 can understand input, it's also how it can output things in entirely new ways," said Josh Woodward, VP, Google Labs, Gemini and AI Studio. Dynamic View will also be in Google Labs to collect feedback.

Gemini Agent, which is a feature that can take a question and break down a plan. For instance, you can ask Gemini Agent to control your inbox, and cluster tasks and messages. "We think it's our first step to a true generalist agent that will be able to work across your different Google products," said Woodward.

Most folks will wind up experiencing Gemini 3 in AI Mode search. Google executives said the goal is to be able to ask natural language nuanced questions without knowing keywords. You'll be able to ask about pictures. Google's AI Mode will be able to route to models based on difficulty.

Constellation Research analyst Holger Mueller said:

"Google keeps innovating fast with Gemini 3 shipping with better reasoning and better coding. Google is also making Gemini 3 available across the Google offerings from search to Vertex AI either immediately or in the near future. Google heavily leverages its lead in multimodal AI and Gemini shows that. Users and tasks seamlessly flow between different modalalities. Google also released its agentic framework Antigravity for developers – with the agent running more autonomously than ever before. Google continues its lead as a multimodal reasoning and coding model with Gemini 3."

For enterprises, Google Cloud cited a wide range of Gemini 3 customers including Box, Cursor, Figma, Shopify and Thomson Reuters.

Data to Decisions Future of Work Next-Generation Customer Experience Google Chief Information Officer

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Microsoft launches Agent 365, a parade of AI agents at Ignite 2025

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Microsoft launched Agent 365, which is designed to be the control plane for native and third party AI agents, as the company aims to be a horizontal as well as vertical play. The other key theme is that Microsoft is arguing that the best way to incorporate AI agents into your business is to extend the infrastructure you already have.

At Ignite 2025, Microsoft positioned itself as a cure for AI agent sprawl, governance and security. In a blog post, President, Business & Industry Copilot at Microsoft Charles LaManna said the company is trying to solve an enterprise challenge: "How to manage and govern agents responsibly and at scale, without rebuilding the trusted systems they rely on."

LaManna argued that the best way to manage AI agents is the same way you manage people including the systems you're familiar with.

This theme is common among enterprise software vendors, which are adding Model Context Protocol (MCP) servers at a rapid clip and making the case that their platform can manage their native agents as well as third party digital workers. Microsoft's core advantage is that it doesn't have to convince enterprises that it can play the horizontal as well as the vertical and function-specific game.

Agent management and governance has been a big blocker for AI agent deployments at scale. Agent 365 is available through Microsoft's Frontier program, which gives customers early access to AI innovation.

According to Microsoft, Agent 365 does the following:

Customers can secure, deploy and control AI agents across Microsoft platforms, open source frameworks and third party tools.
Agent 365 will be an enabler across multiple Microsoft applications ranging from Word and Excel to Dynamics 365, Defender, Entra and Purview.
Microsoft is provided unified observability across AI agent fleets via telemetry data, dashboards and alerts. IT leaders will be able to track every agent being built, used and bought.
Agent 365 includes five core functions: Registry, Access Control, Visualization, Interop and Security.

Microsoft is leveraging its ecosystem to ensure Agent 365 can manage all agents including those from Adobe, Databricks, ServiceNow and SAP to name a few.

Agent 365 can be enabled in the Microsoft 365 Admin Center.

Constellation Research CEO R "Ray" Wang said:

"Customers seek a place to manage their agents and often start with the vendor with the largest footprint in their tech landscape. Agent 365 gives Microsoft users a place to start the process of registering, managing, securing, and orchestrating their agents. As organizations mature in their use of agents across end to end processes, they will then move to a cross-platform, multi-agentic model."

Agent 365 is clearly the headliner at Ignite, but Microsoft's Book of News is packed with database updates including Azure DocumentDB and Azure HorizonDB, a PostgreSQL cloud database now in private preview, Microsoft Dataverse integration across Microsoft Fabric and more. Microsoft Foundry will have a unified catalog of MCP tools to enrich agents. Microsoft also announced Fabric IQ, a unified semantic layer used in Power BI, across its platform. Foundry IQ is a next-gen retrieval augmented generation offering.

Simply put, nearly everything Microsoft announced at Ignite--even secure Edge browser updates, Windows features and .NET app modernization had a hook into AI agents. OK, Microsoft's launch of its next-gen CPU, Cobalt 200, didn't have a direct tie to AI agents, but you get the idea.

If you were to sum up Ignite in three words though it would be agents, agents, agents (preferably in the voice of Jan Brady). Microsoft's AI agents touch everything from personal productivity to process transformation to workforce augmentation.

With Agent 365 as the control plane for agents, it's not surprising that Microsoft unveiled multiple agents across its platform. Microsoft is using Work IQ, its intelligence layer that powers Microsoft 365 Copilots and agents, to scale agents.

The company said Workforce Insights, People and Learning Agents are generally available. The Workforce Insights Agent provides managers with insights into how teams are doing. People Agent is designed to find people in an organization based on role, function or skill. Learning Agent specializes in microlearning, tips and curated courses.

Microsoft's Sales Development Agent, now available in the Frontier program, indicates where the company's AI agent strategy is headed. Sales Development Agent is autonomous and will search for, qualify and engage leads. The agent will also research prospects, create personalized outreach and follow up with the ability to hand off to a human.

Constellation Research saw a demo of Sales Development Agent and it was clear that it could alleviate multiple sales pain points.

Here's Microsoft's kitchen sink of agents launched at Ignite.

AI business and productivity agents powered by Work IQ

Word Agent: Organizes complex information into clear documents such strategic plans and policy briefs.
Excel Agent: Turns data into charts, summaries, and insights using built-in formulas and logic.
PowerPoint Agent: Builds presentations with storytelling and visual structure with conversational interface.
Sales Development Agent: A fully autonomous sales agent that will research, qualify, and engage leads to drive revenue growth.
Workforce Insights Agent: Gives leaders and managers comprehensive real-time insights into their team across roles, tenure, and location to help make data-driven workforce decisions.
People Agent: Helps users find people in their organization based on role, function, or skill and offers suggestions on how to connect with colleagues.
Learning Agent: Delivers personalized microlearning experiences, tailored tips, and curated courses to help employees build role-specific and AI skills.

IT, admin and security agents across Microsoft 365

Teams Admin Agent: Automates and streamlines administrative tasks in the Microsoft Teams admin center, such as meeting monitoring and user provisioning.
SharePoint Admin Agent: Uses AI-driven insights and automation in the SharePoint admin center.
Change Review Agent (in Intune): Analyzes change requests in context, checking for risks, conflicts, and compliance before deployment.
Policy Configuration Agent (in Intune): Accelerates policy creation by capturing intent from uploaded documents or natural language requirements and mapping them to recommended settings.
Device Offboarding Agent (in Intune): Uses activity signals to suggest which devices should be removed and streamlines offboarding.
Conditional Access Optimization Agent (in Entra): Ensures the right protections are applied to the right users.
Identity Risk Management Agent (in Entra): Investigates and remediates risky users with intelligent insights and recommendations.
App Lifecycle Management Agent (in Entra): Automates discovery, onboarding, monitoring, and remediation of apps across the environment.
Access Review Agent (in Entra): Streamlines user access and permissions reviews and quickly acts on recommendations with AI-powered insights.
Data Security Posture Agent (in Purview): Helps admins proactively manage risk by discovering sensitive content, assessing posture gaps and improving policy hygiene.
Data Security Alert Triage Agent (in Purview): Enables analysts to triage, prioritize, remediate critical alerts and automate incident response.
Threat Hunting Agent (in Defender): Orchestrates full threat-hunting sessions through natural language, allowing analysts to ask questions and receive summarized answers with underlying KQL queries.

To help build these agents, Microsoft added a series of new tools in Microsoft Copilot Studio including:

Agent evaluations, automated tests to measure performance across predefined scenarios and criteria. Admins and builders will have the ability to compare agent performance.
Computer use to enable agents to automate tasks across apps and websites.
Real-time monitoring during agent runs.
Agents built in Copilot Studio will each get an Entra Agent ID.
Agents created in Microsoft 365 will be able to create files and access context from Teams meetings, calendar data, directory information, OneNote and shared mailboxes.

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Zoho One gets new UX, moves closer to business operating system vision

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Zoho One, a suite of 50 applications available for $37 a month, is getting a new user interface that integrates the business software buffet into one platform.

Instead of using Zoho One's applications individually--75,000 customers on average use 22 applications--Zoho is pulling them into one interface leveraging context, data and AI.

The new interface sets up Zoho One to be more of a platform for businesses. Zoho Evangelist Raju Vegesna said the new interface makes it clear to customers that they "are not licensing apps with Zoho One. They are licensing peace of mind."

According to Vegesna, who provided a demo of the new Zoho One interface, users can pull in application functionality and features on one screen without worrying about switching software.

"What if we can take all of these applications and make them behave like a single application, where the context becomes the king?" said Vegesna. "Of course, these are not restricted to Zoho applications. Users can bring in any third-party applications in here, because we also support single sign-on. You can plug in a third-party application and make it behave like a first-party application."

Indeed, the unification of experience, integration and intelligence does get Zoho One closer to Zoho's business operating system vision. From here, Zoho can continue to add intelligence to Zoho One.

Here's what you need to know.

Zoho One UX

Apps in Zoho One are grouped into Spaces across the top toolbar including Personal, which includes apps unique to the user such as productivity software, Organization, which has company-wide communication, and Department, functions such as HR, Marketing and Finance.

Spaces can be customized with automated actions and workflows.

Zoho also is aiming to provide the user access to everything you need to know on one screen. UX features include:

Action Panel, which surfaces upcoming meetings, unread messages and emails and tasks in one view with easy navigation.
Dashboards and Boards, which consolidates data from all connected apps and third-party systems in one location via widgets. Customers can build custom dashboards from specific apps.
The addition of Vani, a visual-first intelligent virtual space for brainstorming and planning.

Integrations

Zoho One is natively integrated with Zoho apps and third party software. Zoho One also uses the Zoho platform for security features including smart offboarding, device management and encryption key support.

Key integration features include:

Monitoring via an integrations panel where users can create integration flows and monitor usage.
Unified Portal, a custom space where users can consolidate all of their application-specific portals from Zoho and third parties.
Integrations for support tasks such as domain verifications.
Outcome-based integrations for workflows that require multiple steps and apps. Zoho One has a Smart Offboarding tool that handles department transfers, manages device data and takes care of user application data from one screen.

Intelligence and context

Zoho One includes Zia, Zoho's AI assistant, available throughout the interface with the ability to aggregate and provide context across platforms such as Google Workspace. The federated intelligence is designed to break down data silos, speed up decisions and improve productivity.

"We are embedding Zia contextually so that user does not even know that they are using AI here," said Vegesna.

Other features include:

Zia Hubs, a content management system, has its own space in Zoho One across workflows that feature Zoho Sign and recorded Zoho Meetings conversations. Data automatically goes to Zia Hubs so they can be surfaced in Zia Search.
Ask Zia is available throughout Zoho One from the bottom toolbar.

Constellation Research's take

Here are my thoughts on Zoho One's UX.

Although crowded in spots, Zoho One's applications are all pulled into tabs and the integration of the platform is a plus. Zoho is likely to see more usage across applications and Zia, which could emerge as the primary navigation feature.

For power users, the new interface for Zoho One is going to be a win. What remains to be seen is whether users that are used to just a few Zoho applications become overwhelmed.

One thing is clear, the new interface for Zoho One is just the start and the next few installments are going to be worth watching. It's possible that other software vendors follow suit in deconstructing individual apps and pulling them into one interface.

You can expect Zoho to leverage Zia and smart workflows to bring applications, data and AI together into one package. Zoho is likely to deliver more value to users with the combined package of Zoho One, which was already a great deal at $37 a month.

Constellation Research analyst Liz Miller said:

"Businesses of all sizes and scale are struggling to battle the complexity and chaos of fragmented technology that results in inefficiency and subpar experiences. Opinionated, intentional and holistically integrated platforms don’t just transform how technology can be focused on delivering expected outputs that drive growth but increasingly, can be set to the task of optimizing the business outcomes everyone from the individual contributor to the executive strategist expects."

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Zoho One gets new UX, moves closer to business operating system vision