Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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Informatica is planning on riding digital transformation, which is still a work in progress for enterprises, a need to integrate data across vendors, clouds and on-premises and generative AI in 2024.

The data management and governance company hit its stride in the fourth quarter with strong results. Informatica CEO Amit Walia said the company is benefiting from customers that are getting their data houses in order as well as a vendor agnostic approach. Walia said:

"Customer spending more than $1 million in subscription ARR increased 17% year-over-year to 240 customers. We had a record number of customers spending more than $5 million in subscription ARR, which grew 57% year-over-year. We pride ourselves on being the Switzerland of data and have accelerated ecosystem co-selling with Microsoft Azure, AWS, Google Cloud, Snowflake and Databricks and announced a new strategic partnership with MongoDB."

As enterprises focus more on data platforms to fuel digital transformation, automation and generative AI plans, Informatica stands to gain. Informatica does appear to be at an inflection point and topped the high-end of its guidance for the fourth quarter and year.

In the fourth quarter, Informatica reported net income of $64.26 million, or 21 cents a share, on revenue of $445.18 million. The company has been migrating customers from licensing to a cloud subscription model, but still has a sizable on-premises installed base.

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For 2023, Informatica reported a net loss of $125.3 million on revenue of $1.59 billion. Informatica has also been able to pay down its debt ahead of schedule and is now under a 2x leverage ratio.

Informatica also passed the $1 billion mark in subscription annual recurring revenue for the fourth quarter and year. Cloud subscription ARR in the fourth quarter was up 37% from a year ago to $617 million. Informatica also said it processed 86 trillion cloud transactions per month in the fourth quarter.

Walia said 75% of new cloud bookings came from new workloads and expansion by customers. Informatica's updates to its platforms, led by its CLAIRE AI, have been coming at a steady cadence. In addition, the company is on track to integrate the data access management tools acquired in the Privatar acquisition.

Informatica, which cited Royal Caribbean, Pella and enGEN as key customer wins in the quarter, said first quarter revenue will be between $375 million to $395 million, up 5.4% from a year ago. Cloud subscription ARR, which is what Wall Street is watching closely, will be up 34.5% in the first quarter. For 2024, Informatica is projecting $1.68 billion to $1.7 billion.

Holger Mueller, Constellation Research analyst, said that Informatica's ability to move to double-digit growth rates for cloud and subscriptions is notable. The company still has to pay down debt and build on its product roadmap. Mueller said:

"Informatica for the first time broke the $1 billion in revenue milestone with software revenue now running at double the size of maintenance and professional service revenue, an improvement over the past. Informatica is more valuable. What is weighing hard on Informatica is interest expense, roughly at 10% of revenue, dragging the vendor into the red, more than doubling losses per share. It will be key for Amit Wallia and team to address this in the coming fiscal year. Informatica needs to keep product innovation and strategic partnerships (a 2023 highlight) going."

Constellation Research analyst Doug Henschen added:

"Informatica hit an important milestone in reaching $500 million in cloud subscription revenue in 2023, representing 50 percent of total subscription revenues. That percentage will only increase as cloud subscriptions continue to drive the company's growth."

Walia said future growth will come from the following key trends:

• Enterprises need a neutral platform that can handle multiple vendors and clouds.
• Digital transformation efforts require modern data stores and integration tools. "Enterprises need to move away from bespoke tactical tools and adapted end-to-end data management platform that treats data strategically to drive digital transformation," said Walia.
• Informatica customers are migrating to the cloud and there are plenty of migrations coming. The company still has $1 billion in on-prem maintenance and self-managed revenue.
• Generative AI is landing Informatica new customers. "There is no Gen AI without data. And for data to have value, it needs core data management such as holistic data, clean data, govern data, accessible data," said Walia.

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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Twilio projected first quarter revenue growth of 2% to 3% to $1.025 billion to $1.035 billion, below expectations of $1.05 billion.

The company also projected non-GAAP earnings of 56 cents a share to 60 cents a share. Wall Street was looking for 55 cents a share.  The outlook came as Twilio reported its fourth quarter earnings. Twilio's results were the first with new CEO Khozema Shipchandler at the helm.

Shipchandler said Twilio is entering 2024 "from a position of strength and the team is focused on further delivering on our customer engagement vision for our customers."

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Twilio's outlook was light, but its fourth quarter results handily topped estimates. The company reported fourth-quarter non-GAAP earnings of 86 cents a share on revenue of $1.08 billion, up 5% from a year ago. Wall Street was looking for earnings for 58 cents a share on revenue of $1.04 billion.

Communications revenue in the fourth quarter was up 5% from a year ago and Segment revenue was up 4%.

For 2023, Twilio reported a net loss of $5.54 a share on revenue of $4.15 billion, up 9% from a year ago. Non-GAAP earnings for the year were $2.45 a share.

Twilio ended the quarter with 305,000 active customer accounts, up from 290,000 a year ago. Dollar-based net expansion rate was 102%, but that was down from 110% a year ago.

According to the company, the Segment unit is being evaluated to "identify the appropriate path forward for improved execution and profitable growth." Segment revenue was $295.2 million for 2023 and $75 million in the fourth quarter.

Segment was a major topic on Twilio's earnings conference call. Analysts were peppering Shipchandler with questions about whether Segment fit. A few key quotes to note from Shipchandler about Segment. 

• "Twilio Segment is not performing at the level it needs to and I've already begun to take a closer look at this business to see how we can deliver improved performance."
• "Over the past five weeks, I've been working with the team to conduct an extensive operational review of Segment, and this work is ongoing. We plan to do a read-out of these results in March at which time I'll be ready to share our findings, path forward, and any changes to Twilio's financial framework as a result."
• "Some of the indicators that we're looking at is sequential bookings, and we did see improvement in Q4, but as we alluded to, it's not exactly where we'd like it to be. And I think just the overall pace of the improvements that we were anticipating and that we would expect of ourselves, they're just kind of not meeting our expectations."
• "I think that we do see a lot of opportunity there in terms of our ability to combine our data offering with our Communications offering. And we've started to launch a handful of products that do exactly that, bring together kind of all of the best capabilities of Twilio within single offerings. You see that today, for example, in our Flex Unify offering, which has been announced relatively recently."

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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Cisco said it will cut 5% of its global workforce in a bid to "realign the organization and enable further investment in key priority areas." The company outlined the restructuring as it reported its second quarter results.

The networking giant reported second quarter revenue of $12.8 billion, down 6% from a year ago, with earnings of 65 cents a share. Non-GAAP earnings were 87 cents a share.

Wall Street was expecting fiscal second quarter earnings of 84 cents a share on revenue of $12.7 billion. The biggest concern going into Cisco's report was the weak demand for networking gear as customers deploy systems that have been purchased.

For the third quarter, Cisco said revenue will be $12.1 billion to $12.3 billion with non-GAAP earnings between 84 cents a share to 86 cents a share. Analysts had expected adjusted earnings of 92 cents a share on $13.09 billion in sales. For fiscal 2024, Cisco said revenue will be between $51.5 billion to $52.5 billion with non-GAAP earnings of $3.68 a share to $3.74 a share.

Cisco said that it will take charges of $800 million for the layoffs and most of the hits will be recognized in the third quarter.

Chuck Robbins, CEO of Cisco, said the second quarter was solid, but the company has to focus its investments on future growth. "Our innovation sits at the center of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organizations," he said.

Robbins said:

"We're seeing a greater degree of caution and scrutiny of deals given a high level of uncertainty. As we discussed last quarter, and subsequently saw in other technology provider results, customers are starting to deploy the elevated levels of products shipped in them in recent quarters. This is taking longer than our initial expectations."

Robbins added that telecom and cable companies are pulling back on spending. He said that customers will take another quarter or two to digest shipments already received. "Our team is also partnering closely with customers to assist with this heightened focus on deployments at Cisco equipment on hand," said Robbins. 

The Cisco CEO said he's optimistic about AI workloads boosting demand, but noted that "we're still in the early stages of AI workloads."

Constellation Research analyst Chirag Mehta said Cisco's future growth is pegged the the acquisition of Splunk, which could close in the third quarter.

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Mehta said:

"With the acquisition of Splunk, Cisco is poised to elevate the cybersecurity landscape, potentially merging their respective portfolio of products, and enhance them with advanced AI capabilities. This strategic move not only amplifies Cisco's commitment to cybersecurity but also paves the way for unparalleled benefits to a vast spectrum of its customers. As networks and security converge, Cisco's focus on cybersecurity will be paramount to unlock sustained growth in an ever-evolving digital landscape."

Cisco's second quarter networking revenue was down 12% from a year ago with security and collaboration up 3% each. Observability revenue was up 16%, but from a smaller base. Services revenue was up 4%.

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Cisco’s results land a few days after Arista Networks reported fourth quarter earnings, which were strong. Arista Networks, which counts Meta Platforms and Microsoft as its largest customers, reported fourth quarter revenue of $1.54 billion, up 21% from the same period last year. Net income was $613.6 billion, or $1.92 a share. Non-GAAP earnings were $2.08 a share.

Arista Networks CEO Jayshree Ullal noted that generative AI will create a networking infrastructure upgrade cycle. “AI at scale needs Ethernet at scale. AI workloads cannot tolerate the delays in the network, because the job can only be completed after all flows are successfully delivered to the GPU clusters. All it takes is one culprit of worst-case link to throttle an entire AI workload,” said Ullal.

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Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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Uber has leveraged its technology stack and data architecture to create a flywheel that can expand into multiple new markets. Uber is data incorporated and likely a glimpse into future business models.

At  Uber's Investor Day, CEO Dara Khosrowshahi and the company's executive team outlined the company's growth plans, a $7 billion buyback and its data flywheel.

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Here are some key takeaways from Uber's 90-minute session with analysts.

Uber's technology stack is its secret sauce. Khosrowshahi said the technology stack is the company's biggest advantage.

"While it may not always be visible to the casual user or investor, this really is our secret sauce. Whether you're ordering a ride or delivering much of the underlying tech and tech enabled operations, identity maps payments, fraud detection, ordering, dispatching, pricing and more. They're all shared across Uber," he said. "In fact, around 75% of our engineering resources are focused on these shared elements. This advantage is also self-reinforcing as the lessons we learn in one business can be applied elsewhere and technical investments we make in one area accrue to the whole platform."

The tech stack and platform drive the datasets that drive AI. Khosrowshahi said Uber's shared architecture and platform drives the data loop that enables it to build predictive models, personalized offers, generative AI assistants and tools that can be used in new markets including advertising, travel, last mile delivery and enterprise.

Disruptive technologies are nice but keep the business goals in front. Khosrowshahi said the company's strategy is simple: "To build best in class products and then amplify them with the power of the platform."

He added that Uber can acquire customers at a lower cost and generate higher customer lifetime values. "We want to bring in new consumers through our mobility and delivery apps and then convert them into Multi Product consumers both within and across segments," said Khosrowshahi.

Data and customer experience drives multi-product usage. Khosrowshahi said that more than a third of Uber users now use multiple products. "The mathematical advantage for Uber lies in the fact that consumers who use multiple products on average spend 3.4 times more than those who don't," he said. The simple truth is that in the end, math wins, and compounding only amplifies the win."

Khosrowshahi said:

"The more products and services we add to the platform, the more data we have and the more opportunities we have to make that particular pitch really compelling for the consumers at the right time. With the right incentives. And with shared identity and payments across all of our apps we can make it super simple, super easy to move from one app to the other, or one service to the other."

Loyalty programs also play into multi-product usage. Uber One now has 19 million members. Those members not only drive the data flywheel, but also spend more--3x more. 

Simply put, frequency matters and Uber's growth depends on using multiple products and membership.

Khosrowshahi said:

"We have a product team that is focused on driving essentially AI driven offers to put in front of consumers. In the morning it might be coffee. In the evening, it might be dinner. If we see you reserve an on-demand trip to an airport we may say you can reserve next time. All of this is going to be driven by AI so we just have more shots on goal than anyone else."

The platform and data strategy also drives the supply side of the equation. The running theme throughout Uber's Investor Day is that it needs to continue to recruit drivers organically on its own platform on multiple services. "The platform gives us a much more cost-efficient way of finding drivers than through external channels," said Khosrowshahi. "So, for example in the US, converting an existing courier into a driver is about half the cost of finding a new driver through third parties. This is a huge opportunity. In fact today 20% of first time drivers in the US have come from a courier pool."

This organic recruitment across multiple services is critical since Uber is expanding into healthcare transportation as well as a bunch of other areas.

Andrew MacDonald, Senior Vice President of Uber's Mobility and Business Operations, said the driver experience on the platform is critical. "Our tech teams have shipped hundreds of improvements to improve the driver experience," said MacDonald.

Uber's expansion into advertising is just starting. "The power of our advertising platform stems from what Uber users tell us every time they use our apps where they want to go and what they want to get. And as a result, we've got the unique ability to bring together both location based and shopping data with closed loop attribution across our mobility and delivery channels for both performance and brand campaigns," said Khosrowshahi.

In fact, Uber is combining consumer signals with its AI to automate offers on the fly.

Khosrowshahi said Uber will follow the data to balance advertising load and customer experience. "We run a certain percentage of our audience with no ads on a long-term cohort basis. And then we compare that audience behavior to audiences who are receiving ads and we make sure that the experience there isn't significantly different," he said. "You don't want to build an ad business that penalizes the customer experience."

Continuous improvement on costs is the mantra. Uber CFO Prashanth Mahendra-Rajah said data, technology and the platform can be leveraged to drive costs out of the business. He said:

"There's a term in the Uber lexicon called operating cost structure or OCS. OCS is a collection of capturing all costs between revenue and EBITDA. There is a team within Uber to  grind out incremental cost efficiencies out of that OCS. When you think of what's in that cost bucket it breaks down into variable and fixed."

Examples of how the OCS team expands margins include implementing technology to optimize routing, incentivizing customers to use different payment options, reducing fraud costs with data and AI.

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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Akamai announced plans to embed cloud computing across its edge network via an initiative called Gecko (Generalized Edge Compute) in a bid to grab AI inferencing, multiplayer gaming, streaming media, analytics and spatial computing workloads.

The company historically has been known as a content delivery network (CDN) provider but has moved into distributed cloud services. Akamai's bet is that cloud and edge networks will converge over time instead of being treated separately.

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For Akamai, the timing for Gecko is right given that more companies want to bring compute and inferencing to where data resides with lower latency. Given Akamai's distributed content delivery network locations, adding a traditional compute stack to the mix makes sense.

Dr. Tom Leighton, CEO of Akamai, said the Gecko initiative builds on top of the Linode acquisition and its existing distributed cloud network. "With Gecko, we’re furthering that vision by combining the computing power of our cloud platform with the proximity and efficiency of the edge, to put workloads closer to users," said Leighton.

On Akamai's earnings conference call, Leighton said:

"Traditional cloud providers support virtual machines and containers in a relatively small number of core data centers. Gecko is designed to extend this capability to our edge PoPs, bringing full stack computing power to hundreds of previously hard-to-reach locations. Deploying our cloud computing capabilities into Akamai's worldwide edge platform will also enable us to take advantage of existing operational tools, processes, and observability, enabling developers to innovate across the entire continuum of compute and providing a consistent experience from centralized cloud to distributed edge."

As part of the Gecko initiative, Akamai outlined a three-phased plan to embed compute in locations underserved by hyperscale cloud providers. The first nine locations for Gecko include Bogotá, Colombia; Denver, Colorado; Houston, Texas; Hamburg, Germany; and Marseille, France.

Akamai added that it has been conducting early trials of Gecko with enterprise customers and identifying use cases.

Here's what you need to know about Akamai's Gecko effort:

• Akamai plans to bring full-stack computing to its edge locations and leverage the networks tools, processes and observability technologies.
• Developers will be able to build applications for the cloud and edge as the networks and compute converge.
• Gecko's network will be global. Akamai said that it has deployed Gecko-architected regions in Hong Kong SAR; Kuala Lumpur, Malaysia; Querétaro, Mexico; and Johannesburg, South Africa. Santiago, Chile is planned to launch by the end of the first quarter.
• Akamai plans to add hundreds of cities to its cloud computing footprint to build beyond its 10 Gecko locations and existing 25 core computing regions.
• The second phase of the Gecko buildout will add containers to those regions. The third phase will include automated workload orchestration and a consistent user experience across core computing regions and the edge.

Leighton said:

"We accomplished what we set out to achieve last year in terms of infrastructure deployment, product development, jumpstarting our partner ecosystem, onboarding the first mission critical apps from some major enterprise customers, and achieving substantial cost savings as we moved our own applications from hyperscalers to the Akamai Connected Cloud."

Leighton said Akamai's cloud computing business is gaining customers in social media and software. Akamai also plans to be its own customer reference. He added:

"We also derived significant cost savings by migrating several of our own applications from hyperscalers to Akamai Connected Cloud. Our bot manager and enterprise application access solutions were among the first to migrate. Together, these products are used by over 1,000 customers and they generate over $300 million in annual revenue for Akamai."

Separately, Akamai reported its first quarter earnings. The company reported fourth-quarter net income of $1.03 a share on revenue of $995 million, up 7% from a year ago. Security and compute revenue was 61% of total revenue in the quarter. Non-GAAP earnings in the quarter were $1.69 a share.

Akamai's cloud compute business revenue in the fourth quarter was $135 million, up 20% from a year ago. Content delivery revenue was $389 million, down 6% from a year ago, amid traffic declines and large customers that were renewing contracts. Security revenue was $471 million, up 18% from a year ago.

For 2023, Akamai reported net income of $3.52 a share ($6.20 a share non-GAAP) on revenue of $3.81 billion, up 5%.

Constellation Research's take

Constellation Research analyst Holger Mueller said:

"If one was wondering why Akamai acquired Linode in 2022 and Guardicore in 2021 – it is clear – cloud and security revenue were 60% of revenue in 2023  and security revenue was almost 50% of Q4 revenue. Akamai's traditional delivery revenue base declined. Akamai manages to cross sell effectively, adding a better platform for digital experiences beyond content delivery. But growth is pedestrian, and Akamai is one of the very few – if not the only vendor I comment on – who has a higher G&A than S&M and R&D. The question is whether Akamai can grow its content delivery business in 2024 or will it have to rely on security and compute. The Akamai vision remains compelling and offers CxOs an experience platform at the edge that can do it all."

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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Shopify is best known for its online commerce platform, but future growth is increasingly coming from offline brick-and-mortar merchants and point-of-sale terminals as well as new channels such as business-to-business companies.

Those takeaways were highlighted on Shopify's fourth quarter conference call. For those keeping score at home, "offline" was mentioned seven times on Shopify's earnings conference call. "Generative AI" was mentioned three times although Shopify Magic, the brand for genAI tools at Shopify, was mentioned six times.

Shopify reported fourth quarter revenue of $2.14 billion, up 24% from a year ago, with net income of $657 million. For 2023, Shopify reported revenue of $7.06 billion with net income of $132 million. For the first quarter, Shopify projected revenue growth of the low 20 percent range.

To keep that growth going, Shopify is looking to grab more of the commerce stack and that means moving offline as well as being the mobile payments and online vendor. Shopify launched new point-of-sale (POS) terminals as well subscriptions for brick-and-mortar merchants. The company is also expanding its enterprise footprint.

As a result, Shopify POS delivered offline revenue of $441 million, up 5x from 2019. Shopify added big brands like Carrier, Nike Strength, Banana Republic Home and others to its customer roster.

Harley Finkelstein, President of Shopify, said on the company's conference call:

"In order to discover new customers and build deeper connections with existing ones, you need to be online, offline and everywhere in between. And this is one of our superpowers, and why merchants of all sizes are coming to Shopify to build their own future. Starting with our off-line channel. Our go-to-market efforts, combined with enhancements to our product offering continue to resonate with more merchants that operate both off-line and online presences."

Finkelstein said Shopify is already the e-commerce platform for many big brands but offline operations were elsewhere. As digitally native brands move to physical stores, Shopify becomes the infrastructure. Other merchants are looking to Shopify to consolidate vendors. The goal for Shopify is to be "the unified commerce operating system for merchants whether they come to us to sell online, offline or anywhere in between."

Similar to the offline retail play, Shopify is looking at B2B merchants so it can connect merchants.

"In 2024, we will continue to focus on growing our merchant base by catering to businesses who conduct only B2B transactions that were differentiated B2B offering," said Finkelstein. "We are building on our commitment to help merchants sell to all of their customers from a single unified commerce platform with upgrades to our B2B offering, including headless B2B storefronts, and support for sales reps in the admin, among others, as we look to establish our B2B offering as a leader in commerce."

Shopify said it plans to build out the offline and B2B efforts and target core verticals. Finkelstein said Shopify's headless commerce platform capabilities, composable commerce and broad software stack is also appealing to enterprises.

Add it up and Shopify's battle is likely with vendors focused on smaller businesses such as Square, Toast and Clover. But as Shopify moves up the stack it'll run into Oracle Micros and NCR Voyix.

More commerce:

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Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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Otter.ai launched Meeting GenAI, a set of tools aimed that mine meetings across multiple platforms to create insights.

The announcement is notable for a few reasons. First, Otter.ai Meeting GenAI can work across multiple collaboration silos such as Microsoft Teams, Google Workspace and Zoom. In addition, Otter.ai's Meeting GenAI play could be a way for enterprises to gauge meeting zeitgeist and form knowledge repositories based on meeting notes and summaries.

The company said Meeting GenAI will be included in its plans ranging from the free Otter Basic plan to the $20 a month per user Otter Business plan.

Meeting GenAI from Otter.ai includes:

• Otter AI Chat across all meetings with the ability to get answers and generate emails and status updates. The big idea behind Meeting GenAI is that it can focus on multiple meetings and leverage past meetings to collect insights from multiple platforms. Otter.ai added that Meeting GenAI will be able to answer questions like what was missed while on vacations. Users will be able to ask questions, generate content and get insights.
• AI Chat in Channels, which will give the ability to chat between Otter AI Chat and team members for alignment. With AI Chat in Channels, Otter.ai is looking to make its assistant a team collaboration tool.
• AI Conversation Summary View, which will identify action items in real time and deliver a narrative summary. The goal with this tool is to eliminate post-meeting confusion while ensuring accountability.

My take

Being able to summarize and transcribe meeting across the enterprise and multiple platforms is a savvy move by Otter.ai because it leans into its biggest advantage—it's vendor and platform agnostic. Tech vendors—and many enterprises—want collaboration on one stack such as Zoom, Google Meet and Teams/Microsoft 365, but the reality is that workers use multiple platforms. The other reality is that we're already overtaxed on meeting so anything I can do to get a cross platform digital twin comes in handy.

I also am an Otter.ai subscriber and it is useful when you have to be in two places at once or two conference calls at same time.

What remains to be seen is whether Otter.ai can convince enterprises that the cross-platform recordings, transcriptions and summaries are worth it. Enterprises are about to become tired of copilot add-ons, costs and overall sprawl. Otter.ai will have to demonstrate returns outside being part of a bundle, but its move to include Meeting GenAI in existing plans is a nice start.

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• Why vendors are talking RPOs, pipelines, pilots instead of generative AI revenue
• Generative AI features starting to launch, next comes potential sticker shock

I will say that some high-level dashboard of all meetings, a word cloud and quick summary could give CEOs and CXOs a quick view of what's happening. The benefits of the new Otter.ai features are also obvious to individual workers. Makes me wonder if we'll all start bringing our own copilots to work.  

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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Datadog continues to land large customers with more than $1 million in annual recurring revenue, but the company's outlook for fiscal 2024 and the first quarter was below expectations.

The company, which features a cloud application monitoring and security platform, delivered a strong fourth quarter. The company had 396 customers with more than $1 million in annual recurring revenue, up from 317 a year ago.

Datadog reported fourth quarter earnings of 15 cents a share, or 44 cents on a non-GAAP basis, on revenue of $589.6 million, up 26% from a year ago. For 2023, Datadog delivered revenue of $2.13 billion, up 27% from a year ago, with net income of 14 cents a share.

That solid performance was overshadowed by its 2024 outlook. Datadog projected non-GAAP earnings per share of $1.38 to $1.44, below estimates of $1.78 a share. Datadog said 2024 revenue will range from $2.55 billion to $2.57 billion compared to estimates of $2.59 billion.

Constellation ShortListâ„¢ Digital Performance Management

The first quarter guidance was also below expectations with non-GAAP earnings of 33 cents a share to 35 cents a share compared to estimates of 39 cents a share. Datadog projected first quarter revenue of $587 million to $591 million compared to estimates of $586.24 million.

Datadog will hold an Investor Day in New York Feb. 15.

Larry Dignan

Editor in Chief of Constellation Insights Constellation Research

About Larry Dignan: Dignan was most recently Celonis Media’s Editor-in-Chief, where he sat at the intersection of media and marketing. He is the former Editor-in-Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in CNET, Knowledge@Wharton, Wall Street Week, Interactive Week, The New York Times, and Financial Planning. He is also an Adjunct Professor at Temple University and a member of the Advisory Board for The Fox Business School's Institute of Business and Information Technology.  Constellation Insights does the following: Cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews, and event coverage of vendors, as well as Constellation Research's community and…...

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The manufacturing industry and its supply chains are being rewired and could ultimately evolve into data-driven signal chains.

Those are some of the takeaways from Raj Badarinath, Chief Marketing & Product Officer at Rootstock.

DisrupTV caught up Badarinath to talk shop. Badarinath has held multiple positions at cloud companies and large enterprise vendors such as PeopleSoft/Oracle, Capgemini and Infosys. Here are the highlights of the conversation.

Disrupting the ERP market. "This is a space--a $57 billion industry--that's begging for disruption," said Badarinath. "There's a market demand because the typical manufacturer put their ERP system in when (CIOs) had their first-born child and now the kid is graduating and they're still on the same ERP. There's a generational shift here with moving to the cloud."

Badarinath said it makes sense for enterprises to have Rootstock sitting natively on top of the Salesforce platform, which powers manufacturing.

Globalization and the supply chain. Badarinath said globalization had been the theme for 50 years and that's ending now. "Re-globalization is what we're looking at now," said Badarinath. "From a US standpoint, there was a pandemic and the supply chain got stuck. There's distrust in a model where China is the single manufacturing hub for the world. There's a China plus one strategy that's going on and that's rewiring and re-globalizing supply chains."

Badarinath added that every state entity is doubling down on investment in the manufacturing sector because it's the bellwether for GDP growth. "This investment is not in your grandfather's manufacturing. We're talking EV technology, renewables, battery technology," said Badarinath. "In the next five years Western countries will be very different from where we were 5 years ago. Manufacturing is not going back to how the world was 20 or 30 years ago."

• Return on Transformation Investments (RTI)

Manufacturing moving from transactions, automation and transportation to insights and signal intelligence. Badarinath said the data value chain in supply chains and manufacturing is critical.

"There is an interesting split in manufacturing right now. The front end of manufacturing has been digitized. The digitization of the demand side has received investment," said Badarinath. "The supply side is still very people oriented, logistics and moving physical atoms. The bits on the demand side are moving faster. What we try to do is build a decision layer on top of the data, collect the data and create signal intelligence."

Badarinath said when the data is in one place, machine learning, generative AI and AI can be used. "When it comes to structured and predictive analytics manufacturers are looking for real ROI use case. We believe that bringing the signals together and creating a decision platform is the future," he said. "The whole process of bringing demand capacity and supply to one platform is what we're calling the signal chain."

AI in manufacturing. Badarinath, who noted that Rootstock's annual conference will spend a lot of time on AI, said the manufacturing industry is methodical and deliberate and AI will be no different. "Manufacturers want to make sure they are looking at all the dimensions before making choices," he said.

Manufacturing's next generation. AI will assume a bigger role in manufacturing because there won't be a choice. Many people with institutional knowledge will be retiring and AI can help bring some of that experience into systems.

Manufacturing will also change because it requires less people due to automation.

"I think manufacturers will have to shift whether they like it or not because markets are changing. ERP will have to be reimagined in the AI era," said Badarinath, who noted that experiential knowledge, historical data and real time signals will all be built in. "We're working with our customers and saying let's build an AI that matters to you. The hype of AI will not work in manufacturing. It has to be real."

Battling giants. Badarinath said Rootstock is battling incumbents and it couldn't be in conversations without being on Salesforce's platform. "People are making decisions on platforms and what platform they trust," he said. "As Salesforce becomes much more well known in the market, the next generation wants something cooler. the idea that we can seamlessly extend the CRM investment into ERP resonates."

Rootstock is starting in the midmarket with plans to go for larger enterprises in the next few years.