Snowflake's Slootman steps down as CEO, technologist Ramaswamy takes over

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Snowflake has a new CEO. The company said Sridhar Ramaswamy will become CEO immediately as Frank Slootman stepped down but remains Chairman of the board.

Ramaswamy (right) had been SVP of AI at Snowflake. Slootman said "there is no better person than Sridhar to lead Snowflake into this next phase of growth and deliver on the opportunity ahead in AI and machine learning."

Previously, Ramaswamy led all of Google's Advertising products, which included search, display and video advertising, analytics, shopping, payments, and travel.

Slootman explained the succession strategy on Snowflake's earnings conference call:

"The Board has run a succession process that wasn't based on arbitrary timeline, but instead, looked for an opportunity to advance the company's mission, well into the future. The arrival of Sridhar Ramaswamy through the acquisition of Neeva last year represented that opportunity.

With the onslaught of generative AI, Snowflake needs a hard-driving technologist to navigate the challenges the new world represents. Sridhar's vision for the future and his proven ability to execute at scale made it clear to us as a Board, he is the right executive at the right time to lead Snowflake."

Ramaswamy added:

"To deliver on the opportunity ahead, we must have clear focus and move even faster to bring innovation on the Snowflake platform to our customers and partners. This will be my focus."

The news overshadowed a strong quarter from Snowflake. Snowflake reported fourth quarter revenue of $774.7 million, up 33% from a year ago, with a net loss of $169.35 million, or 51 cents a share. The non-GAAP fourth quarter earnings per share were 35 cents per share.

Wall Street was expecting Snowflake to report fourth quarter earnings of 18 cents per share on revenue of $760.22 million.

Constellation Research analyst Doug Henschen said Snowflake could be entering a newer slower growth phase.  

For the first quarter, Snowflake said product revenue will be $745 million to $750 million, up 26% to 27% from a year ago. For fiscal 2025, Snowflake projected revenue $3.25 billion, up 22% from a year ago.

Henschen said:

"Frank Slootman joined Snowflake in May 2019 and quickly and spectacularly achieved what he was brought there to do: take the company public. Snowflake's September 2020 IPO raised an impressive $3.4 billion and still stands as the biggest software IPO in history. Now that market conditions have changed, there's a sense that Snowflake's fastest growth years may be behind it and it will require even harder work to maintain what's likely to be moderating growth. I wouldn't be surprised to see Slootman come out of retirement at some future date to take another company public."

CFO Mike Scarpelli said the fourth quarter was more normalized after a challenging year. 

"Holidays make it difficult to discern meaningful consumption trends. In the quarter, younger customers led revenue growth. These accounts are adding new workloads in migrating from legacy vendors. Financial Services and retail were our largest revenue contributors, and we are seeing emerging momentum from the EMEA region and technology vertical.

Customer optimizations returned to a normal level, with eight of our top 10 accounts growing sequentially. We proactively engaged with customers to help them optimize their Snowflake usage and we'll continue to do so. History has shown that optimizations expand our long-term opportunity. We now have 83 customers with trailing 12-month product revenue greater than $5 million, up from 75 in Q3."

Scarpelli noted that Snowflake's outlook accounts for a few moving parts related to storage pricing and product efficiency. 

"We are forecasting increased revenue headwinds associated with product efficiency gains, tiered storage pricing and the expectation that some of our customers will leverage Iceberg Tables for their storage. We are not including potential revenue benefits from these initiatives in our forecast. These changes in our assumption impact our long-term guidance. Internally, we continue to march towards $10 billion in product revenue. Externally, we will not manage expectations to our previous targets until we have more data. We are focused in executing in FY '24 to ensure long-term durable growth."

Scarpelli said that Snowflake is assuming an additional $50 million of GPU related costs in fiscal 2025 and $10 million should flow to product revenue. Snowflake's guidance isn't assuming that product revenue. 

Constellation Research analyst Holger Mueller noted that Snowflake's expenses have been rising. 

"Snowflake had a great year on the top line, but all costs went up – from cost of revenue all the way to operating expenses that topped $3 billion for the first time. The change in the CEO position – not telegraphed before – may or may not have to do with this, but certainly a slightly increased loss per share was not what investors wanted to see. Slootman is now out and with Ramaswamy a more technology focused executive is in charge. Like all data centric vendors, Snowfllake needs address the generative AI trend, and that is something Ramaswamy is probably in a better position to deliver on. Future will tell – starting with Q2."

Ramaswamy said he is focused on executing on Snowflake's current roadmap.

"I've had over 100 conversations with customers over the past year about generative AI in particular. And the product announcements that we've already made, things in private preview, including Snowflake Cortex, which is our managed AI and search layer combined with applications like Document AI for extracting structured data or our Copilot. These have been very well received. Document AI, for example, has hundreds of customers waiting for it to hit GA that are on our waitlist. So, I would say it is a matter of executing to the roadmap that we have already laid out. Cortex will hit public preview soon. Getting this in the hands of our customers, and having them realize value is the top priority. I don't think of this as needing a new strategy."

Data to Decisions snowflake Big Data Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer

Salesforce posts strong Q4, adds dividend, outlook conservative

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Salesforce delivered revenue growth of 11% from a year ago and joined the ranks of tech companies paying dividends.

The company reported fourth quarter earnings of $1.47 per share and non-GAAP earnings of $2.29 per share on revenue of $9.29 billion.

Wall Street was expecting Salesforce to report fourth quarter earnings of $2.27 a share on revenue of $9.22 billion.

For fiscal 2024, Salesforce delivered earnings of $4.20 a share and non-GAAP earnings of $8.22 per share. Annual revenue was $34.86 billion, up 11% from a year ago.

The company also said it will pay a quarterly dividend of 40 cents per share per share of common stock. Salesforce also added $10 billion to its share buyback program.

Salesforce’s earnings land a day after the company said its Einstein Copilot was in public beta to kick off what the company hopes is a subscription upgrade cycle. Einstein Copilot is native across Salesforce applications to answer questions, generate content and automate. Salesforce customers can access Einstein Copilot with an upgrade to Einstein 1 Editions. Einstein Copilot is available in beta for Sales Cloud and Service Cloud with Commerce Cloud and Marketing Cloud available later in 2024. Einstein Copilot for Tableau will launch in the second half of 2024.

• AWS, Salesforce expand partnership with Amazon Bedrock, Salesforce Data Cloud, AWS Marketplace integrations
• Salesforce launches Einstein 1 Platform, enables metadata across platform, Data Cloud
• Salesforce launches Data Cloud Vector Database, Einstein Copilot Search
• CXOs placing bets on AI, analytics, automation going into 2024

CEO Marc Benioff touted Einstein 1, operating margin improvements and said the company is "well positioned to build on our success and capitalize on the massive surge in tech spending expected over the coming years."

CFO Amy Weaver said the company saw a strong close to the fiscal year. In the fourth quarter, Salesforce's integration and analytics products (MuleSoft and Tableau) posted the strongest revenue growth of 21%. Marketing and Commerce Cloud had growth of 7% with Sales, Service and Platform posting revenue growth of 10% to 12%.

As for the outlook, said first quarter revenue will be $9.12 billion to $9.17 billion with non-GAAP earnings per share of $2.37 to $2.39. Fiscal 2025 revenue will be between $37.7 billion and $38 billion with non-GAAP earnings of $9.68 per share and $9.76 per share.

Weaver added that generative AI won't be a material revenue contributor yet. "In terms of the new products, in Data Cloud, we're already seeing this great traction, which is certainly factored in. Some of the GenAI, it's still early, and given that the adoption curve at really our size and scale as a $38 billion company, we're not factoring in material contribution from these new products into our FY25 revenue guidance at this time," she said.

On a conference call with analysts, Benioff said the company will highlight its next-generation AI that will go beyond copilots and delve into Data Cloud. 

He said:

"There is no other time in the history of our industry that that rich data and metadata together in one place is so important, because that is what you're going to need to drive this artificial intelligence. And you're going to see that next week at Trailhead DX as we show you our copilot for our first time and prompt builder for the first time, and data cloud for the first time, and how it works together so that you can get the insights that you need."

Other items from Benioff include:

• "Our deals greater than $10 million, well, they grew nearly 80% year-over-year in fiscal year '24."
• "In Q4 25% of our deals already over $1 million have included Data Cloud. And we've recently added over 1,000 new customers to Data Cloud. We've never seen traction like this of a new product because you can just easily turn on the Data Cloud and it adds huge value to Sales Cloud, it adds huge value to Service Cloud, to Marketing Cloud, to the CDP."
• "All of us can understand the tasks that the Copilot is performing. And I bet a lot of people, even on this call, that a lot of other companies might say they can do this. But I assure you, without the deep integration of the data and the metadata across the entire platform, with the Copilot's deep integration of that data, they cannot do it. They cannot do it. I assure you they cannot because they don't have the data and the metadata, which is so critical to making an AI assistant so successful."

 

Data to Decisions Marketing Transformation Next-Generation Customer Experience salesforce Chief Information Officer

PGA Tour eyes spatial computing, new models

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Travis Trembath, VP, Fan Strategy & Experience at the PGA Tour, sees Apple's Vision Pro potentially as the future of golf experiences and engagement with fans.

Speaking at Constellation Research's Ambient Experience in Austin, Trembath detailed PGA Tour's Apple Vision Pro rollout and how it can influence experiences, advertising and gambling.

Constellation Research Ambient Experience: Everything we learned about CX, EX, AI, data | Ambient Experience Summit | AX100 2024 | All AX Leaders

"We're excited about it, but we don't expect it to drive massive engagement yet," said Trembath. "But if I were to step back, close my eyes and picture the future of how people engage with golf I see something similar to what's on the Vision Pro. You might have a leaderboard in front of you, statistics on making a birdie and the ability to click into an experience that's beyond the tee box or on the green."

These experiences would be delivered while watching live, he added. "We're learning about the space and making smart investments," said Trembath. "We see the future potential."

As for the business model, Trembath said spatial computing would expand its sponsorship opportunities and media rights. There are also integrated product offers that would be available.

Gambling is also likely to be a revenue stream for PGA Golf in the future too. "In the sport of golf, the number of bets you can place is literally endless," said Trembath. "It's a commercial opportunity and an opportunity for additional fan engagement."

Spatial computing could also widen the customer base to a younger demographic. Trembath noted that PGA Golf also has a game on Meta Quest for that purpose too.  

• Apple Vision Pro could rev hybrid work, video collaboration
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• Apple's Double Tap gesture on Apple Watch sets up Vision Pro UI handoff

Marketing Transformation Next-Generation Customer Experience Innovation & Product-led Growth Future of Work apple Metaverse Chief Information Officer Chief Marketing Officer

Constellation Research Ambient Experience: Everything we learned about CX, EX, AI, data

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Constellation Research kicked off its Ambient Experience 2024 in Austin and the key theme was the intersection of data, artificial intelligence, digital transformation and employee and customer experiences.

Here's the recap of everything we learned.

Ambient Experience Summit | AX100 2024 | All AX Leaders

AI and data foundations

Generative AI is an immature technology that has put CIOs on the hot seat. Enterprises have to lead with privacy and trust before broad rollouts. "AI should not be used everywhere and some use cases don't apply. You can build it and they won't necessarily come," said Ghalib Kassam, CIO, Los Angeles Times.

AI will be critical to drive personalized and contextual experiences, said Robert Kleinschmidt, Senior Vice President, Marketing & Mil/Aero SBU AirBorn. AirBorn makes connectors and parts for harsh environments. The company is looking to build experiences focused on personas, context and personalization.

To drive these AI experiences, customers will have to gather data attributes across systems and types. Data will also be needed to focus on teams behind projects instead of individual leads. "In B2B, there are five, 10 or more people involved in a project," said Kleinschmidt. "The lead on a project is not a person. There are different journeys for customers, and you need to see the connections between individuals."

The biggest challenge for AI is convincing CEOs that data is the foundation, and you need to spend time and resources on the grunt work, said Kleinschmidt.

Generative AI could be "scary for enterprises and vendors," said Rob Tarkoff, Executive Vice President & GM, CX Applications at Oracle. Why? "As an industry this is the first time where we've had applications that we don't entirely know what they will do," said Tarkoff. "Incorporating new models creates a whole new frontier of prompt engineering. You test against synthetic data, and you run as many models, and you constrain prompt engineering as much as you can. In an enterprise context, you don't have as much margin for error."

Leadership

Anthony Noble, SVP, Chief Strategy Officer at American Tower Corp., said leadership requires building an understanding on how your colleagues contribute to the business and their knowledge bases. "After that you put together teams with different knowledge bases to solve problems." said Noble. "There's a power in learning together once you're past the scary part and understand the opportunities."

Don't get caught up on technologies because the lifespan of digits is much shorter than inspiring people, said Raju Vegesna, Chief Evangelist at Zoho.

Leaders are more influencers than commanders, said Constellation Research analyst Dion Hinchcliffe. "The biggest trend is that leadership has moved away from command and control," said Hinchcliffe. "Leaders are not order givers but influencers. You need employees to solve local problems at scale with innovation and creativity."

B2B customer experiences

The user journey, experience and interface need more attention in B2B companies. In many B2B companies digital UX has been an afterthought. Kimberlee Sinclair, VP of Digital Customer Experience at H.B. Fuller, said her team enabled transformation by melding technology and digital marketing. "We needed dotted lines between the technology and marketing for it to come together," said Sinclair. "Luckily, our CIO is a businessperson and not a technology wonk."

"Customer experience no longer rests with the sales team," said Trane's Portia Mount, Vice President of Marketing at Trane Commercial Americas, Trane Technologies. "Experience is the integration of product, sales and marketing teams if you want transformation."

Continuous upskilling will be required in the manufacturing sector amid generative AI and productivity gains. "How do we help people get smarter and faster?" asked Mount.

High touch doesn't mean a good experience. Chad Meley, CMO of Kinetica, said experience used to hinge on giving your best customers attention. "There's a pivot toward more self-service and meeting customer preferences to how they want to buy," said Meley.

Employee and customer experiences combine

Does employee experience drive customer experience? April Obersteller, Director of Global Experience: Employee Experience + Customer Experience at Woom Bikes, works at a company that puts employee and customer experiences under one leader. "We believe strongly that the customer is at the center and that has shifted to the employee experience as well," said Obersteller.

Bob DelPonte, Senior Vice President of Customer Success and Global Delivery Services at UKG, said he worked with his HR leaders to correlate customer satisfaction and employee engagement. "My lowest engaged team actually has the worst customer satisfaction systems. And so, when people say happy employees, happy customers, I can correlate directly to productivity, engagement and overall satisfaction," he said.

Employee experience needs to reduce friction. John Bollen, CIO at Blackstone Portfolio Companies, said reducing friction for employees across systems is critical to improving customer experiences. "We never call an employee an employee. They were co-star. Co-stars were part of the experience, and they were part of the show. Everyone was part of the show," said Bollen. "We have all these systems, all these different touch points and getting that data into the cloud so that any employee can look up the customer and understand who they are. It's UX and CX in your hand."

Retention is also a key metric behind employee experience efforts. "We're being very intentional, for the first time ever about the employee experience," said Darla Caughey, Director of Employee Experience at Austin Independent School District. "It's not typical to see an employee experience department in a public school district and it is making a difference with retention." Enterprises will need to have AI strategies and use cases to retain and attract employees.

Employee experience is getting focused on key personas. Christy Punch, Senior Mgr., Product Manager Engineering Experience at Liberty Mutual Insurance, said she's focusing on the developer experience at her company. "I've spent the majority of my career focused on employee experience. And so rather than going broader with customer experience, I've actually started to narrow my focus. And now I am focused on the engineering experience, which is more traditionally known in the industry, the developer experience, and that's actually a very hot topic," she said.

 

Marketing Transformation Future of Work Next-Generation Customer Experience Data to Decisions Innovation & Product-led Growth Tech Optimization Digital Safety, Privacy & Cybersecurity ML Machine Learning LLMs Agentic AI Generative AI AI Analytics Automation business Marketing SaaS PaaS IaaS Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP finance Healthcare Customer Service Content Management Collaboration Chief People Officer Chief Information Officer Chief Marketing Officer Chief Digital Officer Chief Data Officer Chief Executive Officer Chief Technology Officer Chief AI Officer Chief Analytics Officer Chief Information Security Officer Chief Product Officer

Zoom reports strong Q4, outlook, sees contact center traction

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Zoom Video Communications reported a better-than-expected fourth quarter, raised its first quarter outlook and said it would buy back $1.5 billion in shares.

The company reported fourth-quarter revenue of $1.15 billion, up 2.6% from a year ago, with net income of $299 million, or 95 cents a share. Non-GAAP earnings for the fourth quarter were $1.42 a share. 

Wall Street was expecting Zoom to report fourth quarter non-GAAP earnings of $1.15 a share on revenue of $1.3 billion.

Zoom expands reach, generative AI use cases with pricing that aims for market share

Zoom said enterprise revenue in the fourth quarter grew nearly 5% as online revenue, typically individuals and small businesses, fell less than 1%.

In prepared remarks, Zoom CEO Eric Yuan said:

"Since its launch only five months ago, we expanded AI Companion to six Zoom products, all included at no additional cost to licensed users. But we are far from done. Our future roadmap for AI is 100% guided by driving customer value. We are hard at work developing new AI capabilities to help customers achieve their unique business objectives and we’ll have more to share in a month at Enterprise Connect."

Yuan added that Zoom's Contact Center suite is beginning to win against incumbents. 

For fiscal 2024, Zoom reported net income of $637.5 million, or $2.07 a share, on revenue of $4.53 billion, up 3.1% from a year ago.

As for the outlook, Zoom said it expects first quarter non-GAAP $1.18 a share to $1.20, compared to estimates of $1.15 a share. Zoom said first quarter sales will be $1.13 billion.

Zoom said it had about 220,400 enterprise customers, up 3.5% from a year ago. Fourth quarter average monthly churn was 3%, down 40 basis points from a year ago. 

Future of Work zoom Chief Information Officer

Workday to buy HiredScore amid mixed Q4

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Workday's delivered fourth-quarter sales that were slightly below expectations, but handily topped its earnings estimates. Separately, Workday said it will buy HiredScore, which specializes in talent orchestration.

The company reported fourth-quarter earnings of $4.42 a share, which includes a $1.1 billion tax benefit. Non-GAAP earnings for the fourth quarter were $1.57 a share on revenue of $1.9 billion, up 17% from a year ago.

Wall Street was looking for fourth quarter earnings of $1.47 a share on revenue of $1.92 billion.

For fiscal 2024, Workday reported revenue of $7.3 billion, up 17% from a year ago. Earnings were $5.21 a share.

Workday's subscription revenue backlog was $20.9 billion in the fourth quarter, up 27% from a year ago. Carl Eschenbach, CEO of Workday, said the company saw "continued momentum with full platform customer wins and expansions within our base." Workday's Eschenbach becomes sole CEO, Bhusri executive chair

As for the outlook, Workday CFO Zane Rowe said the company is reiterating its fiscal 2025 subscription revenue guidance of $7.725 billion to $7.775 billion. Non-GAAP operating margins will be about 24.5% as the company balances investment in the business with profits.

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Rowe said the fourth quarter was solid. On a conference call with analysts, Eschenbach said the company is looking for growth outside of North America.

He said:

"International represents over half of our addressable opportunity yet is 1/4 of our revenues. We're working to change that, and we're seeing early signs of progress. In EMEA, our leadership additions continue to drive improved and more consistent results."

Japan and Australia are also growing markets. 

Regarding HiredScore, Workday said it will combine HiredScore's Talent Orchestration platform with its Talent Management and Skills Cloud. Terms of the deal, which is expected to close in Workday's first fiscal quarter, weren't disclosed.

Eschenbach said the following about the HiredScore deal:

"When you think about the addition of HiredScore, that we just acquired, along with our recruiting platform, our Talent Optimization platform and our candidate engagement platform, it gives us the ability to deliver a full suite for talent acquisition around how we identify talent, how we engage with them, how we source or recruit them and then how we retain them for internal mobility. So I am really confident in our ability to deliver a strong ROI to the recruiting and talent organizations, with us having what I think now is one of the best full platform suites for talent acquisition going forward." 

 

Data to Decisions Future of Work New C-Suite Innovation & Product-led Growth Tech Optimization Marketing Transformation Next-Generation Customer Experience Digital Safety, Privacy & Cybersecurity workday AI ML Machine Learning LLMs Agentic AI Generative AI Analytics Automation B2B B2C CX EX Employee Experience HR HCM business Marketing Metaverse developer SaaS PaaS IaaS Supply Chain Quantum Computing Growth Cloud Digital Transformation Disruptive Technology eCommerce Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP Leadership finance Social Healthcare VR CCaaS UCaaS Customer Service Content Management Collaboration M&A Enterprise Service Customer Experience Chief People Officer Chief Information Officer Chief Executive Officer Chief Data Officer Chief Digital Officer Chief Marketing Officer Chief Customer Officer Chief Human Resources Officer Chief Technology Officer Chief Information Security Officer Chief AI Officer Chief Analytics Officer Chief Product Officer

Mistral AI launches Mistral Large, Mistral Small, Azure distribution

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Mistral AI said it released Mistral Large, a next-gen text generation model that's designed to be on par with OpenAI's ChatGPT, Anthropic's Claude 2 and Google's Gemini Pro. Mistral AI said Mistral Large will be available on Microsoft Azure.

The Mistral Large launch with Azure availability follows AWS' announcement that Mistral AI models would be coming to Amazon Bedrock to join models from AI21 Labs, Anthropic, Cohere, Meta, Stability AI and Amazon. Amazon Bedrock will carry Mistral 7B, Mistral AI's first foundation model, and Mistral 8x7B, which can summarize text, answer questions, and generate code.

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For Mistral AI, Azure and AWS can give the company more distribution for its models, which seem to be advancing almost weekly. Enterprises have been evaluating multiple models including smaller ones that are use case specific. Meanwhile, regulators have been looking into generative AI investments and partnerships such as Microsoft's deal with OpenAI.

Mistral Large is fluent in English, French, Spanish, German and Italian and has a 32K token context window. Mistral AI said it will first bring Mistral Large to Azure, which is most closely associated with OpenAI's ChatGPT. Hyperscalers are racing to offer model choices to enterprises. Mistral Large is also available on Mistral infrastructure La Plateforme in Europe.

Although Mistral Large and the Azure deal will garner the headlines. Mistral AI also said it launched Mistral Small, which is optimized for performance, latency and costs.

Also see: How Generative AI Has Supercharged the Future of Work | Generative AI articles | Why you need a Chief AI Officer | Software development becomes generative AI's flagship use case | Enterprises seeing savings, productivity gains from generative AI | Work in a generative AI world will need critical, creative thinking

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

KKR buys VMware's EUC division from Broadcom for $4 billion

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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KKR said it will buy Broadcom VMware's End-User-Computing (EUC) division in a deal valued at $4 billion. With the move, Broadcom can focus on VMware's business and EUC will become an independent company.

EUC will include Workplace One, a remote access digital workspace, and Horizon, as well as an autonomous workspace emerging roadmap. In a blog post, Shankar Iyer, senior vice president and general manager at Broadcom VMware's EUC division, said KKR will be dedicated to EUC's customer base and keep existing management in place.

During its December earnings conference call, Broadcom said EUC and Carbon Black, which wasn't included in the deal with KKR, has about $2 billion in annual revenue. Broadcom CEO Hock Tan said the EUC and Carbon Black had strong assets. "We’ll find good homes for them because there are a lot of very interested parties who are more than happy to take those assets. And we’ll be very, very thoughtful about where we put those assets eventually, simply because the customers of many of these two assets, many of the customers are also the same customers to the VMware Cloud Foundation," said Tan.

At VMware Explore in August, EUC outlined a series of AI integrations with its Anywhere Workplace platform as well as virtual desktop, endpoint management and security advances. Boeing was also referenced as a VMWare Workspace One customer at scale.

In a statement, KKR Managing Director Bradley Brown said the private equity firm will continue to invest in Workspace One and Horizon as well expand its partner support and go-to-market efforts. The deal is expected to close in 2024.

KKR portfolio companies in technology include BMC, Barracuda aPeoplend Cloudera. EUC rival Citrix was acquired by Vista Equity Partners and Evergreen Coast Capital in 2022 and later merged with Tibco.

With the EUC sale, Broadcom can focus on VMware, which has rattled some customers with its pricing changes.

• VMware mansplains to customers about model changes, subscription pricing, account upheaval
• Dell Technologies to exit commercial agreement with VMware
• Will VMware customers balk as Broadcom transitions them to subscriptions?
• BT150 CXO zeitgeist: AI trust, AI pilots to projects, VMware angst, projects ahead

 

Future of Work vmware Chief Information Officer

With Equifax's cloud transformation at finish line, AI scale comes into focus

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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

Equifax in 2024 will decommission mainframes and data centers in North America as it largely completes a cloud transformation that dates back to 2018. Now Equifax CEO Mark Begor is looking for more product velocity, artificial intelligence capabilities and competitive advantage.

The Atlanta-based giant is best known as a credit reporting agency but has a portfolio of products via an insights engine powered by multiple data stores financial services, mortgage, commercial and residential real estate, auto, healthcare, government and employer services to name a few.

Begor, speaking on Equifax's fourth quarter earnings call noted that cloud-enabled AI using a combination of proprietary models and Google Cloud's Vertex AI will enable the new Equifax.

BT150 Interview: Equifax's Manish Limaye on data architecture, transformation

"We are convinced that our new EFX cloud single data fabric and AI capabilities are delivering new differentiated products faster with better performance and will provide a competitive advantage to Equifax for years to come," said Begor.

Equifax's journey highlights how cloud migration, digital transformation and data architecture are required to move AI efforts ahead. Equifax has also invested in transformation as its mortgage business has suffered due to rising interest rates. Fewer refinancing and home mortgages mean less Equifax data services.

Among the key milestones for Equifax in 2023:

• 70% of Equifax revenue is in the new Equifax Cloud.
• Equifax decommissioned 7 data centers and migrated 37,000 customers to Equifax Cloud.
• Saved more than the targeted $210 million goal.

And in 2024, Equifax plans on the following:

• Completing the North America move to the cloud and migrate all customers to Equifax Cloud.
• Decommissioning mainframes completely as well as remaining North American data centers.
• Progressing with transformation efforts in Europe and Latin America.
• Saving an incremental $90 million a year in 2024.
• And have about 90% of revenue in Equifax Cloud with the majority of new models and scores being built with Equifax AI.

Begor noted that the cloud enabled Equifax has launched more than 100 new products a year for the last four years. In addition, average revenue per new product is up nearly 50% since 2021.

For 2023, Equifax reported net income of $545.3 million on revenue of $5.26 billion, up from $5.12 billion in 2022. The company's divisions include Workforce Solutions, Online Information Solutions, Mortgage Solutions and Financial Marketing Services.

Equifax cloud's journey

In 2021, Equifax outlined Equifax Cloud, a cloud native architecture designed for highly regulated data workloads. The launch of Equifax Cloud took $1.5 billion in investment.

Equifax Cloud was primarily built on Google Cloud, but Equifax in its annual report does cite Amazon Web Services and other vendors used for outsourcing.

According to case studies from Google Cloud and AWS, Equifax uses Google for its cloud data architecture and AWS to host mission critical applications.

Equifax said it built Equifax Cloud because it needed to build something once and then deploy across its markets with customizations that required little engineering.

Manish Limaye SVP, USIS Chief Architect & Head of Data Engineering Equifax, said in an interview at Constellation Research's Connected Enterprise 2023 the Equifax decision to build on Google Cloud had a lot to do with machine learning and AI expertise.

Limaye, a BT150 member, said:

"Equifax is deep into statistical modeling. AI, you knew was going to be big. We were one of the leaders in the explainable AI space. When we partnered with Google, it was more than just what I'd call run of the mill cloud transformation. We wanted a deep partnership with Google beyond Google Cloud into data engineering. We partner with them. We learn from them. They learn from us because we have the most complex data. There's also the value and security of the data."

The company's cloud transformation also had a lot to do with security. Equifax has argued that a distributed cloud architecture reduces the attack surface.

In Sept. 2017, Equifax announced a data breach that exposed 147 million people. The company settled with various regulators for $425 million to help people affected by the breach.

Limay said Equifax vowed to be a security leader after its data breach.

"That security commitment really meant rethinking and reimagining how we look at securing our data given the sensitivity of it. We came up with a proper security control framework and paired it with our cloud native capability. There is an ability to destroy and rebuild data at any time. When you pair security frameworks and cloud together you walk away with a very comprehensive security framework. That control framework gets translated into a series of technical requirements. It's a very rigorous process."

Equifax CFO John Gamble said the company will gain operating leverage in the second half of 2024 due to the cloud migration. "In 2024, cost savings we will generate from decommissioning of North American infrastructure in the second half of '23 will exceed the redundant system and migration costs we are incurring, generating about 30 basis points of margin benefit," said Gamble.

For Begor, Equifax's cloud transformation is also evaluated based on new product releases. Equifax tracks a Vitality index, which is a percentage of revenue in any given year derived from new product releases over the previous three years and current year.

Equifax's multi-cloud approach reshuffles vendors

As Equifax's cloud transformation evolved so did its contracts and core vendors.

Starting in its 2019 annual report, Equifax began showing cloud payments to Google Cloud and AWS. Its 2018 annual report focused on payments to IBM, which was cited as a key vendor.

Equifax also noted that its cloud transformation was also a risk. The company said in its 2019 annual report filed with the Securities and Exchange Commission: "We are transitioning and migrating our data systems from traditional data centers to cloud-based platforms. This initiative will place significant strain on our management, personnel, operations, systems, technical performance and financial resources and internal financial control and reporting function. In addition, many of our existing personnel do not have experience with native cloud-based technologies and, as a result, we have and will continue to hire personnel with such experience. This effort will be time consuming and costly."

Here's the breakdown of Equifax's vendor roster from 2018 to 2023:

2018: Equifax said it had separate agreements with IBM, Tata Consultancy Services, Fidelity Information Services and others to "to outsource portions of our computer data processing operations, applications development, business continuity and recovery services, help desk service and desktop support functions, operation of our voice and data networks, maintenance and related functions and to provide certain other administrative and operational services." Equifax said it paid IBM $49 million in 2018, $40 million and 2017 and $45 million in 2016.

2019: Equifax added Google and Amazon Web Services as core vendors along with IBM and Tata Consultancy Services. Equifax's future minimum contractual obligation to its technology vendors at this point was $296 million. IBM was paid $52 million in 2019. Equifax noted that its payments to technology vendors could vary based on the volume of data processed and "significant new technologies."

The company said it paid Google $14 million in 2019, up from $7 million in 2018. Payments to AWS weren't disclosed.

2020: Equifax had agreements with Google, AWS, IBM, Tata Consultancy Services and others for portions the functions outlined in previous years. Equifax's future minimum contractual obligation to its technology vendors was about $318 million at the start of 2021.

Equifax outsourced mainframe and midrange operations, help desk service, desktop support and network operations to IBM in various regions. IBM was paid $50 million in 2020. By this time, Google started gaining wallet share. In 2020, Google was paid $29 million, more than double its 2019 payment.

2021: Equifax again cited Google, AWS, IBM and Tata Consultancy Services as core vendors with the aggregate minimum contractual obligation remaining of $902.4 million going into 2022.

Of that sum, the minimum contractual obligation to Google was $520 million. In 2021, Google was paid $62 million. IBM was paid $51 million.

2022: Equifax's vendor lineup changed in 2022. Including Google Cloud, AWS, UST Global, Kyndryl (formerly a part of IBM) and others, Equifax's future minimum contractual obligation at the start of 2023 was $948 million. Google and AWS accounted for the majority of that sum.

In its 2022 annual report, Equifax disclosed that its future minimum contractual obligation to Google Cloud was $440 million with no individual year's minimum to exceed about $120 million. In 2022, Equifax paid Google $152 million, up from $62 million in 2021.

For the first time in a regulatory report, Equifax outlined its obligations to AWS for hosting mission critical applications. Equifax's future minimum contractual obligation to AWS was $222 million with no minimum to exceed about $52 million. Equifax paid AWS $74 million in 2022 and added that it paid AWS $58 million in 2021 and $43 million in 2020.

2023: Equifax cited agreements with Google, AWS, UST Global and Kyndryl with an aggregate minimum contractual obligation of $1.4 billion as of Dec. 31, 2023. The minimum contractual obligation to Google for the remaining term was $1 billion with no individual year to exceed $228 million. Google was paid $171 million in 2023, up from $152 million in 2022. AWS' future minimum contractual obligation was $173 million for the remaining term with no individual year exceeding $52 million. AWS was paid $52 million in 2023, down from $74 million in 2022.

Focusing on Equifax AI

With Equifax's cloud transformation mostly complete, Begor said the company is focusing on Equifax (EFX) AI, which leverages the company's internal data, proprietary data sets and models from its Ignite platform as well as Google Cloud Vertex AI.

"Our proprietary data at scale and our single data fabric leveraging our new EFX Cloud gives us significant advantages in using AI to build more predictive multi-data models, scores and products," said Begor. "Our EFX AI is enabled by our explainable AI solutions that leverage our Ignite platform and our Google Vertex capabilities."

Begor added:

"Our investments in AI are generating results. To date, Equifax has received over 90 approved AI patents supporting areas such as our proprietary AI NeuroDecision Technology, or NDT, an explainable AI with over 130 AI patents pending. We've launched new products developing at EFX AI, including Equifax OneScore for consumers incorporating traditional credit, alternative credit, as well as cell phone utility and pay TV data, which has improved the performance of the solution to score 20% more consumers."

The game plan is to connect more data sets with Equifax AI to create new combinations of data, products and services.

Leveraging Google Cloud's Vertex AI was also an easy leap since Equifax built its data architecture on Google Cloud too. Equifax's data fabric has grown over time, but it's an internal data warehouse with additional capabilities.

Limaye said:

"You have a variety of layers--governance, observability streaming, virtualization, catalog and other things. We built our data platform on top of Google Cloud technology, and we standardized the pipelines at every step. When the data comes, it goes through the initial cleaning and transformation. It also gets entity resolution and linking. There is no differentiation between the operation and the warehouse. Because on the one hand you are getting all this data, you're cleaning it up, and you're making it available for the product. We built our own data hub where we collect data for every platform, and it brings the operational data for different types of uses. We call it purpose views. You could use it for online transactions. There's also typical data warehousing using Google technologies where you can do analytics and marketing on top of Google Cloud."

With cloud savings and new AI-driven products for growth, Equifax is projecting 2024 revenue of $5.72 billion, up 8.6% from 2023. The company expects that its margins will expand due to organic growth and cost savings from its cloud migration. "As we look beyond 2024, the cost benefits of completing our cloud migration as well as accelerating high variable profit revenue growth are expected to drive significant improvement in EBITDA margins," said CFO Gamble.

 

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