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Lessons on leadership, life, management via DisrupTV

Lessons on leadership, life, management via DisrupTV

Each week I comb through Constellation Research's DisrupTV transcripts and videos for insights, news nuggets and items that can provide context on enterprise trends and topics.

What has come from this exercise--aside from a bevy of articles--is a bevy of life and work lessons. DisrupTV at times is one part book club and one part wisdom dispenser with a dash of professional career therapy. To that end, I'm going to start aggregating things from DisrupTV that made me go hmm and may not fit with the daily enterprise tech grind.

Here's the running list:

Mike Hayes, Chief Operating Officer, VMware; Author, Never Enough: A Navy SEAL Commander on Living a Life of Excellence, Agility, and Meaning.

  • "Life is really about people, whether you're in the Seals, White House, Boardroom or any enterprise of any size."
  • "Wisdom is a series of learnings from a bunch of things you wish you could have done differently or wish came out differently."
  • "You're only excellent if you know, you're never excellent enough."
  • I think it's so incredibly important to really think about doing more for others than self. And when you solve hard problems, then you share in the victory and in the win and whether it's life or in business, you share in the economic value that you create.
  • "In the Seals, we could be absolutely up or absolutely down. But what matters the most is relativism because on any team, somebody is always relatively up and somebody else is always relatively down. The person who's relatively up has to reach in to help the person who's relatively down today because tomorrow I'm gonna be the one who's down. In the words of my grandfather, when you are down, the best thing to do is find somebody who else is further down than you are and pull them up."
  • "When somebody succeeds or fails, you can't yet know if they failed. You have to go down the logic tree one more node and say, did you fail and learn? If you failed and learned, then you succeeded."
  • "Agility is like one of those words, like leadership, where everybody's got a different definition and it never sounds quite right because there's always something that's missing. My thoughts about agility are really like the way Seals plan for missions. We go into a mission with a plan, but the plan from the beginning is for that plan to change. What I describe is that there are no playbooks. You have one playbook and it's called the meta playbook, which is the playbook for how to create the playbook in the moment. You can have 100 playbooks and that's not gonna win anything. You need one playbook. It's how do you define the vision, the outcome you want and then the strategy, which is how you're gonna get there. Then the execution."
  • "How do you self-actualize? Do you need to be the one on the stage getting the award or would you rather have one of your people getting recognized? I very, very deeply, would rather have people around me be recognized because their success is my success. And I don't need my name up in lights. And so as soon as you get to the point of your career where you no longer need any sort of credit because you have that confidence that the recognition just doesn't matter that liberates you to really think differently."
  • "I think being intrusive is so important. I've buried about 70 friends and unfortunately many of them have died by suicide. Unfortunately, I've become very comfortable asking people if they've ever considered things like harm to self. Those aren't easy conversations and 99 times out of 100 it's cringy and awkward. But I'll take 99 awkwards for one yes."

David Dodson, Author of The Managers Handbook

  • "The manager's handbook is not about how I ran companies. It happens to be how I wish I had run companies, but it was really the curation of this observation that I made about other managers. The differentiating factors among the people who are great at getting things done and everybody else was really skill based. And there were no exceptions.
  • "I was looking at people like, you know, Steve Jobs and Mark Zuckerberg and Jeff Bezos, People think they have x-ray vision, and they can see around corners and they're larger than life, but they didn't actually have red capes. They just mastered the basics and then they made sure their organizations mastered the basics."
  • "Call on people in reverse order of seniority. If you really want to pull out the wisdom of the crowd and get the benefit of having everybody in the room together that is one of the like easiest things, you can do."
  • "Walk behind the tractor comes from where I grew up. I grew up in rural Colorado. My dad manufactured farm equipment and you sell farm equipment through farm dealers. He never sold his equipment directly to the end user. He'd follow them home and essentially walk behind the tractor to know what the customers are about."

Frances Frei and Anne Morriss, authors of Move Fast & Fix Things

Frei:

  • "You can accelerate excellence if you learn how to go fast. In accelerating excellence, moving fast and fixing things can go even faster than reckless disruption."

Morriss:

  • "I think speed's bad reputation was confusing people. One of the main lessons of our work is that the most effective leaders know they're solving problems at an accelerated pace, but they're
  • also taking care of their customers and employees and shareholders along the way. We wanted to get the word out because this ethos of moving fast and breaking things is still out there and still influencing the decisions that builders and operators are making."

Frei:

  • "Create a good enough plan. And a good enough plan is distinct from the perfect plan, which is this fantastical creature that's actually never existed in the wild."
  • "You are more likely to trust me if you experience my authenticity while also experiencing my logic, while also experiencing my empathy. And it's only when you experience all three that you'll have the involuntary reaction of trusting me. And every single time you don't trust me, it will be because of one of those three drivers."
  • "Here are a couple of classic mistakes companies make. They're like, ok, I've done all of the things I'm supposed to, I'm gonna go fast. So now I'm gonna try to be great at everything. Here's what we can guarantee. If you try to be great at everything, you will end up with exhausted mediocrity."

Morriss:

  • "We love middle management as a place to go and learn and diagnose what's not working in the organization. It's a really powerful stakeholder group because they usually have all the information about what's happening. So, it's often the first place that will go."

Lisa Sun, Author of GRAVITAS: The 8 Strengths That Redefine Confidence

  • "Society has defined confidence as a behavior. When someone says we're confident it's standing on a stage, speaking up, being assertive, being in command. And if you look up the word, I, I challenge everyone to go look it up in the Oxford English dictionary. Confidence is an understanding and appreciation of your own abilities. There's nothing about swagger, there's nothing about bravado. This is why sometimes the quietest person in the room is often the one that you're saying that person has gravitas."
  • "In our adolescence, there are six forces that start to hold us back. We start to become self-aware, and we start to doubt ourselves. As adults, confidence actually requires us to make a choice to see the best in ourselves and to channel a mindset that then drives behaviors."
  • "Oftentimes when people tell you to be more confident, they're asking you to be in command or asking you to perform and be extroverted and charismatic. Less than 26% of people in our data set had those two qualities. Does that mean 80% of us aren't allowed to feel good about ourselves? Have we not valued other traits?”
  • “We do undervalue things like achieving and knowing because we expect people to perform in leading and performing. By the way, if we were all leaders and performers, nothing would get done."
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Atlassian acquires Loom for $975 million, will add asynchronous video to platform

Atlassian acquires Loom for $975 million, will add asynchronous video to platform

Atlassian said it will acquire video messaging company Loom for $975 million in a move that brings asynchronous video to its team collaboration platform.

In a statement, Atlassian said it will acquire Loom for $975 million including Loom's cash balance. Atlassian said it will pay $880 million in cash and the remainder in equity awards. The deal is expected to close in Atlassian's fiscal third quarter.

Loom has more than 25 million users and its customers record nearly 5 million videos a month.

Atlassian, which has collaboration and productivity software aim at distributed workforces, said asynchronous video is the next evolution of team collaboration. Atlassian has more than 260,000 customers using products such as Jira and Confluence.

For the fiscal year ended Aug. 3, Atlassian delivered revenue of $3.53 billion with a net loss of $486.7 million. Non-GAAP earnings for fiscal 2023 were $492 million. The company said it was playing offense and driving enterprise sales, expanding from ITSM to supporting teams in legal and HR with Jira Service Management and adding generative AI capabilities to its platform.

Atlassian appears in the following Constellation ShortLists:

According to Atlassian, Loom's investments in AI will also be useful to provide video, transcripts, summaries, documents and workflows. Loom customers will be able to add asynchronous video into Jira and Confluence. Loom will continue to be sold as a standalone product similar to Trello, which is a subsidiary of Atlassian.

In a blog post, co-founders and co-CEOs Mike Cannon-Brookes and Scott Farquhar said:

"The rise of distributed work has meant a greater reliance on tools to help teams work asynchronously, across different geographies and time zones.

This is where async video comes in, a tool increasingly sitting side-by-side with other modes of communication like text, presentations, and spreadsheets."

Atlassian's move comes at an interesting time. For instance, video-first communications firms such as Zoom are branching out into broader collaboration.

Constellation Research’s take

Constellation Research analyst Liz Miller handicapped Atlassian’s Loom acquisition. She said:

“While this feels like a video channel pick up for the project management and work collaboration platform, Atlassian picking up Loom opens the doors to cross team collaboration and best practice documentation and exchange. Bringing Loom into the Atlassian portfolio is a good signal that the project management and collaboration platform understands that the WAY teams want to engage, share and collaborate around work is forever shifting.

In a relatively brief period of time, Loom has become one of the hottest ways for teams to communicate, share and collaborate with a growing list of use cases and applications emerging at a pace driven by users. Everyone from sellers to HR teams has used Loom videos as a quick and easy way to communicate. Some of the most interesting use cases have been teams cataloging best practices and “how to” sessions as they learn tools, tricks and shortcuts to getting the job done. We have also seen other CX functions leverage “Looms” from customer service knowledge center clips to quick bite demos being used to deliver brief introductions in sales motions to tutorials around company policy or team on boarding.

Asynchronous communication across project teams is just one step to this pick up…and to be sure, it is an important addition to enable cross project team collaboration via video messaging. However, what this deal also opens for organizations managing complex projects with Atlassian is historical knowledge exchange and documentation. Loom videos have become a powerful connection between the teams of today and the teams of tomorrow. It can also provide a critical content pipeline to teams looking to gain insights from video conversation transcripts or AI powered summaries or analytics.”

 

Related:

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CX Transformation, Workday Rising, Tech Earnings | ConstellationTV Episode 67

CX Transformation, Workday Rising, Tech Earnings | ConstellationTV Episode 67

🎬 ConstellationTV Episode 67 just dropped! Co-hosts Doug Henschen & Dion Hinchcliffe give a rundown of the latest enterprise #tech news, Larry Dignan interviews SuperNova finalist Mary Farrell Kent CGMA ACMA from Magnox Ltd about transformational #CX initiatives, then Holger Mueller and Doug share key takeaways from Workday Rising.

00:00 - Introduction
01:09 - Tech News (Tech #earnings, cyber security attacks, #cloud)
14:13 - SuperNova Finalist Interview about CX Transformation
25:32 - Analysis of Workday Rising
35:50 - Bloopers!

ConstellationTV is a bi-weekly Web series hosted by Constellation analysts. The show airs live at 9:00 a.m. PT/ 12:00 p.m. ET every other Wednesday.

Subscribe to our YouTube Channel: https://lnkd.in/gsFWq66W

 

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UiPath adds AutoPilot generative AI to its automation platform: Here's what it means

UiPath adds AutoPilot generative AI to its automation platform: Here's what it means

UiPath launched Autopilot, which melds generative AI, domain specific AI and its automation platform, to automate work via natural language. The launch adds to the automation platform push at UiPath that's well underway as the company aims to shed its image as a robotics process automation (RPA) company.

On the surface, UiPath Autopilot is YAGAIA (yet another generative AI announcement), but if you zoom out a bit you'll see what the vendor is trying to do. The short version: UiPath plays in process mining, RPA, task mining, automation across multiple domains and optimization and if you roll all of those things up you get a platform. That platform can create business value. 

To UiPath CEO Rob Enslin the company's narrative is a spin on the platform always wins theme. Autopilot aims to further that narrative and position the company to be a more AI at work play. UiPath is betting that there will be process and automation focused generative UI use cases that will remain above the foundational model commoditization. Autopilot capabilities include generative AI experiences for developers to create workflows and build automations, target business users and enable faster testing of automation.

Customers cited in UiPath's press release noted that Autopilot within the company's automation platform can consolidate various copilots and systems, so they act in concert to follow business and process rules. For good measure, UiPath is adding its UiPath Trust Layer, which will govern data and interactions with generative AI and large language models.

As Constellation Research analyst Andy Thurai noted, UiPath wants to be between you and generative AI. Enslin added that UiPath isn't an RPA company but an AI at work company. In an interview with Diginomica's Jon Reed, Enslin noted UiPath is a business automation platform with a complete stack of tools to discover processes, automate them and then optimize from there.

UiPath is also working with ERP giants like SAP, which is a big partner, and has connectors to multiple enterprise systems. The company will also connect you to Amazon Bedrock and multiple generative AI connectors. Enslin wants UiPath to be more than the sum of its parts. Sure, UiPath process mining is running at Colgate, Verizon and Pfizer, but it's the expanded platform that's driving the benefits. The problem? Every vendor wants to be an automation platform.

Nevertheless, UiPath is well on its way to be seen as something bigger than RPA. Indeed, UiPath said it will start to sell and market an iPaaS offering in 2024 that will include the following:

  • The company's library of connectors, templates and accelerators.
  • Delivery options for Automaton Suite in multiple regions.
  • Data mapping and transformaton capabilities.
  • API design, creation and management tools. 

These two slides from UiPath's recent Investor Day lay out the automation narrative, which is bigger than generative AI. For UiPath, generative AI provides semantic capabilities to the broader automation platform. 

In the end, UiPath has to sell its narrative to CXOs. Don't count Enslin on this one given his sales history at Google Cloud and SAP. UiPath sells business outcomes and returns to CXOs. With process, task and document mining along with automation, UiPath can generate some heady returns for customers. The company prioritizes financial services, healthcare, manufacturing, and the public sector.

More:

For its part, UiPath is planning to become more efficient, move customers to a cloud model and keep sales and marketing expenses at about 30% to 35% of revenue on a non-GAAP basis. And UiPath plans to leverage its SAP partnership and gain wallet share with its platform.

Add it up and UiPath's Autopilot launch isn't groundbreaking but spins the company's broader narrative forward. Now it just has to get buy-in from CXOs.

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Adobe Max 2023: Firefly's new model, GenStudio and everything announced

Adobe Max 2023: Firefly's new model, GenStudio and everything announced

Adobe launched a new model behind its Firefly generative AI image system and outlined GenStudio, which is a suite that will enable enterprises and marketers to better manage the content supply chain.

Although those two items were among the headliners at Adobe's Max conference in Los Angeles, the company launched several new enhancements, products and services with generative AI layered throughout the company's portfolio.

The company made its case that creativity is the new productivity and will take a huge leap due to generative AI, which will enable creatives to explore possibilities, scale and personalize experiences.

MoreAdobe raises Creative Cloud prices, adds generative AI credits | Adobe Firefly heads to enterprises, Adobe ExpressAdobe reports strong Q3, ups outlook for Q4 

Not surprisingly, Firefly and generative AI was a common theme for Adobe at Max. The new Firefly Image 2 Model provides enhanced photographic quality with higher resolution and colors and improves human rendering. Firefly Image 2 Model is available today at Firefly's site and roll out to Creative Cloud apps.

Firefly Image 2 Model will also enable generative match, new photo setting and prompt guidance. Adobe also outlined Firefly Vector Model, which provides the highest quality output for vectors used in logos, website graphics, product packaging and icons, Generative Match, which matches output with existing brand styles, and Firefly Design Model, which is generative AI for template designs.

Adobe added that Firefly models will also play a big role in GenStudio. For instance, teams can customize Firefly with branded assets and automate and integrate custom models in Creative Cloud workflows.

GenStudio is Adobe's enterprise play to improve the content supply chain. Adobe's plan is to move manual processes to AI and automation, connect workflows across silos, democratize content creation and be transparent.

ResearchConnecting Experiences From Employees to CustomersConstellation ShortList™ Digital Experience (DX) Platforms | Constellation ShortList™ Content Management System (CMS) – Hybrid | Constellation ShortList™ Digital Asset Management (DAM) for High Volume Commerce

The company said GenStudio brings together applications across Adobe's portfolio including Creative Cloud, Express and Experience Cloud. Firefly and Adobe Experience Manager Assets are also included along with other applications.

Here's what Adobe GenStudio is hoping to do:

  • Scale content creation with generative AI including ideation, creation and editing.
  • Minimize manual tasks for creatives and automate production.
  • Use models to customize content to brands.
  • Automate workflows and handoffs.
  • Improve collaboration.
  • Provide metadata across the content cycle.
  • Minimize waste and centrally manage approved assets.
  • Give enterprises insights on performance.

To accomplish those goals, Adobe said GenStudio will be available in modules to cover workflow and planning, creation and production and delivery and activation. All modules will have an analytics engine. GenStudio is available now.

Adobe deployed GenStudio internally and said it saw an 83% decrease in time spent packaging content and an 88% decrease in time spent activating content. Amit Ahuja, senior vice president, Digital

Experience Business at Adobe, said GenStudio "can take tasks that would normally take hours or days down to minutes."

Here's a selection of other Adobe announcements at its Max conference.

  • Adobe Experience Manager Sites gets updates to be better equipped as an enterprise content management system.  Adobe said Experience Manager Sites has performance improve to boost search rankings, traffic and conversions, tools to optimize web content and experiment. The platform also simplified its authoring tools and enabled marketers to drag and drop Microsoft Word and Google Doc content and layouts into Experience Manager Sites. 
  • Creative Cloud gets more than 100 new features with Illustrator, Photoshop and Stock adding Firefly features and web-based workflows. Other apps including Lightroom, Premiere pro and After Effects will get AI features.
  • Illustrator will get Text to vector Graphic capabilities via Firefly. Other Illustrator additions include Mockup and retype. 
  • Adobe Express will use Generative Fill and Text to Template. Aside from a bevy of new features in Express, Adobe said the software will have an integration with Wix for web pages. Adobe will also make Express available on Google Chromebooks.
  • Premiere Pro users can publish videos directly to Instagram, Facebook, YouTube and TikTok. 

Constellation Research's take

Constellation Research analyst Liz Miller said:

"While much of the world is launching their first go-round of generative AI tools, Adobe is introducing a significant evolution of the Firefly portfolio of models with Firefly 2. The quality of output from Firefly is truly impressive with more detail, clarity and accuracy with every prompt. But it should also be noted that while the models are being refined to improve output, the business model is similarly being updated and upgraded to answer some of the significant business, ethical and creative concerns the market has. From creator and artist protections to content authenticity data to ensure availability for enterprise use, Adobe is focused on making this new ago of AI creativity positive for creators and users alike.

Adobe has also applied AI tools in smart places, helping creatives, marketers and business users alike be more efficient, effective and authentic. While it might sound trite, for a team to take hours of mundane work off their plate while simultaneously giving space for new paths to creativity to emerge is game changing. AI has revitalized so many creators who can now unleash their ideas in entirely new mediums. Adobe fully intends to stay ahead of that turn.

Adobe's differentiator has always been in the capacity to redefine and reapply creativity, be it through artistry or through portable document formats. The next step will be Adobe bringing these communities of creativity and connecting them in the name of profitable, durable growth."

Looking ahead

Adobe also showcased 11 early-stage innovations that revolved around generative AI. The prototypes may not make it to be commercial offerings but give Adobe's engineers and researchers to highlight their work.

The headliner at Adobe Max Sneaks was Project Stardust, an object aware editing engine. Project Stardust gives users the ability to select, edit and delete elements in any image. You can select people in a photograph, move them to a different place and fill in the background where they were standing. Elements like clothing can also be changed.

Other select innovations highlighted include:

  • Project See Through, an AI tool that makes it easy to remove reflections from photos.
  • Project Fast Fill, which takes Firefly to video with the ability to add, remove and expand content with text prompts. This tool, available in Photoshop now, would be added to Adobe's video applications.
  • Project Dub Dub Dub uses AI to improve video dubbing and automatically translate an audio track to a supported language.
  • Project Poseable, which takes an image generation model that can interact with 3D objects including poses from photos of real people.
  • Project Draw & Delight, a suite of generative AI tools that can take an initial doodle or scribble and turn it into polished and refined sketches. Users can then experiment with colors, styles and backgrounds.
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Boomi Steps Up on Automation and AI as Integration Demands Evolve

Boomi Steps Up on Automation and AI as Integration Demands Evolve

Boomi says customers want more than integration from integration platform as a service (iPaaS) providers. Automation and AI headline next steps unveiled on the Boomi World Tour.  

Boomi unveiled its evolved “Intelligent Integration and Automation Platform” on October 3, with the intelligent part being Boomi AI. It’s an advancement over the company’s existing artificial intelligence capabilities, but the headliner in Boomi AI is the addition of, you guessed it, generative AI capabilities.

The announcements, made in Silicon Valley during the first stop of the five-stop Boomi World Tour, marked the first big strategic moves spearheaded by Boomi CEO, Steve Lucas, who took the helm of the company in late 2022. Lucas previously served in executive roles with iCIMS, Adobe, SAP and Salesforce, so he’s used to leading companies in competitive enterprise markets. The change in leadership came 18 months after Dell’s 2021, $4 billion sale of Boomi to private equity firms Francisco Partners and TPP Capital.

During his keynote, Lucas emphasized that integration alone is no longer enough for organizations to overcome “digital fragmentation.” Of course, Boomi is no stranger to supporting more than application and data integration, having added Flow (workflow and automation), API Management, Master Data Hub, and Data Catalog & Preparation components to its platform over the years. But Lucas is driving the company to do more. Several customers I spoke to at the event echoed Ken Maglio of customer World Wide Technology, who said, “He seems to have lit a fire a under everyone's feet to lead the industry.”

Boomi CEO Steve Lucas announces the ‘Intelligent Integration and Automation Platform’ to kick off the Boomi World Tour.

A recent step toward broader and deeper iPaaS capabilities was Boomi’s June 2023 release of Boomi Event Streams. The new message queueing and streaming service manages and monitors event-driven connections through a unified user interface, enabling customers to sense and respond to sudden changes in execution, performance, risks and customer opportunities.

Boomi is also no stranger to AI and machine learning (ML), having introduced Boomi Suggest, an ML-based integration recommendation feature, way back in 2010. It added Boomi Resolve, a predictive assistance feature, in 2014. This spring, Boomi added Boomi Quick Start, a no-code, question-and-answer-based approach to building application and data integrations and automating business processes. All three features leverage the de-identified knowledge graph of more than 200 million integrations handled on Boomi’s cloud-based platform over the past 20 years.  

Boomi AI, last week’s big announcement, brings together Suggest, Resolve and Quick Start into a broader AI platform that now also includes Boomi GPT. Built on a composable AI framework that can swap in and out the models that best fit. Examples of open source LLMs include LLaMA, LLaMA2 and others, as well as other advanced ML models and techniques. Boomi GPT will enable users to generate and explain new integrations and automations through natural language interactions. On the roadmap is enabling Boomi GPT to generatively document and explain existing integrations on the Boomi platform -- a useful addition for times when integrations or automations were developed by people who have since left the organization.

Boomi GPT is generally available today through a new Pro-AI Edition of the Boom Platform. Additional Boomi AI capabilities including Autonomous Orchestration, Autonomous Management and Special Connectors are set for release through a separate Enterprise – AI Edition of the platform set for release some time next year.

Boomi detailed 2023 platform composability, democratization and visibility and control improvements including the introduction of Event Streams and Boomi GPT.

As the many GenAI announcements made this year demonstrate, any software vendor can access open source LLMs and cloud compute capacity. Indeed, several iPaaS vendors have made GenAI announcements in recent months. So how do such offerings stand apart?

Boomi’s AI will be differentiated, said Ed Macosky, Chief Product Officer, because the vendor can train AI models (on a private, internal cloud) against its massive, de-identified knowledge base of more than 200 million integration patterns. It’s a dynamic resource that will support continuous optimization, as integration points and pipelines and automation patterns constantly evolve.

Constellation’s analysis. In Constellation’s view, having more data will absolutely give vendors with more customers and longer history AI advantages, but before this year, generative AI features weren’t even on customer radars. Many customers I talked to were cautious about GenAI adoption and more excited about enhancements announced by Macosky on platform scalability and performance, and new security compliance certifications. Macosky also peaked a lot of interest by pre-announcing a lightweight, no-code Task Automation product (with mobile capabilities shown in a demo), which Boomi plans to release in early 2024.

Leaders and fast followers looking for productivity gains will undoubtedly try out Boomi GPT right away. More conservative customers might take a wait-and-see approach. Boomi was clear in portraying Boomi GPT and its broader AI capabilities as being aimed at augmenting humans and adding more potential users, not replacing them. And it was clear from the demos that AI-suggested Quick Starts and Boomi GPT-generated integrations and automations will be starting points that will need the final touch of human review and approval before being put into production.

Where AI meets iPaaS is concerned, it’s all about doing more integration and automation work in a shorter time so teams can get more done and move on to the next project.  

 

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What's good for customers won't thrill Wall Street

What's good for customers won't thrill Wall Street

Zoom Video Communications held its annual Zoomtopia conference, rolled out a series of generative AI capabilities across its platform and made it clear that it all about reinventing work with tools like Zoom Docs as well as customer experience. What was missing? Talk about add-ons for Zoom's AI Companion, price increases, monetization strategies and ways to get more money out of customers.

If Zoom's analyst Q&A was any indication, Wall Street isn't thrilled about delivering value without charging more. Wall Street is hooked on this concept of $30 extra a month per user for generative AI features.

The abbreviated list of questions went like this:

  • What is your monetization strategy and where can we expect incremental revenue?
  • How do you monetize virtual agent vs. human agent capabilities in Zoom Contact Center?
  • How can the company monetize and upsell Zoom One?
  • GPU costs aren't cheap so what's the plan for pricing AI Companion?
  • Please explain the decision to offer AI Companion at no additional cost relative to the competition.

See a theme here?

Zoom executives didn't exactly alleviate concerns about monetization. Customers, however, are happy that Zoom isn't prematurely gouging them. For adoption, Zoom's approach to refrain from add-ons isn't a bad idea. The company said nearly 30,000 companies have enabled AI Companion so far.

CFO Kelly Steckelberg said the AI products recently announced are free. Regarding Zoom Docs, the company will outline monetization closer to general availability.

As for Zoom Contact Center, Steckelberg added that Contact Center is sold on a per seat basis and Virtual Agent is based on queries. "They're priced according to bring value to the customer," she said. Features like AI Expert Assist for Contact Center could be monetized at some point, but that's separate from AI Companion.

Zoom One is a big opportunity, said Steckelberg, who noted that the bundle approach will see more traction as renewals come up. Zoom One Pro prices increased at the beginning of 2023.

On GPU costs, Steckelberg noted that Zoom outlined that it expected gross margins to fall a bit due to "the computing power we are continuing to acquire."

Zoom's Mahesh Ram, Head of AI Applications, addressed the elephant in the AI room for software companies. He said:

"When you listen to the customers intently, you hear what they're saying. And I think what we were hearing from customers was, if you make AI a premium offering, then I have to choose between the haves and the have-nots. And we see generative AI as being something that's just part and parcel of everyday work and collaboration.

If you have a 20,000, 50,000 employee workforce company and you're having to think about $30 a month, you're making decisions that are probably not in the best interest of your business.

We want to make Zoom the platform of choice. We want to make it as valuable to every employee as possible in every business. As you start talking to customers, there's a collective sigh of relief."

The upshot here is that Zoom is playing a long game with customers and that the future benefit is vendor consolidation. Workday is playing a similar game and Adobe’s generative AI pricing seems fair, but the club of vendors not focusing on add-ons is small. As vendors go add-on happy, CIOs are going to look to consolidate costs and vendors. That outcome will only benefit platform plays like Zoom that held back from the add-on pricing frenzy.

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Cybersecurity confession parade led by Clorox, MGM, Caesar's Entertainment

Cybersecurity confession parade led by Clorox, MGM, Caesar's Entertainment

Companies hit by cyberattacks in the last quarter are detailing the financial hits with earnings on tap and rest assured there will be more disclosures to come. Clorox said it will see a big sales hit in its first quarter. MGM said it will incur costs of $100 million due to a data breach in September. And Caesar's reportedly paid ransomware to avoid a hit to its results.

The trio of disclosures is likely to be just the start. In July, the Securities and Exchange Commission adopted rules requiring public companies to disclose material cybersecurity incidents and report annually on risk management, strategy, and governance.

With the new regulatory requirements, it's possible that the quarterly confessional season will be as much about cyberattacks as earnings and revenue growth.

Here's a look at three recent incidents and the financial hits involved.

Clorox

Clorox quantified its sales hit due to a cyberattack--a fiscal first quarter loss and a sales decline ranging between 28% to 23% compared to a year ago. In the first quarter of a year ago, Clorox reported revenue of $1.74 billion. Based on Clorox's first quarter guidance sales will fall in a range between $1.25 billion and $1.34 billion.

As previously disclosed in a regulatory filing, Clorox was hit by a cyberattack disclosed in August hampered production. Business was on track leading up to the cyberattack. Because of the attack, Clorox had to restore its systems and manually take orders. On Sept. 25, Clorox began transitioning to automated order processing.

Clorox said in a statement that sales will be down significantly and well below the mid-single digit growth previously outlined. The company is now projecting a loss between 75 cents a share and 35 cents a share. In the first quarter of a year ago, Clorox delivered earnings of 68 cents a share.

According to the company, it expects "to experience ongoing, but lessening, operational impacts in the second quarter as it makes progress in returning to normalized operations." Clorox said it may benefit from retailer restocking. Clorox said it will update investors on the cyberattack impact for the rest of the fiscal year. 

MGM

MGM said that it suffered an attack on Sept. 11 and discovered the incident on Sept. 29. The high-profile attack forced MGM to go with manual customer facing processes.

Ultimately, MGM said it took a $100 million hit in the quarter. The attackers got information ranging from phone numbers, names, addresses, data of birth and driver's license numbers. A limited number of customers had Social Security numbers and/or passport numbers stolen.

MGM said it has put safeguards in place and the damage was confined to September. MGM said in a regulatory filing that the impact from the cyberattack is about $100 million for its Las Vegas resorts. The company also saw impacts to occupancy through its app and website but has mostly recovered. In addition, MGM had one-time expenses of $10 million in the third quarter due to the attack to cover consulting services, legal fees and third-party advisor expenses. That $10 million is likely to be covered by cyberinsurance.

Caesar's Entertainment

Caesar's Entertainment disclosed an attack due to a "a social engineering attack on an outsourced IT support vendor used by the company."

The company said that it detected the attack and contained the breach. On Sept. 7, Caesar's determined that the attackers acquired a copy of the company's loyalty database, which included driver's license numbers as well as Social Security numbers.

According to Caesar's the financial hit should be limited, but there will be expenses going forward to remediate. However, Caesar's reportedly paid a $15 million in ransomware to avoid any customer disruption, according to CNBC.

Caesar’s attack happened in the same time frame as MGM's breach.

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HOT TAKE: NICE Picks Up Proactive Outbound with a Side of CCaaS

HOT TAKE: NICE Picks Up Proactive Outbound with a Side of CCaaS

The pre-holiday shopping specials must still be hot because the acquisition news keeps rolling, this time with NICE Systems, announcing its intent to acquire LiveVox, a San Francisco-based Contact Center as a Service (CCaaS) platform that has differentiated itself thanks to AI-powered proactive, outbound engagement capabilities. This is especially important as contact center and service look beyond their norms of tech stacks with clear delineation between inbound and outbound systems to solutions that combine capabilities for a more holistic customer journey-driven experience strategy.

LiveVox cut its teeth on key points of intelligence including health industry and risk intelligence, evolving into a robust communications solution that combines a customer relationship management (CRM), workforce optimization (WFM), omnichannel communications and a broad portfolio of AI-powered assistants, bots and models. There’s even an outbound dialer, cloud PBX and hardware offering to keep an eye on. Integrated into NICE’s open, flexible comprehensive customer engagement platform.

What We Know About the Deal: Growth Positive

According to press releases issued by both companies, this deal has been approved by both boards and will see LiveVox stockholders will receive $3.74 in case per share of LiveVox common stock, placing the estimated value of the deal around $350 million. This is a sharp departure from 2021 when LiveVox was merged into a SPAC valued at over $850 million. Based on recent earnings details from LiveVox, the company has been operating at a loss, which over the past year has narrowed. NICE CEO, Barak Eilam, believes this move gets the market one step closer to the promise of smart conversational AI with NICE. “In joining forces with LiveVox we now have the strongest and broadest proactive outreach portfolio,” Eilam noted in the release. “The era of Digital Engagement is already here and we are excited to enable organizations to propel their Digital Engagement and Conversational AI forward. In joining forces with LiveVox we now have the strongest and broadest proactive outreach portfolio.”

NICE notes that the deal should be cash flow positive and accretive to NICE’s operating income, operating margin and non-GAAP EPS during 2024. The deal is expected to close in early 2024.

What It Means for NICE: Expands the Scope of Communications and Engagement

This acquisition picks up a collection of outbound tools which will allow NICE customers to include proactive points of engagement to their customer journey workflows, not to mention a CRM alternative. This will also be a boon for existing LiveVox customers looking to take advantage of the NICE portfolio of business ready AI tools around automation ranging from robotic process automation (RPA) that can automate mundane tasks that benefit agent productivity to journey orchestration capabilities that will be critical to connect inbound and outbound engagement strategies, workflows and proceses…which again highlights the importance of that CRM offering to keep that close.

It's also important to note that LiveVox brings a customer portfolio that will expand NICE’s footprint in the fast-growing midmarket, addressing Wall Street questions around how NICE can address a slowing market and growth trajectory.

The Bottom Line: Best Practices Will Be Critical

In the moment, this deal will be talked about as an expansion of AI-related capabilities. And yes, that is absolutely going to happen. But looking beyond the AI hypecycle, this also is a clear signal from NICE that the trend of collaborative dynamic communication as the center point for true, holistic CX that focuses on where and how the customer’s experience exists as opposed to where functions, departments of technology exists is the path to profit and growth. This new view understands that customers don’t identify departments…they just identify the contextual experience they want, expect and need. But, best practices that showcase where and how this dynamic customer collaboration can and should bridge the gaps between CX’s frontline of sales, marketing and service are needed now more than ever.

This also feeds into the conversation around what NICE could do as various strategic partners have launched their own CCaaS solutions. While those partnerships continue to be important for all parties, this new holistic offering provides customers a single stop for comprehensive customer communications.

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How Kinetic aims to transform digital EV repair, maintenance and aftermarket services

How Kinetic aims to transform digital EV repair, maintenance and aftermarket services

Kinetic is a company aiming to transform the aftermarket for electric vehicles (EVs) with a business model that rhymes with cloud infrastructure-as-a-service.

The effort is worth watching since Kinetic blends physical and digital services as automobiles evolve from mechanical systems to digital ones that resemble data centers on wheels. Who is going to maintain and repair all those EVs? While charging infrastructure is an issue, maintenance and repair could be just as critical.

Kinetic, which raised $10 million in Series A funding from Lux Capital and Construct Capital as well as early-stage venture capitalists, has a bevy of big backers with experience with disruptive models as well as the auto industry. Kinetic will use the money to expand its engineering team and scale its Kinetic Hubs. The company has one service hub in Orange County, CA with another one planned to launch in Las Vegas.

I caught up with Kinetic CEO and Co-founder Nikhil Naikal to talk shop. Naikal previously was CEO of Mapper.ai, which was an end-to-end provider of high-definition machine-readable maps. That company was sold to Velodyne Lidar, which makes lidar sensors for autonomous vehicles, robotics and other industries. Here are the key points from the conversation.

The transformation of the automobile industry. The core thesis behind Kinetic is that the aftermarket for automobiles will have to transform from one focused on internal combustion to one focused on digital systems and sensors. "If you strip down an electric car, half of it is what it used to be--brakes, tires, steering column--the other half isn't the same. The drive trains are different, there's more compute, more sensors, more self-driving," he said. "The infrastructure that is needed for repair and maintenance is going to be rethought and reimagined just because of the makeup of these new cars."

According to the International Energy Agency there were 26 million electric cars on the road in 2022, up 60% from 2022.

The problem Kinetic aims to solve. Today, an accident involving an EV or sensor-heavy auto involves a car to an insurer, who then orchestrates a drop-off for repair and a rental car. The repair center returns the car to its original state physically, but then gets hampered by what Naikal calls "last mile digital aspects." These digital repairs and calibration of systems today often require a house call and potentially days where the automobile sits in a lot. The repair center may have to eat the cost of the rental car for repair delays. Simply put, today's digital repair last mile is akin to a doctor making a house call. Kinetics is more like an urgent care facility. "You can start working with us and be done in an hour," said Naikal, who noted that Kinetic will operate behind the scenes. "We see ourselves slotting into the existing framework and we work with existing collision repair centers and dealerships."

Kinetic's plan. With the opening of the company's hub--each hub is about 5,000 square feet and looks more like a clean room than an auto shop--Naikal said Kinetic will focus on sensor repair and safety systems. Automobiles have millions of lines of code and sensors have proliferated. Those systems also need repair, reprogramming and recalibration that require robotics, software and AI to fix. "We are providing physical and digital infrastructure and there's already a vibrant market," said Naikal. "You'd be hard pressed to find a car without adaptive cruise control or lane changing sensors. It's real business today."

As EVs and ultimately autonomous vehicles gain share, Kinetic's business will evolve, said Naikal. That decision is smart since EV domination may be delayed by charging infrastructure and other hurdles. "We made an early decision to start focusing on an aspect of vehicles that lies at the intersection of both ICE (internal combustion engine) and EV," he said.

Simply put, Kinetic's hubs will have plenty of work to justify a build out today since cars of all types are only getting more sensors and digital systems. Each hub will serve a 10- to 12-mile radius and service auto repair shops, dealers, collision centers and other auto aftermarket players who need digital servicing. Kinetic will charge based on consumption of services and the benefit to customers is a 60-minute repair turnaround. Kinetic's goal is to halve the cycle time from pickup to digital repair, calibration and return as it scales.

Business model inspiration. Naikal said Kinetic's model rhymes with infrastructure as a service player such as AWS. Kinetic is a B2B company that will enable dealers, manufacturers, auto repair shops and aftermarket companies transform. Kinetic's hubs are multitenant and save the food chain upfront costs to equip their facilities with digital repair services. 

And like AWS, Naikal said Kinetic will continually add on services and evolve. "We do see the possibility of satellite locations and a shop within a shop approach to help consumers understand the digital system," said Naikal, who said a digital-based aftermarket for autos is inevitable. "There will also be an ecosystem of third-party applications." If successful, companies will be built that use Kinetic's infrastructure, added Naikal.

You could call Kinetic an EV aftermarket as a service company. 

Data and digital twins. One of the more interesting aspects of Kinetic's model is the potential data play. Naikal said Kinetic is "reconstructing digital twins of the cars we capture." "The data in the vehicle itself improves the experience," he added. Indeed, Kinetic could be in a position to help automakers determine the wear and tear of a model after a few years or provide data the improves engineering processes going forward. Kinetic could also provide insights that inform future models from automakers.

"When cars come into our centers, we'd be capturing 4 to 5 million data points on the car and supporting an ecosystem," he said.

Challenges ahead. Naikal said much of the focus for Kinetic is on finding locations and scaling locations. There's also a supply chain element where Kinetic must procure robots and automation tools in advance. "We want to scale as fast as possible. So, I think that's one of the challenges. The second challenge, of course, is we're basically a software company and a last mile integrator of hardware," said Naikal.

What the digital automotive aftermarket may look like. Naikal said it's likely that car companies and consumers will look to upgrade memory, install new driving models and add localized features. And yes, the auto aftermarket will have to solve for battery swaps. "If in 5 years, the technology changes so you can extend range there should be the ability to slot that in," said Naikal. "This will require automation since you just can't change a 700-volt battery easily. It's going to look a lot like slotting in memory on a much larger scale."

Going forward, it's also possible that consumers will want to change the body of a car, said Naikal. How that model evolves with automakers remains to be seen. "We are trying to think about consumer pain points today and build with an eye on tomorrow," said Naikal.

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