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Palo Alto Networks CEO Arora: Generative AI will favor those with strong data sets

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. ...

Palo Alto Networks CEO Nikesh Arora said generative AI has boosted productivity but also can present security risks.

Speaking on Palo Alto Networks' third quarter earnings conference call, Arora said:

“AI is a data problem and security is a data problem and has an interesting role to play in security, both for its ability to help deliver superior security outcomes in near real-time and unfortunately the potential threat associated with AI being used to generate attacks. “

Arora added that there's "significant opportunity" to embed generative AI into Palo Alto Networks' security platform, products and workflows. These opportunities include:

Improving detection and prevention efficacy by advancing the company's AI and machine learning models in products today.
Providing more accessible ways to enable customers to engage and comprehend data sets and telemetry. Generative AI can also provide a more natural-language driven interface to products.
Bolster productivity throughout the Palo Alto Networks organization and save money on support costs, headcount and other costs that add up at scale. On CNBC, Arora noted that his company used generative AI to create marketing narratives in four hours compared to two weeks.

"We intend to deploy proprietary Palo Alto Networks security LLM in the coming year and are actively pursuing multiple efforts to realize these three outcomes," said Arora.

Nevertheless, Palo Alto Networks executives acknowledge that generative AI is also a security risk. Arora said that Lee Klarich, Chief Product Officer and team, have been researching ways that generative AI can more efficiently produce malware. "There's a lot of work we're doing as well to make sure we are able to protect our customers against any such activity that is conducted using generative AI," said Arora.

Overall, Arora was upbeat about generative AI's impact on security and its business. Generative AI will likely favor the companies that have strong data sets. "I think it favors the people who have a lot of data already as part of their strategy, and they have built a business on the back of a data-led strategy," said Arora. "It favors companies that have a tremendous amount of data."

Palo Alto Networks delivered a strong third quarter with net income of $107.8 million, or 31 cents a share, non-GAAP earnings of $1.10 a share, and revenue of $1.72 billion, up 24% from a year ago. For the fourth quarter, Palo Alto Networks projected revenue between $1.94 billion and $1.97 billion with non-GAAP earnings of $1.26 a share to $1.30 a share. For fiscal 2023, Palo Alto Networks is expecting revenue of $6.88 billion to $6.91 billion.

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Why firing is more important than hiring when building a startup

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Learning to fire is way more important than hiring, according to Uri Levine, a two-time unicorn builder with Waze & Moovit and author of "Fall in Love with the Problem, Not the Solution."

Speaking on the latest edition of DisrupTV, Levine outlined how it's critical for entrepreneurs to bring the right people into an organization. "Firing is more important. Hiring is the easy decision, and you have to learn how to make hard decisions," said Levine.

When Levine talked to entrepreneurs about why teams weren't performing, he would hear communication, performance, and ego management issues. "When I asked, 'when did you know the team was not right, all of them said within the first month," explained Levine. "So, they knew within the first month that the team was not right and didn't do anything. The problem is that you weren't making the hard decision. If you're not making those decisions two things happen. No. 1 is you're stuck with people that shouldn't be there. The other is even worse in that the top performing people leave because they don't want to be in an organization that is unable to make the hard decisions."

Levine added that if a startup has two choices of hiring someone awesome or firing an underperformer it's more important to fire.

"If you hire a new person mark your calendars for 30 days down the road and ask yourself one question: 'Knowing what I know today would I hire this person?' If the answer is no, then fire them immediately because they're not going to be successful. If the answer is yes, tell that person they are exceeding your expectations and give them more options or equity."

Other takeaways from Levine:

Entrepreneurship is about value creation. Levine said when he had an idea as a child, his dad would always ask why. The question was meant to focus Levine on solving a problem.
Startups are about the roller coaster. "This journey is going to be very challenging. This is going to be a long roller coaster of failures and each of them is important," said Levine. "If you tell me all the businesses in the world have ups and downs I'd agree, but the frequency of those are way higher when you're building startups."
Failures matter. Given the entrepreneurship journey and frequent failures it's critical you learn from them. "It's a journey of failures so we try one thing and then another," he said. "If you're afraid to fail you already failed. You need to teach your kids to fail."
Keep going. The sooner an entrepreneur knows it's a journey of failures, she has to fail fast. "When you fail fast you still have plenty of time to make another attempt and try different things until you find one thing that does work. If you have more attempts than anyone else you are way more likely to be successful," said Levine.

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OpenAI's Brockman: Industry use cases, developers next stage for generative AI, ChatGPT

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

OpenAI President and Co-Founder Greg Brockman said industry specific use cases as well as developers adding on top of models will drive more value from generative AI.

Brockman, speaking at Microsoft Build, said "the technology (ChatGPT, generative AI) is getting better and better, but the value is going into specific domains and understand how they work there." Brockman referenced the legal industry as one area where developers can add a lot of value.

"There's a huge amount of value that can be added," said Brockman.

Microsoft unveils Microsoft Fabric at Build 2023, pitches integration, simplified pricing

Kevin Scott, Chief Technology Officer and Executive Vice President of AI at Microsoft, followed up on a barrage of announcements for Copilots across the software giant's product line. Roughly speaking, a Copilot application uses AI, has a conversational interface and helps you do common tasks.

While Microsoft launched a series of Copilots by product line--Dynamics 365, Windows, Bing, Power Platform etc.--the company urged developers to leverage plug-ins, open source and foundational models to focus on solving problems. According to Mary Jo Foley, there are 20 customers currently in the M365 Copilot Early Access program.

Scott said the generative AI model is not the product and developers need to focus on creating good products that address problems.

"It is up to you all to build great experiences," said Scott. He told developers to focus on what problem the Copilot to address. For instance, UX flows are less important since there's natural language processing. The focus is really figuring out how to keep the Copilot on point.

To date, generative AI has been aimed mostly at functions and horizontal productivity tasks. Think social media posts for Scott’s podcast. Scott noted he wasn’t good at social media posting so he built a Copilot to help. Here’s how it broke down.

Going forward, Brockman's legal use case is just the beginning. Once vendors launch a series of generative AI tools and product integrations, the next step will be focused on industries such as CPG, manufacturing, transportation and health care to name a few. These industry use cases will likely be deployed as software vendors, AWS, Azure and Google Cloud all duel.

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Accenture's Paul Daugherty: Generative AI today, but watch what's next

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Generative AI will have a tremendous impact on workers and likely impact 40 of the working hours across industries, but that doesn't mean 40% of jobs will go away, said Accenture CTO Paul Daugherty, who was the 1,000th guest on Constellation Research's DisrupTV.

Daugherty also said on the show that generative AI is just the first installment of what's likely to be a set of innovations that'll change business. "As exciting as generative AI is, it's not the last and probably not the biggest breakthrough we'll see in AI. There will be other bigger breakthroughs coming with common sense AI," said Daugherty.

He added that shared reality and the merger of the physical world and digital bits will be another advance. "The next stage of digital is digital plus physical," said Daugherty, who also said metaverse has potential even though it's being panned on multiple fronts.

Other technologies to watch include:

Computational chemistry.
Synthetic biology.
Generative AI in pharmaceutical and drug discovery.
Operational technology with new forms of computing like quantum computing.

Daugherty said his team at Accenture is already working on its next Tech Vision Report. In the meantime, here are some generative AI takeaways from Daugherty.

Generative AI will create automation that can replace some jobs, but the bigger impact will be human augmentation. "Every worker will have a co-pilot or multiple co-pilots that help us do things more effectively," said Daugherty. "AI will give people superpowers in the form of these co-pilots that could allow us to do more things."
Think of generative AI as a bit of Moore's Law for people where it can help us know more and extend skills.
Enterprises need to step back and get perspective on generative AI. For instance, companies can't assume generative AI will solve everything. Instead, businesses need to look holistically and see where to apply the technology.
Figure out what models you want to consume and then tune. "For enterprises there is going to be an array of models to just consume or in some cases fine tune and customize," explained Daugherty. "In other cases, you'll want to develop your own models for unique domains."
Companies will need to change processes. "Processes are so different with co-pilots," said Daugherty. "There's also the change management and training around it."

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Microsoft unveils Microsoft Fabric at Build 2023, pitches integration, simplified pricing

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Microsoft launched Microsoft Fabric, a unified analytics platform that combines technologies like Data Factory, Synapse and PowerBI. Microsoft's pitch: Convince enterprises to go with one integrated AI-powered analytics platform instead of integrating multiple vendors and services.

The news, launched at Microsoft's Build conference, is the headliner, but there was a bevy of other Copilot announcements. Microsoft also announced Copilot in Power BI, Power BI Direct Lake, a new storage mode, and Power BI Desktop Developer Mode. Speaking during the Build 2023 keynote, Microsoft CEO Satya Nadella said "platform shifts are in the air." Speaking about generative AI, Nadella said "every piece of the stack has been impacted" and there were 50 announcements related to ChatGPT on deck.

Regarding Microsoft Fabric, Nadella said:

"This is a product we've been working hard on over multiple years. This is the biggest data product launch since the launch of SQL Server. It unifies the business model across all analytics workloads. This unification will fuel the next generation of AI applications."

Constellation Research analyst Doug Henschen put Microsoft Fabric in context:

"We’ve seen a bunch of fabric-type offerings and customers seem to be keen on the idea of having one platform that provides access to all data – even if, in actuality, it’s about distributed data access layer on top of multiple repositories and capabilities, as is clearly the case with Microsoft Fabric. Other examples recently in the news include IBM Data Fabric and its acquisition of Ahana and SAP Datasphere. Other incumbents include Dremio, Starburst, and various “lakehouse” offerings, though Microsoft is combining a huge breadth of workload types and is promising generative AI interfaces on top of them all."

Microsoft Data Fabric also lands as multiple vendors are aiming to be the business process automation platform of choice.

The bet here is that Microsoft's pricing strategy can make Fabric compelling and more economical for CXOs. Customers can buy one pool of compute to power Fabric workloads. That pricing strategy could be compelling. Henschen said:

"One of the most compelling aspects of this announcement, in my view, was the prospect of buying a single pool of credits that can be used across all workload types: data engineering, data integration, data science, data warehousing, BI and analytics. That’s a unique offering and gives a sense of a single platform, even if it’s, technically, a unified layer on top of a bunch of existing offerings. This is classic suite versus best-of-breed marketing. The complication is that these budgets are owned by different groups today, and they’d have to get together to make decisions about how many credits each group needs and so on."

Ferguson, T-Mobile and AON were named customers looking to consolidate their analytics footprints on Fabric. Informatica is one of the first design partners for Fabric and the company said customers can enroll in a private preview starting in June 2023.

Key points about Microsoft Fabric include:

Fabric will have a single unified experience and architecture via a SaaS delivery model. It will also integrate with Microsoft 365 applications.
Each team in the analytics process including data engineers, data warehousing pros, data scientists, data analysts and business users will have a role-specific experience.
Fabric is data-lake friendly and open. Microsoft Fabric includes OneLake, a multi-cloud data lake that is built-in. The model for OneLake rhymes with the OneDrive approach. OneLake is built on Azure Data Lake Storage Gen2 and fully compatible. OneLake also has shortcuts to data lake storage from Azure, AWS S3 and Google Storage coming in the near future.
OneLake supports structured data of any format and unstructured data. OneLake will also be discoverable and accessible in Microsoft 365.
Microsoft Fabric will include Azure OpenAI Service at multiple layers. Generative AI and Copilot in Microsoft Fabric will be available and work with various models. Copilot in Microsoft Fabric will be coming soon.

Henschen noted that natural language (NL) can be the interface of Fabric. he said:

"I think we can expect to see Co-Pilot interfaces proving NL interaction based on the Azure OpenAI service for every type of user. Data engineers will have options to use NL to generate code and drive Spark Workloads. Data integrators and analysts will use NL to generate SQL data transformations and SQL queries. Analysts and business users will ask questions to generate visualizations and dashboards. The workloads and platform are basically the same, but the generative AI lets you, it is promised, work more efficiently and productively without all the coding and drudgery that was previously required."

The workloads

Microsoft said Fabric comes with seven workloads in preview.

Data Factory has more than 150 connectors to cloud and on-prem data sources and the ability to transform data and orchestrate pipelines.
Synapse Data Engineering enables authoring in Spark, instant start with live pools, collaboration tools.
Synapse Data Science provides workflows for building models, collaborating, training and deploying them.
Synapse Data Warehousing provides a converged lake house and data warehouse experience SQL performance on open data formats.
Synapse Real-Time Analytics analyzes streaming data from IoT and edge devices, telemetry, logs with low latency.
Power BI in Microsoft Fabric provides visualization and analytics. Power BI in Fabric is also integrated into Microsoft 365 apps.
Data Activator monitors data and can trigger notifications and actions.

Finally, there's the caveat: Everything announced is still in preview. Henschen said:

"I think we’ll see a lot of wait-and-see reactions from customers and a lot of competitive responses. Changing data platforms is akin to turning a super tanker: It’s not something that happens quickly, and I would not expect a lot of market movement overnight."

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Zoom ends Q1 with 215,900 enterprise customers, touts AI strategy

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Zoom Video Communications' first quarter results were better than expected and CEO Eric Yuan said the company will continue to invest in AI "to help make interactions more meaningful and communications more effective."

The company reported first quarter earnings of $15.4 billion, or 5 cents a share, on revenue of $1.1 billion, up 3% from a year ago. Non-GAAP earnings were $1.16 a share. Wall Street was expecting Zoom to report earnings of 99 cents a share on revenue of $1.08 billion.

Zoom is a key future of work play and appears to be gaining some enterprise traction. The company, which recently closed the purchase of Workvivo, said it had 215,900 enterprise customers in the first quarter, up 9% from a year ago. Zoom added that it had 3,580 customers contributing more than $100,000 in trailing 12 months revenue. Average monthly churn in the first quarter was 3.1%, down 50 basis points from a year ago.

In prepared remarks, Yuan said outlined Zoom's AI strategy, which includes ZoomIQ with generative AI for chat and email composing as well as meeting summaries. Zoom also invested in Anthropic, an AI safety and research company. He said:

"Our partnership with Anthropic further bolsters our federated approach to AI by allowing Anthropic’s AI assistant, Claude, to be integrated across Zoom’s entire platform."

Kelly Steckelberg, CFO of Zoom, said the company is seeing growth in Americas with macro economic headwinds in the rest of the world.

As for the outlook, Zoom raised its guidance. For the second quarter, Zoom said revenue will be between $1.11 billion and $1.115 billion. Non-GAAP earnings will be between $1.04 to $1.06 a share.

For fiscal 2024, Zoom is projecting between $4.65 billion and #4.48 billion with non-GAAP earnings between $4.25 and $4.31 a share.

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8 takeaways from Constellation Research's Healthcare Transformation Summit

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Constellation Research's Healthcare Transformation Summit pulls together healthcare CXOs, analysts, startups, and big thinkers to share ideas under Chatham House rules. As a result, these takeaways are anonymized and high-level observations.

Here's a look at some of the key items from the Healthcare Transformation Summit.

Healthcare isn't immune from broader trends, but in many ways is saddled with more technical debt. The challenge for healthcare is scaling and adopting to an aging population, lifestyle attitudes, government policy, automation, AI and technological change and evolving landscape of health and safety laws.
Some of the hot button issues facing the healthcare industry include:

Medicaid's funding crisis.
Talent and staffing burnout.
Automation of routine tasks with AI.
Optimizing healthcare for telehealth.
Redefining nursing workflows and processes.
Consumerism.
Integrated care.
A patient journey that moves across multiple digital domains and silos.

Immersive AI will retool healthcare. It's early, but the combination of augmented reality and AI will be revolutionary.
Generative AI will increasingly take some of the front-end healthcare roles and drive virtual medicine, but integration, data and privacy issues loom. How Generative AI Has Supercharged the Future of Work
The five senses have almost been replicated with smell and taste the final frontiers.
Digital assets in healthcare will bring new monetization models with unique data sets, network and data, longitudinal data sets, derived data advantage and new classes of data.
Insurance will see new monetization models. Today, insurance premiums represent monetization, but the future will include credit service, reselling market assurance, cash value guarantees, independent valuation services and fractional ownership.
Healthcare has technical debt challenges with massive electronic health record deployments and systems, which are the equivalent to ERP for other industries.

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Dell Technologies revamps APEX Cloud platform

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Dell Technologies updated its Dell APEX multicloud platform with Microsoft and Red Hat offerings, storage and data mobility services and compute and PC-as-a-service updates. Dell Technologies said it will connect its on-premises object storage with Databricks' Lakehouse Platform.

The APEX updates, announced at Dell Technologies World in Las Vegas, came as Chairman and CEO Michael Dell and co-chief operating officer Chuck Whitten walked through the company's portfolio, innovation and customers including the likes of Hyundai.

"Technology is at the center of all the significant opportunities in every domain," said Michael Dell, who noted the company ships 2 units per second and 179,000 orders per day through its supply chain.

Dell also talked about artificial intelligence's leap and how data and infrastructure will drive generative AI advances. "We are going to need new architectures with higher speeds and efficiency," said Dell. He said AI models will be deployed at the edge that are proprietary as well as open source.

"We hear your loud and clear about your future with generative AI," said Dell.

Whitten said customers are trying to solve for the future of work, multicloud deployments, scaling edge infrastructure, generative AI and security.

Here's the rundown of Dell Technologies World announcements:

Dell APEX Cloud Platform for Microsoft Azure connects Microsoft's native management tools, Azure Arc infrastructure and governance across Dell on-premises infrastructure and Azure.
Dell APEX Cloud Platform for Red Hat OpenShift aims to simplify container application development with Kubernetes. Customers will be able to run containers and virtual machines with unified experience and support for various CPUs, workloads and Red Hat Enterprise Linux.
Dell APEX Cloud Platform for VMware will enable the ability to deploy vSphere on an integrated system with Dell software-defined storage. The offering also connects with Dell APEX Private Cloud and Dell APEX Hybrid Cloud.
Dell APEX Storage for Public Cloud will connect with AWS, Azure and Dell APEX File Storage for AWS. Customers will be able to tune cloud strategies across multiple cloud and on-premises storage environments.
Dell APEX Protection Storage for Public Cloud combines data protection storage for AWS, Azure, Google Cloud and Alibaba Cloud.
Dell APEX Navigator for Multicloud Storage is SaaS that simplifies and secures management of Dell APEX Block and File Storage. It combines with Dell APEX Navigator for Kubernetes, a service that provides storage management, data replication, mobility and observability.
Dell APEX Compute delivers bare metal compute in data centers, edge environments or colocation facilities.
Dell APEX PC-as-a-Service (PCaaS) aims to deploy PCCs with predictable costs. The service covers the entire Dell portfolio.

As for the Databricks partnership, the companies said Dell's enterprise storage platforms will connect to Databricks Lakehouse Platform. Dell can connect Databricks in the public cloud with Dell object storage in multiple environments.

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Walmart, Target highlight intersection of supply chain, customer experience

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Supply chain and customer experience are typically viewed as two different disciplines, but Walmart and Target are illustrating how they're blending together.

Walmart has been talking about omnichannel retail for years and its tech team has consolidated apps, installed a multi-cloud approach and invested heavily in supply chain automation and logistics. The upshot is that Walmart's stores, apps and commerce engine are unified. Today, those investments are paying off because Walmart tends to benefit during economic uncertainty.

Doug McMillon, Walmart CEO, said on the company's first quarter earnings conference call:

"The omnichannel model we're building continues to resonate with customers and members. As expected, a higher mix of sales in the food and consumables categories negatively affected gross profit, but strong expense management and progress with our newer mutually reinforcing businesses helped us grow profit ahead of sales at 17.3%."

McMillon added that customers are buying private brands, trading down and cutting discretionary spending. As a result, Walmart is managing inventory tightly as well as expense management. It is also boosting productivity and operating margins via automation.

At its investor meeting in April, Walmart walked analysts through its ambient distribution center and market fulfillment centers, which use automated storage and retrieval systems. "It's about creating a supply chain that's better, not just bigger," said McMillon. "We're excited about how our new capabilities will help our associates by making some of our more physically demanding jobs into more rewarding, higher skilled career paths."

Walmart is realizing that its supply chain game directly impacts the customer experience--especially for digital business. Walmart's e-commerce comparable sales were 27% higher in the first quarter compared to a year ago.

And the big benefit is that the more Walmart optimizes its supply chain the more it increases margins. And customers get goods fresh and fast since Walmart is increasingly about grocery. Walmart CFO John David Rainey said, "we want our ROI to go up every year."

At Walmart's April investor meeting, Rainey said the company's investment in automation, robotics and software are exceeding productivity targets by as much as 30%. Walmart said by the end of the year, 65% of its stores will be serviced by automation and 55% of its fulfillment center volume will be automated.

Target is also connecting the dots between supply chain, automation and customer experience. Target Chief Operating Officer John Mulligan said on the retailer's first quarter earnings call that his company is also investing in automation. He said:

"With this modernization effort, our primary goal is to reduce those labor demands on our stores. We achieved that result by moving work upstream to a distribution center where we can apply the appropriate processes, technology, tools and automation to accomplish the work at scale. This results in higher labor efficiency for the company overall, while allowing our store team members to spend more time in the front of our stores with our guests. In the upstream distribution centers, we've opened over the last two years, we've implemented technology and capabilities that improve how product is sorted and loaded onto trailers headed for our stores. These improvements reduce the necessary time for the store team to unload the trailer and for them to move the inventory to where it's needed in the store."

Target is also deploying automation for the shipment of quantities smaller than a full case. The automated system makes the shipment easier to unload. Target is also upgrading legacy distribution centers and deploying tools for faster store replenishment, said Mulligan.

While sortation centers are not highly automated, Target is using "sophisticated process logic" to sort packages and provide better experiences. Last mile delivery is also a focus for Target, which owns Shipt. Target is using larger trucks for last mile deliveries as well as a standardized way to load them.

Mulligan said:

"While there are many different ways our team is working to gain efficiencies and deliver value to the business, all of our projects have some things in common. First and foremost, they're all designed and implemented with a focus on our guest and continuing to build their engagement with Target. In keeping with that guest focus, we design processes and deploy technology and automation as a way to highlight the human element in our business rather than minimizing it."

Ultimately efficiency and experience are blending together for retailers. Walmart CFO Rainey said:

"Retail has changed a lot in the last 5 to 10 years, and the change over the next 5 to 10 years is likely to be just as significant. Customers are demonstrating preference for multichannel offerings, convenience, value and selection, and up to this point, for most, it's proving challenging to provide all of these things at attractive economics. What's important to understand is this, the investments we've made in people, price, e-commerce, and the high value technology capabilities are why we are at an inflection point today. The benefit of any technology platform is being able to scale it at a lower marginal cost."

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Alibaba plans to spin off its Cloud Intelligence Group within 12 months

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Alibaba Group said it will spin off its Cloud Intelligence Group within the next 12 months as a stock dividend distribution to shareholders.

Daniel Zhang, CEO of Alibaba, said the intention for its cloud unit is "to become an independently publicly listed company." Alibaba had previously announced plans to form a series of companies that will become independent companies. Other spinoffs will include its international commerce unit as well as its logistics group among others.

The company's cloud unit, which includes Alibaba Cloud and DingTalk, a productivity and collaboration suite, delivered fiscal first quarter revenue of $3.58 billion, down 3% from a year ago. Stripping out intersegment revenue at Alibaba, the cloud unit had revenue of $2.71 billion, down 2%, with adjusted EBITA of $56 million.

Overall, Alibaba reported fiscal first quarter net income of $3.2 billion on revenue of $30.3 billion, up 2% from a year ago.

Alibaba Cloud said the decline in revenue "reflected delays in delivery of hybrid cloud projects given the COVID-19 resurgence in January, normalization of CDN demand compared to the same period last year, as well as the impact from a top customer phasing out using our overseas cloud services for its international business due to non-product related reasons."

Alibaba said it is working to diversify cloud revenue from non-Internet industries such as financial services, retail, media and automotive. As of March 31, Alibaba Cloud derived 55% of its revenue from non-Internet based companies.

The plan for Alibaba Cloud going forward is to continue to diversify its revenue and deliver compute for machine learning and generative AI. In April, Alibaba Cloud outlined its latest large language learning model (LLM) and plans to use its generative AI throughout its product suite. The Alibaba Cloud LLM, Tongyi Qianwen, will be similar to other generative AI services where there's a base model that can be customized for business use cases.

So far, Tongyi Qianwen has received more than 200,000 beta testing requests from enterprise users. Alibaba has also used Tongyi Qianwen in its DingTalk suite.

It remains to be seen how Alibaba's cloud unit fares as an independent company. Alibaba Cloud has recently cut prices on multiple instances by as much as 50%. The goal is to increase public cloud adoption in China and gain share.

Alibaba said it is currently seeking external strategic investors in the Cloud Intelligent Group before the spinoff. In addition, the cloud spinoff will be subject to restructuring of assets and liabilities, contracts and incentive plans.

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Palo Alto Networks CEO Arora: Generative AI will favor those with strong data sets

Palo Alto Networks CEO Arora: Generative AI will favor those with strong data sets

Why firing is more important than hiring when building a startup

Why firing is more important than hiring when building a startup

OpenAI's Brockman: Industry use cases, developers next stage for generative AI, ChatGPT

OpenAI's Brockman: Industry use cases, developers next stage for generative AI, ChatGPT

Accenture's Paul Daugherty: Generative AI today, but watch what's next

Accenture's Paul Daugherty: Generative AI today, but watch what's next

Microsoft unveils Microsoft Fabric at Build 2023, pitches integration, simplified pricing

Microsoft unveils Microsoft Fabric at Build 2023, pitches integration, simplified pricing

The workloads

Zoom ends Q1 with 215,900 enterprise customers, touts AI strategy

Zoom ends Q1 with 215,900 enterprise customers, touts AI strategy

8 takeaways from Constellation Research's Healthcare Transformation Summit

8 takeaways from Constellation Research's Healthcare Transformation Summit

Dell Technologies revamps APEX Cloud platform

Dell Technologies revamps APEX Cloud platform

Walmart, Target highlight intersection of supply chain, customer experience

Walmart, Target highlight intersection of supply chain, customer experience

Alibaba plans to spin off its Cloud Intelligence Group within 12 months

Alibaba plans to spin off its Cloud Intelligence Group within 12 months

Research

Analyst Services

Videos

Communities

Events

Insights Live

Results

Palo Alto Networks CEO Arora: Generative AI will favor those with strong data sets

Why firing is more important than hiring when building a startup

OpenAI's Brockman: Industry use cases, developers next stage for generative AI, ChatGPT

Accenture's Paul Daugherty: Generative AI today, but watch what's next

Microsoft unveils Microsoft Fabric at Build 2023, pitches integration, simplified pricing

The workloads

Zoom ends Q1 with 215,900 enterprise customers, touts AI strategy

8 takeaways from Constellation Research's Healthcare Transformation Summit

Dell Technologies revamps APEX Cloud platform

Walmart, Target highlight intersection of supply chain, customer experience

Alibaba plans to spin off its Cloud Intelligence Group within 12 months