Results

Agentic AI: Everything that’s still missing to scale

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

Agentic AI is entering its next phase of hype as vendor conference season unfolds. Pick an enterprise vendor and you'll hear a keynote that revolves around AI agents.

It's AI agents everywhere. If we created a drinking game every time "agent" was uttered we'd be hammered. The big idea behind agentic AI will come to fruition, but there are more than a few missing elements that need to fall in place.

Here's what is missing from the agentic AI stack today.

Standards. If AI agents live in one platform and focused on one function such as CRM, HR, service, sales they can be useful. However, there are few workflows that live in one data store in control of one vendor. The reality is that these AI agents are going to have to communicate, negotiate, form workflows and execute tasks on their own.

That reality is why Anthropic created Model Context Protocol (MCP), an open standard for connecting AI assistants to systems where data lives. OpenAI and a bevy of others are backing MCP. The need for standards is why Google Cloud also launched Agent2Agent, a communications standard that also has some big backers. These efforts are a nice step toward connecting agents across the AI workflow chain, but more is needed.

Constellation Research CEO R "Ray" Wang noted that AI agent interoperability needs to model itself after HL7 (Health Level 7), which is a set of international standards for exchanging electronic health information.

Another question worth asking via Constellation Research analyst Holger Mueller: Will these AI agent communication and automation standards be based on natural language or API calls or both?

Multi-agentic cross platform agents. That requirement is a mouthful, but without standards in place and vendors focused on agentic AI within their platforms true agents working across platforms remain more about theory. If agentic AI is going to work they have to be horizontal.

There's a reason why early agentic AI use cases and development have thrived at integrators relative to vendors. Integrators core business is working across platforms. Vendors not so much.

What we need to see is interoperability across MCP, Google Cloud's A2A and platforms from the likes of Boomi. In some ways agentic AI is like email back in the day--at first email only worked within a company. Once multiple companies could email new collaboration was opened up.

The end of agent washing. Vendors hopped on the agentic AI bullet train in a hurry. Everything is now agentic. But there's a downside to this marketing bonanza as surfaced by our BT150 CxOs. The downside? CxOs are glazing over at the AI agent claims. These BT150 veterans, who have seen cloud washing, followed by AI washing, followed by agentic AI washing, are noting that RPA may get the job done and note that there are a lot of APIs masquerading as AI agents these days.

A white t-shirt with black text AI-generated content may be incorrect.

Horizontal use cases that can go vertical. While vendors have focused on AI agents that revolve around their go-to-market efforts, the natural progression for enterprises may be horizontal use cases that can form and then deconstruct based on what needs to be done.

Minimized agent sprawl and lock-in risk. Those realities point to a horizontal approach and CxOs are likely to look to their hyperscale cloud providers as well as cross-system vendors like ServiceNow to orchestrate agents. The value will be in the orchestration layer and neutral vendors are going to be valued.

Data products that are autonomous and can work with agents. To date, the prerequisite of agentic AI is to get your data all in one place--or just a few places. Perhaps that means you'll have just one or two data lakehouses instead of the six you have now.

Here's the problem: Enterprises have been chasing the one data store to rule them all strategy and it hasn't worked. Constellation Research’s Mueller has said enterprises need to get down to a few primary data stores and it's likely you'll still have a data estate that includes SAP, Databricks, Salesforce Data Cloud, Snowflake and hyperscale cloud platforms. If that lineup still sounds like a lot consider that just having four data platforms is way better than the 10 you have now. Congrats!

NextData, a startup led by Zhamak Dehghani, who created the data mesh concept, launched the NextData OS, a platform for building and operating autonomous data products. The idea is that these data products are decentralized and enable you to scale with agents without uprooting your infrastructure. "I hope to change this paradigm and frame of thinking that we have to have the data in one place because the moment you get there it's out of date," said Dehghani. "We want to have one way of getting access to data in a standard way."

Dehghani's company is young, but an abstraction layer and operating system for data that works well with agents and multiple modes of access is on target. NextData's launch webinar featured Mars and Bristol Myers Squibb as customers.

An end to agentic AI storyline that obsesses about humans. To date, agentic AI has been pitched as a way to scale labor. These digital labor pools will complement humans, but also restrain hiring.

Microsoft's annual report on the state of work envisions management roles that emerge to coordinate human and digital labor. Under these constructs, AI agents are mapped to human roles.

That AI agent-as-human thinking may be misplaced. Wang argues that the focus for agentic AI has to revolve around decision trees and automated decision-making. Mapping AI agents to human roles just scales what enterprises do today.

A diagram of automation AI-generated content may be incorrect.

Process knowhow. AI agents are a handy way to handle the process flows that drive ROI. Order-to-cash, procurement, supply chain and other core processes move the returns the most for enterprises.

What's lacking in a lot of these agentic AI pitches is process automation, process mining and intelligence. I've noted before that agentic AI is going to flop without a hefty dose of process.

The focus on process is needed because the biggest question facing enterprises is where do you insert the human in agentic AI workflows? That issue is what unlocks ROI. If you see AI agents as a human labor replacement, you're missing the big process picture.

In the end, enterprises are a collection of human and digital processes that can be optimized and continually improved. Flashy agentic AI marketing isn't going to change that fact.

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

Intel Q1 a start, but no quick fixes ahead

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

Intel's first quarter results were better-than-expected and new CEO Lip-Bu Tan said the company will undergo a restructuring to improve "execution and operational efficiency while empowering our engineers to create great products."

The chipmaker, which has been walloped by Nvidia and AMD, said it will aim to lower operating expenses in 2026 to $16 billion from $17 billion in 2025. Operating expenses in 2025 were previously projected to be $17.5 billion. The company didn't disclose a headcount figure for layoffs.

Intel reported a first quarter loss of 19 cents a share on revenue of $12.7 billion, flat with a year ago. Non-GAAP earnings were 13 cents a share. Intel was expected first quarter earnings of a penny a share on revenue of $12.3 billion.

As for the outlook, Intel projected second quarter revenue of $11.2 billion to $12.4 billion with break even non-GAAP earnings. It's possible that demand was pulled forward in the first quarter due to tariff concerns.

Tan said there are no quick fixes for Intel.

"The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth. I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products. We are going back to basics by listening to our customers and making the changes needed to build the new Intel."

CFO David Zinsner said that the "current macro environment is creating elevated uncertainty across the industry, which is reflected in our outlook."

By the numbers:

  • Intel's client computing group had revenue of $7.6 billion, down 8% from a year ago.
  • Data center and AI revenue was $4.1 billion, up 8% from a year ago.
  • Intel Foundry revenue was $4.7 billion, up 7% from a year ago.

Intel's AI strategy is emerging and Tan said the company will be focused on multiple workloads with a hefty dose of edge use cases. Stay tuned for the plan. Here's what Tan said on Intel's conference call:

  • "There are many areas we need to improve, and there's no quick fixes. We must remain laser focused on execution," said Tan. "We need to fundamentally transform our culture and the way in which we operate. Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win. It takes too long for decisions to get made. New ideas and people who generate them have not been given the room or resources to incubate and grow. The unnecessary silos have led to bad execution."
  • "We continue to identify ways to operate our manufacturing network more efficiently, I have directed our teams to find additional $2 billion of savings in our growth CapEx, taking our target for this year to $18 billion. We will continue to take closer look at our existing factory footprint to ensure that we are making the most efficient use of our in-store capacity before committing to any additional spending," said Tan.
  • "We are taking a holistic approach to redefine our portfolio to optimize our products for new and emerging AI workloads. We are making necessary adjustments to our product roadmap, so that we are positioned to make the best-in-class products while staying laser focused on execution and ensuring on time delivery," he said.
  • "Success in foundry business requires more than process technology manufacturing capabilities alone. It is first and foremost a customer service business, built on foundational principle of trust. And we need to instill customer service mindset across our foundry business," said Tan.

Holger Mueller, an analyst at Constellation Research, said:

"Intel does not manage to catch a break – though the management team has been able to deliver to guidance, which in itself is an achievement. New CEO Lip-Bu Tan is taking a page from the classic acceleration playbook – cut layers and elevate the value creators (for Intel its R&D, avoid unnecessary meetings, change OKRs, and also ask everybody to be in the office for 4 days a week). But the problem remains that Intel’s Client Computing Group keeps shrinking, and the growth of its Data Center and AI group cannot make up for it as it operates at a smaller base. Intel needs new growth and Tan needs to find it."

 

Data to Decisions Tech Optimization Big Data Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer

Alphabet allays Q1 worries over Google ads, Google Cloud revenue up 28%

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

Alphabet handily topped first quarter estimates as Google's advertising business held up well and Google Cloud revenue checked in at $12.26 billion.

The company reported first quarter net income of $34.54 billion, or $2.81 a share, on revenue of $90.23 billion, up 12% from a year ago. Wall Street was looking for first quarter earnings of $2.01 a share on revenue of $89.17 billion.

Sentiment headed into Alphabet's results was weak due to worries about advertising amid economic uncertainty. Here's the breakdown by unit.

  • Google search and other revenue was $50.7 billion.
  • YouTube ad revenue in the first quarter was $8.93 billion, up from $8.09 billion a year ago.
  • Google Cloud revenue was $12.26 billion, up 28% from $9.58 billion a year ago, with operating income of $2.18 billion.

A graph of a growing companyAI-generated content may be incorrect.

CEO Sundar Pichai said the quarter was solid with promise in Google's AI efforts. He said search AI overviews had 1.5 billion users per month. YouTube and Google One led subscription revenue as the company topped 270 million paid subscriptions in the first quarter.

Google Cloud Next coverage:

Other items in Alphabet's report:

  • Capital expenditures in the first quarter were $17.2 billion, up 43% from a year ago.
  • Alphabet had trailing 12-month cash flow of $74.88 billion.
  • The company ended the quarter with 185,719 employees, up from 180,895 from a year ago.

A close-up of a graphAI-generated content may be incorrect.

Items from the conference call:

  • Pichai said Google Cloud is offering the widest range of TPUs and GPUs and will "continue to invest in next generation capabilities."
  • All 15 of products with more than half a billion users are using Gemini models. 
  • Circle to search usage was up 40% in the first quarter compared to a year ago. Monthly Lens visual searches are up by 5 billion since Octover. 
  • Philipp Schindler, chief business officer of Google, said YouTube's revenue growth was driven by direct response over brand ads. 
  • Schindler said AI overview monetization is similar to traditional search results. 
  • Anat Ashkenazi, CFO, said search gains was "once again broad based across verticals led by financial services, due primarily to strengthen insurance followed by retail."
  • Ashkenazi said growth in Google Cloud was across core and AI services. Workspace revenue was driven by increasing average revenue per seat. Google Cloud operating income was driven by improvements in productivity, efficiency and utilization. 

Ashkenazi said that Google Cloud capacity remains constrained. 
"In cloud, we're in a tight demand supply environment, and given that revenues are tied to the timing of deployment of new capacity, we could see variability in cloud revenue growth rates depending on capacity deployment. Each quarter we expect relatively higher capacity deployment towards the end of 2025."
 

A graph of red columnsAI-generated content may be incorrect.

Constellation Research analyst Holger Mueller said:

"Alphabet had a good quarter showing strong ad revenue. Overall Alphabet grew and became more profitable.  Google Cloud did well in the sense of growing 28% YoY now clearly being in the double digit billions of dollars in revenue. Google announced substantial AI innovations at Google Cloud Next, which reaffirms its leadership in AI, with a lead of 3-4 years over the cloud competitors. Now it only has to make sure that CxOs notice and bring in Google Cloud workloads. On the regulatory side, it remains a cliff hanger with Alphabet and its Department of Justice trial. But in the case of splitting up the company, it may bring more focus to the separate entities, so there's nothing investor should worry about – at least from what we know today."

 

Data to Decisions Matrix Commerce Next-Generation Customer Experience Tech Optimization Digital Safety, Privacy & Cybersecurity Innovation & Product-led Growth Future of Work Google Cloud Google SaaS PaaS IaaS Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP CCaaS UCaaS Collaboration Enterprise Service Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer

AI, Decision Velocity, and the Future of Marketing | CR CX Convo

Liz Miller
Vice President & Principal Analyst Constellation Research
About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role&nbsp;of the&nbsp;Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. &nbsp;With over 30 years of marketing, Miller offers strategic&nbsp;guidance on the leadership, business transformation and technology requirements to deliver on&nbsp;today’s CX strategies. She has worked with global&nbsp;marketing organizations to transform… Read more

Don't miss that latest CR #CX Convo between Rob Walker of Pegasystems and Constellation analyst Liz Miller about #AI reshaping enterprise strategy, operations, and customer engagement...

Here are 4️⃣ covered topics you'll want to know more about:

🔍 AI as a productivity multiplier: Intelligent assistants that double output — not just in theory, but in execution.

🎨+📊 The convergence of creative and statistical AI: #GenerativeAI is no longer just for content — it's driving #data-informed creativity across functions.

🏢 Becoming AI-native is a strategic imperative: Firms that don’t consciously evolve risk falling behind. AI-native isn’t a buzzword — it’s a business model shift.

💡 The Future of Marketing: Hyper-personalized content at enterprise scale, AI avatars engaging with customers in real time, and a complete rethinking of traditional campaign models.

Watch the full interview for a peek at the future of enterprise tech.

On cx_convos <iframe width="560" height="315" src="https://www.youtube.com/embed/qPmkOMbTFB0?si=ilFIakFEooHc3mKj" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>

ServiceNow makes its CRM ambitions crystal clear

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

ServiceNow is hellbent on being a big CRM player, relegating established giants like Salesforce to the legacy infrastructure bin and running its platform playbook repeatedly.

For those of us watching ServiceNow closely, CEO Bill McDermott's CRM play isn't that surprising. After all, ServiceNow has dabbled in CRM workflows for years, but the recent acquisitions of Moveworks and Logik.ai telegraph the move.

And if you needed more evidence that ServiceNow sees itself as a CRM disruptor consider this: On a strong first quarter earnings call, the acronym "CRM" was mentioned 35 times. Geopolitical and some flavor of economy was mentioned 10 times. Pro Plus, ServiceNow's AI agent tier, was noted 16 times. AI agents were mentioned 11 times. How's that for priorities?

McDermott noted that ServiceNow CRM and industry workflows are "already ServiceNow's fastest growing business." He added that Logik.ai will be used to drive AI powered selling.

"This will be a natural step forward in ServiceNow CRM strategy, building on our core strengths of connecting functional teams and powering simple, efficient workflows.

Configure, price, quote, sell, fulfill, service on one fully integrated architecture with native built AI agents to take automation to the next level. There's not a day that passes when we don't hear from customers who are dissatisfied with their status quo. For a long time, I've been saying no one has to lose for us to win. Our customers have now adjusted me. They want someone else to lose, so they can continue to invest more in ServiceNow."

The numbers are highlighting ServiceNow momentum and it’s very clear that the company sees itself on a collision course with Salesforce, which is unifying its platform with Agentforce. ServiceNow has plenty of room to run in CRM as it expands its total addressable market. CRM and industry workflows were in 16 of the company's top 20 deals and nine of them had more than $1 million in ACV.

McDermott was asked about ServiceNow's CRM strategy since it doesn't sound like the company is going to be satisfied being a connector of workflows. In fact, ServiceNow is getting closer to the core system of record.

Note the nuance from McDermott:

"We regard the CRM system of record as an important data source. It's fine. But you're right. Our ambitions supersede a database. We believe strongly that our massive capabilities have emboldened us to go after a CRM in a differentiated way. And for one example, when you just talk about sales and order management and that solution, we're just super excited about how we're going to reimagine it. If you talk to a high-tech manufacturer today and they have to put together a supercomputer, the complexity of configuring it, pricing and quoting it could be days. So anything that's complicated, we're going to do in minutes or seconds. And we're delivering a fully integrated AI powered front office. That's going to connect sales and service, streamline operations and dramatically improve time to revenue."

McDermott said enterprises want to get away from "the fragmented legacy CRM stacks" and want a unified platform to take advantage of AI and AI agents. "It would be super tactical to add an agent to one instance of a disconnected CRM system from all the other processes I just mentioned. So we're going to make CRM faster. We're going to make it smarter and it's going to be purpose-built for modern business," said McDermott.

ServiceNow's Amit Zavery also noted that customers are having a difficult time modernizing workflows with AI with legacy systems. It's about process reinvention for CPQ, sales order management and customer service as much as CRM.

Indeed, McDermott said he was talking to one company that had 175 different instances of a CRM system and looking at ServiceNow to consolidate them.

The other takeaway is that ServiceNow leaders see their platform as deflationary to the broader enterprise software space. "No one says I'm going to use my ERP to cut across all systems and drive productivity. And that same goes for a CRM standalone or an HCM standalone. But they do say that about ServiceNow," said McDermott. "We put it all together in an enterprise grade AI workflow. So now you're taking advantage of AI, you're taking advantage of the data, and you're taking advantage of integrating processes at mass scale to get big business outcomes. It just so happens that CRM is one that we intend to be the leader in."

 

Data to Decisions Next-Generation Customer Experience Future of Work Innovation & Product-led Growth New C-Suite Sales Marketing Digital Safety, Privacy & Cybersecurity servicenow Chief Information Officer

IBM maintains Q2 outlook, reports better-than-expected Q1

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

IBM reported better-than-expected first quarter results and maintained its outlook in what CEO Arvind Krishna called a "fluid" macroeconomic environment.

Big Blue also said that its generative AI book of business is now more than $6 billion to date and up more than $1 billion in the quarter.

IBM reported first quarter earnings per share of $1.12 a share on revenue of $14.5 billion, up 1% from a year ago. Non-GAAP earnings were $1.60 a share.

Wall Street was expecting IBM to report first quarter earnings of $1.40 a share on revenue of $14.4 billion. Krishna said:

"We remain bullish on the long-term growth opportunities for technology and the global economy. While the macroeconomic environment is fluid, based on what we know today, we are maintaining our full-year expectations for revenue growth and free cash flow."

  • Software revenue of $6.3 billion was up 7% in the first quarter compared to a year ago. Growth was led by Red Hat with first quarter growth of 12% and automation, up 14%.
  • Consulting revenue in the first quarter was $5.1 billion, down 2% from a year ago.
  • Infrastructure revenue was $2.9 billion in the quarter, down 6%.

A screenshot of a computer screen AI-generated content may be incorrect.

As for the outlook, IBM projected 2025 revenue growth of at least 5%. Second quarter revenue will be between $16.4 billion and $16.75 billion.

Krishna said:

"Technology remains a key competitive advantage allowing businesses to drive cost efficiencies, productivity and preserve the balance sheets. In the near term, uncertainty may cause clients to pause and take a wait and see approach. However, the value of hybrid cloud automation, data sovereignty and on premise solutions becomes even more critical in volatile windows. Recent conversations that I've had with clients reflect this view of the current environment."

He also touted AI's role. 

"The AI portfolio we have built is designed to give clients a comprehensive set of tools to deploy AI within their enterprise. AI agents will accelerate the ability of many enterprises to turn the promise of generative AI into real value. Consulting is helping clients design and deploy AI strategies and use cases." 

Other items from the call:

  • Krishna said infrastructure is playing a bigger role with the new z17 mainframe and first installment of IBM Quantum System Two in Spain.
  • CFO James Kavanaugh said IBM is leveraging AI to improve its own productivity. "We remain laser focused on accelerating our productivity initiatives. We are transforming our enterprise operation, leveraging technology and embedding AI across more than 70 workflows, such as HR IT support, procurement, finance, quote to cash and more," he said. 
  • IBM has decreased its vendor spend by more than $1 billion by optimizing supply chain and service delivery and right-sizing infrastructure. 
  • IBM has little tariff exposure in the US as goods imported outside of the US represent less than 5% of the overall spend. 
Data to Decisions IBM Chief Information Officer

ServiceNow eases worries with strong Q1 earnings, Q2 outlook

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

ServiceNow's first quarter should alleviate a bevy of emerging concerns in enterprise technology. The company landed multiple Pro Plus AI deals in the quarter and grew its US public sector business by more than 30% amid macroeconomic uncertainty.

For the first quarter, ServiceNow reported earnings of $460 million, or $2.20 a share, on revenue of $3.088 billion. Non-GAAP earnings in the first quarter were $4.04 a share.

Wall Street was looking for earnings of $3.94 a share on revenue of $3.09 billion.

The company has expanded more into CRM and revamped its business model so AI agents are activated on its platform and enterprises pay by consumption. ServiceNow's ground game is also strong as the company shined in manufacturing and healthcare and life sciences.

In addition, ServiceNow outlined new partnerships along with its results. ServiceNow said it has partnered with Aptiv to provide edge device intelligence across multiple industries. ServiceNow also said it will launch an AI service management suite with Vodafone Business. The company also said it will partner with Devoteam in a bid to land CRM projects in Europe and the Middle East.

CEO Bill McDermott said the company is driving value for customers and playing a big role in transformation projects. CFO Gina Mastantuono said ServiceNow is driving efficiencies via AI and reducing costs. ServiceNow ended the first quarter with 508 customers with annual contract values topping $5 million.

As for the second quarter outlook, ServiceNow said it was benefiting from a weaker US dollar and it exceeded the high end of its subscription revenue guidance. Nevertheless, it said it “only flowing through part of those benefits” in its outlook to account for economic uncertainty. ServiceNow projected subscription revenue of $3.03 billion to $3.035 billion, up 19% to 19.5%. For 2025, ServiceNow is projecting revenue between $12.64 billion and $12.68 billion, up 18.5% to 19%.

On a conference call, McDermott said:

"While it's true there are some unknowns out there, this is far from the first macro disruption we have encountered. You don't build a defining company by surrendering to uncertainty. You do it by seeing challenges as opportunities. We have zero interest in anything less than outperforming."

He added that customers are focused on taking out costs, modernizing tech stacks and leveraging AI. McDermott also talked up ServiceNow's US government business.

CFO Mastantuono said: "We went through a very rigorous analysis of our business and its exposure to areas that could potentially be impacted by the current geopolitical. Federal is a piece of it and enterprise, of course. What I'll tell you is that demand remains strong. The customers we're talking to are absolutely focused on the future and growth in and cost out. ServiceNow platform remains a deflationary tool that customers are leaning into in times of uncertainty."

Constellation Research analyst Holger Mueller said ServiceNow put up a strong quarter. He said:

"ServiceNow breaks two key milestones, $10 billion projected revenue for the fiscal year and $3 billion in revenue for the quarter. For the longest time it was not clear where future growth will come from, but Bill McDermott and team have expanded their total addressable market going into CRM and HCM. Both markets make sense as they are characterized by unstructured processes and fragmented automation islands. But next quarter will show as ServiceNow is making new enemies."  

Other key items:

  • "CRM and industry workflows continued its momentum in 16 of our top 20 deals, with nine deals that were over a million core business workflow," said McDermott. 
  • McDermott said it is expanding its addressable market with CRM and supply chain. "There's not a day that passes when we don't hear from customers who are dissatisfied with the status quo," said McDermott. 
  • ServiceNow said RaptorDB, the company's next-gen database, saw annual contract value sequential gains and had five deals worth more than $1 million.  

A screenshot of a computer AI-generated content may be incorrect.

The company noted that Paul Smith is resigning as the company’s president of global customer and field operations. He is succeeded by Paul Fipps.

Data to Decisions Future of Work Next-Generation Customer Experience Innovation & Product-led Growth Tech Optimization Digital Safety, Privacy & Cybersecurity servicenow 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

Tech Transformation: AI, Layoffs, and Strategic Shifts | ConstellationTV Episode 103

Holger Mueller
Vice President and Principal Analyst Constellation Research
Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the&nbsp;cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.<br>&nbsp; Coverage Areas: Future of Work Tech Optimization &amp; Innovation<br>&nbsp; Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business… Read more
Liz Miller
Vice President & Principal Analyst Constellation Research
About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role&nbsp;of the&nbsp;Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. &nbsp;With over 30 years of marketing, Miller offers strategic&nbsp;guidance on the leadership, business transformation and technology requirements to deliver on&nbsp;today’s CX strategies. She has worked with global&nbsp;marketing organizations to transform… Read more

ConstellationTV Episode 103 just dropped! 📺 Co-hosts Liz Miller and Holger Mueller kick off with #tech news, covering Google Cloud Next, #AI innovation, and industry workforce dynamics (tech layoffs, sales restructuring, etc.)

Next, Liz and Rob Walker from Pegasystems talk h#AIagents. Namely, how autonomous thinking is the new competitive advantage, becoming an AI company is no longer optional, and how agents must deliver tangible #business value.

Holger concludes with takeaways from the Oracle Database Analyst Summit, describing how 7,000 Oracle developers are reimagining databases and expanding their multi-cloud capabilities and AI integrations.

00:00 - Meet the Hosts
00:19 - Enterprise Technology News
13:38 - CR #CX Convo with Pegasystems
20:50 - Oracle Database Analyst Summit
31:40 - Bloopers!

Tune in for a new ConstellationTV episode every two weeks! Get the latest news, research updates, and case study interviews during the fastest 30 minutes in enterprise technology!

On ConstellationTV <iframe width="560" height="315" src="https://www.youtube.com/embed/c-eVawO4moc?si=WfopJ_V2cVVzypmq" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>

Nvidia NeMo Microservices generally available, aims for AI agent data flywheel

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

Nvidia said its NeMo Microservices are generally available as it aims to enable developers to leverage a "data flywheel" that enables enterprises to scale AI agents.

The general availability of Nvidia NeMo Microservices is a follow-up to GTC 2025 announcements. The idea of the NeMo Microservices portfolio is to automate and scale what Nvidia refers to as AI teammates.

GTC 2025: Nvidia GTC 2025: Six lingering questions | Nvidia launches Blackwell Ultra, Dynamo. outlines roadmap through 2027 | Nvidia launches DGX Spark, DGX Station personal AI supercomputers | Nvidia's model parade: Llama Nemotron, Cosmos additions, Isaac GROOT N1

The components of NeMo Microservices, which will integrate with Nvidia's Triton Inference Server, include:

  • NeMo Curator for data processing.
  • NeMo Customizer for model customization.
  • NeMo Evaluator to pick and evaluate models.
  • NeMo Guardrails for protection.
  • NeMo Retriever for information retrieval.
  • Llama Nemotron, a reasoning large language model.

These components each have a role in taking enterprise data and creating the flywheel to leverage agents. Nvidia's NeMo Microservices are going live with a host of integrators and key enterprise vendors such as SAP and ServiceNow backing them.

NeMo Microservices will be available in Nvidia AI Enterprise, include hybrid cloud deployments and work with multiple models and AI software frameworks. Each microservice operates in its own container and Nvidia said there will be a lot more on deck focused on orchestration and adding components.

In a briefing, Nvidia outlined the following use cases:

  • Amdocs is using telecom genAI agents for a 64% improvement in average handling time with half of calls being resolved on the first call. Amdocs deployments used NeMo Microservices to create agents for billing, sales and network to analyze logs.
  • ServiceNow AI agents across HR, IT and customer support are freeing up 3 million hours of human capacity.
  • Yum is using the Nvidia microservices stack to expand voice AI order taking to 500 restaurants.
  • Accenture, AT&T and Cisco all cited use cases in research, call center agents and software development.

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

Microsoft: Human, AI agent ratios will be critical to success as new roles emerge

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

As enterprises adopt AI agents and digital workers, companies' success may depend on the human-agent ratio and how workflows are managed.

Microsoft released its annual Work Trend Index report, which surveyed 31,000 people across 31 countries and including LinkedIn labor and hiring trends. The report argues that Frontier Firms are emerging that are utilizing digital workers via agentic AI.

According to Microsoft, in the next two to five years most enterprises will be on the way to being a Frontier Firm. Findings of the report include:

  • 82% of leaders say they'll use digital labor to expand in the next 12- to 18-months.
  • 53% of leaders say productivity has to increase, but 80% of the global workforce said they are strapped for time and energy. Microsoft said its telemetry from Microsoft 365 applications show that employees are interrupted every two minutes by meetings, emails or pings.
  • 46% of leaders say their companies are using agents to fully automate workflows and processes.
  • 33% of leaders are considering using AI to reduce headcount.

The Microsoft report included new updates for Microsoft 365 Copilot including search, IT governance tools, notebooks and memory and personalization. Microsoft's general theme is that enterprises will be able to procure intelligence on-demand with digital labor.

Research: The Future of Agentic AI: Get Ready to Build Your Own Agents With Ease | Exponential Efficiency in the Age of AI | AI Trends for 2025 and Beyond | 2025 Employee Experience Trends

What caught my eye in the report is how enterprises on the frontier of agentic AI will have to create new roles and upend traditional org charts. After all, where humans sit in the workflow will be critical to success. Some of those roles that are emerging include:

  • AI data specialist.
  • AI ROI analyst.
  • AI business process consultant.

In addition, org charts may be replaced by models where teams form around jobs instead of functions powered by agents and humans. But mixing and matching humans and AI agents will be as much art as science. Roles may blend HR and IT as enterprises try to blend human and digital labor.

Indeed, 28% of managers are considering hiring AI workforce managers to lead hybrid teams of people and agents.

Microsoft noted in its report:

“As agents increasingly join the workforce, we’ll see the rise of the agent boss: someone who builds, delegates to, and manages agents to amplify their impact—working smarter, scaling faster, and taking control of their career in the age of AI. From the boardroom to the front line, every worker will need to think like the CEO of an agent-powered startup, directing teams of agents with specialized skills like research and data analysis. For those ready to expand their scope, it will be a career accelerator—but the data shows that leaders are ahead of employees. Bridging the gap will take more than access; it will require training, oversight, and a new way of working—one that leaders must help shape.”

 

 

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