AX100 Spotlight: RentSpree's Michael Storey on the intersection of CX, AI and success metrics

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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For Michael Storey, Chief Experience Officer at RentSpree, customer experience (CX) is intertwined with processes that can be simplified, a bevy of user experience metrics and teams across the company that realize strong CX equates to strong business results.

Storey, an AX100 member, is a speaker at Constellation Research's Ambient Experience Summit. I caught up with Storey to talk customer experience and RentSpree's approach.

RentSpree's role. RentSpree is a rental property management software company that started out as a service for screening applications. Today, RentSpree has evolved to be more of a suite for rental property management. "We really target the smaller mom and pop type landlords for property management," said Storey.

Use cases. "When you're looking for a tenant as a landlord and you have a few properties you really want to save yourself time," said Storey. "We hone in on people who want to work with an agent. There's a lot of complexity and compliance that needs to be considered. The agent will help the landlord market the property, screen those tenants and ensure they're reliable. They also set up leases, security deposits and rent payments."

Storey added that RentSpree is designed to make sure the agent is connected to landlords and over time, the landlords can become customers too. "We can really maximize the opportunity for the agent and help landlords maintain a good reputation as well," said Storey.

The end customer. RentSpree has four main cohorts. First is the partner organizations such as MLS and brokerages and their agents. Storey said RentSpree services are traditionally for agents. More recently, RentSpree has ben bringing landlords on to collaborate and create centralized tools. Applicants and renters are also target audiences, but aren't a marketing focus.

CX and process. "Agents have a lot of admin, paperwork and tasks they have to do," said Storey. "We do a lot of generative research to find out where the problems in the process are and how we can help them." He added that the rental market lacks automation and RentSpree is focusing on how it can simplify processes for agents with automation and AI.

CX and AI. Storey noted that even though AI has a lot of potential human centric design principles are still critical. "I think AI is going to help us be much more fluid in how we personalize experiences with contextual information," said Storey. "If we understand what the customer has been doing and what needs to be done, we can automate the experience."

AI plans. RentSpree is still early in its AI journey, but has integrated AI into its chat support and knowledge base. Storey added that genAI is also writing listing descriptions based on agent details. "We're starting to explore how we integrate AI across different features to take away tasks," he said. "We want to create a connected journey so we can take somebody through what they need to do without focusing on the perfect happy path. AI is helping us have a deeper understanding of the individual customer and where they are in their journey."

Measuring CX success. Storey said traditionally Net Promoter Scores and customer satisfaction rating have gauged CX success, but they are lacking. "I've changed my perspective on whether those things are actually useful. Storey said:

"I think giving the user a chance to give you some comments or tell you their thoughts is great, but when asking them to rate something you tend to get very extreme perspectives. You get very happy people or very unhappy people and we miss a lot of the people in between who are getting on with it, but don't feel compelled to write anything or to rate anything. I tend to look at UX success metrics as being things like task success rate, time on task, error rates, daily active users and monthly active users to tell us how sticky the product is really. I'm also looking at things that that lead to potentially lost revenue, support costs and time spent fixing issues. The churn rate is really one of the big ones."

CX as a team sport. Storey said RentSpree has been infusing a customer focused approach that includes the product team and other business teams as well as research and operations. "You want these teams to have a strong voice and seat at the table when we talk about roadmaps," said Storey. "We want people to understand that good customer experience leads to a thriving business. You can't really have a successful business if you don't do something your customer loves."

Zoom lands enterprise, contact center, Workvivo customers amid mixed Q4, outlook

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Zoom Video reported better-than-expected fourth quarter earnings as its enterprise revenue picked up. However, fourth quarter sales were below estimates and the outlook for the fiscal year was underwhelming.

The company reported fourth quarter earnings of $367.9 million, or $1.16 a share, on revenue of $1.18 billion, up 3.3% from a year ago. Non-GAAP earnings in the fourth quarter were $1.41 a share.

Wall Street was looking for Zoom to report non-GAAP fourth quarter earnings of $1.35 a share on revenue of $1.19 billion.

Zoom said its fourth quarter enterprise revenue was $706.8 billion, up 5.9% from a year ago. For fiscal 2025, Zoom's enterprise revenue was $2.75 billion, up 5.2%.

CEO Eric Yuan said Zoom was benefiting from Zoom AI Companion adoption and contact center and Workvivo demand.

In prepared remarks, Yuan said Zoom is uniquely positioned for agentic AI. He said:

"Zoom is a system of engagement for our users with recent information in ongoing conversations. This exceptional context along with user engagement allows us to drive greater value for customers. Our federated AI approach lets us combine the best models for each task.

We can use specialized small language models where appropriate, while leveraging larger models for more complex reasoning - driving both quality and cost efficiency."

Zoom launches AI Companion 2.0, eyes enterprise, industry expansion

Yuan also touted a big customer win with Amazon for Zoom Workspace. Amazon shuttered its Chime platform. "Our AI-first work platform continues to gain momentum, driven by our core strengths in meetings and expanding portfolio of integrated solutions such as Phone, Team Chat, Events, Zoom Docs, Whiteboard, and Zoom Rooms," said Yuan.

"We are excited to offer Zoom to Amazon employees and further strengthen our longstanding relationship with AWS as our preferred cloud provider. This builds on the success we’ve achieved helping customers easily procure and deploy Zoom through AWS Marketplace," said Yuan.

For contact center, Zoom said it signed its largest ARR deal in its history with a Fortune 100 company with more than 15,000 customers. Workvivo landed three deals worth more than $1 million in ARR.

For fiscal 2025, Zoom reported earnings of $1.01 billion, or $3.21 a share, on revenue of $4.66 billion, up 3.1%.

As for the first quarter outlook, Zoom projected revenue between $1.162 billion and $1.167 billion. Non-GAAP earnings are expected to be between $1.29 a share and $1.31 a share. Wall Street was expecting revenue of $1.18 billion in the first quarter and non-GAAP earnings of $1.34 a share.

Zoom projected fiscal 2026 revenue between $4.785 billion and $4.795 billion. Non-GAAP earnings will be between $5.34 a share to $5.37 a share. Zoom said that revenue in constant currency will be higher.

At the end of the fourth quarter, Zoom had 192,600 enterprise customers, 4,088 customers contributing more than $100,000 in revenue for the trailing 12 months and an online churn rate of 2.8%.

Salesforce, Google Cloud expand partnership: Here's what it means

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Salesforce and Google Cloud have expanded a partnership that will bring Google's Gemini models to Agentforce, integrate Salesforce Service Cloud tightly with Google Customer Engagement Suite and enable handoffs between the companies' AI agents.

The deal also gives Salesforce, which historically has run on AWS, another option for its workloads. Salesforce Agentforce, Data Cloud and Customer 360 applications will run on Google Cloud and be available through Google Cloud Marketplace.

See: Behind the Scenes: The Force Behind Agentforce | Salesforce launches Agentforce 2.0 as it ramps its release cadence | Salesforce Dreamforce 2024: Takeaways on agentic AI, platform, end of copilot era | Google Cloud launches Agentspace to create, deploy agents

Key items in the expanded Salesforce-Google Cloud partnership include:

• Salesforce can build Agentforce agents using Gemini and deploy Salesforce on Google Cloud.
• Customers will be able to use data bi-directionally from Google BigQuery and Salesforce with zero copy technology.
• The partnership will enable handoffs between Agentforce and Google Cloud agents.
• Agentforce will use Grounding with Google Search through Vertex AI.
• Salesforce Data Cloud and Google BigQuery will be tightly integrated.
• The integration between Salesforce Service Cloud and Google Cloud Customer Engagement Suite will include real-time voice translation and agent connections. The companies are also planning deep integrations between Slack and Google Workspace.
• Salesforce Tableau will have native integration with Looker and BigQuery.
• The companies plan to roll out integrations throughout 2025.

Constellation Research analyst Holger Mueller said the expanded partnership makes sense for both Google Cloud and Salesforce. Mueller recently penned a deep dive research report on Salesforce's Agentforce approach.

• AI agents bring consumption models to SaaS: Goldilocks or headache?
• DeepSeek's real legacy: Shifting the AI conversation to returns, value, edge
• Here’s what technology buyers say about AI, technology, transformation
• Agentic AI: Three themes to watch for 2025

Mueller said:

"This is a critical Deal for both vendors. Salesforce needs access to the leading AI platform that Google has, and it needs to make Agentforce multimodal. Google Cloud is also making available the most plausible grounding service (as we humans use it all the time) - Google Search.

Salesforce has been slowly weaning itself off from its first partner AWS. For Google it's critical as it needs workloads from SaaS vendors, has invested earlier than anyone into AI and now needs to monetize that investment. Getting the Data Cloud support is critical, as it's another proof point of data gravity and the initial 'hook' for future customer spending. And it's great news for existing and joint customers. AI in Agentforce gets better, with more options. And it gets easier for Salesforce customers on Google Cloud to adopt Agentforce.

Salesforce needs the best AI for Agentforce and Google has it both on the hardware and algorithm side."

MongoDB picks up Voyage AI, aims to integrate model reranking

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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MongoDB said it has acquired Voyage AI in a deal that aims to make embedding and reranking of models a native part of its database.

Voyage AI embeds and reranks models based on accuracy in retrieval augmented generation (RAG). MongoDB's bet is that these tools should be in the database layer to improve accuracy of models before they wind up in the AI agent pipeline.

Terms of the deal weren't disclosed.

Here's a look at what Voyage AI does from its documentation:

In a blog post, MongoDB CEO Dev Ittycheria said Voyage AI will bring the ability to rerank results in RAG to ensure accuracy. "We believe embedding generation and reranking, as well as AI-powered search, belong in the database layer, simplifying the stack and creating a more reliable foundation for AI applications. By bringing more intelligence into the database, we help businesses mitigate hallucinations, improve trustworthiness, and unlock AI’s full potential at scale," said Ittycheria.

Here's how MongoDB sees Voyage AI working in its stack.

Voyage AI will bring the following to MongoDB:

• A strong ecosystem on Hugging Face with Anthropic, LangChain, Harvey and Replit using Voyage AI.
• Enhanced vector searches that capture meaning across text, images, PDFs and structured data.
• Improved accuracy through advanced reranking models.
• The ability to fine tune models for different industries.

As for the integration, MongoDB will continue to make Voyage AI available in AWS and Azure marketplaces. Voyage AI will be embedded into MongoDB Atlas starting with an auto-embedding service for Vector Search followed by native reranking and then industry use cases. MongoDB also is planning enhanced multi-modal tools and instruction-tuned models.

With this integration, MongoDB said developers won't need to manage external embedding APIs, standalone vector stores or complex search pipelines.

• MongoDB 8.0 generally available, along with Atlas updates
• MongoDB delivers strong Q3 revenue growth

Holger Mueller, an analyst at Constellation Research, said the Voyage AI acquisition will make MongoDB a key player to curb hallucinations among models:

“Hallucination is a real AI problem, and the most relevant way of avoiding it through grounding is to query a trusted database. This is why the acquisition of Voyage AI by MongoDb is critical for MongoDB customers as it allows them in an easier and more efficient way to ground their AI models with embeddings (of code) and reranking (to find the right data) of Vector AI - all in their MongoDB data. It is critical that Vector AI remains available for 3rd party and other services as grounding demand is bigger than any single data store.” 

BT150 zeitgeist: CxOs weigh in on SaaS consumption models for genAI, agentic AI

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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CxOs say that software-as-a-service business models that include consumption are going to require a learning curve as well as a few surprise bills. Nevertheless, there may be benefits to consumption-based models even with drawbacks.

As previously detailed, SaaS vendors are all-in on consumption-based models for generative AI and agentic AI. Vendors are keeping seat and subscription models, but pricing AI usage based on consumption pricing.

With our monthly meeting of BT150 CxOs, consumption models were a key topic. Our CxO call, which is operated under Chatham House rules, highlighted a bevy of puts and takes about SaaS consumption models. Here's the breakdown:

Potential benefits

• Cost efficiency and scalability. A few CxOs noted that consumption models force enterprises to get savvy about only paying for what they do. As a result, these companies can avoid overprovisioning. Consumption models can be more cost-effective in unpredictable usage scenarios.
• Forced efficiency. If you don’t want nastygrams from your CFO, CIOs are likely to monitor and optimize usage. Consumption models force efficiency relative to three-year contracts.
• Price and performance alignment. With consumption models, IT costs can be better aligned with business success. When usage is high, costs increase and in downturns you’ll get a break. A consumption model allows software pricing to mirror utilities like water and electricity.
• Consumption models enable AI and genAI adoption. As AI usage varies significantly, consumption models enable dynamic scaling rather than committing to rigid, high-cost contracts that would restrict usage. Also see: BT150 zeitgeist: AI, efficiency, vendor angst and finding the right IT structure | AI agents bring consumption models to SaaS: Goldilocks or headache?

Challenges of consumption-based models

• Unpredictable budgets. Many enterprises struggle to predict costs, leading to surprise bills. Unpredictable costs were common in the early days of cloud computing adoption. Today, there are far more controls available. CIOs are likely to initially resist consumption pricing due to budgeting norms.
• Unpleasant conversations. CFOs favor fixed pricing to ensure budget certainty. In the early going of AI agent adoption, enterprises may over-budget for consumption, leading to "use it or lose it" spending behaviors. How leaders need to think about AI, genAI | Enterprise software 2025: Three big shifts to watch
• Governance and control issues. Consumption models requires strong cost tracking and governance to prevent runaway expenses. These controls will be even more critical with SaaS vendors because they lack the cost management tools that are common with cloud hyperscalers such as AWS, Microsoft Azure and Google Cloud
• Behavioral and cultural impact on users. One CxO noted that a paradox with consumption models may be that employees avoid using AI due to cost concerns. This defeats the purpose of AI and creates inefficiencies as well as shadow IT. In addition, encouraging consumption may clash with cost-control strategies within enterprises.
• Pricing confusion. GenAI and agentic AI with consumption models may introduce new costs that are difficult to quantify. Vendors are going to shift from seat-based pricing to AI-driven consumption, but customers lack the reference points to evaluate costs. There was healthy debate among CxOs about the likelihood of a cost-plus model (base cost and margin) because it torpedoes traditional software margins. Agentic AI: Three themes to watch for 2025 | Agentic AI without process optimization, orchestration will flop
• Justifying AI returns on investment as well as total cost of ownership. CxOs said enterprises will push to justify returns and it’s unclear whether vendors or customers have the maturity to model returns.

What’s next?

• Standardization of consumption models across SaaS vendors. There is no universal consumption pricing framework that exists and enterprises will struggle to evaluate AI and cloud service costs.
• ROI-based pricing. Vendors are shifting toward outcome-based pricing, forcing companies to justify AI investments.
• CFOs and CIOs need to align. Finance teams need better forecasting tools to integrate consumption models into enterprise budgets.
• Market pushback. Excessive consumption-based pricing may face customer resistance, especially for AI tools without clear ROI.

More from the BT150 calls:

• 2024 in review: What we learned from our BT150 CxOs
• BT150 zeitgeist: AI agent questions, SaaS ate the opex and job woes
• BT150 Zeitgeist: GenAI projects and culture, performance management
• BT150 zeitgeist: Dear SaaS vendors: Your customers are pissed
• BT15O CXO zeitgeist: Vendor procurement, cool projects and margin compression
• BT150 CXO zeitgeist: Data lakehouses, large models vs. small, genAI hype vs. reality
• BT150 CXO zeitgeist: Low marks for SAP RISE, process automation, change management, AI risk
• BT150 CXO zeitgeist: AI trust, AI pilots to projects, VMware angst, projects ahead
• BT150 nominations | 2024-2025 class

HPE, Platform9 latest to target VMware customer angst

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Broadcom has made VMware more profitable and has kept large customers in the fold, but the next wave of competitors, notably HPE and Platform9, is ramping up efforts to migrate them to a new virtualization platform.

To date, Nutanix has been the largest beneficiary of the angst from the VMware customer base. But HPE and Platform9 are ramping efforts and seeing gains.

• Broadcom CEO Tan takes VMware victory lap: Will he go shopping again?
• Rivals up pressure on VMware for enterprise migrations
• Nutanix lands larger deals in Q4, ups outlook, plays long game vs. VMware
• Broadcom CEO Hock Tan aims to woo VMware customers with private cloud, simplification pitch
• Nutanix product additions, partnerships designed to capitalize on VMware customer angst
• Nutanix winning deals vs. VMware, but Broadcom punching back with pricing

HPE outlined its virtualization plans at Discover 2024 and now is leveraging its large channel base to poach VMware customers. In a blog post, Gilles Thiebaut, SVP, Worldwide Hybrid Cloud Sales, said HPE will offer HPE VM Essential Software as standalone via the channel globally.

Customers will get the option to use HPE VMware Essential Software standalone or as part of its broader Morpheus stack. The subtext here is that HPE is leveraging its partner network as Broadcom largely cut out the channel. For good measure, HPE said VM Essentials is now supported by its latest HPE ProLiant Compute Gen12 servers.

HPE didn't exactly hide the target market. The blog post noted:

"HPE VM Essentials enables customers to manage VMs deployed across both existing VMware hypervisors and the HPE VM Essentials hypervisor (KVM-based). This approach allows our channel partners to guide customers toward a more open and flexible virtualization future."

The HPE news landed just a few days after Platform9 noted that it is migrating thousands of VMware virtual machines to Platform9's private cloud offering via its vJailbreak open source products. The money quote from the press release (literally) is this:

"Industry analysts estimate large-scale VMware migrations will take 18-48 months to complete, with costs ranging from $300 to $3,000 per VM. With Platform9, migrations can happen in weeks to months and at one-tenth of the cost."

The ability to lift and shift from VMware to Platform9 isn't all that surprising given leadership has a lot of VMware experience. Platform9 Co-founder and VP of Product Madhura Maskasky was behind VMware's vSphere product suite. Chief Growth Officer Sirish Raghuram is also a VMware alum.

I caught up with Platform9's Maskasky for a briefing along with Constellation Research analyst Holger Mueller. What we can say is that Platform9 is at an inflection point with VMWare customers. The company's Private Cloud Director can match VMware features and enable an easy migration path.

Platform9's secret sauce is that it can work with any storage provider including VMware's Tintri and that works well for virtual machine migrations. Platform9's plan is to match VMware vSphere features line by line.

Hershey finishes SAP S/4HANA implementation: Is it sweet or suite?

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Hershey has to navigate inflation, supply chain disruptions, consumer tastes and GLP-1 obesity drugs and their impact on demand. But at least the company has reached the finish line moving to SAP S/4HANA and one instance.

The Hershey journey is worth noting since it's just one example of how SAP's large enterprise customer base is migrating. Yes, SAP launched a program that can give companies more time, but the migration to cloud ERP instances is going to happen.

Hershey is using SAP S/4HANA, SAP Business Technology Platform (BTP), SAP Analytics Cloud and SAP Datasphere.

• SAP launches Business Data Cloud, partnership with Databricks: Here's what it means
• SAP launches SAP ERP, private edition, transition option: What you need to know

Hershey's latest SAP upgrade is also notable since it has gone well relative to the company's history. In the 1990s, the Hershey SAP implementation was a disaster, hurt financial results and wound up being a business school case study on the importance of change management.

We'll let Hershey CFO Steve Voskuil highlight how that SAP finish line feels. Let's just finishing an ERP implementation is sweet (or maybe suite). Speaking at an investor conference, Voskuil said: "As we look forward, we can look at what we did last year and we talked about ERP. No one's happier to have the ERP program behind us than me and that's a big one for us."

Voskuil also said Hershey is seeing benefits from the SAP upgrade. "Over 95% of our global business is on one instance of that ERP platform, and there are more efficiencies to be had in the go-to-market space," he said. "It's also allowed us to accelerate innovation and the focus this year on bigger, bolder, more impactful innovation."

There's also a financial tailwind now that Hershey won't have to spend on the ERP implementation and the consultants and integrators that tag along. Here's the breakdown of Hershey's annual capital expenditures via SEC filings including capitalized software and the ERP implementation.

• 2024 capex: $605.9 million.
• 2023 capex: $771.1 million.
• 2022 capex: $519.5 million.
• 2021 capex: $495.9 million.
• 2020 capex: $441.6 million.

In 2023, Hershey explained that its capex increased due to "continued investments in digital infrastructure including the build and upgrade of the new ERP system across the enterprise." The 2024 capex figures fell due to the completion of the SAP project. Based on Hershey's SEC filings, the company has been spending in earnest on the SAP ERP implementation since 2020.

Now that the SAP implementation is complete, here's a look at Hershey's digital plans on tap.

Planogram wins. Michelle Buck, CEO of Hershey's, said the company is putting science behind its shelves. "We're implementing our gold standard planogram in at least 40% of C-stores this year. That planogram uses a shopper decision tree along with some other proprietary pieces of information to get to an optimized shelf set that can drive results at retail," said Buck. "What we've seen with that shelf is where we have implemented that we see the category doing two times the growth versus where we have not implemented it."

Integrated demand planning. Voskuil said Hershey is planning to tie demand signals to supply chain and fulfillment processes. "In this case, we're using a product from Kinaxis, a best-in-class tool that uses a combination of machine language, data and some AI to make real time adjustments to the way that manufacturing and supply chain responds to demand," he said.

Data, analytics and AI-driven optimization. Hershey is looking to blend data on shopping and consumer behaviors, promotion feedback and effectiveness and AI to optimize the company's promotional spend via an in-house system. Hershey has deployed this system in about 40% of its portfolio. "We're going to continue to expand a proprietary solution that we have built with an outside partner," said Voskuil.

The integrated demand planning and promotional optimization efforts account for 15% to 20% of Hershey's transformation savings today, said Voskuil.

Five9 bets contextual CX data will give it an AI edge

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Five9 is betting that the contextual data layer above AI models will be just as critical to enterprises, and potentially be the difference in return on investment.

Executives at the customer experience and communications as a service company, which reported better-than-expected fourth quarter results, fielded the typical questions about how agentic AI would impact its business. Five9 has key partnerships with the likes of Salesforce and ServiceNow. Why wouldn't the AI spoils go to Five9's much larger partners?

Five9 CEO Mark Burkland said contextual data is critical for future-proofing AI and driving returns. Here's what he said:

"Brands are learning that if they want to offer AI-driven self-service, AI agents need to be accurate and personalized. CCaaS platforms like Five9 are uniquely positioned to deliver these accurate and personalized AI agents. This is our moat and this is why we believe we will continue to win in AI for customer experience."

He said AI agents need four ingredients to deliver.

• Access to large language models, which are being commoditized.
• Contextual data about the consumer and the brand.
• Historical data on consumer interactions with the brand.
• Channels to connect consumers via self-service and an escalation path to a human.

Burkland said Five9 has taken an LLM agnostic approach to focus on the AI application layer. He said:

"We believe Five9's approach allows our customers to future-proof their AI decision. And when it comes to our competitive moat, it's clear that the layer above these engines is what matters. And that layer includes our AI applications that require business logic, that require workflows, that require important data and integrations to back-end systems. The second ingredient, contextual data is what is fed into the LLM in real time and provides true context around an interaction. This includes customer-specific details as well as brand-specific knowledge, both of which are often distributed across many back-end systems."

Burkland added that Five9 typically connects to more than 20 back-end systems in a deployment to harvest historical data as well as current customer experiences.

Five9 has partnered with Salesforce, ServiceNow, Microsoft, Verint and Google on agentic AI to combine humans and digital agents. The game plan for Five9 is to meld its CX suite with its partner platforms--CRM for Salesforce, Now Platform for ServiceNow and Verint's bot army.

Will those larger partners cut Five9 out over time? Burkland is betting they won't. He said:

"It's about contextual data. AI is only as good as the data it has access to. And our platform is a control point for a lot of that contextual data. Not just information about the customer and about the brand but also about recent interactions between that consumer and the brand.

The question at hand is whose AI is the customer going to choose. It's going to be a mix. We're very convinced of that. And the good news for us is, even if in each use case, for a given business unit that organization wants to use Salesforce for their AI. The good news is they still need access for that AI to do its job, they need access to all the contextual data in our platform."

Burkland added that big partners are helping Five9 land larger deals across verticals.

• Five9 acquires Acqueon, cuts Q3 outlook
• ServiceNow launches AI governance tools, contract management, Five9 partnership
• Unlocking the Power of AI in Customer Experience: Lessons from the Five9 CX Summit

The results

Five9 projected 2025 revenue of $1.14 billion with non-GAAP earnings of $2.58 a share to $2.62 a share. First quarter revenue will be between $271.5 million to $272.5 million with non-GAAP earnings of 47 cents a share to 49 cents a share.

For the fourth quarter, Five9 reported net income of $11.6 million, or 13 cents a share, on revenue of $278.7 million, up 17% from a year ago. Non-GAAP earnings in the fourth quarter were 79 cents a share, 9 cents better than estimates.

Five9 said its 2024 revenue topped $1 billion for the first time. The company reported a 2024 net loss of $12.8 million, or 17 cents a share, on revenue of $1.04 billion, up 14% from a year ago.

The company said separately that CFO Barry Zwarenstein is retiring and Bryan Lee will become interim CFO.

Constellation Research's take

Constellation Research analyst Liz Miller said Five9's AI strategy is focused. Here's her take:

"The real Five9 story here is the AI strategy and continued march upmarket with continued success with enterprise customers working to resolve data, workflow and engagement orchestration across a broad range of communications channels. Five9 has been laser focused on where and how AI can make an impact on all aspects of CX delivery through customer service and contact center environments, including how to leverage AI to enhance human workforces while scaling capacity with a new agentic workforce.

The Five9 Genius AI platform has been evolving quickly and arguably ahead of the market thanks to leaders like Jonathan Rosenberg refusing to settle for CCaaS AI to be limited to an intelligent bot or assistant. I’d also point to additions to their leadership team like bringing on a new Chief Product Officer, Ajay Awatramani, as a sign that Five9 intends to stay ahead of the market curve.

Five9 will have a big decision to make in 2025. Will it follow the service market and double down on trying to run the board on engagement tools and battle other commoditized solutions across marketing and sales platforms over who gets to "own" email campaigns and contact management? Or will Five9 really break out and bring their unique service-driven AI and data rich superpowers to other critical operations spaces that could use a shake up and a round of innovation? The reality here is that Five9 has done a terrific job securing the right partners and developed a robust marketplace and ecosystem that will allow it to shift and pivot to meet the needs of adjacent markets. The trick is going to be not to pick the limited spaces and places where the market is already oversaturated with options."

Walmart’s fiscal 2026 bets: Supply chain optimization, AI, automation

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

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

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Walmart continues to bet on leveraging AI, optimizing its supply chain and developing a host of related businesses that'll grow operating profits.

The retail giant reported fourth quarter earnings of 65 cents a share on revenue of $180.6 billion, up 4.1%. For Walmart, it's the first time its quarterly sales were below Amazon sales. For fiscal 2025, Walmart reported earnings of $2.41 a share on revenue of $681 billion.

Walmart projected fiscal 2026 net sales growth of 3% to 4% with operating income growing from 3.5% to 5.5%. Capital expenditure will be between 3% and 3.5% of sales as Walmart invests in technology to optimize its supply chain, remodel stores and open new ones.

Here's a look at what Walmart CEO Doug McMillon and CFO John David Rainey had to say on the earnings conference call.

Walmart has introduced Wally, a new AI agent for the company's merchants. "Wally is learning to help us get to the root cause of issues related to things like out of stocks or overstocks with more accuracy and speed," said McMillon.

Developers at Walmart are leveraging AI for coding and deployments and the company saved 4 million developers hours last year. This year, all of the AI coding tools will be available to all developers in North America and India.

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Walmart's complementary businesses will grow operating profits. The company's global advertising business delivered annual sales of $4.4 billion, up 27% from a year ago. Walmart US Marketplace revenue was up 37% and 45% of orders were filled by Walmart Fulfillment Services. And global membership income was up 21% to $3.8 billion for fiscal 2025. These businesses will grow operating profits faster than sales.

Walmart data is becoming a business. Rainey said: "Within data analytics and insights, Walmart Data Ventures continues to grow rapidly with net sales up double digits. Our client base nearly doubled over the past year, and we're excited about continuing to broaden our reach to new markets with the launch of the platform in Canada."

Walmart's business is 18% e-commerce today and the percentage will increase in the future. Since the selling, general and administrative expenses (SG&A) related to an e-commerce transaction are higher than physical retail, Walmart is betting on automation. Rainey said:

"As you think about our cost structure going forward, one of the big drivers is going to be the improvements that we see in supply chain automation. We're already seeing that. We're encouraged by some of the early productivity metrics. But still today, less than half of the stores in the U.S. are served fully by automation. And so, there's a lot of benefit still to come here as we automate our supply chain as we continue to automate our stores that will drive improvements in SG&A."

Walmart will highlight its investments in supply chain automation in April at its investor conference, said McMillon.

The retailer is honing its delivery game with same-day pharmacy delivery and various shipping offers at Walmart and Sam's Club. McMillon said Walmart is taking the lessons from markets such as China and applying them elsewhere.

Walmart is also trying to lower its cost to serve. Rainey said drivers are aiming to deliver to more houses on a street, add volume and create more dense networks.

Walmart's return on investment improved 50 basis points to 15.5%, a level that was last achieved in 2016.

The company is prepped for a potential volatile economy and customers are looking for value. Rainey said: "Our outlook assumes a relatively stable macroeconomic environment but acknowledges that there are still uncertainties related to consumer behavior and global economic and geopolitical conditions. As a result, we've taken a similar approach to our initial guidance view for the year as we have in the past couple of years, balancing known risk with what we can control. We remain confident that Walmart is well positioned to navigate as it has over the last several years."

Tariffs. Like most enterprises, part of the potential supply chain volatility revolves around tariffs. McMillon said: "tariffs are something we've managed for many years, we'll just continue to manage that. We've got a great team. We know how to do that. We can't predict what will happen in the future, but we can manage it really well. And we're wired to try and save people money. So that will be our ultimate goal."