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

Accenture raised its outlook for the fiscal year as it continues to rake in AI-related bookings.

The consulting firm, which was one of the winners in Constellation Research's 2024 Enterprise Awards, projected fiscal 2025 revenue growth of 4% to 7% with earnings of $12.43 a share to $12.79 a share. For the second quarter, Accenture projected revenue of $16.2 billion to $16.8 billion, up 5% to 9%.

That outlook was better than expected. Accenture also topped estimates for the first quarter with earnings of $3.59 a share on revenue of $17.7 billion, up 9.3% from a year ago. Earnings were 20 cents a share better than estimates and revenue was $570 million above targets.

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Accenture has been able to land new bookings for generative AI projects even as new booking overall are flat. Generative AI bookings in the first quarter were $1.2 billion. Overall, Accenture landed first quarter bookings of $18.7 billion, up 1% from a year ago.

Julie Sweet, Accenture's CEO, said the company saw revenue growth in consulting and managed services across industries. In the first quarter, Accenture had 30 bookings of more than $100 million. "We continued to lead in helping our clients realize value with generative AI," she said.

By industry group, Accenture reported first quarter revenue growth between 4% and 13%. Health and public service industry drove the strongest growth.

On the earnings call, Sweet said:

"Starting with the demand environment, we saw more of the same. Our clients are focused on reinvention, which means large-scale transformations. We do not currently see an improvement in overall spending by our clients, particularly on smaller deals. When those market conditions improve, we will be well-positioned to capitalize on them, as we continue to meet the demand for the critical programs our clients are prioritizing."

GenAI continues to be a catalyst for reinvention across the enterprise and building out the data foundation necessary to capitalize on AI, as an increasing part of that growth. Themes around achieving both cost efficiencies and growth continue across the demand we're seeing."

Constellation Research analyst Holger Mueller said:

"Accenture had a good quarter, considering that the services business is affected by the AI trend both in a positive and a challenging way. In a positive way: enterprises need help to leverage AI. The negative is that AI makes many tasks easier to implement, thus requiring less of consultant help. Accenture's managed services business on the other side is doing well, with new bookings in managed services for the first time surpassing the (traditional) consulting business. A relatively stronger performance in Europe was a positive surprise as well. Now it is all about how Accenture can further leverage the AI era."

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

Salesforce launched Agentforce 2.0 in a bid to move its agentic AI platform to more teams, workflows and markets. Agentforce 2.0 includes Slack integration, more workflows across the enterprise and is generally available in February.

The rollout comes just weeks after Agentforce made its debut at Dreamforce.

Agentforce 2.0's debut also includes a new tagline dubbing the effort a "digital labor platform" that can move beyond Salesforce's core sales, service and CRM borders. To expand Agentforce's reach, Salesforce is relying heavily on MuleSoft, the company's API platform. With MuleSoft, Agentforce will be able to enable actions across 40 enterprise systems via MuleSoft for Flow, surface APIs as actions and add metadata to APIs.MuleSoft for Flow will be in pilot Feb. 25 and surfacing APIs as actions and metadata additions to APIs in Topic Center will be available on the same date. MuleSoft has become critical to Salesforce's plan to expand into new agentic AI use cases.

Salesforce is also adding new pre-built skills that will be released monthly. New pre-built skills in Agentforce will include sales development and coaching, field asset management, commerce merchant, Slack engagement, predictive insights and industry-specific skills. Agentforce 2.0 will also include an expanded roster of third-party skills. Salesforce's Agentforce 2.0 is a fast follow to its Dreamforce launch of its agentic AI platform. 

Salesforce CEO Marc Benioff said:

"As a CEO, I'm not just managing human beings, but I'm also managing agents. There is an agentic layer around the support today for Salesforce. It's not some vision fantasy in the future idea, it's what is happening right now."

Benioff said agentic AI is enabling digital labor, robots and voice as a user interface. "We've already crossed this bridge into the new world of digital labor," he said. 

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Here's how Salesforce sees Agentforce 2.0 expanding into new areas and providing digital labor.

Salesforce's approach with Agentforce 2.0 rhymes with ServiceNow's focus on AI-enabled workflow orchestration. Where ServiceNow started in IT and expanded to other areas including ERP, HR, CRM and any other function, Salesforce is starting with CRM and expanding out into HR, finance and engineering.

Slack search

Salesforce also appears to be leveraging Slack as the collaboration glue for Agentforce 2.0. On Jan. 25, Agentforce will be available in Slack, integrate into Slack enterprise search and feature prebuilt actions. In Slack, Agentforce can take action including creating a Canvas, updates, adding channels and sending direct messages.

Key points about how Slack search is used in Agentforce:

• Slack's search system ensures that a message is visible only to the right users by indexing messages based on channel types and applying visibility filters at the time of query. For instance, public channels are visible to all, but private channels only apply to members of that channel. Search queries are indexed to workspace ID in the public channel scenario, but the index avoids listing every member ID in the private channel scenario. 
• File visibility is also determined by channels and members. Files in public channels will be indexed by workspace ID, but private channels are restricted to channel membership. 
• Slack's search functions are enhanced by retrieval-augmented generation (RAG) techniques. 
• Slack search actions are also controlled by visibility access, admin controls and minimized data sharing. 
• Slack search also has FedRAMP certifications, enterprise key management and custom retention policies. 

Atlas Reasoning Engine details

Salesforce also enhanced its Atlas Reasoning Engine with features that will be generally available Feb. 25. These enhancements include:

• Advanced Retriever, which can be used to improve answers.
• Enriched Indexes that will use advanced RAG and added metadata.
• And Inline Citation, which will improve accuracy and transparency to responses.

The company also added some details to how Atlas works. According to Phil Mui, Ph.D., SVP of Technology, Head of Products and Engineering, Salesforce AI Research and Agentforce, Atlas combines models, data, business logic, events and workflows into one compound system. Atlas aims to understand the nuances of user queries and contexts. 

Mui argued that DIY assistants that are large language model based are rapid, but are focused on basic tasks (System 1). Atlas is an evolution because it can understand and think through a situation (System 2). 

Atlas retrieves the most relevant data based on processes and then refines the query with RAG and additional context and metadata. This step-by-step approach to Atlas' analysis grounds answers and decisions using Data Cloud. 

Salesforce noted that Atlas' move to System 2 thinking is a win, but future progress will incorporate agentic AI and coordinating specialized agents.  

A faster cadence, bigger market

Salesforce President and Chief Operating Officer said at a recent Barclays investor conference that the company is stepping up its innovation cadence with more frequent releases. Benioff also noted agentic AI is expanding Salesforce's market. 

In February, Agentforce 2.0 will feature a bevy of new skills beyond those just outlined including citation support, supervisory LLMs, token streaming, scheduling skills and multilingual support.

"We've prided ourselves on three upgrades a year for 25 years. This (Agentforce) is measured in weeks and so the velocity is really incredible," said Millham. "We feel that urgency by the way. We really feel like we need to be moving quickly at this opportunity."

And the opportunity is large as Google Cloud, AWS and Microsoft Azure all have agentic AI efforts underway. 

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Millham said Salesforce with Agentforce can expand the company's total addressable market dramatically. He explained:

"We're going to provide digital labor to our customers now. And when you start to look at this through the lens of just software, the size of that measured in billions. When you start to think about what the opportunity is for labor offset, you measure in TAM and in the form of trillions. That is the opportunity that we're contemplating out there.

We talk to CEOs and CFOs, they say, this is great. I can take some cost out of my business in the call center, for example, which is fine.

We also can have it from a growth perspective. Hey, over the next five years, I'm growing at 8% on top line and my cost of people is flat. That's a pretty good proposition and people can do the math very quickly on why they should be investing in Agentforce."

Millham said customers are asking about applying Agentforce to other areas such as HR. At the conference, Millham was asked about how Agentforce will be priced. He said pricing for Agentforce will start to resemble platform plays where you have prices for the platform and then universal credits that will be consumed across workflows. In other words, Salesforce's pricing model will likely rhyme with ServiceNow's approach going forward.

Constellation Research's take

Constellation Research analyst Holger Mueller said:

“Salesforce is demonstrating unseen product velocity with the launch of Agentforce 2.0. Mark Benioff is the Jensen Huang of SaaS by accelerating product innovation cycles. Bringing Agentforce to where work happens -- to Slack is critical. Even more will be the necessary integration into Teams / Outlook (no date so far). Equally critical for CxOs will be - which other SaaS vendors will play along with Salesforce - as Salesforce opens Agentforce to ISVs. Will integration happen on a data level, an API level or even an agent level - will be a key AI success question for 2025 - not just for the industry - but for enterprises.”

Constellation Research analyst Martin Schneider said:

"One of the most interesting facets of the Agentforce 2.0 launch is the apparent rebranding of agentic AI into 'digital labor.' This development seems interesting when you think about the existing ambivalence towards AI from a lot of workers and the fear that it will displace labor rather than augment human capabilities. From the business side, the digital labor platform messaging of course implies cost savings and efficiency, but I think Salesforce needs to be careful in how they put this message across certain audiences.

From a technical side, Salesforce seems to be doing the right things in terms of enabling nontechnical users to get started with agentic AI, not just from putting the work in around Data Cloud to power more effective insights, but also pre-integrating with MuleSoft to power the task management and workflow associated with AI agents taking autonomous action. In addition, the new skills concept gives both technical and non-technical users a lot of components that are preconfigured towards building more effective agents out-of-the-box.

Out-of-the-box agents now run across all Salesforce clouds, giving users some fast and useful proof of concepts as they dip their toe into the water of agentic AI. I expect Salesforce's partner ecosystem to go even further and offer even more AI agents that cover even more complex use cases that touch even more systems than CRM and ERP. 

But in the end, the two important factors will be both the quantity and quality of usable data that Salesforce users have on hand to power AI agents. Historically, CRM data can be both incomplete and inaccurate. As AI use cases call for more and more queries into the core Salesforce platform, performance and availability may become an issue as some users are already citing that the more they leverage complex AI use cases, the number of round trips between the Atlas reasoning engine, other data systems, and Salesforce and data cloud are causing some performance issues.

The availability of Agentforce in Slack will be strong bridge between the agentic-to-human handoff, allowing for more seamless workflows, and a better ability for humans to monitor AI agents inside a tool like Slack that is m ore conducive to these actions than a traditional CRM UI."

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

Databricks expects to have a $3 billion annual revenue run rate exiting its fourth quarter ending Jan. 31. The company also has more than 500 customers consuming more than $1 million annually.

The data and AI company disclosed its financial data in a press release announcing a $10 billion capital raise that valued Databricks at $62 billion. Databricks is also delivering positive cash flow.

In addition, Databricks, which counts Rivian, JPMorgan Chase and JetBlue as customers, said it grew revenue more than 60% in the third quarter. The company added that Databricks SQL, the company's data warehousing service, was on an annual revenue run rate of $600 million, up more than 150% from a year ago.

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Databricks' disclosure provides a few interesting comparisons.

• In September 2023, Databricks was valued at $43 billion and had an annual revenue run rate of $1.5 billion with 50% growth. The company also had more than 300 customers consuming $1 million.
• Snowflake's valuation currently is $57 billion.
• And Snowflake's annual revenue run rate exiting its most recent quarter is $3.77 billion.

Databricks said its Series J funding round will be non-dilutive. The round was led by Thrive Capital and investors Andreessen Horowitz, DST Global, GIC, Insight Partners and WCM Investment Management.

According to Databricks, the capital will be used to fund new AI products, acquisitions and international expansion. The capital will also be used to enable current and former employees to cash out.

Ali Ghodsi, Co-Founder and CEO of Databricks, said the company's funding round was "substantially oversubscribed" and the company is "positioning the Databricks Data Intelligence Platform to deliver long-term value for our customers."

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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

Boomi has acquired data integration vendor Rivery as the company continues to build out its integration platform as a service (iPaaS) strategy.

Terms of the deal weren't disclosed.

Rivery offers Change Data Capture (CDC) technology that makes moving data more efficient as well as low-code extract, load and transform (ELT) features. Boomi's plan is to combine Rivery and its data team with its integration, automation, API management and data management tools.

According to Boomi CEO Steve Lucas, Rivery aligns with its "strategy to deliver seamless, powerful tools that transform data into a strategic asset."

Constellation Research analyst Doug Henschen noted that the Rivery purchase addresses "seamless integration of data across silos."

In the big picture, Boomi is looking to stack iPaaS, API management and data integration in one automation platform that includes Boomi AI Agents.

Boomi has been building out its platform organically and via acquisition. Boomi has also forged partnerships with SAP and ServiceNow to expand its reach. Recent developments include:

• Boomi melds API management, AI integration via platform updates, two acquisitions
• Research: Boomi Bolsters Its Platform to Help Customers Drive AI Innovation
• Constellation ShortListâ„¢ Integration Platform as a Service (IPaaS)
• Constellation ShortListâ„¢ API Management (APIM)
• Boomi CEO Lucas: AI agents will outnumber your human employees soon

Here's a look at the Rivery architecture followed by Boomi's stack.

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

Google Cloud launched Agentspace, Salesforce is prepping Agentforce 2.0 and Amazon Web Services wants Amazon Bedrock to be your agentic AI orchestration engine. And that's just two weeks of news.

Simply put, the agentic AI platforms are launching at a rapid clip. AI agents will be a big theme for 2025, but open questions abound.

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Here are three things to watch in agentic AI. Like generative AI, CxOs are going to have to weigh vendor pitches against lock-in and architectural decisions to regret.

Horizontal approaches vs. platform specific

Agentic AI launches have been proliferating in recent weeks ever since Salesforce's Agentforce launch at Dreamforce. ServiceNow is deploying agents across its Now Platform. And every vendor from SAP to Microsoft is talking agents across their platforms.

Naturally, many of these agentic AI visions resemble decks that place the vendor at the center of the universe and a bunch of connectors to other platforms.

For customers, however, the incoming AI agent sprawl is going to be an issue. Will enterprises simply wind up managing different buckets of AI agents? SAP Joule agents are over here. Salesforce Agentforce actions there. Google Cloud agents operating over the top. You get the idea.

The big question for 2025 is whether enterprises will choose to go horizontal with AI agent orchestration and management. Hyperscalers may be in the best position here. Amazon Bedrock will have agent orchestration. Amazon Q will operate across applications and data silos. Google Cloud Agentspace will take a similar approach. Microsoft Azure will also orchestrate your agents, but it's unclear whether tech buyers will see the cloud giant as more about its own platform or a horizontal play.

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UiPath is a player that is betting on a Switzerland approach. CEO Daniel Dines explained where the company stands on UiPath's third quarter earnings call. UiPath launched Agent Builder as it makes agents a first class citizen along with its robotic process automation. Dines explained the difference between horizontal plays and application specific offerings.

He said:

"Our agents and robots work across all applications, both new and legacy, eliminating vendor lock-in for our customers. Business processes today don't run on a single system. We will continue to be the Switzerland of business applications and agents, providing equal access to third-party systems. Agentic orchestration will be the governor across agents, robots, people, and models. We will democratize access to agents by leveraging our low-code platform that is already known to automation developers."

Raj Pai, Vice President, Product Management at Google Cloud AI, had a similar take.

"We see agents--software systems that use AI to complete tasks--as the biggest opportunity to meet this unmet promise of genAI and really drive employee productivity and ingenuity," said Pai. "AI agents across all enterprise data sources can complete tasks that require planning, research, content generation and actions."

In other words, this pole position in agentic AI is going to require a horizontal approach--and hundreds if not thousands of connectors.

ServiceNow CFO Gina Mastantuono, speaking at a Barclays investment conference, said the horizontal approach and ability to be neutral is critical to playing in the agentic AI and genAI space. "We can sit on top of the application sprawl or data sprawl and really drive productivity. And the differentiation that we have in that it's one platform across the enterprise, whether you're working in HR, IT, customer service, legal, finance," she said.

AWS CTO Werner Vogels said in a re:Invent keynote that agents will manage more narrow-focused agents to automate workflows. Vogels gave an example of how AWS is resolving tickets with agents. "The goal of the agent is to efficiently resolve support tickets, and the process then becomes, read the ticket, use the tools iterate. It categorizes, prioritizes the tickets based on analysis, and it determines the action. It could be to resolve automatically, or it could be to escalate for human review," said Vogels.

• AWS unveils next-gen Amazon SageMaker in bid to unify data, analytics, AI
• AWS aims to make Amazon Bedrock your agentic AI point guard

Wild cards include:

• Will a vendor like Boomi make headway with a registry to manage AI agents?
• Are hyperscalers the de facto favorite to manage agentic AI?
• Can platform-specific vendors such as Salesforce with MuleSoft and ServiceNow leverage their breadth of connectors to become horizontal plays?

Pricing for agentic AI

Box CEO Aaron Levie on LinkedIn noted the great AI agent debate. He said that one approach is to price AI agents like traditional work at a steep discount. You'd pay for amount of time or units to do the work. Another approach is pricing agents on a per-outcome basis. This per outcome basis rhymes with a consumption model, say $2 per resolved conversation.

Levie added that pricing agents as close to the AI costs as possible could be great for customers, but doing shareholder returns. And finally, vendors could stick to a SaaS seat subscription model and offer agents to users that do unlimited work.

"Lots of different approaches - and probably many more than the above - but fairly exciting times to watch new business models in software emerge after a decade plus of limited changed," said Levie.

• The art, ROI and FOMO of 2025 AI budget planning

Indeed, Levie's post generated more than 120 comments with some noting outcome-based pricing will result in complicated contracts and too much cost variability. Others seemed to think agents will be free.

In this pricing debate, hyperscale cloud providers may have the edge because customers are used to consumption-based models. For instance, Google Cloud is pricing Agentspace on a per-user basis. Agentspace Enterprise Plus includes the ability to ask agents follow-up questions, carry out actions, create agents and use the research agent. AWS pricing for agent orchestration will ride along with Amazon Bedrock. Keep in mind that AWS will profit from storage, data and compute consumption.

Outcome-based pricing is going to be a tough sell since most CxOs don't want to share a cut of value created. After all, vendors don't give you back dough when value is destroyed.

Salesforce CEO Marc Benioff said consumption-based pricing will likely win out. Speaking about Agentforce, he said "this is a consumption product. We have per-user products, which are for humans. We have consumption products for agents and robots and that's how I think we should look at it, which is the comparative costs is there's just no comparison."

Brian Millham, Salesforce's Chief Operating Officer, said customers understand the cost of labor and when they can deploy agents to manage interactions with customers. Salesforce’s $2 per conversation approach makes sense. When Salesforce launches Agentforce 2.0 we may get more clarity on pricing as well as whether the company aims to be an agent orchestrator across all enterprise applications.

How ServiceNow is thinking about pricing and why hybrid approaches are likely

Pricing is a critical topic in enterprise software--especially with genAI and now agentic AI. ServiceNow's Mastantuono was asked about the company's approach to pricing. She spoke about this pricing strategy before, but it has evolved with genAI.

ServiceNow has launched its Pro Plus SKUs and Now Assist is the genAI flavor. Mastantuono said she thinks there's a hybrid pricing model that's going to play out with AI agents that includes seats and then consumption. Outcome-based pricing is possible too over time.

She said: "We have a hybrid model. It's seat based and you get a certain number of tokens. And then, if you're over-consuming, you need to buy more tokens. This is the way that we have initially thought about monetization."

Mastantuono added that customers like the switch to consumption based because they can more easily forecast (and so can ServiceNow).

With outcome-based pricing, Mastantuono said the conversation appears every few years in enterprise software, but the issue is providing customers with cost predictability. ServiceNow's approach has been to add a pricing uplift of 30% as innovation and value is added. She said: "It's all about value. We're a value seller play and the conversations with customers have gone really well when we can say the lion's share of the value is going to you and we're taking a slice of it because we're investing in all the innovation that's allowing that value."

Wild cards for pricing include:

• Are enterprises really going to accept more operating expense volatility with AI agent consumption based models?
• Will the labor for AI agent argument hold?
• Can a model like value-based contracts work when AWS Marketplace is standardizing contracts instead of making them more complicated?

Are all these agents going to communicate and negotiate?

There is nothing that puts me to sleep faster than talking about technology standards and the committees and meetings that go with them. Standards are necessary, but the topic is a yawner.

However, if we really want this agentic AI dream to play out we're going to need some standards so these agents can communicate and negotiate to get things done.

What happens when an SAP Joule AI agent runs into an Agentforce agent and has to negotiate with a Google Cloud Agentspace creation? Sure, they can connect, but the future will require real communication--like those good ol' humans do.

Today, there isn't one universally adopted standard for agentic AI communications across platforms. IEEE has a few working groups and there are other standards orgs on the case. It’s likely that agentic AI standards will emerge in the years ahead. Challenges include:

• Agent architecture. Agents will be built on multiple platforms and languages.
• Security. How will secure communication channels be managed.
• Performance. Agents will be communicating at scale with multiple agents.
• Industry-specific standards.

Wild cards include:

• Standards move at a glacial pace--unlike AI.
• Multi-cloud is still a work in progress so it's unclear whether vendors will cooperate.

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

Google Cloud launched Agentspace, which is designed to create and deploy AI agents, and a version of NotebookLM for the enterprise.

With an enterprise version of NotebookLM, Google Cloud is adding enterprise privacy, security and compliance, identity support and grounding in enterprise data sources.

But Agentspace is the headliner as hyperscale cloud providers and other vendors such as UiPath are looking to create and automate AI agents. The topic has bubbled up throughout 2024, but Salesforce's Agentforce launch solidified the company. Agentic AI is pitched as a way to automate work and complement (if not replace) labor. AWS' Amazon Q and Bedrock, Salesforce Agentforce, Google Cloud, and Microsoft Azure all have their agentic AI visions.

• Agentic AI without process optimization, orchestration will flop
• Enterprises leading with AI plan next genAI, agentic AI phases
• With Salesforce push, AI Agents, agentic AI overload looms

With Agentspace Google Cloud is looking to address multiple roles and use cases across sales and marketing, HR and software development. Google Cloud said that multiple enterprises have used Agentspace in the trusted tester program including Deloitte, EU retailer Decathlon and Nokia.

Raj Pai, Vice President, Product Management at Google Cloud AI, said enterprises focused on implementing generative AI in 2024, but the promise has been unfulfilled. "We see agents--software systems that use AI to complete tasks--as the biggest opportunity to meet this unmet promise of genAI and really drive employee productivity and ingenuity," said Pai. "AI agents across all enterprise data sources can complete tasks that require planning, research, content generation and actions."

Key use cases include:

• Sales and marketing agents include summarization of target companies and competitive offerings, customer pitch prep, go-to-market strategies, personalized marketing, analysis of performance data and feature requests.
• Software team use cases include automating engineering processes and tasks, identifying and fixing bugs and optimizing code bases.
• For HR, use cases include an assistant for admin tasks, performance review writing and meeting scheduling.

These assistants are enabled by dozens of connectors to Google's suite of applications as well as Salesforce, Box, Jira, Microsoft SharePoint, OneDrive and Office apps, ServiceNow, GitHub, HubSpot, Confluence and other applications.

According to Google Cloud, Agentspace will be differentiated with its search capabilities for retrieval augmented generation (RAG) as well as Google's Gemini family of models. Google launched Gemini 2.0 Flash earlier this week.

Pai said Agentspace is meant to be "the launch point for enterprise AI agents that apply generative AI contextually to your enterprise data." Pai added that Google search enables its agents as much as the models underneath. Agentspace also includes prebuilt agents and the ability to create them and be integrated into NotebookLM.

Google Cloud also has orchestration tools via support for LangChain.

"Our vision with Agentspace is to go across use cases and systems to be a one-stop destination for agents in the enterprise," said Pai.

Agentspace will come in three editions:

• NotebookLM for Enterprise starts at $9 per user per month and includes an enterprise version of NotebookLM Plus with the same interface as the consumer edition, a setup with no connectors, support for Google and non-Google identity, Sec4 compliance and cloud terms of service.
• Agentspace Enterprise is $25 per user per month and includes blended search across all enterprise applications, summarization, citations, people and multimodal search as well as NotebookLM for Enterprise.
• Agentspace Enterprise Plus is $45 per user per month including the ability to ask follow up questions, carry out actions in first- and third-party applications, upload content and QA, create agents and research agents. NotebookLM for Enterprise is also included.

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

Broadcom CEO Hock Tan said the integration of VMware is "largely complete" with revenue growth and operating margins hitting 70% exiting 2024.

"We are well on the path to delivering incremental adjusted EBITDA at a level that significantly exceeds the $8.5 billion we communicated when we announced the deal," said Tan, speaking on Broadcom's fourth quarter earnings call. "This is much earlier than our initial target of three years."

Tan noted that although "many deals slipped into the first quarter for VMware, the company brought in 21 million total CPU cores in the fourth quarter, up from 19 million a year ago. "Of these cores, about 70% represent VMware Cloud Foundation (VCF)," said Tan.

The questions for Broadcom primarily revolved around its AI processor and networking business and whether the company would go shopping again now that it has digested VMware. However, the disconnect between enterprise buyers who are at least pondering moves away from VMware and Broadcom's financials has been jarring through 2024.

• 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

Broadcom said annual booking value (ABV) for VMware was $2.7 billion in the fourth quarter, up $2.5 billion in the third quarter. Tan projected VMware ABV to top $3 billion in the first quarter.

"Since closing the acquisition, just over a year ago, we signed up over 4,500 of our largest 10,000 customers for VCF," said Tan. "VCF enabled customers deploy private cloud environments on prem as an alternative to running their applications in the public cloud."

Tan added that Broadcom continued to cut VMware spending. In the fourth quarter, VMware expenses were $1.2 billion, down from $1.3 billion in the third quarter. VMWare spending was averaging $2.4 billion per quarter prior to the acquisition with operating margins below 30%.

"The naysayers of the VMware acquisition need to tip their hat to Tan, who integrated the company in 12 months. And while everybody is chasing VMware customers, the skeptics will have to learn that re-certification of containers is an expensive business for enterprises," said Constellation Research analyst Holger Mueller. "People keep complaining about VMware, but it hasn't seen major defections yet. Meanwhile, Broadcom may increase discounts if the customer attrition becomes painful."

Other key items:

• VMware's fourth quarter operating income was $8.8 billion, up 53% from a year ago.
• Free cash flow as a percentage of revenue in the fourth quarter fell from a year ago due to interest expenses and debt related to the VMware purchase.
• VMware profitability results won't be broken out going forward.

The other question for Tan was whether Broadcom would go shopping again. Tan said the focus will be on paying down debt but added that cash will be parked on the balance center in case there's "the opportunity to buy someone else." Tan said:

"We are always open (to acquisitions) because it has been a core part of our strategy for the last 10 years. We're always interested in adding to our portfolio with a very good franchise asset in semiconductors or infrastructure software as long they meet the fairly demanding criteria we look for."