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 launched a series of Qiskit software services to go along with its IBM Quantum Heron-based systems. The effort comes as IBM aims to meld quantum computing and classical computing today while aiming for quantum advantage later.

At IBM's inaugural Quantum Developer Conference, the company said IBM Quantum Heron, which is available in Big Blue's quantum data center, can now use Qiskit to run certain classes of quantum circuits with up to 5,000 two-qubit gate operations.

Qiskit research:

• When Quantum SDKs Go to the Gym, Qiskit Wins
• IBM Boosts the Software Side of Quantum
• Everything you need to know about Qiskit 1.0
• IBM upgrades IBM Quantum Data Center with Heron

This ability enables quantum computers to address scientific problems in materials, chemistry, life sciences and physics.

IBM's big theme at its developer conference revolved around integrating quantum computing and classical supercomputing. IBM is looking to leverage its Qiskit to enable supercomputers to split up problems and allow algorithms to use classical or quantum computing to solve them.

The IBM view was popularized by IonQ, which dropped talk of quantum advantage to focus on what quantum computing value can be delivered now. Most of quantum computing has come around to commercial benefits today, hybrid supercomputing and quantum advantage in the future.

• IonQ’s bet on commercial quantum computing working, acquires Quibitekk
• IonQ's quantum computing bets: Quantum for LLM training, chemistry and enterprise use cases
• Quantum Computing Platforms
• Quantum Computing Software Platforms
• Quantum Full Stack Players
• Will IonQ make quantum computing enterprise relevant in 2025?
• Why your quantum computing vendors are going to look familiar

IBM cited the RIKEN Center for Computational Science (R-CCS), Cleveland Clinic and Rensselaer Polytechnic Institute as companies bridging quantum computing with supercomputers with Qiskit.

New IBM Quantum Platform and Qiskit services include:

• Qiskit Transpiler Service to optimize quantum circuits for quantum hardware with AI.
• Qiskit Code Assistant to generate quantum code with IBM Granite generative AI models.
• Qiskit Serverless to run quantum and classical supercomputing approaches.
• IM Qiskit Functions Catalog, which will make services from IBM, Algorithmiq, Qedma, QunaSys, Q-CTRL, and Multiverse Computing available.

Constellation Research analyst Holger Mueller said:

"IBM is making good on it's promise of advancing its hardware progress, with Heron2 being 50x faster year over year. Now scientific use cases are suddenly feasible and the game changes from hardware to software. IBM is well positioned in software with the recent release of its Qiskit Functions Catalogue. The real milestone to watch will be the coupling of two Heron systems soon and that is what CxOs are looking for."  

More quantum computing:

• IBM upgrades IBM Quantum Data Center with Heron
• IBM Boosts the Software Side of Quantum
• Quantinuum, Microsoft claim quantum reliability breakthrough
• Microsoft claims hybrid quantum breakthrough with Quantinuum, partners with Atom Computing
• Quantinuum raises $300 million, valued at $5 billion
• Classiq CEO Minerbi on the intersection of quantum computing, HPC and use cases
• Quantum Brilliance, Oak Ridge National Laboratory aims to meld quantum computing, HPC

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 launched a series of AI governance features across its Now Platform, generative AI contract management tools and an expanded Five9 partnership.

According to ServiceNow, the company is dropping more than 150 genAI features on its platform. A big part of the portfolio additions are governance capabilities. Jon Sigler, senior vice president of Platform and AI at ServiceNow, said the Now Platform has "governance at the core." ServiceNow has been forging various partnerships to help expand its reach.

• ServiceNow posts strong Q3, launches Workflow Data Fabric, expands partnerships, hires Zavery as product chief
• ServiceNow's Xanadu release adds AI Agents, RaptorDB Pro, genAI enhancements
• ServiceNow Knowledge 2024: Model choices, genAI everywhere, automation, process optimization

The company said its governance and security tools will give customers guardrails for autonomous AI agents. Key items include:

• ServiceNow AI Governance for Now Assist, which connects AI to security and compliance features across the Now Platform. AI Governance for Now Assist includes a unified AI inventory data model and a foundation designed to operate as an "AI control tower."
• Now Assist Guardian, which monitors how genAI is used across the platform. Now Assist Guardian will include management and mitigation of offensive content, security vulnerabilities and exposure of sensitive information.
• Now Assist Data Kit, which provides tools to manage data for AI use cases and benchmark accuracy. Data Kit will also evaluate the effectiveness of experiences built with Now Assist Skill Kit.

Now Assist Analytics, which provides a view of users and how they use Now Assist.

ServiceNow also said Now Assist will support English, French, Dutch, German, Spanish, Italian, Portuguese, and Japanese.

On the legal contract, health and safety front, ServiceNow added a bevy of tools to Now Assist. These tools include:

• Now Assist for Configuration Management Database (CMDB), which uses AI to keep a clean and accurate CMDB while reducing duplicate data.
• Now Assist for Legal Service Delivery, which is aimed at legal teams by auto-generating summaries of legal requests and use cases.
• Now Assist in Contract Management, which flags terms and missing sections in contracts.
• Now Assist for Health and Safety, a feature that simplifies incident tracking and uses genAI to summarize incidents and takeaways as well as suggested revisions for non-disclosure agreements.

In addition, ServiceNow's expanded partnership revolves around an AI joint effort that combines ServiceNow Customer Service Management (CSM) and the Five9 platform. The new capabilities will be available in the first half of 2025. Key parts include:

• Five9 TranscriptStream will be integrated into ServiceNow Interaction Management to use genAI to take notes, generate summaries and reduce average handling times.
• Five9's automated routing engine will be able to route ServiceNow digital channels and cases in Five9 channels to the right agents. Metadata from ServiceNow will be used to enrich data in Five9's platform.
• ServiceNow's Native Call Controls in the company's Agent Workspace will integrate with Five9 in one inbox and work with other features.

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

Softbank Corp will be among the first to build out an AI supercomputer using Nvidia's Blackwell platform. Softbank will get Nvidia's first Nvidia DGX B200 systems with plans to build out a Nvidia DGX SuperPOD supercomputer.

At Nvidia's AI Summit Japan, Nvidia CEO Jensen Huang said Softbank will use multiple products including the Grace Blackwell platform, Nvidia AI Aerial accelerated computing and Nvidia AI Enterprise software.

"With SoftBank’s significant investment in Nvidia’s full-stack AI, Omniverse and 5G AI-RAN platforms, Japan is leaping into the AI industrial revolution," said Huang.

Softbank CEO Junichi Miyakawa said the supercomputer will look to reinvent networks for AI. Softbank recently floated a debt offering to pay for the Nvidia supercomputer and other growth investments.

• Is AI data center buildout a case of irrational exuberance?
• The generative AI buildout, overcapacity and what history tells us
• AI infrastructure is the new innovation hotbed with smartphone-like release cadence

Miyakawa tipped off the Nvidia news a few days before Huang spoke at Nvidia AI Summit.

Speaking on Softbank Corp.'s second quarter conference call, Miyakawa outlined the plans for the Nvidia supercomputer. Note that Softbank Corp. is the operating unit of Softbank. Softbank Group is the investment arm with the Vision Fund and equity stakes in OpenAI and others.

Miyakawa said:

"Since the end of October, our new AI computing platform, powered by Nvidia's 800, has been up and running. The number of GPUs on the platform increased to 6,000 to deliver five times better performance, which makes it one of the biggest AI platforms in Japan. We plan to increase the GPU count to 10,000 sometime in the first half of next fiscal year."

Softbank Corp. is aiming to be a leader in genAI in Japan. The company has built a large language model with 460 billion parameters focused on Japan research and development.

Miyakawa said the plan is to accelerate training for a commercial launch next fiscal year. Softbank Corp. has a consumer unit that offers mobile service with brands such as Y!Mobile, which is being converted to Softbank branding, enterprise services and integration, and fintech.

Ultimately, Softbank is investing to be Japan's genAI services provider.

More on Nvidia:

• Nvidia drops NVLM 1.0 LLM family, revving open-source AI
• Nvidia's uncanny knack for staying ahead
• Nvidia highlights algorithmic research as it moves to FP4
• Nvidia launches NIM Agent Blueprints aims for more turnkey genAI use cases
• Nvidia shows H200 systems generally available, highlights Blackwell MLPerf results
• Nvidia outlines roadmap including Rubin GPU platform, new Arm-based CPU Vera

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

Shopify is getting enough traction as an enterprise commerce platform that can deliver a real-time customer case study in two conference calls.

Speaking on Shopify's third quarter earnings call, Shopify President Harley Finkelstein cited On Running as a company that is betting on the company's platform. He said:

"Our platform's composability gives large brands the flexibility to choose modular components like On Running, who recently adopted our checkout commerce component. One of the best things about modular components is that integration can happen fast."

At roughly the same time, On Holding AG was reporting strong direct-to-consumer channel growth of 49.8% in the third quarter from a year ago.

As noted earlier in the year, Shopify was betting that it could expand its business into B2B commerce and larger retailers. So far, so good. The company reported third quarter net income of $344 million excluding the impact of equity investments on revenue of $2.16 billion, up 26% from a year ago. For the fourth quarter, Shopify is projecting revenue growth in the mid-to-high 20 percent range.

Shopify unveils Target partnership, new AI features

Finkelstein said larger brands and retailers are looking for a unified commerce system but are currently stuck with standalone single channel products. "This idea of having a modern future-proofed retail operating system that is unified across every channel like Shopify is very compelling," he said. Finkelstein added that Shopify's Commerce Components is enabling brands to expand on the company's platform. Sometimes it's the backend then checkout and other times its vice versa. With larger brands, enterprises are looking to consolidate checkout options.

"This idea that some of these large brands that are very sophisticated still don't have an optimized checkout like they would have on Shopify is becoming a competitive liability. And so, that's also driving things quite a bit," said Finkelstein.

Shopify is also pushing total cost of ownership and transparent pricing, which is often hard to find with large enterprise vendors. It's not clear what enterprises are replacing with Shopify, but you can check out our all-in-one commerce cloud Shortlist and figure it out.

Finkelstein said that brands, including B2B, are focusing more on direct-to-consumer sales.

He said:

"Once you're in the ecosystem, you begin to make that your retail operating system. Those gaps are getting closed pretty quickly. And we just think B2B, it is a huge -- I think there's like a $14 billion TAM. We're already seeing our B2B GMV doubled since last year. We think that's a great opportunity and we're able to close these future gaps quite quickly."

The game plan from here is for Shopify to replace commerce systems and shift "this narrative that Shopify is no longer just for small businesses," said Finkelstein. Shopify is adding data migration tools and working with systems integrators to expand its reach. "We're displacing the largest enterprise commerce companies in the planet, and that momentum is continuing. And the best part is we're winning these deals," he said.

And Shopify has plenty of runway. The company's US e-commerce market share is just above 10%.

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

Red Hat said that it will acquire Neural Magic, which specializes in generative AI inference workloads.

Terms of the deal weren't disclosed.

For Red Hat, a unit of IBM, Neural Magic will enable the company to align its open platform to AI workloads. Red Hat said it is planning to make generative AI more accessible to enterprises via vLLM, an open source project for serving multiple models. Neural Magic has been a big backer of the vLLM project.

In a statement, Red Hat said it will combine Neural Magic's focus on vLLM with its hybrid cloud AI technologies to run open source models, fine tune LLMs and improve inference performance. Neural Magic has a vLLM-based stack with infrastructure choice, security policies and model lifecycle management and offers a unified library for optimizing LLMs.

Red Hat AI includes Red Hat Enterprise Linux AI, a foundation model platform, Red Hat OpenShift AI, a platform to train models across Kubernetes environments, an InstructLab, which fine tunes IBM's Granite LLMs.

Neural Magic's two primary products are Nm-vllm, an enterprise inference server for LLMs on GPUs, and DeepSparse, an inference server for models on CPUs.

• Snowflake launches Arctic LLM, to release details under Apache 2.0 license
• IBM open sources Granite models, integrates watsonx.governance with AWS SageMaker
• IBM rolls out Granite 3 models, makes default for Consulting Advantage
• Meta's Zuckerberg lays out AI vision with heavy dose of open source
• Nvidia drops NVLM 1.0 LLM family, revving open-source AI

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

Akamai launched its Akamai App Platform, which aims to make it easier for developers to deploy cloud native applications on Kubernetes. Akamai's App Platform highlights how the company continues to transition to a security and cloud infrastructure company.

The Akamai App Platform is built on Kubernetes technology Otomi, which Akamai acquired from Red Kubes. The platform provides templates and tools to deploy, manage and scale Kubernetes clusters as well as frameworks and catalogs and a self-service environment.

Tom Leighton, CEO of Akamai, said the company hit two milestones during its recent third quarter. First, the company's annual revenue run rate topped $4 billion. And more than half of that was security. Akamai also showed cloud compute revenue growth of 28% in the third quarter.

We've documented Akamai's cloud ambitions previously:

• Akamai adds Nvidia GPUs to cloud network, initially targeting media
• Akamai launches Gecko, aims to combine cloud compute, and edge networks
• Akamai's IaaS vision: Become your cloud alternative

In the third quarter, Akamai said its compute revenue was $167 million, up 28% from a year ago. Overall, the company reported third quarter net income of $58 million on revenue of $1 billion. Security revenue and cloud revenue grew at double-digit rates, but Akamai's content delivery sales fell 16%. Non-GAAP earnings in the third quarter were $1.59 a share.

Leighton said:

"We continue to add new compute customers at a strong pace and we remain on track for our new enterprise compute solutions to exit the year with an annualized revenue run rate of more than $100 million. In Q3, we saw enterprise compute wins in the US at one of the largest retailers, one of the world's largest SaaS platforms, a large e-gaming platform, a large sports gaming platform, a nationwide passenger railroad and a global weather forecaster."

Leighton said retailers are using Akamai Connected Cloud to run mobile apps and AI workloads are revolving around image generation and processing, speech recognition, analytics and prediction and short-form video. See: Why generative AI workloads will be distributed locally

The Akamai App Platform is designed to acquire more workloads and position Akamai as an alternative IaaS providers with compute at the edge of networks. Leighton added that Akamai is selling cloud computing to more enterprises and a broader customer base.

Leighton added that Akamai's cloud compute unit is also seeing traction among independent software vendors across multiple industries.

However, Akamai needs to continue to invest in its cloud business. "We plan to shift more investment into the development of our cloud computing capabilities and new security products, as well as into the go-to-market resources and partner ecosystem to sell these services to a broader portion of the enterprise marketplace," said Leighton.

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

John Kreul, Chief Information Officer at Jewelers Mutual Group, said the company's AI experiments and investments will revolve around personalizing customer experiences. Kreul also said the company is building a data strategy and architecture that can adapt to new technologies.

Jewelers Mutual provides insurance for the jeweler industry for everything from personal policies to shipping and services for jewelers.

I caught up with BT150 member Kreul to talk shop. Here's a look at the takeaways.

Customer experience. Kreul said the company looks at customer experience through multiple lenses. The first is personal insurance policies for consumers, which have a different view than agents. Kreul said the employee experience is critical because they need as little friction as possible to process claims and handle calls. "The experience is very personalized based on the type of need you have," he said.

AI and how it applies to experiences. "When I think of AI, the ultimate vision is to use it for personalization and to make decisions at the point of interaction," said Kreul. "We believe AI will provide us with the information we need to personalize the experience and meet customers where they want to be met. AI is a key enabler of our strategy to create personalized, differentiated experiences for our customers."

Productivity use cases for AI. Jewelers Mutual has experiments for improving efficiency and automating multiple processes including claims. "We're doing experiments today and AI is going to be a key component of operational efficiency."

Prioritization. "Investing and experimenting in AI doesn't necessarily start with prioritization," said Kreul. "It starts with looking at the risks and opportunities and then conducting experiments. That's where we are right now. We're learning to understand the value."

He added:

"From those experiments, we'll prioritize depending on how they go. We're not putting 50 things up on the wall and saying, 'What's the perfect AI use case.' Let’s start experimenting, grow, and then evolve to create value."

Buy vs build? Kreul said the company is looking to do a little of both. For cloud computing, data processing, and large language models the plan is to buy. "What we have is our own proprietary data that we need to feed and train the models," said Kreul. "We're going to leverage capabilities from very large tech companies and then we're going to make it work within our environment and manage our data. Things that create the most value for our customers will be built. As we get closer to the customer we will differentiate with customer software."

Most valuable metrics. Jewelers Mutual focuses heavily on Net Promoter Score. "We want to understand if a customer is a promoter of our company and make sure we are investing to continue to get our score up," said Kreul.

Returns on AI projects. Kreul said it's early in the AI experiment process, but "we believe strongly that we're going to get returns on this." "Automation is absolutely going to be a return on cycle time," he said. "A key return is going to be around personalization and tailoring experiences so customers will want to use our products and services. It could lead to more growth, upsell and cross-sell opportunities. Our customers will engage and create lifetime value for our company."

Modeling risk. Kreul said the company has a team focused on modeling volatility and the effects of hurricanes and other events. "We have retail jewelers and customers that can be impacted by volatile events," he said. "We have a team that's looking at analytics and trying to predict where and when we'll need to help customers."

Budgeting for 2025 and beyond. Jewelers Mutual puts projects in three buckets: Innovation, experimentation, and investments. Augmented reality is more innovative and there's a small team doing experiments. AI is in the experiment stage, but quickly becoming an investment. "We look at different areas of the company where we want to do investments and experiments in AI," said Kreul. "We are investing heavily in preparing our data and getting it ready to train models and that'll be a foundational investment to enable experiments in AI."

Future-proofing. According to Kreul, future-proofing needs to go beyond AI. He said:

"We are architecting our environment to be microservice-based, open, and agile so we can rapidly swap components out. We have an end-to-end thought process about how we architect our systems from data to technology as well as software engineering, models, and embedding models. We're spending a ton of time to make sure we are future-ready and able to take advantage of new things because they're coming out very fast."

The human element with AI. Kreul said CxOs need to think about the human element to AI and automation and change the way they work overall. "You're not just automating the things you do today," he said. "I think you have to take a step back and really think about disrupting your processes. The people element is a key component. Change management and culture are also critical. We believe our people are our differentiators. We spend a lot of time with our teams and stakeholders on the importance of talent and how it's all going to work together.

More:

• BT150 member Dr. Jonathan Reichental: How autonomous vehicles could change how cities are designed
• BT150's Ashwin Rangan on CIO evolution, technology curves and what it means for genAI deployments
• BT150 Spotlight: Sunitha Ray on the difference between enterprise AI and genAI
• How leaders need to think about AI, genAI

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

Freshworks is winning more mid-market and enterprise deals and plans to double down on its employee experience business as it builds out its IT service management, IT operations and service management products.

The company delivered strong third quarter results and raised its fourth quarter outlook. Freshworks also said it will cut 13% of its workforce.

Freshworks reported a third quarter net loss of 10 cents a share on revenue of $186.6 million, up 22% from a year ago. Non-GAAP earnings of 11 cents a share were ahead of expectations. For the fourth quarter, Freshworks projected $187.8 million to $190.8 million, up 17% to 19% from a year ago, with non-GAAP earnings of 9 cents a share to 10 cents a share.

For the year, Freshworks is projecting non-GAAP earnings of 38 cents a share to 39 cents a share with revenue growth of 20% to $713.6 million to $716.6 million.

Speaking on Freshworks earnings conference call, CEO Dennis Woodside said the company is expanding in its employee experience (EX) business, which is less known than the customer experience offerings. Woodside said:

"Our EX business is strong with over $390 million in ARR and a year-over-year growth rate of over 40% in Q3. Today, more than 17,800 customers are using our EX solutions to deliver IT and employee service management. By prioritizing investments in EX, we are moving up-market and winning more mid-market and enterprise deals. We won 16 new and expansion deals over 100,000 in ARR in EX, including several against our largest competitor in Q3."

The bet for Freshworks is that it can provide enterprise grade EX software to midmarket companies that are "tired of being forced into oversized solutions that are hard to implement and operate," said Woodside.

• Constellation ShortListâ„¢ Incident Management
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• Connecting Experiences From Employees to Customers

By leveraging its AI assistant, called Freddy, it can provide an employee and customer experience stack that's effective for midmarket firms. With the acquisition of Device42, closed in June, Freshworks has been able to sell IT asset management to Freshservice customers.

Freshworks also said that it is prioritizing R&D to focus on EX and accelerate features for change management, access and controls. While EX has a solid footprint, it's smaller than Freshworks' CX business, which has 56,100 customers.

"By adding these resources to EX, we have significantly pulled forward our product road map, in some cases, up to four quarters," said Woodside.

With its EX moves, Freshworks is looking to sell to larger enterprises without running into ServiceNow. Woodside said:

"EX is a fantastic market. The market is growing at double-digit rates. The competitive landscape is very clear. You got ServiceNow, who cares about the biggest companies in the world. We do run into Atlassian. There’s a number of small players and some incumbents, but nobody is really focused on that mid-market and lower end of enterprise where sophisticated IT departments that need a solution. They want to automate their IT operations, ITAM, ESM, and they need an enterprise-grade platform. That’s what we provide. There’s a lot of growth in that market."

Fortunately, Freshworks won't have to bump into much larger EX players. It'll do fine by adding EX plans to its existing CX customers as it upsells its AI capabilities.

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

IonQ's bet to focus on making quantum computing applications relevant for enterprises today instead of waiting for quantum supremacy appears to be paying off nicely.

The company lifted its sales outlook for the 2024 to $38.5 million to $42.5 million. IonQ said fourth quarter revenue will be between $7.1 million to $11.1 million. In the third quarter, IonQ reported a net loss of $52.5 million, or 24 cents a share, on revenue of $12.4 million, up 102% from a year ago.

• IonQ's quantum computing bets: Quantum for LLM training, chemistry and enterprise use cases
• Quantum Computing Platforms
• Quantum Computing Software Platforms
• Quantum Full Stack Players

Although those revenue figures are small compared to a market cap currently at $3.52 billion, IonQ's approach is gaining commercial traction. Consider:

• IonQ said it will partner with AstraZeneca to develop quantum applications for drug discovery and development.
• The company announced a deal with Ansys to bring quantum applications to computer-aided engineering.
• Inked a $9 million partnership with the University of Maryland.
• Partnered with NKT Photonics to develop and deliver three prototype optical subsystems for IonQ systems in 2025.
• And acquired Quibitekk, a quantum networking company. Quantum networking is a potentially large market and IonQ expects it to be its first cash flow positive unit.

Chapman said to scale IonQ will leverage Quibitekk to network its systems together. IonQ paid $22 million in cash for Quibitekk, which has partnerships with telecommunications companies.

"Quantum networking, like classical networking hardware, is also expected to require several orders of magnitude more physical hardware than quantum computing to build the infrastructure for the quantum internet," said Chapman. "This is another element of the networking market, where IonQ is particularly well suited, given the investments we have made over the past years to scale up our production manufacturing capabilities."

IonQ also said that it landed $63.5 million in third quarter bookings including a $54.5 million award from the US Air Force Research Lab.

On IonQ's earnings conference call, CEO Peter Chapman said, "one can no longer ignore the scale of IonQ's commercial success." Chapman added that 18 months ago, the company bet that it could make its quantum systems enterprise ready.

• Will IonQ make quantum computing enterprise relevant in 2025?
• Why your quantum computing vendors are going to look familiar

"In the quantum world, there are two camps or schools of thought on this topic. One camp believes you need near perfection before value can be unlocked. If they are correct, sadly, Quantum is still a long way off. The naysayers belong to this camp, but their numbers are dwindling every day.

The other camp, which IonQ and others belong to, believe today's early noisy quantum computers can provide value even before they are perfected. If we are right, it gives us a significant advantage by generating early meaningful cash collection as we work towards perfection."

Chapman acknowledged that he wasn't concerned with academic arguments over quantum computing. The plan was to take IonQ's integrated quantum stack and apply the technology for commercial value.

The focus for IonQ is to make sure it has software ready to go when its latest hardware systems are ready to roll.

"When we have the hardware done, we want the software to come along at exactly the same time as when the hardware is ready to run those applications," said Chapman. "We're timing those two things together. What the two announcements that are today with both Ansys and AstraZeneca are the beginnings of working on those applications."

While IonQ’s commercial traction is impressive, the company will still face tough competition from much larger companies.

• IBM upgrades IBM Quantum Data Center with Heron
• IBM Boosts the Software Side of Quantum
• Quantinuum, Microsoft claim quantum reliability breakthrough
• Microsoft claims hybrid quantum breakthrough with Quantinuum, partners with Atom Computing
• Quantinuum raises $300 million, valued at $5 billion
• Classiq CEO Minerbi on the intersection of quantum computing, HPC and use cases
• Quantum Brilliance, Oak Ridge National Laboratory aims to meld quantum computing, HPC

Constellation Research analyst Holger Mueller said:

"The race for software is heating up, as vendors want to see utlization as soon as the hardware is ready. So it is no suprise IonQ is focussing on software readiness as well, assuming its Forte Enterprise system is delivered and it's on track with its Tempo system. In the meantime, the revenue is in quantum scale encryption - so the acquisition of Quibitekk makes sense and deliver immediate, reliable revenue."

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

If Unit4's strategy is successful, midmarket enterprises will leverage the company’s ERP platform and employees will never know it, said CEO Michael Ettling.

The Unit4 strategy revolves around a "self-driving ERP" plan where the platform operates in the background with automated workflows that come to multiple applications.

Speaking at the Unit4 Analyst Summit in Philadelphia, Ettling outlined the midmarket ERP vendor's strategy. Unit4 is focused on people-centric companies (think services), non-profit and education with up to 10,000 employees.

Ettling said:

"Today, we are on ERP X, and tomorrow we're chasing this vision of self-driving ERP. We think this is going to become more and more prevalent. My Holy Grail of self-driving ERP is that you buy my ERP and nobody in the organization ever logs into it. Your access is through Microsoft Teams, Slack or through whatever. No one wakes up in the morning and logs in to the ERP to do ERP work."

This Unit4 strategy could be ahead of its time. As generative AI becomes the new UI for enterprise software, many of the SaaS applications you log into will fade to the background. With copilots and agentic AI, the concept of headless enterprise applications is going to be more prevalent. 

• GenAI may be the new UI for enterprise software
• Agentic AI without process optimization, orchestration will flop
• Enterprises leading with AI plan next genAI, agentic AI phases

To Claus Jepsen, Chief Product and Technology Officer at Unit4, the self-driving ERP concept is really about not having a UI for ERP. Jepsen:

"The way we look at this is that the best user experience is actually no UI. The best ultimate user experience is you don't even have to go into the ERP. ERP systems have a tendency to be very monolithic with complex UIs. There should be a mix between a conversational user experience where we move users away from dealing with the maintenance of data."

Constellation Research analyst Holger Mueller said:

"Unit4 has been painting a compelling vision of ERP for close to a decade. The good news is that it is now serious about moving customers to the cloud with an end of life date by end of 2026. The migration of the masses has not started yet - so all eyes will be on 2025 and Unit4 getting its customer base to move to ERPx."

Unit4, which has €425 million in revenue, ARR growth of 25 and cloud ARR growth of more than 25%, has been on a transformation of its own since 2021 to evolve the product and support it. The company has migrated to the cloud, focused on ERP workflows and integrated automation with robotics process automation with the ability to swap into generative AI.

The stack, which uses Microsoft Azure as its infrastructure, breaks down like this:

Unit4 is "gently nudging" its on-premises customers to the cloud with a common platform. On-premises customers have until the end of 2026 to migrate to the cloud. Unit4 announced the transition in October 2023. There will be exceptions based on government use cases, data sovereignty and security needs.

Ettling said that the move to get customers to go to the cloud enables AI and automation delivery. Unit4 is betting that the real value in ERP is in the workflows, AI and automation between the components--finance, HR and projects--on a common data model that is extensible.

"AI is obviously the buzzword of the moment and we've been thoughtful about how we approach AI," said Ettling. "For AI to work you still need to read and write a transaction and then get AI to do something with those transactions." Ettling also said the company's work with RPA extends into large language models too. That argument has also been made by UiPath. The general idea is that automation and process is more important than the underlying models powering workflows and experiences. 

• How leaders need to think about AI, genAI
• Takeaways on successful AI, generative AI projects

Ettling said:

"Generative AI is now just a different smart in smart automation, as opposed to something new. It's the user experience in self-driving ERP and processes that enable it. Sometimes it may be AI, but sometimes it may also be a robotic solution or something else. We really have a view on AI that it's part of the user experience. A lot of the marketing or story around AI is AI for the sake of AI, as opposed to AI to deliver better on a North Star."

Other takeaways from Ettling's talk:

• Unit4 wants to get 1 billion annual revenue by chasing a North Star of a self-driving ERP that's automated.
• 95% of new logos added to Unit4 over the last two years are cloud deals.
• Unit4 is open to mergers and acquisitions for smaller tuck-in deals that would add functionality or provide a legacy base that can be converted to the cloud.

Research:

• Constellation ShortListâ„¢ Services-Centric Cloud ERP
• Constellation ShortListâ„¢ Enterprise Application Platforms

• How Magnox is Transforming Employee Experience