A Software Insider's Point of View

Monday's Musings: Ray's Law - Intelligence Is Doubling Every 7 Months

rwang0 — Mon, 28 Apr 2025 15:59:18 +0000

Monday's Musings: Ray's Law - Intelligence Is Doubling Every 7 Months rwang0 Mon, 04/28/2025 - 08:59

Moore's Law Focuses On Compute, Ray's Law Addresses Growth of Intelligence

In the computing world, Moore’s law stood for 50 years. In 1965, Gordon Moore, one of the co-founders of Intel observed that the number of transistors that coud be placed on a micro chip doubled every two years. This guiding principal for the semiconductor and high tech industry led to Moore's Law where compute doubles every two years.

In the Artificial Intelligence world, there's Ray's Law. AI capabilities double every 7 months. At this seven month doubling rate, in two years, this will be a 1500% increase. In six years, AI intelligence capability will be 10,0000%. Credit to David Giambruno for codifying this.

Figure 1. Ray's Law AI Capability Doubling

The Bottom Line

The AI revolution is moving at an exponential pace that will exceed human comprehension. Technology leaders need to shift from linear thinking to geometrical thinking. Investors betting on AI face a once in a generation frameshift in winners and losers

Your POV

Have you made the frameshift to exponential thinking? Will you be ready for AI?

Add your comments to the blog or reach me via email: [email protected]">R (at) ConstellationR (dot) com or[email protected]"> R (at) SoftwareInsider (dot) org. Please let us know if you need help with your strategy efforts. Here’s how we can assist:

Working with your boards to keep them up to date on technology and governance.
Connecting with other innovation minded leaders
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Disclosures

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy,stay tuned for the full client list on the Constellation Research website. * Not responsible for any factual errors or omissions. However, happy to correct any errors upon email receipt.

Constellation Research recommends that readers consult a stock professional for their investment guidance. Investors should understand the potential conflicts of interest analysts might face. Constellation does not underwrite or own the securities of the companies the analysts cover. Analysts themselves sometimes own stocks in the companies they cover—either directly or indirectly, such as through employee stock-purchase pools in which they and their colleagues participate. As a general matter, investors should not rely solely on an analyst’s recommendation when deciding whether to buy, hold, or sell a stock. Instead, they should also do their own research—such as reading the prospectus for new companies or for public companies, the quarterly and annual reports filed with the SEC—to confirm whether a particular investment is appropriate for them in light of their individual financial circumstances.

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Event Report: Beyond The Hype - Real Enterprise AI at C3 Transform

rwang0 — Thu, 17 Apr 2025 19:08:43 +0000

Event Report: Beyond The Hype - Real Enterprise AI at C3 Transform rwang0 Thu, 04/17/2025 - 12:08

C3 Transform Celebrates Real-World Enterprise AI

From March 18th-20th, 2025, C3 AI convened more than 650 attendees across 250 organizations and 50 partners for one of the world’s largest enterprise AI conferences, C3 Transform. The annual event, held at The Boca Raton, brought real AI practitioners together for intense knowledge sharing, hands-on training, and thought leadership in the critical field of enterprise AI.

For many who have been following the AI in the enterprise conversation, few technology vendors have cracked the code on enterprise AI and even fewer have delivered turn-key solutions that customers can implement with repeatability. While some firms deliver a loose framework and massive consulting with lots of fanfare and others have great marketing of vaporware, C3 takes the opposite approach and delivers software through 131 turnkey enterprise applications and 100 generative AI applications. In fact, C3 can deliver enterprise grade outcomes from AI such as demand forecasting, predictive maintenance, customer churn, and stochastic optimization for enterprise grade customers.

During the opening keynote, founder, CEO, and Chairman of C3, Thomas Siebel, shared how they can help companies such as Dow and Shell prevent downtime in their plants. The savings in downtime reduction provides billions of dollars of real-time economic value. Tom Siebel has been a voice of reason in the AI hype as customers have often started with a competitor solution and ended up with a deeper investment with C3. In conversations with customers, almost every attendee mentioned how happy they were with the business outcomes, the software experience, and the responsiveness of the C3 Team. C3’s own internal NPS scores reflect this with a +59 for pilots and a +45 for production customers.

On the product side, customers in general rave about the Version 8 performance. C3’s internal numbers show 20X improvements in data ingestion, 24X improvements in data evaluation, 25X in model training, and 150X in data sync time. Most partners would concur that performance has exponentially improved.

Key product announcements include:

C3 AI Data Fusion. C3 has simplified the complex requirements to ingest, integrate, and manage data into the unified federated data image. The visual interface uses Gen AI to recommend integrations including field mappings, then automatically handles logging, veracity, governance, and provenance of data.
C3 AI Vision. The user experience for enterprise software has mostly been dreadful. C3’s new offering delivers on immersive spatial visualization. The design point abstracts transactional or operational processes and displays them into spatial information instead of static charts. The user experience moves from 2D to a digital twin or spatial map.
C3 AI Developer Hub. This new portal makes it easier to provide consistent documentation. Training classes include comprehensive on-line developer training; application development tools; integrated, AI-powered, coding assistant; distance learning; collaboration and community; continuous integration/ continuous deployment, and API management.
C3 Agentic AI everywhere. Since Dec 2022 the vendor delivered 100 Generative AI apps. Most Gen AI apps apps tend to be unimodal or bi-modal. You can’t use all the data. Access controls can’t be used for security, stochastic issues abound, and data ends up on the internet. C3 takes a different approach, one that aligns with enterprises. Key differentiators from Generative AI for C3 include agentic orchestration, deterministic responses, enterprise access controls, traceable to ground truth, no-LLM caused data leakage, zero hallucinations, no IP liability exposure, no incremental cybersecurity fixes, and LLM agnosticity.

The Bottom Line: Real Enterprise AI Exists

Many prospects and customers may be attracted and excited about enterprise AI. However, few are thriving in their implementation. The C3 Transform event brought some of the best in-production use cases in Enterprise AI together to show the art of the possible from traditional AI to Gen AI and Agentic AI. With 15 years of AI heritage in the enterprise, serious AI executives should take the time to talk to C3 customers and partners about what can be achieved in AI, especially for enterprise requirements. As the hype only amps up and the investments continue to increase, Constellation recommends that prospects and customers take the time to understand the differentiators that matter. C3 should be included in ShortLists for Enterprise AI Projects

Monday's Musings: The Great Reset - Looking Beyond The Tariffs

rwang0 — Mon, 07 Apr 2025 20:36:22 +0000

Monday's Musings: The Great Reset - Looking Beyond The Tariffs rwang0 Mon, 04/07/2025 - 13:36

UNDERSTAND THE METHOD TO THE MADNESS

The shock and awe from tariffs represent just one part of the Great Reset that’s being led by a President that has a once in a lifetime opportunity to transform America's standing and shape the POTUS legacy. Hampered by a failing WTO and short-term thinking that plagues the Western world, tariffs provide the biggest leverage point to both political and economic bilateral negotiations for access to the US $29 trillion economy.

Basically the WTO failed to do its job and the balance of trade has gone awry. US has minimal access as other countries enacted trade barriers that the US never responded to or addressed. This left many American industries out of global markets. While the tariffs today are focused on manufacturing at first, which is only 8% of the US economy, this administration could go after the global competency centers (GCC’s) next as they are equivalent to the outsourcing of tech like manufacturing was outsourced to China in the 1980’s.

Keep in mind, while Trump overemphasized the stock market performance in his first term, the second term is about driving down interest rates to pay down the debt at a lower cost structure. POTUS is not worried about the global stock meltdown because the prize is to drive the world to free trade by reducing tariffs and also resetting the balance of trade. The US has a lot to offer for reciprocal trade from agriculture, natural resources, energy, manufacturing, military, and tech. More importantly, this strategy is designed to contain China.

TRUMP'S SEVEN POINT STRATEGY

Think of the tariffs as one prong of a seven prong strategies with a concerted effort to achieve the macro view - a long term foundation for both America's prosperity and the world's:

1. DOGE - Fraud, waste, and abuse. Reduce government spending cut size of government.

2. Direct foreign investment 1.3T or more bringing companies back to invest in the United States

3. Tariffs - keeping fair trade out there and driving down long term tariffs. Access to US markets require a renegotiation on trade, security, tariffs, cooperation

4. Immigration - More legal and good immigration and no bad immigration

5. Tax Cuts - driving down costs of doing business

6. Regulations - reduce regulations so organizations and people can freely make more decisions

7. Interest rates - drive down the cost of borrowing and prop up the dollar

PAUSE, DON'T PANIC, ASSESS THE PROGRESS OF COUNTRY SPECIFIC DEALS, THEN ADJUST

While many will panic, expect some short term pain (6 to 8 months) but the long term gain may prove worth it. Enterprise deals that are focused on exponential efficiency will do well.

Enterprise deal flow: expect a slow down of decisions by a quarter based on country and tariff negotiations status.

interest rates: Expect a 100 to 150 basis point drop in the long run.

Inflation: Expect a continued drop in prices as demand drops

Unemployment rate: expect a short term uptick but long term this will be down as we will have shortage of scarce skills b/c of GCCs and lo immigration

Consumer spending: there will be a short bump up as panic tariff buying will increase. however, expect a stall until the details are ironed out over the next 6 months.

Consumer confidence: The Michigan Index will drop to about 45 in the next 3 months, but will grow when tax cuts are initiated and trade deals are finalized

THE BOTTOM LINE: INSIDE THE GREAT RESET

Right now the market response rests on supply chain resiliency, tax optimization, and trade deal impact. There is an uptake of trade that’s about to be tariffed but beyond that immediate fear, enterprises are waiting for certainty in the bilateral deals. Expect the progression of deals to calm markets that seek certainty and for the reset to open up new opportunities.

The UBER view is a great reset not seen since Bretton Woods. The US is using this opportunity to reset the world order at a Political, Economic, Societal, Technological, Environmental, and Legislative level. This is a once-in-a-lifetime shift that board members and business leaders must start planning for.

Applying the Constellation PESTEL futurist framework the debate can be framed on six axis. Expect to hear more from Constellation and the Executive Network in the next few months on the PESTEL model. The arguments can be framed in this manner:

Political - US vs China. The Great Powers at War
Commonsense vs Ideology.Finding balance in how outcomes are achieved.

Economic - Nationalism vs Globalism. A common wealth of self-interest emerges.
Free trade vs WTO. Changing the rules of the game.

Societal- Autonomous vs Human. Humanity’s purpose and mission in an Age of AI.
Culture of Abundance vs Culture of Scarcity. Fighting the tyranny of centralized scarcity for decentralized abundance..

Technology - Age of Internet vs Age of AI. Tectonic tech shifts will change everything.

Environment - Efficient Energy Futures vs Climate Action. Balancing sustainable models

Legislative - Oligarchy vs the People. Laws created by a few or rule by plutocracy.

Your POV

Did you blink on Tariff's or keep your calm? Are you ready for the Great Reset?

Working with your boards to keep them up to date on technology and governance.
Connecting with other innovation minded leaders
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact [email protected]">Sales.

Disclosures

Contact the [email protected]">Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network

Event Report: HCLSoftware - The Convergence of Tech and Humanity

rwang0 — Mon, 27 Jan 2025 17:31:23 +0000

Event Report: HCLSoftware - The Convergence of Tech and Humanity rwang0 Mon, 01/27/2025 - 09:31

Age of AI Brings New Opportunities and Challenges

On January 23rd, HCLSoftware convened a panel of 10 experts for a deep discussion on the implication for tech and humanity convergence in an Age of AI. Panelists at this Davos event included:

Dr. Basma Albuhairan, Managing Director C4IR, Saudi Arabia
Dan Beck, President and Chief Product Officer, SAP SuccessFactors
Sandy Carter, Chief Operating Officer and Head of Go To Market, Unstoppable Domains
Camila Clarke, Chief Executive Officer, Clarke Capital Advisors
Eric FAJOLE, Director Paris Region, Business France
Kalyan Kumar (KK), Chief Product Officer, HCLSoftware
Jessica Montgomery, Director, Al@cam, University of Cambridge
Stefanie Olives, WEF Global Shaper, Brazil Hub
Diana Zamora, Global Public Policy Director, Mastercard

The group started by taking a futurist look into 2030, envisioning how software organizations would shape the future. As expected, a deep discussion ensued on the topic of how Agentic AI is creating adaptive, resilient, and intelligent systems. Many of the panelists envisioned a world that became more ambient, with context providing mass personalization at scale, and instrumentation to understand human intent.

As conversations continued into other trends such as quantum software development, a consensus emerged that the technology had tremendous potential, yet was still 3 to 5 years away before any pragmatic applications would arrive with early adopters. On the topic of Robotics, the convergence towards a singularity became more apparent, given the inverted population growth in many advanced economies. Panelists discussed the need for safety and reliability of these systems and the guardrails required for responsible AI.

The Bottom Line: Tech Trends Stay Two To Three Years Ahead of Adoption

As with any early set of trends, the pioneers have set the pace for main stream adoption and use cases. Today's trends with early adopters show promise in the latest development in AI strong tendencies for robots and automation, and a need to improve efficient energy consumption. Constellation believes that AI adoption will fundamentally change business models. Companies who embark on AI will have a 10x advantage over similar peers who put off deployment. Meanwhile, expect a massive convergence of disciplines leading to faster cycles of innovation and adoption.

Your POV

What tech trends did we miss? Where do you see the most adoption?

Developing your Agentic AI and Digital Business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact [email protected]">Sales.

Disclosures

Contact the [email protected]">Sales team to purchase this report on a a la carte basis or join the Constellation Executive Networkf

Monday's Musings: Exponential Efficiency In The Age Of AI At Davos

rwang0 — Sun, 19 Jan 2025 17:34:10 +0000

Monday's Musings: Exponential Efficiency In The Age Of AI At Davos rwang0 Sun, 01/19/2025 - 09:34

AI Will Dominate The Davos Agenda, Yet Only A Privileged Few Can Pay For It

While, Trump, China, and the global economy take centerstage at this year’s World Economic Forum, AI will be the main topic du jour. Senior executives and policy wonks seek to understand how AI will transform businesses, societies, and economies. The AI Age truly is the 4th Industrial Revolution, not the other stuff that was peddled as conference fodder over the past five years in Davos (see Figure 1).

Figure 1. Welcome To The AI Era

Unlike the Internet Age, where there was a push for massive decentralization, open systems, many players, and lower costs, the AI Age has so far become the opposite (see Figure 2).

Figure 2. AI Age Is Opposite of Internet Age

Today, the AI systems are highly centralized, closed, with fewer players, and much higher costs. In fact, the barriers of entry to AI will create an AI divide bigger than the current digital divide. Many countries will not be able to afford the compute power, the energy, and the human power required to effectively manage AI. And even worse, the world is abuzz about AI, yet the costs of AI continue to go up, not down. Constellation Research expects an AI divide worse than than today’s digital divide.

Legacy Costs And Technical Debt Burden Most Organizations

Concurrently, the legacy costs of the Internet Era and technical debt continue to pile up with hybrid cloud, legacy transactional systems, expensive and dated software, and rising maintenance costs by technology vendors trying to raise account values not commensurate with the increase in innovation. HINT: most organizations are paying too much for technology without a proper return.

One favorite quote from a Constellation’s Executive Network (CEN) member:

"As a CFO, all my costs go down with volume and time, except for F!@#%G healthcare and tech (SaaS)."

This CFO’s astute comments reflect the current malaise in the SaaS world and cost of hyperscaler compute with lift and shift. In fact, today’s cost structures are way too high and organizations will continue to struggle to cut costs from the Internet Era to pay for the AI Era. The AI era has yet to show that the investments will yield productivity gains for many. Hence the push for exponential efficiency to pay for AI and other innovations.

Exponential Efficiency Explained

Exponential efficiency refers to an algorithm or function whose running time grows exponentially with respect to its input size. In other words, as the input gets larger, this type of algorithm experiences rapid growth in its execution time.

The simple rule for exponential efficiency in the first order: 10 X better or 1/10th the cost.

In the second order of exponential efficiency, organizations achieve: 10x better AND 1/10th the cost

This continues as organizations achieve the holy trifecta of faster, better, AND cheaper. Yes, all three can be achieved when exponential efficiency is applied. Now, many readers may contemplate whether this is possible or not. Recently both X (formerly Twitter) and Meta (formerly Meta), found ways to cut their engineering teams with both AI and automation to achieve exponential efficiency. X reduced 2/3’s of engineering staff and others with little detriment. Meta continues to reduce 1/3 or more of its engineering teams and others with very little detriment. In fact, in back office financial operations, they may be able to get to 50% automation in the next two years.

Exponential Efficiency Will Help Pay For AI

More than just paying for the high cost of AI, organizations see the potential but need to fund innovation with cost savings. Today’s cost structures are no longer sustainable for the AI era. Legacy infrastructure costs must be taken down by 1/10th or improvements must be 10 times better in order to achieve exponential efficiency. In the Internet Era, telecommunications, commerce, distribution, and financial services costs were exponentially cut to make way for this new transformational technology. These innovations paved the way for 1000’s of new business models and monetization techniques leading to explosive growth and societal advancement. In almost every industry, the dawn of exponential efficiency has arrived, yet legacy players struggle to grasp the impacts. Here are five industries where exponential efficiency has arrived:

Financial services. SWIFT wires run about $25 a transaction. ACH costs about $2.50 per payment. ATM costs run about $1.000. In India, the government set up a payment system for over 1 billion people that costs next to free. Why does a Mastercard or Visa or Amex payment gateway exist? These merchant and user fees have been disrupted and smart enterprises will stop paying soon.
Defense and military. Expensive weapons programs create million dollar missiles to be used on the battlefield. Meanwhile, $100 drones have better effectivity. This consumerization of dual use technologies will continue with robotics as future kinetic wars may not be fought with human combatants. The gorgeous drone shows on display will be AI controlled dual use for warfare.
Enterprise software. Users locked into legacy systems pay $500 to $1000 per user per month for CRM, ERP, collaboration, office productivity, video conferencing etc. an Indian software pioneer, Zoho, offers all this for $10 per user per month. The cloud vendors who were the young Turks challenging legacy vendors are now the ones holding customers hostage and hindering innovation. The cycle has been repeated with a lot of money wasted for slow innovation and very little return to enterprises.
Energy and utilities. The cost of electricity continues to go up, while the raw carbon used to power is lower in cost when adjusted for inflation. Why? The cost of pensions and capital expense of power plants and transmission continue to rise. Many localities pay up to $0.25/kwh for not just transmission, but generation. In less than a decade, China will be able to produce energy at close to zero with hydro, nuclear, and battery storage from solar. Nuclear costs China $.05 per kw/hour. Any country who succeeds at lowering power costs will dominate economies with lower cost manufacturing, compute, and AI.
Public sector. The US will begin an exercise to take the bloat out of government. The Department of Government Efficiency (not an official department) will be focused on fraud, waste, abuse, and efficiency. With some of the best minds, this effort could create an efficiency in public sector that would have ripple effects throughout the economy and free up funds for more quality of life spending for society. This advantage will give the US another advantage on the world stage beyond digitization.

Senior executives must prepare for a swath of new competitors to create exponential efficiency disruption. For example, in the consulting industry, the combination of automation and AI, a glut of young computer science graduates and the carnage of layoffs for older workers will open the opportunity for new firms built on AI to operate with 1/10th the labor. Expect the first $1 billion consulting firm to achieve a revenue per employee of $10 million - $25 million each in the next five years.

The Bottom Line: Put AI To Work On Exponential Efficiency

At the 2024 Constellation Connected Enterprise executive summit at the Ritz Carlton Half Moon Bay, exponential efficiency pioneer David Giambruno showed how he achieved $712 million in hard costs with five different industries. David used a combination of AI and automation with bare metal cloud compute to deliver a 68% reduction in IT costs in 21 months. His teams were able to rewrite legacy code and reduce overall cloud costs with this novel approach.

Time is of the essence. Exponential efficiency funds the AI projects which set up the foundation for organizations achieving Second Order exponential efficiency gains. PE firms looking at turnaround playbooks will start with a thesis on exponential efficiency before starting the turnaround. Investment bankers will roll out their exponential efficiency playbooks for post-merger integration models. Be warned. Any Global 2000 company missing the exponential efficiency playbook will be left behind without the resources to fund their AI investments.

Your POV

How will you achieve exponential efficiency? Will you aim for 10x or 1/10th?

Developing your metaverse and digital business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact [email protected]">Sales.

Disclosures

Contact the [email protected]">Sales team to purchase this report on a a la carte basis or join the Constellation Executive Networkf

News Analysis: Tesla's Delivery Numbers Drop For The First Time Ever

rwang0 — Fri, 03 Jan 2025 13:13:23 +0000

News Analysis: Tesla's Delivery Numbers Drop For The First Time Ever rwang0 Fri, 01/03/2025 - 05:13

Tesla Faces First Annual Drop In Deliveries

Tesla reported production and delivery numbers and missed analysts estimates of 504,770 units delivered versus 495,570 estimated for the fourth quarter of 2024. This was the first ever drop in delivery numbers reported by the EV pioneer. While 9200 may not seem like a lot, the market perception of demand based on delivery numbers led to a 7% drop in stock price for the first day of trading in 2025.

Model 3 and Y continue to make up the bulk of the deliveries at 95.2%. Cybertruck sales appear to be driving the overall growth of the other categories which include the slowing sales and aging line up of Model S and Model X. Meanwhile, Tesla's main competitor, BYD, gained 12.1% in battery electric vehicles but still fell short of dethroning Tesla as the top battery electric producer for 2024 at 1.76 million units vs Tesla's 1.79 million units. The competition is gaining share with GM, Ford, Rivian, Hyundai, BMW, and VW competing hard in the US. In China, Europe, and Asia, BYD is creating fierce competition with Tesla for sales.

Many believe the 63% gain in 2024 for the stock was driven by narrative not fundamentals with founder Elon Musk's close relationship to President Trump creating a halo effect.

The Bottom Line: The Tesla Story Has Always Been Bigger Than EV's

While bears are happy to see less than 500k deliveries for Tesla, the numbers delivered were respectable given that overall demand for EVs are down. With subsidies going away in most countries, the return of the hybrid will be dominating most sales for quite some time. This macro pressure will require EV auto makers to drive down the cost of production and hope for better charging infrastructure investments.

In this new era of Exponential Efficiency, Tesla is rapidly working towards driving unit costs down with Optimus Robots and hyper automation. In fact, the new Model Y Juniper has reportedly been set for a daily production capacity of 600 units at a much lower cost structure. Add Robotaxis to the mix for a low cost model and new business model, Tesla is on the cusp of changing the overall economics of transportation.

On the energy front, the Megapacks will be key to energy security around the world. With China projected to produce energy at $0.01 per KwH in five years, the race for cheap energy in manufacturing and data centers that power AI is on. Countries around the world will have to find ways to achieve low cost energy and Tesla has a competitive approach in both battery technology and storage.

But the bigger point is how Tesla is a deep tech company and the work being used to create highly efficient production via Optimus Robots should not be ignored. Cars are the first use case for these Robots. In fact, these robots will play a bigger role in ensuring low cost manufacturing amidst a long term global population decline. Moreover, these robots will be important in other industries going forward including dual use technologies for the modern battlefield.

Few companies in the world and few founders can take humanity from concept to commercialization on critical deep tech. For those naysayers on Tesla, the valuations as a car company will never make sense. For those who believe that the future of deep tech will sit with a few players such as Tesla, these valuations still seem reasonable.

Your POV

Will Tesla's EV business be around in 10 years or will we be looking at Tesla as a deep tech manufacturer for AI and Automation?

Developing your metaverse and digital business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact [email protected]">Sales.

Disclosures

Contact the [email protected]">Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network

Event Report: AWS reInvents Itself for the Age of AI

rwang0 — Sat, 07 Dec 2024 16:50:57 +0000

Event Report: AWS reInvents Itself for the Age of AI rwang0 Sat, 12/07/2024 - 08:50

Matt Garman Has Positively Impacted AWS

Amazon Web Services (AWS) hosted over 70,000 attendees at its 13th annual reInvent conference in Las Vegas, Nevada on December 2nd to 6th, 2024. Since its humble beginnings in 2012 when there were 6,000 attendees, this event has been on the must-attend list for developer and innovation focused business and technology leaders. After losing three years of momentum, AWS finally found the right replacement for Andy Jassy with Matt Garman as the new AWS CEO. This year’s announcements showcase significant product investments that will provide a stronger roadmap of how AWS will support AI startups and enterprises moving fast into AI. Overall, announcements from reInvent reflect a deep customer understanding.

Catch Constellation Research's AWS coverage:

AWS unveils next-gen Amazon SageMaker in bid to unify data, analytics, AI

AWS aims to make Amazon Bedrock your agentic AI point guard

Amazon Bedrock vs. DIY approaches benchmarked (full report)

AWS adds capacity sharing, training plans to SageMaker HyperPod, marketplace for Bedrock

Amazon Q Business gets a story at AWS re:Invent 2024

PagerDuty integrates with Amazon Bedrock, Q Business: Will it boost large enterprise traction?

AWS launches Amazon Nova foundation models in commoditization play

AWS aims to make Amazon Bedrock your agentic AI point guard

AWS revamps S3, databases with eye on AI, analytics workloads

AWS scales up Trainium2 with UltraServer, touts Apple, Anthropic as customers

AWS outlines new data center, server, cooling designs for AI workloads

AWS re:Invent 2024: Four AWS customer vignettes with Merck, Capital One, Sprinkr, Goldman Sachs

Oracle Database@AWS hits limited preview

AWS CEO Garman Q&A: Model choices, competition and AI's future

AWS Marketplace adds 'Buy with AWS' as it expands reach, woos procurement departments

CXO Trends Indicate Optimism On Economy And AI

On the enterprise tech event circuit, AWS reInvent is one of the Big 7 must attends for quality of networking, innovation announcements, and overall show quality. The other six include Adobe Summit, Google Cloud Next, Nvidia GTC, Salesforce Dreamforce, ServiceNow Knowledge, and World Economic Forum. For this year’s reInvent, this analyst spent time speaking with over 50 C-Suite executives and identified five major technology buying trends for 2025:

Positive post-election economic outlook. Almost every executive indicated that tech budgets are up 5 to 10%. With the election over, the economic outlook is very positive and almost bullish.
AI ushers a return of on-premises compute. Executives worry about AI in the wild. A rush to move AI to on-premises development and deployment is hot again for security and cost reasons.
Global competency centers or captives are on the rise. The biggest wave of technology offshoring is happening right now with one new captive being built every four days.
Exponential efficiency funds AI innovation. CXO’s prioritize projects that have a 10X return or deliver 1/10th the cost when evaluating AI projects
AI POC’s convert at about 17%. Organizations have converted POCS to projects for use cases in code generation, procurement, and customer experience (CX)

The Bottom Line: Executives Mostly Have Positive Reactions To Their reInvent Experience

Select quotes from the event highlight the overall sentiment of C-suite level attendees:

“With time and volume, most my costs go down except with healthcare and cloud. AWS costs me way too much”, CFO, Fortune 500 manufacturer

“AWS finally got its act together on AI now that Matt is here”, CIO, Fortune 500 Healthcare organizations.

“The level of meetings have been helpful for furthering our IT strategy and mission. We now know how to build out our AI roadmap”, Enterprise Architect, Fortune 500 energy company.

“This event allows me to meet my entire AWS ecosystem from software vendors to global system integrators. I will be back next year”, CTO, Fortune 500 media and entertainment company.

“We will now move our SAP instance onto AWS knowing that there is a path for AI”, CIO, Fortune 500 BFSI

“The future is multi-agent orchestration and we will need collaborative agents”, Chief Product Officer, SaaS startup

“The billion dollar cloud credit for AI startups is the smartest thing Matt’s done. This is the sequel to the playbook for startups in the cloud “, CTO Global System Integrator.

"It's a good thing Matt's here, Adam's lack of understanding cost AWS a lead in AI", Founder, Fast-Growing AI startup.

Your POV

Ready for the Age of AI? Are you in the midst of margin compression? How do you view AWS in your overall AI strategy? What are your plans for reducing OpEx to pay for innovation in 2025?

Developing your AI and digital business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact [email protected]">Sales.

Disclosures

Contact the [email protected]">Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network

Monday's Musings: Seven Big Themes In Tech For The Next Presidency

rwang0 — Mon, 02 Dec 2024 12:24:12 +0000

Monday's Musings: Seven Big Themes In Tech For The Next Presidency rwang0 Mon, 12/02/2024 - 04:24

Expect Regulations For National Security, But Overall Lighter Regulatory Framework

For the most part, tech has done well regardless of presidential administrations due to the light regulation of the overall industry. This has allowed large digital giants to emerge and dominate global markets across a multitude of industries. Amidst a national security backdrop and increasing capital required in the tech arms race, government has been hesitant to over regulate.

We’ve seen renewed optimism in three areas since Donald J. Trump's election victory:

Cryptocurrencies. Bitcoin – probably will blow past 100k.
Big Tech. stocks are back for tech as M&A activity heats up.
BFSI (Banking, Financial Services, and Insurance). Banks are gearing up for IPOs, M&A, and deals.

In the Biden administration the primary lever was an over zealous anti-trust regime intent on idealogically taming tech giants from becoming monopolies. This over reach of anti-trust doctrine which rested on ensuring the customer was not harmed resulted in more harm to the consumer and markets. Why? Innovative startups had no M&A opportunities, IPO market cratered, and consumers lost out on new innovations. In new markets such as cryptocurrencies, the lack of clear regulation led to an outflow of capital, talent, and innovation to the Middle East which quickly established clear ground rules and light regulation.

2025 Tech Macro Themes Fall Into Seven Camps

When forecasting, Constellation's base case is 3% inflation and 4% growth The stretch case is 4% inflation but 6-7% growth. These assumptions are a far cry from 8% inflation with 2% growth under Biden. Meanwhile, IPOs and M&A activity are gearing up. The bankers are telling us they are starting to ramp up the M&A teams they let go over the past four years. The good news - IPO’s are waiting for unicorns like Stripe, Databricks, OpenAI, SpaceX, Anduril, ByteDance, and CoreWeave are on the list.

Constellation Research expects the following seven macro themes for 2025:

Exponential Efficiency. Tech buyers face massive budget constraints as AI investments increase and margin compression continues. Almost every tech buyer interviewed by Constellation Research seeks cost savings to fund innovation. Today's OpEx heavy budgets leave little room for innovation. Consequently, if a technology vendor's offerings are not 10x better or 1/10th the cost, buyers are ignoring those technology vendors. Expect the continued massive growth of Global Competency Centers where tech talent shifts outside of the US to lower cost delivery owned by enterprises seeking labor and AI arbitrage.
M&A's Return. The regulatory overreach by Anti Trust and DOJ will be pushed back. Startups will have pipeline to exits for innovation. M&As will face easier hurdles for approvals, except national security concerns.
Epic Battle of US vs China. The recent high-memory chip band is a continuation of other national security related actions. Expect an equally or more hawkish stance by the new administration.
AI Moves Up The Stack. The first wave of AI growth came from Chips,. Clear winners include Nvidia, TSMC, SuperMIcro, ASML, and maybe AMD. The second wave comes from the HyperScalers. The next 24 months will come from software vendors who deliver real AI improvements. Currently, the market has seen meager offerings of lame Co-Pilots and weak agents that any university student could build in 30 days or less. When these enterprise vendors finally deliver real AI, there will be a boom. The fourth wave will come from enterprises who apply AI such as Walmart and Uber who have used this for dynamic pricing, optimization of operations, and improved consumer personalization. Consequently, expect a market rotation out of chips and a move to other waves.
Crypto Is Back. With the crypto and tech bros whispering in POTUS' ear, expect clearer guidelines. Should the Crypto Act pass, expect capital, talent, and innovation to shift out of Middle East back to US
Security. Security. Security. From cyber security, to deep technologies, to critical infrastructure, security is also paramount to the administration. This administration is expected to root out any espionage and take a harsher stance on cyber criminals.
Smarter Tech Policy. Since President Obama, the link between Silicon Valley and DC has improved. Unfortunately, the past 8 years has seen a politicization of the tech industry. Expect a swing back to the middle as the Trump team balances out business interests with societal priorities. Constellation expects a deeper discussion on Section 230, Online Safety Act for Kids, overall privacy rights, and TikTok.

Figure 1. Seven Macro Themes for 2025

Source: Constellation Research ,Inc.

The Bottom Line: The Age Of AI Changes All The Rules

The clear demarcation between the Internet Age and the Age of AI provides technology buyers with an understanding of the digital impact across these ages. Keep in mind there was no Fourth Industrial revolution. Those technologies in that fourth industrial revolution were third order derivatives of the internet age (see Figure 2)

Figure 2. The Age of AI Is Here.

Source: Constellation Research ,Inc.

We have seen a sharp contrast with the Internet Age for AI Age and technology buyers have not seen the returns yet. AI has been more closed more centralized, with few winners, and more expensive costs. Technology vendors can not continue to hold their buyers hostage to preserve stock price without delivering on exponential efficiency. For example, India's peer to peer payments system operates at fractions of pennies per transaction versus today's SWIFT regime at $25 for a wire and $1.50 for an ACH transaction. Companies can acquire Zoho at 1/10th the cost of buying Microsoft, Google, Salesforce, Zoom, etc. The conditions are ripe for disruptive startups that will challenge these once innovative vendors who are now holding back progress.

Figure 3. Internet Age Vs AI Age (So Far)

Source: Constellation Research ,Inc.

Your POV

Ready for the Age of AI? Are you in the midst of margin compression? What are your plans for reducing OpEx to pay for innovation in 2025?

Developing your AI and digital business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact [email protected]">Sales.

Disclosures

Contact the [email protected]">Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network

Event Report: Capgemini Business to Planet Connect at Climate Week New York

rwang0 — Fri, 27 Sep 2024 21:40:46 +0000

Event Report: Capgemini Business to Planet Connect at Climate Week New York rwang0 Fri, 09/27/2024 - 14:40

Five Trends From Capgemini's Business To Planet Event

On September 25th, 2024, Capgemini hosted delegates as part of Climate Week 2024 in New York. Attendees learned how organizations and their leaders have transformed operations, built sustainable supply chains, and applied AI to improve their green strategies.

Sustainability by design addresses root causes. Attendees and speakers reiterated how important product and service design plays a role in enabling sustainability. From low carbon package design to efficient energy consumption, many organizations have achieved quantifiable achievements.
Circular economy business models show promise. In many sessions, concrete examples include product use extension, resource recovery, sharing platforms, resource efficient production, and recycling of waste to material. These circular business models consider circular inputs, value chains, and market places.
Pragmatic decarbonization lower costs. Investment has increased in increasing energy efficiency, developing lower carbon products, electrifying processes, replacing thermally-driven prices, and collaborating around the supply chains. Users see a benefit with a comprehensive approach in reducing carbon emissions with consderation of cost, timing, impact, and feasibility.
Data-driven AI supercharges sustainability. Today's projects often involve a heavy digital and data component in not only quantifying inputs, but also reducing outputs. The heavy use of sensors and computing at the edge enables both digital and AI capabilities. Consequently, this has led to a rise in new startups putting this data to good use in operational efficiency, regulatory compliance, and revenue growth.
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Advances in climate tech create new opportunities to democratize action. New climate tech startups focus on bringing hard earned advances to the masses. Some examples include:

Altana - helping companies see intelligent maps of the global supply chain
BeZero - carbon credit rating systems
BioPlaster Research - seaweed based biodgradable packaging
Form Energy - long duration energy storage
Harvest Thermal - home heagina nd colling
InFarm - urban and vertical farming
OCN.Ai - a movement towards a healthier, more resilient ocean,
ZeroAvia - hydrogen fueled aviation

The Bottom Line: The Pendulum for Climate Solutions Has Shifted

Most attendees at Climate Week and at the Capgemini event shared similar insights on the climate for sustainability policies. In the US, boards have pushed back on DEI and ESG. The combination of a public wary of greenwashing and a tighter economic environment has led to the deprioritization of green policies. Policies that show a green bottom line such as circular economy, waste reduction, and compliance have had the most success.

Your POV

How far along are you with your sustainabilty projects? Are you ready to put these into full production? What risks have you overcome?

Developing your metaverse and digital business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact [email protected]">Sales.

Disclosures

Contact the [email protected]">Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network

News Analysis: Capgemini Research Institute's Latest Sustainability Report Shows Prioritization For Regulatory Compliance and Operational Efficiency

rwang0 — Mon, 23 Sep 2024 07:02:11 +0000

News Analysis: Capgemini Research Institute's Latest Sustainability Report Shows Prioritization For Regulatory Compliance and Operational Efficiency rwang0 Mon, 09/23/2024 - 00:02

Broad Reaching Survey Shows Insight Into Both Progress and Trends In Sustainability

In the third annual “A World In Balance 2024” report by Capgemini Research Institute, 6500 consumers over the age of 18 and 2152 executives employed at 727 organizations with more than $1 billion in annual revenue were surveyed on their views, investments, and progress in sustainability. Overall findings show how organizations have prioritized investments with tangible return on investment (ROI), improved sustainable design, and doubled down on measurement. Key regulations such as the European Union’s corporate sustainability reporting directive (CSRD) will drive continued investments to address regulatory compliance.

The report provides Chief Sustainability Officers (CSOs) with recommendations on how to accelerate their sustainability initiatives. Moreover, the insights in the report lay out a case for business leaders in strategy, marketing finance, human resources, procurement, manufacturing, and sales to make investments in a sustainable approach.

Progress On Sustainability Remains Steady And Impactful

Capgemini Research Institute developed a 93 question sustainability index. Some highlights of the report include how countries such as Australia have shown the most consistent progress year over year while the Netherlands have maintained relatively consistent progress in the index. From an industry view, consumer products manufacturing has made the most consistent progress year over year with financial services improving the most in 2024 versus 2023.

Organizations have prioritized circularity projects to achieve operational efficiency and cost savings. The survey showed that 72% of all organizations see recycling products as a key aspect of their programs. Sustainable design creates cost savings in both the supply chain and the recovery process with 67% of executives redesigning products to have lower impact on forests. Furthermore, the push for better measurement has led to improved methods to measure industrial process energy.

Stewardship of water resources have also yielded cost savings. Over 75% of organizations have implemented a water stewardship program, up from 55% in 2022. On the biodiversity front, 66% of executives surveyed from the report agree their organizations invest in conserving natural habitats. On the topic of regulations, regulations have played a key role in driving reporting and compliance, though only 38% of organizations are ready to report Scope 3 emissions.

The Bottom Line: Enter The Age Of Pragmatic Sustainability

Capgemini Research Institute’s latest report provides a clear progress report on the past three years. External forces such as geopolitics, regulation, and pace of innovation have played a key role in shaping sentiment and investment. With growing geo-political risk, organizations may be tempted to de-prioritize sustainability investments.

However, the opportunities to apply exponential technologies to help with sustainability bring hope that stakeholder and shareholder interests can be balanced while achieving both required and self-imposed goals to deliver more with less. Advancements in analytics, automation, and AI play a key role, however, it is the human touch required to lead organizations through this transition that brings the research finding to the forefront of pragmatic approaches that have massive improvements for society.

Your POV

How far along are you with your sustainabilty projects? Are you ready to put these into full production? What risks have you overcome?

Developing your metaverse and digital business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact [email protected]">Sales.

Disclosures

Contact the [email protected]">Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network