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November 27, 2023 18 mins

In an interview with Editor At Large Antone Gonsalves, analyst Paul Nashawaty of Enterprise Strategy Group describes the critical roles of tech industry giants and startups in developing generative AI for enterprises.

 

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https://www.techtarget.com/searchenterpriseai/feature/Enterprise-IT-shops-more-likely-to-buy-GenAI-than-build-it

 

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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Unknown (00:00):
organizations are using generative AI to increase their

(00:03):
development but they're alsousing it to increase their
customer satisfaction andcustomer enhancements.

Antone Gonsalves (00:10):
Hi, and welcome to Tech News this week.
I'm your host Antone Gonsalveseditor at large for techtarget
editorial. Microsoft co CEO,Satya Nadella has said
artificial intelligence is thedefining technology of our time.
As a result, Microsoft isrolling out AI and all its

(00:31):
business software. Here todiscuss the impact that
Microsoft's AI strategy we'llhave on tech buyers is Paul
nashawaty. Analysts at Tiktok isEnterprise Strategy Group.
Welcome, Paul.

Unknown (00:45):
Thank you, Anton. Pleasure to be here.

Antone Gonsalves (00:47):
So So you recently attended analyst day on
Microsoft's annual Igniteconference, describe copilot and
its critical role in thecompany's AI strategy.
Absolutely.

Unknown (01:01):
Thanks, Anton. So you know, you know, I started the
conversation and one of therecent blog posts that I said is
imagine a world where AI is nolonger a buzzword, but really is
an integral part of our lives.Right. And when we think about
co pilot, you know, co pilot, ifyou're not familiar with it,
it's a generative AI assistantthat helps the users create

(01:24):
content, and it helps them focuson, you know, basically
productivity. So when we talkedin the event, when we looked and
listened in on Brad Smith, he'sMicrosoft's Vice Chair and
President, he unveiled co pilotand discuss how Microsoft is
using it to kind of shape theproductivity in the sessions of

(01:46):
advancing the future withtechnology responsibilities. So
it's a really a focus area. It'sthe latest enhancement to
microsoft 365. And it reallyhelps demonstrate a goal and
aiding businesses to helpnavigate into the that next
digital age, right and whatthey're trying to do what I like
about co pilot, it is amazingfor developers, right? It really

(02:08):
helps developers acceleratetheir productivity. They can
create documents faster, theycan create code snippets faster,
and they can create bug fixingfaster. So those three things
alone is very, very impressivethat it with copilot

Antone Gonsalves (02:23):
so what some Americans have talks about, you
know, AI be transformative, doescopilot transform anything at
this point? I mean, what what'sits potential there? Yeah,

Unknown (02:36):
transformative and AI. You know, I think when as a
result of the analyst day, ingeneral, AI was kind of
produced, like, talked aboutthroughout the entire talk track
throughout the entire day, righttransformation of using AI not
only was at the product level,but it was also at the voice of
the customer level as well. Soyou saw it that organizations

(02:59):
were starting to realize thatthe new value of in an era of
AI, and then we're using thesereal world experiences that
companies you know, that we're,you know, engaged like, with
driving new opportunities, likeProvidence, for example,
Providence was a company thatcame in their real estate, a
strategy and operations company.And then also lumen came in as

(03:23):
women technologies, they sharedhow they use their insights to
transform or reshape theirbusiness. So that is really a
focus area where Microsoft ishelping, and what we see in our
own enterprise strategyresearch, we see that 38% of
respondents in our recent Gen AIstudy talked about how chatbot

(03:44):
dialogue is a top CX use casefor AI and 33% indicated that
customer analytics is an area ofincreased investment. So
organizations are using genitiveAI to increase their
development, but they're alsousing it to increase their
customer satisfaction andcustomer enhancements. So when

Antone Gonsalves (04:02):
they were so with Providence, and lumen, you
said was the other one. Allright, what are what are they
doing? You know, what are theydoing? That's exceptional,
something that our listenerscould learn from? Yeah,

Unknown (04:16):
I mean, a couple of things that came up, BJ Morris
CIO and executive vice presidentat Providence, he basically was
talking discussing about howthey use AI to help shift the
productivity helps shiftautomation, and also help them
with creating a faster time tovalue for their customer

(04:38):
satisfaction. So there was a lotabout that chatbot and
interaction in the CXperspective, again, the customer
experience loom and did the samething are Carl Wilson, Senior
Director of services at Illuminatechnologies shared that AI is
really reshaping their businessbecause it's helping them with
giving the customers a fastertime to value as well. So again,

(05:00):
It's really about that CXexperience and that that
strategy that extends drive intothose results.

Antone Gonsalves (05:05):
Okay. And by CX we're talking about customer
experience, customer experience.What define that? For the
listeners? Because it's so broadin the Sure,

Unknown (05:14):
sure. Yeah. So customer experience, it's the interaction
that that customer will havewhat the Interact working with
the organization. So in thecases that we just talked about
with with Providence, and lumen,AI was used to kind of enhance
that interaction with theclients that their clients, but
also streamline theiroperations. Right. And it was

(05:36):
really demonstrated as part ofthis session that they really
talked about that streamliningeffect that really gave that
better response time and fastertime to value for clients. No,

Antone Gonsalves (05:46):
no, a segment of the analyst day was dedicated
to how digital native companiesare changing business operations
with a I mean, I've seen thatterm come up a lot. I mean, what
so help our listeners understandwhat is that what is a digital
native company? And what'sspecial about them in terms of
the use of AI?

Unknown (06:07):
Yeah, that's a really great question, Anton. So
digital native is a digitalfirst approach, right
organizations that have adigital first approach in the
analyst, dad at MicrosoftIgnite, the boys of that
customer session that talkedabout how AI was helping to
digital native companies achievetheir goals. And the two
companies was Alta ml. AndNicole genossen, was the co

(06:31):
founder and CO CEO of thatcompany, and the other company
was commerce, AI. And theytalked about how they put a
digital first approach fordigital native companies to
achieve their goals to achievethe success, what we see in our
research is we see thatorganizations are using AI in

(06:51):
Gen AI, as a top investment, wesee that 47% of respondents are
using Gen AI to enhance code isis really kind of bubbles up to
the top of the list for usecases for application
development. And that is becausethat code is helping those
digital first digital nativecompanies achieve their goals.

Antone Gonsalves (07:14):
I see that. So digital native is a digital
first company, which I mean, notall companies digital first. I
mean, nowadays, I mean, youknow, he target even old real
time retailers would callthemselves digital companies at
this

Unknown (07:30):
point. Yeah, yeah, absolutely. You'd be you'd be
surprised. I mean, the way Italk about the cloud native
monetization approach is thePast, Present Future, right. And
when I think about past,present, future, there is
organization, there areorganizations that have a lot of
their tech stack, still in aheritage environment. And
they're trying to modernize bymove to the cloud, we were

(07:50):
talking about transformtransformation and
transformative approaches. Andyou know, at Microsoft Ignite at
the analyst day, they focused onAI, but as a focus of
transformation, and about movingtowards that digital first
approach. So you can modernizeby taking your existing heritage
system and encapsulate it into asystem of record, and then build

(08:13):
new digital systems ofengagement that kind of attached
to the front end of that. Andthat's a really, that that
modernizing monetizationapproach. And, you know, I think
when I think about that approachthat organizations take, it
really helps foster thatinnovation and really helps you
leverage where you can use AI toplay a pivotal role in the

(08:33):
success of thosetransformational efforts. And

Antone Gonsalves (08:37):
most of those efforts at this point in time is
has to do with, I guess what,what CIO advisors have told me
low hanging fruit, which is yougo after any service that you
can provide to a customer,because you can get an immediate

(08:58):
return on investment, I guessyou can actually use metrics to
see where the benefits are. Isthat correct?

Unknown (09:06):
Well, yeah, absolutely. We're a data driven
organizations. I mean, mostorganizations aren't data driven
today. So metrics are important.And having a digital first
approach allows you to have amore streamlined way to measure
the successes that you're tryingto achieve. Historically, it'd
be a little bit harder tomeasure some of those successes
because you didn't have the realtime metrics that that some
systems that are in place todayallow for

Antone Gonsalves (09:28):
Yeah, I mean, a lot of companies have. I mean,
I've talked to some companieshave complained that they don't
really, they're having adifficult time seeing are
registering a return oninvestment for it for AI.
They're not quite sure how theycan get the money back. You

(09:48):
know, CEOs want them especiallywith CIO CEOs want CIOs to use
digital AI. I mean, I'm sorry, agenerative AI, but the CIO step
back and say well, why In aminute, how am I going to defend
the money that's going to bespent? Which is quite a bit?

Unknown (10:06):
Yeah, that's a fair point. You know, I think I would
I would answer that in thecontext of an analogy. A lot of
times I talk about this and fromthe developers perspective,
think about this as as you and Iare working on projects, and
say, where you have ascrewdriver, and then we're
turning the screw and put itinto the wall. Okay, that's one
way to do it, right. Or we canpick up a drill and hit the

(10:28):
finger on the on the trigger andthe drill and screw that screw
into the wall. It's much fasterto do with the drill, but yet,
you can still do it with ascrewdriver. Right? When you
look at generative AI, and youlook at AI, overall, there's a
number of challengesorganizations are running into
today, right? Some of the thingsthat come up in our research are
the importance of security,compliance, seamless, seamless

(10:50):
user experience, and they allevolve. They're part of that
evolving world of AI. And infact, what we see that 35% of
respondents indicate that datasecurity and protection is a top
concern with using AI and usinggenetic, generative AI to help
solve those problems. If youdon't have new, modernized

(11:10):
approaches to achieve the goalsand the successes that you're
looking for, your organizationpotentially may be left behind.
And you may lose thatcompetitive advantage. So if
somebody is using that drill,and somebody is still using a,
you know, a hand tool to screwin a screw, it's faster results,
you'll get what the drill, butit's you know, you want to make

(11:32):
sure that you're you're stayingcompetitive by using the tools
that are available to you. Okay,

Antone Gonsalves (11:36):
yeah, you're both building a house. But if
you're using a drill, you canprobably build it a little
faster. You know, you know, somecompanies developing AI products
and services, you know, areconcerned that tech giants like
Microsoft, AWS, Google, andothers, you know, could use
their financial power, right, tocontrol the direction of AI and

(12:02):
enterprise IT and stifleinnovation. You get that
complaint a lot from fromstartups. what's your what's
your opinion? It's

Unknown (12:13):
a good question. There's definitely industry,
it's a good question. There'sdefinitely industry movers that
will shape how the technologystacks are going to be used. I
think that AI and agenne AI forcertain is in its infancy. And
its early stages, I think thatthere's a lot more to be

(12:36):
understood before organizationscan fully execute and utilize
the tech stack to drive to theto the results that we're
looking for. I think, you know,if I wouldn't be in it, if I
didn't say it depends, Anton,right? I mean, it depends as the
as the answer with any ITsolution. But when you look at
this, in particular, this isdifferent. This is a way that is

(13:00):
accelerating, use cases andprojects and development and
everything in the car. So seeICD pipeline, and then we
touched on the things likesecurity and compliance and
regulations and sustainabilityand, and regulations, everything
you think about is going to bemoving much faster using an AI
solution. So again, there's acompetitive landscape that you'd

(13:24):
have to think about within yourown organization. But then you
also have to think about whattools are you going to use to
keep yourself, you know,competitive out there. And if it
is using a tool that the one whosay the industry giants are
suggesting, or if there's anemerging technology that maybe
you might find within thestartup world, either one of

(13:45):
those tool sets may beappropriate for your business
needs.

Antone Gonsalves (13:49):
At this at this point, though, would you
agree that a company likeMicrosoft, where they release
this copilot technology thatCIOs in general, are going to
gravitate towards Microsoftcompany like Microsoft
immediately? Because it's atrusted vendor? And it's, it's

(14:13):
an I would assume they give theygive tools that will allow them
to deploy AI much faster than ifthey went with a startup? Yeah,
I

Unknown (14:23):
think that there's definitely, you know, vendors
out there and Microsoft beingone that would be considered,
you know, to be a trustedadviser to a lot of
organizations and they havethose, those, you know, those
relationships in place,certainly, having a, you know,
industry giant, like Microsoft,you know, put out a tool stack

(14:45):
or tech stack that's going tosupport the business needs, and
then incorporate that withintheir portfolio to make it more
streamlined within theirportfolio. There's, there's
something to be said about that.And it's attractive, right? It's
attractive that it's rolled intonot only the tech stack, but
it's also rolled into thelicensing, it's rolled into
everything else that'sassociated with bringing on a
new a new technology into yourinto your organization. So

(15:09):
there's definitely advantages. Ialso believe that if you look at
some of the emerging technologythat's out there, copilot is a
great tool. As I said before,the all of the generative AI
assistants that are out thereare still in their infancy,
they're still young, whetheryour industry giant, or your

(15:31):
startup, they're just all stillyoung. And because of that,
there's a lot of opportunity forenhancements in v two V three V
four of generative AI, that'sgoing to make some real
differentiation in the market.You know,

Antone Gonsalves (15:45):
when you're talking about the technology
being young, what is what ismissing at this at this point?
What needs what needs to maturewithin? Within the technology?

Unknown (16:01):
Yeah, so these large learning models that are being
created, you know, they they're,they're somewhat limited today,
right? I mean, the theintroduction of, you know,
creating a large learning modelthat's net new has to basically
learn to be the right approachfor what you're asking about at
the system. The other thing is,is to bind in your existing data

(16:24):
lakes into your into, you know,one of these systems is another
proven approach. So you actuallytested out that data internally.
So there's different ways ofdoing it. But I'll give you this
analogy and time. What I, youknow, when I when I think about
the developer, and I asked aboutcreating code, and I asked, you
know, one of these assistantsEugen AI assistants to create

(16:45):
some code, the result that comesback is basically what you would
expect from, you know, somebodythat may be new to the field,
maybe a junior intern, right?It's not exactly advanced code.
So and there still needs to be ahuman element to review whatever
comes out of these tool stacksin order for it to be

(17:07):
appropriately used. So you mightget something that works. But is
it optimal? Probably not, is itthe best? Probably not. But
where these tools can improve istaking it from that say, you
know, intern level generatingcode to a senior developer level
code, that's where these toolstacks can be improved? Well,

Antone Gonsalves (17:29):
on that note, Paul, thank you very much for
joining me on the podcast. It'sbeen it's been a good
discussion, and I appreciateyour insight.

Unknown (17:41):
Yeah, Anton, thank you for having us in, you know,
Microsoft, ignite the analystsday. It really left me and
probably most of the otheranalysts that attended really
inspired about, you know, thefuture growth of AI projects.
And really, it helps with like,the insights to what's happening
in the future. And you know, andwhat I also want to say Anton is
a lot of what was discussed inthe in the sessions today or

(18:05):
during the sessions was verymuch in alignment with
ENTERPRISE STRATEGY group'sresearch. And the research that
we have is really starting tojust you know, show that this is
just the beginning of thegrowth. So we're really excited
to see where this is going. That

Antone Gonsalves (18:19):
wraps up today's podcast. Thank you for
listening.
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