0:00

Unknown: organizations are using generative AI to increase their

0:03

development but they're also using it to increase their

0:06

customer satisfaction and customer enhancements.

0:10

Antone Gonsalves: Hi, and welcome to Tech News this week.

0:13

I'm your host Antone Gonsalves editor at large for techtarget

0:17

editorial. Microsoft co CEO, Satya Nadella has said

0:22

artificial intelligence is the defining technology of our time.

0:27

As a result, Microsoft is rolling out AI and all its

0:31

business software. Here to discuss the impact that

0:35

Microsoft's AI strategy we'll have on tech buyers is Paul

0:39

nashawaty. Analysts at Tiktok is Enterprise Strategy Group.

0:44

Welcome, Paul. Unknown: Thank you, Anton. Pleasure to be here.

0:47

Antone Gonsalves: So So you recently attended analyst day on

0:50

Microsoft's annual Ignite conference, describe copilot and

0:57

its critical role in the company's AI strategy.

1:01

Absolutely. Unknown: Thanks, Anton. So you know, you know, I started the

1:04

conversation and one of the recent blog posts that I said is

1:07

imagine a world where AI is no longer a buzzword, but really is

1:11

an integral part of our lives. Right. And when we think about

1:14

co pilot, you know, co pilot, if you're not familiar with it,

1:18

it's a generative AI assistant that helps the users create

1:24

content, and it helps them focus on, you know, basically

1:27

productivity. So when we talked in the event, when we looked and

1:33

listened in on Brad Smith, he's Microsoft's Vice Chair and

1:37

President, he unveiled co pilot and discuss how Microsoft is

1:43

using it to kind of shape the productivity in the sessions of

1:46

advancing the future with technology responsibilities. So

1:50

it's a really a focus area. It's the latest enhancement to

1:54

microsoft 365. And it really helps demonstrate a goal and

1:58

aiding businesses to help navigate into the that next

2:01

digital age, right and what they're trying to do what I like

2:04

about co pilot, it is amazing for developers, right? It really

2:08

helps developers accelerate their productivity. They can

2:12

create documents faster, they can create code snippets faster,

2:16

and they can create bug fixing faster. So those three things

2:20

alone is very, very impressive that it with copilot

2:23

Antone Gonsalves: so what some Americans have talks about, you

2:26

know, AI be transformative, does copilot transform anything at

2:32

this point? I mean, what what's its potential there? Yeah,

2:36

Unknown: transformative and AI. You know, I think when as a

2:39

result of the analyst day, in general, AI was kind of

2:43

produced, like, talked about throughout the entire talk track

2:48

throughout the entire day, right transformation of using AI not

2:52

only was at the product level, but it was also at the voice of

2:55

the customer level as well. So you saw it that organizations

2:59

were starting to realize that the new value of in an era of

3:04

AI, and then we're using these real world experiences that

3:07

companies you know, that we're, you know, engaged like, with

3:11

driving new opportunities, like Providence, for example,

3:15

Providence was a company that came in their real estate, a

3:19

strategy and operations company. And then also lumen came in as

3:23

women technologies, they shared how they use their insights to

3:26

transform or reshape their business. So that is really a

3:29

focus area where Microsoft is helping, and what we see in our

3:32

own enterprise strategy research, we see that 38% of

3:38

respondents in our recent Gen AI study talked about how chatbot

3:44

dialogue is a top CX use case for AI and 33% indicated that

3:49

customer analytics is an area of increased investment. So

3:53

organizations are using genitive AI to increase their

3:56

development, but they're also using it to increase their

3:59

customer satisfaction and customer enhancements. So when

4:02

Antone Gonsalves: they were so with Providence, and lumen, you

4:05

said was the other one. All right, what are what are they

4:08

doing? You know, what are they doing? That's exceptional,

4:12

something that our listeners could learn from? Yeah,

4:16

Unknown: I mean, a couple of things that came up, BJ Morris

4:19

CIO and executive vice president at Providence, he basically was

4:24

talking discussing about how they use AI to help shift the

4:31

productivity helps shift automation, and also help them

4:34

with creating a faster time to value for their customer

4:38

satisfaction. So there was a lot about that chatbot and

4:41

interaction in the CX perspective, again, the customer

4:44

experience loom and did the same thing are Carl Wilson, Senior

4:47

Director of services at Illumina technologies shared that AI is

4:53

really reshaping their business because it's helping them with

4:56

giving the customers a faster time to value as well. So again,

5:00

It's really about that CX experience and that that

5:02

strategy that extends drive into those results.

5:05

Antone Gonsalves: Okay. And by CX we're talking about customer

5:07

experience, customer experience. What define that? For the

5:12

listeners? Because it's so broad in the Sure,

5:14

Unknown: sure. Yeah. So customer experience, it's the interaction

5:17

that that customer will have what the Interact working with

5:20

the organization. So in the cases that we just talked about

5:24

with with Providence, and lumen, AI was used to kind of enhance

5:30

that interaction with the clients that their clients, but

5:33

also streamline their operations. Right. And it was

5:36

really demonstrated as part of this session that they really

5:40

talked about that streamlining effect that really gave that

5:43

better response time and faster time to value for clients. No,

5:46

Antone Gonsalves: no, a segment of the analyst day was dedicated

5:49

to how digital native companies are changing business operations

5:53

with a I mean, I've seen that term come up a lot. I mean, what

5:58

so help our listeners understand what is that what is a digital

6:02

native company? And what's special about them in terms of

6:06

the use of AI? Unknown: Yeah, that's a really great question, Anton. So

6:10

digital native is a digital first approach, right

6:12

organizations that have a digital first approach in the

6:15

analyst, dad at Microsoft Ignite, the boys of that

6:19

customer session that talked about how AI was helping to

6:22

digital native companies achieve their goals. And the two

6:25

companies was Alta ml. And Nicole genossen, was the co

6:31

founder and CO CEO of that company, and the other company

6:34

was commerce, AI. And they talked about how they put a

6:38

digital first approach for digital native companies to

6:42

achieve their goals to achieve the success, what we see in our

6:46

research is we see that organizations are using AI in

6:51

Gen AI, as a top investment, we see that 47% of respondents are

6:56

using Gen AI to enhance code is is really kind of bubbles up to

7:03

the top of the list for use cases for application

7:06

development. And that is because that code is helping those

7:09

digital first digital native companies achieve their goals.

7:14

Antone Gonsalves: I see that. So digital native is a digital

7:18

first company, which I mean, not all companies digital first. I

7:23

mean, nowadays, I mean, you know, he target even old real

7:27

time retailers would call themselves digital companies at

7:30

this Unknown: point. Yeah, yeah, absolutely. You'd be you'd be

7:33

surprised. I mean, the way I talk about the cloud native

7:35

monetization approach is the Past, Present Future, right. And

7:40

when I think about past, present, future, there is organization, there are organizations that have a lot of

7:45

their tech stack, still in a heritage environment. And

7:48

they're trying to modernize by move to the cloud, we were

7:50

talking about transform transformation and transformative approaches. And you know, at Microsoft Ignite at

7:57

the analyst day, they focused on AI, but as a focus of

8:01

transformation, and about moving towards that digital first

8:05

approach. So you can modernize by taking your existing heritage

8:09

system and encapsulate it into a system of record, and then build

8:13

new digital systems of engagement that kind of attached

8:15

to the front end of that. And that's a really, that that

8:18

modernizing monetization approach. And, you know, I think

8:22

when I think about that approach that organizations take, it

8:26

really helps foster that innovation and really helps you

8:30

leverage where you can use AI to play a pivotal role in the

8:33

success of those transformational efforts. And

8:37

Antone Gonsalves: most of those efforts at this point in time is

8:42

has to do with, I guess what, what CIO advisors have told me

8:47

low hanging fruit, which is you go after any service that you

8:52

can provide to a customer, because you can get an immediate

8:58

return on investment, I guess you can actually use metrics to

9:02

see where the benefits are. Is that correct?

9:06

Unknown: Well, yeah, absolutely. We're a data driven organizations. I mean, most organizations aren't data driven

9:11

today. So metrics are important. And having a digital first

9:14

approach allows you to have a more streamlined way to measure

9:17

the successes that you're trying to achieve. Historically, it'd

9:20

be a little bit harder to measure some of those successes because you didn't have the real time metrics that that some

9:25

systems that are in place today allow for

9:28

Antone Gonsalves: Yeah, I mean, a lot of companies have. I mean,

9:30

I've talked to some companies have complained that they don't

9:33

really, they're having a difficult time seeing are

9:40

registering a return on investment for it for AI.

9:45

They're not quite sure how they can get the money back. You

9:48

know, CEOs want them especially with CIO CEOs want CIOs to use

9:53

digital AI. I mean, I'm sorry, a generative AI, but the CIO step

9:58

back and say well, why In a minute, how am I going to defend

10:02

the money that's going to be spent? Which is quite a bit?

10:06

Unknown: Yeah, that's a fair point. You know, I think I would

10:09

I would answer that in the context of an analogy. A lot of

10:12

times I talk about this and from the developers perspective,

10:16

think about this as as you and I are working on projects, and

10:20

say, where you have a screwdriver, and then we're

10:22

turning the screw and put it into the wall. Okay, that's one

10:25

way to do it, right. Or we can pick up a drill and hit the

10:28

finger on the on the trigger and the drill and screw that screw

10:30

into the wall. It's much faster to do with the drill, but yet,

10:33

you can still do it with a screwdriver. Right? When you

10:36

look at generative AI, and you look at AI, overall, there's a

10:41

number of challenges organizations are running into

10:44

today, right? Some of the things that come up in our research are

10:46

the importance of security, compliance, seamless, seamless

10:50

user experience, and they all evolve. They're part of that

10:53

evolving world of AI. And in fact, what we see that 35% of

10:58

respondents indicate that data security and protection is a top

11:01

concern with using AI and using genetic, generative AI to help

11:05

solve those problems. If you don't have new, modernized

11:10

approaches to achieve the goals and the successes that you're

11:14

looking for, your organization potentially may be left behind.

11:19

And you may lose that competitive advantage. So if

11:22

somebody is using that drill, and somebody is still using a,

11:25

you know, a hand tool to screw in a screw, it's faster results,

11:29

you'll get what the drill, but it's you know, you want to make

11:32

sure that you're you're staying competitive by using the tools

11:34

that are available to you. Okay, Antone Gonsalves: yeah, you're both building a house. But if

11:38

you're using a drill, you can probably build it a little

11:42

faster. You know, you know, some companies developing AI products

11:48

and services, you know, are concerned that tech giants like

11:52

Microsoft, AWS, Google, and others, you know, could use

11:56

their financial power, right, to control the direction of AI and

12:02

enterprise IT and stifle innovation. You get that

12:07

complaint a lot from from startups. what's your what's

12:12

your opinion? It's Unknown: a good question. There's definitely industry,

12:17

it's a good question. There's definitely industry movers that

12:21

will shape how the technology stacks are going to be used. I

12:28

think that AI and agenne AI for certain is in its infancy. And

12:33

its early stages, I think that there's a lot more to be

12:36

understood before organizations can fully execute and utilize

12:41

the tech stack to drive to the to the results that we're

12:44

looking for. I think, you know, if I wouldn't be in it, if I

12:48

didn't say it depends, Anton, right? I mean, it depends as the

12:51

as the answer with any IT solution. But when you look at

12:54

this, in particular, this is different. This is a way that is

13:00

accelerating, use cases and projects and development and

13:05

everything in the car. So see ICD pipeline, and then we

13:08

touched on the things like security and compliance and

13:11

regulations and sustainability and, and regulations, everything

13:15

you think about is going to be moving much faster using an AI

13:19

solution. So again, there's a competitive landscape that you'd

13:24

have to think about within your own organization. But then you

13:26

also have to think about what tools are you going to use to

13:30

keep yourself, you know, competitive out there. And if it

13:34

is using a tool that the one who say the industry giants are

13:39

suggesting, or if there's an emerging technology that maybe

13:42

you might find within the startup world, either one of

13:45

those tool sets may be appropriate for your business

13:47

needs. Antone Gonsalves: At this at this point, though, would you

13:52

agree that a company like Microsoft, where they release

13:57

this copilot technology that CIOs in general, are going to

14:03

gravitate towards Microsoft company like Microsoft

14:07

immediately? Because it's a trusted vendor? And it's, it's

14:13

an I would assume they give they give tools that will allow them

14:17

to deploy AI much faster than if they went with a startup? Yeah,

14:23

I Unknown: think that there's definitely, you know, vendors

14:27

out there and Microsoft being one that would be considered,

14:31

you know, to be a trusted adviser to a lot of

14:33

organizations and they have those, those, you know, those

14:36

relationships in place, certainly, having a, you know,

14:40

industry giant, like Microsoft, you know, put out a tool stack

14:45

or tech stack that's going to support the business needs, and

14:47

then incorporate that within their portfolio to make it more

14:51

streamlined within their portfolio. There's, there's

14:53

something to be said about that. And it's attractive, right? It's

14:56

attractive that it's rolled into not only the tech stack, but

14:59

it's also rolled into the licensing, it's rolled into

15:02

everything else that's associated with bringing on a

15:05

new a new technology into your into your organization. So

15:09

there's definitely advantages. I also believe that if you look at

15:14

some of the emerging technology that's out there, copilot is a

15:19

great tool. As I said before, the all of the generative AI

15:25

assistants that are out there are still in their infancy,

15:28

they're still young, whether your industry giant, or your

15:31

startup, they're just all still young. And because of that,

15:35

there's a lot of opportunity for enhancements in v two V three V

15:40

four of generative AI, that's going to make some real

15:43

differentiation in the market. You know,

15:45

Antone Gonsalves: when you're talking about the technology being young, what is what is missing at this at this point?

15:52

What needs what needs to mature within? Within the technology?

16:01

Unknown: Yeah, so these large learning models that are being

16:03

created, you know, they they're, they're somewhat limited today,

16:07

right? I mean, the the introduction of, you know,

16:12

creating a large learning model that's net new has to basically

16:16

learn to be the right approach for what you're asking about at

16:18

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

16:29

proven approach. So you actually tested out that data internally.

16:32

So there's different ways of doing it. But I'll give you this

16:34

analogy and time. What I, you know, when I when I think about

16:38

the developer, and I asked about creating code, and I asked, you

16:42

know, one of these assistants Eugen AI assistants to create

16:45

some code, the result that comes back is basically what you would

16:51

expect from, you know, somebody that may be new to the field,

16:56

maybe a junior intern, right? It's not exactly advanced code.

17:00

So and there still needs to be a human element to review whatever

17:04

comes out of these tool stacks in order for it to be

17:07

appropriately used. So you might get something that works. But is

17:11

it optimal? Probably not, is it the best? Probably not. But

17:15

where these tools can improve is taking it from that say, you

17:21

know, intern level generating code to a senior developer level

17:26

code, that's where these tool stacks can be improved? Well,

17:29

Antone Gonsalves: on that note, Paul, thank you very much for

17:33

joining me on the podcast. It's been it's been a good

17:36

discussion, and I appreciate your insight.

17:41

Unknown: Yeah, Anton, thank you for having us in, you know, Microsoft, ignite the analysts day. It really left me and

17:47

probably most of the other analysts that attended really

17:49

inspired about, you know, the future growth of AI projects.

17:53

And really, it helps with like, the insights to what's happening

17:56

in the future. And you know, and what I also want to say Anton is

18:00

a lot of what was discussed in the in the sessions today or

18:05

during the sessions was very much in alignment with

18:08

ENTERPRISE STRATEGY group's research. And the research that

18:11

we have is really starting to just you know, show that this is

18:15

just the beginning of the growth. So we're really excited

18:17

to see where this is going. That

18:19

Antone Gonsalves: wraps up today's podcast. Thank you for

18:22

listening.