Single-function software faces more AI disruption risk

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 30:29

   Do you think there's any segment in enterprise software that is at risk from generated code and agents? I think that it's true that there will be companies that will be at risk. It's also true that they theoretically should be more valuable because of the data and the context around that data. But if there was a risk, I believe it's more departmental companies. So if you think about companies that do something that span multiple departments or are a serious system of record that is very hard to replicate, they're safe and they'll be a part of the future.

2. 31:15

   If you're serving one function and what you do is not tremendously high value add, and it might not even be a high up on the priority list of a CEO, I think that that would be the chance where the vulnerability equation really rises quickly. um we're fortunate in the sense that we go end to end on a horizontal and north to south on a vertical up and down the stack and across the enterprise and i think that's a pretty huge moat and uh right now i i believe the last time i looked at it was more than 85 billion workflows are in.

3. 32:00

   light as we're having this podcast and we got 7 trillion transactions happening on that platform and it's representing the most important brands in the world and that's not only something we're proud of but it's also a serious responsibility because those companies can't miss and that system always has to be there for them and fortunately it is. You uniquely have run two companies that are just clearly platform businesses SAP and ServiceNow. Do you have a definition in your mind of what makes something a platform business because uh i grew up as an investor in the age of sas yeah and and you know rise the cloud and everything uh and it is it i think it was wonderful for innovation that you could build like sort of features that turned into companies right the software workflows that were um sort of tangential to a system of record

4. 32:54

   for example. ServiceNow originally began with like IT Service Desk as the workflow. But how do you think about like how the positioning is and the actual work is very different now and then like, you know, how you got there? Yeah, I think that had we only done what you rightfully point out, which had been an IT service company as an example, that might have been a system of record for the IT department but I think when CEOs look at a corporation and they say what are the needle movers those are the companies that since you mentioned the two that I work for you know one is running the financial system of global corporations of mass scale and multiple currencies geographies industries and And it's really kind of thorny and complicated to even think about removing something, especially something that's probably been mass customized for the unique attributes of that business.

5. 34:00

   So the investment scale was great. The switching costs are very high. I think you would consider that a platform. And I would say the same is true in a certain sense for a company like ServiceNow, but for a different reason. Yes, it's a system of record for all the things IT and the services that it provides, but it's even bigger than that in the sense that all of the other systems of record integrate with it.

6. 34:29

   So now you have roughly 800 of the more substantial systems of record that integrate into it. And because of our in-memory open-source data platform, so it's built on the open-source technologies, but its speed, its scale, its ability to ingest data, we could take as much as you give us. But similarly, you might say, okay, you know, I'll give you your core IT and OT, and I get the holistic end-to-end process.

7. 35:01

   But, you know, I have data lakes, I have hyperscalers, I have language models. What about in the flow of work or a business process? What can you do for me if I don't want to put it in service now? Oh, we make a zero copy. And then the transaction is complete, done and dusted, nothing moved. There was no risk associated with it, and it works. So I think that is a mission-critical platform in the execution of work and the basics of getting things done.

8. 35:36

   What's unique about it is you can change the business process instantaneously using the AI tools that are resident in the platform. So if you want to build a net new application, you can do so. If you want to see how the business process would change in a knowledge graph, you can do so and you can see how that change. impacted the processes and the way work flows and all the individuals impacted in a corporation in real time. So I think the motion of that is very, very hard to replicate both on the history of it, the bandwidth of it, and also what we have designed in terms of the system's capabilities.

9. 36:23

   It's very unique.