Strategy

Amazon Web Services (AWS) plans to invest $5 billion in Mexico over the next 15 years as a part of a “long-term commitment” in the region. A portion of that investment is a new server region launching today, AWS Mexico (Central) Region, that will allow AWS customers to run applications and serve end users from AWS data centers located in Mexico. AWS estimates that construction and ongoing operation of AWS Mexico will add approximately $10 billion to Mexico’s GDP and support roughly 7,000 “full time equivalent jobs.” 

AWS plans to invest $5 billion in Thailand to establish a new cloud infrastructure region with three Availability Zones, supporting local data center operations and boosting Thailand's digital economy. The initiative aligns with Thailand's "Cloud First" policy, aiming to enhance government services, enable local data storage, and foster innovation. Similar investments are being made globally, including in the UK, Japan, and Saudi Arabia, as AWS expands its cloud and AI infrastructure.

Amazon Web Services (AWS) plans to invest $11 billion in Georgia to expand its AI and cloud infrastructure, creating at least 550 technical jobs and supporting construction and supply chain roles. This investment builds on AWS's history in the state, including economic contributions, renewable energy projects, and disaster relief efforts. AWS also aims to provide community benefits through education programs, workforce training, and partnerships to enhance local infrastructure.

AWS has appointed Julia White, a former SAP and Microsoft executive, as its new Chief Marketing Officer, replacing Raejeanne Skillern. This marks another leadership shift as AWS continues to adjust its executive team, following notable departures such as former CEO Adam Selipsky in May and VP of AI Matt Wood in October. White joins amid other recent hires, including Colleen Aubrey and Baskar Sridharan, in senior roles.

Amazon Web Services (AWS) has signalled a range of partner solutions will be available on the European Sovereign Cloud the firm is launching by the end of next year. In response to customer calls for access to a cloud that meets with regulatory requirements to demonstrate the data is hosted locally, AWS is rolling out an option that should keep European users happy. Max Peterson, vice-president of AWS Sovereign Cloud, took to the web to outline what it was doing to meet customer demands and involve partners in the process.

AWS plans to invest €1.2 billion in Italy over the next five years to expand its data center operations, aiming for a total investment of €2 billion by 2029. This initiative is expected to create 5,500 jobs and supports AWS's strategy to strengthen cloud infrastructure across Europe, following significant investments in Spain and Germany. The expansion builds on AWS's 2020 launch of a cloud region in Italy, serving major clients like Ferrari and Assicurazioni Generali.

AWS has entered a five-year strategic collaboration with Xebia, a digital transformation consultancy, to enhance Xebia's capabilities in leveraging AWS technologies and driving growth in key markets like Europe, the Middle East, and the US. The partnership focuses on sectors such as finance, manufacturing, and retail, enabling Xebia to develop tailored cloud solutions and expand its global footprint. This positions Xebia alongside other top AWS consulting partners like Deloitte and PwC.

Amazon is investing heavily in nuclear power, partnering with Dominion Energy and X-energy to develop small modular reactors (SMRs) as part of its $52 billion U.S. data center expansion. These reactors, smaller and more cost-effective than traditional nuclear plants, are key to meeting the growing energy demands of data centers while supporting Amazon's net-zero emissions goal by 2040. While nuclear power offers reliable, carbon-free energy, challenges remain around cost, waste management, and the feasibility of large-scale SMR deployment, though Amazon sees nuclear as crucial for scaling energy solutions.

Pilar Schenk, a seasoned sales and operations executive with experience at Dell EMC, McAfee, and Cisco, has joined AWS as vice president of global sales operations. At Cisco, she was the COO of strategy, planning, and operations for a large global sales team, focusing on sales growth and operational improvements. In her new role at AWS, Schenk aims to drive global sales growth through data-driven strategies, automation, and operational excellence to enhance customer success.

Adam Selipsky's unexpected departure as AWS CEO was followed by Matt Garman's promotion, a longtime Amazon employee who previously led AWS sales and global services. Garman has not made significant organizational changes but emphasized a renewed focus on startups and maintaining AWS’s lead in innovation, particularly in generative AI. He highlighted AWS’s deliberate approach to AI development with platforms like Bedrock, aiming for flexible, customizable models rather than rushing chatbots to market, while also addressing challenges like high generative AI costs. Additionally, Garman underscored AWS's commitment to open-source collaboration.

Partnerships

AWS and Booz Allen Hamilton are expanding their partnership to provide federal agencies with ready-made digital solutions for cloud migration, cybersecurity, and AI. The collaboration combines AWS cloud services with Booz Allen’s expertise to improve decision-making, reduce costs, and enhance cybersecurity. These solutions will be available through the AWS Marketplace to support the U.S. government's evolving technology needs.

ServiceNow and AWS have expanded their collaboration with a new connector linking Amazon Bedrock models to ServiceNow’s Now Platform, enabling faster deployment of generative AI (GenAI) workflows. The connector allows organizations to integrate third-party AI models, improving workflow customization and accelerating GenAI product development. Additional integrations, like ServiceNow's tools for security incident response and procurement operations, aim to enhance operational efficiency and optimize technology investments.

Philips is expanding its partnership with AWS to host its HealthSuite diagnostics portfolio on the cloud, aiming to streamline workflows and improve diagnostic access. Already implemented in over 150 sites in the Americas, the focus now shifts to accelerating cloud adoption in Europe. The cloud-based system will integrate diverse diagnostic data, enhancing collaboration, remote access, and workflow efficiency for clinicians across radiology, pathology, and cardiology.

Cognizant and AWS have partnered to deliver generative AI-driven smart manufacturing solutions, focusing on IoT, data, AI, and cloud adoption to enhance operational efficiency and real-time decision-making for manufacturing clients. Their collaboration includes solutions for predictive maintenance, digital twins, and factory automation, leveraging AWS’s IoT and AI services and Cognizant’s industrial expertise. This alliance aims to address challenges in smart manufacturing and empower clients with improved productivity, quality, and flexibility across operations.

e& has partnered with Amazon Web Services (AWS) to provide secure and scalable cloud solutions tailored to the Middle East’s public sector and regulated industries. The collaboration includes a $1 billion agreement to accelerate cloud-driven innovation, offering services like AI, machine learning, and cybersecurity. The partnership also focuses on talent development and aligning with UAE's Vision 2031, aiming to support regional digital transformation and economic growth.

Offerings

Amazon is in talks to invest several billion dollars in Anthropic, contingent on the AI company using Amazon's silicon on AWS to train its models instead of Nvidia chips. Anthropic, which has raised $9.7 billion so far, faces significant financial pressures, with projected expenses of $2.7 billion in 2024, potentially making Amazon's offer difficult to decline. The investment would follow a $4 billion deal last year and comes as Anthropic seeks funding at a $40 billion valuation.

AWS and Salesforce are previewing a new offering that integrates Amazon Connect’s communication channels into Salesforce Service Cloud, providing a unified platform for contact center as a service (CCaaS) and customer relationship management (CRM). This integration will streamline customer support by embedding voice, chat, SMS, and video capabilities directly into Salesforce, improving data sharing across departments and enabling AI-driven insights. The solution is expected to benefit businesses by reducing management burdens and enhancing multi-channel engagement, particularly for companies already using Service Cloud Voice with Amazon Connect.

Deals

Mapping and location technology company Here has signed a 10-year deal with Amazon Web Services (AWS) to use its cloud computing infrastructure. In a deal valued at $1 billion, Here will combine AWS technologies with its mapping solutions to help automakers develop location-sensitive technologies for their vehicles. The cloud computing infrastructure will be used to further the development of software-defined vehicles - which can get software updates via the cloud, advanced driver assistance systems (ADAS), and automated driving (AD).

Chicago-based Mondelez said the partnership will spur digital innovation across the company, with the AWS cloud infrastructure and services bringing more security, agility, cost efficiency and reliability to operations. The transition to AWS also is expected to bolster Mondelez’s artificial intelligence (AI) capabilities and enterprise resource planning (ERP) system, now being migrated to the SAP RISE platform powered by AWS.

The BBC is continuing its partnership with SAP to streamline its IT systems, including finance, HR, and procurement, by adopting RISE with SAP on AWS. This move consolidates the BBC's IT infrastructure, replacing separate contracts for data centers and software licenses, making operations simpler and more cost-effective. The cloud-based transformation aims to enhance performance, resilience, and efficiency, allowing the BBC to focus more on delivering quality services to its audience.

Boerse Stuttgart Digital has partnered with Amazon Web Services (AWS) to enhance its crypto infrastructure for European financial institutions, improving scalability and supporting expansion. This collaboration will simplify the deployment of solutions tailored to banks, brokers, and asset managers, as traditional institutions increasingly seek reliable ways to enter the crypto market. Boerse Stuttgart Digital's regulated infrastructure provides a secure and trusted platform for institutional clients to trade, exchange, and store digital assets.

Good News

AWS is launching a £5m ($6.2m) grant to improve cybersecurity in UK educational institutions, offering cloud-based security solutions, training, and incident response support. This follows a government report showing widespread cyberattacks on schools and universities. Similar grants were previously launched in the US and Canada.

AWS has been named a Leader in the ISG Provider Lens Quadrant report for Sovereign Cloud Infrastructure Services (EU) for the second consecutive year. The report highlights AWS's strengths in portfolio attractiveness and competitive capabilities, noting its innovative solutions for digital sovereignty and compliance in the EU. AWS plans to invest €7.8 billion in its European Sovereign Cloud, set to launch by the end of 2025.

Strategy

Microsoft plans to invest $3 billion in AI and cloud infrastructure in India over the next two years, including new data centers, as the country emerges as a key hub for AI innovation and talent. This move aligns with Microsoft's broader strategy, which includes $80 billion in global AI investments this fiscal year. The initiative highlights India's growing role in the global AI landscape and Microsoft's focus on expanding cloud services.

Microsoft significantly outpaced competitors in purchasing Nvidia's AI chips in 2024, acquiring 485,000 of the flagship Hopper GPUs to bolster its AI infrastructure, far ahead of Meta's 224,000 and other rivals like Amazon and Google. This investment supports Microsoft's AI services, including OpenAI collaborations, while competitors develop their own custom AI chips to reduce reliance on Nvidia. Global tech companies are expected to spend $229 billion on servers in 2024, with Nvidia capturing a dominant share of AI-related capital expenditure.

Microsoft will establish an Azure Extended Zone in Perth, Western Australia, by mid-2025 to meet growing demand for cloud and AI services. The expansion aims to enhance service delivery for public and private sectors, with a focus on improving healthcare, education, and supporting the WA government’s digital transformation initiatives. This move aligns with the state’s Industries Acceleration Strategy, which promotes digital security and innovation.

Jefferies surveyed 49 MSFT decision makers who have 1K+ M365 seats. Respondents were weighted to custs with >10K MSFT seats (68%), so it is a good read-through on adoption within large enterprises. Key takes:

• AI is a main driver to MSFT spend growth in '25. Azure AI is listed by 53% of respondents as a main driver for spend increase vs only 23% citing Core Azure. Additionally, 50% of respondents listed Copilots as a main driver of growth.
• Broad AI impact is evident with a majority of respondents indicating that Copilots will significantly boost their Azure & Security spend.
  • 88% of respondents believe that their firm's deployment on MSFT's Copilots will increase its Azure spend (36% saying it will increase it by >6%).
  • 72% believe their adoption of MSFT's Copilots will increase their MSFT security spend.
  • 56% of respondents up-tiered current O365 seat tier due to M365 Copilot
• Strong MSFT M365 Copilot adoption at 67% of respondents today. All of our respondents indicated they planned to adopt M365 Copilot, rolling out to an avg of 58% of their seats, in next 24 months.
• Varied pricing for M365 Copilot with avg paying incremental $18 per seat/month. Incremental price per seat/month of M365 Copilot was incredibly varied with respondents paying anywhere from $6 to $30. We note that this may be attributed to up-tiering or deployment size.
• 27% have adopted Security Copilot. 57% of respondents are planning to adopt Security Copilot within the next 24 months.
• 51% of respondents have adopted Azure OpenAI Services. 76% & 88% plan to adopt Azure OpenAI Services within next 12 & 24 months, respectively.
• Internally built application adoption lags ChatGPT & M365 Copilot. Evidencing the complexities of building vs buying, internally built application adoption, at 45% today, is below M365 Copilot at 67% & ChatGPT at 63%.
• Our what-if M365 Copilot rev build shows potential for $13B+ in rev by CY26. Using conservative assumptions of just 300M O365 eligible seats, straight line adoption, & conservatism vs our survey results, our build indicates that M365 Copilot could be generating$2.3B in ARR today and has the potential to drive $5.4B/$13.1B in CY25/CY26 rev.

Current vs. Planned Adoption of Microsoft Copilots and Products

(Please contact MI for more details on the survey)

Partnerships

ServiceNow and Microsoft have expanded their partnership to enhance front-office processes through AI-powered integrations, notably combining ServiceNow's Now Assist with Microsoft Copilot. This collaboration enables seamless workflows, with Copilot accessing ServiceNow's knowledge base and integrating automated agents to handle customer issues and back-end workflows. The partnership aims to leverage both platforms' strengths to streamline operations, improve productivity, and support broader adoption of AI-driven task automation.

Nokia has extended its agreement with Microsoft Azure for five years to supply routers and switches for Azure's global data centers across more than 30 countries. This partnership includes deploying Nokia’s SONiC-based routers and switches to upgrade Azure's infrastructure from 100GE to 400GE, addressing increasing traffic demands. The deal solidifies Nokia's position as a key supplier for Microsoft's cloud infrastructure, with new deployments starting in February 2025.

Siemens and Microsoft have enhanced the Siemens Industrial Copilot by integrating Microsoft Azure OpenAI Service, enabling it to tackle complex industrial automation tasks. Over 100 companies, including thyssenkrupp Automation Engineering, use the Copilot to streamline operations, manage labor shortages, and boost productivity through generative AI-powered support. Set for a global rollout in 2025, the Copilot automates repetitive engineering tasks, like battery quality assurance, freeing engineers to focus on high-value work and improving efficiency across industrial sectors.

KT, a South Korean telecommunications company, has partnered with Microsoft in a multibillion-dollar, five-year deal to develop AI and cloud solutions for 650,000 businesses and 17 million customers in Korea. KT will migrate its IT workloads to Microsoft Azure, implement Microsoft 365 and GitHub Copilot, and train 19,000 employees in cloud and AI skills, while also using Microsoft tools like Azure OpenAI Service to develop custom AI applications. The partnership aims to provide secure cloud services for regulated industries and foster AI innovation through a new AI transformation service company and a co-innovation center in Korea.

Offerings

Microsoft has added DeepSeek’s reasoning model R1 to its Azure AI Foundry platform after extensive security testing and evaluations. The company also plans to release smaller, local versions of R1 for Copilot+ PCs. Microsoft aims to expand its AI model catalog and explore enterprise applications for R1.

Microsoft has introduced new tools in Azure AI Studio as part of its Microsoft Cloud for Healthcare, aimed at enhancing healthcare data management, improving patient care, and reducing clinician burnout. These tools allow healthcare organizations to integrate and analyze diverse data types, streamline workflows, and deploy AI solutions with minimal computing requirements. By automating administrative tasks and enhancing data access, Microsoft's AI-powered platform helps healthcare professionals focus more on patient care and improves operational efficiency.

Deals

The Flemish government has partnered with Microsoft to drive digital transformation, making Microsoft 365 available to all local administrations and equipping 10,000 public sector employees with Copilot. The initiative aims to enhance efficiency through AI-driven automation following successful pilot projects in 2024. The government emphasizes a thoughtful, ethical, and secure approach to AI adoption.

Lufthansa Technik is collaborating with Microsoft to integrate AI technologies into over 50 maintenance, repair, and overhaul processes using Microsoft Azure AI Services. The partnership aims to optimize complex maintenance workflows while prioritizing security and data protection. This initiative is expected to enhance operational efficiency and service quality.

Bad News

Microsoft's stock dropped 6% as its AI investments failed to significantly boost Azure cloud revenue, while Meta gained 4% after Zuckerberg reassured investors about growth. Analysts noted Microsoft's focus on AI workloads may have slowed core Azure growth, delaying the expected acceleration. The company’s weaker-than-expected cloud forecast led to a market cap loss of around $182 billion.

Microsoft will retire Dynamics 365 Unified Service Desk (USD) by June 2028, phasing out support and updates in the years leading up to that date. The company recommends users transition to Customer Service Workspace (CSW), which offers faster performance, AI-driven agent assist, and ongoing updates. While Microsoft is pushing CSW as the preferred alternative, other companies like Google and Here provide similar unified agent desktop solutions.

Microsoft's Azure cloud services experienced disruptions in the US East 2 region due to a networking configuration issue, affecting various services and causing connectivity problems. While most systems were restored by January 10, intermittent errors and degraded performance persisted for some customers. Microsoft continues to work on recovery and advises users to implement disaster recovery plans.

Microsoft is cutting less than 1% of its workforce based on performance, following earlier layoffs in its gaming unit and broader staff reductions in 2023. Despite its strong financial performance, the company faces challenges, including a strained partnership with OpenAI and slower-than-expected adoption of its AI tools like Microsoft 365 Copilot. Microsoft remains focused on growth, particularly through Azure's AI infrastructure.

A legal claim filed in the UK's Competition Appeal Tribunal accuses Microsoft of overcharging businesses for Windows Server software, seeking over £1 billion in compensation on behalf of UK businesses. The claim alleges Microsoft’s licensing practices unfairly increased costs for companies using rival cloud providers like Google and Amazon, restricting competition. Filed on an "opt-out" basis, the lawsuit highlights the impact on small businesses and forms part of broader scrutiny of cloud computing practices by the UK's Competition and Markets Authority.

Microsoft resolved issues with Outlook and Teams by Tuesday afternoon, over a day after thousands of users reported outages. Most problems were tied to Exchange Online and Teams calendars, with fixes deployed by Monday morning but slower-than-expected progress for many users. The disruption coincided with the rollout of a new Recall AI tool, though Microsoft did not confirm a direct link.

Elon Musk has expanded his lawsuit against the ChatGPT maker OpenAI, adding federal antitrust and other claims and adding OpenAI’s largest financial backer, Microsoft, as a defendant. Musk’s amended lawsuit, filed on Thursday night in federal court in Oakland, California, said Microsoft and OpenAI illegally sought to monopolize the market for generative artificial intelligence and sideline competitors.

The FTC is preparing to investigate Microsoft for alleged anti-competitive practices in its cloud computing business, focusing on claims of restrictive licensing, high exit fees, and incompatibility of Office 365 with rival platforms. This aligns with ongoing scrutiny of Big Tech by regulators globally, including similar investigations by the UK and EU. The inquiry follows broader concerns about monopolistic behaviors in the cloud market, where Microsoft holds a 20% market share behind AWS but ahead of Google Cloud.

Microsoft has accused Google of covertly organizing the Open Cloud Coalition to influence European regulators and counter Microsoft’s cloud practices, labeling it an "astroturf" campaign. The coalition, led by smaller cloud firms but reportedly funded by Google, seeks to advocate for cloud market openness and interoperability, allegedly to counter Microsoft's 2019 licensing changes, which made it more costly to use Microsoft software on non-Azure clouds. This clash intensifies as Europe and the U.K. investigate market lock-in by major cloud providers, with both companies aiming to shape upcoming regulatory decisions.

Google Cloud accuses Microsoft of using restrictive cloud licensing practices to lock customers into Azure, significantly increasing costs for businesses that wish to switch to other providers. Google claims these practices harm European companies, stifle competition, and lead to wasted tax funds and security risks. Despite a prior settlement with some European cloud providers, Google has filed a formal complaint with the European Commission, seeking further investigation into Microsoft's actions.

Strategy

Salesforce CEO Marc Benioff highlighted Agentforce's rapid success, stating it has secured thousands of deals in Q4 and significantly reduced Salesforce's own case volume. Agentforce allows businesses to deploy AI-powered agents for automating enterprise workflows, with companies like AAA and Wiley already reporting efficiency gains and high ROI. Salesforce has quickly expanded the platform with Agentforce 2.0, introducing enhanced management tools, a reasoning engine for improved decision-making, and industry-specific AI solutions like Agentforce for Retail.

Salesforce is launching Agentforce 2.0, an upgraded AI platform that allows businesses to build more versatile and customizable generative AI agents. The new version introduces the ability to combine multiple skill templates, enabling agents to handle tasks across departments, such as integrating customer service and marketing workflows. Enhanced tools, including a testing center and the Atlas reasoning engine, aim to improve agent accuracy and streamline deployment.

The most noteworthy elements of the Q3 (October ended) survey (n=24) results are: 

1. Partners Finish 1.0% Below Plan, improving from the previous quarter’s -3.2% result. The metric continues to trend below the LT average of +2.2%, though marks the best result in a year and a half, as partners cite some lingering trends in the macro backdrop, including budget scrutiny. 
2. Practice Growth Rate Improves; Runway for 10%+ Growth Extends. Expectations for CY24 practice growth rates improve from the previous quarter’s 6.4% to the current quarter’s 7.9%. Salesforce itself tends to grow a couple/few points faster than partner practices, with the recent price increase likely additive to growth. Partner expectations for Salesforce’s long-term 10%+ growth runway extend to 3.5 years vs. 2.9 years in the prior quarter. 
3. Pace of Business & Bookings Expectations Uptick, Though Macro Remains Variable. Net pace of business scoring improves to roughly flat this quarter relative to -23% in the prior quarter and net bookings expectations improve from -41% to -13% this quarter, though the latter metric can be quite noisy. While we are pleased to see the sequential improvement in both metrics, we note that both remain below long-term historical averages, with partners relaying ongoing spending scrutiny in the backdrop, including a “shift toward budget-conscious spending” and that “purchasing behavior has paused” in some cases. Tone of business by segment improves meaningfully in both Enterprise and Midsized Business segments, seeming to break out of a multi-quarter slide in this metric. 
4. Agentforce Leads Product Momentum Scoring Higher, Tying for Highest-Ever Rating in Survey History. Agentforce debuts with a 4.0 momentum score, soaring above 521 discrete product ratings across the history of our survey, matching the highest all-time score. This sends a loud message alongside sequential improvements in Data Cloud, Service GPT, and Sales GPT, as resonating interest in Salesforce’s GenAI roadmap develops. Net technology vision and momentum scoring improves to +25% this quarter vs. -9% in the prior quarter, the largest sequential uptick to date in our survey. 
5. Agentforce Feedback Convincing, Commands Attention: Likely a Solid Product Cycle for FY26/FY27. 8% of partners indicate already having closed Agentforce deals, a remarkable development in the product’s first few weeks since launch, while another 21% see a likelihood of near-term Agentforce deal activity. 44% of partners indicate a positive impression on the product’s ability to catalyze incremental customer activity and subscription sales for Salesforce over the next several years, versus only 9% with a skeptical view. Qualitative partner feedback leans overwhelmingly positive, describing Agentforce as a “pivotal step forward”, “marking the beginning of a ‘Salesforce 2.0’” where “autonomous AI and intelligent automation become core components of the CRM ecosystem”, and it being a “game changer for Salesforce”; those with more measured views indicate that it remains in early days with somewhat limited partner enablement to date and that the “current per-conversation pricing model may limit adoption”
    

Salesforce has completed its $1.9 billion acquisition of Own, an Israeli data backup and management startup, marking one of the largest Israeli tech acquisitions of 2024. This deal is Salesforce’s largest since acquiring Slack in 2021 and follows its acquisition of Israeli company Zoomin earlier this year. Own, founded in 2015 and serving 7,000 customers globally, will now integrate its operations with Salesforce.

Salesforce plans to hire over 1,000 workers to support its new Agentforce platform, a generative AI-powered tool for creating and deploying AI agents to enhance workflows. The platform, launched in late October, has garnered positive customer feedback and significant promotion, including global tour events and CEO Marc Benioff’s vocal criticisms of competitors like Microsoft. This recruitment drive aligns with Salesforce’s broader growth efforts following layoffs earlier in 2023 and has contributed to an 18% rise in its share price over the past month.

Salesforce has acquired Israel-based Zoomin Software for about $450 million, following its $1.9 billion purchase of Own Co. Zoomin specializes in processing unstructured data, helping companies like Dell and Mastercard organize vast amounts of technical content, which can be integrated into AI systems for more accurate responses. Salesforce plans to incorporate Zoomin's technology into its Agentforce platform, enhancing its AI agents' ability to process unstructured data and improving customer service automation, sales forecasts, and marketing strategies.

Partnerships

Strength

• Slight Improvement In Partners Above Plan. 9% were above plan over the past 3 mos. above 6% last Q. Most or 59% still remain below plan.
• Partners See Modest Seq. Improvement In Pipes. 36% saw their pipelines improve, indicating seq. improvement from 28% last Q and 23% two Qs ago.
• Growth Expectations For '24 Improve Slightly. Partners now expect 6% growth for '24 vs. 5%last Q.
• AI Momentum Strong Since Dreamforce '24. 71% have seen more customer interest in AI products since the Agentforce launch.
• Higher AI Monetization. 77% believe that the customer's ACV will increase likely due to the pricing uplift from AI, up from 49% last Q and 68% two Qs ago.
• Data Cloud Adoption Slightly Better; Could Get Pull With Agentforce. 29% have seen some adoption of Data Cloud, above 23% last Q.

Weaknesses

• Macro Still Remains Uncertain. 74% saw their pipelines impacted by macro vs. 57% last Q.
• Unhappiness in Partner Ecosystem. Only 9% were very happy with ecosystem vs. 17% last Q.

Offerings

Salesforce Inc. is targeting retailers with its latest artificial intelligence innovations announced today, including a customized version of the Agentforce platform and a new product called Retail Cloud with Modern POS. The new tools will help to boost the productivity of store associates, digital merchants and customer service teams and help them to provide more personalized experiences, the company said.

AWS and Salesforce are previewing a new offering that integrates Amazon Connect’s communication channels into Salesforce Service Cloud, providing a unified platform for contact center as a service (CCaaS) and customer relationship management (CRM). This integration will streamline customer support by embedding voice, chat, SMS, and video capabilities directly into Salesforce, improving data sharing across departments and enabling AI-driven insights. The solution is expected to benefit businesses by reducing management burdens and enhancing multi-channel engagement, particularly for companies already using Service Cloud Voice with Amazon Connect.

Good News

Salesforce's new AI platform, Agentforce, has attracted over 200 major customers since its launch in late October, enabling businesses to create AI agents without programming skills for tasks like customer interactions or medical assistance. The platform, based on "large action models," contributed to Salesforce raising its annual revenue forecast to $38 billion. Competitors like Microsoft and OpenAI are also developing similar AI agent systems, highlighting the growing focus on this technology across industries.

Salesforce CEO Marc Benioff introduced the company's new AI strategy, focusing on building AI "agents" that handle tasks like customer service and scheduling without human supervision. Benioff emphasized that businesses don't need to create their own AI systems, as Salesforce offers a complete package, aiming to deploy a billion AI agents within a year. He acknowledged that while this AI technology could reduce the need for additional workers, he reassured that Salesforce's security remains strong, addressing concerns after a recent Slack hack involving Disney.

Bad News

Salesforce plans to lay off some employees at Own, the data management startup it recently acquired for $2 billion, as part of its integration strategy. While some roles will end by January 2024, others will be transitional to aid the merger. This reflects Salesforce’s more cautious approach to acquisitions, despite its recent announcement to hire over 1,000 people for its generative AI initiatives.

Salesforce is facing a global outage affecting multiple data centers and leaving customers unable to access its services since 05:55 UTC. Efforts to address the issue include managing traffic and restoring affected databases to stable backups, but no timeline for resolution has been provided. The outage also impacts Data Cloud functionality and follows a similar incident in October 2024.

Salesforce AI CEO Clara Shih has reportedly left the company, with Adam Evans stepping into a broader role as EVP and GM of AI during a strategic shift toward "AI agents." This comes as Salesforce focuses on autonomous, task-executing AI agents like its new Agentforce platform, which launched in October 2024. Despite the AI push, Salesforce has yet to disclose specific AI revenue, and its stock, up 26% in 2024, recently dipped following the news.

Salesforce experienced a major outage, disrupting services for users across multiple regions, with many unable to log in or facing slow performance. The company acknowledged the issue as a "degradation of service" and implemented a staggered fix, though some users continued to report problems throughout the day. The outage, affecting Salesforce instances hosted on AWS, reignited concerns about cloud platform reliability and the importance of clear, timely communication during service disruptions, as users expressed frustration over the lack of detailed updates.

Salesforce experienced a global outage affecting many, but not all, of its customers, and the company has yet to disclose the cause. Salesforce is rolling out an emergency fix to restore service, though some users may experience brief disruptions during the process. The company relies on a combination of Amazon Web Services and self-managed data centers for its cloud infrastructure.

Strategy

SAP is expanding its Executive Board with a new Strategy & Operations division, appointing Sebastian Steinhäuser to lead it. The company also introduced a new CTO, two Chief Revenue Officers, and an extended Executive Board to support its "AI-first, Suite-first" strategy. These leadership changes aim to improve digital transformation, customer success, and cloud adoption while aligning global initiatives.

SAP has launched "Grow with SAP on AWS," enabling businesses to run S/4HANA Cloud Public Edition on AWS infrastructure, marking the first instance where customers can choose a hyperscaler environment for this ERP solution. While aimed at SMBs, it also targets larger enterprises by offering access to SAP's AI tools and integration with AWS services, emphasizing scalability and ease of deployment. Analysts see this as a step toward standardizing cloud ERP solutions but question its competitive differentiation compared to alternatives like Oracle NetSuite or Microsoft Dynamics 365.

SAP has launched a dedicated sovereign cloud service in the UK, backed by a €250 million investment, to meet data residency and security requirements for public sector and defence organisations. The service ensures sensitive data remains within UK borders, addressing regulatory demands for data localisation and cybersecurity compliance. This initiative is part of SAP's broader investment strategy, focusing on providing secure, locally managed cloud solutions for critical industries.

SAP has partnered with Schwarz Digits to allow "RISE with SAP" customers to move their ERP systems to the STACKIT cloud, offering a data-sovereign solution particularly suited for businesses with strict data protection requirements. Schwarz Digits will host SAP's cloud services on its STACKIT infrastructure, providing a secure option for managing SAP S/4HANA environments. This partnership is aimed at supporting companies in maintaining control over their data, especially in critical business processes like finance and logistics, while complying with European data protection standards.

Our commercial partner survey (13 respondents, ~50% from EMEA) showed weaker performance in 3Q w/ 40% of partners meeting/beating targets, below 60% last qtr and TTM avg of 56%. Moreover, 46% indicated that forward qtr Y/Y pipeline growth was at/above prior qtr levels, below 75% last qtr and TTM avg of ~64%, and the CY24 avg growth expectation dropped from +8% to +3%. Positively, net feedback on RISE migration activity slightly improved Q/Q and our GSI field checks suggest sustained momentum in ERP Cloud at >30% & continued momentum in migration activity.

In terms of forward qtr pipeline outlook, 23% indicated it was higher than the previous qtr (vs. 44% last qtr), 23% indicated it was in-line (vs. 31% last qtr), 15% indicated it was lower (vs. 25% last qtr), and 38% indicated limited visibility (vs. 0% last qtr). In total, 46% of respondents indicated that 3Q Y/Y pipeline growth was at/above previous qtr levels, below 75% last qtr and the TTM average of ~64% (75%/70%/54%/58% over previous 4 qtrs).

SAP is expanding its Digital Innovation Accelerator in Singapore with a S$12 million investment, focusing on AI applications in industries like manufacturing, financial services, and logistics. The initiative, supported by Digital Industry Singapore (DISG), aims to co-develop AI solutions with industry leaders, emphasizing sustainability and sector-specific needs. SAP has also committed to bolstering the local talent pipeline through AI courses and upskilling programs, continuing its partnership with Singapore to drive digital transformation and sustainability goals.

Partnerships

SAP SE is collaborating with the UK government through the Unity Cluster program to develop a shared SAP operating model that will enhance efficiency for HMRC, DfT, and MHCLG by implementing cloud capabilities. The partnership aims to implement key SAP solutions such as SAP Ariba, SAP SuccessFactors, SAP Business Technology Platform, and SAP Concur, facilitating better management of HR, finance and procurement services. The initiative highlights the UK government's commitment to digital transformation, emphasizing improved departmental processes, data compliance and overall user experience through collaborations with major tech players like SAP and Deloitte.

UiPath and SAP have partnered to integrate UiPath's automation platform with SAP Build Process Automation, enabling end-to-end automation across both SAP and non-SAP systems. This collaboration aims to accelerate business transformation by streamlining processes, facilitating cloud migrations, and enhancing innovation with AI-driven automation solutions. The integration is designed to offer SAP customers a more comprehensive automation experience, improving compliance and enabling rapid deployment of automation across enterprises.

SAP has expanded its partnership with Mistral AI by hosting Mistral's models, including Mistral Large 2, on SAP's infrastructure, providing a secure environment for customers to use AI in regulated industries. This integration allows organizations to build custom AI solutions that extend SAP applications while ensuring data security and compliance with regional regulations. By offering Mistral's models through its AI hub, SAP enhances its AI capabilities, giving customers the ability to develop generative AI solutions on SAP's Business Technology Platform with greater control over their data.

Offerings

SAP plans to launch a new loyalty management solution tailored for retailers and consumer goods companies by late 2025, offering features like loyalty wallets, personalized offers, and centralized program management. This solution aims to address gaps in customer retention, integrate with SAP's broader CX ecosystem, and provide real-time analytics and financial tracking. Additionally, SAP announced an AI shopping assistant for early 2025 and the general availability of its retail-focused SAP S/4HANA Cloud to streamline operations for the sector.

SAP's latest update to its SuccessFactors HCM suite introduces AI-driven capabilities and expands third-party integrations to address the shift toward skills-based talent management, an area where competitor Workday has led. Enhancements include a Talent Intelligence Hub for centralized skills management, integrations with skills providers, and the AI copilot Joule for onboarding and payroll assistance. Analysts view these updates as SAP's response to rising demand for skills-based workforce planning, with potential benefits in workforce optimization, though some consider certain features more incremental than transformative.

Deals

Mercedes-Benz is integrating SAP’s cloud-based "RISE with SAP" program on AWS to modernize its IT infrastructure and improve operational efficiency. This transition standardizes processes across finance, logistics, and after-sales services while incorporating AI-driven automation for faster decision-making. The partnership aims to enhance digital transformation, reduce complexity, and position Mercedes for long-term competitiveness in the automotive industry.

The BBC is continuing its partnership with SAP to streamline its IT systems, including finance, HR, and procurement, by adopting RISE with SAP on AWS. This move consolidates the BBC's IT infrastructure, replacing separate contracts for data centers and software licenses, making operations simpler and more cost-effective. The cloud-based transformation aims to enhance performance, resilience, and efficiency, allowing the BBC to focus more on delivering quality services to its audience.

Bad News

The U.S. 9th Circuit Court of Appeals has revived a lawsuit by Teradata against SAP, accusing SAP of antitrust violations and stealing trade secrets. Teradata claims SAP used a 2008 joint venture to access its intellectual property and later tied software sales to its competing database product. The court ruled there are material disputes for a jury to decide, reversing a 2021 lower court ruling in favor of SAP.

SAP streicht im Rahmen der globalen "Next Level Transformation" rund 3.500 Stellen in Deutschland, was einem Rückgang der Belegschaft um etwa 14 % entspricht. Während einige Mitarbeitende großzügige Vorruhestands- oder Abfindungsangebote angenommen haben, wächst die Sorge über steigende Arbeitsbelastung und die Verlagerung von Stellen an günstigere Standorte wie Indien, wo SAP stark expandiert. Die Stimmung unter den Beschäftigten hat sich verschlechtert, mit zunehmender Unzufriedenheit über die Restrukturierung, Führungsentscheidungen und organisatorische Veränderungen.

Strategy

ServiceNow reported $10.98 billion in annual revenue, growing 22% year-over-year, with AI-driven automation playing a key role in its strategy. The company introduced AI Agent Orchestrator, AI Agent Studio, and pre-built AI agents to enhance workflows across IT, HR, and customer service. Meanwhile, SAP posted €34.2 billion in annual revenue (10% growth), emphasizing its AI initiatives, including Joule AI and cloud migration programs like Rise with SAP and Grow with SAP.

ServiceNow has officially entered the CRM market, leveraging its Customer Service Management (CSM) platform with AI-driven automation and deep enterprise data integration. Unlike traditional CRM providers, it focuses on complex service workflows, integrating ERP and back-end data to deliver a more data-rich customer experience. While its high complexity and cost pose challenges, ServiceNow is expanding partnerships and hiring 3,000 employees to support its CRM push, aiming to compete with Salesforce, Microsoft Dynamics, and Oracle.

ServiceNow is acquiring Cuein to enhance its AI agents' ability to analyze and process customer interaction data for actionable insights. The acquisition will strengthen ServiceNow’s Workflow Data Fabric, improving AI-driven automation and decision-making across enterprises. The deal is expected to close in Q1, further advancing ServiceNow’s AI capabilities in customer service and business operations.

ServiceNow has acquired Mission Secure, a company specializing in operational technology (OT) asset discovery, to enhance visibility and management of OT environments for industrial customers. This acquisition enables ServiceNow to integrate OT asset tracking into its platform, helping industries like manufacturing and energy optimize operations, reduce downtime, and improve decision-making. The move strengthens ServiceNow's position in the OT sector and expands its digital factory solutions portfolio.

Amit Zavery, previously a leader at Oracle and Google, has joined ServiceNow as president, chief product officer, and chief operating officer, following a leadership shakeup tied to a recent hiring investigation involving government scrutiny. Zavery’s appointment comes after CJ Desai's resignation amid internal conflict-of-interest findings and Raj Iyer’s departure from ServiceNow’s public sector role. With a background in cloud and developer-centric products, Zavery is expected to bolster ServiceNow’s competitive stance against Atlassian and Salesforce, especially in Agile development and AI-driven tools.

Siemens and ServiceNow announced a collaboration focused on enhancing industrial cybersecurity and integrating generative AI into factory operations. Siemens’ Sinec Security Guard will manage industrial vulnerabilities, while its Industrial Copilot, powered by generative AI, aims to improve human-machine collaboration. ServiceNow’s platform will support this integration by automating workflows across the factory floor, enhancing operational transparency, security, and efficiency.

ServiceNow announced a $1.5 billion investment in the U.K. over the next five years, focusing on expanding its local presence and supporting AI infrastructure, including data centers with Nvidia GPUs to process large language models (LLMs) within the U.K. This move aligns with Europe's push for AI sovereignty, ensuring data and technologies are localized. Additionally, ServiceNow plans to launch upskilling programs to reach 240,000 people in the U.K., further supporting the country's technology and AI workforce development.

Partnerships

ServiceNow and Google Cloud are expanding their partnership, making ServiceNow’s platform and AI-driven workflow solutions available on Google Cloud Marketplace and Google Distributed Cloud. The integration will enhance CRM, ITSM, and security incident response by leveraging Google’s AI infrastructure and BigQuery analytics for real-time automation. ServiceNow continues strong growth, reporting 23.5% revenue increase over the past year, while also acquiring Cuein to further improve its AI capabilities.

ServiceNow and AWS have expanded their collaboration with a new connector linking Amazon Bedrock models to ServiceNow’s Now Platform, enabling faster deployment of generative AI (GenAI) workflows. The connector allows organizations to integrate third-party AI models, improving workflow customization and accelerating GenAI product development. Additional integrations, like ServiceNow's tools for security incident response and procurement operations, aim to enhance operational efficiency and optimize technology investments.

ServiceNow and Microsoft have expanded their partnership to enhance front-office processes through AI-powered integrations, notably combining ServiceNow's Now Assist with Microsoft Copilot. This collaboration enables seamless workflows, with Copilot accessing ServiceNow's knowledge base and integrating automated agents to handle customer issues and back-end workflows. The partnership aims to leverage both platforms' strengths to streamline operations, improve productivity, and support broader adoption of AI-driven task automation.

DXC Technology has extended its partnership with ServiceNow to launch a Generative AI (GenAI) Center of Excellence, combining DXC's implementation expertise with ServiceNow's GenAI tools, such as Now Assist, to accelerate AI adoption for businesses. The collaboration aims to optimize IT operations and enhance customer experiences, with DXC already saving 10,000 hours monthly by integrating Now Assist into its service platform. This initiative builds on their 15-year partnership, leveraging DXC’s extensive certifications and industry expertise to drive AI-driven transformation for clients worldwide.

Siemens and ServiceNow are collaborating to boost industrial cybersecurity and introduce generative AI into factory operations, combining Siemens’ Industrial Copilot and Sinec Security Guard with ServiceNow’s workflow automation. This integration will improve OT vulnerability management, provide real-time insights, and support detailed AI-guided instructions on the shop floor. Together, the companies aim to enhance productivity, reduce downtime, and enable faster, more informed decision-making in industrial settings.

Offerings

At the ServiceNow World Forum in Melbourne, ServiceNow showcased its AI-driven Xanadu release, which aims to streamline complex workflows and enhance productivity with over 360 new AI features. The release introduces industry-specific AI capabilities, a new database for improved performance, and features like Microsoft Copilot integration and proactive assistance. Executives emphasized ServiceNow's focus on AI as a fundamental productivity tool, with interest growing in both the public and private sectors, including a new contract with the Victorian government.

Deals

Deloitte has implemented "GreenLight powered by Salesforce" (GPBS), a sustainability management solution, to improve its own ESG reporting and meet its WorldClimate targets. The program leverages Salesforce’s Net Zero Cloud to streamline data management and reporting, addressing issues like data quality and the integration of information from multiple sources. Deloitte's use of this tool internally demonstrates its potential as a scalable solution for clients seeking to improve sustainability reporting across various industries.

Good News

ServiceNow reported a strong Q3 with 23% growth in subscription sales and 26% in booked sales, surpassing analyst expectations. While its new AI-powered tool, Now Assist, has driven contract premiums up by 30%, investors were disappointed with the overall AI impact on financials, causing a slight dip in share prices. ServiceNow also appointed Google Cloud’s Amit Zavery as president and chief product officer, signaling a focus on product and engineering.

ServiceNow has been named a Leader in the 2024 Gartner Magic Quadrant for AI Applications in IT Service Management (ITSM) due to its strong vision and execution in AI-driven ITSM solutions, including machine learning, virtual agents, and generative AI. The company's recent AI enhancements, such as Now Assist for ITSM, streamline workflows, improve self-service, and automate incident resolution, helping organizations boost productivity and reduce costs. These advancements, integrated into the Now Platform, position ServiceNow as a key player in transforming IT service operations through AI.

Bad News

ServiceNow is restructuring its RiseUp training program, which aims to train workers in managing its technology, amid low job placement rates and a broader corporate retreat from diversity-focused initiatives. The program has faced leadership turnover and budget scrutiny, with its original goal of training one million people by 2024 now softened to a broader target of skilling three million by 2027. While RiseUp is framed as part of equity-focused efforts, ServiceNow denies it was designed as a diversity initiative and is increasing efforts to improve graduate employability through job placement support and tracking.

ServiceNow faced significant customer frustration when an expired MID Server Root G2 SSL certificate caused service disruptions for over 600 organizations, impacting key services like Orchestration, Discovery, and AI-powered functions. While ServiceNow acknowledged the issue and is working on a fix, delays in communication and mishandling of the certificate replacement process worsened customer dissatisfaction. This incident follows other recent security challenges for the company, raising concerns about its reliability and prompting calls for better transparency and proactive measures to prevent future disruptions.

Strategy

Broadcom's new channel leader, Brian Moats, aims to prioritize partners who provide value-added solutions, focusing on VMware Cloud Foundation adoption, partner-led professional services, and long-term growth. Smaller partners and SMB customers may face challenges as Broadcom shifts focus to larger, competency-driven partnerships. Moats' extensive experience with CA Technologies and Broadcom is seen as a positive by partners invested in VMware's ecosystem.

Broadcom has revised its VMware strategy, narrowing its direct focus from 2,000 to 500 strategic customers while delegating 1,500 users to channel partners, aiming to strengthen customer retention amid concerns over licensing costs. This shift, revealed at VMware's November Explore conference, comes as many customers explore alternatives, citing a need for flexibility and investment protection. While migrations away from VMware remain modest, the changes have sparked mixed reactions, with some seeing it as a smart pivot and others questioning whether it will restore strained customer relationships.

VMware has aligned its European sovereign cloud offerings with local regulations by partnering with European providers to ensure data sovereignty and compliance. Under Broadcom's ownership, VMware is shifting focus away from public cloud solutions to prioritize private and hybrid cloud offerings, emphasizing sovereignty in data, operations, and infrastructure. However, the lack of unified European cloud regulations and the high costs of alternative European cloud initiatives remain significant challenges for the region.

Bad News

VMware users are frustrated with Broadcom’s new licensing policies, which now require a three-year upfront commitment for vSphere renewals instead of annual renewals. Customers argue this is a deliberate move to lock them in as many consider migrating away due to steep price hikes and the removal of perpetual licenses. Broadcom claims to offer flexibility, but customers and analysts warn that transitioning away from VMware could be costly and complex.

Austrian cloud provider Anexia migrated 12,000 virtual machines from VMware to an open-source KVM system, citing Broadcom's increased license costs as a threat to its competitiveness. Anexia CEO Alexander Windbichler criticized Broadcom's pricing strategy, noting it forced upfront payments and strained trust among customers, prompting other providers like Beeks to explore alternatives. Anexia's transition leveraged its existing infrastructure, minimizing impact on customers.

Netflix has sued Broadcom's VMware, alleging its vSphere virtualization platform infringes five Netflix patents related to virtual-machine operations. This legal dispute adds to ongoing litigation between the companies over video streaming technology, with a separate trial scheduled for next June. Netflix is seeking monetary damages in the new case.

Beeks Group, a UK-based cloud operator, transitioned from VMware to OpenNebula due to soaring licensing costs, declining support quality, and inefficiencies in VMware's platform. The move resulted in a 200% increase in VM efficiency and lower costs, although it required adapting proprietary tools and developing additional performance-monitoring capabilities. While Beeks still offers VMware services, most of its infrastructure now runs on OpenNebula, highlighting dissatisfaction with Broadcom's licensing terms post-acquisition.

A Linux variant of the Helldown ransomware has been uncovered. Previously known for targeting Windows systems, the Helldown group now extends its reach to VMware ESX servers and Linux environments. According to a new report by Sekoia’s Threat Detection & Research (TDR) team, Helldown, an intrusion set that surfaced in August 2024, operates with a double-extortion model.

Since Broadcom’s acquisition of VMware, customers have faced sharp price increases and unexpected late fees if they miss renewals when transitioning to VMware's subscription model. These changes, including new contractual terms and product bundling, have frustrated many long-time VMware customers, some of whom are exploring alternatives like Nutanix and OpenStack despite the high switching costs. Broadcom’s focus on large, strategic clients has left some customers feeling overlooked, and competitors are seizing the opportunity to attract discontented VMware users.

Broadcom’s acquisition of VMware is shaking up the distributed hybrid infrastructure market, opening opportunities for rivals like Microsoft, AWS, Oracle, and Nutanix. Gartner notes that concerns over Broadcom's pricing and licensing changes are prompting many VMware customers to consider alternatives, with up to 30% potentially exiting the VMware ecosystem. This shift could gradually impact Broadcom, although some customers are locked into multi-year VMware contracts, delaying a full-scale exodus.

Broadcom rejected AT&T's request for injunctive relief regarding changes to VMware's licensing practices, arguing that AT&T had been informed in advance about the transition to a subscription model and chose to opt out. AT&T had indicated plans to move away from VMware software but filed a court challenge, claiming Broadcom was forcing it into unwanted subscription deals to maintain support for previously purchased software. Broadcom countered that the transition to a subscription model was well known and necessary due to competition from cloud providers, while some customers have reported significant cost increases.

Strategy

Former Microsoft and Accenture executive Maureen Costello takes helm as cloud computing battle intensifies in European and African markets In her new role Maureen, who held the role of Corporate Vice President for Industry Solutions Delivery at Microsoft, will oversee Google Cloud’s enterprise sales and operations across both regions.

The Schwarz Group has partnered with Google to integrate Google Workspace into its data centers, marking a shift in its cloud strategy. Schwarz Digits’ Cloud STACKIT will provide local data storage for Google Workspace and offer client-side encryption, delivering a sovereign and secure workplace productivity solution with XM Cyber as enhanced security layer.The collaboration ensures customer data remains within the EU and is encrypted to prevent third-party access, including by Google. This partnership supports Schwarz Group’s efforts to build a strong IT business alongside its retail operations, while providing Google with a major new client for its productivity software.

Google Cloud's 2025 cybersecurity forecast highlights increased use of AI by both attackers and defenders but downplays fears of AI dramatically empowering unsophisticated attackers in the near term. The report emphasizes the evolving strategies of state actors like Russia, focusing on frontline infrastructure, and North Korea, leveraging tech workers for infiltration and funding activities. Resilience, particularly in critical national infrastructure, is framed as long-term preparedness against future threats rather than immediate recovery from attacks.

The Common Vulnerabilities and Exposure system is one of those things that many people will claim knowing nothing about while at the same time being strangely familiar. That’s because it’s the CVE bit at the start of any security vulnerability listing. It’s boring but essential as it provides context for how severe a security vulnerability is and so can help prioritize for patching. Microsoft has been issuing CVEs for critical cloud service vulnerabilities, whether users need to patch them or not, since June, 2024. Now Google has joined the “let’s make the cloud less cloudy” critical vulnerability party. Here’s what you need to know.

Lumen Technologies is partnering with Google Cloud to enhance its AI-driven IT operations (AIOps) and develop the Lumen Digital Twin, a real-time network monitoring solution. Leveraging Google Cloud's infrastructure and AI platforms like Vertex AI and Gemini, Lumen aims to proactively address network issues, reduce technician dispatches, and improve efficiency. This collaboration supports Lumen's efforts to optimize operations and enhance customer experiences.

Google Cloud and Saudi Arabia's Public Investment Fund (PIF) have partnered to establish a global AI hub near Dammam, focusing on Arabic language models and local AI applications. The hub will feature advanced AI infrastructure, including Google's TPUs and Vertex AI, and aims to train millions of professionals to support Saudi Arabia's ICT growth. Pending regulatory approval, the collaboration also seeks to enhance Google's Arabic generative AI model, Gemini, and foster AI adoption across industries in the region.

Dagang NeXchange Berhad (DNeX) and Google Cloud have partnered to deliver sovereign cloud services in Malaysia, with DNeX operating Google Distributed Cloud (GDC) as a managed provider. This service will cater to Malaysia's public sector and regulated industries, offering air-gapped cloud solutions with flexible hardware and AI tools like Vertex AI, ensuring compliance with strict sovereignty and regulatory standards. The partnership aims to drive digital transformation, enhance AI use in sectors such as semiconductor manufacturing, and expand DNeX's IT service offerings, with plans to develop an AI Center of Excellence.

Partnerships

ServiceNow and Google Cloud are expanding their partnership, making ServiceNow’s platform and AI-driven workflow solutions available on Google Cloud Marketplace and Google Distributed Cloud. The integration will enhance CRM, ITSM, and security incident response by leveraging Google’s AI infrastructure and BigQuery analytics for real-time automation. ServiceNow continues strong growth, reporting 23.5% revenue increase over the past year, while also acquiring Cuein to further improve its AI capabilities.

EPAM Systems has expanded its partnership with Google Cloud to develop AI-powered solutions for the media, energy, and retail industries using the Vertex AI platform. The collaboration will focus on industry-specific applications, including video search for media, geospatial data visualization for energy, and AI-driven retail assistance. EPAM also aims to grow its financial services capabilities through acquisitions, while strengthening its AI expertise and digital transformation initiatives.

KPMG is investing $100 million over four years to enhance its generative AI, data analytics, and cybersecurity services through its partnership with Google Cloud. The collaboration focuses on deploying Google’s Vertex AI and Gemini models to financial services clients, aiming to automate processes like fraud detection and commercial lending. KPMG expects this expanded alliance to drive $1 billion in additional growth.

NTT DATA and Google Cloud have partnered to accelerate cloud-based data analytics and generative AI adoption in the Asia Pacific region, focusing on industry-specific solutions for sectors like healthcare, finance, and manufacturing. The collaboration includes establishing a dedicated business unit, training 1,000 additional engineers, and scaling NTT DATA’s cloud business in the region tenfold within three years. The initiative aims to modernize AI, infrastructure, and cybersecurity to support enterprise digital transformation.

Qualcomm and Google have partnered to create a generative AI-enabled platform for automotive digital cockpits, combining Snapdragon Digital Chassis, Android Automotive OS, and Google Cloud. This collaboration will support AI-driven features like advanced voice assistants and real-time driver updates, using Qualcomm’s edge AI SoCs and Google’s cloud infrastructure to enhance in-car experiences. The partnership includes a framework to simplify software development, aiming to speed up market readiness for advanced, customizable digital cockpit solutions.

Offerings

Google Cloud has launched the AI Agent Ecosystem Program to help partners develop, deploy, and market AI agents that automate tasks and improve efficiency. The program provides access to tools like the Vertex AI Agent Builder, early collaboration with Google Cloud teams, and a dedicated marketplace category for AI agent solutions. Early adopters, including Accenture and BCG, are already using the program to enhance customer experiences and streamline business processes.

Google Cloud has announced the general availability of its Vertex AI platform along with new features for its Healthcare Data Engine (HDE), aimed at enhancing AI-driven healthcare solutions. Vertex AI integrates models like MedLM to support clinical workflows, allowing healthcare providers to query and analyze health records efficiently. These tools aim to reduce the administrative burden on healthcare workers, who often spend significant time on non-clinical tasks, and improve patient care by enabling faster, more accurate insights from health data.

Google Cloud is expanding its AI and data management offerings, including improvements to its Vertex AI platform and new features in BigQuery. At a London summit, Google Cloud highlighted its growing role in AI, noting that many European and UK AI businesses use its platform, with 90% of AI unicorns operating in the cloud. The company is also developing "agentic AI" systems that could autonomously handle workflows and data interactions. Additionally, Google Cloud is increasing its UK presence with a new startup hub and expanded data residency for machine learning processing.

Deals

Servier has extended its partnership with Google Cloud for another five years to enhance pharmaceutical R&D using AI. The collaboration will help analyze medical data in real time, with around 60 AI use cases identified, including drug discovery and optimization. Servier has also begun integrating Google Cloud’s AI tools for employees to accelerate research productivity.

Mercedes-Benz and Google Cloud have announced an expansion of their strategic partnership, aimed at enhancing the capabilities of the MBUX Virtual Assistant. This upgrade is powered by Google Cloud’s latest Automotive AI Agent, built using the Gemini framework on Vertex AI. This technology is specifically tailored for the automotive sector and leverages the Google Maps Platform to provide drivers with more detailed and personalized conversational responses regarding navigation, points of interest, and much more.

Die Bundeswehr hat sich für die Google-Cloud entschieden, die ausschließlich auf deutschen Rechenzentren der BWI betrieben wird, um den hohen Sicherheitsanforderungen zu entsprechen. Die Cloud ist essenziell für moderne militärische Programme wie D-LBO und FCAS und ermöglicht die Nutzung von KI, die bisher aus Sicherheitsgründen nicht eingesetzt werden durfte. Während die On-Premises-Lösung Sicherheit bietet, übernimmt die Bundeswehr selbst die Wartung, was einen Kompromiss zwischen internationalem Know-how und eigenständiger Kontrolle darstellt.

Air France-KLM has partnered with Google Cloud to leverage generative AI and data analysis tools to enhance customer experiences, optimize operations, and foster innovation. The airline group plans to use AI to personalize travel services, improve operational efficiency, and enable predictive maintenance to reduce environmental impact. This collaboration aims to accelerate Air France-KLM's data strategy and innovation efforts in the aviation sector.

Citi has signed a multi-year deal with Google Cloud to migrate workloads and leverage its Vertex AI platform, aiming to enhance its digital products, streamline workflows, and boost high-performance computing for its Markets business. This includes implementing generative AI for developer tools, document processing, and broader digitization initiatives. Citi expects the partnership to improve application speed, efficiency, and client service capabilities.

Volkswagen of America has partnered with Google Cloud to integrate generative AI into the myVW mobile app, introducing a Virtual Assistant that provides vehicle-specific information and services for 2024 Atlas and Atlas Cross Sport owners. The assistant uses Google Cloud's Vertex AI and BigQuery, combining Volkswagen's connected car data with various resources like manuals and FAQs, allowing users to easily ask questions about their vehicles. The AI-powered assistant will be available for most Volkswagen vehicles from model year 2020 and newer by 2025.

Puma has expanded its partnership with Google Cloud to enhance its digital shopping experience using generative AI via Imagen 2 on Vertex AI. This technology allows Puma to create personalized and region-specific product imagery, improving click-through rates and reducing time-to-market for digital campaigns globally. Additionally, Puma has seen benefits like higher average order value (AOV) and faster product availability since migrating to Google Cloud, and plans to explore further AI advancements like Imagen 3 and Vertex AI Search to improve shopper conversion rates.

Bad News

Microsoft has accused Google of covertly organizing the Open Cloud Coalition to influence European regulators and counter Microsoft’s cloud practices, labeling it an "astroturf" campaign. The coalition, led by smaller cloud firms but reportedly funded by Google, seeks to advocate for cloud market openness and interoperability, allegedly to counter Microsoft's 2019 licensing changes, which made it more costly to use Microsoft software on non-Azure clouds. This clash intensifies as Europe and the U.K. investigate market lock-in by major cloud providers, with both companies aiming to shape upcoming regulatory decisions.

Google Cloud’s europe-west3 region in Frankfurt faced a 12-hour outage due to a power and cooling failure, affecting numerous services like Compute Engine, Kubernetes Engine, and Persistent Disk. Users experienced issues such as VM creation failures, node inaccessibility, and delays in batch job scaling. Google eventually advised migrating workloads to other regions or zones, apologizing for the disruption.

Amit Zavery, previously a leader at Oracle and Google, has joined ServiceNow as president, chief product officer, and chief operating officer, following a leadership shakeup tied to a recent hiring investigation involving government scrutiny. Zavery’s appointment comes after CJ Desai's resignation amid internal conflict-of-interest findings and Raj Iyer’s departure from ServiceNow’s public sector role. With a background in cloud and developer-centric products, Zavery is expected to bolster ServiceNow’s competitive stance against Atlassian and Salesforce, especially in Agile development and AI-driven tools.

Die Schwarz-Gruppe hat für den Ausbau ihres Digitalgeschäfts einen Topmanager von der Konkurrenz abgeworben: Bernd Wagner, derzeit Geschäftsführer von Google Cloud in Deutschland, wechselt bald zu dem Familienunternehmen. Das erfuhr das Handelsblatt aus Branchenkreisen. In der IT-Branche dürfte der Wechsel Aufsehen erregen. „Das ist eine starke Personalie für Schwarz Digits“, sagte Axel Oppermann, Gründer des Analysehauses Avispador, dem Handelsblatt. Der Manager habe ein breites Verständnis des Marktes und sei gut vernetzt. Zudem komme er aus einer Organisation, die für ihre Umsetzungsstärke bekannt sei. „Das könnte für Tempo sorgen.“

Google Cloud accuses Microsoft of using restrictive cloud licensing practices to lock customers into Azure, significantly increasing costs for businesses that wish to switch to other providers. Google claims these practices harm European companies, stifle competition, and lead to wasted tax funds and security risks. Despite a prior settlement with some European cloud providers, Google has filed a formal complaint with the European Commission, seeking further investigation into Microsoft's actions.

Strategy

AI in 2025 will become a critical tool in enterprise workflows, with agent-based automation enabling more autonomous decision-making and process management. Companies will need clear ROI strategies to justify AI investments, while AIOps tools will help manage tech debt and streamline IT operations. Meanwhile, increasing global AI regulations, led by the EU, could either hinder innovation or set a precedent for other regions.

Pegasystems has appointed Rachel Boskovitch as General Manager and VP Sales for the DACH and Nordics region. With over 20 years of experience in software and AI, including roles at Dataiku and SS&C Intralinks, she will focus on helping clients transform their business models and improve processes. Boskovitch highlighted her enthusiasm for Pega's innovation, particularly its use of GenAI in critical business processes, and praised the company’s commitment to continuous learning and forward-thinking solutions.

Pegasystems Inc. has appointed Jackie McKinley as head of Americas commercial sales, where she will oversee sales strategy and client relationship management across the region. McKinley, with over 30 years of global sales and executive experience, previously held leadership roles at NetApp and Dell Technologies, focusing on cloud SaaS transitions and IT solutions. At Pega, she will support clients with technology adoption, cloud migrations, and legacy transformations, working closely with leadership to grow the company’s client portfolio.

Pegasystems Inc. has appointed Jackie McKinley as head of Americas commercial sales, where she will oversee sales strategy and client relationship management across the region. McKinley, with over 30 years of global sales and executive experience, previously held leadership roles at NetApp and Dell Technologies, focusing on cloud SaaS transitions and IT solutions. At Pega, she will support clients with technology adoption, cloud migrations, and legacy transformations, working closely with leadership to grow the company’s client portfolio.

Partnerships

BT revamped its approach to SMB customers by integrating data intelligence, aiming to improve acquisition and retention through AI-driven insights and personalized offers. Partnering with EY and Pegasystems, it consolidated disparate data sources into predictive models to better target high-value customers and enhance engagement. Despite technical advancements, cultural resistance among sales teams remains a challenge, requiring continuous efforts to drive adoption and align with broader organizational changes.

Offerings

Pegasystems has introduced new generative AI and automation features to its Pega Smart Dispute Enterprise Edition, designed to help banks streamline the resolution of payment exceptions, disputes, and claims. The upgraded solution supports a wide range of payment types, leverages AI tools like Pega GenAI Coach and Pega Knowledge Buddy for enhanced guidance, and integrates with customer service tools for seamless operations. These enhancements aim to address rising chargeback volumes, growing complexity in payment methods, and evolving chargeback policies, enabling faster, more efficient dispute resolutions.

Pegasystems' latest Pega Infinity update introduces AI-driven “coaches” designed to guide employees in customer service, marketing, and sales, making interactions sound more natural and less automated. The platform now supports large language models from Google, OpenAI, and Amazon Bedrock, with new brand voice features that provide context-aware language suggestions aligned with company values. Additionally, Pega’s Blueprint workflow builder has been enhanced to streamline low-code app development, aiming to simplify complex business processes and improve customer engagement.

Pegasystems has expanded its Pega University Program globally to address the growing demand for software development talent, building on its initial success in India. The program partners with TalentSprint to provide clients and partners in North America, Europe, and Asia Pacific with pre-trained Pega-certified professionals, helping organizations fill IT skill gaps. The program offers two models: a full-service option where TalentSprint recruits and trains candidates, and an upskilling option for organizations with existing hires, ensuring a steady pipeline of skilled talent.

Good News

Forrester Research has named Pegasystems a leader in task-centric automation software, highlighting its strong market presence and advanced automation capabilities with Pega Infinity and Pega GenAI Blueprint. Pega received the highest scores in the Current Offering and Strategy categories, excelling in 18 out of 23 criteria, including automation deployment, orchestration, and governance. This recognition adds to Pega's recent accolades for its AI-driven automation and low-code platform offerings.

Bad News

Executives at software company Pegasystems Inc. engaged in a corporate espionage scheme to steal confidential information from competitor Appian Corp. and hid the company’s legal troubles from investors, according to a shareholder lawsuit filed Friday. Company leaders “engaged in a systematic, willful, and malicious scheme to misappropriate and profit from Appian’s trade secrets and confidential information in violation of Virginia law,” according to the lawsuit brought by shareholders in Massachusetts Superior Court, Suffolk County. Executives then “concealed the illegal scheme from stockholders for many years,” and hid a 2020 lawsuit that was filed by Appian, the complaint alleges.

Strategy

NVIDIA is establishing a new artificial intelligence research and engineering data center in Israel. The corporation said that the $500 million, 10,000 square meter facility will be one of the largest and most advanced data-center labs in Israel. The data center, which is currently under construction near the northern Israeli city of Yokneam, focuses on advancing next generation data technologies, including networking hardware, software, CUP design and AI applications.  

Nvidia is significantly increasing its workforce in the country. Bloomberg reports that the company plans to employ about 4,000 people in China by 2025, up from 3,000 at the start of 2024. The surge in new hires underscores the importance of the Chinese market for Nvidia, a leading AI chip manufacturer, despite the ongoing U.S.-China technology and trade war. Following the launch of an antitrust investigation by Chinese authorities on December 12, 2024, Nvidia reaffirmed its commitment to the market in its official response.

Nvidia invested $1bn in artificial intelligence companies in 2024, as it emerged as a crucial backer of start-ups trying to gain from the AI revolution the Big Tech group’s chips are powering. The semiconductor giant, which surpassed a $3tn market capitalisation in June on the back of huge demand for its high-performing graphics processing units (GPUs), has pumped ever greater sums into some of its own customers in the burgeoning sector.

Nvidia has acquired Israeli software company Run:ai for an estimated $700 million to enhance GPU resource management for AI applications. Run:ai’s platform optimizes GPU usage across various environments, and Nvidia plans to open-source the software to broaden its use across the AI ecosystem. This move follows recent competition scrutiny of Nvidia's market dominance in AI chips.

Nvidia introduced the Omniverse Blueprint, a technology enabling software developers to create real-time physics-based digital twins for industries like aerospace, automotive, and manufacturing. The blueprint integrates Nvidia's CUDA-X libraries, Modulus physics-AI framework, and Omniverse APIs for accelerated simulations and real-time visualization, achieving up to 1,200x faster performance. Early adopters like Ansys and Luminary Cloud demonstrate its potential in applications such as computational fluid dynamics (CFD), significantly reducing simulation times and improving design workflows.

Nvidia has acquired OctoAI, a startup that develops software to optimize machine learning models, marking Nvidia's fifth acquisition this year. OctoAI's CEO, Luis Ceze, now serves as Nvidia's VP of AI systems software, as the company integrates OctoAI's technology to enhance its AI infrastructure, including its NIM offering. OctoAI, which previously collaborated with Nvidia and other tech companies, will shut down its cloud service as Nvidia faces regulatory scrutiny over concerns about competition in the AI hardware and software markets.

Offerings

Nvidia has released a new AI model, Llama-3.1-Nemotron-70B-Instruct, that surpasses competitors like OpenAI and Anthropic in benchmark tests, signaling a major shift in its AI strategy. Previously known for its hardware, Nvidia is now competing directly in the AI software space, leveraging advanced training techniques to refine the model. This release highlights Nvidia's push to become a full-service AI provider, offering powerful, customizable models that could challenge the dominance of established software-focused companies in the AI industry.

Bad News

Nvidia lost nearly $600 billion in market value after DeepSeek’s AI model R1 demonstrated high efficiency with lower hardware costs, raising concerns about reduced demand for Nvidia’s GPUs. However, analysts argue the market overreacted, as the breakthrough could actually expand AI adoption and increase demand for Nvidia’s inference chips. Some investors and industry experts believe Nvidia remains well-positioned, despite growing competition from Chinese firms like Huawei.

The Biden administration plans to finalize a rule restricting access to AI hardware and models for countries like China and Russia, aiming to close loopholes in export controls. Nvidia has strongly opposed the regulation, criticizing it as overreach that undermines U.S. innovation and global competitiveness, while others, including bipartisan members of Congress, support tighter restrictions to limit China’s technological advances. The rule would expand the Commerce Department's authority over AI-related exports, potentially disrupting supply chains and impacting companies like Nvidia, which heavily rely on the Chinese market.

The U.S. Supreme Court dismissed Nvidia's appeal in a securities lawsuit, allowing the case to proceed. The lawsuit, filed by Swedish investment firm Ohman J:or Fonder, alleges Nvidia misled investors about its dependence on cryptocurrency-related sales, contributing to a sharp stock drop in 2018. Nvidia argued the case did not meet legal standards for securities claims, but the dismissal suggests the court saw no need for broader clarification on such matters.

China has launched an anti-monopoly investigation into Nvidia, citing potential violations related to its 2020 acquisition of Mellanox Technologies and its commitments under that deal. The probe is widely seen as retaliation for recent U.S. restrictions on chip exports to China amid escalating trade tensions. While Nvidia has a significant market presence in China, recent U.S. sanctions and increasing domestic competition have reduced its reliance on the Chinese market.

Nvidia's new Blackwell AI chips are facing overheating issues in server racks designed to hold up to 72 chips, leading to multiple design revisions and delays in deployment. These challenges have raised concerns among customers about preparing data centers in time, as the chips were originally scheduled for release in Q2. The Blackwell chips, touted for their advanced performance, are crucial for customers like Meta, Google, and Microsoft.

The U.S. Supreme Court is reviewing Nvidia's appeal to dismiss a 2018 securities fraud lawsuit alleging it misled investors about its reliance on cryptocurrency-related sales. The case examines whether the plaintiffs met the strict legal requirements under the 1995 Private Securities Litigation Reform Act for bringing such claims. Justices expressed divided opinions, with some questioning Nvidia's proposed legal standard and others seeking a balance between discouraging frivolous lawsuits and allowing legitimate cases to proceed.

Strategy

UiPath has launched an AI Innovation Hub in London to drive AI research, collaboration, and business solutions in partnership with University College London and global tech leaders. The hub emphasizes the UK's growing role as a leader in AI, leveraging London's academic, financial, and technological infrastructure. It aims to nurture talent, develop AI-driven solutions, and advance industries through innovation and collaboration.

Partnerships

UiPath and SAP have partnered to integrate UiPath's automation platform with SAP Build Process Automation, enabling end-to-end automation across both SAP and non-SAP systems. This collaboration aims to accelerate business transformation by streamlining processes, facilitating cloud migrations, and enhancing innovation with AI-driven automation solutions. The integration is designed to offer SAP customers a more comprehensive automation experience, improving compliance and enabling rapid deployment of automation across enterprises.

Offerings

At its UiPath Forward + TechEd convention, UiPath highlighted advancements in agentic AI for automation, focusing on how AI-driven "agentic" software robots can better support human tasks by understanding complex, unstructured workflows. Forrester’s Craig Le Clair discussed agentic AI's potential to improve industries like healthcare, emphasizing new controls to monitor AI behavior and data use. UiPath also announced integrating Anthropic’s Claude 3.5 Sonnet into products like Autopilot and Clipboard AI, offering enhanced task automation, medical record summarization, and contextual AI assistance for enterprise workflows.

Deals

Omega Healthcare partnered with UiPath to enhance its operations using AI-powered automation, significantly improving efficiency, accuracy, and cost-effectiveness. The collaboration has enabled automation of over 60 million transactions, reducing documentation time by 40%, increasing productivity by 100%, and achieving 99.5% process accuracy. These advancements support Omega Healthcare’s strategic goals, including better revenue cycle outcomes, reduced claim denial rates, and enhanced patient engagement.

Good News

Bucharest ranks 26th globally for AI startups, driven largely by the success of UiPath, Romania's leading unicorn. Romania holds 11th place in the global AI startup ecosystem ranking, while the United States and China dominate the field. European cities, including Bucharest, lag behind due to less favorable AI policies.