264 – AI Unleashed: Microsoft & NVIDIA Drive $1 Billion Marketplace Deals & Agentic AI Revolution

Recorded Live at Ultimate Partner LIVE in Redmond, WA

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Welcome back to the Ultimate Guide to Partnering® Podcast.

Join Microsoft’s Sandy Gupta and NVIDIA’s Pat Lee as they explore the monumental shifts driven by AI in the software landscape. Discover why “ISV” is transforming into “SDC” (Software Development Company) , the dramatic reduction in AI token costs and hallucination rates, and the acceleration of cloud migrations. Learn about Microsoft’s commitment to a “marketplace first” approach and a single $1 billion marketplace deal this quarter , and NVIDIA’s vision of embedding AI into every application. This discussion highlights the emergence of agentic AI, the convergence of ISVs and SIs, and the critical importance of embracing AI for all partners to drive significant business outcomes and avoid being left behind.

We’re curating the very best of these moments—fireside chats, expert panels, and executive insights—so you can stay ahead of the curve and fully aligned to where Microsoft and the industry are heading.

And this is just the beginning.
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— Vince

https://youtu.be/ld9h1pZJ_Ro

Key Takeaways:

• The terminology for independent software vendors (ISVs) is evolving to Software Development Companies (SDCs) to reflect a broader scope of software innovation.
• The cost of AI tokens has dramatically decreased, and AI hallucination rates have significantly gone down, leading to greater democratization of AI.
• Cloud migrations are accelerating, largely driven by AI, which is broadening opportunities across the entire value chain for the ecosystem.
• Microsoft is adopting a “marketplace first” approach, with a single $1 billion marketplace deal projected for this quarter, indicating a massive shift in how software is sold and consumed.
• Agentic AI, characterized by headless agents focused on specific tasks, is a rapidly emerging area with significant potential for business process automation and interoperability across different applications.
• The industry is witnessing a convergence of ISVs and system integrators (SIs), as customers require both robust software and hands-on implementation and change management support.

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https://youtu.be/s33fltuizEo

Transcript:

Key Tags:

AI innovation, software development companies, SDC, cloud marketplace, NVIDIA AI, agentic AI, digitaansfol trrmation, B2B technology, strategic partnerships, ecosystem growth, Microsoft Azure, AI monetization, enterprise AI, digital agents, industry foundation models, employee productivity, customer engagement, business process automation, drug discovery, cyber security, financial services, healthcare AI, channel partner collaboration, tech intensity, go-to-market strategy, cloud migration.

Transcript:

[00:00:00] Sandy Gupta: This space is moving so fast and it’s like I was talking to the Pearson guys. The fastest training that’s happening is people who are learning how to develop agents who are non-technical.

[00:00:14] Intro: We believe this time is like no other. We believe we refer to these as the tectonic shifts, all the hyperscalers in the world, if you add them all together.

Managed services will be one and a half times larger because it is the customer buying behavior that has created the need for all of us to rethink our models. Until we have data quality, the effectiveness of AI cannot be realized and effectiveness of the partnerships cannot be realized. Can you figure out, first, what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose?

Now we have a partnership. It’s the ultimate partnership. Welcome to The Ultimate Guide to Partnering. I’m Vince Menzi, own your host, and my mission is to help leaders like you achieve your greatest results through successful partnering. We just came off Ultimate Partner Live at Microsoft Redmond Campus, our most powerful event.

Yet, over two days, we gathered top leaders to tackle the real shifts shaping our industry. If you weren’t in the room. This episode featuring Sandy Gupta from Microsoft and Pat Lee from Nvidia brings us right to the edge of what’s next. Let’s dive in. So I am thrilled to invite to the stage. Uh, first of all, I want, I’m inviting back somebody who was with me in Dallas for the very first time.

He was a day number 52 in his new role, Sandy Gupta, who’s an incredible leader. Uh, at the time we called his role infras, ISV independent software vendors. We’re kind of moving away from that. We’ll talk about that. And here’s the other cl. Piece, we’ve got Nvidia up on stage, right? So have anybody here who’s heard the name Nvidia before?

Uh, any, anyone there? Uh, we, we think that this is a formative moment in time and we talk about tectonic shifts, right? We talk about the world of ai, we talk about the build out. So I am thrilled to invite to the stage both Pat Lee. From Nvidia who leads the alliances and strategic partnerships and Sandy Gupta, who leads the software development corporations SD get ready to say SDC Software development companies.

This is the new terminology we’re getting away from the old world of ISV. So I wanna welcome these two incredible leaders to the stage, Sandy and Pat. Glad to have you. So good to see you, my friend. Uh, so good to see you. I love this guy. So good to see you again, pat. Great to meet you. Nice to meet. Glad you could join us.

Uh, Sandy, I gotta say, because I’ve, I’ve told you this before. We’ve had you on stage. We’ve had you on the podcast. I am envious, so envious of your hair. I just think

[00:02:49] Vince Menzione: it’s incredible. He’s got, he got the most amazing head of hair. Um, well, you know, just by the way, just looking at. I, I just got a haircut and you, and you got a haircut.

Like, and, and Pat, and I can, this will take me a full year to grow and Pat, I, and I can, I love it. So good. So join while we can. So good. So

good. Uh, I’m gonna let you both introduce yourselves and then we’re gonna dive into this conversation, but so great to have you back. Thrilled to have you both join us.

So I’ll let you introduce yourself and then turn it over to Pat.

[00:03:17] Sandy Gupta: Yeah. I mean, Vince, first of all, thank you. It’s an honor to be on this platform. Again, thank you with these incredible partners. But first of all, thank you that you are safe. Thank you. I think, uh, you played down the accident you had, and I’m just so glad you are safe, and I know it’s still not easy, but yeah, you’ll recover and thank you.

And, and, uh, you know, that’s, it’s, it’s amazing that you, you’re good. Um, look, I, I lead the global ISVs for Microsoft and so, um, or STCs. Yes, yes. Now it’s gonna take some while because it’s been a 32 years of practice of calling ISVs and. Well, we now see software companies emerge who are not like ISVs, what we used to think about as isv.

So that’s kind of the change. So I spent a lot of time working with our ecosystem of software companies, helping them grow their top line revenue. Been 18 years in Microsoft and learning every day.

Yeah,

[00:04:11] Sandy Gupta: and by the way, one thing also is like incredible partner here, pat Lee.

[00:04:17] Pat Lee: Well, thank you first of all, it’s a pleasure to be here, an opportunity to speak to this audience.

So I’m Pat Lee. I lead a strategic enterprise partnerships at Nvidia, and I’m focused on really the leading enterprise hardware and software providers and helping them bring AI to their platforms to, and let them enable all the power of the data and, and what they’re delivering to their customers. And I think there’s a great opportunity there, huge.

Once they’ve done that, it’s a great opportunity for all of you to help deliver and deploy it.

[00:04:42] Vince Menzione: So thrilled to have you both on stage. Um, this is gonna be a really exciting conversation. Sandy, I got to be with you day number 52. Uh, I’d love to dive in a little bit about what you’ve learned from, uh, that was early October of 24.

I. It seems like it was last week in some respects, but I, I would love, maybe we could share a little bit with this audience, like how you were thinking about this o other than the fact that we now stopped calling them ISVs and we’re calling ’em SDCs. Yeah. But I know that’s an overall vision for how you’re and how you’re supporting these partners.

[00:05:15] Sandy Gupta: Oh, thanks Vince. Uh, look, I think if I look about what I’ve learned both in terms of externally and internally, what has changed and how it’s shaping for us for next year. Um, one is just externally, if you look at it, the cost of tokens have come down dramatically. If you look at that, I mean, I was just looking at a.

Uh, report from Stan Stanford AI Index. It just came out. It was like the cost of tokens have gone from $20 per million tokens to seven, you know, 7 cents Wow. Per million token, right? And so, and the hallucination, which is also a big part of, hey, for enterprises, like for them to put an autonomous agent, they need to be very thoughtful about that.

If you look at the recent reports, the hallucination has really dramatically gone down. In the same linear scale as the cost. And, and that is because AI is now, you know, really also being trained to look at the outputs of AI to see, hey, is it actually hallucinating or is it not? So there is a lot of democratization of AI that’s happened very, very fast.

I will call it almost like a tech intensity. Mm-hmm. You know, when I joined, when we met first is, um, still the ics were connecting and say, Hey, should I do a co-pilot? Should I, yes. Infuse g PT four in my application, or should I develop a co-pilot? Now it’s like the co-pilots are already out there and, uh, for every role you can think of, whether you’re, you’re on a shop floor or you’re a physician, or there is a co-pilot for you.

And then a lot of them are now looking at, Hey, what’s going on with, um, with, with, uh, with my agent framework, how am I thinking of monetization, governance, security? Go to market, all of that. So massive shift happening. Massive shift in, in that. Um, I would also say that we’re seeing a massive shift in marketplace.

We, we talked about today with Serial and, and also we talked to John and and others about marketplace today. Uh, we are about to drive to a billion dollar marketplace deal this quarter. Wow. Single deal. Single deal. And, uh, that is, uh, so the shift to marketplace is real. And, and I think we are feeling it.

Uh, we are very committed to it. Um, so that’s kind of happening. Uh, we are seeing some in interesting things that, you know, cloud migrations are also accelerating very fast and, and I think part of it is AI is driving a lot of acceleration and it’s really broadening opportunity for the entire ecosystem because there’s just so many ways you can think about the value chain that’s emerging as you get to cloud.

So internally, I would say that this. Group of companies, the software companies that, you know, I’m managing as go to market is the fastest segment of our commercial business. Yeah. And so, uh, that’s fascinating. Good and bad thing is. Getting a lot of attention. Right. And so the good part of the attention was that Judson was like, Hey, this is important.

Yeah.

[00:08:21] Sandy Gupta: And here’s some money to go try a few things that you see are important for H two. Nice. So we can shape next year. Nice. So, so I think there is both internally, there is a lot of recognition of what’s going on and, and we need to, you know, invest and, and uh, and in certain specific areas. Uh, I would say, the way I quickly say is that shaping of for next year is we are going to have a really big focus on tech intensity in a sense of, hey, how do we help our customers do a quick fail fast?

Hmm. Fail cheap, you know, way of investment because you have to try a lot of things. Right. In ai And we’re

[00:09:03] Vince Menzione: saying customers, you’re talking about the ES software development corporations,

[00:09:06] Sandy Gupta: companies. Yeah. And with them. For the end customers and for the end customers. Right. As well. And, and because there is a lot of trial needs to happen, there’s a lot of innovation ideas.

Some of them will never see the light of the tunnel. But many of them are worth trying. And so we want, want to find a very agile way to invest resources and bring very specialized partners, small or big services companies who are deep in AI to really help our ISVs to do those things. Uh, we are gonna come up with a, one of the most, I would say, competitive migration program.

And I’m very about that. Oh, tell

[00:09:40] Vince Menzione: us more.

[00:09:41] Sandy Gupta: Well, I think we’re still cooking. Okay. But I think this is where we, I feel like. The tam of opportunity for still a lot of the ISVs to go to cloud is huge. Exactly. And, and it’s, I think it’s an opportunity for us. So I, I’m very thrilled about that. Um, that I think that’s gonna happen.

And then really next year is a big year for us to take a marketplace first approach. Good, good to hear that. And I can, I hear a roundup applause for that, by the way. I think that’s an incredible,

[00:10:10] Vince Menzione: yeah. That’s incredible.

[00:10:11] Sandy Gupta: I think those three things I would say, Vince, and, and, and overall, I was just telling Pat in the green room, hey, how we are going to stimulate our sellers to sell more with partners?

Yeah. And, and already like, you know, Nicole talked about how we actually put the money where the mouth is today and investing in the ecosystem, but. Making sure that our sellers are really creating the demand that’s out there with our partner. I would love, I want to, I want to give Pat some time as well.

Yeah. But I would

[00:10:38] Vince Menzione: love to hear from you, like, how are you thinking? When we, when we were up on stage in October, you had basically winnowed down the organization, right? You took the top 30. Directly, and then you push down to the field organizations, the other large, very large, significant ISVs or SDCs. Yep, yep.

How are you thinking about the management of this ecosystem? Especially in light of what you just mentioned in terms of the The adoption, the new adoption curve?

[00:11:04] Sandy Gupta: Yeah. Do you wanna go to Pat first or do you want, then we’ll come back. Yeah. And then I think we’ll come

[00:11:08] Vince Menzione: into Pat. Yeah. So

[00:11:09] Sandy Gupta: the way it is playing out is like we are starting to think about what is the right resource model for an ISV.

Where they are on the journey. Okay. I think we have had, for the longest time, you know, Microsoft super well, uh, that we had a very inflexible model that basically said, Hey, you can only do this if you have this designation or this or that. Yes, we have partners who are incredibly technical and they don’t need technical support from us.

There are partners who are incredibly good at Cosal, say, Hey. I’ve got my customers. Don’t worry about it. I’ve got it. What I need you is innovation and, and help us, you know, but we can do the direct co-sell. We are good. So we’re trying to figure that out. It’s like, hey, where do we meet the partners where they are rather than create a, a very rigid model.

I’ll tell you Vince, like I lean in like yesterday, I was in Orlando, just came back last night and we had like a, essentially a late stage startup with big partnership. Jason and I were both there. Very nice. And we are pretty much leaning in, so it’s less about now, Hey, do I have this global partner or do I have a startup?

Yeah, that’s what I was getting at. It’s more like, Hey, is the opportunity, is it the right opportunity? Dive into yes. Is it the right opportunity? And we bring, that’s great. The machinery.

[00:12:26] Vince Menzione: Well, at our next event, I’m gonna dive in even deeper on this conversation with you. Yes. This is a big one, pat. I’d love to hear your vision.

Nvidia is in a juggernaut right now in this industry. Uh, fastest growth of any company, uh, in my lifetime. Uh, we used to talk about compact getting to a billion dollars back in the day. I mean, NVIDIA’s market share and market cap has just been astounding. Uh, we talk about the infrastructure build out, uh, we talk about the, the commitments that are made around cloud.

And really AI is being driven from your organization. You really are the leader in driving the technology, and I’d love to get your idea and vision on how you’re thinking about it working with Microsoft. And how and how you’re doubling down and leaning in.

[00:13:09] Pat Lee: So from First principles, NVIDIA’s a full stack software and computing company.

[00:13:13] Vince Menzione: Yeah.

[00:13:13] Pat Lee: Everybody thinks about us as just providing GPUs. It’s not that. Yeah. We provide the full infrastructure and software stack required to make AI successful and we have partners that take various layers of it and what they need to make their business successful. But that requires partnership. Um, so for EX, and we have a deep partnership with Microsoft and how we work together to provide.

The best infrastructure possible for AI to meet the needs of their own apps, their partners apps, and the apps that all of you’re gonna help your customers build. It’s not one thing, it’s all of them, right? And I think what we need to do is make sure that we help provide the necessary platforms that can be used at all three levels.

Because what Azure OpenAI needs is very different than what a leading ISV needs. It’s very different than what a GSI needs to deliver a solution to a customer. So we’re really trying to make sure we provide the right hardware and software at the right levels to enable people to be successful across the board.

And by doing that, it allows us to help Microsoft be more successful. Great quarter for, uh, Microsoft This last quarter. Yeah. Congratulations. Just watching acceleration growth. I mean, we’re excited to see that because it means more and more people are taking advantage of the power of AI and that is us.

If our number one goal for Nvidia is like, I want every enterprise to have AI embedded in their solution. Yeah. That’s it. That’s our vision. AI in every application, that’s what we wanna see

[00:14:38] Vince Menzione: moment. Yeah. I, I think we’re seeing it. I, you know, it’s funny because we had this conversation a couple years ago.

It was like, it’s not happening fast enough. And I, again, I come back to the Bill g comment, right. ’cause we expect too much too soon. Mm-hmm. We’re getting there in incredible ways. The, the technology is taking off in some, so much more deep and intangible ways right now.

[00:14:57] Pat Lee: And as you see with some of these companies, like is v so a number of ISVs in the room here are partners of our ServiceNow.

Cohesity. Yeah. Um, we’ve done work, work with help them innovate to help bring their AI into their platforms. Right. If you look at some of their own comments about AI and how it’s growing, it’s a, it’s amazing to see how it’s grown and just the amount of time they’re able to first get into market with a basic solution.

And how the technology’s just growing every day. This is not slow. This is not the old days of adding a feature every 18 months, every, every month. Something’s changing, evolving, and people are looking to adopt it. And how do they really bring that power of AI to their customers? Mm-hmm. And then more importantly, figure out in what way Some companies are monetizing it through upsell.

Some companies are baking into their base product to drive more people onto a cloud computing model. Everybody’s trying to figure out the business model that makes the most sense for them. What is the metric that’s gonna allow them to be successful? Yeah. And driving the investment for AI to lead to the outcomes they care about.

[00:15:57] Vince Menzione: How does your team layer in support for Microsoft then? You know, ’cause you talked about three different areas of growth or growth opportunities working with these partners. Is there a level of specificity working with the Microsoft teams on on, I mean,

[00:16:10] Pat Lee: Microsoft’s a strategic partner. Yeah. We have a deep dedicated team focused on, yeah.

Delivering what we need at each level at these things. That includes everything from the infrastructure build out across the board to, you know, help helping Microsoft optimize internal applications that were then delivered on the cloud to then now, I mean, we look at that, one of the things that we’re excited about Nvidia from the software perspective.

That we’re part of, um, Azure AI Foundry, um, and we have a rich software stack that’s embedded in Azure AI Foundry that can be bought through the marketplace. Very nice to deliver high performance models that can be used to help build applications for your customers and delivered NVIDIA’s pride and joy is delivering the best performance ever.

Um, for example, we can deliver LAMA 2.8 times faster than the base solution in Azure AI Foundry. Wow. By leveraging our marketplace solution. It stays in the AI foundry ecosystem, and you can take advantage of that to build out applications to deliver. The best solution for your customers? Yeah. Vince,

[00:17:09] Sandy Gupta: just, you know, we, I, my team manages Nvidia as a software partner.

I see. Very interesting. Why customer, that’s a different approach. Yes. Which is a very different approach, approach to kind approach

[00:17:18] Vince Menzione: frame what Pat is saying. So you’re helping to forge some of these partnerships, uh, from Foundry over to some of these other ISVs that are gonna be building out solutions, ag Gen.

I wanna dive in on AG Agentic, ’cause I think this has been a huge topic area. Yeah. It seems to be the area of most growth right now.

[00:17:34] Sandy Gupta: Yeah. I mean like if you look at it. The taxonomy of it is like if you have a copilot, it’s specific to a role that’s helping the human. It’s like a AI assistant. Yes. And then if you look at AgTech, it’s about, hey, it’s, uh, it’s headless.

It’s specific to a task, and the idea of architecture is make it as narrow to a task as possible. So for a complex task, you can reuse a lot of different agents and, and all of that. I mean, I’d love to like even say, Hey, how many people here use teams? That’s pretty much everyone. Yeah. How many people have added an agent to teams?

It’s like 10%. How many people have created an agent in a team? It’s actually impressed. There is actually more than I expected. Four or five. Yeah. Look, it’s uh, this space is moving so fast and it’s like I was talking to the Pearson guys. The fastest training that’s happening is people who are learning how to develop agents mm-hmm.

Who are non-technical.

Yeah.

[00:18:36] Sandy Gupta: And if you look out to teams, and for those who have not done that, it is super easy to go and, and teams and co-pilot studios just. One framework. There’s just so many low-code, no-code frameworks out there, but it’s incredibly sort of, the pace is moving. But I wanna bring back to like, hey, how is it being used and how is it being consumed?

So I wanna go back to what Nicole was saying. This, this morning is kind of the frame and Judson talked about it, uh, last week. I don’t know if those who heard in his AI. L uh, tour in London. Yeah. Said, Hey, like there’s a four big pillars of how AI is being consumed. One is how we are using for employee experience, and that is a lot of things like, for example, M 365 co-pilot for knowledge workers, but there are a lot of fine tuned co-pilots in the market for different types of audience.

And he was talking about, hey, how, um, 65,000 of his sellers are now using them. And the top quartile of that has kind of seen, like, he’s seeing like a close rate go up 23% and per head revenue’s gone nine 9%, which should multiply by 65. It’s, it’s a, it’s a good number. Uh, so we are seeing a lot of that sort of adoption in the enterprise today on, hey, just employ productivity.

Productivity is incredible. Uh, there is a big pivot that is, we have seen a scale is like the customer engagement. And, uh, we talk about like our own engagement. Like we have like 15,000 support people, about 25,000 vendors. And, and Judson pulled like about half a billion dollar cost out. Wow. And the customer experience has gone up in terms of the feedback we are getting because it’s all now the triage is done through a Gentech framework and they, and the triage decides, the agent decides whether it’s, it’s time to go to a copilot with a human or.

Pass it to an agent to, to be able to, because they know the, the customer really well. But then I think the two big areas it’s emerging now is the third is like really around the business process automation. I was just talking to a big hedge fund yesterday in Orlando and they were saying, Hey, we’ve got one of the most successful hedge funds.

And they were like. We have like 400 business processes that we have identified to really kind of automate over time, but there’s like five that we really are going to really hit is gonna be the biggest, uh, impact for us, and they’re very focused on that. I think like that thing is kind of, I mean, imagine like EIF tomorrow got automated.

Yes. I mean this whole entire room will be full of joy and, and uh, and, and the employee no more

[00:21:17] Vince Menzione: whiteboards with, uh, calculations on them. Uh, our MDF

[00:21:21] Sandy Gupta: here, like, oh my gosh. And the Microsoft employees will play golf every day. Right. If that can happen, no matter what role you are in, you get sucked. EFI is like our investment funds and stuff.

So it’s like a business process that nobody knows how it works. Yeah. Uh, and then like, uh, you look at like, but the last thing I wanna say is he, she talked about bending the innovation. Yes. I think it’s the products that are coming in the market now. Like if you look at Siemens, I was in Hanover a few weeks back and Siemens published with us, like a co-innovate, like a industry foundation model.

Mm-hmm. Essentially putting all the modalities of engineering and manufacturing in GPT-4. And other models and all, and being able to consume that through hundreds of copilots that the ecosystem can develop. I mean, can you imagine Siemens, like company becoming a software company? Yes. Bringing their really core value to the market through a fine tune, you know, industry specific model.

So, so I think there is this way how things are sort of. Like what are the dimensions? But then when you look at, Hey, how’s it been consumed? How the co-pilots and Gentech has been consumed by enterprises in these four dimensions. I would say co-pilot is the best way for diffusion in the enterprise where everyone can touch and feel ai, whatever their role is.

And, and most of this, it is no more longer a debate. Everybody has a copilot now, right? For the role, uh, NISV has for their specific role, whether it’s manufacturing, healthcare, et cetera. And then the things that differentiate you. That’s where it’s really about working on, Hey, do I do, I buy and build? And, and that’s where this whole age agent framework is coming to life, which, which can go in more details here.

[00:23:08] Pat Lee: And I think with age agentic, it’s very interesting, right? Yeah. I think. A lot of companies are trying to say they’ve got the perfect agent solution, but the challenge you all know is nobody has a single system of record. They’re running their business ons. So what happens when you have systems of record from different vendors?

That’s where the fund’s gonna come into play with agent ai, totally and X. One of the things that we’re working with Microsoft on and how do we help agent interoperability standards. So when you want to go, I wanna write an agent in Salesforce and I wanna write one in Microsoft, I wanna write one in ServiceNow.

How can you tie them all together? Yeah. In a way to go back to that question, what business process do we need to solve? Because That’s right. It’s never in one app. Totally. Your business process runs across all these different apps.

Yeah.

[00:23:52] Pat Lee: So the best thing we can do, I mean, one of the things that we’ve talked about internally is like instead of having to learn complex APIs from each different application, you’re gonna be able to speak natural language.

To a set of agents and you’ll have

[00:24:05] Sandy Gupta: context.

[00:24:06] Pat Lee: Then you’ll have context on intention. Intention and, and there’ll be a reasoning agent there. I know this is geeky techy, but you’ll be able to ask questions and it’ll go off and spin up different agents that can talk to different languages and do it all and bring it all together for you across applications.

Yeah.

[00:24:20] Pat Lee: That’s the power of a agentic ai and this isn’t science fiction. This is, this is happening, and like you’re gonna see more and more over the next 18 months. You’re gonna see this growth and it’s a huge business opportunity because. People who are resellers or system providers, your customers are gonna want it.

That’s right. They don’t want end up paying for 12 different applications. They want a single way to solve the problem. Even if they have to pay for them, they don’t want have to interact with ’em 12 different ways. Totally. So how do we help them do That’s right. Yeah.

[00:24:47] Vince Menzione: And we’ve been talking about tectonic shifts for years now, but now it’s really accelerating, right?

Yeah. And AgTech AI is really, so what are the, the milestones along the way? ’cause we’re gonna be here sitting down from here a year from now, having very different conversations than we’re having right now. What do you see?

[00:25:03] Sandy Gupta: Well, I mean, just to bring this to life, if you have a phone, you probably, I have an iPhone where I use 300 applications, right?

Yeah. What if you contact switch from one to the other? What if you don’t need to do a contact switch and essentially go, they go to one another? You can, yeah. And, and you have an open table. Agent that goes and reserves the dinner for you and your wife. And That’s right. Without, as long as you have the intention, without having to go from hey, weather application to this.

And if you think about that system of intelligence that Pat just talked about, which is no longer this passive APIs, but it’s a system of intelligence that is talking to all these different, uh, different siloed, um, system of records that is a whole emerging sort of ecosystem right now. Say a couple of things, Vince, uh, that’s emerging in the ecosystem that we worth talking about.

Yes. You know, we are seeing a lot of convergence of ISVs and sis very

[00:26:03] Vince Menzione: interesting to see this.

[00:26:04] Sandy Gupta: And, and, and I, as I talk to customers, they say, Hey, um, would love to work with these ISVs, but I need them handhold me. And I’ve been giving that feedback to the ISVs, Hey, it’s not enough to just have build a software right?

On the other hand, the sis are having the same thing. It’s like you cannot, because you know for us, we are going and saying, here are the use cases in your industry, in your domain, and you can either build yourself or with the SI or you can buy and configure. And both of them require, there is a convergence of like what your capabilities are as a partner.

Even for consulting partners, I, you know, starting to get the feedback from our customers is that, hey, I love the change management because it’s super critical because we asked the, we have put the business process and nobody’s using them, but the change management has to be in the workflow. Not just an outside training, like how do you insert the change management right in the workflow, what you’re trying to do when you’re trying to do, so, it actually leads you there then doing it.

So,

[00:27:15] Vince Menzione: so we’re gonna see a convergence of ISVs and sis. Then it has to, it has to happen in order to have the velocity that you need to have for these businesses. Totally. Yeah. Yeah. That’s a, that’s fascinating. What else are you seeing, pat, on your side?

[00:27:28] Pat Lee: I, I think it’s the, it’s, it’s the accelerated growth of ISVs adopting this technology.

Some, the, the early ones are getting farther ahead. Yeah. And, but the good news is the technology’s evolving so quickly. It’s time to catch up and it’s not as hard to catch up today. You started two years ago on this journey. It was gonna take you a year to figure it out. Now you can start and have something to market in three months.

The opportunity is just there. ’cause the tooling, the technology. Is better. I know you’ve

[00:27:54] Vince Menzione: talked about healthcare. Is that one of the areas we’re seeing the most Emergence of health. Healthcare

[00:27:58] Pat Lee: is a great opportunity because you know we talk a lot about large language models.

[00:28:02] Vince Menzione: Yeah.

[00:28:02] Pat Lee: Those are not the only models out there.

[00:28:04] Vince Menzione: Yes.

[00:28:04] Pat Lee: Large language models are one component of all the models we have. We have a whole division in Nvidia focused on healthcare and by biological models that can be delivered. Bio nimo is actually gonna be coming to Azure AI Foundry. Wow. So you could do drug discovery inside Azure AI Foundry. That’s amazing.

Kick off the model there and have it tie into the rest of your business system. So there’s lots of opportunities. More and more models are gonna have across various businesses, whether it’s financial services, whether it’s healthcare, um, and security’s a big area. You’re seeing lots of growth in terms of agentic frameworks, just because the complexity of just providing the security needed in this very rapidly moving world.

Is really critical.

[00:28:44] Sandy Gupta: Absolutely. I would say cyber and with all this agent, I mean imagine like a, a company with 500 SMB, 500 people with 5,000 agents. Yeah. That’s gonna be the reality and the security, the pri like about governance of all of that entitlements of like which agent can do what. It’s gonna be a, where I think massive opportunity.

[00:29:05] Pat Lee: It’s interesting about agents. In some ways HR is gonna be it.

[00:29:10] Sandy Gupta: Yeah.

[00:29:11] Pat Lee: HR is gonna be in charge of agents. In some ways it is like I take over that IT it’s like it’s building new things out. It’s a very fascinating place. Everything

[00:29:18] Vince Menzione: you’ve talked about today has been about outcomes too. I think about healthcare being 19% of gross domestic product in the United States, right.

As a, as a, as a recent victim of it, and just, I’m thinking about security. I’m thinking about financial. You start layering in these incredible components of our, of our models today. The outcomes that you’re gonna drive is the derivatives are gonna be so valuable, the creation that’s created. Yeah. So we’re going into, you know, we’re going into Microsoft’s fiscal 26.

Yeah. What, what are the things we need to, with this amazing partner organization, these ultimate partners in the room, how do we need to think, what final advice would you give to them?

[00:29:52] Sandy Gupta: Look, I, I’ll start is one is, uh, I would say don’t stay back from ai. Just like, really skill yourself. I mean, just get into, build an agent today, just tonight.

Just build an agent and, and it’s not that hard. Don’t let the geeks. Frighten you. It’s, it’s actually more easy than you think.

Yeah.

[00:30:12] Sandy Gupta: And, and it’s helping me. I, I built an agent just to improve my English writing. Very nice. So it’s helping me. Every time I write something, it corrects me. Uh, second is, um, the time has come how the ISVs and the channel partners kind of come together.

We talked a lot about in the marketplace session and. We really need, want to go deep into that because if you look at the mid-market and SMB, they’re not gonna consume AI by building it themselves, the solution themselves. And, and I think the market, the time has come now for the, for these partnerships to come together.

And, and the P two P and third is, um. I’ll just leave it that we’re gonna have a massive focus on migration next year. Yeah. And, uh, and I wanna make sure that everyone here is part of that, uh, huge opportunity sort of opportunity. Huge opportunity. It lends every type of partner in that. Uh, but most importantly, thank you everyone for being the, being our partner and, and amazing ecosystem and Vince, amazing platform.

Thank you so much. Yeah. I,

[00:31:18] Pat Lee: I think now is the time. This is not, there’s not a time to wait. Um, and there’s all sorts of ways to get started. You can get started as simply as an agent there, but I think one thing that every business that you work with and support has a mound of business critical data that they need to maximize, to get value out of, to put it, to make their customers get value out of.

And if we’re not helping them get there. They’re gonna lose business. Yeah. Other people are gonna come in and take that business. If you can’t maximize the value in these applications, they’ll be replaced. Yeah. So if we don’t make AI the prominent and most important feature of these applications, they won’t be able to keep up.

[00:31:58] Vince Menzione: I hear you loud and clear. I hope everybody else hears this loud and clear. ’cause it is important. I think there was a sense of hesitancy in the beginning. Like there was this feedback that was coming from CFOs saying, we’re not seeing the value yet in ai. This was in the beginning.

Mm-hmm.

[00:32:13] Vince Menzione: And I do think like organizations need to hit the gas pretty hard right now is the impression.

And they

[00:32:18] Sandy Gupta: don’t need to build everything today. Right. Like I think that’s the key thing is like, and there’s something they should build. So,

[00:32:24] Pat Lee: yeah, they, they should build what’s right for their business. What, yeah. Like as I said earlier in SA platform play. Yeah. Yeah. If I look at number of the partners I talked about like earlier, we’re providing the platform.

Yeah.

[00:32:33] Pat Lee: They’re bringing their business value on top of it. Yeah. And then they’re getting the value out of it. That’s that, that’s the thing. It’s like you don’t have to build all this. There’s a lot of foundation you can build on top of.

[00:32:43] Vince Menzione: Fascinating conversation. I want to thank you both, incredible leaders on stage.

I hope you all valued as much as I did Sandy, so great to see you again my friend.

[00:32:51] Sandy Gupta: I learned so much from you. Every time once we talk, I learned a lot from from you. Thank you, pat.

[00:32:56] Vince Menzione: So great to have you join us. Having the video up on stage at our Ultimate Partner event has been of great value for us as well.

Pat, thank you so much. Thank you very much, so much for joining us. You’ve both been incredible and I hope you’re staying around for a little while. Yeah, yeah, I will. Uh, there everyone, I’m sure wants to spend time with both of you. Yeah. Absolutely. So I want to thank you so much for joining us at, at our event this year.

I will see you at the, at the dinner. Yes. We’re gonna, we’ll see you up on, we’re gonna have a great meal together. Much Thank you much so much. Thank you so Pat, much Pat, so much. Thank you so much. Thanks for tuning into this episode of Ultimate Eye to Partnering. We’re bringing these episodes to you to help you level up your strategy.

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