Breaking Analysis with Dave Vellante

Power Law Explained Wikipediahttps://en.wikipedia.org/wiki/Power_lawHeavy tailed power laws:Why are Power Law distributions called 'Heavy-tailed'?Explainer video for power laws in statistics:https://www.youtube.com/watch?v=JC71ZazlMR0Power law in economics:https://dash.harvard.edu/bitstream/handle/1/34651705/68262294.pdfWhat is retrieval augmented generation (IBM Research)https://research.ibm.com/blog/retrieval-augmented-generation-RAGLlama2 technical paper from Meta:https://scontent-dfw5-1.xx.fbcdn.net/v/t39.2365-6/10000000_662098952474184_2584067087619170692_n.pdf?_nc_cat=105&ccb=1-7&_nc_sid=3c67a6&_nc_ohc=o6bnSMYXMT8AX8QaArm&_nc_ht=scontent-dfw5-1.xx&oh=00_AfD4K2tm94KqZZ6vm0bmor-zmbJ5z5ENslOx60fJRmMO9A&oe=6548D47F

In 1987, Nobel Prize-winning economist Bob Solow famously observed, “You can see the computer age everywhere but in the productivity statistics.” This proclamation became known as the productivity paradox. Ironically, Solow’s statement preceded the greatest productivity boom since the dawn of the computer age which subsequently came to fruition in the 1990’s. It can be argued that a similar pattern is being seen today where AI is everywhere but generally not showing up in earnings numbers or productivity statistics…yet. In this Breaking Analysis we squint through the latest earnings reports from Microsoft, Alphabet and Amazon to understand what’s happening in cloud, evaluate the impact or lack thereof of AI on cloud earnings momentum and explain how we think about the future impact of generative AI and cloud. 

MIT professor and economist Erik Brynjolfsson said recently that he’d be disappointed if AI didn’t lift the  current anemic 1.2% productivity growth rate to 3% or even 4%. This would be a good thing for business and government as it could potentially help with the labor shortage, drive earnings growth and increase tax revenues, which would ostensibly help address current debt levels. This is one of the promised impacts of AI. While the hype surrounding Gen AI has narrowly propped up certain sectors of the market, like AI startups and the magnificent seven, the macro effects have not been felt thus far as adoption remains largely experimental. In this Breaking Analysis and ahead of Supercloud 4, ETR’s Erik Bradley and Daren Brabham join the program to share the latest trends on AI adoption, how Gen AI is being used, some of the deployment models and the AI leaderboard based on spending momentum and presence in the market. Historical trends in the music industry:https://open.lib.umn.edu/mediaandculture/chapter/6-4-current-popular-trends-in-the-music-industry/#:~:text=The%20Big%20Four%20control%20over,current%20distribution%20of%20market%20share.&text=Four%20major%20music%20labels%20control,the%20U.S.%20recording%20music%20industry.Current trends in the music industry:https://musicandcopyright.wordpress.com/2023/04/25/recorded-music-market-share-gains-for-sme-and-the-indies-publishing-share-growth-for-umpg-and-wcm/IDC sponsored content on AI w/ some market data:https://content.dataiku.com/idc-infobrief-2023

Ryan Blue, co-creator of Apache Iceberg and co-founder & CEO of Tabular, discusses the concept of the sixth data platform and the evolution of modern data platforms. They explore challenges in integrating databases, the impact of open data, and transitioning to a data-centric world.

This podcast explores the effects of higher interest rates on technology spending in enterprises and discusses revised budget expectations for 2023. It analyzes the impact of Fed actions on tech spending and the outlook for IT budgets, highlighting the challenges of AI adoption. The limitations of sharing information during ETR's quiet period and the slow adoption process of Gen AI due to privacy and compliance concerns are also discussed.

theCUBE host Dave Vellante is joined by George Gilbert and Bob Muglia for this weeks Breaking Analysis

George Kurtz is pumped up…and why not? CrowdStrike’s business appears to be on a fast track and entering a new phase of growth, despite the difficult macro and elongated sales cycles. The company’s products are considered best in class, its business is growing steadily and an improved profitability and cash flow outlook had investors excited, at least up until this week. A still challenging environment and a rich 13X revenue multiple perhaps led to some profit taking, but Gen AI could be the next catalyst for the company. In the race to close the SecOps staffing gap, CrowdStrike has what appears to be a strong play with a natural language-based intelligent assistant known as Charlotte AI. In this Breaking Analysis we update our scenario on security leader CrowdStrike. We’ll review the company’s recent progress, share survey data that shows where it is strong and where there may be icebergs ahead. And we’ll preview Fal.Con 2023 which takes place next week in Las Vegas. 

UiPath’s recent earnings beat and raise provides some evidence that thus far, Gen AI has not been diluitive for the company. As an early leader that is transforming beyond RPA toward end-to-end enterprise automation, UiPath, like all automation providers, has always faced adoption headwinds beyond isolated deployments. In this sense, Gen AI should bolster adoption and be a positive force. The flip side is that widely available tools like chatbots and generalized foundation models could eat away at the low end of the automation TAM, highlighting the urgency for companies like UiPath to move up market and accelerate innovation that brings differentiation from commoditized tools; and, importantly, create distance from embedded AI within mainstream enterprise SaaS platforms like Slack GPT and Salesforce Einstein. In this Breaking Analysis we briefly review the recent earnings print from UiPath. We’ll look at ETR survey data that shows Microsoft Power Automate’s impact on the automation market and how it is forcing UiPath to target larger accounts with a more functional product set. As well we’ll look at the impact that AI is having in these larger accounts and test UiPath management assertions that Gen AI will be a tailwind for the company. Q2 ‘24 $PATH Earnings Transcripthttps://seekingalpha.com/article/4633537-uipath-inc-path-q2-2024-earnings-call-transcript?feed_item_type=news&utm_medium=referral&utm_source=msn.comGartner MQ for Robotic Process Automation https://www.gartner.com/doc/reprints?id=1-2EDXTGOY&ct=230705&st=sbBarron’s article frames the quarter and the AI debatehttps://www.barrons.com/articles/uipath-stock-earnings-artificial-intelligence-cfde9bcbAutomation Anywhere survey on GenAI adoption in automation use caseshttps://www.prnewswire.com/news-releases/generative-ai-emerges-as-essential-tool-for-successful-process-automation-automation-anywhere-survey-finds-301895896.htmlMotley Fool Bull/Bear case for UiPathhttps://www.fool.com/investing/2023/09/07/uipath-stock-bear-vs-bull/Power Laws have more power than you thinkhttps://every.to/p/power-laws-have-more-power-than-you-think

Google's strong leadership position in data and AI showcased at Cloud Next. Contrasting Google's solutions-focused strategy with AWS's disjointed services. Google's expanded ecosystem encourages global use of its kit. Google betting on AI as a catalyst to its cloud future. Discussion on Google's position in the AI cloud market and spending profile. Exploration of duet AI in low code development and BigQuery acceleration. Google emerging as the preferred platform for tech-centric companies. Transition from building cloud apps to building intelligent cloud data apps.