Constellation Research analysts outlined emerging trends for the second half of 2024 at ARX 2024. Here's a look at the themes that were surfaced.
Constellation Research CEO Ray Wang outlined the following macro economic backdrop influencing enterprise technology buying decisions.
- Business decisions are on hold due to the election cycle, interest rates and the need to push for exponential efficiency.
- Companies are wrestling with AI arbitrage and when it makes sense to insert humans into automated processes.
- Vendors will need to enable either 10x growth improvement for enterprises or be able to deliver at 1/10th of the cost. "You'll have to be either better or cheaper," said Wang. As a result, there will be some interesting duels between vendors trying to preserve margins and those enabling margin compression and value.
Themes to watch across the Constellation Research coverage areas.
Growth operations are becoming critical to AI strategies. Constellation Research analyst Martin Schneider said sales automation, revenue operations and customer success teams are converging into a growth ops org. AI is breaking down silos between those teams and there's a need for enterprises to forge a holistic strategy for growth operations. "Chief growth officers will emerge to drive holistic strategy," said Schneider. Chief growth officers will be more than chief revenue officers and sales leaders. There will be a more holistic view.
Cybersecurity will be about resilience and response instead of prevention, said Constellation Research analyst Chirag Mehta. The cybersecurity stories and best practices that emerge will revolve around how enterprises bounce back from data breaches. You're not going to avoid them.
Infinite computing and AI will enable new opportunities. Constellation Research analyst Holger Mueller said that infinite computing has become a reality now and genAI is democratizing data and making sense of it. Data contained in documents and transactional systems will enable new processes and expand what enterprises can do. "We'll move from infinite computing to infinite deep learning and automation," said Mueller.
The intersection between CX and AI is going to surface a host of issues including data droughts, personalization and a bunch of trust concerns, said Constellation Research analyst Liz Miller. Privacy regulation will also be a big issue as AI and CX converge. "CX will be a proving ground for AI and where the business meets the customer," said Miller.
There's a buy vs. build debate emerging around generative AI. As genAI is operationalized, enterprises are focusing on industry use cases and verticalization. It's currently unclear whether vendors will be able to go vertical or whether enterprises will build. The other wrinkle to ponder is vendor pricing models as generative AI goes vertical, according to Constellation Research analyst Andy Thurai, who noted value-based and usage pricing will be in the mix.
Data platform vendors have invested heavily in AI and they can't pull back even though they're not necessarily seeing a payoff, said Constellation Research Doug Henschen. "Vendors are way ahead of what customers are doing," said Henschen.
Open vs. closed models. As enterprises develop their data and AI strategies one key debate will revolve around open-source large language models and proprietary offerings. If AI is to be democratized, the industry has to move toward an open system.
