Cloud Wars Live with Bob Evans

In today's Cloud Wars Minute, I examine three signs that ServiceNow is positioning itself to become a cybersecurity powerhouse.

Highlights

00:02 — We've recently seen ServiceNow position itself as a security powerhouse, and I wonder if that is ultimately the grand plan, the grand vision of CEO Bill McDermott. We've heard and seen ServiceNow sort of evolve its overall position. It's tinkered around with the Control Tower platform and so on. We've seen it now centered on this AI Control Tower for business reinvention.

00:50 — So, on July 22, it had its Q2 earnings call, and McDermott's opening remarks were heavily, heavily focused on their fast-growing security business. He said it's the fastest-growing major security vendor in the world. He said it's now the eighth largest. He talked about how quickly that part of ServiceNow's business is growing, and he used some very colorful examples of why this is so important.

01:34 — A couple weeks after that, on August 3, ServiceNow named a new chief marketing officer. That chief marketing officer held the same position, CMO, at Armis, a cybersecurity company that ServiceNow has just acquired. So, of all the people, you know, who might be more involved in platform reinvention, McDermott chose as the company's new CMO somebody who was specializing, at the time of the acquisition, in cybersecurity.

03:41 — This AI Control Tower for business reinvention is very nice, and I think it sounds good. I think it's temporary. I think the cybersecurity place is where they're going to go to. And again, I just track that right back to the July 22 Q2 earnings call. Of all the things in the world Bill McDermott could have chosen to talk about, he could have gone into great detail about the AI Control Tower.

04:39 — I would expect that ServiceNow is going to try to straddle those two areas, AI Control Tower and cybersecurity, saying they're really two sides of the same coin. But I think for customers, it's going to provide a lot of clarity about where the company is headed, where they're going, and how they'll be able to build out unique capabilities across industries.

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Highlights

00:02 — Workday last week reported its Q2 results. They came in pretty strong, and I think if we look at the tenor of some of the comments that co-founder and CEO Aneel Bhusri made on the Q2 earnings call last week, we'll see that he's generally pretty low-key. But he's quite bullish now about what's going on with the early momentum Workday is gaining from its AI products.

00:49 — First, quick overview of some key Q2 numbers. Subscription revenue was up 13.9% to $2.47 billion. Its current RPO was up 14.2% to just over $9 billion. And for all of fiscal '27, which will end January 31, its guidance now says that the company expects to grow 13% to about $9.945 billion.

01:54 — AI tools drove more than $100 million in annual contract value in Q2. Workday is very excited about that and believes that that shows good evidence of the uptake from customers and the rising demand for these AI solutions. Also, the AI run rate for AI SKUs, as Workday calls it, across the company is now almost $600 million, and it said that's up 200%.

02:55 — And then what I'm calling the power of enterprise context. Bhusri said said, "We're an enterprise context company." And he said that context — who reports to whom, who pays the bills, where different people are organized, and so on — all those little sort of unstructured things that go on within corporations. Workday has it.

03:35 — So, it has been six months now since Aneel Bhusri returned to Workday as CEO. He felt that with the rise of AI, the AI revolution, that it was time Workday needed to have a deep technologist in the CEO spot, leading the company through this tumultuous change. So, he's increased the pace of technology innovation. He has got the growth rate moving back upward.

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In today's Cloud Wars Minute, I break down Microsoft’s evolving AI consumption strategy and how it compares with Salesforce, UiPath, and other major industry players.

Highlights

00:19 — Microsoft just announced the GitHub Copilot harness for Copilot Studio — a really cool new capability that enables an agentic reasoning loop.

00:33 — As part of this release, it said that on September 1, it's going to start charging for consumption on the GitHub Copilot harness specifically. This is an interesting move for Microsoft because 90% of Fortune 500 organizations have actually given developers a way to be able to explore their curiosity and consume this technology

01:12 — To compare and contrast in this space, Microsoft on the GitHub Copilot harness is giving $0, if you use the Copilot Studio standard harness, there's actually free allocation for developers to go play with this. Now, if we compare this to other players in the industry, such as Salesforce, which Agentforce provides 200,000 Flex Credits to be able to come in.

02:05 — What I would tell you is that I'm expecting that this is going to not necessarily be something that will be able to continue in a market where there's a lot of demand. Just to give you perspective, when GitHub Copilot was doing this before, it took about seven weeks for them to realize that there was a problem with this, and they corrected it.

02:50 — This is lining up to Satya Nadella back on July 29th, saying that it's evolving its business model to go beyond per-seat licenses and are leaning into consumption. So, we will continue to see these types of things, and I expect to see other growing pains like this for all vendors as consumption starts to become the new metric.

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In today's Cloud Wars Minute, I look at how Google Cloud is expanding the Gemini ecosystem into the automotive world through its partnership with Mahindra.

Highlights

00:03 — Google Cloud is partnering with the Indian automobile manufacturer Mahindra to get Gemini Enterprise installed directly into its vehicles. That's another interesting example that we're seeing here of AI leaping out of the digital space and becoming something much more physical.

00:23 — In this new development, the automotive agent in Gemini Enterprise is being integrated into MAIA, Mahindra's Artificial Intelligence Architecture platform. Beyond being a voice assistant, Gemini can understand natural language requests and actually interact with a car and its functions.

00:41 — Sashi Sreedharan, Managing Director of Google Cloud India, explained that "by enhancing its in-vehicle assistant with an automotive agent built on Gemini Enterprise, Mahindra is creating personalized and helpful conversational interactions for navigation, search, media communication, and other vehicle controls that will help drivers navigate and explore rich features in a more natural and helpful way."

01:13 — What we're seeing here is pretty significant: AI operating at the edge, with this idea of the digital and physical working together, and the car becoming the AI endpoint. This is also a really important way for Google Cloud to expand the Gemini ecosystem beyond smartphones, PCs, and enterprise software.

01:37 — The real opportunity that I see here isn't necessarily about Gemini as an AI assistant, but where the tech is embedded; it's those all-important endpoints.

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