Latest / Uphoff on Media Podcast / Enterprise Software is at a Crossroads

Transcript

Enterprise Software is at a Crossroads · Uphoff on Media Podcast

• 0:02
  SPEAKER_00: Enterprise software is at a crossroads.
• 0:05
  SPEAKER_00: Buyers want outcomes.
• 0:06
  SPEAKER_00: Vendors are still selling access.
• 0:09
  SPEAKER_00: Agentic AI just ran out of patience for the gap between them.
• 0:13
  SPEAKER_00: Uphoff on Media by Tony Uphoff.
• 0:18
  I spent two days this week at the AI Agent and Co-Pilot Summit
• 0:23
  in La Jolla,
• 0:24
  California.
• 0:25
  What made this summit a genuinely useful window into the state
• 0:28
  of Agentic AI was
• 0:29
  SPEAKER_00: who's in the room.
• 0:31
  SPEAKER_00: The event is built around four pillars of the AI business ecosystem.
• 0:35
  SPEAKER_00: Microsoft is the central builder of AI platforms and tools,
• 0:39
  SPEAKER_00: partners bringing those solutions to market,
• 0:42
  SPEAKER_00: enterprise buyers actively investing in AI to modernize their businesses,
• 0:47
  SPEAKER_00: and the practitioners and users putting these systems to work every day.
• 0:51
  SPEAKER_00: The cross-section,
• 0:52
  SPEAKER_00: platform,
• 0:53
  SPEAKER_00: partner,
• 0:53
  SPEAKER_00: buyer,
• 0:54
  SPEAKER_00: and user all in the same room at the same time is rarer than it sounds.
• 0:58
  SPEAKER_00: Most conferences optimize for one audience.
• 1:01
  SPEAKER_00: This one brought the full stack together,
• 1:03
  SPEAKER_00: which meant the conversations had real stakes and real friction,
• 1:06
  SPEAKER_00: not a vendor roadshow,
• 1:08
  SPEAKER_00: not an analyst briefing,
• 1:09
  SPEAKER_00: a working session across every layer of the people actually building,
• 1:13
  SPEAKER_00: selling,
• 1:14
  SPEAKER_00: buying,
• 1:14
  SPEAKER_00: and running agentic AI and production.
• 1:17
  SPEAKER_00: Real companies, real deployments, real results.
• 1:20
  Companies like Paragon Films,
• 1:22
  WB Mason,
• 1:22
  Matter Hospital,
• 1:24
  Lindsay Corporation,
• 1:25
  Vixo,
• 1:26
  dozens more.
• 1:28
  SPEAKER_00: Which is exactly what made one moment stand out.
• 1:31
  SPEAKER_00: During a session on AI transformation,
• 1:34
  SPEAKER_00: a Microsoft executive turned to a partner on stage and asked directly,
• 1:38
  SPEAKER_00: do you see yourself shifting from selling software to selling outcomes?
• 1:43
  SPEAKER_00: I watched what happened next.
• 1:45
  The partner,
• 1:46
  very experienced,
• 1:47
  smart,
• 1:47
  well-prepared,
• 1:48
  gave an answer that sounded like an answer.
• 1:50
  SPEAKER_00: They described their current model,
• 1:52
  SPEAKER_00: talked about value delivery,
• 1:54
  SPEAKER_00: outlined the roadmap,
• 1:55
  SPEAKER_00: but never actually answered the question.
• 1:58
  SPEAKER_00: They described what they sell, not what they delivered.
• 2:01
  SPEAKER_00: It was a small moment on a La Jolla stage,
• 2:03
  but it captured exactly the crossroads that enterprise vendors
• 2:08
  and their customers
• 2:09
  SPEAKER_00: are now navigating in real time.
• 2:11
  SPEAKER_00: What makes that moment worth writing about is the backdrop.
• 2:14
  The market has been pricing in this question for months and it
• 2:17
  hasn't been pretty.
• 2:19
  SPEAKER_00: Salesforce is down roughly 40% from its 52-week high.
• 2:23
  SPEAKER_00: Workday off 40% or more.
• 2:25
  SPEAKER_00: ServiceNow,
• 2:26
  which has beaten earnings nine consecutive quarters and is
• 2:29
  still growing at 21%,
• 2:31
  SPEAKER_00: down approximately 50% from its highs.
• 2:34
  SPEAKER_00: Adobe off 35%.
• 2:36
  SPEAKER_00: The iShares software ETF down more than 22% year-to-date.
• 2:41
  Close to $1 trillion in enterprise software market value erased
• 2:45
  since mid-2025.
• 2:47
  SPEAKER_00: These companies aren't being punished for weak execution.
• 2:49
  SPEAKER_00: Heck, Salesforce just reported $41.5 billion in revenue.
• 2:54
  SPEAKER_00: The market is repricing their future.
• 2:56
  SPEAKER_00: Specifically,
• 2:57
  what happens to per-seat subscription businesses when AI agents
• 3:02
  start doing the
• 3:02
  SPEAKER_00: work of the humans who are paying for those seats?
• 3:06
  SPEAKER_00: It's not a valuation correction.
• 3:08
  SPEAKER_00: That's a business model verdict.
• 3:10
  And the people building and deploying in this room are the ones
• 3:12
  delivering it.
• 3:14
  SPEAKER_00: What the summit actually showed.
• 3:16
  The depth and breadth of the sessions across the three days was
• 3:19
  instructive in ways
• 3:20
  SPEAKER_00: that went beyond any single moment.
• 3:22
  SPEAKER_00: For business leaders looking to harness agentic AI,
• 3:25
  SPEAKER_00: not just evaluate it,
• 3:26
  SPEAKER_00: five things stood out as actionable takeaways.
• 3:30
  SPEAKER_00: Number one, humans as orchestrators.
• 3:33
  Vixo's COO and CTO presented one of the more compelling
• 3:36
  frameworks of the summit.
• 3:37
  SPEAKER_00: Humans are becoming orchestrators of agents, not operators of software.
• 3:42
  SPEAKER_00: The implication is significant.
• 3:43
  SPEAKER_00: Your workforce isn't being replaced.
• 3:45
  SPEAKER_00: It's being repositioned.
• 3:47
  The skill shift is from doing the work to directing the agents
• 3:51
  that do the work.
• 3:52
  SPEAKER_00: That's a talent strategy,
• 3:54
  SPEAKER_00: a training strategy,
• 3:55
  SPEAKER_00: and a change management challenge all rolled into one.
• 3:58
  SPEAKER_00: Number two, the ROI window is compressing.
• 4:01
  Multiple sessions made clear that tolerance for multi-year AI
• 4:05
  transformation
• 4:05
  SPEAKER_00: timelines is evaporating.
• 4:07
  SPEAKER_00: Enterprise customers aren't buying vision anymore.
• 4:10
  SPEAKER_00: They're buying outcomes they can measure inside a quarter.
• 4:13
  One session was provocatively titled Launching Quick AI Wins to
• 4:17
  Deliver ROI in 90
• 4:18
  SPEAKER_00: Days,
• 4:19
  SPEAKER_00: and the room was packed.
• 4:22
  SPEAKER_00: Number three, data, is the actual moat.
• 4:24
  Across the Azure AI Foundry data and fabric and ERP tracks,
• 4:29
  one thing was consistent.
• 4:31
  The organizations winning with the Gentic AI are the ones with
• 4:34
  clean,
• 4:34
  connected data.
• 4:36
  The session on WB Basin's transformation with Microsoft and BDO
• 4:40
  made clear that a
• 4:41
  SPEAKER_00: Gentic transformation isn't primarily a technology problem,
• 4:44
  SPEAKER_00: it's a data readiness problem that technology then solves.
• 4:49
  SPEAKER_00: Number four, governance is not optional.
• 4:51
  An entire track was dedicated to governance,
• 4:54
  security,
• 4:54
  and agent lifecycle management.
• 4:56
  SPEAKER_00: The organizations moving fastest aren't ignoring guardrails.
• 5:00
  SPEAKER_00: They're the ones who built governance into the architecture from day one.
• 5:04
  SPEAKER_00: From chaos to control and the agent PMO weren't peripheral sessions.
• 5:08
  SPEAKER_00: The rooms were full.
• 5:10
  SPEAKER_00: And number five, rescaling.
• 5:13
  SPEAKER_00: is the unasked question.
• 5:15
  The re-skilling for human relevance panel may have been the
• 5:18
  most important
• 5:18
  SPEAKER_00: conversation of the summit.
• 5:20
  Agentic AI doesn't eliminate human judgment,
• 5:22
  it changes where and how it's applied.
• 5:25
  The organizations that figured this out first will have a
• 5:27
  durable advantage over
• 5:29
  SPEAKER_00: those still debating whether AI is a threat.
• 5:33
  SPEAKER_00: The two timelines running in peril.
• 5:36
  SPEAKER_00: Here's the nuance that business leaders need to hold simultaneously.
• 5:40
  Agentec AI is both accelerating the pressure toward
• 5:43
  outcome-based models and
• 5:45
  SPEAKER_00: complicating the path to get there.
• 5:48
  SPEAKER_00: Accelerating.
• 5:49
  SPEAKER_00: When an agent autonomously completes a workflow end-to-end,
• 5:52
  SPEAKER_00: resolves the ticket,
• 5:53
  SPEAKER_00: closes the loop,
• 5:53
  SPEAKER_00: processes the transaction,
• 5:55
  SPEAKER_00: the value is no longer abstract.
• 5:57
  SPEAKER_00: You can see it, measure it, and price it.
• 6:00
  The logical unit of value shifts from the user with access to
• 6:04
  the outcome delivered.
• 6:05
  That logic is clean and it's coming regardless of what any
• 6:09
  vendor decides.
• 6:12
  SPEAKER_00: Complicating,
• 6:13
  defining outcome across complex multi-system enterprise
• 6:18
  environments is really
• 6:20
  SPEAKER_00: tough.
• 6:20
  Who owns the result when three agents from three vendors
• 6:23
  contributed to it?
• 6:24
  SPEAKER_00: The closing session of the summit,
• 6:26
  a UCSD professor presenting what often goes wrong in AI
• 6:30
  implementation was a
• 6:32
  SPEAKER_00: reminder that the gap between demo and deployment is still very wide.
• 6:36
  SPEAKER_00: The shift is happening.
• 6:37
  The question remains is who owns the definition of success and
• 6:42
  who gets to price it?
• 6:44
  SPEAKER_00: What I'm taking away,
• 6:45
  the Microsoft executive who asked that question on stage wasn't
• 6:48
  trying to corner
• 6:48
  SPEAKER_00: anyone.
• 6:49
  I think it was a genuine question for a platform vendor trying
• 6:52
  to understand how
• 6:53
  SPEAKER_00: far their partner ecosystem has actually moved in their thinking.
• 6:57
  SPEAKER_00: The answer they got was the answer most of the industry gives right now.
• 7:00
  SPEAKER_00: Careful, competent, and constructed to protect the current model.
• 7:04
  SPEAKER_00: The practitioners in this room,
• 7:05
  SPEAKER_00: the CIOs from manufacturing companies,
• 7:08
  SPEAKER_00: the COOs running field service operations,
• 7:12
  SPEAKER_00: the IT leaders deploying agents into healthcare workflows,
• 7:15
  SPEAKER_00: they're not waiting for vendors to answer the outcome question.
• 7:18
  They're building the answer themselves,
• 7:20
  one production deployment at a time.
• 7:22
  SPEAKER_00: That's the shift.
• 7:23
  SPEAKER_00: And this summit was a live look at it in motion.
• 7:28
  SPEAKER_00: What are you seeing in your organization?
• 7:29
  Are your technology partners answering the outcome question,
• 7:32
  describing their business model?
• 7:34
  SPEAKER_00: Hit reply and let me know.
• 7:36
  SPEAKER_00: If you weren't at the summit this year,
• 7:38
  SPEAKER_00: it's worth putting this one on your calendar for next year.
• 7:41
  Thanks for listening,
• 7:43
  and please take the time to subscribe to Upoff on Media on
• 7:47
  Substack.