Eric Müller of Work & Co meets with “TBR Talks” host Patrick Heffernan to discuss security in the AI age, the importance of curiosity and creativity, and advice for the upcoming generation of talent from his perspective as a seasoned industry professional.

Eric Müller is an Associate Director of Product Engineering at Work & Co, part of Accenture Song. With over 20 years of experience spanning banking, social media, B2B, retail, fashion, and online gaming, he brings deep expertise in both engineering and digital security. Before joining Work & Co, Eric served as VP of Engineering and CISO at Presence, and held key roles at Wells Fargo, Charles Schwab, Razorfish, and Mekanism. He has led award-winning digital initiatives for major brands including Microsoft, Samsung, eBay, and DKNY. Eric is known for his empathetic leadership style and transparent communication, which foster resilient, high-performing teams that deliver without burnout. He also champions strong agency–client collaboration, involving partners early and often to build trust and create better outcomes. Outside of work, Eric is an amateur photographer, baking enthusiast, and passionate advocate for digital security. 

Episode highlights:

• The slow ROI of AI

• Compliance and security in the age of AI

• AI impact on developers

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Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

AI: A Generational Perspective

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about AI and generational trends in technology with Eric Müller, Product Engineering Associate Director at Work & Co, part of Accenture Song. 

Photography and architecture to technology

All right, we’ll jump in. So, Eric, thank you very much for joining TBR Talks. Really appreciate it, and looking forward to this chat so much. Why don’t you just give us a sense, not only what you’re doing now, but your background. What brought you to the point that you are right now in your career?

Eric Müller, Product Engineering Associate Director at Work & Co: Yeah, absolutely. Thank you for having me, by the way. I’ve been doing this for a while, and my background actually was not in computers. I started off, well let me take a step back, you know, I did get involved with computers as a kid, as a teenager. My dad had built a computer that my mom was basically using as an overpowered word processor for her doctoral dissertation. And of course, I started playing with it and I guess we’re lucky I didn’t destroy her dissertation. And, you know, when I got to college, this was in the 80s. I wasn’t really sure what I wanted to do, I studied photography for a little bit, I studied architecture for a little bit. I ended up working at Wells Fargo Bank, but I fell back into technology, the love was there, I missed it. And the timing was, you know, I was very lucky. It was the late 80s, and the internet was sort of like this nascent thing. And by the early 1990s, of course, the web was blowing up. 

And so, while I was at Wells Fargo, I became a developer there, started doing some web work, started contracting and bouncing around between agencies. So, I was a consultant, I worked for companies like, you know, Charles Schwab, Wells Fargo, did a brief stint at Netscape. And, you know, along the way, I just kind of kept building up these development skills and really kind of fell in love with the agency space. I think the fact that I enjoyed photography and architecture earlier in my life, and I still do photography as my primary hobby, really kind of informed where I wanted to move with technology. So, I ended up at Razorfish for a while, Edelman for a little bit, and about 13 years ago landed at a company called Presence. So, I ended up being the Head of Technology and our CISO. What we did is we partnered with design companies to build out, you know, what they had been working on, their designs. I always like to say that we realize people’s dreams as a technologist. And so along the way, Presence was acquired by Work & Co, a great design firm, strategy, technology, product development, who was also ultimately acquired by Accenture, although we are still an independent brand. And that’s how I got to where I am today.

Being curious and continuing to take on new challenges

Patrick: It’s fascinating. So, you’ve had the opportunity to work in so many different organizations, different structures within the technology space. So, I think of an agency, I think of an Accenture, I think of a bank as being just organizationally, functionally so different. Was there a certain appeal to someplace like Razorfish where it was an agency?

Eric: Yeah, you know, it’s interesting. When I look back, there are two things. One is obviously the ability to be creative. And so, I’m building stuff out, but while I’m doing that, or my team is building this stuff out, we’re also working with the creative team, and so there’s a lot of back and forth, and we bring our understanding of user experience and design as technologists and as end users to those conversations, and I’ve always worked in places that appreciated that kind of feedback. And the other thing that I really like about agencies, and I do include a company like Accenture in that, is that we are exposed to different things all the time, right? So, I have an opportunity to work with, you know, over my career, I’ve worked with small startups, I’ve worked with Fortune 100 companies. I’ve worked on hardware, software, mobile experiences, and, you know, I might work on a project for a year or two and it’s wonderful because I’m learning about new technology. I’m learning about a new business. And I dive in very deep into that space. And so, it’s just this constant, it’s like I have a new job every couple of years, but I’m not changing my employer, right? And so, working in places that appreciate that and give me that space, it’s been just incredibly fulfilling.

Patrick: And I would say in all of our research, I think a lot of the folks I speak with who enjoy what they do and they’re still with the same company are often the ones that describe exactly what- have the same experience you had, which is every couple of years they bounce around to something new, something challenging. It’s like- it’s maybe the best way to keep the best talent is to continually give them something new to do and make them challenge themselves to do it well.

Eric: Yeah, and you know, all of the companies I’ve worked at, and I think, you know, I think about Presence and Work & Co in particular, my last, you know, two companies, they really encourage learning, right? I think companies that are successful recognize that no matter how experienced a person is, that there’s always something new to learn, and they encourage that exploration. I didn’t start off in security, as an example, but when I got the Presence, you know, I realized that we had a need with our clients to really understand the security space. And so, although I’d done a little bit of work with that when I was at Charles Schwab and at Razorfish, I really dove in deep at presence, became our CISO, we got our SOC 2 compliance, and then I started consulting with our clients to help them get their SOC 2s or their ISO 27001s. And then that’s been very helpful when AI became the thing, right? And I’m talking not, you know, not just classic machine learning or data analytics but, you know, LLMs that people are talking about now. There’s a lot to learn there, and being able to go into a new field or a new technology and have that curiosity, I think, has really benefited me.

Patrick: Yeah. And you bring not only the curiosity, but also the experience. I mean, you mentioned Netscape earlier, not a whole lot of people that are, you know, that are mid-career right now would remember that, ’cause, you know, I’ll confess, Eric, you and I are both older here, but I think that experience too is important to have grown up at the early ages of technology in this sense.

Eric: Yeah, absolutely, and I find it fascinating that people talk about, I’ll lean into the age thing. You know, people talk about digital natives, and I think people miss the fact that a lot of folks our age, we actually grew up, like we were the first generation to have video games. We were the first generations to start using computers at work and we had to dive in and understand it. It wasn’t like an iPhone or an iPad, we had to really understand the operating systems.

Patrick: Right, and had to understand the change that came with being able to adopt a technology. 

The slow ROI of AI

And actually, that’s a good segue into AI. I wanted to talk about AI a little bit, in part because sort of everybody talks about AI all the time now. It’s the biggest topic. But there’s a couple questions that sort of- that kind of come to mind, particularly knowing your background, knowing what you’re doing now, and especially your background on the agency and the consulting side. There has been a ton of investment in AI, and there’s lots of really cool stories about enterprises adopting this or that, you know, particular piece of AI, particular solution. And there’s a lot of revenue for consultancies, but there hasn’t been that much ROI for the enterprises. In your opinion, and again, this gets back to your experience, your long experience in technology. Is it surprising that there hasn’t been that return on investment right away with AI? Should we have expected it to be slow? Should we have expected faster adoption? I’m just curious, like you’re thinking around all the money that’s being poured in, not a lot of ROI coming out. Does that make sense? Or did we sort of, was the expectation that adoption would be faster and ROI would be quicker, was that just a missed expectation?

Eric: You know, it’s interesting because I, yeah, I’m not that surprised. I think that with any new technology, people need to figure out how to use it. And then- so that can take a little bit of time. I think it’s unfortunate that we are spending so much money on it. I don’t think we need all these companies dumping that much money into this space. And I think there’s some missed opportunities because of that. And I think that there are some really strong use cases that I’ve seen. I mean, full disclosure, I will use an LLM when I’m writing some scripts, right? I’m not a full-time programmer anymore, but I still want to automate some stuff. So, I’ll go ahead and I’ll open up an LLM, and I’ll use it to crank out some Python scripts. And I know some great developers who are using it as a very powerful tool that accelerates their process. I know some folks who use it, I think it can be a very powerful tool if you’re, I don’t know, having to do a little bit of writing. It can be a tool to kind of support that effort. I think the problem is, is that people, for some folks, they think of it as not a tool, but as a replacement, and I don’t think that will be successful in the long run. 

I think that, you know, creativity is a human endeavor, right? An LLM is not creative. It is derivative. It generates the synthetic content. I think that’s all powerful, I think that’s a useful tool, but true creativity, true intuition, that’s a human endeavor, and I don’t think that’s ever going to be replicated by a machine. And I think the idea that we can remove humans from this process is bound to fail. And so, I’m really bothered in this space because I feel like there’s some folks who feel like, you know, they’re on the hype train and they think these AI tools are gonna come along and if we’re not careful, we’re gonna get Skynet, we’re all gonna die, right? That’s not gonna happen. I don’t buy that for a second. I also, I’m really bummed out by people who sit down and say, these tools are worthless and you know, why are we bothering with them? I don’t think that’s true either. I think the middle ground is true, that they’re very powerful tools if they’re used properly and that’s all they are, they’re support. And we shouldn’t think of them as anything more than that.

Compliance and security in the age of AI

Patrick: Yeah, I love how you brought up creativity, because I think the two things that we look at when we say, okay, there will always need to be a human in the loop, to use a very overused phrase, but still it’s the two C’s: creativity and compliance. And I’m really interested in your thoughts on the compliance part of it, because when we think about how much AI can take over running a system, and now I’m thinking more agentic AI, but running within an enterprise and be able to remain compliant and be able to meet all the regulations. That’s all well and good, but at the end of the day, when something goes wrong and something always eventually does, you’re not going to sue the robot. You need to sue a human. You need to, you know, the legal action that comes in goes after a human being. So, with your experience in security, do you think that compliance is sort of always going to be certainly accelerated by and certainly assisted by agentic AI and AI broadly, but always going to have to have that human in the loop?

Eric: Yeah, absolutely. And it’s interesting, so my first pitch here is everyone should go and read the OWASP top 10 on AI. You know, that’s the Open Web Application Security Project, and they’ve always had this top 10, a list of security vulnerabilities for general web application development. And now they have one very focused on agentic AI, and so, I think it’s a wonderful place for people to look at. So, I think that AI tools, having said that, is both the cause and the cure for a lot of security problems. So, starting with secure space, I love, you know, the fact that we can use these tools and going beyond LLMs, right? Going back into classic machine learning, data analytics, sentiment analysis, all those kinds of things, right? They’re very, very powerful tools when you are, if you’re running a SOC as an example, right? And you have to deal with, you know, hundreds or thousands or tens of thousands or millions of potential alerts, right? Having an AI tool there looking for those patterns, those potential attacks against your space, it’s just amazing, right? It takes over or enhances human experience, right? So, it looks for these patterns, it looks for potential attacks, as an example, that can then be analyzed by a human, right? So, I think that’s an excellent example of how AI tools can be incredibly powerful support tools for us in the security space. 

On the other hand, I think that these AI tools, particularly the LLMs, have a lot of security vulnerabilities. So that’s the OWASP top 10. And like any other tool, we need to make sure they are secured. And I think, unfortunately, not enough companies, not enough people are thinking about the risks of, you know, as an example, giving an agent complete control over your local computer, right? 

Patrick: Right.

Eric: There is a massive risk there. What kind of data do you have on your computer? And do you know what that agent is truly doing? Is it exfiltrating data right now? You know, is it reading your emails? Is it pulling up your bank statements? And so, I think people need to be as skeptical of AI agents as they would be of a human, right? Would you ask a random person that you really haven’t vetted into your space and give them complete control over your GitHub, over your databases, the ability to deploy whatever they want into your AWS account? You wouldn’t do that with a human. Why would you do that with an agent? 

Patrick: Right, right. And that’s, I mean, that’s the whole, the trust factor that is just- every single time the hype cycle gears up into a new higher speed around AI, the trust factor goes in the other direction. People are just uncomfortable with exactly the way you just described it. Why would you hand over the keys to your IT environment, to an agent that you haven’t actually trusted, vetted, and ensure that it’s not going to do something harmful?

Eric: Yeah, absolutely. And again, it’s not like the tools should be ignored and they shouldn’t be used, far from it. It’s just we need to be very thoughtful about the way they’re being used.

Patrick: Yeah, yeah, totally agree. 

AI isn’t going to get rid of developers

I want to sort of take a step back and like you, again, I keep referring to how long you’ve been in the business, but I think it’s important because you’ve got that longevity, that longitudinal perspective. And I’m wondering if there’s been a change, a development in the technology space that you kind of expected that didn’t happen. I mean, flying cars is the one that everybody, you know, always taps into or mentions, but forget about flying cars for a minute, something more grounded, something that’s more like, maybe even just in the last year, things that haven’t developed the way you thought would happen, or maybe the opposite, like something like, okay, we’re a lot further along with this technology development than I thought we’d be in 2025.

Eric: That’s an interesting question. You know, a long time ago, I stopped making predictions. *laughs*

Patrick: *laughs*

Eric: That’s part of the problem. I, you know, I- gosh, I really don’t know. I mean, there’s so many of these, so many trends that have come and gone, right? I’m thinking about as long as I have been in this industry, there has always been this idea that we can get rid of developers, right? So, I’m thinking all the way back, remember when 4GL languages were kind of the thing that, you know, you could drag and drop components around and your application would work. And now “what do we need these developers for,” right? 

Patrick: Right.

Eric: It’s interesting. That is a trend that I have always been skeptical about. Maybe that’s the better way to describe it, I’ve always been skeptical of this idea that we can get rid of developers, that everything can be done through drag and drop or, you know, talking to an LLM, like vibe coding or whatever. 

Patrick: Right.

Eric: And so, I’m not surprised that people have not been able to eliminate the developers. I know I’m not answering your question, but that is one trend that I have been seeing for the last 30 years, is how do we get rid of technologists and it still hasn’t happened and I’m really skeptical that it’s ever going to happen.

Getting to the higher value tasks

Patrick: So, I think it’s really important the way you frame that because it’s easier to look at the things that didn’t happen that you thought they would or things that happened quicker than you thought they would. It’s a lot harder to think about all the different expectations and predictions that sort of have flatlined or have sort of not panned out despite all of the investment and effort that people have put into it. And, you know, I think about like, when we look at companies and they tell us that through automation, RPA, artificial intelligence, agentic AI, whatever, they’re going to have such productivity gains that their people are going to be able to do higher value tasks. I always ask the same thing, which is like, why aren’t those people doing those higher value tasks now? What is stopping you? Why are you not? And that has been a drumbeat for, I don’t know, a couple decades now, where the expectation is that the technology will allow for people to do higher value tasks. And yet, those higher value tasks remain elusive. And that’s not a, I mean, that’s not a trend so much as it’s just a constant that, curiously enough, has not been resolved. Maybe it will be. Maybe we’re on the cusp of that with agentic AI and all. We’ll see. We’ll see.

Eric: Well, I do think we are seeing a little bit of that. And in some ways, I think, you know, I’m being biased here from a technology standpoint, I think we have seen that over the years. In that, as we develop more higher-level languages, that it becomes easier in some ways for folks to kind of get their job done. They’re not worried about like memory management as the classic example, right? And so that allows them to focus more on functionality, and I think, what’s interesting to me with a lot of the agentic tools, particularly in the development space, is that you can offload a lot of the basic stuff, you know, setting frameworks, you know, maybe unit tests, you know, boilerplate code. You can offload that to these tools and then your developers can focus on the core of your business. Right. 

Patrick: Right.

Eric: So, I think that in a lot of ways, that’s kind of leaning into that where your developers- you’re getting more value out of your developers, not because they’re necessarily cranking more code. And I’m always bummed out when people sit down and say, you know, I forget who said this recently, but they’re like, I’m doing 10,000 lines of code a day, you know, using agentic AI. I’m like, whatever, who cares? What problems are you solving? What is your business doing? How is it growing? I don’t care about number of lines of code. I’m concerned about functionality. I’m concerned about user interfaces. I’m concerned about your core business. And if you’re offloading a ton of that boilerplate to the AI, now your developers are working on that higher level stuff. They’re focused on the core of your business, and they’re delivering that higher level value.

Patrick: And that gets exactly back to what you said at the very beginning, that you sort of were, I’m going to paraphrase this because I can’t remember exactly the way you said it, but something to the effect of you help people realize their technology dreams. And that’s- if you’re thinking about lines of code, you’re not thinking about dreams. If you’re not thinking- but if you are thinking about why is this good for the business, what’s the business value in bringing, then you’re actually beginning to realize what you’re trying to go after, right?

Eric: Right, right. I mean, it’s the classic line that developers use, which is the best line of code is the one you don’t write. And so, you know, focus- I’m going to repeat myself, but again, it’s like, offload the boilerplate, offload the drudge work, focus on the core business value, and you’re going to have a lot of, you’ll have a successful company, and you’re going to have a lot of happy technologists as well. They’re doing work that’s meaningful.

Patrick: Right, yeah, and that’s what we all want. 

Finding a passion outside of the workplace

A couple more questions, Eric, this has been really fantastic. I’ve enjoyed this conversation immensely. I do- I’m curious because you mentioned at the beginning that you studied architecture and photography and you still bring those perspectives with you to everything you’ve done in your career. Does that make you, have you ever thought sort of, all right, what would I be advising people in their, you know, early 20s or even late teens heading into college, what should they be studying if they want to have a career that’s similar to the one you’ve had? Or what should people study if they want to go into technology other than, of course, technology?

Eric: I’ve always felt, so obviously technology, but I’ve always felt that it’s important to have a passion outside of technology. You know, I’ve always hated the phrase, if you do something you love, you’ll never work a day in your life. And it’s like, no, that’s BS. The moment that you’re sitting down and your passion becomes the thing that you need to do to put food on the table and a roof over your head, you have a different relationship with it. Because you, you know, with a passion project, you can put it down for three months, who cares, right? You can’t do that with work. And so, I think it’s important to have something outside of your career that can re-energize you. Now, it can be related to technology, if you’re a technologist and you want to have a side project, do that. Absolutely do that. But you need to carve out the space for that. But it doesn’t have to be a side project in technology. You can be into photography. I’ve had friends who play an instrument. I know technologists who love to cook. And, you know, the interesting thing about all these things, particularly with cooking and baking is there’s still this geeky kind of component with it, right? 

Patrick: True. 

Eric: You know, guitar playing can have that, photography can have that. You can kind of see how these side creative passions still lean into, you know, mathematics or, you know, formulas or, you know, kind of doing things step by step. They’re very related and for me, photography, to make it very personal, that recharges my energy over the weekend. I go out, I take some pictures. I’m not writing code. I’m not thinking about technology per se, but I’m leaning into the stuff that made me fall in love with technology in the first place. So, I come back Monday morning, I’ve got the energy back. And so, I think for a junior developer, having that kind of weekend recharge tool or passion, I think is really, really important.

Patrick: Yeah, absolutely. I agree 100%. I’ve always believed you have to have a going to work life and a non-work life. You have to have those things that you love that are not what you’re doing every day at work. 

Change management for developers around agentic AI

I want to ask to bring it back to what you’re working on, speaking of work, what you’re working on right now. I’m just curious, to sort of frame up like what are, what’s something that you’re working on now with the company you’re with that sort of has, this might be a strange question, but kind of has you puzzled? And I mean that in a good way. Like it’s a thorny thing that you’re trying to figure out now. And I’ll give you an example. We’re looking at how AI is changing the labor pyramid within IT services companies and consultancies. So, like, how is AI going to change those 800,000 people and that pyramid? And we’re trying to figure out when AI changes the size of the average consulting team, maybe it just expands their capabilities and adds digital full-time employees, whatever. We thought we would see this change by now. We would see more obelisks and fewer pyramids, but we’re seeing the opposite. Companies are actually hiring. So, we’re sort of puzzled about why that’s happening. And I’m not asking you about that. I’m just saying, is there something you’re working on sort of day-to-day that has you kind of asking, why is this happening right now? What’s going on?

Eric: So, I can’t answer that. *laughs* This is probably one we’re gonna cut out, because for NDA reasons and all that, I just really don’t speak about what I’m doing right now.

Patrick: Oh yeah, all right, I understand. Yeah, that’s fine.

Eric: Yeah, looking at it, I can look at it from- I can speak philosophically around that. I think that it’s interesting to me from talking with folks in other companies, with some of my colleagues, that there’s this idea within technology that when we have a new technology that comes along in theory, people are going to lose their jobs, right? And we’ve seen that forever. You know, the classic is the, you know, the buggy whip manufacturer, right? 

Patrick: Yep.

Eric: And I think that in this space right now, from talking with other folks and from what I’ve read, you know, we’re learning that, you know, the dream was that, and I don’t think this is a good dream. Unfortunately, a lot of companies kind of felt like- here’s a great example. I had a friend who said that when all the agentic AI stuff came out, he’s talking to his board of directors and the board said, great, when can we fire all of our developers? Right. Like, there’s this idea that we can fire everyone and our profitability will go up and look at how smart we are. And a lot of companies did that. And then they learned, hey, hallucinations are never going to go away. Like, that’s how LLMs work. You need hallucinations, right? And LLMs can’t create something from scratch, right? They’re always derivative. And so, they kind of made those choices, they realized they made mistakes, and now they’re bringing people back. They need those senior folks back who understand their core business, who understand how to make these tools work. And that’s, I think, the adjustment that we’re seeing right now.

There’s also the cost, right? You know, the AI companies need to turn a profit, and they’re starting to change their price pressure. And so, companies are starting to sit down and look at it and go, you know, for the quality of the work that we’re getting, you know, do we keep dumping money into it? In some instances, absolutely, it makes sense. It’s a great tool that’s supporting them. In other instances, I think companies are kind of rethinking it. And I think we’re still in this space where folks are trying to figure out, one, for the AI companies, how do they turn a profit? And then I think, you know, how do they turn a profit and how do they price this at a level that is profitable? And then for the companies that are using those tools, it’s like, what is the proper use case for it? And what is the team that we need to surround to make it successful?

Patrick: Right, and that is the, well that’s the sweet spot for consultancies to talk about change management. But that is the biggest challenge, I think, going forward for enterprises is it’s not necessarily the adoption of the technology, it’s the adoption within the enterprise, within the organization, what it’s actually going to mean to the structure of the organization and achieving those actual business outcomes from AI, not just the promise, the actual outcome.

Eric: Yeah.

Skills to pursue 

Patrick: Yeah. All right, so I lied. I have one last- I’ll call it a last, last question, but it really, it’s just because I’m really, given your background in photography and architecture and that you still do photography, I have to ask this. So, and we were talking about, you just mentioned, like, when can we get rid of all the developers? We talk about AI replacing people in jobs, that running fear. But we also talk about sort of the importance of skills, of mastering something so good that AI could never replace you, right? So, and just thinking like about skills like that, is there any skill, if you could say, all right, I’m taking three months off of work, I’m just going to perfect this particular skill, like playing, you know, you mentioned your friends have played guitar or maybe speak 4 languages or even turn yourself invisible. What’s a skill that you would say, okay, I’m going to spend 3 months and I’m going to master this?

Eric: Well, it depends, right? So, are we talking about reality of AI?

Patrick: No, there’s no reason to stay within the realm of reality. We can be creative here.

Eric: Well, I ask that because, I mean, if the dream is that AI can do everyone’s job. And if that is true, then there’s no skill you can pick up. If AI can replace us, if it truly is capable of replacing us, then there’s no skill you can pick up that’s going to make you valuable in the future. They’re just isn’t. But I don’t think that’s reality. I think that the cost alone, you know, the energy cost, the compute cost, all of that would be just too high to replace everyone’s job. And so, I think it’s going to be a little rough while people are trying to figure out how we use these tools, how we incorporate them, like I said, how the companies become profitable. And so, I would say, continue to follow your passion. right? If you love technology, continue to do technology. If you love medicine, keep doing medicine. If you want to do the trades, right? If you want to be an electrician or a plumber, continue to do that. And I think this will all shake out. It is going to, unfortunately, it’s going to be kind of difficult. And we’re kind of seeing that some jobs are harder to fill right now because the perception is that AI is taking it over.

Patrick: Right.

Eric: But I just don’t think that’s sustainable. I just don’t think in the long term the costs are going to justify basically replacing every human being in every company. It’s just not going to happen.

Final thoughts

Patrick: Yeah. So, listen, we’ve touched on so much stuff here. I know you said you don’t make predictions anymore, but I would like to predict that we can get together in six months and have a second round of this discussion, and we could probably expand on a lot of the different topics that you brought up and the different trends that we’re seeing, and we just- you just mentioned energy that’s definitely something I think is going to be a constraint as we go forward around AI. So, I think that would be, I’d love to have this conversation again sometime in the spring, Eric, and talk about what we see that’s different now, six months from now.

Eric: Yeah, absolutely. I’d love to see how absolutely wrong I was. *laughs*

Patrick: *laughs* I’ve been wrong so many times and it doesn’t bother me at all anymore. So, Eric, thank you so much for coming on. This has been really fantastic. I appreciate your time. Appreciate your insights.

Eric: My pleasure. Thank you very much.

Patrick: Next week I’ll be speaking with Dan Demers about managing strategic alliances and ecosystem partnerships. Don’t forget to send us your key intelligence questions on business strategy, ecosystems, and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies, large and small, answer these questions with the research, data, and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us and see you next week.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

TBR Principal Analyst Boz Hristov joins “TBR Talks” to share his insights into how global systems integrators and management consultancies are partnering with ISVs, hyperscalers, model makers and OEMs to deliver solutions to enterprise.

Additionally, Patrick talks through industry specialization, permission to play, data management and transformation orchestration within the rapidly evolving AI marketplace.

Episode highlights:

• Three paths companies are taking with their AI strategy

• Change management for AI

• How to partner the right way

Listen and learn with TBR Talks!

Submit your Key Intelligence Questions for Patrick and his guests

Connect with Patrick on LinkedIn

Connect with Boz on LinkedIn

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

AI Delivery to Enterprise via Technology Alliances: Which Vendors Own Each Piece of the Transformation

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about artificial intelligence, the ecosystem, and professional services with Boz Hristov, Principal Analyst for TBR’s Digital Transformation Practice. 

Three paths companies are taking with their AI strategy

Boz, welcome back to season four of TBR Talks. I know, wow, it’s kind of crazy. I think you might be the most frequent guest on TBR Talks, we’ll have to go back and check the data on that. But a lot of that is because your work here at TBR spans across almost all practices because of the ecosystem research that you lead up, that is actually an outgrowth of the digital transformation research that you led. So that means that we have to have you on as often as we can, and so early on in season four, we wanted to talk about two things in particular. One is that ecosystem, and when we say ecosystem, we’re talking about the interplay, the relationships between IT services companies and consultancies, cloud vendors, software vendors, infrastructure vendors, OEMs, VARs, everybody. And that’s topic number one. And topic number two, because we can’t get away from it, is artificial intelligence, which just comes up all the time. 

And you know what, let’s start with, let’s start with artificial intelligence, because I was just in San Francisco a few weeks ago, and every single billboard on the highway, physical, hard copy billboard, was about AI, often agentic AI, but always AI. So I’m curious, it’s easy to sort of say there’s a bubble happening, and it’s easy to get caught up in some of the hype, but more importantly, because of the way we look at this and the way we come at it, thinking about companies first, what are some of the things that you’ve seen over the course of this year so far that are concrete, that are real, that are meaningful? And what do you think is coming in 2026?

Bozhidar Hristov, TBR Principal Analyst: Yeah, thank you for having me. Always good to be here and talk about what we see in the market and the companies we cover. AI, I mean, it’s definitely, I would say it’s a transition year, number one, so far what we’ve seen. Looking from 2022, kind of the hype, kind of everyone’s trying to understand where the investments are being placed and how it’s going to evolve. And there’s certainly a heightened expectation for ROI in 2026, but I’m sure we’re going to talk that about when 2026 comes around. What we’ve seen so far, it’s interesting just to think about the evolution of the AI market and the way GenAI started. And I would say fast forward, pivoted into the whole agentic AI notion, right? And what it means to the companies’ business models, we track how they interact with their alliance partners. So there certainly has been a lot more push around agentic and companies making a choice, either investing and building the pre-configured agents or staying in their swim lane and trying to be more into the agent orchestration game, agent management services game. And then the last group of vendors, which is often the consultancies, are trying to stay more in the upper echelon and trying to be little bit more of the business transformation discussion and trying to stay a little bit providing that wrapper for like the consulting led, the industry led. I mean, they all invest in some way, shape, or form in some certain capacities in their agentic AI capabilities, but largely more into the enhancing the consulting value proposition. So three camps of vendors, again, more on the business side, agent development side, investment side, and then the agent orchestration side, which I think is probably not surprising given the convergence of how the market has evolved and how some of the more bold companies, meaning they’re trying to test new operating models and new commercial models, are trying to go, especially in the agent development side. So that’s kind of, this is the big trend. 

So those agents, as it pertains to the development, let’s start with those. We’ve seen a lot more focus on agents that have industry flavor. We start first with the horizontal and functional specific agents, which is still the case like supply chain and customer experience and sales automation, we’re starting to see that industry specialization. We know often IT services companies talk about industry knowledge, industry specialization as a way to differentiate, which will be very interesting. Now it’s going to be really tested because agents essentially are very similar, because that’s the whole idea behind the AI’s leveling the knowledge field. So now the vendors that really have a deep industry knowledge and specialization will really have to come up and show and demonstrate that either by themselves or partner with specialized partners, could be in healthcare, financial services, telecom, you name it, right, specific vendors that play in that space. 

The agent orchestration side is kind of a continuation, I would say, in a way of how some of the IT services vendors and consultancies have tried to position themselves as ecosystem orchestrators, essentially, multiple technologies, trying to understand who is best positioned to serve a particular client need and how the role of and how the framework around multi-party alliances is starting to play. Now we’re talking about multi-agent setup, the different agent stacks that needs to be connected, certain protocols such as MCP and others that are coming up in the market that are being deployed. So what this goal boils down to is those vendors that are trying to position themselves as more of agent orchestrators is how well and how much permission they have access to of the data and the relationship with the line of business buyers as well as kind of the C-suite buyers that are often in charge of managing that client data because your agent is as good as your data access. So, getting that access and ensuring that data access is not just within the line of business, but it’s cross enterprise wide, it will be so critical. And obviously the last piece is the business transformation side, as I mentioned more on the consulting side.

Are industry specific agents a fad?

Patrick: Yeah, so I want to back up to the industry stuff, because the industry specialization and industry flavored or industry specific agents. So, we’ve been down this road before. Industry cloud was a thing, and then it wasn’t anymore. So, is anything different this time where agents are going to be different than a fad like industry cloud was?

Boz: I think the labeling of the agents is part of the fad part, personally. But I think it gets boiled down to how vendors are positioning them and how they are looking to charge for the capabilities that the industry agents are going to be addressing certain needs, essentially, right? So, it’s not just labeling an agent for agents’ sake being a financial services agent, what’s your value proposition? How do you ensure that, you know- is it the domain? So that domain knowledge, context engineering is becoming kind of the new “SKU” that’s the evolution from prompt engineering, right? 

Patrick: Right.

Boz: That’s the next wave of context engineering that we’re starting to see and hear how- and essentially what it is, in my view, is IT services companies enhancing their consultants’ value proposition being trained on the technology and the translation layer, so that- 

Patrick: Right.

Boz: Think of it that way, the industry specialization in 2026 will be equal or greater, you know, or will be more enhanced by, or kinda like the- I don’t even formalize the formula in my own head, but it’s essentially it’s the context engineering, so that the new industry consultants- 

Patrick: Right.

Boz: That’s the new way of thinking about it, so that’s where I think it is. It’s about how fast, how well can you translate what the agent is doing, because typically the agents is saving you time, so now you have more time to present a greater insight.

The data access challenge

Patrick: Right, okay, so that’s something to keep an eye on for 2026, like the context engineering and industry. 

With respect to data orchestration and ecosystem orchestration, that again, we can look back 10 years and say there were IT services companies and consultancies that were positioning themselves as orchestration layers 10 years ago. And if you had said 10 years ago that the data access problem is still going to be unsolved in 2025, even with the advent of incredible technologies like ChatGPT and GenAI and all that, you’d look like a fool, and yet that’s exactly where we are right now. So why is the data access challenge so persistent for IT services companies and consultancies?

Boz: I think it’s a two-fold thing. One is change management. That’s from the buyer’s side, right? So, line of business, leadership, anyone who understands, you know, that they may see it as a threat, potentially a threat. Now, why am I sharing my data with my peers’ data and, kind of, what does that mean to me? Is it going to be a consolidation and how- humans don’t like to lose control, especially when they’re in charge, you know, that, you know, trying to, they’re in that position because they are good at managing processes, or people or otherwise. So that’s a change management, it’s a factor. The other piece is the, I think, over the years, and I think it’s kind of with the first one, is the inability for vendors to demonstrate the scalable ROI. And that’s a challenge because, you know, vendors can argue and say, well, we didn’t have the right data to show the ROI because the buyers didn’t share the right data with us and the right amount of data. So, I think it’s kind of like a chicken and the egg kind of a problem in this case. I think we’re going to probably see a new wave of data re-architecture and focus on the data orchestration and governance as we’re thinking about how everyone that is looking into the bigger landscape, what it all means and companies that are being on the buyer’s side that are a little bit more further ahead in their “digital transformation” I mean, they’ve used cloud for years and they’ve, kind of, have set up their right data architecture to take the opportunity from agentic. They are going to be the ones with the test beds. But that’s probably less than 10% of the market right now, I would say. So it’s still a long way to go for a lot of opportunities, which generates for the IT services companies to still do a lot of that foundational work around data and kind of the way the restructuring and getting the structured and un-structured data being in the right position, the different data pools and how feeds and stacks up and- which again presents new opportunities for new alliance ecosystem partnerships because there’s a new- they’re not so somewhat new, but they’re kind of like more of important players, I guess, in the space, from the Snowflake and Databricks of the world, but now you’re looking at like the different model developers, the OpenAI, and all these kind of like, model developers. So, they are to be, look up and see how do they play in that whole data stack orchestration as well, because they’re great to provide the POC to start the conversation, but are they preparing themselves to be the right partners. And do we see the likes of Accenture, Deloitte, or anybody in the IT services stack partnering the right way with those companies? Are they training their staff on Anthropic technology or OpenAI practices the way we saw with the advent of hyperscalers and then the ISV providers. So, I think that’s where we’re going to see the back and forth between the various parts of the ecosystem, the push and pull relationship, understanding like who is ready to invest and how the technology partners are seeing the services partners, services companies. Do they see them as an opportunity to open doors for them? Or they may be saying, you know what, we can do it all by ourselves, why do we need you? So, there’s that conversation that I think we’re going to start seeing in the next year or three years, just as the market evolves, as those model companies become a little bit more important players. Not that they’re not important right now, but they’ll definitely need to be paid more attention to as we move forward.

Patrick: So, I want to get back to partnering the right way, because I think that’s both something we need to dive deep into, and it’s a perfect segue into the ecosystem discussion. 

Change management for AI

But before we leave this idea that you laid out sort of three different things. There’s the folks that are developing the agents, and there are the folks that are developing the ecosystem. And then at the top end of it, or at the other end of it, is the change management, the consulting part, the business reinvention, business model reinvention, all that stuff. When you look at those three, it seems to me that the change management piece may actually have the most sort of long-term revenue because those other two pieces are going to constantly be in flux. And so when you look at the companies that we cover, are there, I mean, not that you have to name names, but if you want to go right ahead, are there companies that you think stand out for their, both capabilities and their position with respect to providing change management specifically in a AI/agentic AI/GenAI age?

Boz: Yeah. I mean, obviously, you have the, if you go back to what we always preach is stay in your own swim lane, the usual suspects, the McKinsey’s, the BCG’s, the Bain’s of the world, they have deep roots in change management, right? So, you’d expect them to be as the natural kind of vendor to tap into and to explore that. But which puts a little bit more pressure on them, how well do they understand the agentic AI space? Because they know operations, they know change management, they know organization and change inside and out, and they have the relationship and proven use cases. But they also need to better understand the impact of agentic on the client’s business workflows and whatnot. So there’s a little bit of a, as much as a low-hanging fruit, it’s more of a test of their willingness to change themselves because they need to be able to demonstrate that knowledge, which means that they have to bring in people with certain skill sets in the mix so, it’s not just a consultant at the table, but a consultant plus maybe a context engineer that they may be sitting next to along the way. So that’s going to put some pressure on their business model as well as they try to tap into the opportunity. Others from the IT services spectrum, like the Accenture’s of the world and the Deloitte’s of the world, they’re very strong at HR management. We know Accenture has been investing in their learning services for some time now, which I think it’s in a way a door opener for some change management, kind of the Accenture way. *laughs* You know, maybe you have to take a couple of steps before you actually lead to that, but that’s just a way of doing business. 

I think another change management we may see is the idea of trying to drive a kind of back-to-front consulting, using operations and workaround managed services as driving consulting. Because in the change management there’ll be a different starting point there around work processes and workflows optimization, which when I say, you know, that’s more of a technology discussion, but I think that’s, you know, if you’re able to reverse engineer what the process is and try to think about how it actually impacts your skills in your organization, that’s where you can do that. So, we know that someone like Capgemini recently announced the acquisition of WNS, big splashy acquisition. We see it a little bit more of a test to see what Capgemini can actually do in a world where BPO is getting commoditized, knowing what we know about WNS, a business space, you know, but it’s certainly a space to keep an eye on, as we know the likes of Deloitte is looking a little closer to drive that kind of back-to-front consulting with driving and expanding to operate business overall. So, there’s certain aspects that are, you know, again different starting points and different tests when it comes to, you know, the companies that we usually track to see how well they can do change management and what does change management mean to them as a way how it fits into the bigger, broader play if they are going to be the agent orchestrator versus agent builder and is the goal being an agent managed service provider versus, you know, business transformation discussion.

Patrick: Right, and honestly, from everything you just said, if I had to guess, we’ve spent a lot of time in 2025 answering our clients’ questions about AI. And I think we’re going to spend a lot more time in 2026 answering client questions about managed services to consulting. Like converting that managed services space into consulting opportunities. Because it’s coming up again and again, and the companies that you mentioned are the ones that are sort of at the forefront of being able to tap into that. And they’re doing that themselves, and yet there are a lot of competitors that they have that we don’t need to mention, but everybody knows them, that have massive managed services contracts in place now that they need to either renew or find ways to leverage into consulting opportunities around change management around whatever else. 

Boz: Yup.

How to partner the right way

Patrick: So, excellent. Let’s pivot here to ecosystems. So, we talk about this a lot because we talk about ecosystems a lot. One of the things, I’m curious, in the last year of thinking about ecosystems and all the reports that you published, there’s gotta be a couple things that stand out for when you said companies that partner well or partner the right way. What exactly does that mean? Like what are the two or three things that partnering the right way actually comes down to?

Boz: Yeah, I think it’s a moving target, I would say, but there’s certain common, you know, attributes that we see and we do, as we’ve spoken in the past, you know, we do have the Voice of the Partner report, which the latest results came in September now, but so, it’s where we survey groups of vendors, OEM providers, cloud and software providers, and professional service providers, and we try to better understand what are they, the big question is what are they missing from their partners when we talk to OEM providers, how do they work with the other two groups and vice versa, right? So, I think we know some of the common practices still remain true today around knowledge management, it remains the foundation. It’s a big gap. Co-investments in terms of developing resources, trying to be, you know, skilling and upskilling and reskilling, portfolio development, co-innovation, that’s the part of it. And obviously there’s a lot of like that alignment, thinking about how, you know, leadership sees it because we often find there’s a disconnect between leadership alignment, but then also the field salespeople have a little bit of different priorities. So, aligning, you know, priorities from, you know, just the vision and go-to market, but also incentives and sales motions. 

And we said before, how well can your partners tell your story? Can they say it as good as you can? And we saw some of that changing in the last Voice of the Partner report, where we see some of the, like the OEMs, for example, were looking to, at least they are saying that they’re willing to be a little more agile, a little bit more open. We know historically that group of vendors as a whole has been kind of doing their own way where they do direct sales. Now they’re a little bit more open to the channel, a little bit more looking for support and willing to collaborate in even the multi-party alliances set up with the services providers and the cloud providers. Which I think a common denominator we identify obviously is the likes of NVIDIA that provides the great opportunity right now around AI, going back to the AI comments, but it seems like that’s kind of the common layer that everyone is gravitating towards. And it’s a good way to test how much those companies are really willing to be as flexible as they say they might be in the first place. 

But again, commercial models, I think is the next thing, because it’s about- as much as technology alignment is important, making sure you have the portfolio and the speeds and feeds. Again, if your commercial model is not aligned, this makes it much more challenging. I think AI and agentic AI will further test that commercial model alignment because we hear from the professional IT services companies often talk about outcome-based pricing. But then at the same time, we still hear from the technology partners, license-based or SKU-based sales, subscription-based sales. So, there’s a disconnect between that. So, It will be very hard for the technology partners to move into the outcome-based world, and we don’t think that even IT services companies will go full on outcome-based because clients are not willing to go full on. So, it’s like a domino effect. But I think there’s opportunities in certain industries and certain function areas that that could work. And so, we start hearing more about that consumption-based pricing as the common ground where everyone is maybe willing to compromise for the good of the partnership and for, kind of, creating winning scenarios for all parties.

Where the value for customers is

Patrick: Right. I want to get to customers, because I think everything you’ve just said is very much focused on the relationships between the companies that you’re talking about, the different kinds of companies you’re talking about, but it’s how they behave together, and I want to get to what does that mean for the customer. Well, one thing I think you said that’s really important is the difference in the views of pricing, outcomes-based pricing versus a subscription or some other model, for software. And that actually is reflective of the higher value or the more strategic metrics, which is around, and we heard this directly when we were on the road together in California back in the beginning of the summer, like a software company that is saying, hey, net new contract value is the only thing that matters to us. 

Boz: Yep.

Patrick: And an IT services company saying, it’s the relationship that’s the only thing that matters to us because the relationship means renewal or new opportunities for us. So, having those two things align and then below that is the pricing. I know we have Voice of the Customer coming up in December, we’ll be publishing in December. So, what from the customer’s perspective, because this will be like the fourth or fifth Voice of the Customer at this point, maybe even sixth or seventh. 

Boz: Yeah.

Patrick: It’s a lot. What value does the customer get from an aligned ecosystem of two or three or four, an IT services company, a cloud vendor, a software vendor, and an OEM, all coming together and working well together? What’s the value that a customer gets out of that? Or do they even care? I mean, that’s what it is.

Boz: Well, yeah, I was going to say, because here’s the thing. So, we know historically enterprise buyers don’t like vendor lock-in, right? That has been the thing, you know, it’s a risk management, essentially. That’s what it’s all about. about risk management. So, they have tried that model for years and they continue to do so. They still try to segregate vendors in categories, the way they know them, they work best and the way they see them fit the most. It could be on the consulting side, could be on the managed services side. That’s still the case for the most part right now. But for multi-party alliances structure, one area that we have when we talk to the buyers is, and there’s a recognition that is very challenging that that will happen at the company-wide level. It’s so much more risk to put OUX on one company versus-

Patrick: Sure.

Boz: But when you click down on the line of business level, I think this is where there’s an opportunity for better collaboration, because now you have fewer vendors that do things really well, and with AI and agentic AI, that’s the expectation is in that direction, because you need to do more with less, right, essentially. And so, we’ve seen that vendor consolidation and technology consolidation going on for the last several years now. And I think when you have three, four vendor in consortium going to market and say, we are tackling financial services, you know, supply chain, whatever the case might be, we are the top, you know, three, top five, premier, most use cases vendors, and they can tell each other’s story the best way. I think that’s where it provides that depth and we talked earlier about industry specialization, that’s another layer that can come in. So, vendors can- so buyers can actually get value that for the buyers potentially is really to get the most out of it. That ROI that everybody is talking about, they can now really measure it. Obviously, there’s going to be a greater need for transparency around pricing, accountability, who is overseeing that relationship and whatnot. So, I think that’s going to be behind the scenes, you know, think about what agents could do is essentially is to, hey, these are my agents versus your agents, right? So now you’re talking about whose agents are you orchestrating, how you’re doing all that stuff. But if you have the trust, if you have the permission to demonstrate that value, I think it’s a good opportunity for the buyers to really drive, elevate, you know, internal value within their own stakeholders within the company and shareholders externally as well, just by the nature of the structure. Because we know that all these line of business leaders and others, they have struggled with getting the most out of their investments from cloud and other technologies. 

Patrick: Right.

Boz: So now is the time for vendors to demonstrate that this is not just yet another technology in the cycle, but we actually can prove value. That’s kind of where, but again, it’s going to go down to change management. 

Patrick: Okay, yeah.

Boz: Circling right back to because line of business leaders then thinking about the procurement that gets involved, how do they handle, you know, whose contract the paper is on and who’s being held accountable? So, it is certainly being tested. We’re aware of use cases like that. Is it the norm yet? No, it’s not. But can it become? Yes, it can. And especially as the generational buyers are rotating as well.

Patrick: So next time we chat, we’re going to talk about Voice of the Customer. But if we chat before December, we’re going to talk about change management as a service for startups in the AI space. We’re going to talk about pricing. And we’re going to talk about too much technology and technology burnout. Those are going to be our three topics next time. 

Final thoughts

I have a last question for you, because I know you did a lot of traveling this year, 2025. So, not counting what’s coming up and your anticipation of events to come, what was the best work trip from the best event from 2025? Totally unfair question, but I have to answer that.

Boz: No, it’s not fair at all. Well, I mean, it’s, I gotta say, I mean, probably definitely one of the highlights, you know, of the year, my trip to Japan with PwC.

Patrick: Oh yeah.

Boz: Certainly very much, you know, appreciate it, the time spent with the company, seeing things from a completely different culture perspective being brought up, more change management, how things have been applied internally and externally. So, obviously appreciate the food there in Japan, so that’s always an important factor traveling, so very much liked that. The trip to California with Fujitsu, I know- we know it was great. I think it was a really well-structured event as well. In terms of content, I gotta say I give kudos to the analyst relations team there, just being very receptive to the feedback that we and others have shared with them, and applying that feedback throughout the two-day event we spent with them, and the opportunity to connect with them, so definitely, yeah.

Patrick: It is kind of fun to pat ourselves on the back and say we provided feedback, and then we saw it. Of course, KPMG Lakehouse is at the very beginning of the year.

Boz: KPMG Lakehouse, so I was going there. I was going to say, yeah.

Patrick: Last, last question, because this one kind of fascinates me. So, we talk about AI a lot, and when we talk about AI, and actually the broader discussion around AI is often around how it’s going to replace jobs, it’s going to take away jobs. And so, then the next piece of that is, all right, what are the skills? What are the things that humans can do that AI can’t do, won’t ever do? So, then you think, okay, what are the skills that I would need to make sure that I’m not replaced by a robot, that I’m not replaced by a digital full-time employee? So, if you had 10,000 hours, if you have from now until the end of the year to just simply perfect one skill, and it can be anything. It could be like playing the guitar. It could be speaking four more languages. It could be turning yourself invisible. What is the one skill that you want to have that AI will never be able to do, but you’ll be able to do?

Boz: Wow. Gotta think about that. The languages have definitely crossed my mind as you were saying that, because I just have affinity to study new languages, but-

Patrick: AI can speak new languages.

Boz: AI can speak new languages as well, but I still have that trust factor, we still see people that’s meeting, we don’t see AI talking, translating, there’s people next to them that does the translation, right? 

Patrick: That’s true.

Boz: But anyway, so from- oh ha, swimming.

Both: *laughs*

Patrick: You wish you could swim like across the English Channel 

Boz: Yeah.

Patrick: or swim all the way up the Hudson River.

Boz: I don’t think AI can do that.

Patrick: I don’t think AI can do that. Fair enough.

Boz: Something that requires physical interaction than actually mental I would say.

Patrick: Excellent. Excellent. All right, Boz, thank you so much. Great chat as always. We’ll talk soon.

Boz: Yep. Thank you.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

In our Season 4 premiere episode Elizabeth Roberts, global head of Information Management at Ericsson, joins “TBR Talks” host Patrick Heffernan to share insights into what Ericsson is doing to leverage AI tools for internal knowledge management at the world’s leading telecom vendor.

With over 3,000 regular users, each of whom support different business groups, executives and field leaders, Ericsson’s Business Intelligence Center (BIC) has become a powerful use case of AI internally. Elizabeth shares the challenges with AI adoption, change management and the never-ending need for quick and correct intelligent answers to business questions.

Episode highlights:

• How roles have changed because of technology

• Changes and accelerations in company culture

• Ericsson’s new AI tool: Ask BIC

Listen and learn with TBR Talks!

Submit your Key Intelligence Questions for Patrick and his guests

Connect with Patrick on LinkedIn

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

Ericsson’s AI Strategy: Business Intelligence at Scale

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about Ericsson’s AI strategy and new AI assistant, with Elizabeth Roberts, Global Head of Information Management at Ericsson. When the Ericsson team released the tool to the full organization, the name was established as “Ask BIC” to keep the team branding consistent, but in this conversation, it was referred to as Erica. Welcome to season 4 of TBR Talks. Please enjoy my chat with Elizabeth.

How roles have changed because of technology 

Elizabeth, thank you so much for coming on this podcast, I really appreciate it. We have known each other for over a decade now in our respective jobs, at Ericsson for you and TBR for me. I just, for everyone listening, could you just maybe sort of walk through what is your title? What is your actual role at Ericsson? I just know you as Elizabeth from Ericsson, but I’m sure others at Ericsson actually know you by title so, what is it?

Elizabeth Roberts, Global Head of Information Management at Ericsson: So, my external title is Global Head of Information Management, which is a nice, fancy, fluffy title. Internally, I’m known as the head of BIC, Business Intelligence Center. And that actually defines my role better, which is more of the responsibility of taking care of all of the external research and getting it into one portal where all the users internally can access it.

Patrick: And about how many users a month, say, access BIC?

Elizabeth: We have about 3,000 that are fairly consistent monthly users. 

Patrick: Okay.

Elizabeth: We have about 300 that use it almost daily. So not a bad amount for, you know, a company of 100,000 people.

Patrick: Yeah, that’s fantastic. And I mean, responding to being responsible to 3,000 users a month, that’s not a small task. I imagine you get a lot of compliments and complaints, right?

Elizabeth: A lot of complaints more than compliments, but that’s okay. We learn from a lot of the complaints. So, it makes things better.

Patrick: Excellent. I want to ask you just sort of, because you’ve been there a while at Ericsson and your job maybe has evolved a bit and changed a bit, but really talk about some of the changes in the last couple years, either from a technology perspective or from a responsibilities within an Ericsson perspective. And technology has changed so much in the last couple years, I’m curious if there are things that when you look back and you think about, okay, my job five years ago was not this because of a piece of technology, or my job five years ago was not this because of new responsibilities. I wonder which has changed more for you?

Elizabeth: I’d say responsibilities, but the responsibilities came about as a result of technology. You know, Google is an amazing thing, you know, when we talk about a search engine, it really honestly and truly has changed how research is done. And so, the technology behind how people search for information has changed, which means how I go about answering questions has changed. And I don’t actually have to answer nearly as many questions as I used to five years ago. That technology is available there to make it easier for end users. So, I spend a lot more of my time actually doing more things contract-wise, things along the lines of dealing with compliance and legal and things like that to make sure that we have rights to use the information. And just ways of making information easier to find for people, because while it’s easier to search, you know, natural language search isn’t as great as we’d all like it to be. I wish it could all be just as easy as saying, where can I find X? And the answer would come right back to me, but it’s still not there yet. We’re getting closer.

Changes and accelerations in company culture

Patrick: And how much has the culture within Ericsson changed? And I know that’s a really loaded question, but in the time that we’ve known each other, the workplace has definitely changed. I mean, from a technology perspective, as you mentioned, that sort of search has been increasingly better and better refined. We had, AI has become such a huge part of our daily lives. But also we went through a pandemic, we went through a whole work from home surge, and now it’s changed, and now we’re heading back in the other direction. And I’m wondering, as a technology company, how much has the, not just the technology, but also the culture within Ericsson changed?

Elizabeth: The culture within Ericsson has changed quite a bit. I think the pandemic actually, like most other companies, forced us to become faster at certain things. And in fact, my laptop became 5G enabled last week. 

Patrick: Wow, alright.

Elizabeth: So, I don’t have to connect to Wi-Fi anymore. I could be anywhere, which is an amazing thing. So, in that aspect, I think it’s going to continue to change. I think the biggest cultural change, honestly, within Ericsson is related to compliance. I think we’re a lot more conscious now of what can and can’t be done in certain things. And some of that’s come about because of forced circumstances. And some of it’s come about just because of how fast technology has changed. You know, we used to have the huge standards that said, well, this is how things are done and you had to go through them. And now you don’t have time to spend, you know, 8/10, 9/12 months writing a standard to get to how something should be done in technology. You just kind of say, okay, well, how do we do this, and how do we get it done fast for the customer? So.

Patrick: Right. Yeah, that is, I mean, and for a, especially for an established, a well-established technology company making that kind of cultural change to speed up, to accelerate, to make changes faster, that can be really hard.

Elizabeth: Yeah, it can.

Patrick: And your role as, sort of in some ways the chief information officer, you could say, how, is it- do you feel like you’re part of helping with that acceleration?

Elizabeth: I think so, because I find myself more and more often trying to find answers to questions that there’s no research for. You know, we’re starting to- before it would be, okay, how do we find this answer? And it was fairly easy to find established information because we were, you know, technology wasn’t changing as quickly. And now we’re at- we have people asking questions where there is no research created. There is nothing that’s there. It’s going to have to be created. And so, it’s a matter of, well, where do we go to try and start to put this together?

Finding answers to unanswerable questions 

Patrick: And is that where you just, you’re relying on the trusted resources you’ve had and you’re sort of cobbling together a few different trusted views? Or how are you- that’s crazy to me that you’re getting questions that have no answers to them, and you’re tasked with finding them out. So, what are you doing exactly? Where are you going?

Elizabeth: We just keep asking the question over and over again in different ways and talking to analysts and talking to the firms we work with and talking to people like you, Patrick, where, you know, you might say something that then sparks a different way of looking at the answer to the question, or maybe there’s something that’s said that, oh, we hadn’t thought about that. You know, if you look at the RIC market, so radio, intelligent radio, RAN controller, there was nothing there. But in order to try and figure out how to do something to create a forecast, well, somebody said, well, why haven’t you looked at SMS and the growth of SMS? I mean, it’s kind of the same thing. Well, then suddenly you realize, you know, I’ve been going about this backwards. I’ve been trying to find information on something that doesn’t exist when I should have been trying to find information on something that did exist that I could then draw a parallel to, to create some sort of, you know, beginning of a forecast so that we can look at, you know, how is this going to trend, how is this going to change? And I think that’s where AI is really going to come into play in the future is being able to take things that, as you start to ask questions about the unknown, can it help you find those known parameters to come up with, well, ways to start trying to find an answer to the unknown?

Patrick: Yeah, so let’s talk about that. I mean, in five years from now, do you think a lot of these questions are going to be easier to answer because the artificial intelligence is going to be better? Or where do you, where do you see, how do you see your job? How do you see those challenges being different five years from now?

Elizabeth: I honestly don’t see my job being that much different, to be really honest. I think the need for what I actually call antiquated skills, which is that ability to doggedly search, to try and find an answer to their problem and a puzzle, is not going to go away. AI will make it faster, for sure. But it’s, you know, you’re still going to have to have somebody who can think about a problem in multiple different ways because an AI can only think about the problem the way you write the question. 

Patrick: Right.

Elizabeth: It’s not going to be able to take that question and think about it 16 different ways and go, okay, well, let’s look at it from this direction now. There’s still going to have to be somebody who does that and tells the AI to look at it differently.

Patrick: Right. So, it’s that sort of persistence and judgment that you’re going to have to continually bring to the table, right?

Elizabeth: Correct. Yes.

Ericsson’s new AI tool: Ask BIC

Patrick: Yeah. But I know that you’ve got a new tool, a new colleague, if you will. So-

Elizabeth: Yes, we have an intern now. We call her Erica.

Patrick: Tell me more about that.

Elizabeth: So, Erica is an AI-driven research assistant. We refer to her as an intern basically because she’s still learning. You know, she’s good at answering qualitative questions, like most AI. The problem is quantitative. There’s not really an LLM out on the market that I’ve found, if somebody knows of it, I’d love to know, that can handle numbers and, you know, great big spreadsheets and things like that. That, you know, you and I spend our days living in.

Patrick: Exactly.

Elizabeth: So, until there’s an LLM that can do that, analysts aren’t going to go away because they can handle the numbers. But no, Erica’s been great for answering, you know, some of the more simple, I hate to say more simple, but it’s more simple questions. You know, what are the AI use cases in telecom? You know, she can produce a really nice report to start that answer, but then somebody once they’ve looked at that can delve deeper into, okay, well, what are the front-end and the back-end use cases? You know, can you break that down for me? So, in that aspect, it’s great. The thing that makes Erica different from other things out in the world, AI wise, is she only looks at the resources we tell her to look at. So, she only has about 13 providers that she can read. And we went through a lot of work with those providers to get clearance and permission and the ability in our contracts to use that information in a large language model, because a lot of research providers obviously don’t want to have their research used in an open model where it could suddenly become, you know, common knowledge and things like that. But Erica’s closed, she’s a walled garden, as we used to say in the telecom. And, you know, it’s been interesting. It was a part of my job I never thought I’d learn to do, but I enjoy it.

Patrick: That’s awesome. And so, I’m curious whether internally whether the use case for Erica is more sales enablement, more competitive intelligence, more market intelligence? Is there, do you see it, do you see Erica leaning in any one particular direction in terms of how she gets used?

Elizabeth: We actually have a lot of use from the strategic side.

Patrick: Okay.

Elizabeth: So more of those developing insights. Yes, there’s still the traditional, you know, produce a SWOT analysis on this company in this particular, you know, product area, or give me a comparison of competitor X to us in this service, but we’re seeing a lot more of it from the perspective of tell me about insert a topic here and how it’s going to impact us in the future.

Patrick: Yeah, and I guess, and it makes sense, and if that’s where it’s being used now, that you want to restrict the number of inputs. You want to, like you said, keep it only to the trusted providers that you’re- you believe in their data, you believe in their analysis, you believe in their opinions, and you want to make sure that that’s captured there, but not just the whole world. So that makes a ton of sense.

Elizabeth: It does. And then the other thing we love about what Erica does is she’s a great intern in the fact that she cites her sources. So, everything she comes back with, she can tell you exactly where it came from. So, if you have a question about whether or not it’s right, you can actually go look at the original report and see where that quote that she’s pulled out has come from.

Patrick: So, she’s not come back and said, I made all this up myself? That hasn’t been one of her responses?

Elizabeth: No, in fact, if she doesn’t know an answer, she’ll come back and tell you, I’m sorry, there’s not enough research for me to provide you an answer. 

Patrick: Wow.

Elizabeth: I had a hallucination finally the other day. I was doing some work on one of our competitors and she came back, and she told me she couldn’t find information on Nike. 

Patrick: Ah, *laughs*

Elizabeth: Now, there’s several letters in that are very similar to Nokia, but it was after, I’ll be honest, it was after I had run multiple different queries in the same kind of conversation. And so, we were kind of at the end of the limits of the research that was available. So, it makes sense to me, but there’s still things like that do kind of occur and I get a good laugh out of it.

Patrick: So, for a moment there, you had me hopeful that I could get some nice new Ericsson kicks one day, you know, like get the logo on the side, look like an Adidas or something. So that wouldn’t be so bad.

Elizabeth: Well, no, actually, it’s Nokia that used to make tires and shoes, so you’ll have to go with them.

Where Ericsson will be in 15 years

Patrick: That’s true. That’s true. Listen, I want to just wrap up with one question. You know, you’ve been doing this job for a while, and Ericsson has been really- has been a kind of company that we always have to keep an eye on because it’s such an important player across the market, such an important player in the ecosystem. And I’m just curious, when you look out sort of 10-15 years from now, where do you see Ericsson? How do you see- you’ve had such a great window into how the company has evolved and changed and grown over the last 15 years. Where does it go in the next 15?

Elizabeth: I think Ericsson will continue to be a leader in back-end telecom technology. 

Patrick: Okay.

Elizabeth: That’s always been our bread and butter. So as the technology changes, as it becomes more software driven, as it honestly becomes more AI driven, I can see Ericsson transitioning to help that move faster and more smoothly so that, you know, there’s not the interruption on the front-end for the operators or for the end consumer. They’ll never see, you know, everything we do and all of that. And that’s okay. You know, as long as the backbone works and runs, that’s what matters.

Patrick: That’s awesome. And that, I mean, we’ve seen, especially in the last five years, you know, the companies that have said, this is what we do well. We’re staying in our lane. We’re going to continue to do it well. Those are the ones that have grown, outpaced the competition. And so, I think that’s just a great strategy going ahead for Ericsson.

Final thoughts

Patrick: All right, I lied. One more question. I know you were recently in New Orleans, a city that I absolutely love because I love to eat. So, I need to know what your favorite foods were. And I say foods because you can’t go to New Orleans and have one favorite thing. So, what did you love the most?

Elizabeth: Well, you know, Patrick, I’m a researcher at heart. So of course I had to do some research. So, I visited multiple places for beignets, I have a ranking system now for beignets. I can tell you where to go for the most- the crunchiest ones, the ones with the most sugar, the ones that are flakiest. So obviously beignets, but gumbo. I mean, you can’t go wrong with gumbo.

Patrick: Yeah.

Elizabeth: And here in Texas, they make gumbo, but they leave the okra out, which just is like, that’s not gumbo.

Patrick: It’s not gumbo, no.

Elizabeth: That’s shrimp soup. *laughs*

Patrick: All right, now I know what I’m making for dinner tonight. So, I got to swing by the Market Basket and see if I can find some okra because yeah, I do love some gumbo. Excellent. Elizabeth, thank you so much. An enormous pleasure. And I’d love to have you come back in about six months or so, because I want to hear how your intern’s doing and whether or not she’s been promoted to a full-time position.

Elizabeth: Sounds good to me. I’d be happy to.

Patrick: Excellent, thank you, Elizabeth. 

Tune in next week for another episode of TBR Talks. Don’t forget to send us your key intelligence questions on business strategy, ecosystems, and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies, large and small, answer these questions with the research, data, and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us and see you next week.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

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Technology executive Darlene Wilson joins “TBR Talks” for a discussion on tech disruptions, business model evolutions and life as a technology expert. Darlene is a seasoned technical strategist with over 20 years of leadership experience at companies like Amazon Web Services, Whole Foods Market, and E*TRADE, where she has driven growth through both market- and customer-centric efforts. She is known for building high-performing teams, mentoring emerging leaders, and championing women in tech through roles like co-sponsoring the AWS Women’s Summit and participating in T200. A technology leader and veteran of many disruptions, including “as a Service” to cloud and AI, Darlene talks Amazon Web Services’ entrepreneurial start, the evolution of multivendor alliances and the ever-present consistency of change.

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Art by Amanda Hamilton Sy

Disruption Writ Large with Darlene Wilson, Executive & Technology Thought Leader 

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem, from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors and chip manufacturers to value added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors.

I’m Patrick Heffernan, Principal Analyst and today we’ll be talking about all things technology, including a look back and a look forward with Darlene Wilson, thought leader in the technology space with experience in cloud, IT and digital transformation. Darlene, thank you so much for joining the podcast. 

Darlene Wilson, Technology Industry Thought Leader: Thanks, Patrick. Really excited to be here. 

Patrick: Yeah. It’s a pleasure to have you on. We’ve known each other for a few years now, and I would say we’ve had conversations that have stretched from life and how to live it, to everything you can imagine in technology. 

Darlene: Yup.

How has technology changed over your career 

Patrick: And I think that’s because we both bring very different experiences to the table. So I’m really curious when you look at things right now, when you sort of step back and say, okay, over all the time that you’ve had your different careers and all your time in technology, what have been the biggest changes, not only from the technology perspective, but also the business of technology, how the business of technology has changed over the course of your careers.

Darlene: It’s a great question. And in thinking about this and probably in answering this too, Patrick, I’m going to age both of us and out both of us in an age perspective. 

Patrick: *laughs* 

Darlene: But, you know, thinking back, looking certainly obviously over probably the last ten years of my career if I go back, and we’ll kind of go in reverse chronology here, but if I go back ten years, it’s really the advent of the cloud and everything has been, you know, cloud based and what has changed for a lot of businesses, largely in their journey to move into the cloud, and what prompted that. And again, you know, I’m going to give you a little extension of an appreciation here for, you know, hooking me up on the podcast Acquired, which is great because I did listen to AWS. Even though I had worked there, it was really interesting for me to re-hear the story and really hear it from a different perspective in a lot of depth. And they did a great job talking about how really the cloud and AWS was born, really, and started in the realm of startups. And that was really their target market initially was how do we get startups going really, really quickly and then how they extended it into the enterprise space. And so, for the last ten years, I’ve been sort of living and breathing that with, you know, either through my own applications and working with, you know, what I’ve been doing with certain companies, or even in the consulting space and trying to support some of those enterprise customers, ISV customers, DMB customers, SMB, all the different segments, and to see how they’ve applied that, it’s been really interesting.

But then going back even further than that, you know, it’s interesting to me because I started to think about what I was doing really early on in my career. And again, this is where I’m going to age myself back to the dinosaurs. But, you know, very early on, when I had worked at Dow Jones years ago, and this is back in probably the late 90s, it was really the early stages of the internet. And so, we were installing trading room systems. My job was as a product manager for our institutional and retail trading room systems. And we were installing these systems with on-site servers, point-to-point circuits. You know, all of- everything was very, very, bespoke for every single environment. And then, what I could see though, in this was there was now all of a sudden this, you know, new thing called the internet, but at the time still very static and mostly static HTML content. And people hadn’t quite gotten into the idea, the understanding more broadly, of how the internet was going to change from an application perspective.

And so it was, you know, once we started seeing new applications and, you know, I’ve talked before about Amazon being obviously one of the biggest, earliest adopters in this space, really started to change things. So, watching the evolution of, you know, these on-site servers, you know, very specific into the internet and then how that grew into what has become cloud computing and then watching companies and businesses go through their own transition in the cloud space has been really fascinating. And, what’s probably most interesting is, you know, watching large scale enterprises go through this, you know, adoption journey. But then some of the smaller businesses as well. And then watching the digitally native businesses grow out of, you know, straight up tech computing, the independent software vendors. Anyway, it’s just it’s been a fascinating evolution. But to watch now where we’re at in the cloud journey, I think is the most fascinating. And seeing what’s happening with companies in that space. 

Patrick: So, part of where we’re at in the cloud journey, to look at it from sort of the business side of the technology, is that cloud is now often- the cloud bill is often now the biggest piece of the budget for IT.

Darlene: Yes.

Patrick: And so I’m glad you brought up the Acquired episode on AWS and the startup part of it, because that was not the case, nor was that really the promise of cloud. 

Darlene: Right, right.

Cloud spend and the IT budget

Patrick: And yet that’s where we’ve ended up. So, when you look back, when you think back, in your mind was there sort of a strategic imperative that it was going to get there no matter what, that cloud was going to kind of consume so much of IT the budget? Or is it just that’s what happened organically, accidentally, not by any design?

Darlene: It’s a great question. It’s a challenging question. I think it was probably going to get there, you know, in terms of- what AWS had come up with was so revolutionary. And they were, you know, and they talk about that in the Acquired episode of being so far ahead of the curve, you know, just, you know, so much so that it’s still, you have Microsoft and Google still trying to catch up even though they’ve closed the gap. But what’s interesting about that, I think has been, you know, was that early adopters, that they talked also too about largely it was public sector that actually adopted it second beyond, you know, anything like the startups before the enterprises. And I thought that was sort of interesting. 

Patrick: Right

Darlene: Because that’s a massive trust factor. 

Patrick: Right.

Darlene: And, you know, but certainly I think, you know, certainly colleges, universities, the public sector who started to see the need for that elastic compute capability was- and largely storage as well. So, I think Amazon was really in the right place. I think it was inevitable more than anything. It was just a question of time. I mean, and, you know, you could see it going, you could see what was happening. I think the flywheel effect of starting in that startup space for that rapid, rapid adoption and rapid new technology and the fail fast and everything that you were able to do on, you know, even in these early just with the straight up, you know, compute, database, and storage. And that’s really what they started with. It was so basic, you know, and then CloudFront from a distribution network perspective as well. So, I think it was inevitable that we were going to go there. Because it was just a question of when everybody else was going to catch up. 

Patrick: Right. Exactly, exactly. And you’re right. I mean, they have caught up in a lot of different ways, but AWS still sort of sets a standard for how to- particularly how to run a cloud business. I’m curious, so you’ve had a few different spots in your journey, in your career. 

Darlene: *laughs* Yeah. 

How has partnership and alliance strategy changed

Patrick: And what that gives you is a way to look at the changing nature of the ecosystem in terms of partners and alliances. So, we talk about it a lot at TBR because we get a lot of questions about how do I partner better with this company, how do I create a three-party alliance? So I’m curious what you’ve seen, especially in recent years, with the way that companies across the technology ecosystem, from the consultancies and the IT services companies and the hyperscalers and the software vendors, and I guess even the OEM providers, how are they partnering differently than what you saw early on in your careers? 

Darlene: So, and you could do a multi-hour session just on talking about that for sure. 

Patrick: *laughs* 

Darlene: But, you know, thinking about this, and this is something I’ve been thinking about a lot in terms of, you know, during my last role, you know, and even it started to sort of develop in my time at AWS, too, and it’s the whole philosophy of Occam’s razor. Which is this, you know, the simplest solution is often the best solution. 

Patrick: Right.

Darlene: And one of the things that I think has, you know, when you think about, you know, certainly the different variations of partners that you have, you know, you’ve got the larger GSIs and consultancies who are focusing on the larger scale enterprise business. You know, you’ve got sort of the regional local players, and here in the US, you know, Slalom, Presidio, some of those very targeted- and then you’ve got ones that are, you know, I’ve got a number of friends and former colleagues who have started up their own businesses, which are very small boutique firms. Which is really interesting and focusing on, you know, very specific areas of expertise rather than trying to be broad and generalist and be all things to all people. What I’ve found particularly, you know, in a couple of areas is, it depends on which market you’re looking at. But, you know, because the enterprise space, when you’re dealing with these large scale businesses, but even, I think, down into the SMB space, it’s really coming at your clients and starting from a consultancy perspective of what’s the value you’re bringing to that customer, and helping connect the dots for those customers and for those businesses between what they’re trying to do in their business and how that meets their technology strategy. And I know there’s a number of studies out there that talk about the fact that, you know, two thirds of CIOs won’t meet their goals in any given year because their technology strategy doesn’t align with the business strategy. And what I’ve found is the easiest way to connect the dots and the most impactful way to actually really have an influence on your clients and, you know, become a trusted advisor is to be able to connect those dots between here’s what your business is trying to do, here’s how your technology strategy works for your business. And, you know, to me, this is- I’ve said this over, and I’m sure you’ve heard me say it in presentations before too Patrick, is technology exists to solve business problems. That’s really what it is. It’s there to solve business problems. I mean, it can solve personal, but in this case-

Patrick: Right, right.

Darlene: Certainly, it’s solving business challenges. But we often get so caught up in the technology for technology’s sake and the new, you know, okay, for a while it was Kubernetes. And now we’re talking about AI. And AI is a great example because there’s this boil the ocean approach that a lot of businesses are sort of seeing. They’re seeing so many possibilities. They don’t know where to start. And that’s where you get back into the Occam’s razor-

Patrick: Right

Darlene: Which is sometimes the simplest answer is the best answer. And so how do you break it down to simplify that.

There is a lot of discussion around AI, and it’s a challenging topic these days. And I just recently finished a fantastic book called The Coming Wave by Mustafa Suleyman, and I’m probably mispronouncing the name, but the book really talks about the transformational impact that AI is going to have on business, society, culture as a whole. And I would highly recommend that anybody who is interested in AI in general, but any business that’s looking to determine how to bring it in from a business process perspective or business product perspective, or just even wanting to understand more. It’s a great, great, great read. And I think it should be mandatory reading just because I think it’s so informative and it’s actually very well done. And it’s a very interesting read, but certainly highly relevant for the AI topic and one that opened my eyes tremendously. So highly recommend it to any of your listeners as well.

Patrick: I want to get back to AI in a minute. 

Darlene: Yeah.

How to connect the dots from product to what it does for your client

Patrick: But there’s one piece of what you said that we’ve consistently seen to be such a huge challenge. It’s often more than just a company being fixated on technology for technology’s sake. It’s often the case that a company is really good at technology. And so, they have their product, they have their solution. They’re extraordinarily good at explaining how it works and what it does. But it’s harder for them to do that, okay, this is how it works and what it does for you in your business environment. 

Darlene: Exactly.

Patrick: So, how do you, and I know you have experience on this, so how do you help companies that are technology minded and technology focused and maybe even, you know, to the nth degree, how do you get them to think that way? Because it’s not just the buyers, it’s not just the CIO that has to think about using technology to solve a business problem. It’s also the technology provider that has to have that mindset going in, so how do you do that?

Darlene: So, one of the ways, and it’s one of the things actually, frankly, I had to learn myself as part of my own growth in my own career as I switched from, you know, leading a team of cloud platform engineers and being super hyper focused on what we were doing to support, it was a shared services team, so how was I supporting my teams. How was I supporting, you know, what the entire organization was trying to do. And when I moved away from that and moved into a role at AWS in professional services and started basically, what I really started to do was to really understand my customer’s industry and understand their business. And this is what I found so- that a lot of, you know, a lot of organizations, a lot of individuals within organizations struggle with, is they don’t know their customer to understand- and we all assume, like to your point, we all assume that our customers that we walk into already have that idea of, well, this is my business, this is my technology strategy, and to your point that they can explain how that technology really actually adds value for you.

Patrick: Right.

Darlene: So, what I found is, and there’s a great book out there that I recently finished called The Trusted Advisor, which is, you know, a phenomenal book, which talks about how to become or shift in mindset from a vendor to a partner, and how do you become a partner. And really, that’s shifting. And I’m sure in your business, you see this all the time too, how do you become a trusted advisor in terms of the knowledge you’re sharing, that expertise. So, what I’ve done is started by breaking it down again, back to the Occam’s razor it’s all very simple, is we tend to overcomplicate it. But I think if you can come in and look at it and say, here’s what’s happening in your industry. You know at the highest level.

Here’s what’s happening in your industry, so how do you fit into your industry now? Now here’s what’s happening in your business. And you can look at it both from a business perspective, a market perspective, a technology perspective. But I’ve found that coming in with some ideas and presenting ideas back to those clients, rather than coming in and sort of with a blank sheet of paper and saying, tell me your five pain points, and then kind of trying to go back, go in and be a little bit creative about it. Not overly arrogant to suggest that you know more about their business than them but really try and understand what they’re doing before you walk in and spend that time with them, because they’re looking at you for that expertise. And then largely in some of these, you know, the various partners and the partner organizations, you know, and again, if I go back to my you can take the girl out of Amazon, but you can’t take the Amazon out of the girl, is Andy Jassy used to say famously, and it’s something that’s just burned into my psyche and being right now is, “there’s no compression algorithm for experience.” And so, any business that goes to a partner and is looking for information, even coming to TBR is looking for, you know, looking for that expertise and that experience and so while there’s no compression algorithm for it, that’s what we are able to provide. That’s what you’re able to provide. And so, coming in as and starting with that level of, you know, credibility, and then being able to build on it, which is here’s what we’re seeing with other customers in your space. What we’ve seen that’s worked well, what’s not worked well, shared that, but then gone out and really done your homework and understand what’s happening within the industry as a whole, it makes a huge difference. And so, for me, it was really looking at and it was- I’ve never, when I was at AWS in the professional services, technically, I was in the sales organization of professional services. I never felt like I was selling. I was solutioning for my customers. And then we’d have a commercial discussion about how much that was going to cost to solve that particular challenge. But we would come in and co-build the solution and co-define that solution.

Patrick: That’s fascinating. And I think what we’re seeing now with, to get back to the alliance’s discussion-

Darlene: Yeah.

Patrick: Is a lot of companies shifting their mindset from, I’m going to be a vendor to I’m going to be a partner. 

Darlene: Exactly.

Patrick: And making sure that they understand what it is that they’re- whether it’s the technology or the services or whatever or the software partner, what they’re actually going through as well. And so, coming to the table, not just with here’s what I need to sell you, but coming to the table with, I understand from a consulting kind of mindset what’s going on in your industry-

Darlene: Yes.

Patrick: And being aligned, at least, around sales, around IP, around knowledge management, all that stuff. 

AI and GenAI as a compression algorithm for experience

So, I do want to challenge you on one thing and it ties nicely to AI. I get it, there’s no compression algorithm for experience, except maybe AI-

Darlene: Yes.

Patrick: It’s possible that that that could be what, it is that algorithm. So, I think of the two of us, we’re, you know, we’re not going to be doing this for forever. But in the near term, we are going to see AI change things. So do you think that there’s, because I asked you at the beginning, you know, the biggest change and you mentioned cloud. 

Darlene: Yeah.

Patrick: If we had this conversation in 15 years, both of us will be long retired thankfully. 

Darlene: Yes.

Patrick: But if we had this conversation in 15 years.

Darlene: Let’s hope so.

Patrick: Yes, knock on wood, so would we be saying AI?

Darlene: I think so, because I think AI right now is pervasive, it’s transformative, it’s impacting everything. And it doesn’t- because it’s not just impacting businesses and how they’re operating. It’s impacting individuals in such a profound way. And, you know, it’s one of those things where the cloud largely kind of really focused more on the business aspect of it. You know, even though you could say you’ve got, like, sort of personal cloud computing, things like that. But I don’t think the cloud has really become as pervasive in the personal, individual space, you know, as AI has. And I would agree with you. And I think- the interesting thing I think for the AI is, because the possibilities are endless, I mean, when you think about that, the challenge that most businesses have right now, and I’m sure you’ve seen this in your interactions with companies too, is where do you start and what is going to bring the most value? And you know, that’s one of the challenges. The second challenge is of course, data, you know, schema, disparate data sources, all of that because AI’s only as good as the data you have. And so many companies are running on legacy data systems, things like that. That’s a big challenge.

So certainly yes, Patrick, totally agree that AI is going to have a massive impact, and is going to provide that experience. I think, though, for the foreseeable future. The way I saw it from a services perspective and a services industry perspective is the consultants are that experience. And we’re still going to need, for the time being, consultants to help bring that experience, to help orchestrate the best path forward. Is it going to be that we can accelerate that work through the use of AI? Absolutely, no question about it. And will AI eventually be able to orchestrate and define that path and self-develop? I’m sure we’re going to get to that place. But for the time being, it is the consultants that are able, and the services companies that are hired to come in and help with these particular projects. They are that experience, that they are how you achieve that compression algorithm, rather than going and trying to find 20 people you hire on your own and hope that they have the right experience and bring them together and hope that it works. That’s to me how I always positioned it with my customers was we are that experience, and we are what brings and helps condense that compression algorithm for you. 

But yeah, I think I agree with you. I think that’s going to be the- AI is the game changer because it’s in everything we’re doing and it’s phenomenal, you know, and even just listening to what’s happening, you know, as I was sharing prior in the digital media space and how it’s changing just our experiences with media and all of that is, yeah, it’s- but in the end, what’s so interesting is it all comes down to how are we saving people time. 

Patrick: Right. 

Darlene: And that’s the Occam’s razor for me on that, is anything you do with AI that saves somebody time is going to be a winning combination. 

Patrick: So- And I think the real next step. It’s not just the saving time. It’s the having something to do with that time that you saved. Because I’ve heard for years how automation and analytics and all is going to free people up to do higher value tasks. And my cynical response to that is always, you know, I don’t always say it out loud, but my cynical response is, why aren’t you doing those tasks now?

Darlene: Yeah.

Patrick: You know, if they’re higher value, go do them and figure out another way. You know, let the automation, let anything, take care of the lesser value tasks. And I think we’re at the same kind of position with AI where, like you said, anything that can free up time and then you have to know what you’re going to spend that time on. And that’s what may be one of the bigger challenges to that return on investment on AI is, is understanding where not just you saved money and you save time, but then you invested that saved money and time into something more valuable. 

Darlene: Right. No, you’re absolutely right. And that’s where I think, to your point, AI is going to sort of, and there’s been a lot of articles and a lot of pieces written about this and a lot of discussion about it is, are people going to lose jobs over AI? And you say it’s going to shift, you know, it’s the economy is going to shift. Much like if we go back and look at Amazon, you know, the discussion is like 60% of Amazon’s business right now marketplace is external third-party markets. So, they’ve created a whole new marketplace a whole new channel. And what it’s done is, people say, well, then people have lost jobs. You say, well, but to some degree you can look at it and say, it’s changed the small town, you know, Main Street. Main Street is now serviced. It’s now restaurants, it’s dry cleaners. It’s nail salons. It’s all of the service based industry as opposed to a hardware store or, you know, things like that. So, it’s the product side of it. And that’s where I think AI is sort of going to also shift things as well, is it’s going to be a skill set, and it’s going to be a lot around thought leadership in how you can actually now more effectively leverage AI across your business and coming up with new models and things like that. So, it’s a shift in the industry as a whole.

Patrick: So that-

Darlene: It’s going to be fascinating. 

Patrick: The English majors and the history majors are going to do well. You know, they’re going to be in a good position to tell a good story and understand what it all means. 

Darlene: *laughs* Yup.

Upcoming website launch

Patrick: So, two last things I want to touch on. I know, you’ve got a website you’re about to launch, 

Darlene: Yes.

Patrick: Which will be probably by the time we air this. So just tell us about that. What is it going to be. What’s it going to do. What’s it for?

Darlene: Oh, I appreciate you asking that, Patrick. I’m really excited about launching this website. And, as you know, I’m on a bit of a sabbatical right now, but I do think there’s an opportunity and I’ve had some interest from a number of different individuals, companies, even analysts, about coming in and talking with them based on some of the experience that I’ve had, fractional type leadership roles, things like that. And so it seemed very helpful and beneficial for me to launch a website talking about my own capabilities and being able to promote a little bit of my own experience, and then also being able to communicate my thought process in that I really like to try and connect the business with the technology and look at technology and how it exists to drive those business outcomes. But then also how to help simplify this for a lot of companies, without having to go to larger, you know, services companies and businesses to be able to do this, just to do it on an independent basis.

And I’m really excited about it. So, I’m also going to be blogging and writing about some ideas. All the books that I’ve been reading and listening to as I’m spending copious amounts of time while running and on my bike and doing other things. And so, I’m really excited about being able to share this out and hopefully being able to work with different companies and different businesses in either a smaller or larger capacity to help them on their journeys as well.

Patrick: That’s fantastic. And that really gets at the whole trusted advisor. 

Darlene: Yeah.

Patrick: Because the only reason why anyone listens to a simple or a boiled down, simple answer to a complex problem is if they trust that you actually understand the complex problem underneath it.

Darlene: Yes.

Patrick: If you can take that complex problem, understand it, and then give them the essence, the simple answer, then you’re truly that trusted advisor. So yeah. 

Darlene: Yeah.

Portland to Portland 

Patrick: Excellent. Well, now I have to ask you, you’ve got to tell us about Portland to Portland. I’m telling you, we are, we’re sitting in the studio in Hampton, New Hampshire. There’s no way you don’t go somewhere through Massachusetts or New Hampshire to get to Maine. So, we’re going to be out there with signs on the side of the road. But tell us about it.

Darlene: I’m so excited for that. And I do need to go and look at the detailed map so I can give you the exact days and I’ll be looking out for those signs too. So, the very short version is about probably a little less than a year ago, I was looking for a very nice, leisurely weekend bike road trip my husband and I could do, maybe through Napa. Something kind of casual. I love to cycle. I just, I, you know, I’ve been a cyclist for a while, and triathlete. I run and swim as well, but I thought it would be kind of fun to get away. Do something different as a little vacation. Stumbled upon Trek Travels Portland to Portland, cross-country supported bike ride and I found it in May of last year. And for three months I kept it to myself. But every single day I thought about it and almost every day I went back and looked at the website and finally I said to my husband, because it’s 3,800 miles from Portland, Oregon, to Portland, Maine. 3,800 miles 48 days. So, you’re, you know, riding on average 70 to 80 miles a day. And, I thought, well, this is sort of an interesting idea, except, you know, at the time I was working and I’m, you know, I also have a husband and a dog. And I was like, how do you just pick up and leave for 48 days and go ride your bike across the country? And so, I said to my husband, I said, I found this, I’m interested. And he said, sign up. We’ll figure it out later. And-

Patrick: That’s fantastic.

Darlene: You know, and I think Richard Branson is famous for saying, you know, if somebody asks you if you could do something, just say yes and then go figure it out later. And that’s sort of what I’ve done. So anyway, my time has been largely, in my sabbatical right now has been my part time job, has been basically training and readying myself for this massive undertaking. And I’m very excited about it. And I’ll also be blogging about that, too. So-

Patrick: Fantastic.

Darlene: It’ll be interesting.

Patrick: And when does it start?

Darlene: It starts August 21st.

Patrick: Wow.

Darlene: And on August 21st we will dip- there’s 18, somewhere between 18 and 22 of us, we will dip our wheels into the Pacific Ocean, and then we will ride until October 6th. And we will dip our wheels into the Atlantic Ocean and we will be done. And we will have done 3,800 miles across the U.S. 

Patrick: That is absolutely fantastic. Really looking forward to hearing that. Seeing all the pictures and all that.

Darlene: Thank you.

Final thoughts

Patrick: It’s going to be great. Excellent. And it’s just- it’s inspirational for me to hear you say something like, I’m just going to go do it and I’ll figure it out later. That’s just great, and you’re not inspiring me to do another triathlon. I’ve done those.

Darlene: *laughs*

Patrick: I’m done with those for now, but who knows? Maybe again. 

Darlene: Yeah.

Patrick: Darlene, thank you so much for coming on the podcast. Been so much fun.

Darlene: Thank you.

Patrick: We’re going to go ahead and book you for probably December so you can, after you’ve recovered from your ride, and you can tell us how it was and we can talk about everything we got right and wrong today on our whole chat about technology.

Darlene: That sounds great. Thanks for having me, Patrick. Been a lot of fun, I appreciate it.

Patrick: Thanks so much.

We’ll be taking a break over the summer and will be back with season 4 of TBR Talks in a few months. In the meantime, send us your key intelligence questions on business strategy, ecosystems and management through the form in the show notes below. Visit TBRI.com to learn how we help tech companies large and small answer these questions with the research, data and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, principal analyst at TBR, thanks for joining us and see you next season!

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

Principal Analyst Boz Hristov and Analyst Alex Demeule join “TBR Talks” for an exclusive look at TBR’s Ecosystem Reports, which detail how the top global systems integrators’ (GSIs) most important technology partners — Amazon Web Services, Azure, Google Cloud Platform, SAP, Oracle, Workday, ServiceNow, Salesforce, Adobe — collaborate with integrators and consultancies. How many certified, trained staff do these practices bring to their partnerships within the most influential GSIs? How do they address migration and modernization efforts? How are they deploying AI solutions? TBR has been answering these critical questions for years, and Boz and Alex are excited to announce that upcoming publications will include the addition of geographic data cuts for Americas, EMEA and APAC. (Industry vertical cuts on the horizon as well!) Additionally, the trio will discuss the possibility of more analysis on partner perception of working with one another as well as the addition of more research on ISVs such as HubSpot

Listen and learn with TBR Talks!

Submit your Key Intelligence Questions for Patrick and his guests

Connect with Patrick on LinkedIn:

Connect with Alex on LinkedIn

Connect with Boz on LinkedIn⁠⁠⁠⁠⁠⁠⁠

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

Diving Deeper into Global Systems Integrator Ecosystems: Geographic, Industry and Credentialing Data by Technology Partner

TBR Talks Host Patrick Heffernan: ome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors and chip manufacturers to value added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about TBR’s family of ecosystem research with Boz Hristov, Principal Analyst for TBR’s Digital Transformation practice and Alex Demeule, Analyst for TBR’s Cloud and Software practice. 

Boz and Alex, great to have you guys back on the podcast.

Alex Demeule, TBR Analyst: Good to be here.

Bozhidar Hristov, TBR Principal Analyst: Hey, good to be here. Thanks for having us.

New ecosystem analysis

Patrick: Excellent. Yeah. So, I want to talk about our ecosystem research, our ecosystem intelligence reports, which we’re in year three now of doing these. And it’s been a blend, a combination, a merging of work that we do in the cloud and software space and work that we do in the IT services and consulting space. Basically we look at each of the companies that we cover in detail in those spaces, but now for the last few years, we’ve been combining those two research streams and saying what are the relationships between these companies like and what can we learn about the ecosystem that they’re working in by understanding those relationships. And this has proved to be enormously valuable to our clients because all of them depend on their ecosystems in order to grow, and I want to wrap up when we get to the end to talk about how we see that kind of changing. But if you could maybe just walk us through right now what are we looking at that’s new in the ecosystem research? And I mean just to say at the beginning, we do have ecosystem research around the hyperscalers, we have it around some ISVs, and so maybe you can tell us where we are now and where we’re kind of, what’s new, maybe what’s coming next.

Boz: Sure, happy to. So, as you mentioned, you know the research spans across the consultancies and the global systems integrators, intersections with the hyperscalers as well as the ISV community. So, the streams of reports that we’ve been producing in the last three years have been focused on the infrastructure side, as I said, you know, and the application side. So, the application side of the house is what we are expanding in terms of coverage. So we’re about to launch our ServiceNow Ecosystem report, which looks at the intersection of ServiceNow’s relationship with 10 of the largest GSIs and consultancies, which is a very similar report to what we have for the likes of the SAP Oracle and Workday, Adobe and Salesforce on the application site, as well as the hyperscalers, the AWS, Google Cloud, and Microsoft Azure. So, that report is a brand new one coming up shortly and it’s really just the combination of a lot of conversations we have had with both sides of the house, both technology and services providers. And looking through the lens of the role of ServiceNow as it augments its own value proposition and enhances its partner strategy along the way, portfolio, technology portfolio, commercial models, sales promotions and so forth. You know, knowledge is happening in the short manner as we are recording this podcast. So, I’m sure we’re going to hear more updates on ServiceNow as well as its partners from Partner Day. So that’s coming up. 

So that’s the big new report that’s coming up. But we also are in the field right now with the next iteration of our Voice of the Partner report. So, the Voice of the Partner, as it suggests, looks at the intersection and the relationship between three groups of vendors, the OEM providers, the cloud and software providers, as well as the services providers, and really trying to answer the big question, what are partners missing of each other. And again we are going for the second iteration of that report, that should be publishing in the next three to four weeks as well, like late May, early June.

Patrick: Okay.

Boz: Essentially, last but not least we are adding additional data cuts, as I mentioned you know we have the Cloud Ecosystem report that looks at the hyperscaler’s relationship with the GSIs and consultancies. So that was the first set of reports that we launched 3 years ago and now we have reached kind of a point where we have gathered enough data, where we are going to model additional data essentially on our own and expend that proprietary methodology looking through the geo specific cuts. So, we’re breaking down the- let’s take for example Accenture’s AWS revenue and headcount by geography, right, we’ll do the same thing for the other three practice areas as well as across all the 11 providers there in the report. So, we’re starting to add additional data cuts in that report. So ServiceNow, additional data cuts, and Voice of the Partner, if I had to sum it up.

New analysis being added

Patrick: Excellent. And Alex, so now we have ServiceNow, SAP Oracle Workday, right, and then Adobe and Salesforce. So, we’ve got six. In your view, coming from the cloud and software side of the house are those the most important and who might be coming next?

Alex: Well, the big one that’s coming next for the cloud practice and you’re talking about Voice of the Partner is the Cloud Voice of the Partner. That report that Boz started, you know, we looked at that from the cloud practice and just such great insights coming from, you know, what’s differentiating these vendors within the ecosystem and how is the ecosystem looking at its peers and being opinionated about how they collaborate and with whom they’re collaborating with. So, we really want to double tap on the cloud angle around this Voice of the Partner report, so, coming out with a dedicated cloud report in the coming months, I believe that’s going to be a 2Q25 report for us, sort of towards the middle of the year. So that’s something that people can expect to see, a big new report coming out of the cloud practice.

Patrick: Do you anticipate within a year or so that we’ll be, or less, that we’ll be adding another ISV to that that mix along with Adobe and Salesforce and Workday and all the rest? Is there anybody else, I guess I’m asking that you’re like, I wish we had the ecosystem report for these guys.

Alex: There’s a lot of great companies that probably should be included in these reports. I think picking one is sometimes sort of the challenge that comes to my mind. You know, HubSpot is a fast grower. 

Patrick: Right.

Alex: When I look at the Cloud Applications Benchmark and their relationship to Salesforce, you know looking at how they compete, you know their name, that could be included within the Adobe and Salesforce Ecosystem report just because I think that they’re growing really well right now. And I think that their role in the market is going to continue to, you know, be very competitive.

Patrick: Right. And I could see coming at it Boz, from the services point, you might say, here are the companies that have chosen or are working with HubSpot in a very strategic way. So maybe highlighting them just from the services perspective.

Could the management consultancy’s labor pyramids collapse?

Alex, you said differentiation and that always sort of is a trigger for me, when you think about how these ecosystem reports are used, is that one of the most important use cases is like it allows you to see not just the staffing or the, you know, the dedicated resources and the acquisitions or the, you know, the investments that are being made, but how you can actually tell the difference between Accenture’s Azure practice and Deloitte’s Azure practice? Is that what sort of comes out in these reports?

Alex: Yeah, I would say so. And you know one of the things I mean, I’m always thinking about it from sort of the cloud angle, being in the cloud practice. 

Patrick: Right.

Alex: So, you know when we talk to these services vendors, like the word I just used opinionated, and so that opinionation is going to be based in what they see as differentiation by the vendors and sort of how they are executing on their product strategy and sort of what the road map looks like and sort of how that is positioned in the broader cloud opportunity, whether it’s you know, core enterprise migrations, or something more emerging like AI. So, you know, getting to the root of, you know, how these cloud vendors are being viewed by the services professionals and how that is influencing where the services professionals are investing their money, that’s really what I like to think about a lot.

Patrick: Okay. And then Boz from your perspective, the same kind of question.

Boz: Yeah, differentiation is like you said, it’s a trigger word for sure. And I think from a services side, one question we’ve been trying to get a better understanding of is how well services providers and their cloud and software counterparts think about each other meaning- and how well they know each other, I should say is probably is better way to phrase it, is, you know, that knowledge management and ensuring that SAP can tell, you know, the EY story as good as EY can tell their own story. So, I think that’s the kind of, the big question that I think no one has cracked the code on that particular challenge yet from just- from what we’re gathering sentiments and the Voice of the Partner, you know, surveys and just ongoing conversations. There are some bits and pieces and efforts in certain practice areas that we see some vendors being a little bit closer aligned and think ServiceNow actually, now that we’re doing the research around it, we see them, some of the partners being better positioned themselves within each other and between each other meaning, you know, there’s like three to four industry offerings for example for specific industries, right, versus, we can be ServiceNow’s partner across 19 industries, right? So that kind of starts to suggest you know the calibration of expectations and better alignment between the two parties, so that then when the sales process, when the go to market motions get fine-tuned, there’s a little bit more better alignment to that, which can actually essentially service the customer you know through the- to the best way possible. But I think that’s the differentiation for me is about how well partners can tell each others’ story.

Patrick: We just had a conversation recently with a client that was talking about how they’re trying to shift their own brand in the marketplace and how, you know, they’re trying to get more into, honestly into the consulting side of things. They’re trying to do, you know, higher value kind of work, which is great. And one of the things that we advised was listen, having your partners tell that story is going to be more powerful than you trying to go out and tell your story. Because nobody sort of, not nobody, but it’s harder to market, you know, believe that we’re different as opposed to having somebody like a, you know, a hyperscaler come in and say, hey, these guys are different. 

GenAI and pricing models

So, I want to pivot a little bit to, you know, what is it you don’t know? Like you guys are obviously experts, you know everything, but there’s gotta be stuff, there’s still questions you don’t know the answers to. So, when you think about the ecosystem and ecosystem intelligence, and I know from a competitive intelligence perspective, we’re really good at saying these are the key intelligence questions we’re going after. What are the key intelligence questions within the ecosystem intelligence space, that despite 3 years of looking at ecosystem intelligence reports, you’re still going after, you’re still trying to solve? Boz, you want to go first?

Boz: Yeah, sure. I mean, I think that the biggest opportunity for everyone that I think we’re trying to also untangle is around the commercial construct, an opportunity that we are starting to see being amplified and accelerated with discussions around GenAI. What I mean by that is so the GenAI focus and the push around, you know, we can sell you, you know, you can use the technology to increase productivity, to improve your kind of like operations etcetera, etcetera. So that is putting a different pressure on the services vendors. Meaning that now they’re on the hook for delivering essentially those outcomes. So- and historically, services companies, that’s what they know for, consultancies, they pride themselves on being able to talk about the business language, the business outcomes and trying to be a little bit more, you know, kind of a line of business and industry wrapper around the technology discussion. Now the challenge that we see and we’re trying to understand is how prepared are the software and the cloud providers to change their pricing models to become more of an outcome-based focus. We don’t know of any, we’re not aware at least, I don’t think- I spoke with many people around in the ecosystem, any single ISV provider or cloud provider that currently is prepared to charge on outcome-based for this piece of software, right.

Patrick: Yeah.

Boz: Now, one can argue that, you know, this is the job of the consultancies, right? But that puts pressure on the consultancies to ensure that the relationship is aligned and you know, we know about the consumption model. So, you can say, oh, there’s a consumption, they consume XY and get paid that way and the outcome is driven by the consumption, etcetera, etcetera. You can kind of massage the message that way. But I think the challenge is that, you know, the expectation is evolving, and I think that maybe it’s something that it’s three years, five years down the road, whatever time it takes for GenAI to start to really pick up steam in terms of making a difference on the financial side. I mean, now it’s got plenty of steam on the hype side from a GenAI perspective, but in terms of like the monetization of the technology, are there software providers out there, either current, that currently in the market space or up and coming, they’re really going to catch the Salesforce and the Workday of the world in the blind spot where they actually will be prepared to actually come out in the public and say we are going to- we’re changing the business model. 

Patrick: Yeah.

Boz: We’re changing the way we’re going to charge and that’s going to make everyone’s job different. Now that’s going to create opportunities for new partnerships because McKinsey can look around and say we always talk about outcomes. You’re selling on outcomes, your piece of software. Now we can make a joint- 

Patrick: So, we’re aligned. 

Boz: We’re aligned. So, I’m trying to draw some comparisons to 20+ years ago when, you know, Salesforce and Workday came around and disrupted traditional ISV models. The big change was, yeah, sure, the technology architecture was different from modular to agile. Yada, yada. But actually the big change was about how those companies are monetizing the IP, right. And the cloud was about business model change. So, is the next wave of business model change for ISV’s going to become more an outcome-based, and that’s something we’re trying to understand. It is, I will understand that especially if you become publicly traded company messaging to Wall Street and whatnot that’s a completely different, that changes the narrative.

Patrick: Right.

Boz: But as you know the, you know, this has to change, the professional services companies are gradually evolving and they’re trying to change you know how they’re thinking about their commercial models as well and trying to think how much GenAI is disrupting their business model and from a being times and material to more fixed price or outcome-based?

Patrick: Right.

Boz: So, this is kind of the big questions we’re trying to, you know, go after and see how the ecosystem will evolve as the outcome-based pricing model changes across the board.

Patrick: Right, Alex. He just laid down a lot of landmines for you to kind of walk around, or maybe step on. Because I think the challenge that Boz just presented was to the companies that you cover, can they actually change their business models and their commercial models, or does it need to go the other way, that the IT services companies need to learn how to be more, I don’t want to say commoditized but learn how to sell at a subscription or retainer kind of model.

Boz: Yeah, that’s the flip side, yeah.

Patrick: So, what do you think Alex?

Alex: I mean, as far as commercialization goes, you know the consumption method has definitely proven to be the, you know, the go-to as far as AI is concerned. There is one software vendor that is doing outcome-based pricing that I’ve come across. I think it was Zendesk.

Patrick: Okay.

Alex: I think Zendesk is doing outcome-based pricing. I really should be double checking that.

Boz: We they sell it directly or sell it with partners?

Alex: I have to double check on that and get back to you,

Boz: Okay, just curious.

Alex: But it’s rare. It’s definitely-

Patrick: Yeah.

Alex: It’s definitely not something that we’re seeing broadly, broadly adopted. And like one of the other things that that caught my ear while Boz was talking was just this idea of these- where are these AI first vendors going to look at, we know that they are, they’re probably being built right now. You know, they probably exist out there. They probably haven’t risen in terms of like the spotlight that all the major incumbents still have. But at the end of the day, Salesforce, which was this massive disruptor back in its time, is now the incumbent, 

Patrick: Right.

Alex: And now it’s going to be the target of disruption and you know, getting to- like bringing back to this idea of like the opinionated service provider. Getting their opinion on, you know, a Salesforce is much simpler than understanding what they’re looking at as far as these up and coming AI first companies. 

Patrick: Right.

Alex: And so it’s going to be a constant challenge for us to be intellectually agile to, you know, hear and figure out sort of what they’re looking at and being able to keep up with them. Because it’s not something that’s necessarily being projected outward, they’re much more vocal around those major, those really large incumbent and those partnerships.

Patrick: Right.

Alex: But understanding who they are placing early bets in and these like AI native companies, that’s something that’s going to be challenging and an outstanding question.

What comes next: Companies, questions and data cuts

Patrick: So, when you think- so, Alex, put yourself in the same seat in a year from now. What are some of the questions you think you’re going to be answering then or is it different from what you just said or, and maybe even what are some of the companies since you mentioned these sort of the up and comers, what are some of the companies that you imagine a year from now we’ve got in the ecosystem intelligence reports mix? I keep asking you for specific companies. 

Alex: I know. *laughs*

Patrick: And it’s not fair, but you know, putting you on the spot.

Alex: I know it. You know this isn’t a good example, but one that I do think is a name that everyone’s familiar with, OpenAI. 

Patrick: Yeah.

Alex: You know, Satya Nadella had a podcast that was pretty widely dispersed where he said OpenAI is not a model company anymore. They are a product company.

Patrick: Right. 

Alex: ChatGPT is the product, you know. ChatGPT is a product, it’s a great product and all a lot of these model companies have done a really good job of productizing their investments already. You know, Anthropic has done a good job with it. Perplexity, there’s a lot of these tools that are, you know, sort of, were born sort of in the consumer because, you know, it was sort of these online platforms that anyone could go access — but look at PwC: Like PwC was one of the first companies to go out and make it an enterprise-wide tool and be a reseller and a service provider delivering ChatGPT to the enterprise. 

Patrick: Right

Alex: So, you know even these well-known AI model providers, you know, those are names that now that they’re turning these product companies, could become more relevant to us as that goes.

Patrick: Yeah, and then Boz, from your perspective, I know a year from now you could say, okay, we’ve got ServiceNow we’re looking at 10 IT services companies and consultancies. So, a year from now you can say we can look at ServiceNow and 20. That’s the easy answer, give me the hard answer which is, you know, what are the other kinds of things you think are going to be different a year from now.

Boz: Yeah, the expansion of the partnerships absolutely. And I think what I just started, I think it’s kind of like got my, you know, attention as well as I’m thinking about that coverage expansion is, you know, drawing parallels to the way cloud first came around, right? And everyone was building cloud trained personnel.

Patrick: Right.

Boz: You know they had a big announcement. Now we’re seeing everyone is training GenAI, AI training, data and AI practices are expanding, certain goals, yada, yada. So, naturally the next evolution will be how many people you have vertically around OpenAI, around Anthropic’s Claude, around Gemini. You know all these pieces now, when you develop a community are you are you focused on, you know, having model trained personnel, that is part of, you know, the joint go to market efforts, or it’s for more your own proprietary kind or partner enabled, you know, accelerators. So that’s kind of the thing that’s just a natural evolution of the discussion because AI essentially becomes the new cloud discussion from a business layer perspective and how companies organize. So that makes perfect sense, what he’s discussing that it’s going to be about a year from now or two years from now in terms of like, started building out the same way we’ve been building out the cloud practices and the ISV practices for those SIs. But I can see that being naturally kind of the next wave of, you know, the ecosystem intelligence reports moving forward and understanding. 

Patrick: Right.

Boz: I think that’s where really the big commercial model, pricing model will come into play of how those companies will be the key focal point discussion. In terms of the current coverage and thinking about what next, I think naturally the questions we usually get from clients are around the industry vertical intersection. So, I mentioned we’re starting with the geographic expansion of the Cloud Ecosystem report. Naturally, we’re going to build into similar kind of data cuts within the existing other reports within that on the application side. 

Patrick: Right.

Boz: So that geo breakouts are the natural one. And then the next one will be to start adding the industry vertical. You know understanding, okay, can we give us, you know, the top six, top eight industry verticals by practice area by partner, you know. So, essentially again thinking, let’s say Capgemini this time with Microsoft, what are Capgemini and Microsoft’s top six or top eight verticals? 

Patrick: Right.

Boz: And obviously the bundle of all will be like the- another intersection of industry by geo, but that’s something that we could do, it just take so much more of the research and the- but it’s certainly it’s on the road map, the internal road maps, but it’s certainly something that you know just will take a little more time.

Multi-party alliances

Patrick: So, let me paint a picture that’s going to be either wildly optimistic or just insane. Or both. So right now, if you took all 200 companies that TBR covers and justice put them in a big matrix, we can fill in a lot of those squares, like the relationship between, you know, Microsoft and Deloitte, the relationship between KPMG and SAP. You know, we can fill those boxes in with data, with analysis. 

Boz: Yeah. 

Patrick: What we have now, we’re now expanding to say, you know, let’s look at that by geo. Let’s look at that by service line. Okay, that’s a two by two where you’re filling in all those boxes. Now let’s take the next step and say what about multi-party alliances? Let’s put together the SAP, EY and Infosys relationship. 

Boz: Yeah.

Patrick: How does that look? Can you imagine- how soon are we going to be able to say here’s the three-dimensional, four-dimensional view of the ecosystem?

Boz: I think it’s certainly in the near future, right? But I think what starting point before that prerequisite as you said it, made me think about another set of conversations we’ve been having about the expansion of the portfolios around workloads. 

Patrick: Ah.

Boz: So, I think this is kind of where we started thinking about the multi-party alliances and understanding, take for example Microsoft Stack, right, Microsoft Azure, and understanding what’s the composition of workloads? SAP, Oracle, Salesforce, whatever ISV you can just put and then start there thinking about from that and then cut across, or put across I should say, vertically against the stack the other GSI, right? 

Patrick: Okay.

Boz: So then start thinking from through that angle. So that’s the, you know, understanding the workload distribution across hyperscalers, I think because the hyperscalers are essentially the backbone-

Patrick: They’re the backbone of

Boz: Of all this work all right.

Patrick: Sure, yeah.

Boz: So, you need to start from there and then really understand how it stacks up and then understand who are, which are the channel partners that drive the most of that workload from the GSI and the consulting perspective.

Patrick: Yeah, okay. That makes a lot of sense. So, we’d be looking at, we’d be looking at the multi-party alliances not by which of the companies are forming together to solve a particular problem, but saying this particular problem exists as addressed by this workload. So, within that within, I keep trying to draw, as though people can see this. I’m like using my hands like-

Boz: Yeah, we’re, drawing, yes.

Patrick: But, in that stack of this particular workload. 

Boz: Yeah.

Patrick: Different percentages of that work is being driven by different companies and how those pieces all fit together, 

Boz: Yeah.

Patrick: determine like what that multi-party ecosystem alliance is.

Boz: And the biggest question will be is that, are those workloads being driven by the hyperscaler directly, direct sales of the hyperscaler, or the GSI?

Patrick: Or somebody else.

Boz: Right, that’s the- or the direct sale of the ISV provider. So how- who actually is the leading, who’s the orchestrator, who’s the management you know and that stuff.

Patrick: And then there’s the companies coming in underneath and saying you’re doing this inefficiently. Here’s where we can, you know, provide fin-ops and make it work better for you. So, there’s that too.

Boz: Yeah, that too, plus there’s one group, one more group of vendors that we have not touched upon that’s in the Voice of the Partner, is the OEM providers. The infrastructure providers, they’re as critical as the hyperscalers and everybody else in the ecosystem, right.

Patrick: Right. 

Boz: So, we need to account for their implications and know sometimes you know, oh yeah, if it’s an infrastructure provider, you know, it’s a kind of a given, right? 

Patrick: Right.

Boz: No, they also do look through that workload, especially when you take the AI discussion we just had a moment ago and thinking about the workloads on-prem versus in the cloud, right? How do they then think about their partners and who actually thinks about it through that lens as well, because that adds another dimension in the ecosystem reports.

Where will workloads live

Patrick: Alex, it sounds like it’s a lot more work for you, is what it sounds like, because you’re coming at it from the workloads 

Alex: Yeah.

Patrick: That’s your, that’s your space. 

Alex: Yeah, right. Yeah. I mean, where the workloads are going? Yeah, that’s something that we spend a lot of time with, especially in our customer research and trying to understand, you know, we had this big wave of cloud repatriation, which I look at, you know. How you can take costs out of your IT procurement and whether that is something that is going to be a long term headwind to cloud growth. I- we tend to be of the mind that, you know, the cloud is still the final destination for a lot of these workloads. But when you bring in AI and you start talking about latency requirements and security requirements, it definitely shakes up- it shakes up the puzzle, and there’s definitely gives and takes, and it’s going to be probably determined around, you know, the specific use cases that the customer is focusing on, you know. When we talk about like a manufacturing or a health care where there’s more OT angles, you know, and latency becomes mission critical, then yeah, we think more about on-premise AI deployment. But I still think that with how much data and the innovation that people get access to when they deploy in the cloud, there’s still going to be a large chunk of the pie that ends up that ends up there.

Patrick: Yeah. Yeah, I think you’re right. And that repatriation story was kind of a spike early on with GenAI when there was the when the-

Alex: Yeah.

Patrick: The excitement over what it could do was met by the bill that came with it, and then it’s like well, so we can- what can we repatriate. 

Final thoughts

Awesome discussion. This was really good. We covered a ton of ground. I’m really glad we’ve got these reports coming out in the near term and what I think we should do is in the next- in season 4 of the podcast, we’ll sit down again, because by then you’ll have the Voice of the Partner reports out. We’ll have the latest ecosystem reports out and we will have had feedback from our clients on what really resonated and what kind of questions they had after that. So, let’s plan on chatting again. Boz, Alex. Thank you very much.

Boz: Thank you. 

Alex: Thank you.

Patrick: Next week I’ll be speaking with Boz Hristov and Kelly Lesiczka about Big Four firm EY’s people advisory services. Don’t forget to send us your key intelligence questions on business strategy, ecosystems and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies large and small answer these questions with the research data and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR, thanks for joining us and see you next week.

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