Episode Transcript
[00:00:00] Good morning. Today I want to spend 20 or 25 minutes talking about all of the HR technology announcements and fanfare that happen ahead of the conferences that we go to, the one being next week called Unleash in Las Vegas. Now, in case you haven't noticed, there's a massive scramble for your brain and your eyeballs going on in the world of the technology providers. Microsoft wants your eyes and brain focused on the copilot.
[00:00:31] Anthropic wants you enamored and dazzled with cowork. Gemini wants you to understand why Google and Notebook LLM and Gemini are the best thing in the world. And then there are the dozens of other LLM providers, including some from China, that are also putting together incredible tools to take your time and attention. And it seems to be proliferating as the market gets bigger. Oracle is now in the AI technology business, going to see a pretty impressive announcement from workday next week. And we also should be expecting soon a massive announcement from ServiceNow as they release the new agents that they're building from their MoveWorx acquisition.
[00:01:13] So just in the corporate space alone, there are dozens of massive companies building AI tools for us. And then of course, for those of us in hr, there's all the specialized providers as well. So now, next week, you're definitely going to see some announcements from Cornerstone, you're going to see announcements from Findom, you're going to see announcements from Eightfold and Maki People and many, many other providers. Now, I'm sort of used to this, and I've lived almost 35 years dealing with it. And what I generally do when there are lots of announcements is I try to read all of them and I look at the companies themselves and their success, their customers, their growth rates and their management teams, and I try to assess on your behalf where these products fit, how mature they are and what they're likely to do to your entire IT infrastructure. And in the case of AI, it's becoming more confusing by the minute. Most AI tools are now called agents, which means they have agency, which means they can do things, they can look up things, they can transact, they can run reports, they can open the files on your computer if you let them. They can send emails, they can send messages, they can talk to you, you can talk to them, they can record things. And that means that all of these tools that we're buying have the opportunity to impinge on our corporate data, our personal experiences at work and our daily lives. Yesterday I had a very interesting conversation with, with PBS Marketplace, which will come out on the radio about spying and espionage at work. And we talked for almost an hour about digital twins and meeting recordings and personal meeting recorders, which as you know, have proliferated our lives. It always kind of makes me smile when I'm in a meeting with an outside party and we're recording the meeting and each individual person has also invited their personal recorder to join us. I guess they just don't necessarily trust the fact that the recording we're making is the quite the same one they want to listen to. So this is getting kind of confusing and kind of messy. So let me take a step back in the middle of all of these technologies. Elon Musk talking about robots that can run companies. OpenAI talking about the military and their need and role to fly drones to there's some basic fundamental things and that has to do with people. Despite the claimed state of autonomy in these systems, none of them are autonomous. Yet even the Tesla Autopilot has humans behind the scenes, including the Waymo, by the way. And so when you read a story about Block or Atlassian or Amazon laying off tens of thousands of people or 2 digitized Google by percentages of employees for AI, those are usually wishful thinking, as I wrote about in my substack. And by the way, I am writing on Substack to just find a place to put more non business stories for you to read. Most of the announcements about layoffs and AI eliminating jobs are CEOs admitting that they simply hired too many people and they need to restructure and remove bureaucracy to improve productivity. In other words, their announcements about intentions to increase talent density in most cases. If you read the articles and LinkedIn stories from individuals who were laid off, these companies don't really have much automation. Yet there's a fascinating screed of discussions from the head of transformation at Amazon. I believe that's his job, although it's a little hard to tell about the 16,000 people that they laid off in the Amazon engineering function. And that what happened is as they got all the agents running, many of the agents had bugs and they had to hire back many of the specialized engineers to supervise the agents. And the story as I wrote about in substack is that the humans had to come back and train the agents so the agents could better take their jobs away from them.
[00:05:29] So even though that sounds a little silly, that's the state of where we are. Every agent that you build will require you to take care of it. We know this in Galileo, by the way. Next week we're going to be announcing a new version of Galileo with all of the things you're going to hear about from workday. And we now have 1100 companies using it. So it's been extraordinarily successful and we have many, many exciting things to share along those lines. And what we know from our experience supporting you is that we have to build infrastructure and tools and human services behind it. In fact, as I talked about with the CEO of Maki People, who is really a pioneer in the talent acquisition space, the future of AI is not autonomous systems with no people. Future AI is enabling people to take technology into and train it and support it to do extraordinary things. That's why companies like Findom and Meta and many, many others use humans to label and improve the quality of the data. In the case of Maki People, they have built one of the most successful job screening, job fit job assessment technologies using AI that literally asks you questions and talks to you to assess your fit to a given job. But it has to be customized for the company and the role within the company. The AI cannot figure out that on its own. Now, you will hear many, many stories of AI automatically building training courses, automatically building interview scripts, automatically solving customer service problems. And of course there are use cases where that works, but there are going to be edge cases and there always will be that the AI doesn't understand. And our job as humans literally is to supervise them. And that's really the story of these layoffs, is that a lot of these companies are using the AI story as a way to convince Wall street that they're really taking a positive step forward. Now, one of the other interesting news items that I want to just mention as we talk about vendors and announcements next week is Oracle. And I talked about Oracle in the last podcast, but I want to just talk about them briefly again. Oracle is a really amazing company. It's one of the few technology companies, a little bit like IBM, but a little bit more aggressive, that has managed to stay on top of the technology market for many decades. I would say Microsoft falls into that category, Cisco falls into that category, and Intel. But as you know, most of these older technology companies lose their mojo to grow. They end up with a lot of legacy customers and legacy products and eventually reach some form of stagnation where they have to reinvent themselves. Well, Oracle has sort of avoided that problem.
[00:08:18] And I think the reason they avoid that problem largely does come down to Larry Ellison. Larry Ellison, and I have met him once or twice when I was at IBM, is a very aggressive, smart, disruptive man. He understands, and his management team as well, that in order to stay relevant and competitive in this highly, highly competitive world of technology, you have to reinvent yourself pretty regularly. You have to see the future, you have to move swiftly into the future and you have to jettison the past, sometimes in a painful way. Oracle goes through layoffs. Oracle buys companies. Oracle competes and then acquires their competitors. They did a hostile takeover, for example, a hostile acquisition of PeopleSoft years ago. They bought Cerner. I've talked about this last time. And they're not afraid to transform themselves as they go. It's a highly competitive culture. I know people that have worked there for many, many years and they keep people on their toes who work there. And from a technology standpoint, every time a new technology arrives on the scene, Oracle immediately jumps into it and figures out what to do with it. And that process and that dynamic culture has allowed Oracle to continue to thrive. Now, the company is now sitting on a massive load of debt. But interestingly enough, if you look at, and I'm going to talk about this next week in my keynote, if you look at Oracle's market capitalization or the valuation of the company in the stock market, it is seven to eight times revenue, almost nine times revenue, depending on what day you look at it. If you compare that to SAP Workday, Salesforce or the traditional enterprise software companies, it's trading at a 50 to 75% higher multiple of sales than those companies, which means that Oracle's market cap give it the opportunity to, to potentially acquire one of these other companies. And they are known to acquire software companies. So as a result of Oracle's shrewd moves of getting into the AI infrastructure business, they've increased their market cap to the point that they could decide to go scoop up new technology or other technology companies in our market of hr. I don't know that they will because they're doing fine. But that's the kind of thing that happens when there's this much disruption taking place. Now, in addition to all the announcements that we're going to talk about next week week, I do want to mention Microsoft. We know from most of the analyst reports that about 15 million people or 3% of the licensed Microsoft Office users are now paying for the Copilot. Now that sounds like a small number, but it actually is a lot of revenue for them and they have no intention of slowing down. So this week they announced a price increase on one of the bundles that goes to corporations called E7, and that includes the Microsoft Copilot. And all of the agent management tools called Agent 365 that go with it. Because as companies use and build more agents and yes, a lot of companies haven't figured this out yet, but more and more will. They need management infrastructure to take care of it. And as I mentioned before, Workday is going after this market, ServiceNow is going after this market, Oracle's going after this market, and all the enterprise software companies will now, because Microsoft has a tremendously powerful sales organization, a very strong brand, and a culture of incredible amounts of innovation. This, to me is a story. We know from our work with Microsoft with Galileo that the Copilot is capable of doing some pretty amazing things. Not because it's built on OpenAI, but because it has access to the Microsoft Graph. The Microsoft Graph, for those of you that use Microsoft, which is about 70% of the world's corporations or higher, knows your emails, your job title, your profile, and lots and lots of information about your calendar, your communications and essentially what you're doing at work. If you use SharePoint, if you use teams, all that information is available. If your IT department decides to share it with the Microsoft Graph. Which means that over time, the Microsoft Copilot has the potential to be or create a digital twin to advise you when you go to a meeting, what to focus on or what to expect to help you optimize your schedule and your communications, to give you a better career path and so forth. Now, obviously all this is not built yet, but that vision of how our AI toolbox at work comes together to make us more productive, to give us a better experience, to improve our careers, is really starting to come into fruition. The announcements you're going to see from Workday and Sauna are very much along the same direction for the world of workday. And I have to believe that Services now and Oracle and SAP are also thinking the same way. So despite the proliferation of incredible tools and interesting technologies that we're seeing in the world of AI, in some sense they're all going in the same place. My recommendation to you, whether you like it or not, is you have to experiment with these systems. They're all nascent, new, fast growing technologies. Every single one of them is unique and powerful in its own interesting way. And if you're an aspiring HR leader, if you're an HR technologist, if you're an HR business partner, or you simply like playing and tinkering with things, you really need to pay attention. We are going to be doing some announcements in Galileo next week. We have workshops going on at Vegas for those of you that are coming to unleash. And we will also be announcing a new partnership at the Transform Conference the following week in Vegas as well. I could not be more excited about what's going on in the world of HR technology and technology in general, because HR technology isn't really about hr. It's about work. It's about your career, it's about your skills, it's about your wellbeing, it's about your productivity, it's about your life. So all of these arcane back office administrative tools that we've been buying for years are opening up and becoming part of our daily work and life experience. It's an interesting, interesting direction and the market is moving faster than ever. I hope this is an interesting perspective on what's going on. And I will be sharing some really interesting news insights on the market next week in Vegas. Hope to see you there.
