Hot Desk Pod Ep 27: Adobe earnings, Databricks Summit, Infocomm, SAP Sapphire, Cisco Live & Zoholics

Disclaimer: This show is for information and entertainment purposes only. While we will discuss publicly traded companies on this show. The contents of this show should not be taken as investment advice.

Transcript:

Robert Kramer: Welcome to this week’s edition of Moor Insights & Strategy Hot Desk Podcast. I think we’re on episode 27. I’m Robert Kramer and I’m joined by Melody Brue. I handle ERP and enterprise data and Melody handles modern work, HCM, CX, CRM, anything else, acronyms as we like to talk about these. We also get fined if we tell too many of them. On the show, we talk about tools, trends, and trajectories and peoples, in marketing technologies, enterprise apps, ERP, CRM, and the glue that holds it all together, which most people will say is data.

So this week, we’re talking about a bunch of different things. We’ve got a great show with Adobe Earnings, Databricks, InfoComm, SAP Sapphire, and Cisco Live, plus Zoholics, we were both there. So we should do a quick disclaimer, then we can get going. This show is for information and entertainment purposes only. While we will discuss publicly traded companies on the show, its content should not be taken as investment advice. So let’s get started, Mel. What do you think, should we go with Adobe first?

Melody Brue: Yeah, we’ve got a lot to talk about today, so we’re going to have to move through this, but both of us have been on the road for the last couple of weeks, so we’ve been to all of these things that we’re talking about. So yeah, let’s get started. Well, actually we haven’t been to Adobe, although I will be going to Adobe Max soon. I’m excited about that. So yeah, Adobe released its Q2 2024 earnings this past week on Thursday and just killed it. Beat, beat, and raise, which I think was a really good signal, I think, to the market obviously. So stock went up as much as 15%. I think we’re still up today around nine, 10%, even with Adobe had a little bit of a PR thing. It really wasn’t that big of a deal in my opinion. They released a new terms of service and people got a little bit antsy about it, I would say. There really wasn’t much new about it, to be honest. I think it was just some clarifying some language.

But I think with AI, people are antsy about that, especially creators and how companies are training models. So Adobe came out and said, “Okay, we’re going to clarify the language.” They released the new language today. Very much said, “We’re going to take the time, we’re going to talk to our customers, we’re going to make sure that we’re really clear on this,” and I think they handled it really well. So that aside, they released that today. It doesn’t seem to have had any effect on the stock price. Obviously their numbers were great in Q2. They raised what they’re looking at for Q3 in terms of revenue, APS, and the ARR. So looking good on that. I think what we’re seeing is starting to really see the monetization of AI. Subscription revenue increasing, lots of new logos, big enterprise logos across all of the clouds, Document Cloud, Creative Cloud and Experience Cloud.

I think one thing that’s really important, I would love to see them break out where the AI revenue is coming from. It’s probably too early to even tell that because I think what they’re seeing is a lot of upsell in subscription because people want access to Firefly. So a lot of that is going to be guesswork at this point, but I think soon, they’ll be able to break that out. Whether they will or won’t, we don’t know. But I do think that with Firefly services and Express, there’s just so much momentum. They raised their ARR target for the digital media business. Lots of momentum here. I think we’ll see good things. What about any thoughts on that? I know you’ve been buried in wrapping up these other things, but any thoughts there?

Robert Kramer: No, it’s great. I think it’s synonymous with what’s going on in the industry with additional companies. So I was just at Databricks, it was in San Francisco. And Databricks is that company that handles that middle layer. Adobe’s more of the, although they do have a customer data platform, they handle a lot of the SaaS applications. ERP handles more of the anchor components of the data, which we’ll talk about in a minute when we get to Sapphire. But the Databricks has this amazing AI and data platform that aggregates the data from ERP and all these SaaS applications into a platform. So their focus was AI and data at this event, and they talked a lot about owning the data, not taking the data from where you have it, whether it’s in the cloud or perpetual, but where you can actually use it into a platform, aggregate it, and then actually have intelligence off of it. So I thought it was really a… It was my first time at the show, but it was really an eye-opener to see how they’re actually handling it firsthand. Competition to them is like a Snowflake or like a Cloudera. So I have a little bit of an audience in the background here, but it was a good show.

Melody Brue: Awesome. Well, it sounds like you’re getting some commentary from the peanut gallery there, so I’ll move on to InfoComm. This past week, I was at InfoComm in Las Vegas. It was really great. So InfoComm has just traditionally been kind of like this AV show. And AV is important, but there was a really interesting kind of turn, and maybe this has happened over the past couple of years, but it was really obvious this year, where it went from AV solutions to AV experiences. And one place where… So I did two different Six Five videos while I was there. One was with Shure and one was with HP Poly. The HP Poly one is out, the Shure one is not yet. I will post both of them in the show notes.

But with Shure, I was with Sam Sabet, who’s the CTO. We talked a lot about just the user-centric design, their new MXW neXt 2, which is kind of a plug and play conference system. We talked about their ShureCloud Beta. They’re expanding to the cloud, making it a lot easier for people to want security, device management, all of that. And then at HP Poly, we just went through a bunch of different things. All of their collaborations, well, not all, a lot of their collaboration systems, AI-driven technologies, how the AI-driven technologies help with collaboration, with easy setup, with scalability in meeting, the flexibility in meeting spaces, all of that. We talked about their Microsoft Teams rooms, their Zoom device management with Poly Lens and Zooms. And one of my favorite topics, their sustainability practice. So HP Poly was, I think admittedly a little bit behind on sustainability, or sorry, Poly was a little bit behind. Together with HP, they are 100% full force ahead with sustainability in how they build.

Robert Kramer: That’s impressive.

Melody Brue: Yeah, it’s really, really great. And then finally, I had just such a neat conversation with the BrightSign CEO, Steve Durkee, about how BrightSign, which is a… Well, okay, so they do a lot of different things, but I’m going to focus on one thing. In sporting arenas, their technology replaces, can replace menus and signage where they replace static menus with dynamic content, so experiences. So think about when you’re at a concession stand, say you’re at a game and you go to the concession stand, you don’t want to hear that there was a touchdown or a goal scored or whatever before you see it on the TV because there’s some delay, right? They deliver the solution that has no delay from what’s happening on the field to what’s happening at the concession stand. At the same time, they have these sensors in… They integrate these sensors. They’re not their sensors, they partner, with these sensors that tell you whether the bathroom is full. So when you get your hot dog, or you probably should go to the bathroom before you get your hot dog.

Robert Kramer: Good point.

Melody Brue: It tells you which restrooms have availability, so you don’t spend a lot of time searching for that. It also, the menus can be changed to reflect what’s available. So you don’t go up and you’re waiting in line for

Robert Kramer: They’re out of something.

Melody Brue: … 20 minutes because you want a pretzel and then they’re out of pretzels. So this really, it just makes the fan experience so much better. So again, we’ve talked about this so many times before, sports technology that actually serves the fan experience, but also showcases the technology. It’s not just a sponsorship with a logo. It really showcases the technology in a way that really delivers something more extraordinary to the fans. And in this case, it saves them a ton of time from having to wait in line, from being disappointed that something’s sold out, all these types of things, so that was really cool.

Robert Kramer: Really neat.

Melody Brue: In general, I think InfoComm, and I forgot to change… I get so excited about what I’m talking about, I forget to change-

Robert Kramer: That’s pretty cool though.

Melody Brue: But InfoComm in general, I think just this, everything is about experiences, right? We’ve talked about this with employee experience, with customer experience. Everything now is how are companies delivering experiences? And at InfoComm, that was across the board. Certainly, what all of the conversations that I had with HP Poly, with Shure, with BrightSign, it was like how do we deliver better experiences, whether it’s in a meeting room, a stadium, whether it’s while you’re delivering a speech at a conference or in a classroom, wherever you are, how are we delivering better experiences?

Robert Kramer: So calling back to Databricks, that’s a good point. I met with a couple of people from the Atlanta airport. So what they’re doing is they’re bringing about two to 300 different applications into the Databricks Intelligence data platform to aggregate that data to have a better experience for the traveler. So they’re grabbing all the weather, the parking, the traffic on the terminals, the restaurants, the bathrooms, all those things that you were talking about a little bit, but relative to sports. And then how they understand what to expand, where to open up more concessions, where to help out where the delays are, and even onto the highways where the traffic is actually coming into the airport. So it’s really interesting where technology’s going to better serve the customer to give them a better experience like you’re just talking about and where everybody wins.

Melody Brue: Yeah, that’s really cool. Actually, at Avaya ENGAGE, I met with, I can’t tell you which airport it was because it was under NDA, but a major airport, and some of the things that they are doing with their customer service is incredible. And they’re using a bunch of Avaya’s platforms to do this, and it’s really incredible when you see all of the things that go into running an airport.

Robert Kramer: Oh. Atlanta is doing it without the technology, and there’s still… I actually think it’s not a bad airport, it’s just busy. But this experience that you’re talking about is going to just be better from the airport that you were speaking about.

Melody Brue: Yeah. Crazy.

Robert Kramer: Okay.

Melody Brue: So much. Okay, so we’re kind of working backwards here. So Adobe earnings was last week. We both were at several events over the last couple of weeks. You were at SAP Sapphire.

Robert Kramer: Yep.

Melody Brue: You were there live.

Robert Kramer: Yep. So SAP is just one of those large companies that does business with large companies, supplying enterprise software, ERP specifically. And the market’s actually going in an upstream for ERP, they had good earnings recently. But the message was at SAP Sapphire was AI. They’re embedding AI throughout all their solutions, which is not necessarily a shocker, but this is to help improve RISE, which is their implementation methodology to move their older, not older, but let the latter enterprise applications that are on-prem to the cloud and then also to endorse what their new program is called, GROW, for small to medium-sized businesses to go right to the cloud to adopt it right out of the gate and on their business technology platform as well.

But they have some key partnerships that they announced, and a couple of them are Google, NVIDIA, Accenture, all around helping the customer get better features and functionality from the data. But one of them I think that you can talk about is Joule and how Joule and Microsoft are working together with the Copilot to better serve what the ERP actually has for their customers.

Melody Brue: Yeah, so this was, I think, one of the more interesting, at least for me, one of the more interesting things is I kind of called this an enterprise AI power couple. This partnership with Microsoft really is like this deep integration between Joule and Microsoft 365 Copilot. So it allows employees to access information from SAP business applications and Microsoft 365 tools without switching the platforms. So for enterprise employee productivity and kind of accelerate that innovation. But it pulls from both places. So I think that’s a really great strengthening-

Robert Kramer: It is.

Melody Brue: … value prop to Joule is adding that, the strength of Microsoft 365 Copilot to it.

Robert Kramer: So I think they said that there’s about 25,000 customers that are on the older applications for SAP, and about 6,000 have taken the RISE program and moved over to the cloud, which all this new AI tools are going to be on the cloud version. So they have kind of a challenge for GROW and RISE to actually be successful. And I think GROW is very successful right now and RISE is starting to be, but you have these companies that are on these perpetual licenses that might not move. So you have a third that have actually moved, a third that might not ever because of the complexity of their implementations, and then the other will.

So their point is how do they get the ones and how do they supply service and support to the ones that will never move? So I think that they need to come up with some plans of how those ones that are in the perpetual licenses, they have options for them. But it was a good conference all in all, and it was exciting to be there and look at what they’re developing. So as we continue with this podcast, let’s jump into Cisco. You were there in Live as well.

Melody Brue: I was at Cisco Live in Las Vegas. I swear, the past couple of weeks have been such a whirlwind. Will Townsend, who covers security, was also there. I will link his, he did a great write up in Forbes about all of the security announcements. I’ll link that in the show notes. So I’m going to take a different approach and I’m working on a write up, it’s just things have been so busy since then, to Cisco Live because Will’s covering, Will has covered the core announcements, at least from a security standpoint. There were some other announcements on the WebEx side with AI-powered contact center, kind of their hybrid work innovations, which were very cool. Kind of this conversational self-service experiences, AI assistant for contact center agents, AI assistant for WebEx suite, which will soon be available. And then WebEx Control Hub.

There’s a lot of really great things that are happening I think within WebEx that I’ve been waiting for for a while. I feel like from a marketing and branding standpoint, WebEx has come so far in the last, I would say, six to nine months. WebEx is really stepping away from that… I would say actually in general, Cisco is stepping away from being just this stodgy, we’re a networking security company. I think some of that comes from the culture of the Splunk acquisition. Splunk has just kind of a really-

Robert Kramer: They complement each other pretty well.

Melody Brue: The combined culture is different and you can feel it. There’s something about it. It was palpable there. So I’m going to take sort of a different approach on this. And I think there were some really cool things that I witnessed, and I don’t want to give it all away, but the people, the policy, and the products, the way that they’re approaching those things is just different. And Jeetu Patel, who runs all of security and collaboration, which I think is a really interesting combination, and I’ll get into why, because security is… I think the threat surface has just gone beyond what we originally thought it could be. For God’s sakes, people are getting into people’s private information by hacking into their electric toothbrushes at home, so this is reality.

But Jeetu stood on stage in front of tens of thousands of people and said, “If you don’t have an open ecosystem, you are doing it wrong. Shame on you.” Because look at the things that are happening in hospitals where people are not able to have a liver transplant or whatever because they had a security breach. So that’s the reality, and I loved that Cisco is looking at things like that. They’re not just looking at how do we sell more of this? They’re looking at how do we solve really big problems? So that’s kind of my approach to this. And it is coming from-

Robert Kramer: Pretty cool.

Melody Brue: From product, from people, and that includes AI. So it’s not just AI is going to automate everything, it’s AI with a human in the loop. And policy, how are they helping to regulate policy around AI so that they can protect, but also have enough leeway to keep the bad guys out, if that makes sense.

Robert Kramer: So are you a fan of the merger or the acquisition of Splunk? I think it’s a huge compliment to what Cisco… They didn’t have what Splunk has to offer, so I think it’s a big-

Melody Brue: Absolutely.

Robert Kramer: … step forward.

Melody Brue: On the observability part, 100% and read all of Will’s stuff on that. But secondary and I would say pretty important on just the culture, the marketing, the branding, all of the things, just a great compliment.

Robert Kramer: Cool.

Melody Brue: And I think I would say WebEx, the WebEx side of the house was kind of already there and everything else is sort of all coming together. I was really just impressed with so many of the things. And there’s a customer experience element to it that’s like they’re walking the walk, I’ll just say that.

Robert Kramer: That’s great.

Melody Brue: I don’t normally gush about-

Robert Kramer: No, you’re loving it. So we were both at an event, I think it was like a week and a half ago in your hometown, so what do-

Melody Brue: Right after, literally you came directly from Sapphire, I came directly from Cisco Live.

Robert Kramer: Yeah. So this was in Austin, Texas, and I actually came home and I should have brought it out, but a nice cowboy hat, and I actually had to wear it on the plane. It was really, really nice.

Melody Brue: Oh, that’s so funny.

Robert Kramer: Kind of funny. But they’re looking to expand and they are expanding into the enterprise apps. Their product is saying it’s CRM for everyone, which every person in the company should put a hand in it to enter data, and it gives more ability to maximize what the application can do because you have more data, obviously. But they’re also venturing beyond the CRM, the relationship part of what you can do with the application. I think they have about 55 different apps within the application, but part of that deals with the enterprise part, which is billing and inventory control for small businesses, because there is a lower entry point from a know monitoring perspective. But I think that controlling that data for a company of a small size is a smart move because it gives them the ability to not have to have multiple systems. Because in the end, I think the key is the data management, but also is to control your technology stack. So what’s your take on Zoholics? And this was not your first rodeo there, but what did you think?

Melody Brue: So yeah, I was actually going to ask you that. So I’ve been covering Zoho for a while, and this was not my first Zoholics. Let’s talk about, so Zoho is a different company also, but also very different from Cisco because Zoho is privately held, does not answer to shareholders. So from that perspective, so Sridhar, the CEO, came out and he said lots of things that I think you normally don’t hear from a CEO. I think some people who were first-timers were a little bit surprised by some of that.

And I think fair question was how do you maintain this? Which is we don’t answer to shareholders, so we’re able to really focus on what our customers want, what our employees want. We build around these small towns so that we’re feeling economic development in these towns, having a place for our employees to thrive. That’s kind of a very short summary of their ethos as a company. And like I said, fair question, how do you keep that going? So what’s your impression as a first time Zoholic, of just kind of the company in general? And were you surprised by how many things that they do?

Robert Kramer: I was, I didn’t think they had that many apps within the core package. I liked they have, what they do is, like you said, they set up shop in some of these small towns, but they do training classes to teach development skills or things of that nature. And it’s almost like a cult following that they had there, there’s a lot of energy with the clients that were there, a lot of good things to say. So I was actually surprised, I didn’t know that they wanted as deep as they do within the enterprise circuit. So if you’re having like a CRM application and you want QuickBooks and it’s something of that nature, maybe a little bit further down the road with a NetSuite or something like that, or one of the Sage applications or even a small enterprise one like a SAP as a business one, but it’s probably of kind of a far stretch.

But I thought they had a little bit more of a following than I thought, and I was really admired their energy because it empowers all the people that work there to love their job, to get out of bed. And the CEO, that’s his vision and that’s what he empowers his generals to do, and all the managers and everybody that works there, everybody’s important. So my sense was fantastic on it. I think that they have competition and I think that they have to continue to develop this enterprise sector in order to understand how to continue to innovate, but at the same time, what their data management strategies are because I think companies at this level aren’t really focused on that. They’re just focused on getting the job done and making money.

Melody Brue: Yeah, so definitely, they have a huge following. They do also, of course, have a ton of competition. I think one of the things that they’ve done really well is keeping it… Retention. So they have, and you saw this in the keynote, they said, “Raise your hand if you use one product, 5, 10, 15, 20, 30.” People kept their hands up. One of the ways that they do this is collaboration within the apps and interoperability between the apps. So if you use one and you can share within the teams within different permissions, so within Notebook, within Drive, Sign, all of these things. Also within the CRM, you don’t have to leave the CRM to collaborate, assign projects.

Robert Kramer: That’s a big deal, yeah.

Melody Brue: That’s a really big deal. So there’s this stickiness that they are building into their products. So yes, they do have competition, but the people who land there, it’s like a fly on a sticky mat. It’s like once you land there, there’s lots of good things to eat while you’re there.

Robert Kramer: Absolutely.

Melody Brue: So I think the Zoholics, it’s like that’s the reason for the name is people really do get embedded in there. And it’s not from a perspective of like, “We’re so deep in here, a migration would be so painful.” It’s like when you have all this at your fingertips, how do you not have that? So they build for their customers, I think with Zia, their AI assistant, it has a single search across the entire platform. So they’re building some pretty smart things in there.

Robert Kramer: They are.

Melody Brue: I think they’ve always relied on this word of mouth and building on what they have, what customers are already using and adding on. I think that with so much competition in the market, they’re going to have to get themselves out there a little bit more from a marketing perspective, but-

Robert Kramer: That’s a good point.

Melody Brue: And I think maybe sort of clarify some of their differentiators. Security has always been a major, major priority for Zoho. I don’t know that the market totally knows that. And as we’re talking about AI and all these threat surfaces and everything, I don’t know that that’s something you would immediately associate Zoho with is like, oh, security, security. But they are hardcore on that. So certainly worth mentioning. We will put in the show notes all of The Six Five On the Road videos that we had there. We had a full half day of videos from Six Five, Moor Insights & Strategy, and the Futurum group analysts all there commenting on what was happening live on site. So more on that. I also did a panel on their collaboration news. There was a lot going on there, so I can’t believe we fit all that into 30 minutes.

Robert Kramer: I know, we did it.

Melody Brue: All right, so what’s coming up for you?

Robert Kramer: So we are going to just get a lot of papers done. We got some research that I’m doing on ERP and also some supply chain, and I’m going in a couple of weeks to an analyst day for Amazon AWS. And I’m looking forward to working on some of the backlog that I have with some of the things I just mentioned. How about yourself?

Melody Brue: Oh, let’s see, I have… Where am I this week? Oh, I am at Samsara in Chicago next week.

Robert Kramer: Fabulous.

Melody Brue: Which I’m really looking forward to. And I found out that they have sensors in one of my favorite things, which is Farmer’s Fridge. Samsara does IOT sensors. And Farmer’s Fridge, if you’re ever in an airport and you see a Farmer’s Fridge, you must have it. It’s like the freshest, yummiest airport food.

Robert Kramer: Are those in the vending machines?

Melody Brue: Yes.

Robert Kramer: I’ve seen them. Yep. I haven’t, They look a little, I wouldn’t say suspect, but maybe suspect because I’ve never had one before.

Melody Brue: It is not. It’s so good and so fresh. I actually wrote a Forbes article about it because I had it in the Dallas airport, and I was like, “Where has this been all my life?” I was just like-

Robert Kramer: That’s funny.

Melody Brue: I’ll link that too. Yeah, and then I’m off to Nashville for a baseball tournament and I will be working from there. Got to love this job where we can work from wherever we are, right?

Robert Kramer: Lovely.

Melody Brue: Yeah.

Robert Kramer: Well, thank you everyone for tuning in and we will see you on the next episode, which will be 28 next week, I guess.

Melody Brue: 28, yeah. All right.

Melody Brue

Analyst in Residence | + posts

Mel Brue is vice president and principal analyst covering modern work and financial services. Mel has more than 25 years of real tech industry experience in marketing, business development, and communications across various disciplines, both in-house and at agencies, with companies ranging from start-ups to global brands. She has built a unique specialty working in technology and highly regulated spaces, such as mobile payments and finance, gaming, automotive, wine and spirits, and mobile content, ensuring initiatives address the needs of customers, employees, lobbyists and legislators, as well as shareholders.

Robert Kramer

VP & Principal Analyst at Moor Insights & Strategy | + posts

Robert Kramer is vice president and principal analyst covering enterprise data, including data management, databases, data lakes, data observability, data analytics, and data protection. Robert has over 30 years of proven experience with startups, IT companies, global marketing, detailed strategies, business modeling, and planning, working with enterprise companies, GTM assets, management, and execution.

Patrick Moorhead

Founder, CEO and Chief Analyst | + posts

Patrick Moorhead is the founder, CEO, and chief analyst of Moor Insights & Strategy. His big-picture view of technology is grounded in more than 20 years as an executive leading strategy, product management, product marketing, and corporate marketing functions at NCR, AT&T, Compaq, and AMD. He has shared his expertise in areas from silicon to infrastructure to enterprise SaaS and everything in-between in thousands of national broadcast appearances (CNBC, Yahoo Finance), articles (Forbes, CIO), research-based analyses, and podcast episodes. Today, he has 100+ CXO-level advisory clients and is often ranked the #1 technology industry analyst by ARInsights.