Talking Cisco, Google, Apple, Cloudera, Salesforce, Six Five

By Patrick Moorhead - June 13, 2023

On this episode of The Six Five Webcast, hosts Patrick Moorhead and Daniel Newman discuss the tech news stories that made headlines this week. The handpicked topics for this week are:

  1. Cisco Live 2023
  2. Google Cloud Executive Forum
  3. Apple Vision Pro
  4. Cloudera Observability Announcement
  5. Salesforce Senior Leadership Changes
  6. Six Five Summit 2023 Wrap Up

For a deeper dive into each topic, please click on the links above. Be sure to subscribe to The Six Five Webcast so you never miss an episode.

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Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we ask that you do not treat us as such.

Transcript:

Daniel Newman: Hey everyone. Welcome back to another episode of the Six Five Podcast, episode 171. It’s Friday morning and I’m feeling spry and light. Why am I feeling spry and light, Patrick Moorhead? I’m feeling spry and light because the Six Five Summit, fourth edition is in the bag; 40 of the world’s most prolific tech companies, 60+ sessions, three days of 28 or so plus CXOs of these companies and a lot of other senior executives on the stage talking innovation. Pat, I am talking fast, feeling good, and with my bestie, how are you today?

Patrick Moorhead: I’m doing great Dan. And I got a big smile on my face, and not just because the Six Five Summit number four is in the bag, but because it’s Friday and this is what I like to do, I like to pod with my bestie. We basically riff right here, six topics, five minutes each, sometimes 10, but it’s a good time. And I am broadcasting from an undisclosed location in my bunker in Colorado-

Daniel Newman: Looks like a laundry room, just so you know.

Patrick Moorhead: It’s a hallway.

Daniel Newman: Well, I’m glad you’re feeling good. I’m feeling pretty good myself, Pat, and I’m not going to lie, as our companies have gotten bigger and as the Six Five has gotten bigger, it certainly has become a little less stressful, but it’s also become more stressful because it’s now a business, it’s now become a company. We are now growing this global footprint. We have some incredibly large technology companies that have looked at the Six Five as an opportunity to really build visibility for their product solutions, services, and thought leadership. And I, for one, couldn’t be more proud of what we’ve been able to accomplish. But it’s also been nice to have a whole team of people. You saw the social stream buzzing all week long, LinkedIn, Twitter, I was TikTok-ing. Just kidding, I don’t TikTok. But the point is there was a lot going on and that’s really good. So thanks to all our sponsors. We’ll wrap that up at the end though.

We have a great show this week. Pat, why do we even say that? They’re all great shows. But we got six good topics. We’ve got Cisco Live, you were in Las Vegas. We’ve got the Google Cloud Executive Forum. I was there out in northern Cal in the Silicon Valley. Apple had a event, I think I heard a rumor. Cloudera announced a new observability solution. Salesforce shook up its front office and we just want to do one more victory lap on the Six Five at the end because, well, because it’s our show and we can do what we want. A quick reminder the show is for information and entertainment purposes only and while we will be talking about publicly traded companies, please do not take anything we say as investment advice. All right buddy.

Patrick Moorhead: Glad you got that out.

Daniel Newman: I’m calling your number. Number one topic, Cisco Live 2023. You were there, you were Tweeting, you were having the meetings, you took the shuttle bus between the hotel and the event, you were making it. I’m just kidding. You made it happen. Talk about what went on at Cisco Live.

Patrick Moorhead: Yeah, Dan, it was a good three days there chock-full, kind of rail to rail, but they gave us a little bit of time to work in between. So it was nice. But this was all about, from my point of view, bringing simplicity to hybrid multi-cloud networking, security, and observability. And I think Cisco’s really hitting two fundamental areas I think are super important. So first of all, as you know and my audience knows, I’m a big fan of the hybrid multi-cloud fabrics, essentially ways of interconnecting your data, networking, security, observability, data management, everything, but cross cloud, on-prem edge and across multiple IS providers and doing it in an easy way. And that’s one of the biggest reasons I like Cisco’s networking cloud and Cisco’s security Cloud, and also integrated in there is observability. So, Cisco is working super hard and they have three of these cross cloud fabrics and I just think it’s an absolute winner.

One of the things, again, is they’ve done in the last six months, they’re really leaning into is simplicity. To their credit, they realized they were part of the simplicity problem with networking. I mean command line interfaces, they’re famous for it, and if you look at all the CNEs, the certified Cisco network engineers, I mean that’s what they lived in and breathed off of, but they realized that hey, their customers want simplicity, their channel wants simplicity. So making it as simple as possible and do doing a lot of the orchestration in the cloud.

And also, simplicity even on security. If you look at one of the biggest areas of angst is integrating different security packages inside an enterprise, takes a long time, it’s difficult. Many times you can leave open a hole and it takes so long that sometimes you’re on that second or third version of that “best in breed” security practice. And Cisco’s wrapping all that up and making it simple for you. Same thing for observability. Observability packages are like kudzu too, right? You’ve got one for endpoints, one for data center, one for your apps, one for APIs. It’s just spread all over the place.

My final comment I’m going to hit on is, like everybody we’ve seen for the past two months, they had to amp up their discussion on generative AI. And I think based in the context of the Cisco Security Cloud, they did a pretty good job talking about how they’re going to be using generative AI to improve security. I like in the future in security to AI spy versus AI spy and those who have the best AI will likely win. So overall, Cisco says that their mission is to securely connect everything and make anything happen. And from my analyst point of view, that’s exactly what the company is doing. Good show.

Daniel Newman: Yeah, it seemed that way, Pat. And while I did miss it, I was tracking the analysis from Ron Westfall, Craig Durr, and other Futurum team members that were there. And we of course cover a broad swath of the portfolio. Pat, I mean look, AI is the thing of the moment, and to be clear, it’s not a fad. And so the generative AI play is more really about how AI can start doing more proactive for companies. By the way, I want to say, the market architecture is good and I think Cisco’s got a really important moat to offer around securing the enterprise and using AI to do that.

I also think Cisco’s been doing this for a while, which by the way is a bit of a sub theme of a lot of the customers that we deal with is that they’ve been doing this a long time. AI suddenly got a market buzz and now they’re adding more AI flavor to the top line of the story, but it was always really there. I mean Pat, they’ve had for a long time intent-based networking. What do you think intent-based networking is? It was always driven by machine learning and AI and the ability to make decision, optimizing and routing the network so that it would be as efficient, productive as it possibly can be.

Then you have the overall role that generative AI can play. Well, I think what we got here was a preview, a preview of how the technology can move from a fragmented to more holistic. We can simplify policy, you can deal with things like quantum cryptography, which is something that Cisco is promising that its generative AI powered capabilities are going to help with. So like all things though, there was kind of those few big takeaways, which in my opinion, the generative AI play was the thing on display, but they had some pretty promising announcements. Observability has been in style for some time at Cisco. I felt that that was a focal point and something that we could definitely lean into.

And then you kind of see the rest of the portfolio. There’s question marks and some work that needs to be done around the WebEx and the collaboration platform. We’re seeing that portfolio lag the overall industry. But I mean we’re users, at Futurum group so we still believe in this, but how are they going to adapt and adopt? And you saw things like integrations recently with Microsoft Teams and others with Cisco knowing that they’re starting to see interoperability as a key capability. So Cisco Live, and because of Cisco’s massive breadth of portfolio, it’s hard to cover the whole swath, but I do think the generative based security was probably the hottest topic of the conference. And then I think their continued focus on observability software and shift to ARR were some of the other items that I think we’re really in focus as well, Pat. So-

Patrick Moorhead: Yeah, day two they did do a double click into the UCAS and CCAS part of that. Pretty impressive. It’s everything you would have expected, like call notes, things like that. Cisco is already using AI to make audio better. But yeah, analyst, Melody Brew will have a writeup on that. I’ve already published day one insights on forbes.com. You can check it out in the show notes.

Daniel Newman: Everybody, Pat’s Forbes columns are always the best.

Patrick Moorhead: I wouldn’t say that, but-

Daniel Newman: Always the best. All right, so listen, let’s hit the next topic. Let’s talk about Google Cloud Executive Forum.

So Google Cloud Executive Forum was probably one of the most interesting, prolific moments for me in this whole generative AI shift. And let’s talk about why that happened. We’ve been kind of looking at the haves and have nots for some time. And so over the last two decades, ML-based data science and data pipeline has been something that, how do you explain it? Has been really a haves only, meaning you had to have a big company, you had to have a rash of data scientists, you had to have a team of hardware engineers, you had to have the ability to stand up and run PyTorch or different AI/ML data science stacks. You probably were running Hadoop or Cloudera. And what I’m saying is this was what you needed in an enterprise to be able to take advantage of data.

So going back, thinking about the era of Walmart having such a massive competitive advantage of being able to know what customers would want and have order volumes correct that small mom and pop shops could never possibly compete with. Well then over the last few years we’ve seen kind of the democratization of app building. You saw this happen with websites, but up to maybe a year ago, data science and AI was something that was really for a very small set of audiences. Sure there were some tools and things you could do in Intuit and QuickBooks or there was some light versions of tools in Salesforce or in NetSuite that you could use, but it was hard.

And so what I really thought was in focus here was they brought us in front of customers, large enterprises, but also smaller businesses and they brought them all together into one place to talk about a number of different things, but the shift from Vertex, which is their generative AI and AI/ML platform that Google has been offering. And now what they’re launching is called the Generative AI App Builder, okay, Pat? And this is basically the low-code, no-code version of the Google Cloud platform for companies that want to build enterprise search. So I hit you in the back channels. I’m like, “Pat, this is cool.” You’re like, “They’ve been doing enterprise search for a long time.” Yes, they have. But it wasn’t something that just any company could stand up. This is something now that you, me, and other small businesses could literally stand up to get access to that more proprietary data. And that’s the story that you and I have been telling now for months.

By the way, I just wanted to call something out interestingly between you and I, we’ve been saying for a long time about the marriage of enterprise data and open internet data as a key to AI. But I also just wanted to point out, you and I talked about AI two years ago and three years ago when people weren’t, and as I was reading through the stream of Twitter this morning and just realizing how many AI experts have come out of the woodwork in the last 15 minutes, three months, is that it doesn’t feel good to kind of know that we were on this topic well before it became trendy and cool. Anyway, just a personal victory lap there.

But anyway, going back to the Generative AI App Builder, what I really loved about this event was seeing in real time the ability for companies to be maximizing data, multi-mode, multi-model modes. It’s got security governance and regulatory frameworks and it all is really simple enough that someone with limited amount of tech acuity can stand it up. Now of course, like all coding, the more technical you are and the more capable you are, the more you’re going to be able to maximize the enterprise AI capabilities inside of the Generative AI App Builder, as well as Vertex.

But what I really liked was that the company seems to be really zeroed in, end-to-end on their stack and its capabilities to develop and build generative AI apps across any enterprise. Had the chance to talk to the CTO of Wayfair, for instance, about how they plan to use it, things like image generation for being able to do room design builders where you could literally take an app and you can put all the products onto a website very quickly using verbal descriptions and then put them into a room and design them. And just this next generation stuff that’s going to go from only big companies like Wayfair down to much smaller enterprises. And you’re going to see a whole new set of companies that are going to rise out of this.

The other big thing too, Pat was Duet. So we heard a lot about the Copilot in Microsoft Office. Well Duet was a really interesting launch to see this working. So we saw kind of an end-to-end walkthrough demo. I shared a tweet with a video of it where a salesperson can go from optimizing meeting notes to making a statement of work to generating a custom PowerPoint presentation for a particular client just using some text prompts. And so this is the kind of Google Workspace answer to what Copilot is doing. And it’s really interesting to see, Pat, how quickly Google was able to take its capabilities, its technology and the moats that it had with its own palm model and its legacy, the models they’ve been developing over decades and Deep Mind and Brain and actually very quickly
kind of catch up to the buzz that Open AI was able to create.

And in my opinion, like I said, it’s not about one or the other, it’s about the overall collective that both companies are moving really fast, they’re innovating, they’re competing, and they’re generating cool new products and technologies that are not only going to make businesses more productive but more efficient as well.

Patrick Moorhead: So, I looked at the announcements for the forum and there weren’t really any new product announcements. These were all rolled out a couple weeks back, but what I liked about this is that the company really brought it to life. They showed demos and they brought up partners. It was about collaborating with companies like the Mayo Clinic. It was talking about showing price line, how it’s using UniSuper, as an example. So how partners are using. I mean they talked about Salesforce as well, strategic partnerships, they talked about GA Telesis, I mean PhotoRoom.

So this was really about bringing it to life and bringing partners and customers into this. So it’s kind of the one-two punch, because I attended their Data and AI Forum and they brought out a lot of these features. And I’m not saying that that means it wasn’t good, it was good, just an observation, this is the second of a one-two punch and I think Google is really good at data and AI. While I don’t talk to 100 enterprises a week, I do talk to one every 10 days, and more times than not they are using Google Cloud as one of their IS providers for data or AO. And I just think that Google will continue to excel here.

Daniel Newman: Yeah. And Pat, you made a good point, and obviously not to conflate the announcement and the timing, as an analyst, we were a very small subset that got invited to see the customer interactions and that’s why it was an executive forum, it was customer centric. And I think you and I love that and that’s kind of an important thing to point out is, from time to time it’s great that we’re constantly hearing from the vendors about what they’re doing, but it’s probably even better for us when we hear from the customers how they’re implementing it. And so I’ve been impressed with the speed at which they’ve gotten to market with things. And of course, like I said, I think we’re going to see constant leapfrogging and back and forth. And by the way, who wins when that happens? All of us. We all win when these big tech companies are competing. It sounds like a commercial for an insurance or mortgages or something, “When banks compete.”

Anyway. All right buddy, let’s go on. Dude, let me strap my goggles on, my massive goggles, and I’ll put my battery pack in my back pocket and let’s talk Vision Pro. Wait, I don’t have one. Go.

Patrick Moorhead: Yeah, a lot of things to talk about here. So first off, unless you’re living under a rock, you know that Apple announced XR headset at WWDC. This is a large pair of ski-looking goggles with an external cable with a battery pack that you stick in your pocket. You can also plug it in by the way, costs $3,500, available in the US only, available early 2024, which could also mean the very last day of June. I want to give you some of my experience highlights.

I mean I’ve been looking at this area, I mean 3D stereoscopic goggles goes back to 1996, so yeah, I’ve been thinking about this a lot. [inaudible], he’s an analyst of mine, spends 50% of his time just on this topic. I urge you to read his article. I think he has 250,000 reads so far-

Daniel Newman: Holy crow. Really?

Patrick Moorhead: … of his analysis. Yeah, I know. Pretty amazing. So first off, some of the experiential highlights for me, kind of the new stuff, kind of micro finger gestures. So no paddles and no why, just think of violin in your hands type of stuff and just even putting them on the ground. And I think this is a pretty good deal.

Second observation. So typically there’s this demarcation between VR and XR, where it’s VR, nobody can see your eyes, sorry, VR and AR. AR, people can see your eyes. But what Apple did here is they actually put a display on the outside so when a person comes into view, they can start to see your eyes, they’re not your fake eyes, sorry, they’re not your real eyes, they’re actually a set of fake eyes that come up. So you can actually have a conversation with a person if they come into view. And iMessage calls, it creates a fake version of you because obviously you don’t need the external cameras, there’s cameras inside of the headsets. But I thought that was really interesting.

Headset does require a special fitting just like the early HoloLens did. So you won’t just be able to buy this, it needs to be a perfect fit to work as Apple thinks it needs to work. So a little friction there. 4K per eye, that’s good, but I think you’ll likely see pixels if you have very high visual acuity like me. Some of the immersive movie claims and demos were super exciting. But then again there’s that two hours of battery life, literally two hours of battery life. Maybe you can get a movie in, maybe you can’t. So who cares? So what?

State of the market. Market’s small, very small, driven by the challenges of people wearing goggles and having a new interface that’s not a keyboard or a mouse or a touch. This doesn’t solve the goggle problem, but does it solve the interface problem? Maybe, right? If any company’s going to nail this, I think Apple will, and I think industry wants it so competitors can come in and make it cheaper and more open. It happened like this in PCs, tablets, and smartphones. On goggles, if the experience is a must-have work experience, people will be okay more with this than consumer. People use goggles today out there for B2B, doing training, stuff like that.

Using the M2 as a processor I thought was an interesting choice given the proximity of the M3 processor. TSMC N3 nanometer claims a 30% power reduction at the same speed, you would get almost an extra hour. We’ll see the M3 based on TSMC N3 in the iPhone 15, probably available later this year, and the Vision Pro won’t even ship till early mid 2024. So it doesn’t make sense to me. Two hours battery life.

Also, let’s talk about the price. You can buy seven Meta Quest 3s for the same price. I think there’s two ways we can look at this, right? I can buy seven flip phones versus one iPhone today, but we still buy the iPhone. But the question is, is the Vision Pro experience black and white demonstrably better than the Quest 3? I don’t think so, but we’ll see. And by the way, thanks to Moore’s Law, prices will go down, but I don’t think they’ll go down as quickly as people think given all the custom silicon and capabilities and the low volumes.

That battery life. I mean can you watch a movie or complete one marathon meeting? You could plug it in. Apple will probably offer larger battery packs, but M3 would’ve been nice, another hour. Kind of thinking, “Hey, is this V1 really just a development vehicle that we’re going to sell to drive a little volume and for Apple to learn for the next five years?” But also shows us how long we’re going to have to wait to get to eight hours of continuous use with a battery pack.

So final thought is creepy. Creepy factor. There’s in particular a video and a photo of a dad sitting in a living room with his two kids talking to them with their goggles on. Looks creepy, really creepy. The second of all, I talked about that external display that shows your fake eye, a woman is talking to a man on the couch and it just looks creepy. Net net, in the end, I think if Apple moves the ball down the court on this experience, bravo, everybody benefits. Dan, your ball.

Daniel Newman: All right. So I’m going to be a little bit more optimistic about it, and when I say optimistic things about Apple, you know I really must be losing my mind because I don’t normally say any good things, not because Apple doesn’t do good things, but because they get enough credit, they don’t need my help. The product itself is, I actually kind of fall in line with you, Pat. What actually got announced was kind of like, I can remember putting on my Samsung Gear, plugging in with my 7 maybe, Samsung Galaxy and there was no looking through, but the interface kind of looked the same to me.

Now, the access to your more everyday apps on your iPhone versus the experience of getting started and loading apps and doing all the things you have to do on these other Quests and Samsungs, that’s going to be really interesting, because one of the things anyone that’s ever set up a Meta Quest or Meta knows that it takes 20, 30 minutes from the time you plug it in to start using it. I haven’t had the chance to go from zero to set up on Apple, but I have a feeling they’re going to get that right. That just seems to be something Apple will do better.

Patrick Moorhead: And by the way, we agree on that, right? Is if anybody’s going to nail the experience, it’s going to be Apple.

Daniel Newman: And so what I actually felt like, to your point, is this was a bit of the whole looking through, which I’m very bullish on, nobody wants to be confined in the dark. It really is kind of for gamers, probably adult movie watchers. I mean I’m not joking, I’m not saying that in vain, I’m being sincere. The traditional closed-in VR experience, the looking through is what I’ve said for a long time is societally, we do want to move to a immersive experience where we actually move away from this kind of thing that we’re doing all day long. And we’ve done it a little bit with this thing, I hang out with you, you use an Apple Watch, I don’t wear one, but the point is that’s given us a little bit more of ability to, “Now, that’s a really nice one.” But the-

Patrick Moorhead: This one? Oh okay, you mean this one?

Daniel Newman: There you go buddy. But the ability to quickly glance and not always be in and out. I went to a dinner with a customer this week in San Jose with Cloudera, we’ll talk about them soon. And I actually sat for two hours at a dinner and never looked at my phone. And then at the end of it they actually mentioned how weird that was, that I did that because they just know me, that’s not normal. So the whole idea of moving to more of what I would call an immersive periphery kind of experience where you can have some of the data and important things in this viewpoint while concurrently being physically in a moment is interesting to me.

And that’s what I think Apple will eventually get to. And that’s why I kind of look at this as a seminal moment. The idea of sitting in your family room, strapped into this thing with a battery pack in your left pocket while raising your children and cooking dinner to me seems completely obtuse. I do not see people in their kitchen making a salad while viewing a movie up here and looking through and raising their children. To me, it’s still got that kind of gimmicky thing right now. But what I really wanted to get out and my point really on this whole thing was this is going to land. I am telling you, Apple did not just put out a bomb. This will not fail, but it’s not in its, what I would call, iPhone moment yet-

Patrick Moorhead: What’s your timeframe, Dan? What’s your timeframe-

Daniel Newman: Three years.

Patrick Moorhead: … of success or failure?

Daniel Newman: Two or three years, they’ll put out a product that I think will be usable in our more everyday life and it will be, when it’s ready, it will look a little bit more like maybe a thick rim horn-type pair of glasses.

Patrick Moorhead: I’ll tell you what though, it has to be enclosed. This current use case is 100% enclosed, given that movie experience that they show. I think it’d be hard to have a movie experience without having, and I don’t know if you remember, there was some glasses in the 60s or 70s that had leather on the side that would give you the full piece. But I think that’s going to be hard to do with regular glasses.

Daniel Newman: Yeah, I mean I’m not a John Ivy type. I don’t have that kind of vision and innovation and I don’t know what can be done with low power and tethering to a protect. I still always envisioned a tether that would be going on. And so the compute probably wouldn’t actually be in the glass, but again, that requires a lot of engineering and design and low power and the ability to have almost no latency while doing something wirelessly. So there’s a lot of reasons that may or may not work. I’m just telling you, I just don’t think… It was kind of like I joked, when Nvidia put out that $4 billion guide up and I said, “There’s no way they did that if they didn’t know they could hit it.” And Apple, I just don’t see any chance that they would’ve launched this knowing this was the best it was ever going to be. They know they’re going to be able to do better.

And what I really think in the end is they’re going to solve the immersion problem. And whether this version ends up being the version, the immersion problem is that AR and VR and spatial computing has an application, but right now it has mostly forced us to exit the physical realm to be in the digital realm. And even the glasses, they’re still kind of weird. You got all… What I’m saying is at some point we need to be able to physically and digitally co-exist in kind of Terminator mode. And so, is Apple going to build a more elegant Terminator mode? And I think they’re going to be the ones that get it right.

And by the way, I also think they just have this prophetic desire to be in Meta’s garbage and just causing Meta so much discomfort and pain all the time if they can because Meta’s been doing this for a decade. They’ve been spending billions of dollars every month and then Apple comes out with a product that’s okay, it’s interesting, and instantly all of a sudden everyone’s like, “Woo hoo, it’s ready.” Meta has been doing this a long time and other people have too, but when Apple does something, it tends to mean it and it tends to stick.

Patrick Moorhead: Good feedback. Good ads.

Daniel Newman: I know it’s my turn now and I’m supposed to keep going, but I just wanted to pause there just in case you had anything. Again, I think we covered the gamut of worst to best and the whole story. And I think we actually agree on more than we don’t. But I guess my point was I just walked away positive more that spatial computing just found gravity and before, to me, it was still a gimmick. So here we go, here we go, here we go.

Let’s talk about something much more enterprise. Let’s talk about observability. Cloudera. Oh, by the way, at the Six Five Summit announced a powerful new observability solution. I had the chance to talk to CEO Rob Bearden on the Six Five Summit and on the day of, they put out a press release, isn’t it cool that the Six Five Summit is becoming a product launch platform? That’s so cool.

Patrick Moorhead: I do. I love that. I love that so much.

Daniel Newman: And really what they announced was a SaaS tool that provides telemetry data and gives visibility into the performance and health of the Cloudera environment. So in an era of observability, Cloudera too is launching an observability platform. So, it’s basically all about customers being able to monitor and optimize their platform. With the era of AI growing, and by the way, Cloudera having something like 50 times the data, 50 times the data of Snowflake or something, it’s a huge amount, it’s a huge amount of data under management. And they’re going to be able to use this to basically now optimize the data platform, deal with financial governance, system monitoring, service health monitoring, workload optimization, what else? Self-service analytics and
issue resolution.

Now. This is focused on the Cloudera data environment. So this is not observability in the sense of the observability that’s looking at a whole IT architecture and ecosystem. This is basically saying, “You may have petabytes of data in your business under management and all this data is influential to how apps run, how infrastructure is performing and such.” So it’s working inside the Cloudera data environment to provide observability so that you can use Cloudera in find issues, root causes, support requests.

I thought this was a good add, Pat, I mean this was a good additional capability. Their roadmap has been very innovative for a company that sometimes doesn’t get credit for being innovative. They’ve been showing predictive AI-focused stuff, Pat, AI and ML. By the way, another company that’s been doing this for a really long time. It’s not a new thing there, but predictive tuning, automated metadata, intelligent troubleshooting, cost predictions and capacity. So these are things that they’re doing and building around the observability platform. And I think the observability platform is giving customers more of a reason to stay. And I think for Cloudera, that’s got to be a big focus with all the hyperscale cloud providers, data solutions, with all the born-on cloud is they need to make sure they’re compelling the market and the customers that have been building for a long time on Cloudera to stay on Cloudera. And I think this observability solution gives more ammo to keep the customers on the platform.

Patrick Moorhead: No, listen. First of all, observability is all the rage, and that’s because of the fractalization of infrastructure and applications. There was a day that all data applications and infrastructure was in one place and you knew if that mini computer or mainframe or even [inaudible] server application went awry, you knew where the problem was. But now we’ve got applications that utilize 12 different APIs that all have to come together. We have infrastructure in the on-prem, public cloud, on the edge, multiple IS providers, and you need to figure out what the heck is going on. Heck, there could be something going on in your device at the endpoint that is a problem. So it’s all the rage.

One of the areas that people haven’t invested a lot in is observability for data management. And that’s exactly what Cloudera is doing here. They’re looking at it from a security point of view. You can clog up an entire database with some rogue application hitting it a million times. The second thing you can do is you can spot a security issue. I like the cost management point of view as well. In the future, I fully expect them to join some observability interoperability group to be able to work across every observability to make it easier for the enterprise to stitch all those observability packages together.

Daniel Newman: You got it? You got it? Is that it? Are we good? All right. Keep rolling.

Patrick Moorhead: That’s this, buddy. We’re good.

Daniel Newman: So, Pat, I’m off to New York on Monday for a top secret launch for a company that might be doing some cool stuff on AI. I can’t say anything about that, but let’s not talk about that company, let’s talk about another company that might be doing something interesting around AI. But let’s talk about some leadership changes with this company. I’m just throwing AI in everything now because you know, you are-

Patrick Moorhead: You should just change your name to Daniel Newman.AI.

Daniel Newman: No. Dan, wait, hold on. D-A-N-I… D-A-N. I’m going to call myself Daiel, I’m just going to take the N out of my name BC then I’ll have an AI in my first name. Okay, Salesforce, big changes. Someone that we’ve worked with in the past, pretty big fan, landed as CMO. Talk about what’s going on there, what’s Marc Benioff up to?

Patrick Moorhead: Yeah, so another Salesforce management shakeup and I’m going to call this getting the band back together. So in the last pod we talked about Salesforce’s Q1 earnings, right? There were up 11% and some analysts asked if the company was still growth play, right? It was the slowest pace of growth in 13 years. There were bright spots though, right? You had MuleSoft, 26% growth, you had Slack at 20% growth. And gosh, past three years, Dan, we’ve always talked about organic growth versus acquired growth, but no growth is front and center.

So, Miguel Milano is moving back to Salesforce where he was Chief Revenue Officer at Celonis. He was President of all Salesforce International until 2020. Ariel Kelman, that you referred to, previous CMO at Oracle, and then before that, AWS, and then before that 12 years ago, he was VP of Marketing for the Salesforce platform, right? Now 12 years ago is not coming back quickly. It’d be like me going back to AMD, which by the way would never happen.

The other thing that was in this memo, and by the way, Ariel’s announcement is live on LinkedIn. We’re not rumor mongering here. So, the Benioff memo also said that President Chief Ops, COO, Brian Millham is going to be taking on a host of new responsibilities. It looks like he’ll have marketing, employee success, and business technology. So all of these changes on the heel of co-CEO Brett Taylor leaving, Slack founder Stewart Butterfield leaving, Tableau CEO, Mark Nelson leaving. So what does this all mean?

Well, complete re-architecture of the organizations. First thing we saw were big product and business leader changes. And by the way, the heir apparent change. Now we have big changes in the sales and marketing function with Miguel and Ariel, and potential new successor to Marc with Brian. So in isolation, big changes like these take time. I mean it’ll be interesting to see the before and after two years ago to where we are now. But I think if the economy improves and Salesforce can punch in this AI capability grid and gets its fair share of it, I don’t see why the company can’t get back to the 20% growth days.

Daniel Newman: Yeah, I think you hit a couple of key points on the head. I don’t think we need to belabor this, but let’s talk, this is a great reset. The company’s seen its growth slow to the slowest it’s grown in ever, I’m pretty sure is what the data points came out to. It made a lot of very large investments through inorganic acquisitions, which Pat, you and I have talked about for a long time. Inorganic is part of the strategy to grow, but you need to continue to innovate on the core products in most cases in order to be successful. I think Marc Benioff is looking at this as probably a pretty good inflection now with a lot of this changeover to really bring in what would become the band for the next wave of significant growth. And the band for the next wave of significant growth into the, Pat, what am I going to say next?

Patrick Moorhead: AI.

Daniel Newman: AI era.

Patrick Moorhead: When in doubt, you’re going to say AI.

Daniel Newman: Dan doesn’t actually know a lot, but he likes to say the words AI. But in all serious about AI, Pat, is look, they just launched Salesforce GPT, Tableau GPT, Slack GPT. This company is pivoting to now be a… Remember Einstein, remember AI in the Boardroom. I mean he’s been talking about this for a long time, but it hasn’t landed for the company. It has not been a success. It kind of had some of the same flavors of Watson 1.0, like the way IBM reconfigured itself for AI is now the way a Salesforce needs to reconfigure itself for the AI era. And I believe that he’s looking at the team, he’s trying to figure out who the successors and heir apparents could be, but he’s also just trying to get a team to get their head down and get working.

I think he unequivocally was unhappy with the growth rate of this company. He’s seeing the magnificent seven, the companies that have defied the market all year long, growing, growing, growing. And Salesforce, it’s been kind of paddling in the waters, watching Googles and Microsofts and these companies run away. And Salesforce has the most deployed SaaS-based CRM solution on the planet. And in this era, the company needs to get itself up to date and stay relevant. These are those pivotal moments in a company’s existence where they have to make a decision to change to stay relevant and keep growing. I think Salesforce has the capabilities to do that, it’s got the customer base, it has the loyalty, it has the admiration in the marketplace, but it has gotten a little bit stagnant. Shake it up, shake it up, shake it up, let’s rock and roll.

AI’s got to be the moment. And now we have to start to see some energy, some growth, some innovation and product to help the market get excited again, spending more, expanding that revenue dollar with every existing client and getting new clients to sign up. It’s going to be more competition than ever, and generative AI will create new competition from unexpected places. So, Salesforce, big moment. Let’s see how this goes, Pat.

We’re going to end here on a-

Patrick Moorhead: Heck yeah.

Daniel Newman: We’re going to end here-

Patrick Moorhead: Victory lap, baby.

Daniel Newman: … let’s just talk about ourselves for a minute, because you know what I mean? It’s not about us-

Patrick Moorhead: But it’s kind of about us.

Daniel Newman: It’s kind of about us. So, in case you have been under a rock for the last, I don’t know, four years, every year we do this thing called the Six Five Summit.

Patrick Moorhead: Yes, we do.

Daniel Newman: This started in 2020.

Patrick Moorhead: Yeah, we do.

Daniel Newman: Born in the pandemic era with an overwhelming amount of requests from our customers to help them in a kind of pivot to remote era, help tell the story, and we really embraced it. And so we had our fourth. Year one, Michael Dell was our opening keynote. In year two, we had Pat Gelsinger of Intel. In year three, we had Arvind Krishna of IBM. And this year we had Broadcom, and possibly soon to be VMware, CEO, Hock Tan. And not only did we have those four, but we have now had probably over 100 CEOs of big tech companies, and not to mention hundreds of CXOs in the top ranks of these organizations speak at our event. And this isn’t a news event so much, although it’s kind of become that a little bit because we’re kind of cool and people want to launch stuff at our event, Pat, but it’s also become really a best world-class, world economic forum in itself of thought leadership around tech with this year the focus being on innovating in rough macroeconomic environments.

And by the way, if there wasn’t a more perfect example, it’s been the tech boom that’s come from?

Patrick Moorhead: AI.

Daniel Newman: That literally, between the time we launched this event and the time the event happened has driven the tech industry from what was recessionary and contracting to, Pat? We just reentered a bull market-

Patrick Moorhead: AI.

Daniel Newman: We just reentered a bull market-

Patrick Moorhead: AI.

Daniel Newman: … after the longest, longest-

Patrick Moorhead: AI.

Daniel Newman: … bear market since the middle of the 20th century because of…

Patrick Moorhead: AI.

Daniel Newman: There you go. Hey, don’t pick on me, man. When I’m right, I’m right. Just say it, “Dan. You’re right.” How do those words taste? How do those words taste?

Patrick Moorhead: Well, here’s what I know. Given a long enough timeframe, anything we always say will end up being right. I mean right?

Daniel Newman: That’s why I say things 20 years out.

Patrick Moorhead: I mean in the 1960s, the first AI algorithms came out and they said they were going to revolutionize the world. In 1990, the first tablet computer came out and said it was going to revolutionize the world, it just took 20 years. But no, I’m just kidding, Dan. You were definitely AI guy. I’ll give you that credit. I’ll give you some of that victory lap, particularly when it came to the Nvidia valuation of $1 trillion, you called it. And that was when I think it was maybe worth 600,000?

Daniel Newman: 30 months ago.

Patrick Moorhead: How about that? No, I love that. Hey, I want to talk about the Six Five Summit now.

Daniel Newman: That’s what I was talking about.

Patrick Moorhead: And where the heck did that wrap go? Where did it go?

Daniel Newman: Wrap it.

Patrick Moorhead: It’s right there. So hey, some of my highlights, first of all with Hock Tan, CEO of Broadcom, we had an opener that just doesn’t speak at conferences. He just doesn’t do this, right? And that’s what I think 99 out of 100 people gave me feedback. It’s like, “Oh my gosh, how did you get Hock Tan to speak in an event?” And I really appreciated his wisdom that he brought to the table. We’re so focused on the next new thing, he just puts a level of wisdom that’s really hard to come across. And by the way, it’s really hard to communicate, and he did a great job.

Another highlight for me, another one of our opener, Kirk Skaugen, President at Lenovo. And this is a company that generally stays quiet on the data center front and it was cool to get a front row, center seat, insider view of how the company is racking up such big share gains. As all of these infrastructure companies are going down, Lenovo’s going up and they’re doing things like vertical integration, they’re leveraging partnerships. It was pretty cool to see.

I really liked Ericsson North American CEO coming on, giving us a sobering view of 5G, kind of what it’s going to take to get full advantage of it, of the technology, which is about developer focus, right? API-driven capabilities and leveraging those massive [inaudible] abilities to be able to get the perfect quality of service at the right price for those Web.4.0 apps.

And then finally, Marvell COO, Chris Koopmans giving the insights into AI and why connectivity matters. And I think we need to remember that, that it’s not just about the GPU compute, it’s about the connectivity as well. And I really appreciated that. Overall on the track openers, I had looked at it and literally most of them were AI. Imagine that, Dan, you must have been really happy. AI for developers, AI for enterprises, AI on the edge, AI in the data center, AI for security, AI for use cases.

Daniel Newman: I was just really right. I was just really right.

Patrick Moorhead: Yeah, I mean you need to just get a legal name change to AI until we get bored with that, then you can pull that back. Okay?

Daniel Newman: Look, I don’t mean to brag, but that was it. That was the whole thought.

Patrick Moorhead: Anyways, to be a top industry analyst, you have to have some courage to be able to take the shot. And to have the courage to take the shot, you have to understand the content, you have to have some perspective, but you have to have a huge ego. And I’m the first one to say, I have a gigantic ego and I look back on the big calls that I’ve made. I haven’t gotten them all right, but I feel like I’ve gotten the one that matters right, but hey-

Daniel Newman: If you don’t get a few wrong, you’re probably not making a enough calls or you’re not making any real calls.

Patrick Moorhead: I’m not taking enough risks. That’s exactly right. So hey, I want to wrap this segment up just by saying I really want to thank all the participants. I want to thank all the viewers. If you’re one who doesn’t like to register for a conference, don’t worry, we’re going to be streaming all of these videos live 20 days from today. Sorry, sorry, sorry, sorry, 13 days from today, which would be the June 22nd. And you can catch it on Twitter, you can catch it on LinkedIn, and we might even stream it to Facebook and of course, YouTube.

So, thanks and give us feedback. We want to make this better. We’re going to go into our fifth year, give us feedback on, “Hey, should we do this earlier? Should we add a segment? Should we remove a segment? Should we make the segments longer? Should we make this segment shorter?”

Daniel Newman: Should we do an AI summit sometime between now and the next event?

Patrick Moorhead: We might have to.

Daniel Newman: We might have to. And Pat, you summed it up great and I just want to say from, I think on behalf of both of us, Connor, the whole Futurum team and the More Insights team, thank you to all of you. We couldn’t do it without great partners. We couldn’t do it without a community that continues to support, amplify, distribute, view, engage, criticize, all the things that you got to have to have a show, a platform like we do with the Six Five. So Pat, that’s a great way to end the show. A humble moment from two guys that sometimes struggle with that concept. I’m kind of kidding. So, I mean because it’s not about me, but whatever.

So, there we have it. Another week in the bag. We did 60 sessions this week. We went to Cisco Live, we went to Google Cloud Executive Forum, we ran around the country. You’re going to take a hike now. Literally, Pat’s about to take a hike. I just had to fit that in. And we’ve got, it’s Friday off. Next week I’m heading to New York and then Málaga because the Futurum Group is the sponsor of the Digital Enterprise Summit. And I’m super excited about that. I think you’re at home next week, right? You’re actually-

Patrick Moorhead: I am, yeah, for the first time in a long time.

Daniel Newman: I’m so jealous of you.

Patrick Moorhead: I’m home. And Dan, I don’t know if you’re hiring influencers for your show, but I might be available.

Daniel Newman: Pat, I couldn’t afford you. All right, well there we have it everybody. Another great week. We talked Cisco, we talked Google, we talked Apple, Cloudera, Salesforce, and of course, we talked about ourselves. And I want to thank all of you for tuning in this week. Hit that subscribe button, join us, be part of the Six Five community. Come back every week, tell Pat what he said wrong, and we’re off for the day. We’ll see you all later.

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.