Published on February 1, 2024, 8:29 pm
In a sign of the increasing adoption of generative AI in the enterprise, tech vendors are starting to see the benefits of their investment in this technology. Google Cloud, for example, reported revenues of over $9 billion in the fourth quarter of 2023, with a 26% year-over-year increase attributed in part to generative AI. Sundar Pichai, CEO of Alphabet, highlighted the role of generative AI during an earnings call on Tuesday.
Microsoft also experienced growth in its Azure AI customer base, which now stands at 53,000. Satya Nadella, Chairman and CEO of Microsoft, announced during the company’s Q2 2024 earnings call that more than one-third of these customers are new to Azure within the past year. Additionally, GitHub, which is owned by Microsoft, saw an expansion in its subscriber base thanks to the adoption of Copilot.
ServiceNow has developed a suite of generative AI products called Now Assist solutions. These products leverage OpenAI and Azure OpenAI technology and can be used for conversational chats, workflow development, and service management. CJ Desai, COO of ServiceNow, believes that generative AI will present opportunities for all software companies in the coming year.
Despite these advancements, it is important to note that generative AI currently represents only a small portion of overall IT spending this year based on research from Gartner. Andrew Miljanovski, VP advisor at Gartner, sees these developments as just the beginning and believes there is still much more potential for growth in generative AI.
Tech vendors have made significant internal changes to support their AI initiatives. They have invested heavily in infrastructure upgrades and expanded their partnerships to enhance their capabilities and reach in this field.
It is clear that workers today desire better collaboration tools that align with their preferred ways of working. This finding was revealed by Microsoft research indicating a disconnect between worker preferences and tool availability.
Not all tech investments are created equal when it comes to paying down technical debt. It is important for organizations to carefully evaluate how they allocate their $1 billion tech investments to ensure maximum impact.
In conclusion, the embrace and integration of generative AI by tech vendors is proving to be fruitful. Companies like Google, Microsoft, and ServiceNow are reaping the benefits of their investments in this technology, with positive financial results and expanded customer bases. The potential for generative AI remains vast, and its impact on software companies is expected to grow in the future.