Source URL: https://www.tomtunguz.com/survival-not-granted-in-the-ai-era/
Source: Tomasz Tunguz
Title: Fighting for Context
Feedly Summary: Systems of record are recognizing they cannot “take their survival for granted.”
One strategy is to acquire : the rationale Salesforce gives for the Informatica acquisition.
Another strategy is more defensive – hampering access to the data within the systems of record (SOR).
Unlike the previous software era where SORs built platforms on top of themselves to develop broader ecosystems (in Salesforce’s case Veeva & Vlocity), the AI shift does seem to be more defensive.
[App builders] can no longer index, copy or store the data they access via the Slack application programming interface on a long-term basis.
This isn’t the first time within the AI ecosystem that companies have shut off access to APIs. The DeepSeek launch shook the ecosystem’s assumptions.
Newer models employ distillation : asking a previous model many questions as a way of training itself for far less to achieve similar results. The result : tighter controls over AI API access. OpenAI, Anthropic, Cohere, Google are just some of the foundation model companies that now have clauses explicitly banning developing competitors via the
API.
Some startups have found terrific success by partnering with SORs : Abridge, AI for clinical documentation, has grown tremendously through its partnership with Epic. ServiceNow announced its intention to acquire MoveWorks for $2.85b.
AI has increased the stakes because the underlying workflows that have powered software are changing. BDRs no longer manage one email account, they manage five or ten or more. The growth rates of AI companies are faster than ever, & the context/data stored within systems of record is some of the most valuable assets in the market.
The combination of these three forces will drive more M&A, bigger outcomes, & greater defensive behavior as incumbents search for the right strategy for their business. For startups relying on big partners, the potential for platform risk has never been more acute.
AI Summary and Description: Yes
Summary: The text discusses strategic shifts in systems of record (SOR) amidst the evolving AI landscape, highlighting competitive dynamics, defensive strategies, and collaboration trends between startups and established enterprise platforms. It emphasizes the implications of these shifts for data access, API controls, and the overall merger and acquisition landscape.
Detailed Description:
The analysis of the evolving landscape surrounding systems of record (SOR) suggests significant implications for data security and operational strategies. Key insights include:
– **Survival Strategies**: SORs are recognizing the need to adapt their survival strategies in a post-AI world. This includes defensive measures to protect data integrity and access.
– **Acquisition Trends**: Strategic acquisitions, like Salesforce’s acquisition of Informatica, signal a shift from traditional growth methods to more protective approaches. Companies are looking to solidify their data control rather than merely expanding their ecosystems.
– **API Access Restrictions**: There is a notable trend where access to APIs is being restricted, affecting how app builders can utilize data. For example, data accessed via the Slack API can no longer be indexed, copied, or stored long-term. This has consequences for data leverage and app development.
– **Competitive Dynamics**: The competitive landscape has tightened, with corporations such as OpenAI, Anthropic, Cohere, and Google implementing clauses in their API agreements explicitly banning the development of competing services through these APIs. This indicates a more defensive posture among major AI players.
– **Startup Collaborations**: Startups, such as Abridge, are successfully partnering with established SORs (like Epic) to leverage infrastructure while navigating market complexities. This points to a trajectory where strategic partnerships become more crucial for success.
– **Changing Workflows**: The rise of AI is transforming traditional workflows, particularly in data management. Business Development Representatives (BDRs) are now managing multiple accounts (up to ten), complicating their operational strategies.
– **Market Dynamics**: The rapid growth of AI companies is creating a highly valuable data landscape within SORs, making these data assets critical in competitive positioning.
– **Mergers and Acquisitions (M&A)**: The convergence of the above forces is expected to lead to increased M&A activity as organizations seek to refine their strategies and solidify their market positions.
– **Platform Risk**: Startups reliant on partnerships with larger entities face heightened platform risk, where dependence on a major partner could jeopardize their operational stability.
In conclusion, the text outlines how the emergence of AI-driven workflows is reshaping the ecosystem around SORs, emphasizing the need for strategic caution and adaptive business strategies among established players and startups alike. Security professionals should take note of these trends, as the changing data access dynamics may have profound implications for information security practices within cloud and SaaS architectures.