The Six Five Team discusses Oracle Generative AI Capabilities with Cohere.
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Transcript:
Daniel Newman: So this is about a week old, Pat, we just didn’t get to it. So one of the companies that’s a lot of investment and focus on enterprise large language models is called Cohere. So we hear a lot about… By the way earlier we talked about Luminous, now we’re talking about Cohere, everything was OpenAI for a while, but what’s happened is then it was open AI and PaLM/Bard, then it was OpenAI, PaLM/Bard, and then Hugging Face. And now we’re kind of going down the list and we’ve got Cohere as a company that HPE tied up with Luminous, Oracle’s tying up with Cohere. And basically what they’re doing is looking to integrate lots of generative AI capabilities into their Fusion Cloud and NetSuite as well as their industry specific apps.
So one of the things that is really interesting here too, Pat, is that we’ve talked to you and I about the holy grail of private data sets, public data sets, and this is where Oracle’s really leaning in. They’re planning to use the Cohere foundational models to point at private data sets, not worrying about public domain data and being able to enable companies to train on smaller sets to be able to create higher confidence results and people that can get key benefits from all that enterprise data into those enterprise apps. So long and short is that what we’re seeing, whether it’s the Google generative AI app builder or you’re seeing Salesforce and their GPT product or Oracle here is you’re seeing that the large software companies are saying, look, yes, every company can become data scientists and build their own training data sets and create algorithms and models if they want to spend a fortune, hire a ton of data scientists, buy hardware that’s not available in the marketplace at all right now, and then try to keep up with a pace that’s unrecognizable right now. Nobody’s seen a pace like this before.
Or you can work with multi-billion dollar high profit companies with deep engineering and data science expertise that are going to build large sets of these AI capabilities right into the applications for you that will address the Pareto 80/20 of your needs. And then maybe you can do a little bit of modification and customization to train for specialty needs, tools, and technologies. This is what that is. If you’re running NetSuite, it’s what are the generative capabilities to build a more sufficient CEO dashboard or CFO dashboard? What are the capabilities to build quote to pay, accounts receivable, generative tools that can take… And again, you’re really going to look at a multi app ecosystem. You’re going to say, how does an email get crafted using the data inside of NetSuite to send something thoughtful to a customer that’s going to help you speed up the collection, but doing so with a very prescriptive interaction as opposed to just an automated email that gets pumped out of your system. Stuff like that.
These are the opportunities, and like I said, it is a industry-wide standard, Pat, so Cohere plus Oracle, compared to Salesforce plus OpenAI, compared to what SAP is doing with business, SAP business AI, you’re going to see it from all the platforms and the players. But given what we said earlier, Pat, with Oracle’s recent role, I think that they probably looked to find something very specific. They’re digging in narrowly into that private data set. And I do think it is a compelling offer, especially given the strong growth that we’ve seen across the apps portfolio.
Patrick Moorhead: I don’t know enough about Cohere to intelligently come in, so I can’t figure out if this is a, they were late to the table and they were the last one to dance with. I have no idea because you can partner with OpenAI and then modify the results because OpenAI is the brain. Leveraging OpenAI doesn’t mean that every company that uses it is going to get world data back. OpenAI is the brain and then you customize a level of training above it, very similar to what Microsoft is doing with the layers that they have and then the magic happens. So yeah, again, it’s very hard for me to know what the case is. I think this all comes together if you look at OCI and what OCI brings to the table. And interestingly enough, in this latest round of the friends of Nvidia club, Oracle actually did quite well.
And if you look at the first place that you can get access to many of NVIDIA’s tools, it’s on Oracle Cloud, which if you think about it’s like, wait, they’re the number three, number four, something is really interesting about what Oracle is doing. Now, one thing that is the attractor loop is pricing the way that Oracle does it. Which might sound pretty straightforward, but for the easy stuff, they make less profit and for the harder stuff they make more profit is kind of different, very different from the way that AWS prices stuff. So I’m really look really interested in looking at the top to bottom stack, which is the generative AI services with Cohere plus OCI infrastructure and what does that look like?
Because in the end, you’re not just buying these services with Cohere, you’re pretty much buying everything as a stack. And over time, pricing for these types of services in this full stack will come out. The really good news is that Oracle is a full stack provider. Then you add on top of it the SaaS properties like NetSuite and Fusion, it’s even more important for them to come up with the right solution because they’re going to have to eat their own dog food related to their SaaS apps that’s delivered through a PaaS and an IAS service.
Daniel Newman: Yeah, no, I think you hit on the head, Pat, and I think that’s really where I was trying to go is generative AI is going to be a capability. Some automations were in business applications or capability like some of the business data visibility visualizations that have been created. Now, it’s going to be generative. We’ve already seen things, Pat, over the last few years, attrition scoring that were being created. Now the difference is a generative tool could say, hey, this customer looks highly likely to defect, we’re going to generate an auto email. We’re going to put in all these value added items that we’ve been doing for the customer to remind them of the value. We’re going to hit them up early, we’re going to get ahead. You know what I mean? It’s going to generate some secondary assets to create value, but this is going to be built into the tools.
Companies are not going to have to build a lot of this stuff from scratch. The question now is how much are what people willing to pay for these capabilities on top of what they’re already paying for products, or is this going to be table stakes? And that’s one of the big things a lot of people are keeping eyes on. Is generative AI incremental revenue for a company like Oracle or for Salesforce or is it a expectation within the current customer pricing and more incrementally we’ll see pricing increases like software always does as opposed to truly saying, hey, you want this new AI feature set, it’s going to be a 25% bump to your current cost or, hey, we’re going to bake this in right now because we don’t want you to go to effect over to Microsoft and use their new co-pilot tools. And that’s going to be the question for a while is in the price wars.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
