We’re LIVE for Ep 32 of the MI&S Hot Desk Podcast with Robert Kramer, Melody Brue for a rundown of what’s up this week in enterprise apps, data security. We’re talking Canva’s acquisition, $MSFT earnings, Adobe creative campuses, Commvault, Crowdstrike and Blue Yonder.
Watch the full episode here:
Listen to the audio here:
3:09 Canva Set to Acquire Leonardo.AI
9:49 Microsoft Q4 2024 Earnings
15:15 Adobe CSU
19:26 Commvault
21:16 Crowdstrike
25:01 SCM – Blue Yonder and Sustainability
Canva Set to Acquire Leonardo.AI
https://www.canva.com/newsroom/news/leonardo-ai/
Microsoft Q4 2024 Earnings
https://x.com/MelodyBrue/status/1818414106325762408
Adobe CSU
https://business.adobe.com/customer-success-stories/csu-case-study.html
https://moorinsightsstrategy.com/mis-weekly-analyst-insights-week-ending-august-2-2024/
Commvault
Crowdstrike
SCM – Blue Yonder and Sustainability
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: It’s nice to be live again on podcast. And so fancy meeting you here. We both had probably some good weekends and we started the week pretty well and we have a lot of things to talk about, but we both had a nice weekend.
Melody Brue: We, first of all? Well, I think I have something to add to that. I’ve got this little cutie pie, your little cutie pie.
Robert Kramer: Well, she’s cute. She looks a little bit better there than she does when she’s crying for a bottle. This is my three month old Anna Elizabeth. She loves to play or loves to watch Daddy play pickleball, so she decided to put her little outfit on and she gives me some good vibes to play well, so she’s so cute. We
Melody Brue: Can get her a little mini Manchester United Jersey. She already has her little Wimbledon onesie that I got for her at Wimbledon and we’ll maybe next Game Time Tech pod, we’ll have to bring her on, but
Robert Kramer: Absolutely. And we had a chance to see each other last week, so we will talk about that. But first, this is a great pic of how we were in San Diego last week for Qualcomm.
Melody Brue: Yeah, nice. A little behind the scenes there of Anshel talking to Don McGuire, the CMO of Qualcomm, about their Snapdragon front of Jersey, sponsorship of Manchester United. We’ll have a Game Time Tech full pod on that within the next couple of days, so we’ll get to that. But what are we going to talk about today?
Robert Kramer: Yeah, so welcome to this week’s edition of Moor Insights and Strategy Hot Desk podcast. So I think Mel, we’re on episode 31. I’m Robert Kramer. This is Melody Brue, and we’re both here to talk about what ERP enterprise data modern work, HCM cx. But on this show we talk about the tools, trends, the trajectories in the people and the marketing technologies, enterprise apps, E-R-P-C-R-M, and the glue that holds it all together. It’s data. But we’ll be talking on this week’s show, a little bit about Canva and a little bit about Microsoft’s numbers and as well as Adobe Commvault, a little bit about CrowdStrike and as we dive a little bit further deeper from ERP into SCM Blue Yonder. So just a little bit of a disclaimer, the show is for information and entertainment purposes only. While we’ll be discussing publicly traded companies, this other show as content should not be taken as investment advice, I always kind of messed it up sometimes we always like to give advice because analysts, so let’s get started. We had some really some fun times, but it’s not all fun times when we’re doing Game Time Tech because we’re analyzing and we’re advising those companies on how they can utilize their sports technology to the benefits of fans and the brands and the IT companies. But let’s get into a little bit of what we’re going to talk about today, which is Canva.
Melody Brue: Well, I would say it is a fun time, but it’s not just fun and games.
Robert Kramer: Absolutely
Melody Brue: Right. Yeah. So Canva announced its intent to acquire Leonardo AI, which is an Australian AI content. Oh, my stomach just growled so loud, you got to love live things. It’s like, no, we’re actually live when you’re can hear your stomach growling. But this is I think, significant for Canva. Well one, it is using generative AI models to create images. So it’s akin to a Firefly model. I made a LinkedIn post about this and I actually used the Leonardo AI to make the image on the LinkedIn post and it was pretty good. It is a nice image. I mean, I used a robotic image holding up a sign that says acquisition news, but it also gave me a bunch of different prompts to suggest how to improve it. I didn’t spend a ton of time with it. So I’m going to say first glance, I don’t think it has the sophistication that Firefly does because obviously Firefly has a bunch of different models that Adobe is using throughout all of the layers of marketing production. And as we’ve talked about on this podcast before, IBM used it for one of their campaigns to produce millions of images within seconds.
Robert Kramer: What an asset that is
Melody Brue: Amazing, and I thought they were gorgeous, but I think this produced a really nice image. There were a couple of different levels of being able to tweak it and everything. It’s also interesting, I think this acquisition comes with about 120 of their engineers, researchers and designers. So it really shows Canvas certainly investing a lot into their AI offerings. They also separately just expanded their partnership with Getty Images, which again, you got to look at this from their competition with Adobe, which of course Adobe has Adobe stock on their images. So they’re using the Getty images for some of their model training for their Gen AI tools, but also just as kind of having those images as part of their library. So the big question here is, is it enough to compete with Adobe? Canva started out as a tool for individual creators for schools, for those types of things, and now they’re really making this push into the enterprise and they’re investing a lot into AI. They have I think 190 million monthly active users right now, but I would say from a general standpoint, they don’t have that high caliber professional designer to the level that Adobe has. There’s also I think just some kind of legacy establishment that Adobe has as a leader in the space and as a trusted leader in the space in terms of what they’ve done with AI. Also, the additional products they have essentially kind of made me laugh. I opened up one of Canva’s investment documents just to get some background on the company and it opened in Acrobat. So I mean-
Robert Kramer: Did Adobe start more years ago at more of the consumer level than they went to the enterprise level through a lot of different types of innovations and acquisitions and Canvas maybe just years behind, but trying to follow the foot, they’ve paved the way.
Melody Brue: And that’s kind of the thing is that professional, there’s the professional designers and then there’s the enterprise customers. And those professional designers are often doing work for those enterprise customers. But I think there’s definitely really a lot of value in getting to people early on in their journey. And we’ll actually talk about this in a little bit with Adobe’s creative campuses, which is a different topic, but I do think that it is a long journey to get from that place to these IBM type customers. Canva does have some high kind of high-end enterprise customers, but when you look at it from an entire suite and you look at, especially throughout the end to end with Gen Studio, I think they have a lot of room, a lot of ways to go there, I would say. But this is definitely a good move for them. And I think when you combine it with the other acquisitions that they’ve had over the last nine months or so, they’re definitely making some moves.
Robert Kramer: You remember 10, 15 years ago when product catalogs had to be made and it was completely manual, and now this is split done in 10 minutes. So what an asset Firefly and Canva offer to those product catalogs and to the marketing teams that they’re working with. I mean, it’s just light years ahead of this innovation. I think that I’m sure most companies know about it, but if they don’t, both will give them what they’re looking for comparable to what they had years ago. I mean, it’s absolutely fascinating.
Melody Brue: Yeah, I think that it’s funny when you say compared what we had years ago to now, it’s like the number of things and we’re both marketers, former marketers, the things that we had to do manually and this kind of these static campaigns that are now so dynamic that can be changed so quickly based on even just interactions within a couple of seconds from the consumer and the data that you get back from the interactions online. And so you have to have these kind of really advanced tools. And now with Gen AI, you don’t have to necessarily be a data scientist to get that feedback. You can ask it, which we could go on about this for a really long time. But that actually sort of does lead to the next topic, which is Microsoft’s earnings because we could talk about a lot of things when it comes to earnings. We could talk about a lot of things when it comes to the stock market this week and we’re not going to.
Anybody who’s tuned in for that reason, you’re in the wrong place. Although look at the New York Times article that Pat had some comments in about today about the market and what’s going on with technology and the cyclical nature of all kinds of things and intel and everything else. But for this particular purpose, I really focused my research notes, my research note on Microsoft earnings, just on the growth of copilot and teams. And I think everybody is looking at how these companies are monetizing AI and whether the investment in AI because the capital expenditures from these companies are massive, what they’re putting into AI. And so I think everybody wanted, now I’m going to talk a little bit about what’s happening in the stock market, but I’m not going to really, but everybody wanted to see this quick hit, okay, AI is going to be this next massive big, huge thing.
Well, there’s going to be a runway of that, but what we’re seeing with Copilot is that there’s a massive adoption of Copilot, the number of seats, the number of users, the number of use cases that are now coming out from Microsoft, other companies as well. But right now we’re specifically on Microsoft. And what happened, I think early on where we saw from a development standpoint with GitHub, how it was just really from a productivity standpoint from the developers were using gen to write code. That was the big use case. That was like, okay, you can write code, you can do this quicker, you can do all these things. Well now we’re seeing that across with Copilot across multiple things rather than from just a developer standpoint. So finance, hr, a number of other departmental use cases that are really starting to benefit from these use cases and the automation that they’re getting from Copilot.
Also tremendous growth within teams and the premium in teams. And I think that has to be driven a little bit by Copilot. They don’t break out those numbers. So we haven’t seen exactly what’s driven by the specific tools within Teams or the specific tools within Copilot, but I think that some of that growth has to be driven by that. And certainly on the earnings call that was a heavy emphasis of the copilot growth and everything. And there’s of course some reaction to things coming in a little bit under of what analyst’s expectations were that shouldn’t, I think, at least from my swim lane point of view doesn’t temper. And I’m not looking at it purely from a stock price point of view. I’m looking at it as a long-term, my is Copilot taking off the way that Microsoft needs it to be and are consumers using it in a way that they need to be using it for this to stick
Robert Kramer: The question.
Melody Brue: And so far, I like the indicators.
Robert Kramer: Do you think just quickly for companies to be successful with AI, I think the dust hasn’t settled yet. I think the jury’s still out. The data management structure has to be in place for the AI to ROI for these companies to invest because I am not sure that companies have truly understood their long-term investment for success.
Melody Brue: I think you’re absolutely right on that, and there are a lot of companies that are trying to deal with that on different fronts. We’ve talked about box and box AI and how they use generative AI to structure all of that unstructured data so that companies can make the most use of it. So I think that is a huge factor. I think the other really, really big factor in this is adoption. If you’re not driving adoption within the organization, if you’re not teaching people how to use it and you don’t have those champions from the top level, but also on the ground level, people who are using it with Microsoft refers to as their power users. If people aren’t using it and they’re not being shown how to use it correctly, and I’m not talking about just search, I’m talking about actually using it to automate workflows, using it to shorten the mundane tasks in your day so that you can actually use your time to be more creative, more strategic, all of those things, then the adoption doesn’t matter because people are going to stop using it and they’re not justify the ROI. So
Robert Kramer: Well said.
Melody Brue: We have a lot
Robert Kramer: Of Adobe.
Melody Brue: So we talked a little bit about Adobe, and it’s funny how I don’t think we ever really plan these things, but they end up sort of coming together in a way that we can maybe help them make sense. But this isn’t new, but Adobe just released some data on this. Adobe has a relationship with the California State University system and they have what they call these Adobe creative campuses. And so on certain campuses throughout the CSU system, they have access to all of these great Adobe tools within their classrooms, and they released some data on this. They have a hundred percent placement for graduates who are experienced with creative tools in, these are in specific job functions, but they really have, so these are for journalism students who learn creative apps. They’ve had in 45% of their curriculum, they’ve built in creative and digital skills with technology embedded into the curriculum.
So I think about all of the things that people have talked about recently with AI look like it’s either going to replace jobs or AI isn’t going to replace your job, but somebody who knows AI better than you is going to replace your job. This is arming a ton of students who, if you look at the demographics from California State University campuses, there’s a large percentage of underrepresented communities that attend these universities that are getting access to these creative tools. The other part about this is that they’re not all going into journalism or some sort of creative design or something. This is being used in finance classes. It’s being used beyond just these creative applications,
Robert Kramer: Which is a different model, right, than normal, which is great.
Melody Brue: It’s a different use case. So what you’re doing is you’re giving, even in a finance scenario, you’re giving people the ability to learn how to put together a creative deck and use these tools to make a presentation, even to create a podcast. And when people have those skills, and LinkedIn has done some studies on this, when they can put those AI skills on their resume, that’s going to catch the attention of recruiters more often than people who don’t have, there’s been studies that have shown that the recruiters will take somebody with less experience, but more AI capabilities than somebody with less experience. So this is just giving that kind of access, and I don’t really like to use the whole democratization of that word that is beaten to death, but this is kind of one of those cases where it does make sense that it’s like it’s giving access to people to really be able to use these tools in a way that can get them ahead in their career, put them in the right place to where they’re starting in their career. Even if this isn’t necessarily, you think of like, well, I don’t want to be a designer. You don’t need this to be a designer. You need this just to function in.
Robert Kramer: Right? That’s the bar.
Melody Brue: Yeah. The future is how to use AI. Just like Gen AI fluency is going to be the next basic thing that you have to have just to compete in any job. I’m going to say even in I think a lot of frontline jobs now frontline workers, they’re having to interface with a lot of these apps where they are using gen AI to figure out what’s their next step or how do they talk to HR or how do they get paid or how do they request time off or how do they serve this customer? How do they answer this inquiry? So it’s stuff that people really need to know.
Robert Kramer: I agree.
Melody Brue: Total change in topic, Commvault,
Robert Kramer: We’re going to go over to the security protection industry, and Commvault just, which is a security protection company, just released their quarterly numbers, which was a Q1 25, very successful, and I believe they’re up 13%, which is fantastic. And they’re growing. That was quarterly 13%, but annually 17%. What’s interesting is the data management and protection industry that’s growing and there’s reasons why they’re growing and there’s also future concerns as well, but it’s growing because of all these companies are adding massive amounts of SaaS applications, and so it generates more data, it generates more risk for cyber attacks, and so you need advanced security technologies. Another company called Dynatrace just released their numbers. They’re more of a monitoring observability platform. They had similar numbers, actually a 19% yearly increase and 20% for the quarter. So what I’m seeing is these companies need to continue to innovate in these segments, but at the same time differentiate because of the fact that there’s a lot of competition. So they’re growing right now, but the concerns are how do we support these enormous amounts of SaaS applications that are breeding more data and potential for security risks. So I think the resiliency is a lot of the things that they’re doing to actually that they’re touting because it’s going to happen. So how do you actually rebound quickly from these attacks? But that’s why I feel that those are growing in some capacity.
Melody Brue: I think in general, I feel like there’s a heightened view on security right now. One because of AI, right? Because there’s now a much bigger threat with ai and being able to find lots of different ways in hacking the or CrowdStrike thing had nothing to do with that. But I do think that there’s a heightened awareness around that in general. And then how much of a panic for consumers and for companies did this CrowdStrike issue Cause.
Robert Kramer: And-
Melody Brue: Maybe we need the combination of you with the data security and will with the bigger picture security, but how much do you think that that just affects people’s general comfort and-
Robert Kramer: It reduces
Melody Brue: It? Is that potentially an opportunity for companies like Okta, like Wiz to come in with solutions for, I mean, we clearly see Cisco putting a massive, massive focus on security now.
Robert Kramer: Huge. I think the chain value chain that they’re trying to, what Cisco’s doing is to expand what their offerings are to obviously incorporate Splunk, but they can offer more with what their model they have. So I think you’re right, it opens the door for sure.
Melody Brue: I think the question is people freak out when something like this happens, and the question is, well, what do we need to do? And this unfortunately, and fortunately I will say affected so many people that I think it will really make people think and tighten things up from a security standpoint and realize the vulnerabilities that they have both personally and at a corporate level. Because if you have vulnerabilities personally, like we’ve talked about this before, and I think it’s such a ridiculous example, I think, but there was an executive whose work account got hacked through his electric toothbrush because his electric toothbrush had an app to his phone, which was unconnected to his work email. So I have lots of friends who lost luggage, who lost were delayed flights for days at a time. And now of course there’s all this back and forth about whose fault was it and who’s responsible for all that. But really it just sort of sheds this big massive spotlight on we have to be paying attention to every single piece of security.
Robert Kramer: I think it’s very deep to security issue. It goes from the ERP level to all these SaaS applications, and I don’t think there’s any true solution that’s handling the whole complete package. And I think that’s potentially an issue. And if there is, that’s great, but I’m not aware of one that’s really handling at all from the ground zero all the way through the SaaS applications. And I think there’s some vulnerability issues, but what these applications can do is get you back on and running quickly. So that’s one of the things that they are able from the resiliency standpoint. But let’s jump into some ERP and some SCM, which deals with Blue Yonder, which is a major leader from an SCM perspective. They acquired a company called One Network, almost a billion dollars. It was eight 39 million, they just closed recently. And what this does is one network has a really a strong AI powered technology that includes a multi enterprise, multi-tiered network ecosystem of suppliers and partners.
It’s like 150,000 different types of organizations, and they can facilitate really real time information and connect all these different types of companies. So like an automotive industry, like the manufacturer is connected to the parts supplier to distributors, and they can share information and quickly resolve disruptions and then handle those hurdles from a supply chain perspective. So it’s a stronger unified platform, but the number that they bottom ’em at is a very high number. So they see this as the potential, and I see it too in the supply chain connecting all the vendors outside of your network. It allows you to really make changes on the fly if you need parts, if you need a different supplier from a sustainability standpoint to know who is an eco-friendly supplier. You only want to do business in certain parts of the world. It allows you to connect this technology, and it’s all powered by AI. So I think it’s a major vision acquisition for Blue Yonder, and it spans their network pretty well. So I’m excited as I hear more from them.
Melody Brue: I have a question, put you on the spot a little bit. ERP obviously has been around forever. Companies can’t run without it, but for some reason it’s becoming a really big topic that people are talking about again, almost as if it’s new and it’s not. What’s changed the industry in the kind of, I guess, the atmosphere, the tech world, that this is becoming more of a priority to really get things in order in the A RP?
Robert Kramer: That’s a good question. It started off that ERP was mostly on-prem and was modular to where it handled most of your business. And now that you had all these SaaS applications, I think things shifted to the SaaS applications to do some of the modern features that you might’ve needed. And what’s happened is the ERP is now known as has always been known, but more known is the source of truth that companies are now realizing that you can’t live without your master files being at the focal point, that it’s the source of truth. You have to make sure that data is in order. But these ERP companies are starting to modernize their solutions. They’re offering a lot of the features of the AI technology that we’re talking about. They’re adding a lot of the supply chain, the sustainability, even blockchain, lots of innovative features to modernize and to also have the APIs to sync up to those SaaS applications.
So for some reason, I understand what you’re saying, and the pulse that I see is, I don’t think I’ve ever forgot about the ERP, but I think people got diverted with all these SaaS applications and the AI hoopa that they felt like, well, do I really need an ERP solution? But the question is, if your CRM goes down and your ERP goes down, which one do you care more about? It depends what you’re using what for, but chances are your order to cash manufacturing, shipping, logistics, ar all that is going to be happening with your ERP, and that’s down millions is you’re losing an hour. CRM is a lot different, but I think that I would tail it back to the manufacturing modernization component. That is a big ticket that is now more front and center. All the ERP companies have consolidated a little bit more and they’ve modernized.
Melody Brue: That’s a good explanation because I do think, I mean for you, obviously it’s something that you live every day, but I think from industry-wide, it’s all of a sudden getting a little bit more of a spotlight. And so piecing that together, a little bit of where we started, where we went, and coming back to that of modernizing, and I think you do explain some of that in your ERP series and in the SAP article from Sapphire. So I think
Robert Kramer: We’re growing though the industry, as you see it, and you’ve talked about it a little bit, they’re seeing growth that they haven’t seen before. And a lot of this is, I think that AI is spurred on as well, the ERP companies to get their data in order and to spend more on that spectrum. Because if the data’s not right from the ground zero, the anchor and security is tight, then some of these things are not working from the SaaS community. So I think it’s kind of a double ended sword. You have to take care of the ERP, and I think that’s one of the most important components, but I think it fuels the whole system and the lifecycle of a company to work with AI.
Melody Brue: Well, good. We started with baby pictures. We went all over, we went through acquisitions, we went through earnings, we went through creative campuses, and now ERP. I think we’ve really kind of taken this full spectrum.
Robert Kramer: It was a fun 30 minutes, and we loved doing these podcasts, and we want everybody to enjoy with us and get to know us and tell us what you want to hear as well. So it’s a lot of fun.
Melody Brue: Yeah, for sure. I would love for anybody watching, if you want to hit us up on Twitter, give us a comment, let us know what you want to hear about. Because every week there’s so many things going on and we kind of throw these things together because these are the things we’re interested in, but we want to talk about what you’re interested in too, because most likely we are too. But anyway, thanks for joining everybody. Robert, good to see you again, and we will see you all next time.
