sean.horgan.net

Thoughts on Stratechery's Enterprise Philosophy & AI

Sean Horgan

DRAFTING

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https://stratechery.com/2024/enterprise-philosophy-and-the-first-wave-of-ai/⁠

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Consumerization continues to be a major element of B2B strategy. It sounds obvious but companies that effectively navigate the internal gatekeepers at the customers will seriously outperform those that don’t. It’s hard to win if you need to go toe to toe with IT.

However, the agent equation, where you are talking about replacing a worker, is dramatically different: there the cost umbrella is absolutely massive, because even the most expensive model is a lot cheaper, above-and-beyond the other benefits like always being available and being scalable in number.

Does the above encourage companies to consider pricing AI-based agents relative to the employees they are replacing?

If, however, you believe that AI is not just the next step in computing, but rather an entirely new paradigm, then it makes sense that enterprise solutions may be back to the future.

What does this mean for access to internal data? Maybe it's the only thing that matters.

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Picking apart this diagram a little:

Integrations should be everywhere

Apps are missing. It's more than analytics and workflows

It's right to think about layers or planes, not everything can or should connect with everything else.

Executives, however, want the benefit of AI now, and I think that benefit will, like the first wave of computing, come from replacing humans, not making them more efficient.

I think this only considers the cost side of the equation for businesses. That could increase margins but if left to just that, a company sets themselves up for more competition from others that both lower costs & grow their business.

And, instead of per-seat licenses, we may end up with something more akin to “seat-replacement” licenses (Salesforce, notably, will charge $2 per call completed by one of its agents). Services and integration teams will also make a comeback.

This could be a great way to compete asymmetrically with established players charging traditional per-seat prices.

True consumerization of AI will be left to the next generation who will have never known a world without it.

I think consumerization of AI will happen faster than people think simply because the rate of change on both the benefit side and cost side are dramatically increasing, higher and lower respectively.

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