Cloud Wars Live with Bob Evans

In today's Cloud Wars AI Minute, I look at how Microsoft is using Work IQ to make AI agents faster, more efficient, and potentially less expensive to operate.Highlights00:10 — Today, the topic is going to be Work IQ, and we're actually starting to see Microsoft make very interesting moves inside of Work IQ. We've already seen AI agents doing a lot of really interesting things, specifically around the Graph API. But the big difference here is Microsoft is really looking to monetize the ability for them to be able to do preloaded context, and so this allows us to be able to optimize our token spend.00:47 — It's already pre-calculated and just provided to you. And what we're starting to see is that, with Work IQ, you can get about an 80% reduction in the amount of tokens that it would require for you to go derive the same sort of information out of your Graph implementation of your data.01:10 — This is really powerful for organizations who are looking to optimize their token spend. It also means that there's going to be a lot of power coming into Microsoft around the ability for them to monetize this in a way that could be quite effective.01:57 — This is going to be a very interesting world as Microsoft leans into the ability to monetize all of this context that it has from its Graph. The other thing that's a little interesting about it as well is that it didn't offer it as yet another SKU. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at why Microsoft Work IQ could become increasingly valuable as enterprises deploy more specialized AI agents.Highlights00:12 — Microsoft's much-anticipated Work IQ is finally going into preview. Quick refresher: Work IQ is an intelligence layer that gives Copilot and AI agents context about how work happens across an organization.00:27 — That understanding is grounded in business data from D365 and Power Platform. Cloud Wars CEO John Seifert has written up a great analysis of the launch and what it means for customers, which you can read now on CloudWars.com, but I wanted to take the opportunity to look at the wider implications of what Work IQ could potentially mean for the direction of the AI industry.00:54 — Work IQ really demonstrates a shift in what it means to personalize AI. Up until now, Microsoft, like many other vendors, has talked about AI personalization in terms of your emails, your documents, your preferences. But, with Work IQ, there's a shift towards understanding the individual employee in the context of the organization.01:23 — Work IQ is coming in at a point where the proliferation of agents has really become quite significant. We're way beyond general-purpose agents now, and we have specialized agents working across different areas like sales, finance, HR, etc. Increasingly, those agents need to coordinate.01:42 — The question is whether agents can understand the shared organizational context well enough to coordinate with one another, and Work IQ is really enabling that shared understanding. And that links to my final point: the value of Work IQ could increase as Microsoft expands its agentic AI ecosystem.02:14 — The more agents Microsoft introduces, and the more those agents need context to operate efficiently, the more valuable Work IQ could become as that intelligence layer underpinning them. And I think we could see that exact scenario play out in the companies using Work IQ as well. The more agents they deploy, the more valuable a shared intelligence layer will become. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I unpack Sam Altman's comments on AI safety, security, and responsibility during his Dreamforce conversation with Mark Benioff.Highlights00:03 — I wanted to talk today a little bit about a discussion at Salesforce's recent Dreamforce event. It was a conversation with Salesforce CEO Mark Benioff and the CEO of OpenAI, Sam Altman, and they talked specifically about this whole notion of AI safety, AI security, responsibility, trust, and the recent disaster that OpenAI had when one of its models went rogue and attacked a Hugging Face server.00:39 — Altman and Anthropic CEO Dario Amodei have become the leading proponents for, "Hey, let's slow down the whole industry." Let's slow down the whole industry while OpenAI gets its stuff together and moves forward. I've got a detailed, extensive article with a lot of verbatim comments from Altman that really do bear out the points I'm going to be making here.01:35 — One of the big things here is that Altman just seems to be begging to be trusted. He says things like, "You should trust us to do the right thing because we want to do the right thing, and we know that the right thing to do is to do the right thing." I think you want to come in a little bit humble: "Hey, we made some mistakes. Here's what we're doing to correct it. We're going to redouble our efforts here, here, and here."02:02 — Altman was more like saying, "Ah, you know..." It's almost like he's saying this happened to somebody else. He doesn't refer so much to OpenAI, but he said these big AI companies, and some of these big AI companies might now have more control, and some people are worried about what some of these AI companies might do. It was just a little bit surreal.02:49 — And then he says, "Well, I'm disappointed in how it was framed." Now, I get to be disappointed. I've made a million mistakes, and I wish people hadn't always discovered them and pointed them out. But those were my mistakes, and I have to be responsible for them.03:02 — And this was just totally the wrong note to hit, especially for enterprise customers. This whole thing about saying we always do the right thing, but he said now, in some cases, people won't do the right thing. He's talking about the whole industry here. So we always do the right thing, except when we don't do the right thing. It's hard to tell just what he meant.04:54 — I don't think all this obfuscation and the fog that Altman was pumping out is going to help the case. I think that OpenAI needs to clean this up quickly. You know, spill on aisle six. We need the cleanup team over here. Anyway, check out this detailed article and the verbatim comments from Altman. I'll have that later this morning on CloudWars.com. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at how Salesforce plans to unleash trapped data, make software do more of the work, and expand beyond its CRM roots.Highlights00:03 — Had some time to digest the big things that happened at Salesforce's recent Dreamforce event, and I wanted to share with you some thoughts of what I think are the five big takeaways from that big combination of Dreamforce, AI partnerships, and Salesforce moving in some new directions outside the traditional CRM space.00:40 — The big promise that I took away from it was that it is going to unleash trapped data within Salesforce systems and other systems. This is a promise that business people have been hearing about, but not necessarily seeing delivered, for quite a long time.02:02 — And Marc Benioff made a big promise about this: that this age of software doing a little bit but not quite enough, and forcing humans who want to get higher output to do more and more of that work to get the higher output, is going to be over.02:38 — I think Salesforce is ready now, with the rise of AI, with some new technologies like AIforce, with some new partnerships I'm going to talk about, I think it's going to spread beyond the traditional CRM boundaries. It'll still, of course, be a major player in CRM, but I think it's going to move into some other areas as well.04:38 — And finally, Mark Benioff's Q&A with OpenAI CEO Sam Altman was absolutely priceless. Altman's one of the creators of the "Let's Slow Things Down" idea and that whole model. And I think Benioff's careful but straightforward, very simple questions really forced Altman to describe in plain language what OpenAI intends to do. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I unpack Workday's move toward agentic contract lifecycle management and greater workflow automation.Highlights00:03 — Workday has announced that its next mission is to bring agentic AI across the entire contract lifecycle, instead of just AI for individual contract-related tasks. The company is launching the Workday Contract Workflow Agent, which is now in early access.00:22 — But before I get into that, I want to share some other findings that kind of support Workday's intentions here. The company recently conducted a survey of nearly 7,000 professionals and found that 89% said their organizations routinely absorbed financial losses from vendor contracts that auto-renew without anybody's knowledge.00:44 — So, to support this and other processes across contract creation, negotiation, execution, management, compliance, and renewal, the company has launched the Workday Contract Workflow Agent, which is one of a series of major enhancements coming to Workday Contract Lifecycle Management, or CLM, and described as the 'beginning of a new era of agentic CLM."01:09 — The overall goal is to automate more of the manual work involved in managing contracts, connect those tasks with broader business workflows, and it really chimes with Workday's wider vision, which is to embed agentic AI into enterprise workflows, rather than treating AI as a separate tool.01:31 — I think that's what makes the company's approach particularly interesting in the enterprise AI space. It's not just about giving employees another AI assistant, but about embedding agents directly into the workflows that run the business. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I examine Microsoft's plans to more than triple its data center capacity as AI compute demand continues to soar.Highlights00:09 — According to reports, Microsoft plans to more than triple its data center capacity, from around 12 gigawatts today to about 38 gigawatts by 2032.00:23 — So, right now, only about two gigawatts of Microsoft's current capacity is centered on AI-specific chips, but that's expected to grow to around one-third of the 38 gigawatts that it's planning. These data centers will be a mix of owned and leased capacity.00:56 — Microsoft expects $50 billion in CapEx for the first quarter of 2027 and $175 billion for the 2026 calendar year, and as we've seen across the industry, there really is no getting around these massive CapEx figures. Microsoft needs to supercharge its infrastructure build-up because AI compute demand is so high, and it needs the capacity to support that demand.01:15 — But I think there's something else telling here: the fact that only around two gigawatts of Microsoft's current capacity is dedicated to AI-specific chips. To me, that's a sign that we're still very much in the infrastructure and preparation phase.01:49 — There's been so much talk about AI adoption and its increasing integration into companies, but if the infrastructure being built today is any indication, some of the biggest changes could still well be ahead of us. So, if you think we've already seen the full impact of AI on businesses, be prepared for what happens when all of this compute capacity actually comes online. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at Microsoft's new AI-powered Dynamics 365 Activate and what it could mean for Salesforce customers.Highlights00:11 — Microsoft has launched Dynamics 365 Activate. It's an AI-powered tool for migrating from Salesforce to Dynamics 365. In practice , this means analyzing a company's existing Salesforce setup, its data workflows, customizations, and integrations.00:31 — And then mapping what should be migrated, simplified, or redesigned in Dynamics 365. Now, the goal is to reduce the cost, the complexity, and the friction of switching enterprise software. So this is just the start for Activate, and Microsoft plans to expand it beyond Salesforce to other CRM and ERP migrations.00:55 — The company is really positioning this as a way of getting over vendor lock-in in the CRM space, and here's what Jeff Teper , Executive Vice President, Microsoft Apps and Agents, had to say about it: "Often, we hear from leaders that they feel locked into systems customized over years, surrounded by point solutions, and connected through complex integrations."01:19 — He says that Dynamics 365 Activate can help partners and customers move to Dynamics 365 faster, with less manual effort and lower migration risk. Now, why would they want to make the jump? Well, Microsoft is essentially saying, "Hey, Dynamics is a cutting-edge AI- and agent-oriented platform, so why stay locked into Salesforce architecture when you could move to a Microsoft platform designed around the AI agent Era?"01:49 — Now, it's rare that you see such an explicit example of a company targeting another where it hits hardest. In this case, that's Salesforce and its CRM business, where it remains a market leader with around 20% market share, despite all the alliances and partnerships we've seen, and continue to see , in the AI Era. The Cloud Wars are certainly alive and well. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I examine what Salesforce's reported interest in Listen Labs could mean for the future of Agentforce.Highlights00:04 — Salesforce is reportedly in talks to acquire Listen Labs for close to $2 billion. Listen Labs is an AI-powered customer research company that uses AI tools to carry out really large-scale customer interviews and analyze those conversations.00:23 — And it's got a pretty impressive client base, with companies like Microsoft, Perplexity, and Robinhood among its customers. So, why the interest from Salesforce? Because while it's one of the world's best-known CRM companies, it isn't traditionally a market research company.00:41 — Well, the idea could be to bring this kind of analysis and customer understanding — what customers are thinking and feeling — into Agentforce. Now, that could give its agents even more context when making decisions.01:02 — What's interesting is what it says about the direction of travel for AI agents. Again, it's this move beyond Q&A to active decision-making, and in that decision-making, context and customer understanding are so critical that Salesforce could well be willing to bet billions on what is essentially another cog, or neuron, in the autonomous vision it's creating for Agentforce. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I recap some of the comments from CEO Marc Benioff's keynote at Dreamforce about the value of partnerships that enable extended, end-to-end capabilities for customers that a single company cannot provide alone.Highlights00:32 — CEO Marc Benioff said the arrival of Salesforce's new AIforce UI changes everything. No one company can handle all of the changes, so the corresponding expansion of partnerships that Salesforce undertook with these other great companies is a sign that customers want the simplicity, speed, and wide-ranging end-to-end solutions that will require all of the Cloud Wars Top 10 companies to continue to be as aggressive, expansive, and open-minded as possible with the partnerships they form.01:26 — The new technology and the capabilities coming from these partnerships unlock much potential for customers — how much they can reduce migrations and integrations, complexity, and contractual issues.01:46 — These partnerships will lead to some key outcomes. The heart of the Google Cloud partnership is Gemini Enterprise — the integration, the models being used, and its tighter integration with Salesforce's data, applications, and Agentforce will lead to some powerful new outcomes for customers.02:11 — With AWS, it's wide-ranging. The expansion includes what's going on with cloud infrastructure. It's opening doors to new things in the AI Revolution. With Nvidia's Nemotron, the new reasoning capabilities will make data more trustworthy and capable, as well as drive greater insights for customers.02:58 — Salesforce enlisted Anthropic and Claude to let customers do more immediately with these technologies. Benioff went into detail in the keynote, essentially explaining how Salesforce can do a lot, but it can't do it all. He elaborated on how this partnership will unleash new insights and capabilities that were never possible before. I think that's exactly the sort of outcome customers are looking for here. Visit Cloud Wars for more.

In today's Cloud Wars AI Minute, I break down Gartner's $2.59 trillion AI infrastructure spending figure and why rising compute and memory costs are shifting where the economics of the AI boom are landing.Highlights00:11 — Let's talk about this new Gartner number that just came out. Gartner is claiming that it's $2.59 trillion in CapEx expenditures that we're starting to see companies investing in the AI infrastructure space. Well, this is a very big number, and in an earlier video, I covered the fact that now we're starting to see cash flow not being able to keep up.01:02 — If we take a look at Nvidia for a second, that is going to be running a lot of this compute on its hardware, you're going to see that they're at $89 billion in one quarter. Now, that's their revenue in just one quarter alone, and that's up 117 percent year over year. This means that they're demanding prices and they're manufacturing this in a market that the demand is far exceeding their ability to actually produce equipment.01:36 — And you're also seeing 400% DRAM prices going up since the start of 2024, and so when you combine these two different pieces together, what we're seeing is that the revenue is really being made by the hardware manufacturers and the ability to do the compute. This is where all revenue seems to be going right now.02:15 — Gartner has even predicted that in 2026 we're going to see the trough of disillusionment happen in the AI space. Now, what this really means is that we're going to see the hype cycle bring it down a bit to be able to go into what is the actual reality of AI return on investment, and so we should start seeing this hype cycle come down.03:22 — And so this is going to be a very interesting thing for us to continue to watch throughout 2026, and it should open up some opportunity and hopefully maybe help us reduce the demand that we have on both compute and memory infrastructure, allowing this to normalize a bit. Visit Cloud Wars for more.

In today's Cloud Wars Agent and Copilot Minute, I break down Microsoft's rollout of OpenAI's GPT-6 Astra in Foundry and why enterprise controls could be a major differentiator for agentic AI.Highlights00:09 — So a quick recap before I get into this story: at the start of September, OpenAI launched GPT-6 Astra, which it described as the world's most intelligent and aligned model. Now, I'd urge you to check out the promotional video that accompanied that launch, because it's pretty mind-blowing in terms of what this model can do.00:31 — It's been a shift away from Q&A or chat and into actions. So, we're talking computer use, software engineering, browsing, and so on. Now, the reason we're talking about this today is that shortly after launch, Microsoft announced that it had made this frontier model generally available for all customers in Microsoft Foundry.00:53 — Now, in practice, this means that customers can use the model to complete multi-step, agentic work with open-ended goals. Microsoft is really pushing the idea of computer use and how transformative this can be for its enterprise clients.01:09 — And the model is pricey, with the standard global tier starting at $10 per million input tokens and $50 per million output tokens, short context. Long context is $20 per million input tokens and $75 per million output tokens.02:29 — Foundry complements OpenAI's safety alignment and other factors with security, safety, and compliance capabilities, including Microsoft Entra identity and access management, encryption in transit and at rest, private networking options, role-based access controls, content filtering, safety evaluations, monitoring, and, of course, governance tools. And that is what I think will draw people to Microsoft in this case. Visit Cloud Wars for more.

In today's Cloud Wars AI Minute, I break down the explosive growth in AI infrastructure spending and the growing pressure on hyperscalers as CapEx begins to exceed operating cash flow.Highlights0:14 — The thing I'm going to talk about today is the fact that we are now seeing over $700 billion in AI buildout as far as the investment in CapEx that's starting to be spent. Well, this is really an interesting situation because we're starting to see that the actual CapEx expenditures are exceeding the cash flow funding it at this point.0:57 — Amazon is saying alone in 2026 it had to raise to $220 billion in CapEx expenditures, due to memory cost as the cited reason. So, now the question becomes: Will the memory shortage start to push back a little bit in this because of the fact of where these numbers are going?2:09 — How do we continue to fund these things where we don't actually see the cash flow being able to be a return? Now, currently, right now, we're sitting at $2.59 trillion total worldwide AI spend, and this is up 47% from 2026.2:53 — We're either going to see them have to borrow money, or they're going to have to go into a situation where they tune it back a bit to be able to deal with the fact that it's starting to exceed their cash flow. It'll be an interesting space, and it will be something that we'll continue to watch as we continue to go forward. Visit Cloud Wars for more.

In this Cloud Wars Minute, I dive deeper into comments from Oracle's Q1 earnings call on its philosophy, position, and strategy where agents meet applications.Highlights00:16 — I think Oracle has, by far, been speaking with the most clarity about what the interplay between apps and agents will be. This is incredibly important for customers. Just a couple of years ago, Microsoft CEO Satya Nadella turned the whole apps world upside down when he suggested that the arrival of AI, agents, and copilots would hollow out applications.00:46 — During the Q1 earnings call, CEO Mike Sicilia made remarks about Oracle's view on applications and where apps and agents collide. He focused on the notion that Oracle's suites of applications are moving into industry suites that seamlessly blend agents and apps together.01:48 — Sicilia further stated that AI is an accelerator for packaged apps, not a replacement. He cited a number of ways that acceleration is happening. With this blend of apps and agents, employees will shift to overseeing agents, resolving exceptions, and using human judgement to solve complex decisions that arise. This very tight blending of what they're calling "fusion" agentic applications will make that possible.02:21 — It's important to remember Nadella's comments on a podcast interview two years ago as he described this, saying that AI is going to take command and applications will be rendered much less valuable. He said they would be going after this with agents and copilots aggressively, with hopes of collapsing it all, referring to the current state of the role of applications at the time.03:55 — Oracle has done the best job of consistently describing where apps end and where agents begin as well as where agents complement what apps are doing. Visit Cloud Wars for more.

In today's Cloud Wars AI Minute, I break down the rise of AI model fatigue and why the industry's rapid release cycle may be moving faster than buyers can keep up.Highlights00:16 — The thing we're going to talk about today is going to be model fatigue. And this is a real thing that's starting to happen in the industry as these models keep coming out, and they come out so quick that you're starting to see that the race of the releases are just outrunning the buyer's ability to be able to consume them.00:37 — And just to give you some perspective of some key concepts that kind of showcase this is five of the key frontier models all released new versions within four days of one another, and when we start looking at this and having this model fatigue, you're actually starting to see the labs that build these different frontier models starting to ask for the slowdown of the development of AI.01:13 — What we really are starting to get into is going to be that we need to make sure that we have the ability for people to consume these things and understand the value. You're also starting to see that there is also a need for deeper integration and depth, and data quality and domain fit are actually starting to be much more important than just releasing a new version of the model.01:48 — The other perspective of this is not only is it causing a problem in being able to adopt, it's also causing a problem in ability to actually service the needs. So we saw that Astra, which is GPT-6 Astra, literally in seven days turned off its Pro offering. And why did they do that? A lot of it just comes down to the race to produce these new models.02:20 — And so now, what we're seeing is that even if you make these new models, getting the capacity rolled out to be able to service the model's demand is just not going to be able to be kept up with. So I anticipate what we will see is a slowdown in the number of models, so that it will be more consumable for the market in general. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at why OpenAI is developing automated shutdown capabilities for its AI systems.Highlights00:04 — Weeks after disclosing that one of its AI tools had escaped a sandbox environment during testing, OpenAI has revealed yet more model safeguards. The company has understandably been under scrutiny in this area since the news broke about the rogue AI.00:23 — OpenAI has reportedly told two House Democrats that it was developing automated shutdown capabilities for its AI systems. We're still waiting to hear more news on what these automated shutdown capabilities might be, but they're clearly a response to a proposed AI Kill Switch Act that would give the U.S. government the power to force the shutdown of any model that put human life or the economy at risk.00:52 — OpenAI could, with these automatic shutdown settings, jump the gun on that act in many ways, future-proofing by building in its own kill switch. And I think this is a really interesting development in this complex battle, or at least discourse, between regulators and AI companies.01:13 — Foreseeing this kind of regulation and acting on it could help steer how that regulation is ultimately set out. That could help set the guardrails in ways that AI companies know won't damage trust or productivity, while boosting confidence from all sides. Let's see what these capabilities turn out to be and how they match up with the proposed act. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I review Oracle's Q1 cloud revenue and how its business model innovation could propel the growth rate to rise even higher.Highlights00:54 — Oracle reported Q1 cloud revenue of $11.6 billion, which is up 62%. $7.4 billion came from cloud infrastructure, with OCI having a growth rate of 121%. Oracle's RPO (remaining performance obligation), or its backlog that hasn't been recognized as revenue yet, jumped 46% to $664 billion. So, there's this enormous backlog waiting to be converted to revenue.01:41 — Over the last several quarters, the OCI growth rate has been steadily, and often dramatically, rising. While it's already at 121%, I think this is going to go up more as this giant RPO number gets kicked over to revenue.02:10 — It's not just the technology propelling this, but the business model innovation. Oracle CEO Clay McGuirk mentioned three ideas during the earnings call:Suppliers are willing to defer payment that Oracle has to make to those suppliers until Oracle customers have begun to pay for the delivery of their data center services.Customers are supplying some of the hardware, reducing the outlay that Oracle has to make up front.Customers pay in advance: From startups to big established companies, customers are putting together big pools of money and are willing to pay in advance for the services they want.03:42 — Hyperscalers need to determine how to get these services that everybody wants and is willing to pay a lot of money for into the hands of customers in ways that don't just require blunt-force spending by vendors. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at OpenAI's decision on Cursor and what it reveals about the importance of mutual trust across the AI industry.Highlights00:04 — OpenAI has announced that it's planning to wind down its contract with Cursor following the company's acquisition by SpaceX, meaning OpenAI models will no longer be available through Cursor after November 12 this year.00:22 — So, just a quick recap: Cursor is an AI-powered code editor that was acquired by SpaceX on August 14 this year. Now, OpenAI says it's made this decision because it can't be confident that SpaceX will use its technology in line with its terms of service.00:40 — It explicitly points to Elon Musk and his other companies, saying that after Musk acquired Twitter, the company violated terms of its contract with OpenAI. Then, it also says that Musk admitted under oath that xAI had violated OpenAI's terms of service in that case as well.01:01 — The most interesting aspect of this decision is what it says about trust in the AI industry. We journalists and industry analysts often talk about trust between AI companies and their customers, but as AI becomes increasingly collaborative, trust between the companies building and rolling out these technologies is just as important.01:26 — Now, what's been created is an AI ecosystem where companies are becoming dependent on one another for models, for infrastructure, for distribution, and the scale of this collaboration is really unprecedented, making this idea of mutual trust incredibly important. And the OpenAI-Cursor situation that we've talked about today really shows what can happen when that trust breaks down. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I explore Oracle's blowout Q1 and the numbers signaling its growing power in AI and cloud infrastructure.Highlights00:03 — Yesterday, Oracle reported what I'm calling a blowout Q1, and let me talk about some of the key numbers here that formed that impression for me. Its overall cloud revenue was up 62% to over $11 billion. It breaks that out in two ways. Its cloud apps business grew about 10%, a little over $4 billion in revenue.00:26 — But this is the star now: the cloud infrastructure business grew 121% to $7.4 billion. And that is, of course, revenue — a measure of the recent past.00:54 — Its RPO, which is similar to backlog or pipeline, but it's fully contracted business, was up 46% to $664 billion. So, its revenue for the most recent quarter grows, its RPO for future business is also growing very rapidly. Plus, the company guided in Q2 that its cloud revenue will grow again, accelerate again, going into Q2.02:28 — So, Microsoft's current cloud revenue is about five times larger than Oracle's cloud revenue, right? So, much bigger. And you might say, well, it's got a much bigger cloud revenue right now; its RPO or backlog is probably on a similar level. But, Oracle has almost matched the RPO or backlog that Microsoft has: Oracle, $664 billion; Microsoft, $678 billion.03:37 — More and more customers now are betting that while some of the other cloud vendors have been very strong and the dominant players coming up, Oracle is going to be an even bigger player going into the future. I think that's a big part of what these numbers tell us. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at how Google Cloud is combining AI agents, enterprise data, specialized skills, and partners to transform industry-specific solutions.Highlights00:04 — Over the last few years, Google Cloud has made different moves to address what I believe is an enormous opportunity in industry-specific solutions. It's gone about this a few different ways, always leaving the door open to work very closely with partners, whether that's integrators or ISVs. And, I think it's on to now the right way, as they have now gone industry-specific with Gemini Enterprise.00:32 — It's putting around what Thomas Kurian calls a system that involves skills plus data plus agents plus partners moving forward on this. It's probably going to go across a lot of different vertical industries. The first two they're addressing are financial services and legal. Kurian said general-purpose AI is terrific, but it's just not enough to be able to handle these industry-specific solutions.01:34 — And, one of the things he said here this is only the beginning. That could mean going deeper into financial services and legal, but also expanding broadly across other industries. It's laid the foundation: skills that can be encoded into the software, access to relevant data, agents that can get real work done and complete projects, and an ecosystem that's completely open to partners.03:08 — Kurian said, "We put together nice scaffolding for partners on which they can develop specific solutions." And he said, "We also make it very easy for those solutions to be discoverable by customers or prospects," and how this has worked together. He kept emphasizing, "We want this to be simple, easy."04:37 — And I think, paired up now with the hugely successful Gemini Enterprise, it's going to give businesses now looking to move into AI — not just in a broad sense, but for industry-specific capabilities — I think this is going to be a big boost, and I think this is going to be a model that other vendors in the Cloud Wars Top 10 follow. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at how Microsoft is bringing Arabic-language AI models into its ecosystem through its strategic collaboration with HUMAIN.Highlights00:09 — Microsoft has announced a long-term strategic collaboration with HUMAIN. They're a Saudi Arabian AI company owned by the Public Investment Fund. That's Saudi Arabia's sovereign wealth fund. So, what we're looking at here, and this is why I think it's particularly interesting when we're analyzing Microsoft's strategy, we're looking at something that isn't necessarily an infrastructure deal.00:35 — We've seen quite a few of those recently. Instead, this is more of a deployment and go-to-market situation. So, the crux of this partnership includes a number of steps from both sides. HUMAIN will bring its Arabic-language ALLaM models to the Microsoft ecosystem through Microsoft Foundry.00:54 — Those models will also be integrated into Microsoft 365 Copilot, which will allow companies to create specialized agents using ALLaM for Arabic-language tasks. And beyond this, HUMAIN's AI specialists are going to work alongside Microsoft forward-deployed engineers with customers to really accelerate AI from experimentation to production.01:18 — Now, further down the line, the two companies are going to explore deeper ties and use cases, including productivity, devices, models, perhaps infrastructure, and joint go-to-market initiatives. Now, this is, of course, going to start in Saudi Arabia, but both companies can see these efforts expanding across the broader Middle East and Africa region.01:43 — I think it really highlights the importance of not just seeing AI as an English-language technology. And by explicitly focusing on bringing Arabic-language AI models into its ecosystem, Microsoft has positioned itself to build a much larger and powerful presence in that region. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I analyze how Aneel Bhusri is reshaping Workday's agentic AI strategy following his return as CEO.Highlights00:03 — Interesting conversations on the Workday FY27 Q2 earnings call last week. One of the things that came up here was the difference in their approach to agentic AI that's come about over the last several months since the return of CEO Aneel Bhusri.00:48 — One of the big things that happened here, he said, we don't necessarily want to have a whole lot of agents for a lot of simple functions. We want to focus on agentic AI that targets big, complex processes and challenges that our companies, that our customers are facing in HR and financials.01:08 — Here's one of the quotes that he gave on the Q2 earnings call. He said, "We have to have agents that deliver real ROI." He said, "We've killed a lot of agents since I've come back, or we've rolled small, simple agents up into bigger, more complex agents."01:27 — He said, "Anybody can solve the simple problems. That's not a place where we're going to be able to deliver this real ROI for customers." So, interesting time now for Workday, right? Because they're a big company, right? They're guiding to $10 billion in revenue for FY27, which will end January 31st.02:41 — I've got an article later that offers some more perspectives on this. Also, some comments from President and Chief Product and Technology Officer Gerrit Kazmeier. He goes into some detail about why this new wave of agents is so vital: that they've got to be able to be connected to everything, be able to handle these complex problems, and drive that big ROI. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I examine why Meta is buying massive amounts of AI capacity from Microsoft despite building its own AI infrastructure.Highlights00:10 — Meta has become one of Microsoft's largest AI customers, spending hundreds of millions of dollars annually through Azure and consuming trillions of tokens per week. It's a massive figure.00:24 — But to me, the real story here is about how AI is utterly transforming relationships in the tech world. Even though Meta is building its own AI infrastructure, it's still buying massive amounts of outside AI capacity through Azure, and the stakes are so high in this race that no company can afford to slow down.00:47 — Even if that means making a competitor richer in the process. It's also a massive validation for Microsoft's Azure AI Foundry strategy, which means Microsoft can make money regardless of which AI model comes out on top. So, AI companies — and I'll use that term, AI companies, because really that's what all these tech businesses are becoming — AI companies are increasingly becoming customers of one another.01:13 — And I think we've sailed past the "who builds the best model wins" competition, and now it's about something else. It's about infrastructure. In the battle for supremacy in this AI race or evolution, it may not be who builds the best AI, but who owns the best infrastructure to run and access it that will come out on top. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I ask whether OpenAI has quietly abandoned its AI super app as customer confusion around AI continues to grow.Highlights00:02 — I wonder if over at OpenAI it's got a detective case going on here — the case of the missing AI super app. This is a concept, an idea that OpenAI floated very visibly, very demonstratively five months ago at the end of March, when the company put out a landmark blog post outlining its valuation.00:44 — It laid out in detail its plans, its strategy, how, you know, compute is the base, then models, then that leads, you know, to other steps, all of which makes businesses and individuals more capable.01:48 — But, in the August 24 Sarah Friar post on LinkedIn, there was zero mention of this AI super app. Now, was it just an oversight? I don't think so. Sarah Friar's pretty good with the details, pretty good with the strategy, and I wonder if, in hindsight, they're saying, you know, customers are already being overwhelmed with so many new things.02:47 — What seemed like a great idea five months ago might not be such a great idea now. They've perhaps got other priorities, and I just think this notion of calling something a super app comes at a very bad time. I've got a detailed article later this morning on CloudWars.com where I offer a lot of context, and I compare side by side.04:44 — I think, therefore, that it's possible that OpenAI has rethought this and said, "We're going to blow by this AI super app thing. It's just too much novelty, too much of a distraction, perhaps too much confusion for customers here to deal with when they have so many other highly relevant, urgent things to grapple with now." Visit Cloud Wars for more.

In today's Cloud Wars Minute, I examine three signs that ServiceNow is positioning itself to become a cybersecurity powerhouse. Highlights 00:02 — We've recently seen ServiceNow position itself as a security powerhouse, and I wonder if that is ultimately the grand plan, the grand vision of CEO Bill McDermott. We've heard and seen ServiceNow sort of evolve its overall position. It's tinkered around with the Control Tower platform and so on. We've seen it now centered on this AI Control Tower for business reinvention. 00:50 — So, on July 22, it had its Q2 earnings call, and McDermott's opening remarks were heavily, heavily focused on their fast-growing security business. He said it's the fastest-growing major security vendor in the world. He said it's now the eighth largest. He talked about how quickly that part of ServiceNow's business is growing, and he used some very colorful examples of why this is so important. 01:34 — A couple weeks after that, on August 3, ServiceNow named a new chief marketing officer. That chief marketing officer held the same position, CMO, at Armis, a cybersecurity company that ServiceNow has just acquired. So, of all the people, you know, who might be more involved in platform reinvention, McDermott chose as the company's new CMO somebody who was specializing, at the time of the acquisition, in cybersecurity. 03:41 — This AI Control Tower for business reinvention is very nice, and I think it sounds good. I think it's temporary. I think the cybersecurity place is where they're going to go to. And again, I just track that right back to the July 22 Q2 earnings call. Of all the things in the world Bill McDermott could have chosen to talk about, he could have gone into great detail about the AI Control Tower. 04:39 — I would expect that ServiceNow is going to try to straddle those two areas, AI Control Tower and cybersecurity, saying they're really two sides of the same coin. But I think for customers, it's going to provide a lot of clarity about where the company is headed, where they're going, and how they'll be able to build out unique capabilities across industries. Visit Cloud Wars for more.

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Highlights 00:02 — Workday last week reported its Q2 results. They came in pretty strong, and I think if we look at the tenor of some of the comments that co-founder and CEO Aneel Bhusri made on the Q2 earnings call last week, we'll see that he's generally pretty low-key. But he's quite bullish now about what's going on with the early momentum Workday is gaining from its AI products. 00:49 — First, quick overview of some key Q2 numbers. Subscription revenue was up 13.9% to $2.47 billion. Its current RPO was up 14.2% to just over $9 billion. And for all of fiscal '27, which will end January 31, its guidance now says that the company expects to grow 13% to about $9.945 billion. 01:54 — AI tools drove more than $100 million in annual contract value in Q2. Workday is very excited about that and believes that that shows good evidence of the uptake from customers and the rising demand for these AI solutions. Also, the AI run rate for AI SKUs, as Workday calls it, across the company is now almost $600 million, and it said that's up 200%. 02:55 — And then what I'm calling the power of enterprise context. Bhusri said said, "We're an enterprise context company." And he said that context — who reports to whom, who pays the bills, where different people are organized, and so on — all those little sort of unstructured things that go on within corporations. Workday has it. 03:35 — So, it has been six months now since Aneel Bhusri returned to Workday as CEO. He felt that with the rise of AI, the AI revolution, that it was time Workday needed to have a deep technologist in the CEO spot, leading the company through this tumultuous change. So, he's increased the pace of technology innovation. He has got the growth rate moving back upward. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I break down Microsoft's evolving AI consumption strategy and how it compares with Salesforce, UiPath, and other major industry players. Highlights 00:19 — Microsoft just announced the GitHub Copilot harness for Copilot Studio — a really cool new capability that enables an agentic reasoning loop. 00:33 — As part of this release, it said that on September 1, it's going to start charging for consumption on the GitHub Copilot harness specifically. This is an interesting move for Microsoft because 90% of Fortune 500 organizations have actually given developers a way to be able to explore their curiosity and consume this technology 01:12 — To compare and contrast in this space, Microsoft on the GitHub Copilot harness is giving $0, if you use the Copilot Studio standard harness, there's actually free allocation for developers to go play with this. Now, if we compare this to other players in the industry, such as Salesforce, which Agentforce provides 200,000 Flex Credits to be able to come in. 02:05 — What I would tell you is that I'm expecting that this is going to not necessarily be something that will be able to continue in a market where there's a lot of demand. Just to give you perspective, when GitHub Copilot was doing this before, it took about seven weeks for them to realize that there was a problem with this, and they corrected it. 02:50 — This is lining up to Satya Nadella back on July 29th, saying that it's evolving its business model to go beyond per-seat licenses and are leaning into consumption. So, we will continue to see these types of things, and I expect to see other growing pains like this for all vendors as consumption starts to become the new metric. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at how Google Cloud is expanding the Gemini ecosystem into the automotive world through its partnership with Mahindra. Highlights 00:03 — Google Cloud is partnering with the Indian automobile manufacturer Mahindra to get Gemini Enterprise installed directly into its vehicles. That's another interesting example that we're seeing here of AI leaping out of the digital space and becoming something much more physical. 00:23 — In this new development, the automotive agent in Gemini Enterprise is being integrated into MAIA, Mahindra's Artificial Intelligence Architecture platform. Beyond being a voice assistant, Gemini can understand natural language requests and actually interact with a car and its functions. 00:41 — Sashi Sreedharan, Managing Director of Google Cloud India, explained that "by enhancing its in-vehicle assistant with an automotive agent built on Gemini Enterprise, Mahindra is creating personalized and helpful conversational interactions for navigation, search, media communication, and other vehicle controls that will help drivers navigate and explore rich features in a more natural and helpful way." 01:13 — What we're seeing here is pretty significant: AI operating at the edge, with this idea of the digital and physical working together, and the car becoming the AI endpoint. This is also a really important way for Google Cloud to expand the Gemini ecosystem beyond smartphones, PCs, and enterprise software. 01:37 — The real opportunity that I see here isn't necessarily about Gemini as an AI assistant, but where the tech is embedded; it's those all-important endpoints. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at how AI monetization is moving beyond execution and into creation as agentic development becomes more costly and valuable. Highlights 00:15 — One of the things that I want to talk about today is the meter moving upstream. A lot of this has to do with the fact that what we're starting to see is that the cost that is associated with the actual build process is starting to get really high. And the reason behind that is the concept of an agentic reasoning loop and the cost that's associated with the build process. 01:35 — And what you're starting to see is that the build is actually costing a lot more because of the fact that we're using these different AI models in an agentic reasoning loop to be able to go do the build process. An example of this would be Microsoft starting to charge for the creation of agents inside of Copilot Studio. 02:03 — This is not something that's new in the industry because of the fact that we see other vendors that have tried this across the board. An example is that is exactly what you see in GitHub Copilot and Claude Code. These are definitely going to be tools that are building and being able to execute, and we're seeing a massive amount of adoption in this space to be able to allow builders to be able to build. 02:49 — We definitely are going to see some movement in this space. We're probably going to see each of these different vendors want to compete on who can give the best experience and do it in a cost-effective way. It's going to be very interesting to see how this starts to play in the concept of discoverability of different products and of different vendors. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I analyze Salesforce's latest results and why Dreamforce could be critical for proving its AI opportunity is here now. Highlights 00:03 — Salesforce yesterday released its Q2 results, and I'd say that while there's some very good things in there, it's a little bit of a mixed bag relative to what some other companies in its category are doing. But let's take a look at this because I think the big, the big news here, aside from the numbers, is Salesforce announced a huge new partnership with Anthropic. 00:41 — Customers will be able to tap into the power of Anthropic reasoning with their Salesforce applications and agents and data. So I think that offers a lot of potential for the future. But some of the key numbers here: we saw Salesforce revenue go up 11% for Q2, ended July 31. That's $11.3 billion relative to Q1. 01:30 — Its AI and data products—starting to break those out—said they now have an annualized revenue run rate of about $3.85 billion, almost $3.9 billion. It said that's up 210%, and then for Agentforce, annualized run rate of almost $1.5 billion, it said that's up 240%, and this, that. 02:43 — Combine that with the incredible presence of Salesforce applications and agents all over the world, all sorts of businesses. Bring those together. I'm sure for Anthropic, this is great too, as they aspire to become an enterprise powerhouse. The Salesforce partnership and connection here gives them entrée to some huge customers and huge opportunities. 04:21 — It's got to step up the urgency on that, and I think the deal with Anthropic is going to be just the medicine that's needed here for Salesforce. Got a detailed article that'll go into this on CloudWars.com, and we'll be following up more next week with the analysis of what Marc Benioff and others talked about on the earnings call. Visit Cloud Wars for more.

In today's Cloud Wars AI Minute, I explore why falling token prices aren't necessarily making AI transactions cheaper. Highlights 00:01 — So, one of the things that I want to talk about today is going to be the token economy. And what we're actually seeing is that tokens are about 12 times cheaper than they've been before. 01:30 — But what we're seeing is the average cost of a transaction is actually going up, and that is because of the fact that while token prices are coming down, the amount of tokens it takes to process something is actually going up. We're actually seeing a 520 percent increase in the amount of tokens that you're going to need to have per unit of work. 01:56 — And the reason behind this has been this agentic reasoning loop and the reasoning models that are starting to go and process. As a matter of fact, you're actually seeing that most recently, we've even seen that chat-based things and chat conversations that have happened between humans and agents have actually now, for the first time, started to fall off. 02:30 — So, if this industry trend continues, what you're going to see is that we're going to continue to see this drop. But what we want to see is we want to start also seeing some sort of normalization and drop happening on the average amount of tokens spent on a per-transaction basis. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I explain why Workday believes AI security is becoming an ecosystem problem that no single vendor can solve independently. Highlights 00:06 — Workday has become the latest organization to join the Open Secure AI Alliance. It's a well-supported initiative that aims to improve the security of AI systems through open-source tools, research, and knowledge sharing. Workday's joining this alliance, and it's in very good company alongside companies like NVIDIA, Cloudflare, Microsoft, and IBM. 00:31 — I want to read a short passage from Workday's joining announcement to give you a sense of why the company chose to join the alliance. So, from Workday: “Delivering safe, trusted enterprise AI requires multiple layers of protection across the entire application stack, from identity management and access permissions to continuous guardrails, monitoring, and governance.” 00:53 — “Our commitment to continuously build our internal security engineering programs to meet these high standards is why Workday is joining the Open Secure AI Alliance.” Enterprise AI is shifting quickly towards more open stacks and more ambitious agents. Initiatives like the Open Secure AI Alliance are incredibly important. 01:22 — Workday and the other members of the alliance recognize that AI security is quickly becoming an ecosystem problem, not just something that one vendor can solve independently. And that's why, for example, Workday specifically said that it has historically worked on security internally for its own platform, but now is sharing what it's learned with the wider community. 01:50 — As AI becomes more open, distributed, and agentic, securing models isn't going to be enough. The challenge now, and that's one that Workday and the other members of the alliance are trying to address, is securing everything around these models. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I examine why the emerging Google Cloud and Oracle alliance could reshape how enterprises accelerate their AI transformations. Highlights 00:01 — Interesting to see some new and different combinations of partners moving forward here in the AI Revolution, because the pace at which customers have to move, their escalating business, competitive pressures, their new technology requirements, and just the urgency they're all feeling to innovate, move into their AI transformations as quickly as possible, is leading to some unexpected combinations of companies and new sorts of enhanced partnerships. 00:33 — So, I think a real power pair that is emerging are the number one and number two companies on the Cloud Wars Top 10, Google Cloud and Oracle, and I think they're coming together. Each has sort of put forward into the mix, not some peripheral products they have, but really, in each case, sort of the crown jewels for what's happening right now. 01:26 — Google Cloud for Q2 had revenue of almost $25 billion, up a remarkable 82%. Meanwhile, its backlog soared 390% to $514 billion. Oracle, for the quarter ended May 31 — and it'll have its new numbers out in a couple of weeks — but for the quarter ended May 31, its fiscal Q4, its cloud revenue was almost $10 billion, up 47%. 02:50 — So, really, each company has put forward the very best it has to offer in this new and extended partnership. And again, I think we're going to see more and more of these sorts of groundbreaking, unprecedented, or certainly unexpected partnerships going forward, because what customers want and need now is changing so rapidly. 03:47 — So, this is a great, great new step forward for customers. And again, I think we're seeing lots of different combinations among the Cloud Wars Top 10 companies. So, these partnerships, alliances, whatever you want to call them, they're more important than ever before. Visit Cloud Wars for more.

00:03 — According to recent reports, Microsoft is set to reveal its Maia 300 AI accelerator as early as September this year. For context, Microsoft launched Maia 200 back in January with the direct aim of reducing the cost of AI inference. 00:27 — The Maia 300 is expected to support both AI training and inference, but the key story here is the scale of ambition behind it. Now, Microsoft is once again partnering with TSMC, Taiwan Semiconductor Manufacturing Company, who delivered the first iteration of Maia chips. However, this time, the scale is much larger. increasing from tens of thousands of Maia 200 accelerator units. 00:54 — It's increasing from tens of thousands of Maia 200 accelerator units to potentially hundreds of thousands, or even over a million Maia 300 chips. For me, this initiative is really about Azure. By investing in these chips, Microsoft isn't necessarily trying to compete with NVIDIA. Rather, it aims to ensure that Azure doesn't rely entirely on NVIDIA infrastructure. 01:14 — This move will give Microsoft greater control over the cost, supply, and performance of the AI infrastructure running on Azure. And beyond that, Microsoft CEO Satya Nadella has stated that building the company's own silicon to work alongside NVIDIA and AMD chips is a priority. 01:35 — The successful launch of Maia 200 demonstrated that Microsoft's custom silicon strategy can work, albeit on a relatively small scale. The hope now is that Maia 300 will enable Microsoft to scale this strategy into a genuine competitive advantage for Azure. Visit Cloud Wars for more.

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Bob Evans speaks with Chad Wahlquist, an Architect at Palantir, about what is driving the company's extraordinary growth and, more importantly, what customers are getting from its technology. Wahlquist argues that Palantir's momentum comes from helping enterprises solve difficult operational problems rather than simply deploying AI or chasing model benchmarks. Their conversation explores AI sovereignty, business outcomes, Palantir's Ontology, LLM complexity, customer operating leverage, and the importance of retaining control over enterprise decision-making. Outcomes Over AI Hype   The Big Themes: Outcomes Drive Palantir's Growth: Wahlquist connects Palantir's growth to the tangible returns customers see after adopting its technology. Rather than treating AI as a standalone investment or another piece of enterprise software, customers increasingly expand their Palantir relationships because successful initial projects create opportunities for broader deployment. He points to strong net dollar retention as evidence that existing customers are spending more after experiencing ROI. The underlying philosophy is straightforward: when an investment generates meaningful business value, executives are willing to repeat and expand it. Production LLMs Create New Problems: Getting an LLM working is only the beginning. Wahlquist discusses the stochastic and probabilistic nature of models, changing provider guardrails, security requirements, model deprecations, and unpredictable behavior across edge cases. Technically switching from one model to another might appear simple, but ensuring that a replacement works reliably across production workflows is significantly harder. This creates a fundamental enterprise question: how do businesses build durable operations on technology whose behavior and availability can change? Protect the Enterprise Decision Loop: One of the conversation's most important ideas is that a business can be understood as a collection of decisions. Companies continually observe data, apply logic, take actions, measure outcomes, and adjust future decisions. Wahlquist calls that feedback loop a source of business “alpha” — the proprietary knowledge that helps one organization outperform another. As AI agents become participants in enterprise decision-making, ownership of that loop becomes increasingly important. Companies should understand who controls the data, logic, actions, outcomes, and learning generated through those processes. The Big Quote: “LLMs don't just magically fix everything. They also create new problems that you have to go solve.” Visit Cloud Wars for more.

00:03 — We've had a lot of big numbers come out for Q2 reports. Google Cloud is at 82 percent. AWS growth jumped up to 37 percent. But I have to take a little more time here to dig into what I'm calling the Palantir phenomenon. Here's a company that, over the last three quarters, has seen its growth rate go from 71 percent to 85 percent to 93 percent. 01:12 — What are customers asking Palantir right now to do for them? That may seem like a goofy, simple question. But if you grow at 93%, you have to be doing something special. What is it that customers are asking for, and that Palantir is delivering, that drove this 93% growth? Chad goes into a lot of detail about that and offers some unique insights there. 02:34 — I think that that's still valid, but the bigger issue now around sovereignty is who controls your data, and not only the data, but how that data is being used to drive AI output. Palantir is making the case that the large language model companies are incorporating the data and everything that goes with it into their own models. 03:27 — Finally, we had a fun conversation considering this company that has grown 93%. It is predicting that the U.S. commercial business, for the next year, will grow 134 percent, but Palantir doesn't have prices for its software. 04:00 — They go in. They talk about what the customer wants to do. They say, "Okay, given that, if we drive the value you're looking for, you pay us this." And then, as that seems to be working quite well, the customer often comes back and says, "Hey, that was terrific. Let's do this, this, and this in addition." Visit Cloud Wars for more.

  00:03 — In a big coup for Salesforce, the Pentagon has approved the use of its Missionforce national security platform to launch AI agents on the most sensitive unclassified missions, and that's because it's been granted Impact Level Five, or IL5 , authorization. 00:21 — The first major user will be Army Human Resources Command, which will use the technology to help with soldier and family support and everyday admin tasks. Later, there will be other use cases, including recruiting, personnel management, and logistics. The big thing here is that Salesforce AI can now take actions and automate workflows. 00:47 — Handling routine tasks while human specialists can stay in the background and remain responsible for sensitive decisions. For the Pentagon, this is quite a jump, moving from AI that, beforehand, solely advised to AI that can actually execute tasks autonomously in military operations. That's no small thing, and I think the fact that Salesforce has won this contract is a massive reflection. 01:14 — On the level of security and governance that the company has in place around its agentic infrastructure, and that will certainly be an attractive proposition for customers. Government contracts always help to boost the credentials of a company, but here, in the age of AI, to have a government department okay the use of agents in an autonomous capacity is a very big win indeed. Visit Cloud Wars for more.

In this special episode of Cloud Wars, Bob Evans speaks with Garrett Lord, co-founder and CEO of Handshake, about one of the biggest challenges facing enterprises today: turning the extraordinary promise of AI into measurable business outcomes. Lord explains why AI agents have delivered dramatic productivity gains in software engineering but have yet to achieve comparable results across many other knowledge-work domains. Making AI Agents Work AI's ROI Gap Persists: Enterprises are enthusiastic about AI and are spending heavily on tokens, but Lord says meaningful returns remain uneven. Software engineering has emerged as the standout, with AI agents producing what he describes as two- to threefold productivity improvements and increasingly executing lengthy assignments autonomously. The challenge is translating that success into disciplines such as finance, manufacturing, retail, oil and gas, and insurance. In these areas, agents can generate presentations, emails, and briefing documents, but they aren't yet consistently transforming complex, long-running workflows. Evaluations Define What 'Good' Means: Lord repeatedly returns to evaluations as the foundation for enterprise AI. Because models are nondeterministic, companies can't assume an agent will reliably produce the desired result simply because it performed well once. Instead, businesses need to codify what successful performance actually looks like across their specific workflows. Lord compares an evaluation to a product requirements document: it creates a measurable baseline against which an agent can continuously improve. Once organizations can evaluate performance, they can improve their agents and harnesses, decide which models are appropriate for particular jobs. Long-Horizon Work Is the Frontier: Generating an email or presentation is fundamentally different from completing a 20-hour investment-banking assignment. Lord describes knowledge work as a complex trajectory involving data rooms, Outlook, Slack, Excel, Bloomberg, FactSet, colleagues, and potentially hundreds of individual actions. Humans continuously manage context while navigating those systems, but today's AI agents still struggle to execute these long-horizon workflows reliably outside software engineering. That distinction helps explain why impressive AI demonstrations haven't always translated into enterprise transformation. The Big Quote: “The point that most enterprises are at right now is they want to bring agents into production beyond software engineering.” Visit Cloud Wars for more.

In today's Cloud Wars AI Minute, I break down the rise of agentic reasoning loops and why their impact on AI token consumption and costs could be significant. Highlights 00:12 — Today's topic is going to be agentic reasoning loops. Everyone's moving to this concept where we can have a planning, act, observe, and reflect type of process, which allows us to be able to get much deeper analysis and much more resilient implementations across AI, across the world. 01:03 — Now, the other thing is with this, we're seeing that about 33% of enterprise software will run on this kind of approach by 2028. Also, the other part of this is that because these different loops are taking place, we're actually seeing that tokens are going to get more and more consumption happening off the back end. 01:38 — So one of the driving factors of this is going to be the increase that we're seeing, and just to give you perspective of what we're starting to see, it's about a 17x on a single chapter that we're starting to see happen as a result of this. So what it used to do when we just did simple RAG patterns. 02:01 — Now we're seeing about 17 times the amount of tokens being consumed, and when we start seeing that level of token consumption, we're going to see that while we're getting better answers, there's also going to be a higher cost that's associated to it. 02:28 — But it doesn't matter that the tokens are necessarily coming down in cost because of the fact that what we used to see is that an average transaction would be about three cents, and now we're seeing it move to about 15 cents across the board, and so this is going to be one of those things that we really need to be thinking about as you start to build out your solutions. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at why Palantir's approach to AI sovereignty, sales, and customer value deserves the software industry's attention. Highlights 00:02 — I wanted to talk a little bit more today about Palantir, and I know I've been mentioning the company, digging into what they did in Q2 and their discussions about customer developments, the huge advances some customers are making as they use Palantir. 00:18 — And the reason I want to do this is because when a company almost doubles its growth rate against some very intense competition, that deserves extra scrutiny. What's going on there? Why is this happening? So, today I wanted to take a look at the CEO of Palantir, Alex Karp, as the company posted recently its Q2 numbers. 01:31 — Just to recap, Q2 Palantir's revenues soared 93% to 1.9 billion dollars. Their U.S. commercial business grew 149 percent and is now almost bigger than their government business, and their net revenue retention was up 157 percent, which shows that once customers start to work with Palantir, they quickly accelerate the investments they're making with Palantir. 02:26 — His first point, he said, there is a revolution underway for independence and for AI sovereignty. He said this is well underway. It's taking place. Businesses are going to demand that they be in control of their data and all the metadata surrounding that, the processes, the related workflows, that give the great value to that data as it's used for AI outcomes. 03:10 — His second big point, he said, we are accomplishing this stunning industry-best growth, while he said we have a minuscule and shrinking sales headcount. So, while Palantir has been undergoing this incredible growth rate, they've been reducing the size of their sales organization. 04:21 — The third point, he said, we've always aspired to be paid as a derivative of value creation for customers. So, they don't have a price list. He's saying, we set up an agreement up front with customers that said if, in working with us at Palantir, you achieve the business outcomes you want and we're a significant contributor to that, then we will extract our fees, our payment, our revenue as a derivative of that value that's being created for the customer. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at why Oracle is rejecting a single-model AI strategy and embracing a flexible, multi-model future. Highlights 00:03 — Oracle has announced that it's extending its partnership with Google Cloud and will be making Google's Gemini models available across its enterprise AI portfolio. This includes Oracle Fusion Cloud Applications, NetSuite, Oracle AI Agent Studio, and Oracle Cloud Infrastructure, or OCI. 00:22 — In true Oracle style, the company will embed Gemini into business applications and AI agents, allowing customers the flexibility to use Google's models within their existing workflows. At the same time, customers will have the freedom to switch between the various models offered in Oracle's suite. Now, what this is doing is giving customers more choice when they build Fusion-native agents and agentic apps. 00:53 — Oracle and Google Cloud already have a strong relationship, but the broader story here is how Oracle is positioning itself as an AI control plane that delivers outstanding infrastructure without the need to roll out a host of foundation models itself. Now, the company is really embedding itself in this area, and I think it's working out incredibly well for it. 01:17 — The company has really pushed the idea of flexibility, interoperability, and choice. Now, Oracle, from very early on, has really avoided that single-model strategy, saying that's a strategy that's aging quickly, and instead, Oracle's building a platform that can adapt as the AI landscape continues to evolve. 01:40 — I think this really ties in with the ambitions of those enterprises that want to take advantage of rapid AI developments while still controlling their data, applications, and workflows. And that's where Oracle stands out in its ability to bring together infrastructure, applications, and multiple AI models while seamlessly enabling companies to maximize the benefits of the latest AI developments. Visit Cloud Wars for more.

In today's Cloud Wars AI Minute, I break down the rapid rise of forward deployment engineering and why getting AI into production is becoming the next competitive advantage. Highlights 00:10 — Today, the topic is going to be why we're seeing AI move to forward deployment engineering type of scenarios, and this industry trend has actually increased in just year-over-year growth of forward deployment engineering job postings in just the first half of 2026, increasing by 1,000%. 01:29 — You actually have to get to deployment, and the big problem there is that between 88 to 95% of all AI pilots that are being built today are actually never actually getting to production. So we have a whole lot of interest in the market and a lot of stuff that's being really cool and is being done, but we're not actually seeing it get to production. Hence the need for FDE, or forward deployment engineers. 02:04 — Two, you actually have embedded engineers to go help a client to be able to get up and get going. And just to give you guys a typical situation here, now we're starting to see a lot of the pay for these type of roles. They're getting very, very valuable in this market space. 03:04 — So this is a major, major shift in what we're seeing, and it's also why even in DCI and our training offering, I'm looking at building out how to be able to move toward an FDE-type approach engagement, specifically for partners, because you're gonna really have to think about how you move to AI being able to get about 99% code coverage in order to be able to play in this space and be able to have fixed-fee, high-quality implementations that actually drive into production implementations. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I explain why ServiceNow's fast-growing security business is becoming central to Bill McDermott's AI strategy. Highlights 00:01 — I wanted to chat a little bit about ServiceNow's Q2 performance, but mostly what CEO Bill McDermott disclosed on the Q2 earnings call. Very strong performance across the board. They beat on all their numbers, doing very nicely. And what McDermott did, what he used the Q2 earnings call for in his opening remarks, was to lay out what I think is a significant new direction. 01:15 — Now, on top of that, we see a lot of anxiety from businesses now about — while they see the huge potential of AI, they also see that it raises security to levels that it hasn't been at before. So McDermott is sort of pairing those things up: the fully integrated Control Tower plus security plus governance. 02:14 — He said, “We're going to be able to handle all that simply and easily for customers.” He said that whichever chip wins, whichever lab wins, whichever price-per-token regime wins, he said, ServiceNow is going to be able to handle that. You're not — any of the customers aren't going to be, you know, going down a dead end or a dead-end alley if they choose to work with ServiceNow. 03:23 — He said CEOs have been losing sleep over this idea of risk at scale, and we're going to help those CEOs sleep well at night. So it's a big promise. It's a big adaptation for ServiceNow, but I think it's one that's consistent with some of the steps that McDermott has been making in the past, and it's very timely now to bring these two forces together. 03:59 — Now, one of the things that has made McDermott so successful over his seven years at ServiceNow, and before that at SAP, is his ability to use these earnings calls as almost like a come-to-Jesus discussion of where we as a company are, where the external market is with customers, and how aligned we are not just with where customers are now, but where they're heading. Visit Cloud Wars for more.

In this special episode of Cloud Wars Live, Bob Evans speaks with Manish Sood, founder and CEO of Reltio, about the rapidly changing relationship among enterprise data, AI, and business strategy following SAP's acquisition of Reltio. Sood explains why trusted, interoperable data is becoming increasingly important as enterprises embrace agentic AI and autonomous business processes. He also discusses why AI models themselves may increasingly become commoditized, how organizations can bridge legacy and next-generation technology, and the ideas behind his new book, Agentic Intelligence: Strategy at the Speed of Data. Data Powers Agentic AI Data Becomes the Differentiator: Sood argues that enterprises should stop viewing data simply as another asset and instead recognize it as an interoperable asset that becomes more valuable as it is put to work across the organization. This distinction becomes particularly important as AI capabilities spread. If businesses eventually gain access to broadly comparable AI models, competitive differentiation will increasingly come from proprietary enterprise knowledge: decades of customer information, operational history, relationships, and business context. AI Creates Unavoidable Urgency: Enterprise transformation once proceeded at what Sood describes as a relatively organic pace. AI has fundamentally changed that dynamic by creating an enormous pull on organizations to move more quickly. Executives might still feel uncertainty about AI, but another fear has become even stronger: getting left behind. That competitive pressure is creating urgency around experimentation, investment, and execution. Sood sees this as potentially healthy because it forces organizations to reconsider technology and processes that previously seemed difficult to change. Strategy Still Beats Shiny Objects: AI's extraordinary pace doesn't eliminate the fundamentals of good business strategy. Sood notes that every major technology cycle produces a new "shiny object" that organizations race to adopt, sometimes before determining the architecture, strategy, and business value required to make it useful. AI shouldn't become another example. Enterprises absolutely need to embrace the technology, but Sood argues that they cannot sacrifice disciplined thinking about what they are trying to accomplish. That idea sits at the center of Agentic Intelligence. The Big Quote: "Our thesis has always been that data is not just an asset. Data is the interoperable asset that needs to be used.” More from Manish Sood and Reltio: Follow Manish on LinkedIn and learn more about Reltio and SAP at the following links: Reltio: Agentic AI Readiness Research, SAP Business Data Cloud, and Reltio: Building a Foundation for Agentic AI Visit Cloud Wars for more.

In today's Cloud Wars Minute, I explore Oracle's major $7 billion Pentagon contract and what it means for the company's government and enterprise ambitions. Highlights 00:03 —The Pentagon has awarded Oracle a major 10-year contract worth up to $7 billion, sending the company's shares around 3% higher in extended trading. On the news, investors are clearly happy to see another major government win here for Oracle. 00:22 — The agreement will see Oracle's software deployed across on-prem data centers used by the U.S. military, intelligence agencies, and Coast Guard. But the contract covers far more than just software licenses. It also includes long-term maintenance, technical support, and consulting services, which will ultimately provide Oracle with a steady stream of recurring revenue over the next decade. 00:50 — This deal is also pretty significant in the wider Cloud Wars and shows how Oracle's ongoing investment in its OCI platform is helping it win these really high-profile enterprise and government contracts. 01:05 — And also for customers, really its enterprise customers, this contract is a really important endorsement of Oracle's technology and its ability to support some of the world's most challenging and sensitive IT environments, and crucially, at a massive scale. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I analyze the extraordinary RPO growth at Microsoft, Oracle, Google Cloud, and AWS and what it signals about AI demand. Highlights 00:03 — We've got another example here where, in the greatest growth market the world has ever known, we are working with some big numbers that put the law of big numbers to the test here. So, if you look at the four hyperscalers, and I go in order of the size of their backlog or RPO, you've got Microsoft, Oracle, Google Cloud, and AWS. 00:29 — So this is fully committed business. It's fully contracted and not yet recognized as revenue. So this is what's coming down the road, to look into the pipeline, in the future, these companies have — this isn't some guesstimate of what they hope they'll get. This is signed, contracted business. So this is one of the factors, probably the key factor, behind why you see these CapEx numbers approaching or exceeding $200 billion. 01:09 — Now that has led to a couple of these companies entering into the debt markets to try to fund this data center expansion and all that enormous CapEx outlay that they've got to go through. In turn, a couple of these companies for a quarter or two had negative cash flows, and that's got some people on Wall Street unable to comprehend it. The world's coming to an end. What are we going to do? 01:46 — I think the perspective is being switched here, right? Traditionally, the idea is bad. You don't want to have negative cash flow. Okay, that's pretty basic. I think we got that. The difference is there have never been a market with a size, a total addressable market , anything like this, growing at the rate this is. Look at these latest numbers for the four hyperscalers. 02:23 — Oracle, off a much smaller revenue base, has this huge future business coming in: $638 billion in RPO, growing at 363%. Google Cloud had a huge jump this past Q2, $514 billion in backlog, up 390%, and a resurgent AWS posted its biggest backlog number ever, $496 billion, and I believe that growth rate of 154% for its backlog is much higher than any they've reported over the last five or six quarters. 04:07 — So I think it's significant, but I also think it's being vastly overblown. I just want to say one more time: $2.3 trillion. Now, that's not like a TAM figure. Somebody's saying, "Oh, we think the market for new scooters is going to be $2.3 trillion." These are four companies, just four , not the whole tech industry, and these are their signed, contracted, committed figures for what they've got in their backlog or RPO. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I compare Google Cloud, Microsoft, and AWS to reveal which hyperscaler is winning the most new business. Highlights 00:15 — While all of them had terrific quarters, I'd have to rate it this way: Google Cloud was far and away the best. AWS had a terrific quarter, especially for the way it had been performing before that. Microsoft, at its phenomenal size, had a very good quarter. It's just not growing as quickly, not winning as much new types of business in that way, as the other two. 01:44 — So we had Microsoft go from $54.5 billion to $59.3 billion. So it added $4.8 billion in new revenue in Q2. For Google Cloud, $20 billion to $24.8 billion; it also added $4.8 billion. AWS, $37.6 billion to $42.2 billion. It added $4.6 billion. 02:32 — Yet Google Cloud gained as much new revenue last quarter as Microsoft did, and Google Cloud gained more new revenue than AWS did. So we find that the mix of products and services, the fit to what businesses need right now, Google Cloud is matching what Microsoft's doing, matching or exceeding what AWS is doing. So the size differential is becoming less significant now. 03:27 — What we see with this analysis of the numbers is that Microsoft is not continuing to extend that size differential. The others are chopping into that, and particularly for Google Cloud, at this size and with its growth rate, we see that happening. So, you know, how is this possible? And I think it all comes down to this notion of, you know, the customers have a terrific set of choices here. 05:02 — But in terms of — you look right here, right now — the new business that Google Cloud is winning, they are matching or beating their competitors here, and I think we're going to see that continue with the momentum that Google Cloud has. Visit Cloud Wars for more.

In today's Cloud Wars AI Minute, I explain how Microsoft's AI agent momentum could transform business applications at scale. Highlights 00:00 — So we're now hearing, according to Microsoft, that it has 40 million agents deployed now in the Microsoft ecosystem. Now compare that to the 30 million seats that it actually has sold for the M365 Copilot, and that really starts to show us that AI agent creation and things of this nature are starting to take off when we're starting to see more than one-to-one ratios here. 00:33 — So this is a really big situation for Microsoft. It's actually a really good signal that custom agents and agents that are being built are starting to get more value off the backside. Now we can't necessarily completely get to this level because what you'll see is a lot of these agents are probably really simple right now. 00:54 — But with some of the new applications coming out and the focus that Microsoft also came out and announced — that they are looking at going through and producing a Super App Copilot — and this was something that Satya Nadella just talked about in the news just last week. 01:13 — So when we think about this and we start thinking about how is it that Microsoft's going to start combining all of its different Copilot assets or its AI agent assets, it really opens up a door where we might start seeing a much bigger multiplier effect happening on the number of agents created. 01:32 — Due to the fact that they're going to make it not so confusing to be able to determine where to get started and be able to help you get this all down. So this is really exciting news, and it's really a good thing for why you should start looking and understanding these agents because they're really starting to take off as business applications themselves. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I break down Microsoft's push to protect open-weight AI models and why the debate over openness could shape the future of the AI ecosystem. Highlights 00:09 — Microsoft is among more than 20 tech companies, including NVIDIA, Meta, and Palantir, that have issued an open letter urging U.S. lawmakers to slow down in placing restrictions on open-weight AI models. These are models that users can modify and run on their own infrastructure. 00:38 — The backlash from the companies comes in light of discussions within the U.S. government about potentially restricting access to Chinese open-weight AI models in the U.S. The administration's floated the idea of potential restrictions or sanctions involving Chinese open-weight models around concerns about copying other AI models, intellectual property theft, and national security. 01:06 — The tech companies that signed the letter argue that open-weight models strengthen competition, and with technology benefits broadly shared instead of being concentrated into a few hands, and that, in fact, relying entirely on closed models is not inherently safe because they can be breached, misused, or fail in ways that outsiders can't detect. 01:30 — They say that keeping AI advancements in a small circle of companies just compounds that risk. Sharing the letter on his personal X account, Microsoft CEO Satya Nadella said, "Open-weight models are essential to a healthy AI ecosystem. Together with others across our industry, we are outlining a path for open-weight models to strengthen American competitiveness and expand economic opportunity while protecting national security." 02:14 — This is yet another example of how the democratization of AI is being promoted by tech companies. In my opinion, the idea of collaboration and openness has made it much easier for the public to trust AI. Not only does this strengthen the position of the companies themselves, but it also means that more people will benefit safely and securely from the potential of AI technologies. Visit Cloud Wars for more.

In today's Cloud Wars Minute, I look at why Palantir's AI strategy is resonating with customers and disrupting the software industry's established order. Highlights 00:03 — Well, we had a fascinating earnings report and earnings call with Palantir recently. A couple of things happened. Its growth rate soared. It almost doubled its growth in Q2, up 93% to over $1.8 billion. 00:19 — But intriguingly, the story behind this growth now is one that CEO Alex Karp is doubling down on, and that is to cut directly against the grain of how traditionally the software industry has worked. He feels that there's too much power being consolidated among the tech vendors, particularly now the AI labs and the AI model companies. 00:55 — Now, is there a direct correlation between the 93% growth rate and this refreshing, new, different customer-oriented approach from Palantir? I think there is. Whether you think Karp's antagonism toward the entrenched order is overblown or not, you've got to look at the financial results. Palantir is outperforming every major tech vendor on Earth. 02:36 — What Karp is promising, he said, what Palantir is offering, is a new, better way that allows customers to keep control of that data, keep the benefits of that data, keep what he calls the alpha, and let them control their own outcomes instead of turning over their data to model companies. 04:36 — I just find myself throughout the call listening and watching Karp, who always wears a white T-shirt. He is just completely unabashed in not holding back and stating his opinions. I think we need more of that in this business, especially at these very critical times when businesses are betting their futures on what's going to happen here. Visit Cloud Wars for more.