At Omega our focus on AI-powered applications is about ‘Systems of Intelligence.’ The platform shift towards AI is fueling unprecedented innovation and value creation across Enterprise software. Beneath the surface, powerful market trends are propelling AI-powered applications. One of these megatrends is that software platform capabilities have undergone a major advancement—towards Systems of Intelligence.
We are currently in the midst of one of the biggest, if not the biggest, technology innovation cycles in history. Over the past few years we’ve seen applications move to the cloud as well as distribution and consumption shift to connected devices, smartphones, and tablet. At the same time, we’re witnessing exponential growth in usable and useful digital data, which by some measures is doubling every 60 days. And we’re seeing rapidly inflecting adoption of cloud computing, which provides massive computing power on-demand with unprecedented low costs.
Systems of Record (1970s – 1990s)
Data and applications that store data in service of an important business function are characterized as Systems of Record. There are a few major systems of record in an enterprise:
- CRM (Customer Relationship Management) stores critical data about your customers to power sales and, by extension, marketing (e.g., Salesforce, Siebel, Hubspot)
- HCM (Human Capital Management) is the authoritative single source of truth about employees, recruiting, performance management and all things HR (e.g., Successfactors, Workday, Peoplesoft)
- ERP (Enterprise Resource Planning) is where enterprises store records relating to their assets and financials.
Many substantial companies have been built on dominating a system of record category. In CRM we’ve seen Salesforce displace Siebel as the system of record for customer data, and Workday replace Oracle / PeopleSoft for employee data.
Systems of Engagement (1990s-2010s)
Systems of Engagement improve the interface between users and Systems of Record. Because these systems have a direct connection with the user and control the interface, they are inherently valuable.
In client-server computing, Systems of Engagement are the companies that control the desktop operating system (e.g., Microsoft, Apple) and subsequently the browser (e.g., Chrome, Edge, Safari) as the interface to access and use cloud-hosted applications.
Companies like Salesforce, which was early to recognize the importance of Engagement as a Software-as-a-Service company, have forward integrated to own the interface with the user and try very hard to not allow themselves to be turned into just a data store. While users may use a browser or mobile device / app to access Salesforce, the company drives user lock-in from its user interface (‘UI Lock-in’TM).
Systems of Intelligence (Today)
A Systems of Intelligence is valuable because it harnesses and combines valuable information from multiple Systems of Record or underlying data stores in the Enterprise.
For example, Tealium has built a System of Intelligence on top of its unified customer data platform and combines that with digital analytics, third party data, and historical transaction information to surface highly valuable customer insights and predictions. In order for Systems of Intelligence to be robust, they must add value to the System of Record by bringing other data sources (public or private) into the equation. Salesforce is building Einstein on top of its own CRM records, with plans to integrate other data sources.
The next generation of enterprise products are using artificial intelligence (AI) to build Intelligent Software. The opportunity for innovators is most robust across customer-facing applications, employee-facing applications, and infrastructure systems (e.g., data center, cybersecurity, and IT service management). In addition to these broad horizontal functions, successful startups are also focusing on market verticals to build Intelligent Software around vertical market data.