Wedbush Securities analyst Dan Ives recently told Seeking Alpha that the influx of AI into the software industry was reminiscent of the 1990s, calling it a 1995 moment. As an investor, Ives seemed to be looking at the eruption in share values of almost any software company getting involved with AI.
In a similar vein, major CRM vendors like Salesforce, and tech giants such as Oracle and Microsoft (it’s important to differentiate them as they offer much beyond CRM and CX solutions) are basking in prosperous times.
I wholeheartedly agree on multiple fronts. However, my perspective on the 1990s, having been in the industry during that era, leans more toward the technological advancements than the financial aspects, especially the looming tech upheavals.
It’s important to note that the mini-computer industry still had a presence in 1995. While it wasn’t thriving, the major players’ remnants were being acquired at rock-bottom prices, never to be heard from again. The largest and most successful mini-computer manufacturer, Digital Equipment Corporation (DEC), disappeared within a decade after being acquired by Compaq, which was later absorbed by HP.
Remembering Creative Destruction What I recall from the 1990s is that businesses were cautious about investments. In addition to the mini-computer industry’s downfall, IBM had to pivot away from its core mainframe business into services. Meanwhile, the tech world eagerly awaited an operating system that could effectively network the PCs that had been purchased in the previous decade.
For many of us, the 1990s were marked by an endless wait for “the OS that’s just around the corner.” While it eventually arrived, it didn’t stick around for long. Before we knew it, client-server computing had given way to a more streamlined and powerful internet.
Therefore, when investors label this AI surge as a “1995 moment,” they are observing the creative side of creative destruction. Furthermore, from a historical perspective, it’s worth pondering whether artificial intelligence represents the creative or destructive aspect of this new wave, or quite possibly both.
The past few years have seen significant advancements, albeit with the COVID-19 pandemic as a backdrop. We’ve witnessed the culmination of the cloud computing era that has been unfolding over the past two decades.
Today, we have powerful devices capable of accessing information anytime, anywhere, and software that can write software. Networking, integration, and provisioning are as straightforward as inputting a credit card number.
End of the Cloud Era, Rise of AI It’s safe to say that we are at the end of the cloud computing era, and perhaps even the CRM era. CRM, however, is undergoing a significant transformation. This is where the comparison to the 1990s holds true. In the old era, traditional CRM looked for product line extensions among the major players. In the realm of AI, startups are the rulers, and they have a significant impact, as evidenced by the meteoric rise in the value of ChatGPT.
We are now firmly in the AI era, or whatever it will come to be called. For a long time, I would have bet that the last era would be known as the client-server era, SaaS era, or Social CRM era. Each had its moment but eventually faded into the background. While some evolved and merged, others became obsolete. Few people, aside from Elon Musk, want to be closely associated with social media today.
Navigating the New Landscape: AI and Security Concerns We’ve entered a new era with significant changes in the tech industry. Trust and security are paramount when it comes to applying AI to CRM, and for good reason. Salesforce wisely recognized that user adoption hinges on trust, particularly the assurance that your data is not being exploited. However, research shows that many of the same adoption inhibitors that have plagued previous innovations still persist. Employees are asking, “How do we use this technology?”
There’s also a legitimate concern that some individuals may attempt to corrupt AI, just as they did with social media and cryptocurrencies. Furthermore, we must consider how to keep AI on the right track. We were not very successful in preventing social media from descending into chaos, and AI presents an even greater challenge.
In all of this, there may be an opportunity for new technology that leverages AI to ensure personal or business security. Currently, trust, truth, and security are primarily considered in one-on-one interactions between individuals and businesses, or individuals themselves. However, these issues should be all-encompassing.
Future Outlook AI-based security systems could act as fortresses around individuals and large organizations, serving as a new level of defense. In an age where truth can be manufactured, having powerful systems to call out falsehoods might be essential. If individuals or businesses cannot rely on their ability to discern truth from the surrounding noise, they may need an internal safeguard.
The tech industry and CRM are still evolving, but they are gradually taking a backseat to AI, which has assumed the leading role. We must now adapt to a world that has transformed almost overnight.