|
Welcome back! As businesses spend more on AI from Anthropic and other new providers, traditional enterprise apps and IT services providers are sometimes fighting for a smaller piece of the pie. In one example, French biopharmaceutical giant Sanofi told me it’s using its own in-house AI agent developed with Claude Code and software from an AI startup, Elementum, to reduce usage of ServiceNow IT management software. At the same time, Sanofi says it’s set to use German software giant SAP more than it did in the past. Sanofi is linking its AI agents to SAP’s own AI agents to automate tasks such as auditing Sanofi’s purchase orders, helping the company significantly reduce its use of outsourcing firms in India that previously handled the work. The example shows how companies are actually diving deeper with some traditional software providers while reducing their use of others. But in many cases, companies are simply reducing the number of apps they’re using. Starbucks is the latest large software customer to pursue AI alternatives to major apps made by companies such as Microsoft and IBM, Bloomberg reported Thursday. Julie Teigland, global vice chair of consulting firm EY, says clients are looking to consolidate their enterprise apps as they adopt AI from Anthropic, OpenAI, and also use new AI features from some traditional software firms. AI customers “are really looking at their legacy tech debt”—a term that usually describes a collection of software systems companies have had for a long time—“and saying, ‘How can I make this simpler and easier to move?’" she said. The consolidation trend appears to be even more common among smaller companies. Mixology, a family-owned clothing business with 500 employees, last year began developing custom AI applications with Palantir’s software to generate social media ads, forecast demand and schedule employees at its 16 brick and mortar stores. At the same time, Mixology plans to use less of Salesforce’s customer relationship and marketing software. “Until I came to Palantir, I ran my whole business on Salesforce. I‘m not sure that it’s necessary going into the future,” CEO Jordan Edwards said. “You conceptually could do anything that we're doing at Salesforce inside of Palantir,” he said. To be sure, Salesforce is exceedingly difficult for large customers to ditch, as we explained in an article earlier this week. But some of Salesforce’s smallest customers are having more luck replacing it with AI alternatives. In another example, Utila, a young Israeli startup that sells software for enterprises to manage their cryptocurrencies, is getting rid of smaller apps and begrudgingly keeping HubSpot. Din Arbel, a go-to-market lead at Utila, said the startup got rid of 10 applications from small software providers such as Clay and Vendelux that helped with issues such as tracking data about potential new customers, sending emails to prospective clients, creating and managing marketing campaigns and events, and preparing for sales meetings. Now, Utila uses sales and marketing software as well as AI agents from one startup, Swan AI. Arbel said the move helped reduce the company’s software budget 50%, though he declined to share the specific figure. At the same time, he said, the company is still storing important data in HubSpot, a customer relationship management app, that Swan-powered AI agents can tap to complete their tasks. “We still have HubSpot but it's only for data storage,” he said. As we previously covered, HubSpot has told investors it planned to charge customers to use external agents to tap its data, but Arbel said he would continue using it anyway. New GitHub Rivals Sharpen Their Knives GitHub just can’t catch a break. Once the frontrunner in AI coding software with its GitHub Copilot product, the Microsoft-owned company has seen its lead in the AI coding market slowly erode thanks to competition. Now GitHub is seeing more competitors angling to erode its core business as a code repository where developers and companies can store and edit code in a shared environment. Cursor recently announced a competing repository, and OpenAI President Greg Brockman said Wednesday that his company had hired former GitHub senior director Taylor Blau to “chart the future of Git,” suggesting the company is moving ahead with efforts to develop tools that compete with GitHub’s. (We first reported OpenAI’s plans in March.) The latest firm angling to take a bite of GitHub’s repository business is Entire, a startup founded by former GitHub CEO Thomas Dohmke that raised $60 million earlier this year. Entire on Wednesday announced its own Git repository product that lets customers store and collaborate on code, adding to its existing product, which is geared towards helping developers keep tabs on how and why their AI coding agents wrote software without needing to manually review every line of code. Dohmke said Entire is aiming to make its competing service faster and more reliable than GitHub’s—which has been plagued by outages amid an influx of AI agent traffic—by renting servers from all three major cloud providers in geographies spread across the world. Doing so can reduce the time it takes customers’ AI agents to upload and edit code. “One way to solve the outage issues is to just have more redundancies and have those spread across the world, which will enable scale for agents and humans,” Domhke said. For its part, GitHub said in a blog post Wednesday that it experienced six outages last month but has been moving more of its systems to Microsoft’s Azure cloud servers from its own servers, which it said would reduce outages.
| 
