BMI Calculator – Check your Body Mass Index for free!
Be wary of enterprise software providers’ AI
IT leaders need to assess lock-in risk, data silos, a lack of openness, removal of discounts and product bundling in AI offerings
Financial results analysis by Forrester has found that enterprise software providers are ramping up efforts to sell the idea of an artificial intelligence (AI) user experience. The analyst firm warned that products with embedded AI from the likes of Microsoft, Oracle and SAP require careful financial management, and that IT leaders need to look for openness and avoid data silos.
Within its enterprise software providers’ financial report analysis, Forrester noted that the rapid adoption of Microsoft Copilot is forcing the hand of IT decision-makers. It recommended adopting FinOPs (finance and DevOps) to ensure costs are kept under control. With Oracle, it recommended IT leaders prioritise negotiating commercial protection and have an exit strategy.
Forrester warned Adobe customers to be prepared for the high costs associated with data management and workflow integration. Salesforce customers should “rigorously test” openness to avoid data silos, while SAP customers should focus on transparent pricing during contract negotiations.
Forrester described ServiceNow as a central nervous system of the business, inferring that IT leaders need to establish strong central governance, treating it as a critical platform. With WorkDay’s evolution to a platform, Forrester said IT leaders should invest in building out developer skills and talent to deliver custom applications based on this platform.
Forrester’s analysis noted that enterprise IT software firms are positioning embedded AI copilots, assistants and autonomous agents as the new primary interface, which the analysts at Forrester describe as an operating system for the application.
They urged IT decision-makers not to be swayed by a “slick demo” since the value of AI and agentic AI is entirely dependent on an organisation’s willingness to invest in process redesign. According to Forrester, the barrier being created in the current crop of enterprise software is less about the AI’s intelligence and more about the monumental organisational effort to retrain the workforce on new workflows. According to Forrester, this dramatically increases the risk of being locked into a provider’s enterprise software portfolio, which limits choice especially in terms of choosing best-of-breed products over a fully integrated software stack from one provider.
“While consolidating to a primary platform can yield efficiencies, it also concentrates risk and neuters your negotiation leverage. Your next major software decision is a bet on a single vendor’s security posture, pricing model and innovation capacity for the next decade,” the analysts at Forrester warned.
They advised IT leaders to address the “all-in-one” narrative by architecting for a composable enterprise. Instead, IT leaders should put in place a strategy that defines a primary “host” platform while maintaining what Forrester calls “a robust integration fabric”, such as using integration platform as a service (iPaaS) and application programming interfaces (APIs) to connect best-of-breed “tenants”. The analyst firm also recommended that IT leaders assess platform openness and data export capabilities, which it said is now more critical than ever.
According to Forrester, enterprise software providers are now positioning their proprietary data platforms such as Salesforce Data Cloud or SAP Business Data Cloud, as the commercial gateway to their AI services. Its advice to IT leaders is to resist the push to create a new, proprietary data silo. Instead, IT teams need to build a data fabric or mesh architecture that is not tied into one particular provider’s technology stack.
“Fund the essential work of data governance but do so in a way that gives you architectural control and allows you to federate data from multiple sources without being held hostage by a single platform’s data strategy,” Forrester said.
According to Forrester, this productisation of data platforms ties in with enterprise software providers ending discounts and forcing product “rebundling”, which, it warned, concentrates risk for enterprise IT. It recommended IT leaders have a strategic response built on rigorous financial governance, architectural flexibility and a clear-eyed view of business outcomes.
Read more on Artificial intelligence, automation and robotics
BMI Calculator – Check your Body Mass Index for free!
