This Week in Enterprise Technology, Episode 48, Hyoun Park and Charles Araujo critically assess the biggest tech news for the CIO Office:
- Earnings: IBM, SAP, ServiceNow
- ServiceNow’s AI Orchestrator Automates Complex Workflows
- IT Service Automator Atomicwork Secures $25M
- EU AI Act In Effect: Now What?
- Musk’s Government Actions Stoke CIO Concerns
- DeepSeek’s Disruption: Lower AI Costs, More Efficient Models
- New US CIO Barbachi’s Background Brings Up Big Questions
Earnings: IBM, SAP, ServiceNow
Hyoun and Charles examined last week’s earnings announcements from IBM, SAP, and ServiceNow. IBM is embracing AI and cloud consulting under CEO Arvind Krishna, while SAP is shifting towards cloud adoption despite its legacy challenges. ServiceNow impressed with growth and CRM expansion, despite stock market reactions.
CNBC on IBM: https://www.cnbc.com/2025/01/30/ibm-rallies-heads-for-best-day-ever-on-strong-earnings.html
SAP: https://news.sap.com/2025/01/sap-announces-q4-and-fy-2024-results/
ServiceNow: https://www.servicenow.com/company/media/press-room/fourth-quarter-full-year-2024-financial-results.html
ServiceNow’s AI Orchestrator Automates Complex Workflows
ServiceNow is making bold moves into CRM and agentic AI, positioning itself directly against Salesforce. Despite strong announcements, Charles feels ServiceNow’s pitch seems forced, signaling their desire to catch up. The challenge lies in entering an established CRM space while aiming to improve sales-service automation through AI.
IT Service Automator Atomicwork Secures $25M
Atomicwork raises $25 million in Series A funding, surprising many due to their strong market presence despite limited initial capital. Focusing on IT service automation, they join other companies like Symphony in revolutionizing processes. Charles and Hyoun highlight the advancements in employee support technology.
EU AI Act In Effect: Now What?
The EU AI Act came into effect February 2, imposing strict regulations on AI systems, especially those interacting with European customers. CIOs must be mindful of potential risks and ensure compliance, as penalties could reach up to 7% of revenue. With guardrails in place to protect data, there’s also the risk of overprotection that could hinder legitimate business. The evolving regulatory landscape demands careful attention from tech leaders, say Charles and Hyoun.
Official EU AI Act Website: https://artificialintelligenceact.eu/high-level-summary/
Musk’s Government Actions Stoke CIO Concerns
Elon Musk’s self-insertion into the U.S. government’s treasury and Social Security data has raised alarms, particularly regarding security clearances and potential compliance risks. Hyoun and Charles agree that CIOs must consider the resulting uncertainty and volatility, as well as the need for a more deliberate strategy in handling government data.
Washington Post: https://www.washingtonpost.com/business/2025/02/01/elon-musk-treasury-payments-system/
MSNBC: https://www.msnbc.com/msnbc/rcna190222
DeepSeek’s Disruption: Lower AI Costs, More Efficient Models
While the costs of model development and inference are expected to continue dropping, the big takeaway for CIOs from DeepSeek is the increasing feasibility of AI integration into systems without relying on massive compute power. Charles and Hyoun discuss how AI development can become more efficient, with advancements in model distillation and using lower-level languages like PTX. The shift toward model independence creates opportunities for more tailored solutions.
Ben Thompson’s DeepSeek FAQ at Stratechery: https://stratechery.com/2025/deepseek-faq/
Dario Amodei on DeepSeek: https://darioamodei.com/on-deepseek-and-export-controls
VentureBeat: https://venturebeat.com/ai/deepseek-r1s-bold-bet-on-reinforcement-learning-how-it-outpaced-openai-at-3-of-the-cost/
Prateek Kathpal on DeepSeek: https://www.linkedin.com/pulse/deepseeks-bold-ai-move-ditching-cuda-ptx-high-stakes-play-kathpal-b1yyc/
New US CIO Barbachi’s Background Brings Up Big Questions
The United States has a new CIO. And his background seems pretty solid from a security perspective, but he doesn’t seem to have much experience actually managing IT departments. Will that matter? Hyoun and Charles discuss the expectations for Greg Barbachi.
The Register: https://www.theregister.com/2025/01/28/the_us_governments_new_cio/