From CRM Present to AI Future

artificial intelligence

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.

Closer to home, major CRM vendors like Salesforce and tech vendors like Oracle and Microsoft — I must make a distinction here because they offer so much beyond CRM and CX — are experiencing happy days.

I completely agree on multiple counts, but since I was in the business in the 1990s, my recollection is less about the financials and more about the amazing technology coming on-stream, and especially what was heading for the elephant graveyard.

It’s important to note that there was still a mini-computer industry in 1995. To be sure, it was not healthy, and the bones of the major vendors were being scooped up for a song never to be heard from again. The biggest and most successful mini-computer maker, Digital Equipment Corporation or DEC, didn’t last the decade after being bought by Compaq, which HP later bought.

Reflecting on Creative Destruction

My recall of the 1990s is that no one was buying anything.

As if the mini-computer implosion wasn’t bad enough, IBM had to pivot away from its bread-and-butter mainframe business into services. Meanwhile, we all waited for an operating system that would enable all those PCs we’d bought in the prior decade to network.

For many of us, the 1990s were the decade of “that OS will be here shortly.” That eventually happened, but it didn’t stay, and before we knew it, the client-server had given way to a more streamlined and powerful internet.

So, when I see investors excited about a 1995 moment, I know they’re only witnessing the creative side of creative destruction. Plus, from a historical perspective, I can’t help but wonder if artificial intelligence represents the creative or destructive side of a new wave, or more likely both.

There has been something tidy and neat about the last year or two. Covid notwithstanding, we’ve seen what I think of as a culmination of the cloud computing wave we have been living through for about twenty years.

Today we have powerful machines and pocket devices that can get us almost any information, anytime, anywhere. Software can write software, networking is a breeze, as is integration, and provisioning is as simple as punching in a credit card.

End of the Cloud Era, Dawning of AI

I’d say we are at the end of the cloud computing era, maybe even the CRM era, or at least I’d say that CRM is taking a massive turn. This is where I think the comparison to the 1990s is most accurate. There are few new niches in the old wave; a group of major software companies has established an oligopoly in the front and back offices, making traditional CRM look like the airline industry.

There will be plenty of work for historians who might look for ways the past is repeating itself. Karl Marx said it repeats as farce. Twain suggested that it rhymes. Groucho Marx sidestepped the whole thing saying that time flies like an arrow but that fruit flies like a banana.

I’m more Groucho than Karl which means Sam Clemens has a good deal of influence on me. Suffice it to say that our world is changing fast, and it feels like some sort of cycle is beginning as one ends.

Key point: The big play now is AI, but the field is wide open to anyone. In the old cycle, traditional CRM looked for product line extensions among the majors. But in AI, startups are kings and kingmakers, which is why the value of ChatGPT inflated overnight like some cosmic eruption.

It’s now the AI era, or whatever it comes to be known as. For a long time, I would have bet the last era would be known as client-server, SaaS, or Social CRM. Each had a moment but faded, and while some merged and evolved, some became radioactive. I don’t know many people not named Musk who want to be closely identified with social today.

Navigating the New Landscape: AI and Security Concerns

So, we’ve turned a massive corner. The tech industry is not what it was by a long shot. If the past is prologue, we can expect many wrinkles and ripples in the new era.

Already trust and security dominate one conversation in the application of AI to CRM, and for good reason. Salesforce shrewdly determined that user adoption would channel through the dominant idea of trust, as in your data is not my product. With that as a prologue, their research shows many of the same inhibitors to adoption that follow every innovation. Employees are saying in a chorus, how do we use this stuff?

Also, one must be concerned that some charlatans will find ways to corrupt AI like some did with social and crypto. Likewise, we must wonder how to keep the new technology on the rails. We weren’t very successful at keeping social media from going to the dark side, and AI has an even bigger cliff to fall from.

In all this, there may be a niche for a new technology that uses AI to keep a person or business safe. So far, we’re only thinking about trust, truth, and security as single efforts between individuals and businesses, or just individuals. But those issues ought to be all-encompassing.

Future Perspective

AI-based security systems might, in the future, act as fortresses around people and large entities, firewalls on another level. In an era where truth can be manufactured, it might be wise to have systems that are just as powerful to call bullpucky. Because if a person or a business can’t depend on its ability to glean truth from the natural world, survival may require an internal source.

That’s all before us. Tech continues, CRM continues, but they’re being grandfathered. They aren’t exactly the leading categories anymore, though they are vitally important. AI has the lead now, and we need to figure out how to exist in a world that changed overnight.

Denis Pombriant

Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. Email Denis.

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