Zendesk's bet on "clean data"

Welcome to Runtime! Today: why Zendesk's CEO thinks structured data will help it find success in the AI era, the U.K. puts AWS and Microsoft under a regulatory microscope, and this week's enterprise moves.

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Structural integrity

Zendesk has been on a roller coaster over the last two years, battered by public and private markets, failed acquisitions, wholesale management changes, and to cap it off, a downturn in the enterprise tech spending market that forced layoffs and price increases. But CEO Tom Eggemeier, who joined Zendesk last year after his private equity firm took control of the customer-experience management company, thinks a product decision made long ago could chart a course for Zendesk through the AI boom.

"We did not anticipate, quite frankly, what AI would do to the market," Eggemeier said in a recent interview, explaining why Zendesk's long-ago decision to add structure to the data its customers use to evaluate their own customers' experiences is paying off as companies struggle to make sense of unstructured data. "To a certain extent, we got lucky."

During our conversation last week, Eggemeier touched on the current state of tech spending, how the race to build customer-data platforms is shaking out, and why "clean" data is better than dirty data for AI applications. Excerpts from that interview follow below.

On the state of tech spending:

Eggemeier: We definitely have seen a slowdown in spending from a macro perspective, and I think just about all application providers like ourselves have seen that slowdown. We should still be growing double digits this year, so we're happy about that. But I think short term, there's definitely a slowdown in the customer experience and quite frankly most application spaces.

More customers are looking for (ways to) increase their revenue, keep their customer base, keep their employees happy, keep their customers happy, and decrease costs simultaneously. We feel like we play well into that trend because if you get CX (customer experience) right, (the) more loyal customers spend more with you.

On customer-data platforms:

Our view on CDPs is they should be open and adaptable. That means you can bring any data from any system to fully blend your customer-experience data into your business processes. Our customers are dealing with their customers on a day-to-day basis, and we want to make sure that they can deliver a tailored service in the most effective way possible. So data from Zendesk can be added to a CDP, or the other way around; data from a CDP can be added to enhance the customer experience.

CDP data is really important and we're going to see a continued evolution. I think it mixes with AI in that if you've got dirty unstructured data, it's more difficult to make better predictions with AI to get to the best customer outcomes.

On competing with Salesforce, Freshworks, and ServiceNow:

I think it was forethought from our founders (at) the founding of the company now 15 and a half years ago (that) we had pretty structured data models on these 19 billion tickets. And so we don't believe — and I'm saying believe — we don't believe anyone else has 19 billion interactions that are in the very structured data, or fairly structured data (formats) that we have.

We think that's the differentiator here; a lot of people might have more tickets or the same amount of tickets or less tickets, okay, but they probably don't have it as structured as we do.

We did not anticipate, quite frankly, what AI would do to the market. So, to a certain extent, we got lucky; first, we have the tickets (but) I think most people have the tickets. Second, we have most of them structured in data sets that are easily analyzed and used. But third, and most importantly, we have them in this positive/neutral/negative disposition from customers on those tickets.

Read the rest of the interview on Runtime here.

Just don't use VAR

On Thursday the U.K.'s Ofcom confirmed reports earlier this week that it will investigate the state of cloud infrastructure computing competition, referring the issue to the Competition and Markets Authority to determine, if needed, "what interventions can improve the supply of these important services for UK customers."

In a 254-page report, Ofcom identified AWS and Microsoft as worthy of additional scrutiny, which has got to be at least a little bittersweet for Google Cloud CEO Thomas Kurian. The regulator said it wants the CMA to look closer at cloud infrastructure business practices that have raised eyebrows around the world in the past, such as egress fees, aggressive discounting, and lock-in.

"Ofcom’s report also outlines concerns it has heard about the software licensing practices of some cloud providers, in particular Microsoft," it said in its press release. In fact, Ofcom devoted an entire section of that report to Microsoft's battle with other cloud providers over concerns the company makes it extremely difficult and costly to run a lot of Microsoft's enterprise software on other clouds.

Enterprise moves

Jim Scharf is the new CTO of MongoDB, just the latest longtime AWS veteran to join the database company.

Latané Conant is the new chief revenue officer at 6sense, after serving as the company's chief marketing officer for the last five years.

The Runtime roundup

Docker introduced a new version of Docker Build that lets developers offload parts of the build process to cloud servers and announced the general availability of its software supply-chain security service.

AWS will require multifactor authentication for administrators with the highest level of access to corporate AWS accounts, starting next year.

AWS is also urging TorchServe users to upgrade to the latest version of the AI model deployment software to protect against a newly discovered vulnerability.

Microsoft rolled out a new version of the Teams app for Mac and Windows users that promises a snappier launch process.

Graphcore said it will need more cash to keep the lights on, dashing hopes it could be the U.K.'s answer to Nvidia's dominance of the AI chip market.

Slack is shutting down for a week so employees can take Salesforce's Trailhead training course, "whose modules include topics like 'Learn about the Fourth Industrial Revolution' and 'Healthy Eating,'" according to Fortune.

Thanks for reading — Runtime is off for the holiday weekend, see you Tuesday!