Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder Bob Evans. Each episode provides insights and perspectives around the “reimagination machine” that is the Cloud.
This episode is sponsored by Acceleration Economy’s “Cloud Wars Top 10 Course,” which explains how Bob Evans builds and updates the Cloud Wars Top 10 ranking, as well as how C-suite executives use the list to inform strategic cloud purchase decisions. The course is available today.
In today’s Cloud Wars Minute, I look at why there might be a price war breaking out on the GenAI front.
00:34 —There’s a divergent opinion among four of the Cloud Wars Top 10 on how to price GenAI-powered products. Salesforce, ServiceNow, and SAP have all said they will be raising prices or introducing premium prices for products with GenAI capabilities. Oracle came out very strongly saying absolutely not.
01:12 — Salesforce was the first. I think it was toward the end of July that Marc Benioff said, it had to raise prices with all the great new technology it’s doing; SAP, not long after, said that for its big new portfolio of GenAI capabilities, it was going to raise prices so that it would reflect a premium of up to 30% for its GenAI products; ServiceNow, right after that, said it was going to introduce tiered pricing, including premiums for its entire GenAI suite up to about 60%.
02:14 — There was a Q&A session at CloudWorld with four of Oracle’s top product executives. I asked each, given what’s going on with some other companies, has Oracle set a pricing policy for GenAI? I had the impression the question took them by surprise.
2:47 — Executive vice president Steve Miranda, longtime head of applications development, said that is a silly point of view. Oracle executive vice president Juan Loaiza, who heads up the company’s mission-critical database technologies, said absolutely not. It was intriguing to see these four terrific companies all take such different points of view.
04:46 — It’s hard to remember sometimes GenAI has only been with us for 10 months. Even though the positions taken by these four terrific companies are all wildly different, we’re only a handful of months into the commercialization of some of these products and technologies.
05:29 — This is great for customers. They’re going to have lots of different choices, lots of different points of view to consider, and lots of different alternatives, and that is what makes the cloud so special.