雅思听力:AI Blurs Boundaries

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AI Blurs Boundaries: Salesforce and SAP Vie for Enterprise Dominance

Enterprise software, once a niche topic, is now generating significant excitement due to the rise of AI. Salesforce, a leader in customer-relationship management (CRM), and SAP, a pioneer in enterprise resource planning (ERP), are both experiencing record market capitalizations. This surge is driven by their ambitions to integrate AI into their offerings, fundamentally changing how businesses operate.

Traditionally, Salesforce dominated the "front office" by automating client interactions, while SAP managed "back office" functions like finance and supply chains. However, with the emergence of AI, particularly semi-autonomous AI agents, the distinction between front and back office is blurring. Both companies aim to provide a unified user experience, leveraging AI to analyze and act on data.

This new AI-driven landscape has created a fierce rivalry between the two tech giants. Their strategies are remarkably similar. First, both are expanding their product ranges. SAP has acquired CRM firms and marketing platforms, while Salesforce has partnered with financial management systems and acquired companies like ClickSoftware for service workforce management. These expansions consolidate client data within their systems, a crucial ingredient for AI.

Second, they are "piggybacking on hyperscalers," allowing clients to choose cloud providers like Alibaba and Tencent. This approach saves Salesforce and SAP from investing heavily in infrastructure they see as prone to "commoditization," a stark contrast to Oracle's strategy, which has seen its capital budget explode.

Third, both are developing their AI layers. SAP has partnered with Databricks to help clients analyze data and deploy its Joule AI agents. Salesforce, meanwhile, is acquiring Informatica to enhance its Agentforce’s ability to process corporate data beyond the front office.

Currently, investors favor SAP, whose systems cover a wider range of functions and hold more data, which is notoriously difficult to extract for non-SAP systems. This gives clients an incentive to remain within the SAP platform. Consequently, SAP’s share price has risen by 12% in the past six months.

In contrast, Salesforce's share price has declined by nearly 30% since its peak in December. Despite surpassing SAP in sales in 2023, its growth is slowing, raising concerns about the profitability of Agentforce and a potential return to previous profligate deal-making, such as the $28bn acquisition of Slack.

The competition is intensifying, with rivals like Workday eroding SAP's ERP market share and Microsoft making inroads into both ERP and CRM. The enterprise-AI "food fight" has just begun.