Category: AI

  • 4 Things to Consider When Integrating Generative AI

    4 Things to Consider When Integrating Generative AI

    Generative AI has emerged as one of the most influential innovations of the past two decades. ChatGPT gained 100 million users in record time, and new generative AI-powered point solutions emerge every day.

    Considering the current state of VC funding, the surge of investment dollars in AI companies is remarkable. Microsoft’s $13 billion investment in OpenAI and AWS’ $4 billion investment in Anthropic (who themselves just raised a $850 million Series C round) demonstrate the tremendous excitement around Generative AI and how it will shape the future of tech.

    As newer companies like Adept and Cohere are emerging, existing SaaS companies are integrating generative AI capabilities into their products and services. However, in the race to join the hype, many companies are building first and strategizing later. Before diving headfirst into building a generative AI solution, companies should carefully consider a few crucial factors, including model selection, usage tracking, monetization and customer transparency.

    1. AI Model Selection: To Build or to Buy?

    Companies must first consider whether to build a generative AI model from scratch, or whether to use a pre-existing model from one of the major AI vendors. This decision depends on the level of customization and control desired, as well as the resources and expertise available.

    Building a from-scratch model is likely infeasible due to the inaccessibility of the necessary hardware. The GPUs needed for cutting-edge model training and inference are currently only built by NVIDIA, and there is stiff competition and long lead times for any company looking to acquire the product. What’s more, large cloud and AI companies like OpenAI, Google, Meta and Tesla already have built systems with up to 100,000 of these chips. New companies looking to enter the scene would face a steep climb to assemble the infrastructure needed to even begin to compete with the current classes of models.

    Small or new companies do not have the funding or time to invest in building their own infrastructure or generative AI models, so a key business decision is to select the best vendor and model for the use case. While ChatGPT is the most well-known, there are other specialized models that can be better suited for certain use cases. For example, OpenAI’s DALL-E is built for image generation, while Anthropic’s Claude 2 is built to perform better with specialized tasks such as legal and math and to handle long-form inputs.

    Regardless of the AI vendor you choose, you will be charged based on your usage with them, which, by extension, is your customers’ usage. Tracking this usage is critical to your generative AI solution becoming profitable.

    2. Metering AI Service Usage: The Key to Success

    Implementing usage metering for generative AI services is crucial at both the individual user level and at the global or system-wide level. This is because usage tracking is valuable to all business functions and is a critical element of any modern PLG strategy.

    For example, customer-facing teams can leverage usage data to proactively track account health and to contextually recommend new solutions and approaches. Usage history provides valuable intelligence to account teams for up-selling, cross-selling, and contract renewal. Product teams can identify usage patterns and customer segments, as well as areas of friction or improvement for new feature development.

    Usage data also plays a major role in developing pricing plans that align with customer expectations and overall market trends. It can be used to inform pricing plan development and optimization to ensure the rates are sensible for the level of consumption and value being realized. Without tracking usage, this becomes a guessing game or a futile exercise in “gut feel.”

    Usage data is imperative to calculating your internal costs. Vendors commonly charge according to a usage-based model for these generative services–per word, per token or per generation are some common models. In any case, having accurate, granular usage data is a must-have for calculating internal costs and, in turn, customer-facing pricing.

    3. Monetizing Generative AI Services: Usage-Based Pricing Strategy

    In the rush to beat competitors to market and offer generative AI services to customers, do not neglect to lay the groundwork for monetization from day zero. It is much easier and more efficient to build with monetization in mind from the start than it is to backtrack and try to monetize a service once it has been offered, particularly when usage-based pricing is involved.

    Usage-based pricing has emerged as the optimal pricing strategy in the AI domain. This is because service usage varies over time for each customer. These services are priced by the vendors according to a usage-based pricing model. Since the backend costs of the service are elastic, the frontend, customer-facing pricing should also be elastic.

    As a roadmap to monetization, follow these steps:

    -Meter service usage to understand segments and patterns

    -Calculate internal costs of usage using vendor pricing

    -Using the information from steps 1 and 2, build customer-facing pricing

    -Track revenue and margins and continue to iterate with pricing as needed

    4. Customer Transparency: On-Demand Access to Usage and Billing Data

    Prioritizing transparency and clear communication with customers is non-negotiable. Ensuring that usage and billing data can be seen at any point in the billing cycle helps foster trust between the company and its users and eliminates billing surprises when the invoice is delivered.

    Adopting Transparent Communication Builds Trust With Customers

    Invest in creating a customer-facing application, portal or experience that allows for on-demand access to usage and billing data. The beauty of combining this level of visibility with usage-based pricing is that customers are empowered to pay for only what they use while viewing usage statistics on demand and modulating usage as needed in real-time to keep the spend within an acceptable range.

    In practice, usage data is available on a per-query level from the vendor’s APIs. For example, for any generation action, OpenAI will show the precise number of tokens consumed for both the prompt and response, as well as all details around the model type and context needed to identify the per-token rate from the vendor pricing. It is important to collect this data and build a user-friendly way to display it back to customers in an app, portal, or website that allows for on-demand access and browsing.

    Conclusion

    While planning to build a product with generative AI, take all of the above factors into account. Do not make the mistake of racing to deliver a technology solution without also considering the business implications and monetization strategy. With all the hype, excitement and investment around generative AI in 2023, it is akin to a modern-day gold rush. Don’t show up to the gold rush without a shovel.

  • Microsoft kills Python 3.7 ¦ … and VBScript ¦ Exascaling ARM on Jupiter

    Microsoft kills Python 3.7 ¦ … and VBScript ¦ Exascaling ARM on Jupiter

    Welcome to The Long View—where we peruse the news of the week and strip it to the essentials. Let’s work out what really matters.

    This week: VS Code drops support for Python 3.7, Windows drops VBScript, and Europe plans the fastest ARM supercomputer. (more…)

  • How Event-Driven Architectures Drive Real-Time Operations

    How Event-Driven Architectures Drive Real-Time Operations

    People, events, the human brain—in fact, the whole world operate in real-time, but businesses have struggled to keep up. With the help of event-driven architecture (EDA) and the Open API economy, businesses can now do the same. The power of an event-driven world means that, after years of geopolitical events affecting how businesses operate, many businesses are starting to uncover real value by truly being able to operate in real-time.

    Whether it be retail and manufacturing or energy and resources and financial services, locating and responding to vital issues within a company’s supply chains or product lines in real-time, is key to success.

    Amazon’s CTO, Dr. Werner Vogels, said that “the world is event driven” in his keynote speech at AWS re:Invent in December 2022. Now, new IDC research unveils that nine out of 10 of the world’s largest companies will deploy real-time intelligence driven by event-streaming technologies by 2025.

    But What’s the Secret Behind Such Success?

    A recent IDC Infobrief, sponsored by Solace, surveyed over 300 enterprise IT professionals in North America, Asia and Europe, all of whom work for large companies implementing or considering EDA. The results are quite telling–an overwhelming 93% of respondents at companies that have deployed EDA across multiple use cases said EDA has either met or exceeded their expectations. In addition to technical advantages from EDA, most businesses also see clear business benefits: A full 23% of respondents reported increasing productivity; 22% said better customer acquisition and 18% saw revenues increase as a result of EDA efforts.

    1. Get Support From the Top to Ensure Alignment Throughout

    Expanding the footprint of EDA across the enterprise is a journey, and every journey starts by assembling those that are critical to its overall success. Business sponsorship and engaging key stakeholders is vital, especially in the early days of EDA adoption – 56% of respondents in the early EDA stages cited this as a priority when ROI and business benefits may not be immediately clear.

    The impact of well-aligned C-suite, operational and technical teams is reflective of business-level digital maturity, too. As 35% of respondents at an advanced stage of EDA rollout felt C-level support was critical, it comes as no surprise that respondents with higher levels of EDA maturity also have higher levels of overall digital maturity, including digital strategy and change management support.

    2. Tackle Complexities Head-On With the Backing of IT

    As EDA becomes more pervasive across an organization, demands on IT become more sophisticated, requiring a deepening of EDA skills in the IT organization, notably with DevOps teams, developers and architects. More than one-third (36.1%) of respondents cited the lack of skills to execute EDA as a hurdle to adoption. Approaches to logging, governance and oversight (30.7%) can also become increasingly challenging and must be thought through carefully.

    This is where EDA providers themselves need to step up and provide adequate training and a certification path for architects DevOps and developers looking to gain the fundamental knowledge and skills to design and implement event-driven systems. This should include technical details such as understanding various design patterns for EDA, microservices choreography versus orchestration, the saga pattern and RESTful microservices. Education should also clearly define and demonstrate key concepts and tools for EDA success, such as event portal, topic hierarchy best practices and event mesh.

    3. The Benchmark for Success Chops and Changes: Businesses Need to Go With the Flow

    The right measures of EDA success in the early days of adoption are not the same measures as EDA adoption grows over time.

    Fewer EDA-mature organizations cited “cost reduction” (23%) and “number of projects completed” (31%) as top measures of success. In the medium term, after two or three use cases, most organizations saw “operational stability” along with “number of projects” to measure success. Further, after broad adoption, “increased revenue” (43%), “operational stability” (32%) and “amount of resiliency” (30%) become more important measures.

    This changing set of measures is reflective of the maturity curve of EDA adoption across multiple applications within a business’s ecosystem. A business is truly operating in real-time when deploying EDA across key customer-facing, employee-facing and supplier-facing organizations. This is where revenue is being generated in high volumes, organization-wide – hence stability and resilience become key to ensuring things continue to run smoothly on what can often be a global scale.

    4. Keep Everyone in the Loop

    It is essential to take the company with you along the entire journey. The research showed the bumps in the roadmap. In the early stages of EDA maturity, lack of understanding of EDA benefits and inconsistent buy-in are the most frequently cited organizational challenges (38%). As organizations progress to a centralized EDA status, cost concerns (42%) and finding the right use cases (36%) can hamper success. More advanced stages of EDA also cite a lack of understanding of EDA benefits (45%), and cost concerns (39%) but change resistance (38%) becomes a major hurdle.

    Continuous focus on change management and communicating business benefits is vital. The core group of invested stakeholders who began the journey must band together to demonstrate the value of EDA clearly and consistently to other areas of the business on a regular basis.

    5. Recognize the Benefits That Partners Bring to the Table

    To accelerate business and technical benefits and reduce the impact of challenges, survey respondents cited “finding a supportive partner to assist with the implementation of EDA” (37.7%) as a critical consideration. Partnerships and product integrations with the providers of preferred business software and SaaS services can make it easy to event-enable an organization. Given the amount of new technical skills and learning previously cited, this can provide peace of mind for organizations taking their first steps on the journey to EDA.

    EDA isn’t just a change in IT architecture, it’s a mindset that applies to modern business leadership organization-wide. To keep the momentum during the journey, respondents also noted the use of a robust change management plan that “ensures coordinated middle management support” (35.1%), as they are typically accountable for getting work delivered and reporting across the organization.

    EDA Becomes the Norm

    The InfoBrief results speak for themselves – EDA is quickly becoming the “normal” process for businesses looking to operate in real-time. As more and more companies recognize the business benefits at stake, understanding these five requirements will be a necessity for successful EDA deployment.

  • Raspberry Pi 5: Faster, Better, Stronger — Spendier

    Raspberry Pi 5: Faster, Better, Stronger — Spendier

    Welcome to The Long View—where we peruse the news of the week and strip it to the essentials. Let’s work out what really matters.

    In a cheeky extra post this week: Everyone’s favorite single-board ARM computer, the Raspberry Pi, has a new generation coming soon. Compared to the ’4, RPi5 has double the performance, quadruple the base RAM and far more capable I/O. (more…)