Tim Horan: Thanks. More of a qualitative question, but can you talk about how much your AI product has improved over the last year? ChatGPT is only about a year old at this point, the breakthrough. Are you using that, has that massively improved the product? Are you using reinforced learning, where the product will be a lot better a year from now? Just any comments on how does it compare right now to the main competition. Thanks.
Barak Eilam: That’s a great question, Tim. You know, I’ve been in the tech sector for more than 25 years, and I’ve seen a variety of cycles of technology, significant technology all the way from proprietary hardware, software, internet, mobile, cloud, and these days AI, and those were the technologies of–an enabling technology that created a compound of innovation. I think we can all agree that what we are seeing with AI in terms of this rate of compound effect, you know, if you are not staying up to date for a week, all of a sudden it seems like a year passed by. We see that with AI. The beauty, going back to our business, is that since we’d started our journey much before, we started it several years back, but practically we started it much before two years back because the most important part and the most important thing in order to have AI working well is the data, a variety of efforts including data.
It’s data, it’s knowledge, it’s media, it’s interactions, and the derivative information from all of those assets. NICE has a unique, unbeatable position where we have years of this data in the tens and hundreds of billions of interactions and knowledge assets and other things, so the answer–the short answer is yes, we are seeing a tremendous improvement in both the accuracy, the relevancy, and on top of that, of course we have more and more out-of-the-box models which dramatically shorten and simplify the deployment for customers. We have today more than 1,000 Enlighten models for every possible, or most possible CX scenarios, and that’s what we do for a living, so we are becoming a CX AI powerhouse both in terms of the assets and the technology.
Of course, in order to focus on our core competency, where relevant and when relevant, we’ll leverage some generic technologies like gen-AI and others in order to focus our effort on the things that are unique for us and that are needed in order to take it and make it a viable option for the CX market.
Tim Horan: Very helpful, so is it fair to say six months, a year from now, the product will be dramatically better, and do you think you’re pretty far ahead of your competitors?
Barak Eilam: Absolutely. First of all, 100% true it will be even better every quarter. I myself spend a lot of time these days with my passion for technology, and I like to see it working both in customer environments and in our labs, if you would like, and I see the cycle of improvement on a weekly basis. In terms of us vis-à-vis the competition, I think we are years ahead of our competitors, both the ones that have–you know, are a bit more sizeable, but also the issue of the point solution. It goes back to my point about it’s not enough just to have the technology, it’s important to have the platform, and our years of investment building CXone as a platform that can contain and manage and converge all the assets together, this is what makes AI for us working. This convergence power of CXone is second to none.
Tim Horan: Thank you.
Operator: Our next question comes from Arjun Bhatia from William Blair. Please proceed.
Rachel : Yes, thank you. It’s actually Rachel on for Arjun. I’ll echo everybody else’s best wishes to you guys. I wanted to ask, it seems like it’s still pretty early days for migrating existing customers to the cloud. Could you talk a little about the opportunity for AI to drive increased conversions or if you see any other potential catalysts to accelerate the pace of migrations?
Barak Eilam: Yes, thank you for the question, Rachel. You know, we’ve said it numerous times in the past, and actually you can see it in our financials, is that we’ve built already a $1.6 billion, give or take, revenue of cloud without tapping much into the legacy customer base of ours and predominantly taking over a market where we did not have any presence, and this is the [indiscernible] market. This is where the market is still only 20% penetrated. AI provides–first of all, it’s a growth engine by itself, but I believe, as I mentioned before, I can be a catalyst for those decisions, and we see it in both pipelines as well as the discussions we have with customers, because of that ripple effect that I talked about before.
Let’s start with they want the AI, in order to have the AI, they understand that they need to converge all assets into one platform, and for that, of course, the prerequisite is to be in the cloud with a true native cloud solution that is scalable to their environment, so that narrative is true both for competitive customers that we don’t have presence, where we replace the incumbents. Someone asked before about certain competition – we replaced a lot of those vendors this quarter, including the one that was mentioned before, but it’s also true for us starting to tap and accelerate the conversion of the existing customer base–the on-prem customer base of NICE.
