SAP CEO Christian Klein believes that generative AI has the potential to revolutionize the way businesses operate.
He says that companies will gladly pay more for enterprise software that incorporates the technology, because it can help them reduce inventory, boost sales, and even improve carbon emissions. While doing this, his company plans to charge 30% more, on average, to customers who use its AI features.
Klein points to German retailer Schwarz Group as an example of a company that is already reaping the benefits of generative AI. Schwarz Group is using AI to better predict demand at its Lidl and Kaufland stores. This has resulted in a 15% improvement in inventory management, a 20% decrease in waste, and an uptick in total sales.
Klein also cautions that businesses that want to take advantage of generative AI need to have their data well-organized. “Without that, AI will have only minimal positive impact,” he says. Although, it sees AI doubling the size of SAP’s addressable market, which Klein says should reach $1 trillion by 2028. SAP is using AI as a carrot to convince businesses that are running SAP or other software on their own servers to move to an SAP cloud subscription.
SAP is not the only company that sees the potential of generative AI. Microsoft and Salesforce are also adding generative AI capabilities to their business products. As the technology continues to develop, it is likely that we will see even more businesses adopt generative AI to improve their operations.
The sources for this piece include an article in Axios.