UPDATED 16:15 EDT / APRIL 18 2024

Ray Wang, founder and principal analyst of Constellation Research talks with theCUBE about the integration of AI in legacy systems. Industry experts at SAS Innovate discuss transforming data into decisions. AI

Beyond AI washing: theCUBE analyzes real-world integration of AI in legacy systems

Industry experts are increasingly highlighting the significant shift from mere “AI washing” — where companies claim AI capabilities without substantial evidence — to the actual integration of AI in enhancing legacy systems and driving new business efficiencies.

“It’s more than just the workloads in production,” said Ray Wang (pictured, left), founder and principal analyst of Constellation Research Inc., during a day 2 analysis at the SAS Innovate event. “We’re trying to figure out who actually has the goods and who doesn’t have the goods.”

There is a prevalent trend in the enterprise of actual AI capabilities being overstated. What truly matters is distinguishing between those who merely claim to use data and those who can effectively transform this data into actionable decisions, Wang added.

Wang spoke with theCUBE Research’s John Furrier, executive analyst; Dave Vellante, chief analyst; and Rob Strechay (right), principal analyst, at SAS Innovate, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed the practical application of AI in modernizing legacy systems, the distinction between real and superficial AI capabilities, and the strategic considerations for companies considering IPOs in the context of AI integration. (* Disclosure below.)

Modernizing legacy systems with AI

One of the central themes discussed by the panel was the modernization of legacy systems through AI. The pivotal role of data in transitioning from traditional data handling to AI-driven decision-making is crucial for enhancing accuracy, efficiency and overall business intelligence. SAS Institute Inc., traditionally viewed as a legacy analytics company, is now leveraging its deep expertise to simplify AI applications for its users, according to Wang.

“What SAS has here, and what they’ve been showing, is really where models come into play, what you can do with the data,” Wang explained. “These guys are steeped in this; we’re talking decades of experience.”

Companies can take a nuanced approach with AI, using it to enhance and retrofit existing workflows instead of opting for a total system overhaul, according to Furrier. This method allows businesses to integrate AI technologies gradually, capitalizing on existing infrastructure to improve efficiency without the disruption of rebuilding from scratch.

“There’s this idea that you don’t need to raze the house and bulldoze everything,” Furrier said. “You can retrofit your workload.”

The path to the integration of AI and IPO aspirations

The analysts also delved into the strategic movements of companies toward integrating AI into their core operations and the implications for potential IPOs. Companies that have substantial legacy systems but are experiencing rapid growth in their newer AI-driven offerings still face challenges, according to Wang.

“They’ve got to get this AI story down,” he said. “They’ve got to show the subscription revenue growth as they’re going from on-prem to cloud, which is one of the big challenges. But they’ve actually been showing growth with Viya.”

There is a delicate balance companies need to strike between managing their legacy systems and embracing AI innovation to attract investment and consider an IPO, Wang pointed out. He noted the simultaneous challenges of internal modernization, effectively communicating the AI transformation story and preparing for the financial market’s scrutiny. This multifaceted strategy is critical as companies navigate their growth in AI capabilities while maintaining robust traditional operations that support their market presence.

“They’re basically doing three things at the same time: one, trying to modernize everything internally, two, trying to actually tell the AI story and, three, trying to run an IPO,” Wang said.

This strategy is essential for traditional companies to remain competitive in a landscape increasingly dominated by AI-centric businesses. There is a critical need for companies to not only embrace AI technology, but also clearly communicate their advancements to the market, particularly if they are considering an IPO, according to the analyst panel. The ability to articulate a compelling AI narrative can significantly influence investor confidence and market position.

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE Research’s coverage of SAS Innovate:

(* Disclosure: TheCUBE is a paid media partner for SAS Innovate. No sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE

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