Bessemer releases State of the Cloud 2024 report — here’s what’s inside

The dawn of the Cloud AI Era: Bessemer Venture Partners’ State of the Cloud 2024 report highlights the transformative impact of AI on cloud computing, ushering in a new era of technological advancement.

• The report, presented by Bessemer Partner Sameer Dholakia, focuses on three key trends shaping the Cloud AI Era: AI foundation models, multimodal models, and change management.
• Insights from four portfolio companies – Abridge, Anthropic, EvenUp, and Jasper – provide real-world perspectives on how AI is revolutionizing various industries.

AI foundation models: A diverse landscape: The AI model ecosystem is rapidly evolving, offering a wide array of options for businesses to choose from based on their specific needs and use cases.

• Anthropic’s Claude model demonstrates continuous improvement in performance, particularly excelling in understanding nuance and detailed context.
• For companies like Abridge and EvenUp, operating in sensitive fields such as healthcare and legal tech, a combination of existing and proprietary models is necessary to ensure the required level of precision and accuracy.
• Jasper, an AI content platform, utilizes approximately 39 different models across its customer base, highlighting the importance of being LLM-agnostic in meeting diverse customer requirements.

Building moats of defensibility: In an era where AI capabilities are widely accessible, companies must focus on creating unique value propositions to maintain a competitive edge.

• Jasper’s evolution from an API wrapper to a full application platform demonstrates the importance of developing comprehensive solutions that go beyond basic AI integration.
• The company emphasizes workflows and integrations as key factors in building defensibility, such as their collaboration with iHeartRadio to streamline ad creation processes.

The power of multimodal models: The integration of various data types, including text, audio, and video, is expanding the potential applications of AI across industries.

• Abridge leverages multimodal capabilities to transcribe and analyze doctor-patient conversations, generating clinical notes from audio input.
• Jasper’s acquisition of ClipDrop enables the creation of personalized images for e-commerce applications, demonstrating the potential of multimodal AI in enhancing customer experiences.

Change management: A critical success factor: The adoption of AI technologies requires a significant shift in user behavior and organizational processes, making effective change management essential.

• In healthcare, Abridge addresses the challenge of introducing new technologies by focusing on core pain points, such as reducing after-hours charting for doctors.
• Jasper emphasizes the importance of developing a parallel services strategy to support customers in adopting and effectively utilizing AI applications.

Key considerations for AI-driven businesses: Success in the Cloud AI Era requires a strategic approach that balances innovation with practical implementation.

• Companies should focus on high-impact, high-ROI solutions that address previously unsolvable problems.
• Building for defensibility is crucial to avoid commoditization in a rapidly evolving market.
• User-centricity and customer delight remain paramount, as in traditional SaaS businesses.
• Educating and supporting customers in adopting AI technologies is essential for long-term success.

Looking ahead: Navigating the AI landscape: As the Cloud AI Era continues to unfold, businesses must remain agile and adaptable to capitalize on emerging opportunities and overcome challenges.

• The rapid pace of innovation in AI models and applications necessitates ongoing evaluation and integration of new technologies.
• Successful companies will likely be those that can effectively balance the use of foundation models with proprietary solutions tailored to their specific industry needs.
• As AI becomes increasingly integrated into business processes, the ability to manage change and drive adoption will be a key differentiator in the market.