Anthropic enters the enterprise chat

Welcome to Runtime! Today: Anthropic throws its hat in the enterprise AI ring, AT&T has had it with Broadcom's changes to VMware licensing, and the latest moves in enterprise tech.

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Claude on line 2

When shiny new enterprise technologies like large-language models start to get traction, prospective buyers often face a decision between the startups that invented the tech but don't have an enterprise track record, and their longtime vendors who know how to charm and support enterprise customers but aren't as close to the inner workings of the technology. Anthropic is hoping they'll choose the former.

The AI startup unveiled Claude Enterprise on Wednesday, almost a year after OpenAI launched a similar enterprise product and months after Big Cloud vendors all rolled out support for various LLMs. It follows the introduction of a Teams plan for smaller organizations earlier this year.

• Claude Enterprise is a monthly service that will allow users to upload far more information into the Claude LLM than possible under the Teams plan or through rival OpenAI's GPT Enterprise product.
• The new limit is roughly "equivalent to hundreds of sales transcripts, dozens of 100+ page documents, or 200K lines of code," Anthropic said in a statement.
• The new plan also includes enterprise must-haves like support for single sign-on tech, access controls, and audit logs.
• “We heard from lots of folks, like: oh, we want this, we just can’t adopt it until you make sure that these pieces are all done,” Anthropic's Mike Krieger told The Wall Street Journal.

Claude is one of the more popular models in current use, and companies are interested in using it for the "classic" LLM use cases. Those include writing documents and code, summarizing existing documents, and language translation.

• Of course, that's exactly what GPT Enterprise, Microsoft Copilot, Google's Gemini for Google Workspace, and several other business-oriented chatbots promise to do.
• Anthropic is betting that the larger context windows offered by Claude Enterprise will set it apart, although it's not hard to see those rivals matching that capability before too long.
• “It’s high time we got some general-purpose AI SaaS to compete with the likes of Microsoft Copilot,” Info-Tech Research Group's Jeremy Roberts told Computerworld.
• However, like OpenAI, Anthropic is not disclosing the price of Claude Enterprise, but it told Techcrunch that users should expect to pay more than the $30 per user per month they pay for Anthropic Teams.

That is a hefty price at a time when businesses are struggling to understand why Microsoft Copilot is worth nearly double what they are already paying for their Microsoft 365 plans. Anthropic doesn't have OpenAI's star power or Microsoft's enterprise resume, but there are a couple of other factors that could help it stand out.

• For one, it also doesn't have OpenAI's baggage, given that enterprise customers might not be too thrilled about placing a long-term bet on an organization that has gone through quite a bit of drama and disarray over the last year..
• Krieger, who joined Anthropic as chief product officer in May, plans to sell customers on the notion that Anthropic is a more trustworthy partner, which "is typically enough to get the door open, but not enough to fully make the sale," according to WSJ.
• But it sounds like the long-term plan is to borrow a page from Krieger's background at Instagram and develop collaboration tools that let teams work with each other inside Claude, which is similar to how Microsoft and Google's products work.

When it comes to implementing new technology like LLMs, however, enterprise customers need customer support and long-term partnerships. That would favor the current crop of Big Cloud and enterprise software companies scrambling to cram as much generative AI into their existing products as possible.

• There are serious sustainability concerns about AI startups like OpenAI and Anthropic, which are burning incredible amounts of money in order to train new models, even if a lot of that money is coming in the form of cloud computing credits from the Big Three.
• But every new tech wave has seen the rise of a new enterprise vendor that understands the new thing better than the vendors that still rely on selling the old thing.

Support woes

There has been a lot of grumbling among VMware customers over the last ten months since Broadcom closed its acquisition of the virtualization software company about higher prices and changing licenses. Last week AT&T decided to take the next step.

AT&T sued Broadcom in New York last week alleging that it is being forced to purchase bundles of software it doesn't want in order to keep its existing support contracts alive, as reported by Channel Futures. The telecom company says it entered into a two-year support deal with VMware in August 2022 that gave it the right to extend that deal for another two years at the end of its term, but Broadcom is refusing to honor that extension after making substantial changes to the way VMware software is sold and supported this year.

Without support, AT&T said it "has no way to ensure the VMware software installed on approximately 8,600 AT&T servers that deliver services to millions of AT&T customers worldwide will continue to operate," and that switching to something else could take "years." Broadcom told Channel Futures it plans to defend itself against the charges, but it seems likely other high-profile VMware customers will be watching the outcome closely.

Enterprise moves

Kara Sprague is the new CEO of HackerOne, joining the bug bounty company after seven years in product leadership roles at F5.

Murali Swaminathan is the new CTO of Freshworks, following eight years at ServiceNow.

Josh Harbert is the new chief marketing officer at Couchbase, stepping into the cloud database company following marketing roles at Delphix, Tanium, and Qumulo.

Gus Shahin is the new executive vice president of business technology and operations at NetApp, following 25 years at Flex.

The Runtime roundup

Palo Alto Networks bought $500 million worth of security software assets from IBM, hoping to break into the threat detection and response market.

AWS released a rare post-incident summary of a major outage at US-East-1 that flew under the radar because of the Crowdstrike incident earlier that month.

HPE beat Wall Street estimates for revenue and profit, chalking it up to an increase in demand for AI servers.

Pango acquired the 1 million U.S. customers running Kaspersky's security software after the U.S. government banned the software earlier this year.

Thanks for reading — see you Tuesday!