Today: Freshworks CEO Dennis Woodside recaps the progress it has made in the last year and looks to the future, OpenAI reportedly buys into the AI coding assistant market, and the latest funding rounds in enterprise tech.
Under Woodside, Freshworks is taking direct aim at ServiceNow, which has been the leading company in several aspects of IT management software for several years. "Three years ago, our product wasn't anywhere near as enterprise-ready as it is today," he said.
Today: AWS and Microsoft were on opposite sides of Wall Street's expectations during the first quarter of the year, Redis returns to open source more than a year after a Big Cloud fork, and the latest enterprise moves.
Today: Freshworks CEO Dennis Woodside recaps the progress it has made in the last year and looks to the future, OpenAI reportedly buys into the AI coding assistant market, and the latest funding rounds in enterprise tech.
Welcome to Runtime! Today: Freshworks CEO Dennis Woodside recaps the progress it has made in the last year and looks to the future, OpenAI reportedly buys into the AI coding assistant market, and the latest funding rounds in enterprise tech.
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Dennis Woodside has helped several iconic Silicon Valley companies scale into major power players, namely Google and Dropbox. A year into his tenure at Freshworks, a push to move beyond small and medium-size businesses and cater to bigger companies is paying off.
Shares of Freshworks rose nearly 10% last week after the customer-service and IT-management software company reported earnings that beat Wall Street estimates while raising its revenue guidance for the year. After joining the company as president in 2022, Woodside took over for founding CEO Girish Mathrubootham last May to help "the first India-born SaaS firm to trade on a US exchange" reach new customers.
In an interview with Runtime last week, Woodside discussed how the company plans to take on ServiceNow, why pricing for agentic AI is likely to continue to evolve, and Freshworks' potential for expansion into other enterprise software markets like HR and asset management. Excerpts follow below.
On his first year as CEO:
Woodside: I think what we've been able to accomplish, number one, is that the motion up-market is absolutely working. Our average revenue-per-customer is up 10% year over year. Two years ago, a $100,000 deal was a big cause for celebration. Now we do many, many of those every quarter. And I like that. I like that ability to succeed with larger accounts which have a bigger impact on the world.
I think the second big thing that we've done in the last year that's notable is we really have leaned in and delivered products that monetize on AI. AI Copilot was just introduced into GA a year ago February, and we already have 2,700 paying accounts. Those accounts are using the product intensively. We have over a million calls to the Copilot product every single day from the 2,700 accounts.
On agentic AI pricing:
Different agents have different values. What we're in beta with now for AI Agent is a set of agents that are very specific for ecommerce and for travel that are deeply integrated into systems of record in those industries. We may decide that the value that we're creating there — because customers can change their order on the fly, they can add to an existing order on the fly, or change their travel plans on the fly — the value might be so great that we charge more.
I think the charging models are going to definitely change over time because, at the end of the day, the software is enabling the people to be more productive, and the people are very expensive. So if you can free up 10% of a $100,000 person's time, that's worth $10,000 to the customer.
What's the fair share that we should capture versus the customer? That's kind of how we think about setting pricing in the right way for an AI agent.
On taking on ServiceNow:
Woodside: Priority One for us is the [employee experience] business, that's IT service management and enterprise service management. We're winning there in the midmarket, and midmarket for us is about a 5000 person company. They're a global company. They have a sophisticated set of needs in their IT team. They've got lots of different software and hardware, all all managed by the IT team.
They need an enterprise grade solution that's AI enabled, but a solution like ServiceNow, which is really more suited for JP Morgan, is not going to work particularly well for them. That's where we're getting a lot of wins, customers that maybe three years ago had a contract with ServiceNow that is up for renewal. Three years ago, our product wasn't anywhere near as enterprise ready as it is today.
Read the full interview on Runtime here.
AI coding assistants have really taken off over the last year, and "vibe coding" has become one of the few breakout successes of the generative AI era. If OpenAI is ever going to live up to its massive valuation, it's going to need several different ways to make money, and companies are increasingly willing to spend money on technology that makes their expensive software developers more productive.
According to Bloomberg, OpenAI has reached a deal in principle to acquire Windsurf, which was known as Codeium until April, for $3 billion. Over the last few years Windsurf, along with Cursor, captured the attention of developers that started AI coding with GitHub Copilot but wanted a coding editor more tailored to their needs than Microsoft's popular Visual Studio Code.
Windsurf's coding tools would be an interesting and welcome addition to OpenAI's premium enterprise plans, although Cursor appears to be a more widely used tool. AI coding tools have enormous potential to shake up the market for professional software development tools, and if they continue to lure developers into their subscription plans expect to see big tech companies scramble to catch up.
Cast AI raised $108 million in Series C funding for its Kubernetes cost-management and observability software.
Statsig landed $100 million in Series C funding, which values the product-development software company at $1.1 billion.
Parloa scored $100 million in Series C funding for its platform that helps companies manage customer-service AI agents.
Astronomer raised $93 million in Series D funding for its data orchestration platform, which is based around Apache Airflow.
Unblocked landed $20 million in Series A funding to help developers add context about their code bases when working on new projects.
Row Zero scored $10 million in seed funding for its take on the venerable spreadsheet, which was designed to work with much larger datasets than Microsoft Excel can support.
ServiceNow introduced a new CRM product that takes aim squarely at Salesforce customers, and stay tuned for more Runtime coverage Thursday from its Knowledge 2025 event in Las Vegas.
Databricks is in talks to acquire Neon, which makes a serverless version of PostgreSQL, for around $1 billion according to Upstarts.
SAP extended CEO Christian Klein's contract through 2030, giving him an additional two years to continue moving SAP customers from on-premises software to cloud services.
AMD's data-center group enjoyed a 57% jump in revenue during the first quarter, which exceeded Wall Street expectations according to CNBC.
Thanks for reading — see you Thursday!
Under Woodside, Freshworks is taking direct aim at ServiceNow, which has been the leading company in several aspects of IT management software for several years. "Three years ago, our product wasn't anywhere near as enterprise-ready as it is today," he said.
Today: AWS and Microsoft were on opposite sides of Wall Street's expectations during the first quarter of the year, Redis returns to open source more than a year after a Big Cloud fork, and the latest enterprise moves.
Today: A deep dive into a dispute between the backers of NATS and the CNCF, which is just the latest example of changing norms in open-source software, and the latest funding rounds in enterprise tech.
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