Friedberg

We're seeing it in real time. In 80-90, what I'll tell you is what Sacks said is totally right. There's so many companies that have very complicated processes that are a combination of well-trained and well-meaning people and bad software. And what I mean by bad software is that

Some other third party came in, listened to what your business process was, and then wrote this clunky deterministic code, usually on top of some system of record, charged you tens or hundreds of millions of dollars for it, and then left and will support it only if you keep paying them millions of dollars a year.

Some other third party came in, listened to what your business process was, and then wrote this clunky deterministic code, usually on top of some system of record, charged you tens or hundreds of millions of dollars for it, and then left and will support it only if you keep paying them millions of dollars a year.

That whole thing is so nuts because the ability for people to do work, I think, has been very much constrained. And it's constrained by people trying to do the right thing using really, really terrible software. And all of that will go away. The radical idea that I would put out there is I think that systems of record no longer exist because they don't need to.

That whole thing is so nuts because the ability for people to do work, I think, has been very much constrained. And it's constrained by people trying to do the right thing using really, really terrible software. And all of that will go away. The radical idea that I would put out there is I think that systems of record no longer exist because they don't need to.

And the reason is because all you have is data and you have a pipeline of information. Can you level set and just explain to people what system of record is? So inside of a company, you'll have a handful of systems that people would say are the single source of truth. They're the things that are used for reporting compliance. An example would be for your general ledger.

And the reason is because all you have is data and you have a pipeline of information. Can you level set and just explain to people what system of record is? So inside of a company, you'll have a handful of systems that people would say are the single source of truth. They're the things that are used for reporting compliance. An example would be for your general ledger.

So to record your revenues, you'd use NetSuite or you'd use Oracle GL or you'd use Workday Financials. then you'd have a different system of record for all of your revenue generating activities. So who are all of the people you sell to? How are sales going? What is the pipeline? So there's companies like Salesforce or HubSpot, SugarCRM.

So to record your revenues, you'd use NetSuite or you'd use Oracle GL or you'd use Workday Financials. then you'd have a different system of record for all of your revenue generating activities. So who are all of the people you sell to? How are sales going? What is the pipeline? So there's companies like Salesforce or HubSpot, SugarCRM.

Then there's a system of record for all the employees that work for you, all the benefits they have, what is their salary? This is HRIS. So the point is that

Then there's a system of record for all the employees that work for you, all the benefits they have, what is their salary? This is HRIS. So the point is that

The software economy over the last 20 years, and this is trillions of dollars of market cap and hundreds of billions of revenue, have been built on this premise that we will create the system of record, you will build apps on top of the system of record, and the knowledge workers will come in and that's how they will get work done. And I think that Sachs is right.

The software economy over the last 20 years, and this is trillions of dollars of market cap and hundreds of billions of revenue, have been built on this premise that we will create the system of record, you will build apps on top of the system of record, and the knowledge workers will come in and that's how they will get work done. And I think that Sachs is right.

This totally flips that on its head. Instead, what will happen is people will provision an agent and roughly direct what they want the outcome to be. And they'll be process independent. They won't care how they do it. They just want the answer. So I think two things happen. The obvious thing that happens in that world is systems of record lose a grip

This totally flips that on its head. Instead, what will happen is people will provision an agent and roughly direct what they want the outcome to be. And they'll be process independent. They won't care how they do it. They just want the answer. So I think two things happen. The obvious thing that happens in that world is systems of record lose a grip

on the vault that they had in terms of the data that runs a company. You don't necessarily need it in the same reliance and primacy that you did five and 10 years ago. That'll have an impact to the software economy.

on the vault that they had in terms of the data that runs a company. You don't necessarily need it in the same reliance and primacy that you did five and 10 years ago. That'll have an impact to the software economy.

And the second thing that I think is even more important than that is that then the atomic size of companies changes because each company will get much more leverage from using software and few people versus lots of people with a few pieces of software. And so that inversion, I think, creates tremendous potential for operating leverage.

And the second thing that I think is even more important than that is that then the atomic size of companies changes because each company will get much more leverage from using software and few people versus lots of people with a few pieces of software. And so that inversion, I think, creates tremendous potential for operating leverage.

How is that different from how this clunky software is sold today? I mean, look, I don't want to take away from the quality of the company that Mark has built and what he's done for the cloud economy. So let's just put that aside. But I wish this is what we could have actually all been on stage and talked about. I told him that. When he was at the summit? I said that.