The rise of artificial intelligence (AI) is not just transforming technology; it is also reshaping how businesses operate. Satya Nadella, CEO of Microsoft, on a recent podcast episode at BG2Pod has offered a compelling vision of how AI will change the landscape of business applications, including Customer Relationship Management (CRM) software. To understand Nadella’s perspective, it’s important to first understand the role of CRM today and then consider how AI could disrupt it.
The Current State of CRM
Customer Relationship Management (CRM) software is a category of technology solutions that helps companies manage interactions with current and potential customers. At its core, CRM is about centralizing customer data, streamlining sales processes, and enhancing customer service. A typical CRM system includes features such as:
• Contact Management: Storing and organizing customer contact information.
• Sales Tracking: Managing leads, opportunities, and sales pipelines.
• Customer Service: Tracking support tickets and customer interactions.
• Marketing Automation: Automating email campaigns and other marketing activities.
CRM systems are designed to be the single source of truth for customer-related information, helping businesses make data-driven decisions. However, these systems are often complex, requiring users to navigate multiple interfaces and manually input or retrieve data. According to Nadella, this is where AI will make a significant impact.
Nadella’s Vision: The Collapse of Traditional Business Applications
Nadella believes that the traditional notion of business applications, including CRM, is likely to collapse in the era of AI agents. This is because:
• Business applications are essentially databases with business logic: CRM systems and other business applications are fundamentally databases with a layer of business logic on top that helps companies manage their data.
• AI is taking over the business logic: AI agents are taking over the role of the business logic layer, meaning that these agents will be interacting with multiple data sources, not limited by the traditional backends of CRM or other systems.
• The AI tier becomes the central logic processing area: Nadella envisions a future where the AI tier will become the primary location for all business logic processing, meaning users will not need to access CRM systems directly.
With AI handling the business logic, the specific back-end database or application (like a CRM) becomes less important. Instead of logging into a CRM system to find information or input data, users will interact with AI agents that can retrieve, update and analyze data across various systems, including CRM. In Nadella’s words, it will be possible to “literally say hey I’m meeting with Bill tell me about all the companies that benchmarks uh invested in it’s both taking the web anything that’s in my CRM database collating it all together giving me a note”.
The Role of Co-pilot and AI Agents
Microsoft’s co-pilot is a key component of Nadella’s vision. Co-pilot is positioned as the organizing layer for work artifacts and workflow. It serves as the user interface for interacting with AI, allowing users to leverage its capabilities across various applications, including Microsoft 365 and other systems. In the context of CRM, this means:
• Seamless orchestration: Co-pilot will orchestrate business logic with AI agents, making the interaction with business applications more seamless.
• Direct data access through conversational interface: Instead of navigating through a CRM system, users can ask the co-pilot (an AI agent) to retrieve information or perform actions.
• Multi-system updates: AI agents will be capable of updating multiple databases, without being limited to a single CRM system or application.
The Transformation of Workflows
Nadella illustrates the potential for AI to transform workflows with an example of preparing for a customer meeting:
• Traditional Workflow: Historically, employees would need to gather information from various sources, like CRM, email, and other databases. They would need to prepare a brief, and share it within a team.
• AI-Powered Workflow: With co-pilot, a user can ask the AI to gather all the necessary information about a client from various sources, including the CRM, emails, team meetings, and the web. This information is then organized and can be shared with the account team in real-time.
• Real-time analysis: AI-powered financial analysts can provide real-time insights to supply chain managers as they work through contracts and other activities, helping avoid mistakes.
In this vision, workflows are not centered on individual business applications, but instead on the AI agent and its ability to access information and perform tasks across multiple systems.
The Move Towards AI-Native Business Apps
Nadella also notes that Microsoft is seeing significant adoption of its Dynamics backends and the use of AI agents. This suggests a shift toward what Nadella terms “AI-native Biz apps”. These apps will have a logic tier orchestrated by AI and AI agents, making them more efficient and capable of more complex tasks. This approach will mean that business logic will be located within the AI tier, and users can interact with their business applications through the co-pilot interface.
Conclusion: A New Era of Business Applications
Satya Nadella’s vision suggests a future where traditional business applications, like CRM systems, become more like databases, while AI agents become the primary interface for users. This transition will be enabled by AI-powered tools like co-pilot, which will integrate with multiple systems and simplify the way we access and interact with data. This new era promises to move away from traditional application silos, and offer more streamlined workflows, making it easier for businesses to access and use their data to make better decisions
