00:00So really what they're doing is instead of reflexively buying out, you know, going out and buying software, now what
00:06they're trying to do is look at, okay, does it make sense for us to actually build some of these
00:10applications in-house?
00:12You know, they customize a lot of this software anyway.
00:15Just imagine what it takes to really, you know, personalize your order at Starbucks.
00:19Well, for example, the POS, the point of sale system, has to be able to reflect that so baristas can
00:26actually ring up your order.
00:27And so they're like, okay, if we're going to customize the software anyway, does it make sense to build it?
00:31And we're in an age which, you know, with artificial intelligence, it's just that conversation just gets a little easier
00:37because AI can help.
00:40I wanted to point out, too, because software stocks are actually lower on the back of this announcement.
00:45So if you're looking at IBM, that's down about 2%.
00:48The ticker symbol is IBM, of course.
00:50And then ServiceNow is flat, but marginally lower.
00:53And then Salesforce down, about 2% CRM is the ticker on that.
00:58So why the dynamic there?
00:59Obviously, is it more just because of the competitive landscape?
01:03So this move by Starbucks feeds into this broader conversation in the technology space about whether with AI, customers or
01:12maybe startups can just, you know, build tools that can replace some of the software that is now sold by
01:19some companies like IBM and Microsoft.
01:21So basically, I think with Starbucks, what we're looking at is at a case study of this actually happening inside
01:27a company.
01:27So it's really fueling sort of this ongoing conversation in this space, if that makes sense.
01:33Yeah, this is what the market's been concerned about.
01:36And we've seen the sell-off in some of these software names and software as a service names because people
01:40are saying, boy, some of these things can be kind of done with AI and maybe cheaper.
01:45And, you know, that's kind of what we're seeing in the story.
01:48So, I mean, in your story, Daniela, we see that Starbucks is spending – they spend about $400 million a
01:54year on software alone.
01:55Are they thinking they can materially reduce that?
01:58They can.
01:59I mean, their chief technology officer has outright said, as we reported, that there are opportunities to cut spending in
02:06software.
02:06This one part of Starbucks technology organization called Enterprise Technology is looking to cut their spending by about $10 million
02:14by the end of this fiscal year, which for Starbucks ends in September.
02:19So they're definitely basically, okay, taking a step back and saying, all right, first of all, let's review every contract
02:25and service, make sure that we have the best price there.
02:28And are there places in which it actually makes sense for us to build our own product with the help
02:33of artificial intelligence?
02:35So it's definitely something that they're taking a second look at.
02:38Obviously, this is also part of something broader that Starbucks is doing, which is they are going through a turnaround
02:43and they are looking to cut costs.
02:46So this review is also part of that.
02:48And then we have AI helping make that a little bit easier.
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