Eno Reyes of Factory on AI agents for enterprise code modernization: $80M SI quotes being disrupted

bake offs. Number one in IR in G2. Number one in having an Irish founder.

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And we will invite our next guest to the stream from factory.ai. Welcome to the stream. How are you doing? Good to see you.

Hey, how's it going? Glad to be here.

Great. Thanks so much. Kick us off with an introduction on you and the company.

Yeah, my name is Eno, uh, co-founder, CTO at Factory. uh we are building a platform for enterprise software developers to perform what we call agent-driven software development. So basically more than just code bringing agents into every stage of the software development life cycle. So think coding, code review, maintenance, incident response, documentation. Uh we think agents should be a part of all of this and we think that they should be driving a lot of that menial component while you think at the high level about how to plan and structure the work.

There's so many different

like enterprise is a narrow cate it's you know oh not consumer I guess but uh it's such a wide it's such a wide category. Is there a beach head? Is there a certain type of project within within different industries or specific industry that's getting a special an especially large amount of value out of factory these days?

Yeah, totally. I think that one thing that we see a lot and typically when we say enterprise we're thinking greater than 1,000 engineers, right? Like 2,000 3,000. And one reason why we focus on that larger scale, you tend to have uh these large organizations where people are the the bottleneck is not code, right? The bottleneck is how do we plan a migration of 185 code bases to this new framework and there are 3,000 developers that are going to touch this over the next 6 months and an SI just told us the quote is $80 million to do it. uh and we have to figure out how

replatforming broadly is one of the major major uh tasks uh for many many enterprises right

100% modernization and migration is huge

yeah yeah that makes a lot of sense how do you estimate the market that market size and is that is that what you guys are leading with on the GTM side in terms of trying to find these legacy companies that are maybe not even using cursor yet I mean we who who we we talked to the CEO of GitHub yesterday and what

50% didn't he say or

it was like at least half of their user base is not using any AI tools.

Yeah.

Yeah. Totally. I I think that the the the thing that we hear often we pretty much only deploy into companies that have already tried an AI native IDE or have an autocomplete tool deployed. And I think that the thing that we hear often is you you sort of hear like these numbers thrown around like 5x 10x uh and then in practice when you adopt an AI IDE you see 10% 15%. And so a lot of people are sort of saying like what is the delta there like what causes that transition and our our sort of argument here is that there is a workflow change that's actually required to really adopt agents in the life cycle right and so if you're just sort of like accelerating an individual developer uh that you can go a little bit faster but if you are able to parallelize and automate at scale that is going to be that larger introduction of change and so if you imagine the market here There are companies where you know 5 or 10% of global payment transactions run on some cobalt system that was written 40 years ago. Every developer is gone and they are it's a ticking time bomb. Like at some point it needs to go to Java but there's nobody who even knows how to do that. And so those are the types of projects where the market is so enormous because you know half the business runs on this legacy system uh hundreds of billions of dollars. put it all in lisp, skip Java, go straight to lisp. Um,

yeah, exactly. Python, right?

Python would be the logical one. Um, uh, I'm sorry, we're running behind, so we're going to have to cut this short, but, uh, I want to know more about how the enterprise coding agent market will develop. we could see one world where we wind up with, you know, GCP, Azure, um, AWS, like, you know, pretty comparable competitive. They've all had really great margins. It's been this oligopoly. There's another world where you could see more specialization. One of these companies goes deep into high security environments or oil and gas or financial environments or specializing based on specific programming languages. um as as the market develops like how do you think it'll play out?

Yeah, great question. I I think that what's very clear is that the bulk of very large enterprise has a lot of similar problems, refactors, migrations, modernization. So, uh a platform like factory is able to deploy into that and solve problems quickly. Uh I I think that there's likely to be like that sort of 8020 where there are going to be these very specialized providers that only focus on one sort of problem. Um, and that will represent maybe like 20% of what's out there. Uh, and so it won't be like necessarily black or white, but we do think that the bulk of enterprises have a lot of similar needs. Uh, especially when you just get cross a certain threshold of number of engineers, scale of code base.

Sure. Sure. Yeah. I mean, we we we even see that with the the the clouds where, you know, obviously there's the hyperscalers, but then there are neoclouds and we talked to Armada where they'll they'll send you a shipping container with a bunch of racks inside and put it in stranded energy. So, there will obviously be the a long tail here. Uh that's a great take. Thank you so much for stopping by. Have a great rest of your day and uh enjoy the GBT upgrade. We'll talk to you soon.

Have fun out there.