Write gooder, spill secrets?

People using writing assistants at work might love sending polished emails to colleagues or crafting smarter company social media posts. Their companies' IT and legal teams might not love the fact that some of those tools use their content to train their AI.

When people use Grammarly, a popular writing software, they grant the company permission to use the content they write in the tool to help adjust and improve its machine-learning models. Grammarly uses human linguists along with AI tools such as natural-language processing and machine learning to automate suggestions for ways to make writing crisper, more grammatically correct or even more diplomatic.

• “User inputs such as suggestion accept or reject rates help us identify adjustments we may need to make in the product,” said Shane Collins, a Grammarly representative. “In some cases, we may store some text to help us improve the product, though we do not store all text transmitted through Grammarly.”
• Collins noted that the company removes user account data and personally identifiable information from text it uses to train its natural-language processing systems.

But Grammarly also sells an enterprise version of its writing tool that’s used by businesses and their employees inside text editors or even in apps such as Slack. And that data use by Grammarly’s business customers could create intellectual property concerns, said Jumi Kassim, a patent attorney at law firm Patterson Thuente, who also has a software engineering background.

• “They are taking copies of anything you’re typing into their system,” Kassim said. For instance, when people use the Grammarly plugin while writing an email, “You’re giving them permission to take a copy of that,” she said.
• At a law firm like hers, software would have to go through a vetting process to ensure it does not compromise the security of confidential client information, “I’m sure there are lots of companies where they don’t care if you use Grammarly or not.”

For some companies with employees writing about products or proprietary information, the data use is a red flag.

• “We have had some pushback from clients,” said Elissa Ennis, head of Client Success at Enshored, which provides customer service, sales support and content-moderation services. The company offers its clients access to Grammarly to help them maintain brand consistency by setting up a customized Grammarly style guide.
• Ennis said that customers such as software-makers that are concerned about competition are especially leery of using Grammarly.
• Software giant Microsoft reportedly said no to Grammarly too. GeekWire reported in 2019 that the company prohibits employees from using the writing tool. Microsoft declined to comment for this story.

It’s another example of shadow IT, when employees or teams purchase or use software for business purposes that companies should have processes in place to manage.

• “Any time your business is going to use a new piece of software, there should be someone vetting what software is being used and looking at the terms of service to see: Are they using my user data, and how?” said Kassim.
• "Intuit, like I would imagine many Fortune 500 companies, is super concerned about security,” said Tina O'Shea, its director of Content Design and Strategy. “We had to go through a super rigorous checking process … The security team had to vet it to make sure nothing was getting out.”

Ultimately, said Kassim, businesses might want to consider paying for premium versions of tools that take less data.

• “From a risk-management perspective, there are times when you can get away with things that have no cost to the business versus times it makes sense to pay money,” Kassim said. “There’s value in having a reduced risk.”

— Kate Kaye (email| twitter)

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Zoom’s gloom

It’s no surprise that Zoom exploded during the pandemic, when remote work became ubiquitous. But analysts and investors have long wondered how long Zoom could maintain the same momentum after practically saturating the market.

The answer to that question appears to be “no longer.” Zoom’s stock dropped Monday after projecting revenue short of analyst expectations, despite fiscal year revenue growth of 55% year-over-year.

Zoom now plans to double down on enterprise customers, expecting that business to grow at around 20% year-over-year. Part of this growth may be driven by the company’s new contact center service. “The market is huge for contact centers,” CEO Eric Yuan said on a conference call following the release of the results, noting the company still has a strong partnership with competitor Five9.

Although some Zoom customers have already deployed solutions from competitors such as Five9 or Genesys, Yuan sees Zoom’s ability to offer a consistent communication experience as a competitive advantage. But it’s still not clear how Zoom will actually fare in the contact center market.

During the call, one investor noted that Zoom’s contact center pricing was about half of the industry standard, raising questions around whether Zoom truly sees itself as a strong competitor. But CFO Kelly Steckelberg was unfazed. “Zoom has always been disruptive in pricing and contact center is absolutely no different,” she said.

— Aisha Counts (email | twitter)

Financial corner

Fabric is worth $1.5 billion after raising $140 million to provide APIs, inventory management and other services for retailers and B2B brands.

LinkedIn acquired analytics startup Oribi for around $80 million to bolster its marketing and advertising services.

Netflix has spun out several enterprise tech startups over the last decade and the latest is Orkes, which emerged from stealth mode with $9.3 million in seed funding to commercialize the open-source Conductor tool.

Red Siftraised $54 million for its cloud email security business.

Around the enterprise

Workday revenue rose almost 22% as it beat Wall Street expectations and, unlike Zoom, it offered stronger-than-expected guidance, presumably because it no longer has to pay Phil Mickelson.

After convincing wireless carriers to use its cloud services, Microsoft now wants to use their 5G networks to service its other cloud customers.

A MESSAGE FROM HASHICORP

At HashiCorp, we believe infrastructure enables innovation. We help teams operate that infrastructure in the cloud. Organizations rely on our solutions to provision, secure, connect, and run their business-critical applications. Our products provide multi-cloud infrastructure automation, and underpin some of the most important applications for the world’s largest enterprises.

Learn more