Businesses must own their source of truth, or risk being swept up by AI hype
Mar 17, 2025
Paramark News Desk
Credit: tropicapp.io
Key Points
Relying solely on third-party data for AI purposes makes businesses moat-less and interchangeable.
Companies are shifting towards consolidation, with a focus on owning unique data assets.
Tropic Co-Founder and COO, emphasizes the importance of building proprietary data sources for AI companies to maintain a competitive edge.
In the post-COVID surge, there was a willingness to invest in a best-of-breed approach, meaning you could buy a point solution to tackle a specific area, and that solution could do it better than anything else that's out there. Growth was the name of the game.
Justin Etkin
Co-Founder and COO
,
Tropic
What’s more powerful—AI’s newest flashy solution or the data it pulls from? Some argue that without a source of truth for data, any business that relies on AI-powered solutions pulling from third party information risks making themselves replaceable.
Justin Etkin, Co-Founder and COO of AI procurement orchestration platform Tropic, believes that one of the most effective ways for AI application companies to stand out in a wave of new competitors is by building their own "source of truth" for data. In an exclusive interview, Etkin shared his insights on why relying solely on outsourced data will leave companies vulnerable to disruption, and how maintaining proprietary, unique data assets is essential for long-term resilience.
Setting the scene: "In the post-COVID surge, there was a willingness to invest in a best-of-breed approach, meaning you could buy a point solution to tackle a specific area, and that solution could do it better than anything else that's out there," Etkin explains. "Growth was the name of the game." But Etkin points out that it led to larger foundational problems: "What that led to was massive technology sprawl. And it also led to really inefficient spending—tons of overlap, shelfware, and things that were stood up but not fully implemented or well integrated."
Where we are today: Fast forward to this year and businesses are swinging back toward efficiency. Etkin sees a significant trend toward consolidation as companies look to reduce redundancy and streamline operations. "All these solutions that had popped up and had been established, they’ve started to consolidate into a few winners," he said. "Those winners are serving as these platform sources of true systems of record, owning the capability set within that specific function."
Owning data is a priority for Tropic, an AI solution that helps businesses manage their spend by collecting and storing first-party data to establish a source of truth through its platform. From spend forecasting and contract management to supplier intake and shadow IT, users can manage the entirety of their cost management on an end-to-end basis.
All these solutions that had popped up and had been established, they’ve started to consolidate into a few winners. Those winners are serving as these platform sources of true systems of record, owning the capability set within that specific function.
Justin Etkin
Co-Founder and COO
,
Tropic
Third party data as a weakness: But consolidation doesn't just apply to technology; it also extends to data. “With AI, we’re seeing a similar but different evolution," Etkin notes. "The best vertical agents today are attaching onto some of the existing point solutions and systems of record, making data more intelligent, more savvy, and more action-oriented for the users of those tools.”
Questioning data reliance: "The real question is, what happens to businesses that rely solely on external data?" Etkin ponders. "The benefit these AI vertical agents provide is functional efficiency, but because they’re reliant on other sources of data, it’s unclear how resilient that business model is going to be." The worry is that these point solutions will simply be interchangeable, losing their unique value over time.
Jury is out: Etkin highlights several examples where AI is being used to layer intelligence onto data from existing systems, such as CRM platforms and CLM systems. AI-powered startups are taking raw data from these platforms to improve sales cadences, enhance legal document workflows, and more. Yet, Etkin’s concern is clear: businesses that rely on outsourced data sources may be at risk of losing their competitive advantage in the future, especially as companies with their own in-house data continue to leap ahead. "What’s unclear is whether the sources of truth themselves will continue to innovate and develop these capabilities natively or if they’ll acquire other leaders through M&A strategies to bundle them into their own offerings," Etkin adds. "The jury is still out on that."
Solutions
© 2025 Paramark, Inc.
Businesses must own their source of truth, or risk being swept up by AI hype
Mar 17, 2025
Paramark News Desk
Credit: tropicapp.io
Key Points
Relying solely on third-party data for AI purposes makes businesses moat-less and interchangeable.
Companies are shifting towards consolidation, with a focus on owning unique data assets.
Tropic Co-Founder and COO, emphasizes the importance of building proprietary data sources for AI companies to maintain a competitive edge.
In the post-COVID surge, there was a willingness to invest in a best-of-breed approach, meaning you could buy a point solution to tackle a specific area, and that solution could do it better than anything else that's out there. Growth was the name of the game.
Justin Etkin
Co-Founder and COO
,
Tropic
What’s more powerful—AI’s newest flashy solution or the data it pulls from? Some argue that without a source of truth for data, any business that relies on AI-powered solutions pulling from third party information risks making themselves replaceable.
Justin Etkin, Co-Founder and COO of AI procurement orchestration platform Tropic, believes that one of the most effective ways for AI application companies to stand out in a wave of new competitors is by building their own "source of truth" for data. In an exclusive interview, Etkin shared his insights on why relying solely on outsourced data will leave companies vulnerable to disruption, and how maintaining proprietary, unique data assets is essential for long-term resilience.
Setting the scene: "In the post-COVID surge, there was a willingness to invest in a best-of-breed approach, meaning you could buy a point solution to tackle a specific area, and that solution could do it better than anything else that's out there," Etkin explains. "Growth was the name of the game." But Etkin points out that it led to larger foundational problems: "What that led to was massive technology sprawl. And it also led to really inefficient spending—tons of overlap, shelfware, and things that were stood up but not fully implemented or well integrated."
Where we are today: Fast forward to this year and businesses are swinging back toward efficiency. Etkin sees a significant trend toward consolidation as companies look to reduce redundancy and streamline operations. "All these solutions that had popped up and had been established, they’ve started to consolidate into a few winners," he said. "Those winners are serving as these platform sources of true systems of record, owning the capability set within that specific function."
Owning data is a priority for Tropic, an AI solution that helps businesses manage their spend by collecting and storing first-party data to establish a source of truth through its platform. From spend forecasting and contract management to supplier intake and shadow IT, users can manage the entirety of their cost management on an end-to-end basis.
All these solutions that had popped up and had been established, they’ve started to consolidate into a few winners. Those winners are serving as these platform sources of true systems of record, owning the capability set within that specific function.
Justin Etkin
Co-Founder and COO
,
Tropic
Third party data as a weakness: But consolidation doesn't just apply to technology; it also extends to data. “With AI, we’re seeing a similar but different evolution," Etkin notes. "The best vertical agents today are attaching onto some of the existing point solutions and systems of record, making data more intelligent, more savvy, and more action-oriented for the users of those tools.”
Questioning data reliance: "The real question is, what happens to businesses that rely solely on external data?" Etkin ponders. "The benefit these AI vertical agents provide is functional efficiency, but because they’re reliant on other sources of data, it’s unclear how resilient that business model is going to be." The worry is that these point solutions will simply be interchangeable, losing their unique value over time.
Jury is out: Etkin highlights several examples where AI is being used to layer intelligence onto data from existing systems, such as CRM platforms and CLM systems. AI-powered startups are taking raw data from these platforms to improve sales cadences, enhance legal document workflows, and more. Yet, Etkin’s concern is clear: businesses that rely on outsourced data sources may be at risk of losing their competitive advantage in the future, especially as companies with their own in-house data continue to leap ahead. "What’s unclear is whether the sources of truth themselves will continue to innovate and develop these capabilities natively or if they’ll acquire other leaders through M&A strategies to bundle them into their own offerings," Etkin adds. "The jury is still out on that."
Solutions