>>Hello, I'm CR howdy shell president at advisors, uh, excited to be participating in GreenLake day Han joined by valued long-term 15 year customer Srini Vanga he's vice president information technology at wr grace and company Srini. Thanks for joining me today, especially in light of the $570 million acquisition completed yesterday. Congratulations on that. And can you tell us a little bit about yourself, your organization, and a bit about the relationship you've had with advising? >>Sure. Uh, thank you, Sierra, let me start with grace. Grace is a $2 billion global specialty chemical manufacturing company. It's got two main business segments, catalyst technologies and materials technologies. Our FCC catalyst technologies help our petrochemical refining customers in producing, uh, mainly transportation fuel and petrochemical feedstock. So, and our materials technology business delivers silica based materials to our customers to improve their products and processes in, uh, segments like coatings, uh, consumer industrial and, uh, pharma businesses. Um, as a CRE, as you just mentioned, uh, we recently closed it in acquisition and acquired the fine chemicals business of, uh, Alvamar, which will increase our business share of a pharma business. So coming back to me, um, uh, regarding myself, I've been with the grays for 22 years. It's been a long time guys. So I I've been mainly in the SAP technology area and took over the role of the, uh, Weiss president and head of it for years back. Um, and I've been working with the advisors for almost 15 years now, and it's been an excellent strategic partnerships. >>Well, thank you. And we definitely appreciate the business and, uh, the relationship. So, uh, we'll, we'll move on to the next question. So what are, what are the most important factors for you to be successful in the business? Obviously, growth is going to be key with what you just, just accomplished with the acquisition, but, uh, one of the most important factors for you to be successful >>Since, uh, since grace is a specialty chemical manufacturing company, uh, it's very important for us to understand and, uh, sometimes even anticipate, uh, uh, exact customer requirements and then, uh, quickly create that a special material which helps improve our customer's products and processes. That's the most important thing for us. Um, the company depends on me and my team, uh, to provide value to our business and, uh, helping them make decisions quicker and in real time and, uh, adaptable, uh, to the ever changing market, the business niche this year. So that's the most important factor. >>Great. It is obviously playing a, a bigger role as, as you mean. Good. So what are some of the most, I don't like to use the word pain points, but I'll call them business challenges, you know, in your industry. >>Um, so building on my previous point, right? So chemical manufacturing is not new and it has a wall or the years and, and with numerous mergers and acquisitions along the way, uh, the systems and processes are not always, uh, harmonized are standardized. So keeping it moving together and in the same direction has, uh, has always been a challenge, right? And, and added to that COVID has affected most of the sector. And, uh, and our under our industry is no exception, especially in the refining sector. Uh, we need to be able to provide, uh, rapid customization to our customers, uh, which means our business, uh, which needs a flexible computing power, uh, to process and analyze huge amounts of these, the material properties data, and, and allow them to come up with products, uh, back to, we can go to market faster than our competitors. Yeah. >>Right. Got it. And obviously that's key, you touched on this briefly, but I'd really like to hear more about how your business has changed in the last year. You mentioned COVID so love to hear how things have changed and what you can share >>So specifically about COVID right. So about 50% of our employees have been working remotely since March of last year. Um, unless unlike other industries, uh, we cannot go a hundred percent remote, uh, because we have chemical plants to run and chemical labs to operate. So we'll always be at this 50%. So technology has enabled us to do that. We have done a lot of things remotely, which we never thought possible. Um, um, we did work two on factory visits for our pharma customers, our remote plant startup for our poly properly in, uh, uh, customers. Um, and also did virtual, um, annual customer conferences. Uh, in the end, some of this will go back to pre COVID days, but most of this is going to stay and stay here for good. >>Well, congratulations on that, because I think the whole working remote, I think we're all seeing the challenges, but obviously it looks like you've seized the challenge and it's going to be more of a business as usual going forward. Yeah. Well, congratulations. That's key obviously to the business also going forward and with that, with a hybrid model, I mean, many customers, the hybrid clouds with journey, will you share with us at wr grace and company journey for the hybrid cloud? >>Sure. So, yeah. Um, when I took over this role, uh, four years back, uh, I made a decision that I no longer want to be in this data center business. Uh, we need to focus on our core strength and core competencies as a chemical company. And, uh, I wanted it to be spending more time helping our, our business, uh, manufactured and sell our products safely and efficiently. So working with our strategic partner, uh, advisors and HPE, we moved ahead with, uh, with GreenLake, which just solved mainly my problem of this, uh, getting out of the data center business. Uh, we now have a private on-prem cloud solution that is elastic fully scalable and is, uh, based on the consumption model based model, right? So that's very similar to what these hyperscale cloud providers have. And I love it. This, the consumption based model is what, what is great about the GreenLake that I have signed up, um, with, with GreenLake, I can, uh, scale up quickly and I will, I can grow as my business needs grow. And, um, it makes, it makes this a perfect cloud solution for grace. >>That's great to hear it, especially since we are a big part of, and I'd have to agree, you know, with, with the words, getting out of the data center business, we're hearing it more and more as we, as we hear meet with more customers. So, and with that in a hybrid model, there are a lot of decisions to be made on what goes into public cloud. What should, what should remain on prem. And obviously this is a decision you had to make. This can be crucial when it comes down to business critical applications. How did you and your team approached this when you were looking at, at your SAP environment? >>Great question to CR, but for me, the answer is simple. Uh, as I told you previously, like I did not want to be in the business of data center. I also did not want to be in the business of developing custom applications. We retired most of our custom built applications in, uh, procurement sales, HR, and replaced them with the SAS providers like Ariba conquer Salesforce and success factors, which are all hosted in the cloud. Uh, these companies, uh, spend billions of dollars in R and D and come up with solutions that are state of the art in this, uh, in these processes that I talked to you about. Right? So, so unless I have a special need, which I don't in the finance procurement and HR, I don't need this custom built applications, which is the reason I went to these SAS based applications. All of which are hosted in the cloud. >>That leaves me with, uh, my mission critical application, which is SAP and there's peripherals, right. For business reasons. I wanted this on-prem. Um, so I chose the HPE GreenLake, uh, to host this on-prem in my own data center at, at our headquarters in Columbia, Maryland, but with the Dr. Capability in the cloud. Um, so that I don't have to have a colo facility, which I have right now from IDR. So I use both on-prem and cloud hybrid cloud for myself, uh, for, for grace. So I have very few custom built applications on prem. Um, and as these become more standardized, I certainly look at taking them to the cloud or even keeping them on prem. Um, so we wanted that inherent flexibility. So yeah, that's the reason we went to this model. >>That's great. Cause that leads in right into the next question I had for you many customers in this past year, they're all looking for the flexibility, right. And how important it is. Can you share with us the value you see from HPE GreenLake and, and how that provided flexibility for wr grace and company specifically to workloads that can easily scale up or down? >>The main thing that helped me make the decision for GreenLake is the GreenLake is sized with this 20% buffer that we can scale to in minutes, um, that would usually take a weeks or even months to deploy. We know how that power and the flexibility in mere minutes, uh, when not when our business comes to us with a new requirement, either for a new applications or new data analytics capability that needs computing power, I don't have to wait for two or three months to give them that capability. So I, it can be done right away with this 20% of flexibility. >>That's great. And agreed. So this is a newer question with, with the event of your, um, acquisition, how do you see that added flexibility when you're looking to integrate a new company, >>This, this is an exact, you, you hit it on the head, uh, CR that's true. If I were to, if I had to bring this on with this additional computing power, I would have had to place an order, wait for the codes, come back and do all that with this 30%, I can easily fit in a new acquisition. >>Well, that's great. And that, that, that really helps for the short and long run. I'm sure that helps the business. Yes. So last two questions really is. Can you talk about what really stood out for advisors with advice, et cetera, about advisors, you know, basically why advise X and what will you saw the benefit of working with us >>Advisor? you have a great team CR so, so I've been, I've been, I mean, I've been working with, I told you write for 15 years and, um, I've been working with the same account manager for most of these years and the team as well. Right? So, so the account manager and the team knows how I, and what I expect of the team, right. So I can call them 24, seven anytime day or night. And they, they always pick up my phone and assist me in that time of the need. That's the most important thing. That's the reason that I I've been working with adviser, extended advice, Excel always proposed good solutions to me, either with HP or with other vendors, I can always trust them. Um, we have developed a strong strategic relationship. And, um, more importantly, like I told you that there is this trust that is difficult to find, and, um, it has continued to endure. Um, and, um, I deal with a lot of it vendors and I can confidently say that advisors X is at the top of the list from the customer service perspectives here. >>Well, thank you. And listen, that means a lot. I know we've had some bumps, we, and I've been on the phone for some, some of the tougher times, but, you know, you get through those to the, to the good times like now, and, uh, really, really excited about what we're doing with GreenLake. So, and, and most importantly, appreciate that relationship. And I'm sure our on Akuna is going to love the fact that you mentioned the relationship. So thank you for that. You know, finally, you know, any, any parting words of wisdom, brother, customers, as they consider HPE GreenLake, >>Um, like a standard earlier, uh, you must ask yourself, do you really want to be in this data center business, uh, ask yourself what your core businesses and what your core competencies are and focus your business acumen to deliver those that value to your business. Um, I'm sure he will come to the same conclusion as we did, um, and take a good look at GreenLake fund itself, flexibility. Um, you be very pleased and happy with the value the solution provides to your business. >>I would have to agree and what we're seeing with the best of breed solutions you can bring forward with GreenLake. Uh, we're excited about it too. And look forward to doing more work with you and customers like wr grace and company. I just want to say thank you for the time as importantly, thank you for the business. Really do appreciate it and appreciate the, uh, the kind words. Thanks, and, uh, have a great day. >>Thank you. See ya.

(thoughtful electronic music) >> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Enterprise applications are an enormous market, and they're enormously important to organizations globally. Essentially, the world's businesses are running on enterprise applications. Companies' processes are wired into these systems, and the investments that they make in people, process, and technology are vital to these companies' success. But it's complicated because many of these systems are decades old. Markets have changed, but the ERP system for example fundamentally hasn't. Hello everyone, and welcome to this week's Wikibon CUBE Insights, powered by ETR. This week, we're going to do a data download on the enterprise software space, and put forth some themes in our thesis around this very important segment. I'd like to do a shout-out to my friend Sarbjeet Johal, who helped me frame this segment, and he's a strategic thinker and he shared some excellent insights for this episode. What I'd first like to do is let's lay out the scope of what we're going to talk about today. So we're going to focus on the core enterprise apps that companies rely on to run their businesses. Talkin' about the systems of record here, the ERP, the financial systems, HR, CRMs, service management we'll put in there. We may touch on some of the other areas, but this is core that we're going to drill into. This is a big, big market. Customers spend many hundreds of billions of dollars in this area, you could argue about a half a trillion. And it's a mature market, as you'll see from the data. Look, it's good to be in the technology business today. This business is doing better than most, and within the technology business, it's better to be in software because of the economics and scale. And if you have a SaaS cloud model, it's even better. But the market, it is fragmented, not nearly as much as it used to be, but there are many specialized areas where leaders have emerged. ServiceNow and ITSM or Workday and HCM are good examples of companies that've specialized and then exploded, first as we saw ServiceNow blow past Workday's valuation. It was nearly 2x at one point. Now, that was before Workday crushed its earnings this week. It's up 15% today. ServiceNow took a slight breather earlier this month, but it's up on Workday sympathy today. Salesforce also beat earnings, and of course replaced Exxon Mobile on the DOW Industrials, can you imagine that? But let's bring it back to this digital transformation that you hear about. This is the big cliche from all the tech companies and especially software players. Now a lot of this DX, I sometimes call it, is related to old systems. It's especially true for the mega-caps like Oracle, SAP, PeopleSoft, JD Edwards, and even Microsoft. Take ERP and some of the mature products for example, like Oracle R12, or SAP R3 or R4. Many of these systems were put in place 15 years ago, and yeah, they're going to need to transform. They are burnt in. They were installed in what, 2005? It was before the iPhone, before social media, before machine learning and AI made its big comeback, and before cloud. These systems were built on the 1.0 of cloud. The businesses have changed but the software really hasn't. It happens every 10 to 15 years, companies have to upgrade or re-implement their systems, and optimize for the way business now runs, because they had to be more competitive and more agile. They can't do it on their old software. And God help you if you made a bunch of custom modifications. Good lucking tryin' to rip those out. And this is why pure play companies in the cloud like ServiceNow and Workday have done so well. They're best-of-breed and they're cloud, and it sets up this age-old battle that we always talk about, best-of-breed versus integrated suites. So let's bring in some of the other themes and feedback that we get from the community. Now we've definitely seen this schism play out between on-prem and cloud plays. And that's created some challenges for the legacy players. People working remotely has meant less data center, less on-prem action for the legacy companies. Now, they have gone out and acquired to get to the cloud and/or they've had to rearchitect their software like Oracle has done with Fusion. But think about something like Oracle Financials. Oracle is tryna migrate them to Fusion, or think about SAP R3, with R4, SAP pushing HANA. All this is going to cloud-based SaaS. So the companies that've been pure play SaaS are doing better, and I say quasi-modern on this slide because Salesforce, ServiceNow, Workday, even Coupa, NetSuite which is now Oracle, SuccessFactors which SAP purchased, et cetera, these are actually pretty old companies, the earlier part of the 2000s or in the case of Salesforce, 1999. And you're seeing some really different pricing models in the market. Things are moving quickly to an OPEX model. You have the legacy perpetual pricing, and it's giving way to subscriptions, and now we even see companies like Datadog and Snowflake with so-called consumption-based pricing models, priced as a true cloud. And we think that that's going to eventually spill into the core SaaS applications. Now one of the concerns that we've heard from the community is that some of the traditional players that were able to hide from COVID earlier this year might not have enough deferred revenue dry powder to continue to power through the pandemic, but so far the picture continues to look pretty strong for the software companies. We'll get into some of that. Now, finally, this is a premise that I talked to Sarbjeet about, the disruption perhaps comes from cloud and developer ecosystems. Y'know I remember John Furrier and I had a conversation awhile back with Jerry Chen from Greylock. It was on theCUBE, and it was kind of like, went like this. People were talking about whether AWS was going to enter the applications market, and the thesis here is no, or not in the near future. Rather, the disruptive play, and this is really Sarbjeet's premise, is to provide infrastructure for innovation, and a PaaS layer for differentiation, and developers will build modern cloud-native apps to compete with the SaaS players on top of this. This is intriguing to me, and is likely going to play out over the next decade, but it's going to take a while, because these SaaS players are, they're very large, and they continue to pour money into their platforms. Now let's talk about the shift from CAPEX to OPEX and bring in some ETR data. Of course, this was well in play pre-COVID, but the trend has been accelerating. This chart shows data from the August ETR survey, and it was asking people to express their split between CAPEX and OPEX spend, and as you can see, the trend is clear. Goes from 48% last year, 55% today, and moving to over 62% OPEX a year from now. It's no surprise, but I think it could happen even faster depending on the technical debt that organizations have to shed. And hence, the attractiveness again of the SaaS cloud players. So now let's visualize some of the major players in this space, and do some comparisons. Here we show one of our favorite views, and what we're doing here is we juxtapose net score on the vertical axis with market share on the horizontal plane. Remember, net score is a measure of spending momentum. Each quarter, ETR asks buyers, are you planning to spend more or less, and they essentially subtract the lesses from the mores to derive net score. Market share on the other hand is a measure of pervasiveness in the dataset, and it's derived from the number of mentions in the sector divided by the total mentions in the survey, and you can see each metric in that embedded table that we put in there. So I said earlier, this was a pretty mature market and you can see that in the table. Eh, kind of middle-of-the-road net scores with pretty large shared ends, i.e. responses in the dataset, but a lot of red. There are some standouts, however, as you see in the upper right, namely, ServiceNow and Salesforce. These are two pretty remarkable companies. ServiceNow entered the market as a help desk or service management player, and has dramatically expanded its TAM, really to the point where they're aiming at $5 billion in revenue. Salesforce was the first in cloud CRM, and is pushing 20 billion in revenue. I've said many times, these companies are on a collision course, and I stand by that, as any of the next great software companies, and these are two, are going to compete with all the mega-caps, including Oracle, SAP, and Microsoft, and they'll bump into each other. Which brings us to those super-cap companies. You see Microsoft with Dynamics, they show up like they always do. I'm like a broken record on Microsoft. I mean they're everywhere in the survey data. Now Oracle and SAP, they've been extremely acquisitive over the years, and you can see some of their acquisitions on this chart. I've said many times in theCUBE that Larry Olsen used to denigrate his competitors for writing checks instead of code, but he saw the consolidation trend happening in the ERT, ERP space before anyone else did, and with the $10 billion PeopleSoft acquisition in 2005, set off a trend in enterprise software that did a few things. First, it solidified Oracle's position further up the stack. It also set Dave Duffield and Aneel Bhusri off to create a next-generation cloud software company, Workday, which you can see in the chart has a net score up there with ServiceNow, Salesforce, and Coupa, and it also led to Oracle Fusion Middleware, which is designed as an integration point for all these software components, and this is really important because Oracle is moving everything into its cloud. And you can see that its on-prem net score, which puts it deep into negative territory. Now SAP, take a look at them, they have much higher net scores than Oracle, and you can see it's acquired SaaS properties like Ariba, Concur, and SuccessFactors, which have decent momentum. But you know, SAP, and we've talked about this before, is not without its challenges. With SAP, HANA is the answer to all of its problems. The problem is that it's not necessarily the answer to all of SAP's customers' problems. Most of SAP's legacy customers run SAP on Oracle or other databases. HANA is used for the in-memory query workload, but most customers are going to continue to use other databases for their systems of record. So this adds complexity. But HANA is very good at the query piece. However, SAP never did what Oracle did with Fusion, which as you might recall, took more than a decade to get right. HANA is SAP's architectural attempt to unify the SAP portfolio and get, (laughs) really get off of Oracle, but it's many years away, and it's unclear when or if they'll ever get there. All right, let's move on. Here's a look at a similar set of companies, but I wanted to show you this view because it gives you a detailed look at ETR's net score approach, and it tells us a few things more. And remember, this is a survey of almost 1,200 technology buyers. That's the N, that's the respondent rate. So this chart shows the net score granularity for the enterprise players that we were just discussing. Let me explain this. Net score is actually more detailed than what I said before. It comprises responses in four categories. The lime green is new adoptions. The forest green is growth in spending of 6% or more, the gray is flat spend, the pink is a budget shrink of 6% or greater, and the red is retiring the platform. So what this tells us is that there's a big fat middle of stay the same. The lime green is pretty small, but you can see, NetSuite jumps out for new adoptions because they've been very aggressive going after smaller and mid-sized companies, and Coupa, the spend management specialist, shows reasonably strong new adoptions. Now ServiceNow is interesting to me. Not a ton of new adoptions. They've landed the ship and really penetrated larger organizations. And while new adoptions are not off the charts, look at the spending more categories, it's very very strong at 46%. And the other really positive thing for ServiceNow is there's very little red. This company is a beast. Now Salesforce similarly, not tons of new adoptions, but 40% spend more. For a company that size, that's pretty impressive. Workday similarly has a very strong spending profile. At the bottom of the chart, you see a fair amount of red, as we saw on the XY graph. But now, let's take another view of net score. Think of this as a zoom in, which takes those bar charts but shows it in a pie format for individual companies. So we're showing this here for ServiceNow, Workday, and Salesforce, and we've superimposed the net score for these three in green, so you can see ServiceNow at 48%, very good for a company headed toward five billion. Same with Workday, 40% for a company of similar size, and Salesforce has a comparable net score, and is significantly larger than those two revenue-wise. Now this is the same view, this next chart's the same view for SAP and Oracle, and you can see substantially lower than the momentum leaders in terms of net score. But these are much larger companies. SAP's about 33 billion, Oracle's closer to 40 billion. But Oracle especially has seen some headwinds from organizations spending less which drags its net score down. But you're not seeing a lot of replacement in Oracle's base because as I said at the top, these systems are fossilized and many are running on Oracle. And the vast majority of mission-critical workloads are especially running on Oracle. Now remember, this isn't a revenue-weighted view. Oracle charges a steep premium based on the number of cores, and it has a big maintenance stream. So while its net score is kind of sucky, its cashflow is not. All right, let's wrap it up here. We have a very large and mature market. But the semi-modern SaaS players like Salesforce and ServiceNow and Workday, they've gone well beyond escape velocity and solidified their positions as great software companies. Others are trying to follow that suit and compete with the biggest of the bigs, i.e. SAP and Oracle. Now I didn't talk much about Microsoft, but as always they show up prominently. They're huge and they're everywhere in this dataset. What I think is interesting is the competitive dynamics that we talked about earlier. These kind of newer SaaS leaders, they're disrupting Oracle and SAP, but they're also increasingly bumping into each other. You know, ServiceNow has HR for example, and they say that they don't compete with Workday, and that's true. But y'know, these two companies, they eye each other and they angle for account control. Same thing with Salesforce. It's that software mindset. The bigger a software company gets, the more they think they can own the world, because it's software, and if you're good at writing code and you see an opportunity that can add value for your customers, you tend to go after it. Now, we didn't talk much about M&A, but that's going to continue here, especially as these companies look for TAM expansion and opportunities to bring in new capabilities, particularly around data, analytics, machine learning, AI and the like, and don't forget industry specialization. You've seen Oracle pick up a number of industry plays and as digital transformation continues, you'll see more crossing of the industry streams because it's data. Now, the disruption isn't blatantly obvious in this market right now, other than SaaS clouds going after SAP and Oracle, and it's because these companies are deeply entrenched in their customer organizations and change is risky. But the cloud developer, the open source API trend, it could lead to disruptions, but I wouldn't expect that until the second half of this decade as cloud ecosystems really begin to evolve and take hold. Okay, well that's it for today. Remember, these Breaking Analysis episodes, they're all available as podcasts wherever you listen so please subscribe. I publish weekly on Wikibon.com and SiliconANGLE.com, so check that out, and please do comment on my LinkedIn posts. Don't forget, check out ETR.plus for all the survey action. Get in touch on Twitter, I'm @dvellante, or email me at David.Vellante@siliconangle.com. This is Dave Vellante for theCUBE Insights, powered by ETR. Thanks for watching everybody. Be well, and we'll see you next time. (thoughtful electronic music)

>> From the SiliconANGLE media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hi, everybody, welcome to this CUBE Insights, powered by ETR. In this episode of the Breaking Analysis, we're going to take a look at SAP. Thursday, October 10th, SAP surprised the Street, they announced early, they preannounced their earnings, and at the same time they timed that with the announcement that CEO, longtime CEO Bill McDermot was stepping down, his contract was up for renewal in January of 2020, and he decided that he's going to turn it over to a co-CEO structure that I'll talk about a little bit, so that was big news. Spending on SAP has been holding pretty steady over the last several quarters, I'll share some ETR data with you. It's been quite a run by Bill McDermott, he started out as CEO, I think it was February of 2010, as co-CEO with Jim Hagemann Snabe, and then two years later was named the sole CEO and I'll share some data on that in terms of the performance of SAP during his tenure. But the bottom line is, we expect, based on the spending data, some continued momentum from SAP, I'll show you some data that shows a little bit of a mix in the numbers, ETR basically just dropped a report on Friday that I'll share with you as well, but the bottom line is we see some major challenges ahead for SAP, specifically from a technology integration point that I'll talk to you, and it really is not showing up yet in the spending numbers, but it's something that we're keeping an eye on, and it's something that we want to share with you, our community. So Alex, if you wouldn't mind bringing up the first slide, here. I'll make some key points, really around SAP's Q3 earnings and the CEO news. So as they say, they pre-announced earnings on October 10th after the close, 10% revenue growth, which is a nice, healthy double digit revenue growth, cloud was up considerably, Bill McDermott made the big emphasis when he was doing the rounds on how their cloud revenue is growing faster than competitors, 33%, but definitely from a smaller base, but their license revenue, their traditional on-prem businesses continues to be under pressure and decline, it's got a, SAP is a strong services business, services and maintenance business, and they're up to 12,000 customers with HANA, I'll make some comments on HANA in a little bit later. This may have some implications for Europe, we've been saying that Europe is over-banked, that banking is soft based on the ETR spending data, so this may be a little bit of a bright spot for Europe. Of course SAP with its ERP business of strong manufacturing, anybody who has a supply chain, so this may be a good sign for Europe, that's something that we're watching. And then, say McDermott steps down, we're going back to the dual CEO structure. Jennifer Morgan, who headed the cloud business, is a longtime SAP employee, and she essentially is going to be taking that role of the customer-facing CEO. Christian Kline is really, has history as product development and HANA, he did a stint in finance at SuccessFactors, and is really an operations guru, so back to that dual CEO role that you saw with Snabe and McDermott, where McDermott was really the front-facing, sales-facing individual, and Snabe was the product person. So that's kind of an interesting structure, we see that, we saw that in Oracle before Mark Hurd stepped down with Safra Catz as co-CEO, so it's not a unique structure, although it's not, certainly not common in the industry. The next thought I want to share with you is one that you may have seen before, every time that ETR does a survey, and this is data, fresh data from the October survey, every time they do a survey, they take spending intentions and they ask folks, "Are you spending more, "are you spending less, are you spending the same, "are you adding to the platform, "are you subtracting from the platform?" So they essentially ignore the, for this net score that I'm showing you now, they ignore the people that aren't spending, that are staying the same, flat, and they take the more minus the less, subtract amount, you get a net score, and the net score here is 27%. This is not uncommon for, from the data that I've seen out of ETR for a large company established legacy provider like SAP. Net score 27% is not great, but it's a holding steady score, it's not in the negatives, it's not in the red zone, and so you can see here that 32% of the survey respondents were saying they're going to spend more, 54% basically flat, but only a smaller number, 6%, saying they're going to spend less, so it's reasonable for SAP, but if you look at the trendline, Alex, bring up the next slide, look at the spending trendline from the survey for SAP since the July 16 survey, they do this every quarter, and so the blue is the net score, that green minus the red that I've talked about in the past, and you can see that sort of steady decline, but this is not a disaster, what it is, is it's a sign of spending momentum relative to previous years or previous quarters, and you can see the yellow line is also declining, that's market share, what that means is market share in terms of spend relative to other initiatives, so the categories that SAP participates in, enterprise software, et cetera, spending on SAP relative to other sectors has been in decline. If you look at, Alex, if you bring up the next slide, look at the SaaS business, you'll see that it's a much happier story. SAP's made a number of acquisitions that I'll talk about in a moment, of cloud/SaaS players, so you can see their SaaS position has been holding firm, ETR cites Concur, SuccessFactors, Ariba, Callidus, they kind of remaining stable versus a year ago, and you can see the market share's kind of ticking up, so pretty solid from the new growth, that high growth area, and that's something that the Street really pays very close attention to. The next data point that I want to show you on the next slide is actually quite fascinating, so SAP beat its forecasts, so it didn't beat and raise expectations for the rest of the year, but so what this shows is ETR's regression analysis, what the quants at ETR do, is they crunch the numbers, and they compare them to the consensus on Wall Street, and they actually forecast higher or lower, where they think that earnings are going to come in based on their spending data, so you can see here that green, you see that little RPM meter, they're in the green, that's where you want to be, 359 basis points ahead of the median forecast, so they're saying, so the ETR second half spending 10.4% versus consensus of 6.8%, very positive sign. I think it's no coincidence that SAP records B for the quarter, so based on that data collected in that October survey, it looks like there's some momentum for SAP. Now the next slide I want to show you is the stock chart, this is kind of the scorecard, if you will, for Bill McDermott's tenure, and you can see, so I went back to 2010, as I say, he started in 2010, as a co-CEO with Jim Snabe, and then look at the performance here, I mean it's been pretty solid. And so you see today it's up around 10%, as I say, they announced the earnings beat, they announced their revenue beat, and they basically affirmed expectations, maybe raised them a little bit going forward. The reason why the stock is up is the beat, but also McDermott has put in place sort of an efficiency improvement and a restructuring. They've made a promise to improve operating margins by 1% a year over the next five years. They've made a promise to get cloud gross margins to 75% by 2023. They've done a restructuring, I think it affects around 4400 people, and they're hiring data scientists and AI experts and machine learning people, and RPA folks, they acquired an RPA company a while ago, and kind of just threw that in 'cause it's such a hot space. Software coders all around the world, China, US, Europe, all over the place. And so that restructuring, the Street loves when you restructure, you cut the dead wood, so to speak. With all due respect to the folks that might be affected by this, but the Street loves that. So you're seeing the combination of the beat, and the uptick or the efficiencies taking place in the quarter, and they timed that with the McDermott announcement because they wanted to, I'm sure, time it with some positive news, so you can see the stocks up today, so that's kind of a scorecard on Bill McDermott, I have to say, pretty impressive performance over the last 10 years, or nearly 10 years. But here's the thing, we see some major challenges coming forth with SAP, and I want to talk about that a little bit. Before I do, Alex, if you would play the video from Bill McDermott answering a question that John Furrier asked several years ago, and then we'll come back and talk about it. >> I had a meeting with the CEO yesterday, and this is a very common conversation. He grew his business by acquisition, and now he's got a federation of a whole bunch of companies, and he feels like a holding company. What he wants to do is consolidate these businesses onto a common platform. He won't do it overnight because you can't shut down businesses, but the vision over the next few years is consolidate everything onto one common SAP platform, and take all the databases out and standardize everything on HANA. >> Now here's what's ironic. The core success of SAP historically has been what? It's been that they have a single, unified system, the general ledger and all the financial data and all the supply chain data, all of that is in the same place, accessible, single version of the truth if you will. What's ironic is SAP's made 31 acquisitions in the last nearly 10 years under the tenure of Bill McDermott. So in a way, SAP is becoming a tech holding company, kind of picking up on some of the things that Bill McDermott said in his little clip there. In our view, SAP's big technical challenge is to get all this stuff working together. As you all know, it's nontrivial when you make a lot of acquisitions, billions and billions of dollars of acquisitions, which by the way, they promised to stop that torrid pace of multibillion dollar acquisitions, very difficult to pull those together. Let's look at some of those acquisitions that they've made, Ariba, Concur, SuccessFactors, SuccessFactors is interesting because SuccessFactors was kind of talent management, you had kind of core HR from SAP and it's kind of been a challenge to put those things together. Think about the legacy R3 and R4 and all the on-prem manufacturing stuff that SAP still runs, that customers still run. Acquisition of Sybase, Callidus, so... SAP's answer to all this integration is to put everything in memory in HANA. So the motivation for HANA, however, in many ways was to compete more effectively with Oracle and not have to rely so much on the Oracle database and get people off Oracle. But here's the thing that SAP didn't do that Oracle did do, and I think, my opinion, Oracle got right. Oracle did Fusion, they bit the bullet and did Oracle Fusion, it took the better part of a decade, it actually took more than a decade, but every time Oracle buys a company, and every SAS application that it jams into the Red Stack, runs Fusion middleware, and runs the Oracle database. So, it's not the case with HANA. So it's kind of an integration nightmare, it's very very complex what SAP has got handed to the new regime. I think this is a daunting task, and I think this might be in part why the timing of Bill McDermott stepping down, I mean he sees that this is going to be a heavy lift, it's going to need more of a product-focused leadership team, that's why I think it's smart that SAP has maybe gone back to that two-headed monster of two CEOs, one that's customer-facing and one that's more product-oriented and R&D-oriented because they have a major integration challenge ahead of them. So as I say, SAP has promised to stop making these multibillion dollar acquisitions, they got to get to work on integration, which is going to be a major portion of the task in the next five years, so spending data from ETR shows some positive momentum relative to consensus, now remember, the Street works in a quarter, so they're on a quarterly shot clock, so if the Street says, "You're going to do this for earnings," and they do this, well, that means higher EPS, so the stock's going to go up. If you do this and you come in below, that means the stock's going to go down, so these are very tactical kinds of things. We're talking here about more longer terms, this could be a five to seven year integration challenge if not more, remember, it took Oracle 10 years plus in terms of integrating Fusion, so that's something that you need to keep an eye on, especially if you're a customer and you're getting pitched all these different services and cloud services, just got to think about the architecture for integration. Okay, this is Dave Vellante with CUBE Insights powered by ETR, thanks for watching, we'll see you next time. (techno music)

(suspenseful orchestral music) >> Every company is a cloud company today, right? Well, there's one company that was in the cloud long before it was fashionable. Citrix Systems, way back in 1989, was founded. Coming up on its 30th anniversary, and Citrix was a pioneer in the area of virtual desktop infrastructure, delivering desktops from servers to the, as a virtual machine, long before anybody was using the term cloud. Well, Citrix is still going strong 30 years later, and its Synergy Conference is coming up at the end of May, May 21st through 23rd in Atlanta. With me is Tim Minahan. I'm sorry, I was with Stu Miniman, our analyst. (laughing) Tim Minahan, who is the executive vice president of business strategy and the chief marketing officer at Citrix. Tim, welcome. >> Thank you, Paul, it's great to be here. >> I am Paul Gillin, this is The Cube, and with Synergy coming up, The Cube will be at Synergy, so we thought we'd take a chance today to look a little bit at where Citrix is going, where it's come from. A company that is still going strong, 50 acquisitions over the years, and really probably not the company that you would think of. People think of Citrix as desktop virtualization. I know you're still in that market, but I'm sure that Citrix is quite a different business today. So what business are you in? >> It absolutely is a much different business today, Paul. You know, this is not your father's virtualization company anymore. We still, as you point out, continue to lead that market both in market share as well as innovation. However, based on our customer needs as they've evolved to try to operate in this hybrid multi-cloud world, as they've tried to digitize their business, Citrix has also gone on a transformation journey. So really, I would organize it around three primary transitions. One is moving from a, let's say, disparate array of individual products to much more integrated solutions that more holistically address the needs of our customers around digital workspace, around networking and security, and around analytics. The second one, as you intimated in your introduction, is making our products, or our solutions, available not just on premise for customers to manage in their own data centers, but as cloud services, so that they can consume the technology in the way that they want and scale very quickly. But probably the most significant transition is moving from delivering application delivery products to really becoming this strategic platform for work. >> And when you talk about that in your messaging, It talks about powering a better way to work. What is a better way to work? >> Well, if you, Paul, if you think about today, really, as companies are beginning to digitize their businesses, they're trying to compete around the world, one of the things that continues to come to the top is the need to drive a superior employee experience. Those companies that can attract the right talent, develop the skills needed for today's modern age, and give them the tools and the flexibility to work where and how they want becomes a competitive advantage. And so when we talk about empowering a better way to work, we're bringing together our digital workplace, our networking, and our analytics technologies in order to empower companies to do that, to arm their employees with single sign-on access to everything they need to be productive in one unified experience that travels with them. Whether they're working in the office, whether they're on the road, at a client meeting, in a hospital room, really allowing them to power a better way to work. >> And you say that this is particularly important for attracting this new generation of knowledge workers. What are their expectations? How do you need to frame the workplace to make it appealing to them? >> Yeah, well, I think it's an interesting point you bring up. It's a misconceptions that, you know, it's all about the millennials. Well yes, we are introducing new work styles, new work types, and new generations into the workplace, but we have multiple generations in the workplace, each of which has different ways of which they engage with technologies, each of which has ways that they want to collaborate. But the one thing that is key to employee experience is, you know, gonna be a competitive advantage, what's holding us back. And it really is all this choice, all this technology that we've brought into the market, has created an unintended side effect, which is complexity. And employees are actually frustrated at work because they need to navigate multiple different environments, they need to remember multiple passwords, they need to spend time in a whole host of applications that may not be pertinent to their job, but it's something that they're required to do. So it's keeping them from their core job. And so really what we're trying to do is giving that unified experience, making it single sign-on to all of your applications, all of your content, regardless of where you are, and then literally bringing intelligence into the workspace to allow employees to actually be guided through their day so they don't need to log in to multiple applications, but presenting up the insights and the tasks that they need to do to remove the noise from their day and get on doing their core fulfilling work. >> Of course, this is not your father's single sing-on anymore. It used to be single sign-on was for primarily on-prem applications. Today everything's moving to the cloud. Citrix itself has undergone a sort of reinvention as a cloud-first company. Tell us what that involved and what that means for your customers. >> Yeah, well, the very first thing is I came from a host of companies that have made the transition to a cloud services model in the past. Most recently, SAP. And I thought I was coming here to help Citrix transition to the cloud, but it became very clear really quickly our job is to help our customers, you know, save our customers from the cloud, allowing them to pursue their very unique cloud strategies as everyone's on a different path on this journey, you know, this hybrid, multi-cloud environment, and to pursue that strategy with confidence. Giving them the latitude to be able to have portability of their workloads. If they want to move them out of the data center to maybe Microsoft Azure or AWS or Google Cloud platform or a private cloud, allowing them that flexibility, the interoperability, and the portability that they need to do that at their own pace. >> Now, what are the implications then for your product line? Because, are you talking about actually helping customers to manage the multi-cloud, to shift workloads, or is this more in the area of creating a unified work environment where all these applications come together? >> Well, the first step was certainly to make our offerings available as cloud services. So customers that wanted to consume them that way, they could. The second step was indeed to provide a control plane that allowed IT to really unify their entire environment, whether that workload was in the data center or in any of the public clouds I just mentioned, and have the portability to move them between those environments as they saw fit. Related to that is unifying the employee experience so that they, to your point, have single sign-on access to everything they need to be productive. So not just their, as you point out, their on-premise apps or their virtual apps, but their SaaS apps, which are growing in popularity and use against the enterprise. Their mobile apps, their web apps, but not just their apps too. You know those traditional virtual desktops that they might need. Or, importantly, their content, which we all need to organize and have the information we need to make the right decisions at the right time. So you're content needs to be available in that workspace too, in a similar way, regardless of where it's stored. It could be stored in any of the public cloud storage service providers. It might be stored on premise in a SharePoint environment, and you need to be able to have that with you regardless of whether you're working on your laptop at the office or on your smartphone on the train. >> Now, you have a lot of cloud experience. You were at Ariba, which was a cloud-native company. You went to SAP during their transition of the cloud. Now at Citrix. What kind of expectations are you helping the company set for how customer relationships change in a primarily cloud environment? >> You hit the point right on the nose. The big change everyone thinks is, wow, it's making your products available as a service. Well, that's part of it, certainly. Well, it's about transitioning to more of a subscription model. Well, that's also part of it. But the real big shift is the way you engage and support customers. In a traditional on-premise world, you would celebrate when the deal gets done, right? In a cloud services model, you are an ongoing service provider. Your real goal is to help the customer drive adoption and achievement of their business outcomes. And so within Citrix, what we've done, as in the previous companies we had before, I was at before, is we've made investments in that post-sale adoption. We have a full customer success team that is really your coach. You come into the gym, we'll get you on the treadmill, we'll make sure you get the health benefits you want, right, that's the type of environment and mentality we need to have even from a marketing perspective. There's a whole adoption marketing team now that is focused on working in unison with that customer success team so that we are ensuring that customers have the information they need, how to leverage the products, what functionalities available to them, and how to drive the business outcomes they were hoping to achieve. >> Are you finding the customer retention is actually better in a cloud environment? Do customers tend to stay longer, despite the fact they're not paying these large licensing fees up front? >> I think the real secret to customer retention and driving that customer retention is ensuring, okay, number one, there's clear alignment on what the business outcomes are to begin with, and number two, that you have this infrastructure in place, or this coaching organization in place, to make sure that they're driving to success. And because oftentimes you've heard, you know, you've been in the business for a long time, that IT projects, well, the implementation goes on for too long, or you know, we've implemented it but now no one's using it, and really, in a cloud services model, that can't happen, right? It's similar to any service you subscribe to as an individual, whether it's your cable service or the like, if you're not using something-- >> Turn it off. >> At the end of that subscription term, you're gonna turn it off. >> Yeah. >> And so, you know, in a cloud services model, the provider, like Citrix, is much more aligned with the business outcomes that the customer is hoping to achieve. >> Now, I know you're not development guy, but in the process of sort of overhauling the product line, there are a lot of new architectural tools that can be used, such as serverless computing, microservices. What have you done in terms of restructuring the way you build your products? >> Yeah, it's interesting, there's a few things. You know, the biggest one is, instead of, in an on-premise world, you would deliver a monolithic upgrade, here we go, every few, 18 months, two years, three years, and then work on helping your customers move that way. In a cloud services model, we're delivering innovation, you know, every week. And it just gets turned on as part of that service. So a much more agile development methodology. And yes, you know, behind the scenes, you mentioned microservices and the like that. What we're seeing within our customers as they're looking at how do I begin to abstract, you know, those monolithic applications and turn them into more microservices that are much more agile, that I can test things, I can deploy them very quickly. We're using those same type of techniques within Citrix ourselves. >> You've had a lot of experience with SaaS providers. How do you prepare a company culturally to make that leap from selling, you know, the big licensed package, to a subscription model? A lot of people are affected inside the company by a change like that. >> Yeah, no, absolutely. And part of it is transitioning literally from selling to being a trusted advisor, right? What is the business outcome you want to achieve? Let's land with this particular capability to get you going and then as you mature, as you begin to get the initial benefit, let's expand beyond that. And so what we were talking about with the customer success for post-sale adoption, really, to your point, moves back up the chain to how we engage customers even at the outset. >> The company has done more than 50 acquisitions, or I believe exactly 50 acquisitions. I know you weren't there for all of them, but do you have any thoughts, obviously very successful, the company does this very well. What are some secrets of making acquisitions work? >> I think one of the biggest opportunities and secrets to making such acquisitions work is having a really solid post-merger integration plan. And when I say post-merger integration, yes, you need to integrate that technology into your overall solution set so that it increases the value to the customers. Obviously, you know, having a clear roadmap on that, clearly articulating that both to the organization as well as to the customers. In fact, both your existing customers and the added value they're gonna get, but the ones of the company you've acquired. But I think the even, the bigger opportunity lies in making sure on the post-merger integration side you have a clear plan for how you're going to integrate that culture and the like. So as you acquire companies, particularly as you acquire SaaS companies, for example, infusing that SaaS mentality into your overall organization. You've acquired this company because they were doing well. They had a unique capability. Maybe they had unique skillsets that you need and making sure that you have a clear plan for how to help that thrive in your new environment. >> One of your roles is as head of marketing, and I understand you're sort of a data-driven guy. You're a big believer in data-driven marketing. >> I have more dashboards than you can imagine. (laughs) >> Really? Well, how, marketing and sales typically in B2B companies don't have the best of relationships. How are you using data to bridge that divide? >> Yeah, I think that's an excellent, that's an excellent question. And I do think data is the answer. You know, part of that traditional, kind of yin and yang, or friction between sales and marketing is a result of biases and opinions. When you organize around data, you begin to eliminate that. You get to the facts. And so I mentioned I have more dashboards than I care to note. But those dashboards are shared with my counterpart, the chief revenue officer, as well as his senior leadership team, so we're all looking at the same data. We're all identifying, hey, where we are with this customer, where we are with the overall pipeline growth. And it is going into a meeting and not spending the first 45 minutes disputing the data, but saying, "Hey, look, we are collectively seeing this." And, you know, looking at driving solutions on how to maybe accelerate something or provide a little extra service to a customer because we're all looking at the same data. Data is absolutely a great leveler at eliminating a lot of the traditional friction that is between sales and marketing. >> Citrix is one of the oldest, if that's a term, don't like to use that term in software, but it's been around a long time. >> 30 years young. >> One of the things, a big celebration coming up in April, I understand, your 30th anniversary. One of the things that happens to companies that have been around a long time is they acquire misperceptions. Customers tend to view them as they were many years ago. What misperception about Citrix would you most like to correct? >> I think, you know, the biggest misperception is the one you started with. That, hey, you know, Citrix is the virtualization company. And yes, we were the pioneer in virtualization, because at a time, when we burst onto the scene 30 years ago, you had this new rising information worker, you had client server technologies, and that worker wanted to work outside the office, and what were going to do? Well, Citrix provided an answer. Well, over the years, we've continued to innovate as companies moved to mobile, and now as they move to the cloud, and they want to embrace entirely new work models that allow them to give their employees, full time, contractors, gig workers, access to the tools they need to collaborate and be very effective and fulfilled in their jobs. We're there now, right? So we've continued to evolve with and even ahead of the market. So virtualization, still relevant for some key customers and some of the most mission-critical applications. But they have these other needs too, and Citrix has evolved to support those as well. >> And in two months, end of May, you'll be bringing your users together at Citrix Synergy in Atlanta. How many people do you expect to have there? >> Just about 6,000 or so. >> About 6,000, huge crowd. What are you gonna tell them? What are the messages you want them to take away? >> Well, the top line team for the conference is really, you know, how the future works. You know, we've talked a lot about this is the future of work, and it's coming, well guess what, it is here. We have multiple generations working in the workforce today. We have entirely new work styles. We have, as I mentioned, these gig workers, contractors, full time employees. We have entirely different devices and applications that have come into this environment and people want to collaborate through different channels, Teams, and Slack, as well as traditional email. So how do we bring all of that together? We believe that we're delivering this today. Our customers are seeing real benefit by having this unified digital workspace experience and making that available to their employees. You know, we're now injecting, like I mentioned, machine learning and simplified workflows or micro-apps into that environment to make employees even more productive within the workspace than outside of it, really guiding them through their day. So when we say this is how the future works, you know, the key message is, you know, we're, the future is here today. We're delivering the experience, the security, and the choice that employees and organizations need to drive innovation, to engage customers and employees in new digital ways, and to be productive any time, anywhere. >> Well it's a huge agenda in Atlanta, and if you're a Citrix customer you'll certainly want to be there. Even if you're not a Citrix customer, you'll want to follow us on The Cube, as The Cube will be on the ground in Atlanta at Citrix Synergy. Tim, have a great conference. Thanks very much for joining us. >> Thanks for having me, Paul. Look forward to seeing you in Atlanta. >> I'm Paul Gillin, this is The Cube. (upbeat electronic music)

(futuristic electronic music) >> Live from London, England, it's theCUBE covering .Next Conference Europe 2018. Brought to you buy Nutanix. >> Welcome back to Nutanix .Next 2018 in beautiful London, England. I'm Stu Miniman, my co-host Joep Piscaer, and happy to welcome back to the program, third time guest, I believe, Chris Hallenbeck, who's the senior vice president of database and data management with SAP. Fresh off the keynote stage this morning. Were you were with CEO Dheeraj Panday? >> I was, a great time. >> So, SAP, things are going well. I see SAP at lots of shows. You've been on our program at a few different ones. You are based here in Europe now, you're from the US. Chris, introduce us a little bit. Give us some of the summary of what brings you specifically to the event. >> Well, I mean, several things. So, my responsibility is looking after data platform. And what we're doing from a strategy perspective, what we're doing, what applications we're building on that in the cloud, what we're doing, everyone asks what are you doing with HANA? What are you doing with Data Hub? And so that's the core of what I spend time on. But equally I think you need to step back and look at SAP's business 'cause we're also, we're our own OEM, right? HANA's what makes S4 possible. HANA's what powers all of our cloud applications. We're going to announce now that everyone one of those, everyone of the acquired companies now runs on HANA and not on any other database. And so you really see these three pillars of SAP. You talk about I've been with SAP seven years ago, and everyone said, why would you go there? Because there's this old applications company that seems to be getting, oh, and even Hasso Plattner, our founder, was saying that was true. Came out with HANA, that we quickly streamed up. Passed Teradata, become the number four database company in the world. Still growing phenomenally. They used HANA as a method of rejuvenation for originally S4 and now that's gone to the cloud. And during that time, we were able to acquire all these cloud applications and build those, SuccessFactors, Ariba, and other stuff, and that's become a wildly successful business. >> Yeah, Chris, I wanted to step back for a second because you talk about data products. >> Yeah. >> You know, I've watched databases for my entire career. I've watched the huge growth of the importance of data. Especially the last few years. You know, we went through that big data wave, which was kind of middle end success, but everything today, data is the center of it all. You know database is where a lot of data live, but how am I getting, and how are customer getting more advantage out of their data when they are using your products? >> It's a great question. So, one is it continues to be the fact that now, people now have realtime access to that information. And it continues to actually be the biggest driver, to be honest. The other one where we see HANA getting picked, especially, is when you have tens or even hundreds of data feeds coming in simultaneously. Frequently, some are streaming, some are traditionally relational, coming from all different systems, and people then want to do analytics on that. But when we talk about analytics, I don't just mean a BI tool, although you could, but now we're doing predictive on that. And, in fact, and then figuring out how does a data scientist then go through, do machine learning, build a model, deploy for scoring, from a full lifecycle perspective. And that's where HANA's getting used tremendously, is in these analytic systems, and data warehousing, and in particularly people going, I want a realtime data warehouse. The other one where we see it being a lot more is in applications where HANA originally was only for SAP applications. We got a huge amount of work on that to make it work for OEM, ISVs, to port their applications over. And you've been seeing that continuously. I think there's some phenomenal work we've done with Esri. HANA's now the fastest geospatial database in the world. And Esri has about 80% of the geospatial market. Now prefers and runs on HANA. So that's been huge. So customers are beginning to use it in more areas. Not just SAP customers, or the CIO who ran the SAP systems, we're getting used a lot by the chief data officer's division. We're getting used out by other groups. We're getting used by specialty firms doing things like geospatial, doing text analytics. And so it's been kind of exciting. I don't know if I answered your question, by the way, but-- >> No, I think that was really good. >> So that sounds like you positioned yourself to enable customers to make the most out of the cloud, make the most out of data, make the most out of IoT. But I'm curious, how are helping customers succeed in that digital transformation? >> Yeah, well, with the digital transformation, and the way I always look at digital transformation, well, it's like big data, what does it mean, right? But what you see the patterns are is people are trying to remove layers between them and the actual consumer or the product. And if I can take those layers out, now you have people like Netflix who went all the way from just saying, let's make it easier to get a DVD, but now they are the movie studio directly to the consumer. They got rid of the 18-year-old kid at the video store, they got rid of everything through streaming. They went out on the, business. They took out all these layers and got closer. Whether it's Airbnb and all these pure plays, that's exactly, they've reduced the number of layers. Our existing customers are trying to do the same thing. They're saying, how do I get closer? How do I understand them? That requires, like if I'm running machinery, IoT data will tell me exactly how they use my machinery. If I can then start to take a look at that, now they want to work with me in different ways. Customers dictate how they're going to work with me. That means if they want to come over the web one time, other time they want to phone, they should always be treated equally based on how important they are to me. Reducing layers. Equally, though, you always have to be worried about someone coming out of nowhere, the pure play that comes in with a brilliant idea in your division, and you can't let 'em just take you out. So what we're seeing is these traditional companies, not necessarily know what the digital transformation is, but saying, I've basically got to get fit. And I can't do that with a really complicated landscape. If my department says, oh, that's great, new business model? We got to have the accounting up and ready in three years to compete with this new entrant. It's not going to work. Yet you upgrade your systems, and let's say SAP is financials, somebody comes up with a new business model, that's a day change in the system. You want to reorganize, that's a few clicks in the system, and I have a new hierarchy. That used to be a two year process. And so we working in all different aspects. We can do the IoT, we can do the agile work, we can have the data science machine learning understand the customer, all the way back to the applications that are agile now as people upgrade to the S4 system. >> Alright, I want to bring us back to the Nutanix show here, Chris. >> We like Nutanix, let's help them here. >> That's great, let's talk about platforms out there. You have applications that they all want to get certified on. Your application certified on their platform, so it's always, okay, am I SAP certified? And, okay, Nutanix even went through some redesign in there file system to make sure that they run really well for HANA and we're real excited for the certification there. Talk a little bit about what goes into that. Is there joint efforts between the companies? Or is it just their going through and following the process that you've got to describe? >> While I was on stage with Dheeraj and this wasn't, although it's nice to say supported database, this was a year and half effort. In memory computing, people get in and go, okay, it's not just a big data cache, this is a fundamentally different way software runs. How data stored in memory uses caches. So Nutanix worked with us, back and forth, on we would have this happen. Now it was worth it to us. Our customers have been demanding simpler infrastructure. And these hyper-converged infrastructures are exactly that. And Nutanix being the leader, we wanted to be supportive. This is good for both of us. If our customers can have agility on both sides of the business, running traditional SAP applications, they've got to ramp up, they need to add 100,000 users at quarter end, they can do that with a Nutanix platform. Equally, they want to quickly bring up an agile data mark for project basis, click a button, have a new data mark in seven minutes like they did on stage. And maybe they don't even want to do that when they're on on-prem/cloud. They want to do that on AWS or somewhere, GCP, they can do that. Yet that's all controlled from a single interface running through Nutanix. So really, really good for both of us. >> SAP is partial with a lot of companies out there, so you have kind of a neutral view when it comes down to everything. I'm sure you have certain partners you work more with and less. But what are you hearing from your customers? How do they think of cloud today? And any more about the Nutanix connection along the way. >> Yeah, it's interesting 'cause talk about data density, the most valuable data a company has is sitting, you typically, if they're an SAP customer, it's in their SAP system. It's exactly who is my customer, what did they buy, what is their service, what is their bill of material? All that, it's very value dense. It's the huge amount of security governance. What we've actually been seeing is a lot of them, yes, we're moving those workloads to the cloud to save money, I've actually seen a fair number come back on-premise. 'Cause they're saying, look, I'm not getting rid of SAP for easily the next seven, but we have no plans. So then they're realizing, I can run this on a private cloud infrastructure and actually save a ton of money. So they've been pulling back on prem, and we've been hearing that from all, the Forrester, and Gartner, and IDC are saying the same things. We have a lot of folks who don't want to go to the cloud with that core system yet, or they're saying, look, I got to save money and I think I'm going to the cloud, but I'm not ready. And so that's exactly where we see private cloud being really, really crucial, and then the ability to then push out and be ready to go to the cloud. Nutanix really is a good solution for that. And in particular, on-prem database right now, depends who you get your estimates on, is roughly growing at 5% to 8%, five year kay-ger. On-prem private cloud is forecasted to go up 26%. I mean, that is massive. Cloud's only 40 overall for databases. So you see it's a close second. So, huge, huge growth. What's declining is bare metal on-prem, it's gone. Everyone wants to run an either virtualized or fully hyper-converged infrastructure now, even on-prem. So we see people, like I said, staying on, getting ready to go to the cloud. A lot of people pushing workloads to the cloud, but even some repatriation. >> Alright, well, Chris Hallenbeck, really appreciate the updates. Thanks for everything and-- >> Well, thanks for having me. I always love speaking with you guys, thank you. >> Awesome, thanks so much. Joep Piscaer, I'm Stu Miniman, we'll be back with more programming from Nutanix .Next 2018, thanks for watching theCUBE. (futuristic buzzing) (futuristic electronic music)

(intense orchestral music) >> Hey welcome back everybody, Jeff Frick here with theCUBE We are taking a short break from the madness of the conference season to do some CUBE Conversations here in the Palo Alto studio, which we always like to do and meet new people, and hear new stories, learn about new companies. And today we've got a new company, we've never had 'em on theCUBE before, it's Evan Kaplan, he's the CEO of InluxData. Evan, great to see you. >> Yeah, hey thanks for having me. >> Absolutely. So for people that aren't familiar with the company, give 'em kind of the 101 on Influx. >> Yeah so, InfluxData is an opensource platform for collecting metrics and events at scale. The company is about almost four years old, has a large selection of tier one customers, is broadly accepted by developers as the number one time-series platform out there, so. >> So a lot of people talk about collecting data, so we've been doing Splunk since 2012, and, they really found something interesting on log files, and took it a whole 'nother level, so there's a lot of people that are capturing events. So what do you guys do that's a little bit different, how are you slicing and dicing this opportunity? >> Yeah, to put this is even in the broader context of what we're looking at is the 20 year break-up of the Oracle, DB2 and Formex franchise that dominated and relational databases were the answer to all problems and so if you look at a company like Splunk working on logs, they optimized a platform for those logs, for that data set, Elastic also, really interesting space. I think our innovation has been in saying "Hey, where the world's going, where all of these complex systems are going?" Particularly IoT, is to real-time view of the data and so, rather than collect verbose logs, historical views of the data and things like that, real system operators, real developers and builders want to instrument their applications, their infrastructure, so you can view 'em in real time. The place where the rubber hits the road is IoT. Sensors spit out metrics and events, period, full stop. And so if you want to be performant in how you handle, your instrumentation of the physical world, and how you do your machine learning, and how you want to manage these systems, you use a fundamentally time-series based database. As opposed to Splunk or Elastic or, which are primarily search-based databases. >> And are you primarily capturing and standardizing the data to feed other analytics tools, or do you have the whole suite, where you're doing some of the analytics as well? >> Yeah, such a great question. So, the fundamental platform is called the TICK Stack, and it stands for Telegraf which is a collector, which has about 200 different collectors that sit out there in the world and collect everything from SNMP data, to Oracle data, to application, to micro-service data, to Kubernetes, to that sort of stuff. There's Influx, which is the DB, which is highly optimized for millions and millions of writes a second, so collecting data points and samples. There's Chronograf which is the visualization engine and so, it allows you as soon as the data comes input you can see how it's graphed, see it on time-series oriented graphing, and then there's Kapacitor which takes action on the data. What we don't do is the super high sophisticated analytics. There are lots of companies in Silicon Valley who take our data, pump it up, and then we put it back on the platform to build a control loop for it. >> Right. So when the Kapacitor, does your application then take action on those things? >> Yes. Yeah, so, it'd do everything from alerting, to sending out another machine request, to spinning up a new Kubernetes pod, to basically scaling the application, self healing. >> Right. So does it fit in between a lot of those other types of applications that are sending off notifications, and those types of things? >> Yes, yeah. so you're in between? >> And usually, we're instrumented the way a standard developer, or an architect or CTO does is they look at a complex application, or a complex set of sensors, they instrument with Influx and Telegraf, and collect that data, they view it in real time, and then they build control loops, automation loops, to make that easier so when you see a problem, it's got a tolerance you can self adjust for. So it's the beginning of kind of the self-healing system. >> Okay, and I know that Telegraf is definitely opensource, are the other three? >> All four are open-source All four are open-source. >> Everything, in our world, everything for a developer is free, so, and a single note of Influx can handle a couple million writes a second, which is really really performant to run in production. Where our business model is, where we make money is, our closed source clustering, sharding, distributing the database, if you decide you want to run highly available in the production environment, you would buy our closed-source stuff. We have about 430 customers who run our closed source stuff on top of the opensource. >> So, it is kind of like a MapR to Hadoop if you will, where, you know, it's built on, built on the opensource, and then they've got their proprietary stuff kind of wrapped around it, almost like an open core? Or is that a? >> Yeah, it's a little It's a little different than the normal Hadoop stuff. One is, our stuff doesn't have any external dependencies. It can work with other third party projects, but just, it's a platform onto itself, there aren't 25 projects. There are four different projects, we own them all, they come across as a single binary, and it's not part of Apache. >> So they're integrated So the TICK is the full TICK >> Yes, and then you put the clustering on top. So there's some similarity, but not being part of Apache, we can control and keep clean what that experience is. And we're about, the thing that's been most successful for us is, well Paul our founder who is my partner, it's called time to awesome, the idea that a developer in 10 minutes can very quickly be up and instrumenting an application or a set of sensors, and see that data pouring in within 10 minutes from going to the site and downloading the opensource. >> So it's interesting, the giant opportunity is really around IoT, just in terms of the explosion of the sensor data, and we see that coming, and we were at AT&T show a couple weeks ago, talking about 5G which is, slowly, slowly coming down the road, (Evan laughs) they've got the standards fixed. But in terms of the, you said the shorter term, nobody has budget, I always like to joke, nobody has budget for a new platform, they do have budget for new applications, because they've got real problems. So you said you're seeing, your main success now, your go to market application, is around application monitoring? Would that be accurate, or what is kind of your? >> Yeah, there are two broad things, and they're both very similar technology as a service. One is the central monitoring stuff so, Tesla's Power Wall, Seimens' Windmills, a variety of solar companies build Telegraf into their platforms and then use InluxData to collect and store that information and analyze it. On the software side, people like IBM's Cloud Service running their network and their fabric, SAP with Ariba, Cisco with all their collaboration stuff, they instrument their software applications. And that's the idea is it's a general purpose platform for collecting and instrumenting instrumenting the applications or the sensors, either one, or both. >> Okay, and so what are you guys working on now, what's next, kind of raise the profile, get some new stuff >> Yeah, so we are-- before the whole IoT thing completely explodes, we're not quite there yet but it's coming down the pike. >> But we're starting to see it really happen, so that's really exciting for us. And this is just a really, really big market, it's certainly a super set of the log market, it should be. As you think about just the instrumentation of the physical world, how much instrumentation is going on, your clothes, your cars, your homes, your industrial devices, my watch, how much sensor data there is. We think this is a tremendously large market, so we're doing a couple of things. One is, we're about to introduce a new language for querying these kinds of time-series data that's going to be opensource, that a bunch of other people can use with their data stores. We're rolling out a new API-driven service, so that people can store these things directly in the could natively, so all they have to do is know our API. So we're really trying to push from the technology limit we're a product-driven company, and so, and an opensource-driven company, so we're trying to push that, that community is super important to us. >> It's so wild to me, the opportunity to have a closed feedback loop between someone's product back to the barn, you're barely starting to see it, Tesla obviously, is a good example, they're slowly seeing it in other places. But what a fundamental change in manufacturing, from building a product, making some assumptions about use, shipping that product to your distribution, and then, maybe you get some feedback now an then, versus actually monitoring the way that that thing is actually used by your end user, whether it's a product like a car, or even a software application, as you're rolling out all these different apps and features in the apps, how are people using it, are they using it? Where do you double down, where do you back off? And that loop has not really been >> That's pretty insightful. >> opened up very wide. Yeah, no it's just starting to open up, and that whole notion of product telemetry, my prediction is is that, as development teams grow and things like that, you're going to have telemetry experts, people are going to be specializing. How do you instrument these products so you get maximum engagement, and usage, and things like that? So I think that's pretty insightful on your part. If you think about it from a systems point of view, right? Instrumentation is first. You can't do anything 'til you instrument, whether it's telemetry from a product, it's the engagement or this. So instrumentation is first, visibility in real time is second. So observability is the big thought in systems application and building now, this notion of observing your system in real time, because you don't know, apriori, it's impossible to know a complex system, how it's going to behave, then it's automation, right? So like, okay now I can see these behaviors, how do I automate something that makes the experience for you, the user, better? But lastly, we can see this with self-driving cars, it's autonomy. It's the idea that the system becomes self-healing, and AI, and those sorts of things, but that's kind of the last step. There's a lot of learning in that process to get there. >> And it has to be automated because at scale there's no way for people to keep up with this stuff, and then how do you separate signal from noise and how do you know what to do? So you've got to automate a whole bunch of this. >> And you know if we had an aspiration it would be we're not going to write the applications that do these things but what we want to do is be that system of record so that people have a really efficient, effective metrics and events store so they can really track and keep track of all that engagement. Time-stamped data, for lack of a better way to say it. >> It sounds like you're in a pretty good space, Evan. >> Pretty excited (chuckles), thank you. Thanks for saying that, but yeah, we're pretty excited. >> Alright, well thanks for taking a few minutes out of your day and sharing the story, we look forward to watching the journey. >> Yeah. Thanks man. Alright, take care. >> Alright, thanks. He's Evan, I'm Jeff, you're watching theCUBE. We're having a CUBE Conversation in Palo Alto, we'll see you next time, thanks for watching. (intense orchestral music)

>> From Orlando, Florida, it's theCUBE. Covering SAP SAPPHIRE NOW 2018. Brought to you by NetApp. >> Welcome to theCUBE, Lisa Martin with Keith Townsend. We are just wrapping up day two at SAP SAPPHIRE 2018. Keith, this event is enormous. We were just comparing our step goals. This event size is 16 American football fields. Enormous, 20,000 people. I think, combined, we have around 15,000 steps today. >> That sounds about right. >> Quite a few of them go to your longer legs than mine but this event is really been incredible, the energy that SAP's CEO Bill McDermott kicked off with yesterday morning has really been carried through this event and with our guests on the show for the last two days. >> No, we did 23, 24 interviews and every last one of them was high-energy. The guests were extremely excited about the products, the solutions, and the problems they're solving for, not just enterprise, but for society. I thought that was a really great theme of the guests today specifically. >> It's amazing, and you talk about, you know, the impact on society and SAP wants to be one of the top world's most valuable brands like Apple, Google, Coca Cola, who are all customers of SAP's and who all sell products that we can interact with, that we can taste, you know, Mercedes Benz, we can drive. They've got this invisible software product. They've been around for 46 years. And to your point, the stories that we have heard about how these invisible product, products, are transforming industries, are saving lives, was really something that I did not expect. >> Well when you make a great product that impact lives or... I compare it to making great content. theCUBE makes great content, that content would be found, people would take notice, you make a great product that impacts people's lives. It's no wonder that SAP is near the top of that brand recognition, brand value, 17th on the list. If they continue to do that, if they become the product, the ERP solution that you can talk to and you can ask a question, you know, not just business questions of what were the numbers the last quarter for Chicago, but you can ask a question, you know what, where is the best place to take my family to live in Eastern Europe during the summer months? That becomes value-add that people wouldn't be able to ignore. >> They've done a tremendous job building this partner ecosystem. There were hundreds of partner sessions alone. We've heard from a lot of their partners. We're in the NetApp booth, thanks to NetApp for having theCUBE here. NetApp is a customer and a partner of SAP and we heard a lot about how SAP is transforming to the cloud dramatically with the help of this massive partner ecosystem. >> You know what, we've had Microsoft, Fujitsu, SAP, NetApp, Nvidia, the list goes on and on of customers and partnerships of examples of companies that have come together and they've been consistent. In some areas, obviously Microsoft competes with SAP. In some areas, Microsoft competes with NetApp. But they recognize that without these alliances, without these partnerships, they can't solve these large, complex problems of ridding parts of Africa with mosquitoes. SAP can't do that by themselves. Microsoft can't do that by themselves. And this week was a great acknowledgement and a example of how the ecosystem works. >> They also talked a lot at this event about the intelligent enterprise where it's, you know, it's not just about digital transformation as table stakes. Companies that do it well have, or are working towards getting, this true 360-degree view of the customer which is essential. They talked about enabling that via certain things that they're leading in, or pioneering, which is connecting the demand chain and the supply chain. They really talked about enabling this new, this current SAP that's built for this fourth generation customer experience. Our lives as consumers have dramatically influenced business. We expect to have the ability to, you know, try and buy an app if we want it, right? And they're using that model very well to give customers in many industries, they have 390,000 customers, choice and flexibility. And the partner ecosystem is just part of that flexibility that they have to give. And they do a great job of listening to their customers who really are helping with a lot of the co-development in a very symbiotic way. >> Yeah, SAP is reentering this people-centric view of ERP, CRM, of data, saying that their relationship is about people. Bill McDermott spent a lot of time talking about trust. One of the reasons why people trust the brand of theCUBE is because we're on the ground, we're talking to the users, we're talking to the people. People can reach out and touch and feel you, there's a personal relationship between that brand and the community. The same thing with, got the same feel for what SAP is trying to do of, you know, obviously with over 20,000 people, I dunno if the number is 21,000, 22,000, but more than 20,000 people, a million people online watching the event, SAP the serious about this C/4HANA move, of being able to say, you know what, we are going to create a ecosystem of trust. We talked about trust with the app center and being able to validate applications on the platform. SAP has long been one of those companies that's serious about their partnerships and validation and certification of platforms. So whether it's HCI, storage with NetApp, the deep relationship with NetApp, SAP is going to put its brand upfront and say that if you're going to engage with one of our partnerships, there's a transient trust that goes from SAP to their partners. >> And we talked with a number of folks working in different groups within SAP focused on the customer. This morning we had on their Chief Customer, a guy from their Chief Customer Office who talked about these, kinda top 100 strategic accounts that they partner with who then also they take that information, those learnings and don't just improve the technologies but they also use them to influence much greater than a hundred customers. They're strategically utilizing that data. We talked yesterday with one of the gentlemen running the SAP four, S/4HANA community rather, and the Leonardo community and the amount of engagement that they have in that community, especially in Leonardo which has only been around for a year. The customer engagement is key but also their reaction to it, and I would say even, I think we heard a lot of how they're being proactive with creating content and enabling their customers to be able to learn at the same time as they're learning from their customers. >> Yeah some hero numbers that we heard this week: 6,000 people in that HANA, the S/4HANA community. While the Customer Success Group focuses on the top 100 customers, there were, I think 38,000 people following the Twitter account, so there's obviously outreached stretch. The Leonardo and S/4 communities have created a thousand videos on how-to. So obviously the impact of and the reach of SAP has ambitions of not just raising brand awareness and getting into that Top 10 with Apple and Google, they also have the ambitions of becoming a platform, a ecosystem. You know, we look at Microsoft as kinda one of the ultimate platform companies. Microsoft partners make more money off of Windows than Microsoft makes off of Windows. SAP seems to have the same goal of their partners, there's a hundred partners on the show floor, that should generate more revenue than SAP which would be impressive. SAP, I looked the other day, $136 billion market capital, not a small company at all. >> So you have an interesting perspective, for many reasons, but one you've run large SAP infrastructures before. And here you are now at SAPPHIRE from the press and media, the analyst perspective. What are some of the things that really surprised you in all of your experience as a user of SAP to now covering it from this angle. >> You know what, I don't know if it was a year ago. It was not even a full year, my anniversary for running my company is August. So less than a year ago I ran SAP for a large pharmaceutical. And we're in the throes of selecting where our next platform was gonna be hosted. Cloud was a possibility and it is amazing how the conversations have changed from my peers a year ago, or a year and a half or even a year ago, to now to how readily acceptable customers are of running mission-critical, the core of the business, 77% of the world's transactions, we heard today, goes through SAP, how willing customers are at running those work goals in the cloud. Second piece, which was probably a proof point, how much SAP has improved SAP in the cloud. SAP has marketed SAP HANA and SAP as cloud-ready applications, it was more of something that you... I took legacy application, I installed it on VMs in the cloud, cloud-ready. No we've given examples from the hyperscalers, specifically Google, of how, and Microsoft of how, customers are coming whipping their credit card up, spinning up instances of HANA, spinning them down. Google talked about how you can migrate your whole ECC on HANA to the cloud within 30 minutes to two hours, amazing movement in cloud. I think it's by far my biggest surprise coming to this show. I didn't expect SAP to accelerate their cloud adoption as fast as they have. >> I'm curious to your thoughts too about simplicity, simplicity of message, you know, what's their best-run businesses campaign? Best-run businesses run on SAP. Simplicity has long been part of their messaging. As we look at the SAP cloud platform and some of the announcements there today and you look at, they've got Ariba, and Concur, and Fieldglass, and SuccessFactors, with the C/4 announcement from yesterday, what is your impression on, have they been able to sort of simplify and kind of reduce customer confusion in terms of this breadth of products and technologies that SAP now delivers? >> You know, SAP is a big company and they have a lot of products. They've been around for 46 years. You know, we didn't talk about any legacy database stuff. They still own Siebel so they still own a traditional database company. It's easier said than done to simplify the message. When you come to... You know, we talked to interviewee after interviewee, customers are still overwhelmed when they look at a overall problem. They can even identify SAP as the potential partner to solve it, but 300 products is still 300 products. It's very... You can help simplify the message by throwing those products in categories, sales force, which product you lead with, so new customers, you know, sales force will help you with that. Traditional customers that don't have deep relationships with their sales force and solution providers, maybe, I think there's still a little difficulty around understanding the messaging around all of 300 products. I mean, it's 300 products. >> Well, there's always work to be done and well we have... There was a lot of product announcements, a lot of energy, and evangelicalism that you and I heard consistently throughout the event and on-set here. A third area that I think really struck me is, SAP has been very vocal about having an initiative to raise the profile of women in technology. They did an excellent job of getting women onstage during both keynote sessions, yesterday and today. From their CMO, Alicia Tillman, to Lindsey Vonn and a whole suite of women Olympic athletes that were yesterday in the general session, to some of the women that were doing some of these outstanding demos and I, I really tip my hat to SAP because for being as large and as lengthy of an incumbent as they are, they're really able to focus on some of these key areas and we at theCUBE love to cover that because it's something that really needs consistent awareness. >> Well, I dunno if people would notice but we probably, both of us, are very vested in diversity and Silicon Valley, in general, is always appreciated when companies go, not just acknowledge the challenge of diversity, it is a very, very difficult problem. It's probably one of the most difficult problems in our industry. So to actually put some meat on a bone, announce the problem, announce the challenge, and go forth and put, you know, obviously, extremely capable women and minorities in the forefront. >> Yeah. Well Keith, always a pleasure hosting with you. Thanks so much for working with me the last couple of days, it's been-- >> I always enjoy it. >> I do too. It's really been a really fun, energetic show so thanks for all of your help. >> Thank you. >> Keith and I wanna thank you for watching theCUBE. Lisa Martin for Keith Townsend, we're from SAP SAPPHIRE 2018. Thanks for watching. (energetic music)

>> From Orlando Florida, it's theCUBE. Covering SAP SAPPHIRE NOW 2018, brought to you by NetApp. >> Welcome to theCUBE. I'm Lisa Martin with Keith Townsend and we are in Orlando at SAP SAPPHIRE NOW 2018. This is a huge event. Not just 20,000 people here but there's about a million people SAP SAS are going to engage with their life and on-demand video experiences for Sapphire, amazing. We are excited to welcome for the first time to theCUBE Jinesh Jain the VP of Global Delivery at CenturyLink. Welcome to theCUBE. >> Thank you, thank you guys for having me here. >> The theme in this event is really around what SAP is doing to enable the intelligent enterprise. This is really beyond digital transformation where customers have to have a customer centric view. It's about infusing and embedding emerging and advanced technologies, AI machine learning into business processes. How is CenturyLink helping customers on that transformation journey? >> I think that's a great question. Let me give you a little bit of background behind what CenturyLink is all about because this is all SAP here in this event right? CenturyLink is all about connecting customers in the in the digital world. And we recently acquired Level 3, and with that Level 3 acquisition we became now, we provide trusted connections to all the connected world, you know all the network world. So you can imagine in a digital transformation you need a very strong foundation when it comes to connectivity, network, infrastructure and security behind that and that's what CenturyLink does. That's our core business and with that journey as we started the journey, we have 60 plus datacenters as part of CenturyLink core strategic assets. We have around 500K miles of fiber optics, which is one of the, we are the second largest in the United States when it comes to network connectivity and redundancy across. And in 60 plus countries, I think all this strategic assets mix provides us very strong foundation for any customers who is embarking this digital journey. It reminds me of one of those recent survey done by McKinsey Global Institute, where they said that they figured out that digitization index for Europe was 12% and for North America was little better around 18%. But look at the gap, how much of gap is there in terms of exploring the full potential of digitization. So I think our journey in terms of giving the digital transformation starts from our strong foundation of our strategic assets of data centers network and security, along with that as you mentioned about the intelligent enterprise, we have a very strong practice in terms of not just descriptive analytics, but we do prescriptive analytics. We do machine learning. We have IOT and we do big data analysis as well. So all these things combined together provides a complete end-to-end solution. And of course SAP plays a big play here and we can talk about that in terms of what we do on the SAP side as well. >> So let's add some more color to that. When I think of CenturyLink, I think about the 60 data centers. Even when I think about SAP what I normally consider CenturyLink's role traditionally in a SAP relationship is that you know what CenturyLink to get me better either closer to my customers so that data injection can happen faster with lower latency. When I think of CenturyLink, I think of lower latency to hyper scale cloud providers so that if I have hold on applications I can get closer to my core SAP data, but what I'm hearing is that CenturyLink has greater SAP capability outside of that. Tell us about the SAP practice at CenturyLink. >> I'm glad you asked that because everybody is wondering about CenturyLink and SAP relationship. In fact let me go back in time here. Six years, few years back I would say six, five years back, CenturyLink acquired Cognilytics. Cognilytics was all about deep HANA expertise, deep analytics and all about BI strategy. And then recently a couple of years back, they acquired SEAL Consulting. So these two organizations which CenturyLink acquired, that gave us deep roots into SAP ecosystem in terms of what CenturyLink and SAP can work together. So now let's look at Cognilytics. They were all about HANA, core HANA expertise. They co-innovated with SAP in terms of that HANA analytics. They came out with number of used cases symptoms of predictive science and then when they acquired SEAL Consulting, it was all about yes for HANA transformation, which is absolutely the theme across this Sapphire and for all the SAP customers globally. From SEAL perspective, which is now of course part of CenturyLink, but now we can provide infrastructure as a service, platform as a service, OSDB as a service, which is already part of CenturyLink. Now with SEAL and Cognilytics coming into play, we are end-to-end sharp in terms of SAP strategy, digital transformation strategy, using SAP tools and products, implementation upgrades, application management services, and continual improvement as part of the digital transformation every customer is looking for. I think that's how we are using the strategic assets of CenturyLink as part of with the SAP expertise coming into play. >> So every customer, digital transformation to any business is just, it's you got to do it right or you will lose relevance and go out of business and we've seen a lot of incumbent retailers for example go away because they haven't been able to transform digitally. I read a stat recently that said 70% of siloed digital transformation projects fail. So how does CenturyLink and your expertise with SAP as for with HANA, how do you help customers be successful? Do you come in and see these siloed projects that you know maybe shadow IT had evolved and helped them to break down those silos, so that they can actually facilitate what it is that they need which is that that 360-degree view of their customers. What they want, when they want it, to be able to predict what they're gonna want next. How do you help break down those silos? >> Right, now I think is a known problem, known challenge across all of the customers who are embarking this journey. I'll tell you what. I'll give you a simple, the way we work, our digital strategy is very much aligned with our customer's business and IT goals. So what we do first and foremost is we want to align ourselves with what the business and IT goals are. Let's double click on that right. So if I look at the business goals, so most of the customers today, A, they want to make sure they want to protect the revenue stream right? B, they want to make sure they have real-time position, no latency in terms of their business decision making. And C, they want to make sure that they go into the new markets. They just can't stay silent to same market there. Plus know the unfamiliar competition, which comes up many times. So that's the business aspect of the goals. We want to look at that and make sure that we align our implementation, our strategy to those business goals. If you look at IT side of that, and I tell you what, these are the things which are being missed out with most of the partners in this ecosystem. If I look at the IT side of it, first and foremost we want to make sure that IT think goals are, it's all about innovation. They want to be innovative. They want to have minimal shelf wear so that they can innovate all the time. They want to evolve the resources so they are aligned with the lines of business all the way and that way everybody has a career path, and they are evolving to the market needs. And then lastly it's all about making sure that all the mundane tasks you know if I look at they need to focus on core competency and offload all the routine tasks. And we very much aligned as part of the journey to those business and IT goals. So if you look at our mission, we won't just look at our mission in terms of overall CenturyLink for SAP customers. We want to provide them a private managed secured cloud, which is scalable, which can be commissioned in a week's time with full automation, completely secure, data protected and an uptime of 99.99% and take care of all the lights on kind of routine tasks, so they can focus on their main core competency about business decision, new business, business process design and things like that which are being lagging behind. So that's our key theme in terms of how we drive all the SAP information. >> There's a lot of complexity behind getting this much value out of any platform, whether it's complexity at the data analytics layer, whether it's the networking that needs to be done, the design and deployment of NetApp stack. We're in a conference where all the hyper scalers are here. >> Yes. >> The company smaller than CenturyLink provides larger than CenturyLink. How is CenturyLink uniquely positioned to basically go to whether it's a Fortune 100 customer or someone down level to basically add value where these other providers potentially will trouble at. >> Alright, no I think it's very true, we need to be nimble. I mean you know we can be a big ship, but should not take time to turn. And I completely agree with that. I think what we do is I'll tell you, one of the unique position we have in this market space is you know we can proudly say that we are, we don't need to go to any third party when it comes to data center locations. We have our own 500k lines of fiberoptics. So network is where we provide, we can provide minimal latency from network perspective. We are all over the, we are 60 plus countries. We are into 350 metros. We can do a metro tier. I think if you look at our network, our hosting capabilities our infrastructure capabilities, we are uniquely positioned compared what the customers need today as a one-stop shop or a one hand to shake to make things happen for them. At the same time, we are very nimble for many customers because that's how CenturyLink has grown up. They acquired us, and we were 800 people company. So was other acquisition as well. We can very easily adapt, innovate, comprehend and adapt to the needs of the customers based on our core competency, our solutions which are available, and strategy which is very much fitting most of our customers in the retail space, in CPG space, in manufacturing space, in healthcare, and in life sciences. We have some designated industry solutions as well, which can help us drive those values quicker. At the same time measurable. >> Being nimble I think of you know being adaptive and being flexible but adaptive struck a big, actually Hasso Plattner this morning in his keynote talked about SAP being adaptive in the context, I think he was talking about intelligence. And everybody wants to paint intelligence all over everything and they talked about SAP being adaptive. That kind of aligns with something I read recently that Bill McDermott said, which is where SAP was the last to accept the status quo. I think he was talking about in relation to CRM specifically but the first to change it. So with that spirit of being nimble, being adaptive how are you helping customers adapt to needing to bring on you know edge core millions of devices or customers that go you know what I want to be able to use advanced technologies like AI to make you know my manufacturing smarter or to be able start connecting my supply chain with demand chain? How are you harnessing that, your adaptability to meet their needs on some of those emerging trends? >> Absolutely, this can be very overwhelming and if you really look at what everybody's talking about, where do you start with and I think we have been doing this for last six years, even before the keynote announcement to be honest to you guys. We have documented 60 to 70 used cases in this case. So what we do is when we approach a customer or a prospect, we come out with some specific used case for their line of business. It can be in a marketing campaign. It can be in a supply chain. It can be in financials. It can be in insurance. So depending on what the needs are, we have those documented used cases, so what we do is for each of these used cases, we break it down in terms of what problem are we gonna to solve, what is the problem definition. And for that problem definition, what's my used case, how do I solve this, what are the alternatives, and how do I reach to my measurable value of that solution. And then we have built-in data models ready to go for each of these used cases behind the scene. So that helps us build something which is nimble, because the data is available. We just need to customize to 20% of what the customer needs are, and then provide that value right away. And once that pilot goes live for a small segment of user community, then we expand that to the larger audience to see the value of whether this is a predictive science machine learning or just pure KPI driven analytics. So we do that and then we expand that. This is what we have done with number of Fortune 500 companies and we're really proud of what we do in terms of being big, but being nimble. >> So speaking of being big, talk about customer engagement, not necessarily the actual customer conversations, but how do customers engage with CenturyLink. One of the simple things that you look at the hyperscalers, I can go to the website, and when I have a question, I can type it in and I'll get a script that answers me in an hour or so. What is the engagement model for interacting with CenturyLink for new customers? >> I think, actually let me go back on this one. I was reading a survey in a CIO magazine. Actually this is a recent survey last year it was, that around thousand-plus CIO's who were interviewed and most of the CIO's, all the CIO's had SAP systems in their companies. And 40% of them said they want to move from on-premise to cloud. Right there that's our engagement strategy there. That we come as a one-stop shop for all these customers who are planning to move from on-premise to cloud. Why? Because number one, they want to reduce their CAPEX, upfront reduction in your cost. They want to make sure that their steady-state cost for keeping the lights on is bare minimal. So whatever budget is left out they can focus more on innovation. We take the sliver line of keeping the lights on and moving them from on-premise to cloud as part of our engagement strategy to start with number one. As we do that, they realize, customer realize that we are not just hosting partners. We just don't provide scalable private managed security cloud for our customers, but we can also do SAP implementation end-to-end, which is whether this is ECC upgrade to S/4HANA or this is a digital strategy for S/4HANA going forward, or just HANA as a pure analytics tool. Or the different SAP suite of products, whether this is Hybris, whether this is Ariba or other suite of products which are very much in a SAS model aspect of SAP, we support that end to end. Our support model is based out of the United States. We have offshore centers in India. So globally follow the same kind of approach. We do this between our number of you know units here in US and in India. That's our engagement strategy across. >> So last question is we're now in our booth here at SAPPHIRE NOW. Tell us about what CenturyLink, NetApp, SAP are doing within the context of automation. >> Wonderful yeah great. That's important actually because I think if you really look at the pace of what customer needs today, the pace is changing so fast. In a typical SAP landscape, you want to commission a system, a development system or a production system within weeks or within days. Gone are other days where you need two months and three months. I mean you miss the business goals for doing all these things. So what we have done is we want to get into the automation mode, and we are heavily investing in that part with help of Cisco, UCSKS. NetApp plays a very big role here in terms of providing their data-driven strategy, their hyper-converged infrastructure as part of the storage system and working with another partner Vnomic to make sure that entire, all these gears behind the scene have a very good orchestration layer to automate the whole process of building the infrastructure, building the application, building all the services and handing it over to our, to the customer team for them to start the journey. So that whole cycle can be reduced by the automation. So I would say NetApp plays a big role there, no doubt about that because most of the IT organizations are data driven today. The SAP workloads are changing and you can't wait for those change manually to be operated. So these are all application driven workloads which changes you know, which can adapt to all these changing workloads and this is where we are going right now in terms of automation. >> Well thanks so much Jinesh for stopping by. I wish we had more time but talking to us about what CenturyLink is doing with SAP, with NetApp for example to help customers on this arduous digital transformation journey. We appreciate your time. >> Thank you so much I mean this is great, thank you, enjoy rest of the day. >> We want to thank you for watching theCUBE. Lisa Martin with Keith Townsend from SAP Sapphire 2018. Thanks for watching. (upbeat music)

>> From Orlando, Florida, it's theCUBE! Covering SAP SAPPHIRE NOW 2018. Brought to you by NetApp. >> Welcome to the CUBE we are in Orlando, at SAP SAPPHIRE 2018, I'm Lisa Martin with Keith Townsend as my co-host. We're in the NetApp booth, and we are very excited to talk to the VP of the Chief Customer Office at SAP, Mark Marcus, Mark, welcome to theCUBE. >> Thank you, glad to be here I appreciate it. >> This event is enormous. One of the things that really struck me in Bill McDermott's key note was, you know, we always here about, oh we are expecting 20 thousand people, he talked about a million people engaging with SAP SAPPHIRE this week, via the in person, and the live, and the on demand video experiences. Massive! 390 thousand customers, hundreds of customer sessions the voice of the customer validating SAP as one of the world's most valuable brands is not only pervasive here its palpable. So talk to us about the Chief Customer Office. What is it, what's it's mission, why was it created? >> Yes, okay that's a great, a great way, so first of all thank you, I appreciate you being here, I live in Orlando so it's great to see this event in my-- People wonder why SAPPHIRE is actually in Orlando, it's because I live here. (all laughing) >> You're the reason! >> You're the reason. >> I'm the reason SAPPHIRE is in Orlando, Florida. >> Okay, you heard it, Mark Marcus, you're the reason. >> No, so what happened is, when Bill McDermott came to SAP, he was a different type of leader, and what he wanted to do immediately is start meeting with customers. So what he did is, he started meeting with customers, and he said if you have any questions or problems, give me a call. And so what happened is, his phone started ringing, people needed help, so he needed somebody that could help him with the customers when he ran North America. And so that was the genesis to Chief Customer Office. So we started off, first, we were extremely reactive. And so what I mean by that is, if the customer had a problem, we'd have to go in, and we'd have to help them. And it's much more difficult when you have a problem, then try to prevent a problem. So what we've been doin' the last several years, is trying to be much more proactive, so instead of waiting for the phone to ring, we've been getting with customers, and making sure, you know, as their project start, begin their steering committee meetings and make sure that things go well. >> So, you've taken that more proactive approach, it's almost how the organization's evolved. What is the focus today? >> Yes, well the focus has always been the customer, but I think it's more of, taking the best practices that we've learned, and actually sharing those with the customers, and helping them explain how other people have done their journey, because what you'll find, is people are in different phases of their journey, and what they like to hear more of is, you know, what did other customers do, what did they do right, what did they do wrong, and how can we be more successful? So we've been able to, over the years, if you think about, just to put it in perspective again, there are, SAP North America has 158 thousand customers, and we're only on, my particular team only has about a hundred of those customers, that we have. So it's a very, very small amount, they're are ones that, you know, are strategic to SAP, that we get involved in. But what we're able to do though, is, through social media and other areas is, customers wanna hear what happened, again, in the past, and how we can, you know, learn from that and move forward. >> So, I'm a big social media fan. Twitter handle has 38 thousand followers, which a lot for your focus on a hundred customers, so I think that, that you're echoing the, the theme very well. Talk to us about how it's changed over the past, 14 or so years, shift has focused from on-premises solutions to hybrid-cloud, to cloud analytics, AI, what's the, what are customers talking about? >> I'll tell you what, you're talkin' my language now, (Keith laughing) okay, because what happened is what we did is, actually what I'm in part, what I'm a part of is actually the cloud ambassador program. And so what that is, is it's focusing on our cloud customers so, you know, success factors, Ariba, Concur, and those kinda things, and so, really what happened, is, you know, when SAP, when I came to SAP 14 years ago, it was all on-premise ERP, alright? So it's very contained, very controlled with what people had now there's Cloud's, we're not really sure what customers are doing, how they're interacting with the solutions, and so what we have to do is we really focus, and again, my group is 100% focused in on that, so. What part of our mission has been is, we're not necessarily know what customers are doing, so we're helping to understand what they're doing, and trying to help educate groups inside SAP to be more responsive and help them. >> So you mentioned having responsibility for some strategic accounts, about a hundred. Do those represent kind of a subset of some of the key areas in which you're looking for the voice of the customer, and their practice using your technology to influence the direction of some of the key technologies? >> Yes, 'cause I'd say they're some of the biggest, most strategic customers that we have, and so what we do a lot of is, we're able to, we align directly with the executives, at the customer, so one of things with Chief Customer Office, is we're aligned at the C level, so it's, the CIO, the CEO, the CFO, at that level, so we're able to say we heard directly from the leaders of the companies, our most important customers, key customers, and we're able to take that back the other areas of SAP, and say, this is the what the leadership's demanding, and that's what we're able to help them with. >> So, as we're going through this phase of digital transformation, through a lot of organizations, that audience is even more important than, what?! (chuckles) Tell me how, as digital transformation has become, more than just a buzzword but a imperative from the C-suite, from CEOs to CIOs, CMOs, CDO, all the C's, CXO! How has the conversation between those groups changed, from the SAP perspective? >> Yeah, I'll tell ya, that is, again, I'm not just sayin' that you are, you're hitting exactly what we focus in on because, traditionally SAP has been focused more on the CIO level, so it's more the IT groups of implemented ERP, it's been more of a back-office type solution, well now, what we're finding is the line of businesses are the people that are actually making the decisions. So what we're finding out is that, it's not necessarily so much that the, technically, how they work, it's more the business processes they have, and how we can help actually, basically automate, and help them run more smoothly. >> Yeah, Hasso Plattner actually, and some of the guys this morning during the keynote talked about that, in terms of, customers were saying, you know, I'm getting kind of confused, there's so many different product names, a lot of acquisitions, he was talking about that, we heard from customers that there was confusion there. So when he was talking about, in the context of C4 for example of, making things simpler to understand, but also to your point, the back office and the front office now has to be connected so they also talked about that, in terms of, the integration with SAP Cloud, and how they really focused on enabling wholistic integration because it's the processes that have to now communicate together, so that, a whole, kind of proactive, customer responsiveness, that was really apparent this morning. 46 years young SAP, you have a new initiative about the customer for life, tell us about that. >> Okay, so customer for life is a new initiative that we have, so what I told you, at the Chief Customer Office we've done, we're able to touch very few customers, but, you know, again, you know we have 156 thousand, in SAP North America, you know, multiply that all over the world, I mean, it's many customers, okay. So what we've tried to do, is take what we've done on a small scale in the Chief Customer Office, and make that pervasive throughout the whole company. And so what we're really good at too is actually, you know, understanding what the customers do, finding them a solution, but now what we wanna do is go through the whole life-cycle of what we do so, I mentioned, you know, having a customer executive assigned to every customer. Being able to be part of the steering committees that we have, and being able to follow them through so we can help guide them, so it's not only selling the solutions but actually helping them through all the way, so the new initiative we set is customer for life, it's something that we're rolling out right now, and we've had, and again, it's taking what we did in the Chief Customer Office and, you know, propagating that through the rest of SAP. >> So, this facility, you like to say it, 16 football fields, American football fields, so that's a big facility. I walked the facility this morning, got in about three thousand steps. Hundred plus partners on the floor, ranging from system integrators, technology partners, and infrastructure space, software SIs. Help us understand as SAP, 20 thousand plus people here at the show, a million people online engaging on SAPPHIRE, SAP is becoming a platform company. How has that changed your role, your conversations? >> Well, I think what has happened a lot is, especially in the cloud projects, again I'm gonna focus more on what I'm a part of is, you know, there's a lot of new partners that come up. Because what happened is that, you know, we acquired several companies, we did, you know Concur, Ariba, SuccessFactors, a lot of big companies, and a lot of different partners. So really what our role is, in the Chief Customer Office is, to basically, to help these partners to understand how to work together, and we do a lot of things in meetings, we have, what we do, is, it's usually like the three legged stool, it is, you know, it's SAP, the partner, and the customer together, and we all do that together. And what I've found is, some of the problems that we've had is not neces-- you know, I always say like, how can take the exact same solution, and it works well in one company, and it doesn't work in another company? And what it is, to your point, with all the partners here, is it's communication, are they working together, you know, is the partner, and SAP, and the customer all working together, and so that's what I'm really focused on today is meeting with all the, you know, do the SAPPHIREs, to meet with the partners, to make sure we're aligned, you know, talk about our key customers, and make sure that we're all working together. >> We talked to one of the gentleman yesterday who was running some of the communities around HANA and Leonardo and, just the massive amount of content that is being generated to enable and educate customers across 25 plus industries, was massive, as well as, leveraging that peer validation from customers, like you're saying, you know, some customers in certain industries have a ton of success with the same thing that others customers struggle, depending on a lot of different variables. So that sort of collaboration and communication, even within the SAP communities alone, was very apparent yesterday that that's one of the big drivers, of I'm sure, the customer for life initiative is, as you have evolved, so have your customers. One thing that struck me yesterday was, you know, looking at, you're now number 17 of the World's top most valuable brands up there with Apple, you know, products that we can engage with and, I saw on a bus yesterday some of the messaging, and ERP you can talk to, and hear from. (Keith laughing) So SAP really set a very lofty ambition of being up there with the Amazons, and the Coca-Colas, and the Googles, and now you have technology that people can, you know, like at home with their digital assistant, talk to and communicate with. I thought that was very powerful message. >> And I'd say that's, I'd say too that, you know, I've worked with SAP for 14 years, and when I came to SAP, nobody had really heard of SAP and what they were, they thought maybe, you know, sometimes on TV when you see SAP when it's translated in other languages or something, that's what they think of SAP, they don't really know what the company is but, yeah, it's been great to see how, you know, people would stop you, you know, whether you're wearin', you know, they'll see somethin' on your laptop, on your shirts or somethin' like that, yeah so it's been good. I think that's been a big focus of getting it out because, one thing is is we have 150 million cloud users, that's a lot of people, so a lot of people use SAP, so. Again, one of the cloud products that we have is called Concur, it's for expense and reporting, and so a lot of times people might not've heard of SAP, but they've heard of Concur, because they all do their expenses, that kinda stuff. So, exactly right, it is pretty good, you know, when you have even family members know who SAP is now. They've done a great job, you know, hiring, you know, with the market department and the people they've hired, it's been great, it's been good. >> So, okay, we talked a little bit about analytics and the customer experience as we're looking at intelligent business. Is that a message that's actually resonating with customers in that top 100 strategic accounts, are they using analytics to actually power business, What are some of the data analysis success stories? >> Yeah, I would say that, what I would say is that, what I've found a lot of times is that, you know, people can get the information in, but they need to be able to get the information out. And so, everybody across that has done it, so, I would just say almost every customer we have has basically needed to get that out, and do reporting and those kinda things, you know? So, part of what we do at the Chief Customer Office is, you know, not only, you know, help them with the reports that they have, but to be able to run that kinda stuff. >> You guys also have, you know, some really interesting use-cases, I'm a Formula One fan, I've worked with Formula One before, I'm, I understand it from a fan perspective. You guys are really involved in McLaren Motorsport, for example, from finance, to procurement, to manufacturing. How are you seeing some of these really big use-cases like Formula One, or Coca-Cola, infuse into some of the, you know, the mid-sized businesses, who, you say, might be using Concur for example. What is some of the value that a small company can get from the massive users? >> Yeah, well I'd say there's a lot of things, because what happens is that from those big massive customers that we have, we're able to put together as we call model company. And so what a model company is, is it takes the best practices you have and puts it into more of a, I'd say nothings out-of-the-box, but makes it much more easier to implement, to be able to do it, so what we're able to do is, you know, with the massive amounts of info like McLaren, I think Hasso mentioned what, there's 400 sensors that they're getting on their cars, and that kind of stuff. So basically being able to take all the information that we have, and then from that, distill it down into where it's a very, repeatable type instance we can use for other customers. So there's a lot, I mean that's what we do with a lot of the, what the customers have, we try to get that back to where other people can use it. >> A Formula One car is basically an IOT device. You said 400 sensors, generating a ton of data, per race weekend, times three days, times 20 events a year. I read from Gartner just the other day that by 2020, which is around the corner, there's expected to be 20 billion IOT devices. What are you hearing from your customer base regarding IOT and being able to synchronize this, you know, modern next-gen data center with myriad devices? >> Yeah, so that is one of our top initiatives that we have right now. Because, one of the things that we've done is, we have an offering that we have called Leonardo, and what Leonardo is, it was named after the inventor Leonardo da Vinci, alright? So, you know, in his time he was, you know, a great innovator, actually went and saw his house and went over to Europe, and I've done a lot with Leonardo, you know what I'm sayin'? To be able to do that, right? But what that is, is that's basically all about, you know, getting devices to be able to get that information in. Because what you do is, you have you know, thousands of sensors and stuff like that and a good, you asked me earlier about a good success story on that, is one of the ones that I think resonates the most on that is in Buenos Aires, they have a massive problem with rain, you know, it rains a lot, and they have severe flooding, and the architecture is antiquated. But what they've found, is the reason that they were having these flooding problems, is because the sewers and the drains were all getting clogged up. So what they did was, they put a sensor in every one of the drains to be able to make sure that they were unclogged and they were flowing freely. So what they did is, they were able to, if the water flow started going down they were able to empty out the drains, even with an antiquated sewer system, because they were keeping it aligned with, you know, using Leonardo now, they can go and keep it cleaned out, they've had massive rains and the flooding hasn't really been there where it is, so now, what's interesting is every time I go by and see a gutter that's all clogged up, I think, you know, they need Leonardo to be able to help! >> I was reading as well about Alicia Tillman, your CMO, who's been at the helm for about nine months now and, in the context of this desire to become one of the top global brands with an invisible product, she said, you know, that one of the most important things for SAP right now is brand narrative, messages and campaigns will change quarterly or, every six months as they should but, she said, you know, to be able to show the value of basically under-the-hood software, you've gotta be able to show how it transforms countries, lives, industries, and that's one of the things that I think is very, very palpable here at the event is how much impact SAP is making in, whether it's rhino conservation in Africa or, you know, helping water scarcity in India, the impact, which is really the most, the biggest validation that you get, right from the voice of your customers is massive. >> Yeah, and I'd say to that, you know I like to say that, you know, it sounds like, you know, yes we're a software company, and, you know, that kinda stuff, but, it is really a noble endeavor, because we are doing a lot of things to help people's lives, and to run their businesses better, and what you realize is that, Chief Customer Office sometimes we see that other side when the systems aren't running properly at times, you know, they're usually runnin' right, but sometimes they have problems, and when they do, you can just see the impact you have on, you know, people's lives and businesses and stuff like that, that it is really running, you know, it is core to what you have, you know. So I'll tell you one of the interesting things that SAP's involved in is, they do a lot with instant messaging, so they have a part of, one of the acquisitions we have does instant messaging, well, you don't think about that but like, when you use, let's say, Facebook Messenger, or something like that, those messages go inside an SAP infrastructure at times, right? So imagine, you know, if you can't change messages, or doin' those kinda things, you know, so. You're exactly right, it definitely does, what we're doing does really impact a lot of peoples lives, so it's important. >> Well mark, thanks so much for taking some time to stop by theCUBE and chat with us about what SAP is doing with customers, how they're really symbiotically working together with you to evolve and transform this company. >> I wanna say one other thing too, it's great to work with two professionals here, you guys have really helped me a lot. >> Aww! >> I don't do this a lot, but it really made me feel comfortable, so you, I appreciate your help, thank you. >> Our pleasure, thanks so much! And, so you're the reason SAPPHIRE's in Orlando, are you also the reason they got Justin Timberlake tomorrow night?! (Mark laughing) >> I would like that. But I would like to say real quick, one thing before we cut real quick, I would like to say one thing just about the NetApp partnership we have. So RJ Bibby is the person that I work with at NetApp, and, just what he's done to basically, because NetApp really helps run a lot of our infrastructure inside SAP, so it's success factors, some of the high-availability in things that we have, and just working with RJ, and kinda learning how we, how we work and can help other customers, they've really volunteered to help a lot of our customers, and so, I just wanna thank NetApp again for helping us sponsor this. >> Great, great closing. We wanna thank NetApp for having theCUBE in their booth. Lisa Martin, with Keith Townsend, we are at SAP SAPPHIRE NOW 2018, thanks for watching! (bubbly music)

>> From Orlando, Florida, it's theCUBE. Covering SAP SAPPHIRE NOW 2018. Brought to you by NetApp. Welcome to theCUBE, we are on the ground in the NetApp booth at SAP SAPPHIRE 2018. I'm Lisa Martin, I'm hanging out with Keith Townsend. Today we are joined by RJ Bibby, who is the SAP Global Alliance Chief of Staff at NetApp. RJ, welcome to theCUBE. >> Thank you, we're so glad you guys are here. >> So, this, is a huge event. There are, I've heard 20,000 attendees live, but they were saying at the keynote this morning, Bill McDermott was, over a million people are expected to engage with the SAP experience both in person and online, that's enormous, enormous. SAP and NetApp have been partners for 17 plus years now. Right, you've got thousands of customers that run SAP on NetApp. What's current with the partnership? What's going on there from your perspective? >> Well thanks Lisa, thanks Keith. But first off I want to thank you all for being here. We're ecstatic for having theCUBE in our booth. We haven't been back here as a sponsor in a couple years. So being a platinum sponsor, 40 people here on the ground from all over the world. Like you said, we're about 26,000 people this week. So, really busy, we're in our 18th year. This year, as a partnership with SAP. To answer that question, it's really exciting. We have a very unique partnership with SAP. It's a true 360 partnership, and what I mean by that. One, we co-innovate together. So we're doing co-innovation where NetApp on SAP on NetApp. What that mean is basically a lot of the SAP products, like hybris, like Ariba, SuccessFactors are built on NetApp. We're doing co-innovation on blockchain, on HANA, IOT. So, we're really looking at that next phase of automation in data management. And we'll get into data management in a bit. We're both customers to each other. We just had our CIO met with a customer success office this morning to talk about some of the integrations of products that we're doing. Second year in a row SAP has been our largest customer. So the growth on that end is great, and then lastly the GODA market, and that's really what I really do from the alliance side. So, heavily around HANA acceleration. How we constantly are helping our customers move to HANA with our NetApp data fabric and ONTAP, our core signature products that deploy SAP. And we're very focused on industry, very focused on a global to local partner for life. We both have really warm, loyal customers. And then there's a kind of G100 strategic approach too. So that's the partnership, it's been a lot of fun. And we're gonna see where it goes in 2018. >> So RJ, talk to us a little bit more. Add some color on this relationship between Netapp and SAP in the market. NetApp, data driven company. SAP, probably the premier data analysis, analytics. We saw on stage from customer experience all the way to backend. You can't do that without a solid, robust infrastructure that's focused on SAP. What are some of the key technologies and strategy that NetApp and SAP have teamed together, bring together such successes? >> No, great question Keith. Really it goes down to the core of data. So NetApp has done a transformation the last two years, where we're gonna be now the data management company for hybrid cloud. So in that core, customers are looking to do a bunch of different things with NetApp. We want to manage, transport, analyze and protect data. A lot of data on SAP. So they're modernizing their data centers, how do we move to the hybrid cloud? With our ONTAP product, which is really a software capability, really turning into a software company in the cloud, as is SAP. So the core products of HANA, SuccessFactors, Ariba, Field Glass, Concur, all the things from an operations standpoint that's been automated for their business is kind of built on NetApp. Is built on NetApp, a lot of them. So our approach to the customer is how do we help the experience? And, we're doing that transformation internally, so we're going through it with SAP. There's lessons there. SAP did this and moved to a kind of cloud company a couple years ago on NetApp. Those are some of the core instances, but there's a modernizing a data center approach, there's a hybrid cloud. But it still just comes down to, oh my God, data runs my business. I'm really scared about it from protection. There's too much of it. How do I monetize? What are the analytics behind it? And that's what NetApp is really on the forefront of doing. Our CIO talked about this, this week. He's going to talk about it this week, about choice. What we're hearing for customers is, I need choice. I need to move my data around on PRAM, into whatever hybrid hyperscaler environment you want fast, efficient, with analytics read outs. So that's kind of the approach we're starting to take to market. I find it to be a very consultative of approach where it's Mister Customer, SAP NetApp, whoever your hybrid cloud choice is, who your SI is, the other technology partners are. We're all together collectively, almost like a innovation program for a customer approach. And that's kind of, not my secret, but one of my secrets of how we're going to market with the sales teams. >> I'm curious, NetApp is 26 years old. 26 years young maybe. I worked there I was telling you, for a few years as well. On marketing, which was awesome. Lot of evolution from a storage perspective. You say NetApp runs a SAP, SAP runs a NetApp as well. Talk to us about this maybe SAP as an influencer of the evolution of NetApp from storage company to now as you said, data authority for hybrid cloud. >> Yeah, no great question. I think it started where we wanted, we saw that software was kind of taking over. The automation, right? So it's almost like storage is a service. In my four years at NetApp, we never approach SAP as a partner or the customer talking about storage or infrastructure per se. Kind of around this data management methodology a while back. I think SAP has been an influencer internally fpr us in a couple regards. One they have the state of the art, a lot of the software operations. Things that we needed to run the business. There's been some kinks, there's some things that we probably need to customize that fit our business. NetApp's really unique, we're about 6 billion dollars, with 10,000 employees, with three business units. And we're a very unique company. The culture is awesome, we're empowered. Salespeople on the ground are empowered. Me helping run the alliance, we can be very strategic on how and what we want to do. Hey, we want to have CUBE at SAPPHIRE, absolutely do it, as an example. So, with that empowerment, we've been able to look at the best of breed in tools. And I think the tools are helping us from looking at the business and really how the customer experience. I'll give you one example on that. We're listening to our customers and how they want to transform their data, in their data on SAP. Well, I need to also be able to look at the analytics internally on okay, does my customer need a technical refresh? What are they doing on SAP? Is it SAP on Oracle? What products do they have of NetApp? Do our salespeople properly enabled on selling SAP on Cloud? Are they talking to their counterparts at the account from SAP, from a CISCO or Fujitsu, AWS, and then whatever SI. So there's a lot of complexity, there's an art and a science to it. And it's in our transformation in SAP from the tools perspectives at the core of that. >> RJ let's talk about the alliance beyond just the SAP to NetApp. This is really complex, I mean even with the tools, you know, ONTAP on the cloud, ONTAP in your data center. ONTAP kind of in the fog later, wherever you want to say that's at. That normalizes the data, it kind of validates the NetApp as the data driven company. However, when you go to an enterprise and you say that, you know what, this thing that used to live at my data center is now spread across these three different environments. It's really hard to figure out. How do SIs play a role into shaping the strategy in this alliance? Yeah, that's a whole other layer right? The complexity, 'cause I find, I came from the SI side of the house. I worked at Accenture for a really long time prior to my career in the partnership side. You know, I think they're very good from a consultative approach of hey, how do we want to design this thing? How do we want to implement it? How do we want to run it? And where does everybody's silo of stuff or technologies fall into that? I think the art part of it is hey, as NetApp or with MRSI, hey man, how do we help design with you? How do we consult the end to end approach here? I think we're the expert from an end to end data management approach. So there's some butting of heads at times depending on which SI, because they do. They have these long standing executive partnerships. There's a lot of investment from SIs at the account. I was just at a leadership conference with Accenture. And they're spending three billion dollars on three different things around automation. One, training. They can't get people, it's still about people in process. How do we get the process and tools in place? Where do we need to go merger and acquisition on the latest products? And how do we implement with that ecosystem? So I always think it's a work in progress. It's gone well, I think that's something I'd like to see us improve on. I think the SAP to NetApp partnership is advanced. In a lot of regards to that. It's like anything, it's also like when you look at salespeople internally at NetApp with our transformation. How do you get people out of the conference zone talking to their infrastructure lead, their line of business lead. And elevate to the cloud conversation. Going to the CXO, I think the Chief Security Offer is the key executive now in our sales process. Because of data protection. And that's something that we do well, and that's something they own, and I'm always trying to be creative. There might lots of dollars to protect data. How do we turn that into a whole strategy conversation with all the partners? >> So let's go a little deeper on NetApp's value propositions. You know what? Infrastructure is infrastructure, why should it matter? How do you guys differentiate between your competitors and running S4 HANA, the cloud strategy, you know what, end memory databases, storage is no longer needed, that's not true, but what's the story? >> Good question. The story for us is the ONTAP product that we have, the software because what we can do is deploy SAP really fast. Really fast, just some stats. You can get 45% project timeline savings with our deployment of SAP. The secret sauce in that is, the tools of the replication in the snapshot. When you're doing constant development ongoing maintenance, we can do snapshots in real time. That is the key thing that keeps the production going live faster. >> You know, because CICD is not something that we do, I've managed SAP for a long time. And CICD wasn't exactly a concept in SAP. So we rely on the infrastructure a lot to do. So snapshots is an amazing example of how you bring the CICD approach to something that is stayed as SAP. You can't just shut down SAP for the weekend to apply a update five times a year. >> Correct, so hours and hours of down time, where we can do it in three hours. A lot of times it's real time. I was just at a HANA Conference in Vegas and we got a lot of one on one time with customers. It was awesome, and that was the biggest things they said they need more of NetApp. And the differentiator is we're continue to expand our approach to managing the data, and I need the replication and the cloning specifically to run the production value end to end. So that's the other part of it. It's really just doing that end to end landscape management of SAP and Non-SAP workloads. The one thing that's great about the cloud part of this is you do need a lot of storage, and it's software based storage. So I think the approach in NetApp is going in the right direction. I've been working with SAP as a partner now for 12 years. I think that this is probably the best momentum I've had with SAP ever. And one of the reasons why is one, data is the story, right? What does Bill McDermott always say? Data is now the currency. Well today he was saying now trust is the currency, which is completely true too. But from the data being the currency perspective, it's now the end game for both of us. So we've kind of, in all companies, have gone into the middle. That's kind of not only the messaging, but kind of the central thing we're trying to deliver value on. And the choice, I want to keep saying the fact that customers now want choice on where they put their data. That's the thing that we're really promoting here at SAPPHIRE this week. >> Last question RJ. >> Last? All day! >> I know, I know right? Speaking of choice, you mentioned customers want choice. They do want choice. You talked about value, delivering value. From a competitive perspective, customers have choice. They've got other storage vendors they can work with. Give us your best elevator pitch. What makes NetApp and SAP different and better than say, some of those, maybe orange colored competitors? >> Sure, no, no, it's a great question. The biggest differentiator is just the fact that we are the one company out there that can provide data management in any hybrid environment. AWS, a hyperscaler, Microsoft, Google, we're doing cloud volumes just announced a Google Cloud platform. You know, we're one of the premier technology from HANA and Azure. So I think number one it's that. Secondly, we can deploy SAP really quickly, which consumes licenses. So one, the customer really likes that. Two, SAP sales loves it 'cause then it gives them a chance to go back to the customer. And then just the end to end data management that we can provide our customers value. I would say choice one. >> Awesome, well I said a few minutes ago to Keith that Bill McDermott is probably the most energetic C level that I've ever seen. Your energy level RJ, right there with his. >> You know why? 'Cause it's go time, it's SAPPHIRE day one. >> The stage might have exploded if we had them both at the same time. >> That would've been fun. >> Pyrotechnics on day one! Well RJ thank you so much, not only for visiting with Keith and me this morning. But also of having theCube in the NetApp booth at SAPPHIRE. >> We love it, we can't wait. Thanks everybody. >> I'm Lisa Martin with Keith Townsend at theCUBE on the ground at SAPPHIRE NOW day one. Stick around, we'll be right back with our next guest.

(lively music) >> Announcer: It's the CUBE, covering SAPPHIRE NOW 2017, brought to you by SAP cloud platform and HANA Enterprise Cloud. >> Welcome back, everybody. Jeff Frick here with the CUBE with our ongoing coverage of SAP SAPPHIRE 2017 down in Orlando. Really exciting day today, day two, 'cause we got to see Hasso Plattner. Got up and gave his keynote. Joined by George Gilbert. George, great to see you. I know you've known Hasso for years and years and years. Impressions of the kfeynote. God, there is so much stuff that we can dig into. I'm looking forward to it. >> Hasso almost never disappoints, 'cause he's just got %a richness of history and of vision that goes all the way back to the beginning. He was probably the technical visionary from the very beginning. He was the guy who took them from the first super integrated mainframe ERP package all the way to the client server age with R3, and now beyond into sort of in-memory, cloud ready, and with machine learning and iOT baked in. >> But he really speaks like a developer. You can really tell that he likes the technology, he understands the technology, he's kind of a no-BS guy. Some of the Q&A afterwards, people were trying to trip him up and challenge him on stuff. And he would either say, "I don't know," or, "I don't believe that," or, "Here's our impression." Really you could tell he's a humble guy, smart guy, and really has a grasp of what the heck is going on here. Let's jump into it. So many themes we could talk about. But the one that started out early in the conversation was, he literally said, "We need to get as quickly "to the cloud as possible." This is coming from a guy who built the company based on on prem ERP heavy lifting. And even he said today, 2017, "We need to get to the cloud as quickly as possible." >> I think there are a few things going on behind there, when you unpack it. One is, they did start building for the cloud in the early 2000's. It was meant to be a product for the mid-market. In fact, actually its first objective wasn't to be cloud-ready. The first objective was to be highly configurable so that you could bend it to the needs of many customers without customizing it, because typically with the customizations, it made it very difficult to upgrade. In making it configurable first and cloud-read second, they kind of accomplished neither. But they learned a lot. So they started on this next version, which was, okay, we're going to take an in-memory database which we're building from the ground up, 'cause Oracle wasn't building it at the time, and then we're going to build SAP ERP from scratch on top of this new database, 'cause database was so high performance that they didn't have to sepyarate analytics from transactions the way traditionally you do, you had to do in all applications. So they could simplify the app. Then, in simplifying it, they could make it easier to run in the cloud. And now, just like Oracle, just like Microsoft, they now build cloud first and on-prem second, because by building it cloud first, it sort of simplifies the assumptions that you have to make. >> Right, and he talked quite a bit about so much effort now is around integration connectors, to get stuff in and out of this thing. And that's a big focus, he said. It's not that we're ignoring it, it's just a big, hard, hairy problem that we're attacking. >> Yeah, and this is interesting and there's a lot of history behind this. Oracle, in the 90s, up until about the late 90s, their greatest success was in their industry-specific applications, where they took different modules from different vendors and stitched them together. That was how they built, like, a special solution for a consumer package goods company. But it turned out that that wasn't really workable because the different modules for the different vendors6 upgraded at different rates. So there was no way coherently to integrate them and tie them together. And SAP had said that all along. They were, like, this wasn't going to work. Fast forward to the last five-plus years, SAP started buying products from a bunch of different vendors, Ariba, SuccessFactors, Concur, Hybris. So you're, like, "Aren't they doing the same thing "Oracle did 10 year, 15 years before?" But no, and this is what Hasso was talking about today, which was, once those apps are in the cloud, you only have to build the integration points once. It's not like when it's on every customer's data center, you have to build integrations that work for every version that every customer has. So I think that's what he was talking about. You put it all in the cloud, you integrate it once. >> Another thing that he talked, he really, he spoke in tweets. (mumbles) goes to buy Twitter feed, I was basically, like, bang, bang, bang as he was talking. He talked about databases, and databases in the cloud. Nobody cares, right? It's a classic theme we hear over and over. "We presume it works. "We just want it to work." You know, it should just work. Nobody really cares what the underlying database is. >> But he was, in those cases, referring to these purchased apps, Concur, SuccessFactors, Ariba, Hybris. He was, like, "Some of them work on SQLServer, "some of 'em work on Oracle. "But you know what? "Until we get around to upgrading them to HANA, "it doesn't matter because you, the customer, "don't know that." If they were on prem and you had to support all those different databases, it might be a different story. But he's, like, "We'd rather give you the functionality "that's baked into them now "and get around to upgrading the databases later." >> Another thing that came up, and he actually reference the conversation with Michael Dell from yesterday's keynote, about the evolution of compute horsepower. You know, you had CPUs and CPUs kind of topped out. Then you had multicore CPUs. Now we have GPUs that he said you can put 10s or 100s of 1,000s on the board at one time. Basically he's smart guy, he's down the road a few steps from delivering today's product, saying that, you know, we're basically living in a era of unlimited free compute and kind of asymptotically approaching. But that's where we are. And how does that really change the way that we look now at new application development. I thought that was a pretty interesting thing. >> And sort of big advances in software architecture come from when you have a big change in the relative cost of compute memory, network storage. So as you were saying, cost of compute is approaching zero. But the same time, the cost of memory relative to storage is coming way down. So not only do you have these really beefy clusters with lots of compute, but you also have lots of memory. He was talking about something like putting 16 terabytes of memory in a server and putting 64 servers in a cluster, and all of a sudden, I can't do that math, being that I was a humanities major, but all of a sudden, you're talking about huge databases where you can crunch through this stuff very, very fast because it's all, you have lots of processors running in parallel and you have lots of memory. >> It's pretty interesting. He made an interesting statement. He used a sailor reference. He said, "You know, we are through the big waves "and now we're in the smooth water," and really saying that all this heavy lifting and now that this cloud architecture is here and we have this phenomenal compute and store technology, that he can kind of take a breath and really refresh a look out into the future as to, how do we build modern apps that have intelligence with basically unlimited resources, and how does that change the way that we go forward? I thought that was an interesting point of view, especially 'cause he has been at it for decades. >> You know, I think he was probably looking back to some of the arrows he had in his back from having done an in-memory database essentially before anyone else did for mission critical apps. I think when he's saying we're out of the choppy water and into the smooth water, because we now have the hardware that lets us run essentially these very resource-intensive databases and the apps on 'em, so that we no longer have to worry, are we overtaxing the infrastructure? Is it too expensive to outfit the hardware for a customer? So his, when he talks about rethinking the apps, he, like, "We don't have to have separate analytical systems "from the transaction systems. "And not only that. "We can simplify because we don't have to have" what he's calling aggregates. In other words, we don't have to, we don't, let's say, take an order and all the line items in an order, and then pre-aggregate all the orders. It's, like, we do that on the fly. And that simplifies things a lot. Then, not only that. Because we have all this memory, we can do, like, machine learning very inexpensively. >> A whole another chapter in his keynote was about modern software design. A lot of really interesting things, especially in the context of SAP, which was a big, monolithic application, hard to learn, hard to understand, hard to manage. I remember a start, that were were (mumbles) using is a core V to C commerce engine. And to add 16 colors of shirts times 10 neck sizes and 10 sleeve sizes was just a nightmare. You're not going to have some merchant that works at Macy's to put that into the system. But he talked about intelligent design, which is pretty interesting. We're hearing that more and more in a lot of work done over at Stanford, intelligent design. He's talking about no manuals. He's, like, "If I can't figure it out, "I need to understand." He talked about intelligent applications that continue to learn as the applications get more data. And specifically, the fact that machines don't get bored testing 100s or 1,000s or even millions of scenarios and grinding through those things to get the intelligence to start to learn about what's going on. So a very different kind of an application, both development, delivery approach, than what we think of historically as R3. >> Yeah, like the design thinking was, they have this new UI called Fiori. I mean, if you go back 10, 15 years, let's say, when they started, 15 years, when they started trying to put browser-based user interfaces on what was a client server system, they had 10s and 10s of 1,000s of forms-based screens. They had to convert them one by one to work in a browser. I think what he's saying now is, they can mock up these prototypes in a simple tool and they can essentially recreate the UI. It's not going to be the exact same forms, but they can recreate the UI to the entire system so that it's much more accessible. On the machine learning front, he was talking about one example was, like, matching up invoices that you going to have to pay. So that you going to train the system with all these invoices. It learns how to essentially do the OCR, recognize the text. And it gets smarter to the point where it can do 95% of it without-- >> Human interaction. >> Yeah, human inter-. >> You know, it's interesting, we were at Service Now last week, as well. And they are using AI to do relatively mundane tasks that people don't want to do, that machines are good at, things like categorization and assignment and things that are relatively straightforward processes but very time-consuming and again, if you can get to a 70% solution, 80% solution, 90% solution, to free people up to do other things on the stuff that's relatively routine. Right, if the invoice matches the anticipated bill in the system, pay it. Does somebody really have to look at it? So I thought that was really interesting. Something I want to dig in with you, he talked a lot about data, where the data lives, data gravity. He even said that he fought against data warehousing in the 90s and lost. A lot of real passionate conversation about where is data and how should apps interact with data, and he's really against this data replication and a data lake and moving this stuff all around, but having it kind of central. Want to just get your thoughts on that history. What do you think he means now, and where's that going? >> It's a great question. There's a lot of history behind that. Not everyone would remember, but there was an article in Fortune Magazine in the late 90s, where it described him getting up in a small conference of software CEOs, enterprise software CEOs, and he said basically, "We're going to grind you into dust, "because everything comes in our system integrated. "And if you leave it up to the customer "to try and stitch all this stuff together, "it's going to be a nightmare." And that was back when everyone was thinking, "One company can't do it all." And the reality was, that was the point in time where we really had given go past go, collect $200, to every best-of-breed little software vendor. It did prove out over the next decade that the fewer integration points there were, that it meant much lower cost of ownership for the customer. Not only lower cost of ownership, but better business process integration, 'cause you had the (mumbles) integration. I bring this up because, well, actually, I was there when he said it. (laughs) But I bring it up because he's essentially saying the same thing now, which is, "We'll put all the machine learning technology, "the building blocks, in SAP. "If you need any contextual data, "bring it into our system. "You don't want to take our data out "and put it into all these other machine learning programs "'cause there's security issues, "there's, again, the breakdown "in the business process integration." He did acknowledge that with data warehouses, if you have 100s of other sources, yes, you may need a external data warehouse. But I think that he's going to find with machine learning the greatest value with the data that you use in machine learning is when you're always adding richer and richer contextual data. That contextual data means you're getting it from other sources. I don't think he's going to win this battle in terms of keeping most of it within SAP. >> It kind of bring up this other intersection that he talked about. In now delivering SAP as a cloud application, he said, "Now we have to learn how to run our application, "not our customers," a very different way of looking at the world. The other thing that piggybacks off of what you just said is, we've seen this trend towards configuration, not customization. It used to be probably, back in the days, if you had the big SI's, they loved customization, 'cause it's a huge project, multi-years. I used to talk to one of our center partners, like, "How do you manage a multi-year SAP project "when most the people that started it "probably aren't even there the day you finish it?" But he had a specific quote I wanted to call out now, what you just said, is that he said, "Only our customers have the data, "the desire, and the domain knowledge "to make the most out of it." So it's a really interesting recognition that yes, you want customers to have this configuration option. But we keep hearing more and more, it's config, not-- >> Both: Customization. >> For upgrades and all these other things, which now when you go to a cloud-based application, that becomes significant. You don't want customizations, 'cause that's just complicates everything. >> You can't. I don't know if he said this today. I guess he must have said it today. But basically, when you're in the cloud, I forgot the terminology for the different instances. But when you're in, like, the SAP cloud, you can only configure. There's essentially a set of greater constraints on you. When you go to the other end of the spectrum, let's say you run it in your own data center, you can customize it. But when you're running it, essentially sharing the infrastructure, you're constrained. You're much more constrained. And they build it for that environment first. >> Right. But at the same time, they've got the data. Again, this has come up with other SAS companies that we've talked to, is hopefully, their out of the box business process covers 90% of the basics. I think there's been a realization on the business analyst side that we think we're special, but really most of the time, order to cash is order to cash. So if you got to tweak your own internal process to match best-of-breed, do it. You're much better off than trying to shape that computing system to fill your little corner cases. >> It's funny that you mention that, because what happened in the 90s was that by far the biggest influencers in the purchase decision and the overall lifecycle of the app were the big system integrators. They could typically collect $10 in implementation and change management fees for every dollar of license that went to the software vendors. So they had a huge incentive to tell the customer, "Well, you really should customize this "around your particular needs," because they made all the money off that. >> Right, right. Another huge theme. Again, it was such a great keynote. We watch a lot of keynotes, and I have a very high bar for what I consider a great keynote. This was a great keynote by a smart guy who knows his stuff and got history. But another theme was just really about AI. He talked a little bit, which I thought was great. Nobody talks about the fact that airplanes have been flying themselves for a very long time. So it is coming. I think he even said, maybe this is the age of AI. But there always have to be some humans involved. It's not a complete hand-over of control. But it is coming, and it's coming very, very quickly. >> I actually thought that they were a little further behind than might expected, considering that it's been years now that people in software have seen this coming. But they have in the dozens of applications or functions right now that are machine learning enabled. But if you look out at their roadmap, where they get to predictive accounting, customer behavior segmentation, profile completeness for in sales, solution recommenders, model training infrastructure for the base software foundation, they have a pretty rich roadmap. But I guess I would have thought it'd be a little farther along. But then Oracle isn't really any farther along. (mumbles) has done some work for HR. For whatever reason, I think that enterprise application vendors, I think they found this challenging for two reasons. On the technical side, machine learning is very different from the traditional analytics they did, which was really essentially OLAP, you know, business intelligence. This requires the data scientists and the white lab coats and instead of backward-looking business intelligence this forward-looking predictive analytics. The other thing is, I think you sell this stuff differently, which is, when it was business intelligence, you're basically selling reporting on what happened to department heads or function leaders, whereas when you're selling predictive capabilities, it's a little more transformative and you're not selling efficiency, which is what these applications have always, that's been their value preposition. You're selling transformational outcomes, which is a different sort of selling motion. >> It's funny, I heard a funny quote the other day. We used to look backwards for the sample of the data. (laughs thinly) Now we're in real time with-- >> Both: All the data. >> Very different situation-- >> And forward-looking. >> And forward-looking as well, with the predictive. >> That's a great quote, yeah. >> Again, he touched on so many things. But one of the things he brought up is Tesla. He actually said he has two Teslas, or he has a second Tesla. And there was question and answer afterwards really about the Tesla, not as the technology platform. And he poked fun at Germans. He said Germans have problems with simplicity. He referenced, I presume, a Mercedes or a Porsche, you know, the perfectly ergonomically placed buttons and switches. He goes, "You sit in a Tesla "and it just all comes up on the touch screen. "And if you want to do an update overnight, "they update your software, "and now you have the newer version of the car," versus the Mercedes, where it takes 'em three years to redesign the buttons and switches. I thought that was interesting. Then one of the Q&A people said, "But what about the buying experience? "If you (mumbles) ever bought a Tesla, "it's a very different experience "than buying a car." How does that really apply to selling software? It was pretty interesting. He said we're not there yet. But he has clearly grasped on, it's a new world and it's a new way to interact with the customers, kind of like his no manuals comment, that Tesla is defining a new way to buy a car, experience a car, upgrade a car. >> Operate it. >> At the same time, he got the crazy mode, fanatical mode, like, ludicrous mode, so that he could stop and tell the Porsche guys that you're falling behind further every single day. So I thought, really interesting, bringing that kind of consumer play and kind of a cutting edge automotive example into what was historically pretty stodgy enterprise software space. >> You know, it's funny, I listened when you're saying that. That was almost like the day one objective from SalesForce, which was, we want an enterprise app like Sebol, but we want an eBay-like, or Yahoo-like experience. And that did change the experience for buying it and for operating it. I think that was almost 20 years ago, where that was Marc Benioff's objective and he's saying it's easier to do that for CRM, but it's now time to bring that to ERP. >> The other thing he brought in which I was happy, being a Bay Area resident, is the Sharks. Because he's a part owner of San Josey Sharks, obviously it's SAP Center now, also known as the Shark Tank. It used to be owned by another technology company. But he made just a funny thing. "I like hockey, so I should like SAP," and he was talking about the analysis of how often the logos come up on the telecast et cetera. But the thing that struck me is, he said the analysis is actually now faster than the game. Pretty interesting way to think about this data in flow, in that the analysis coming out of the game that feeds Vegas, it feeds all these stat lines, it feeds fantasy, it feeds all this stuff, it feeds the advertising purchase and the ROI on my logo, is it in the corner, is it on the ice, is it in the middle, is actually moving faster than the hockey game. And hockey is a pretty fast game. Very different world in which we live, even on the mar-tech side. >> That was an example of one of the machine learning-type apps, because I think in their case, they were using, I think, Google image recognition technology to parse out essentially all the logos and see what type of impact your brand made relative to your purchase. >> I mean, I could go on and on. I've so many notes. Again, I live tweeted a lot of it, you know, he's just such a humble guy. He's a smart guy. He comes at it with a technology background, but he said we're a little bit slower than we'd like, he talked about some things taking longer than he thought they would. But he also now sees around the corner, that we are very quickly going to be in this age of infinite compute, and we are already in an age of, no one's reading manuals. Just seemed very kind of customer-centric, we're no longer the super-smart Germans that, "We'll do it our way or the highway, "and you will adapt your process to us," but really customer-centric point of view, design thinking, talked about sharing their roadmap as far out in advance as possible. I think he specifically, when he got questioned on design thinking, he's, like, "You know, the studies show that a collaborative effort "yields better results. "It's no longer, 'We're the smartest guy in the room "'and we're going to do it this way "'and you're going to adapt.'" So really progressive. >> And he talked about, with Concur, he said their UI is so easy that you really don't need a manual. In fact, if you do, you failed. And I think what he's trying to say is, we're going to take that iterative prototyping capability agile development and extend it to the rest of the ERP family. With their Fiori UI and the tools that build those screens that it'll make that possible. >> You've handled CAP. We don't spend enough investment on design in UI, 'cause it is such an important piece of the puzzle. But George, we're running out of time here. I want to give you the last word. You've been paying attention to SAP for a very long time. Hasso's terrific, but then Hasso gets off the stage and he said, "I don't run the company any more. "I only make recommendations." As you look at SAP, and Bill McDermott was yesterday, are they changing? Are they just stuck in an innovator's dilemma because they just make so much money on their historical business? Or are they really changing? What's your take as they develop, where they are now, and what do you see going forward for SAP? >> Well it's a really good question. I would say, I look at the value of the business processes that they are either augmenting or automating. I hesitate to say automate because, as he said, you still want the pilot in the cockpit. >> Jeff: In proximity to take control. >> Right. And he was, like, "Look, when we do the invoice matching, "it's not like we're going to get 100% right. "We're going to get it," I think he was saying, like, in the labs right now it's, like, 94% right. So we're going to make you more productive, we're not going to eliminate that job. But when you're doing invoice matching, that's not a super high value business process. If you're doing something where you're predicting churn and making a next best offer to a customer, that's a higher value process. Or if you have a multi-touchpoint commerce solution where you can track the customer, whether it's mobile, whether he's coming via chat, whether he's in the store, and you're able to see his history or her history and what's most appropriate given their context at any one moment, that's higher value. And then it's super high value to be able to take that back upstream towards, "Okay, here's where the inventory is. "I have some in this store. "I can't fulfill that clothing item directly from the store, "but I can fulfill it from this one," or, "I have it in another warehouse," when you have that level of awareness and integration, that's high value. >> Yeah, but I want to push back a little bit on you, George, 'cause I do think the invoice ma-, if he can automatically match 94% of the invoices, that is tremendous value. I just think it's so creative when you apply this machine learning to tasks that feel relatively mundane. But if you're speeding your cash flow along, if you get 94% of your invoices done one day faster and you're a multimillion dollar business, what is the direct dollar impact on the bottom line, like, immediately? It's huge. And then you can iterate and move into other processes. I think what's termed a low value transaction is actually a lot higher value than people give it credit. It's just like again, another one we hear about all the time, automation of password reset. Some of these service desks, password reset, I heard a stat, and one of them was 70% of the calls are password reset. So if you could automate password reset, sounds kind of silly and mundane, oh my gosh, it's like 70% of your calls. It's humongous. >> I hear what you're saying. Let me give you another counter example, which was, I think he brought this up. I don't know if it was today or when Michael Dell spoke, which was that Dell's revolution wasn't that they were more efficient than doing what Compaq did. It's that they had a different business model, which was specifically, they got paid before they even procured or assembled the components. >> Or paid for them, right? >> George: Yes, yes. >> They had no inventory carry costs. >> In fact, that meant their working capital, their working capital needs were negative. In fact, the bigger they got, the more money they collected before they had to spend it. That's a different business model. That wasn't automating the invoice matching. That was, we have such good systems that we don't even have to pay for them and then assemble the stuff until after the customer gave us their credit card. >> Right, right, right. >> I think those are the things that new types of applications can make possible. >> Right. Well, we see it time and time again. It's all about scale, it's all about finding inefficiencies, and there's a lot more inefficiencies around than people give credit, as Uber showed with a lot of cars that sit in driveways and Amazon and the public clouds are showing with a lot of inefficient, not used utilization and private data centers. So the themes go on and on, and they're pretty universal. So, exciting keynote. Any last comment before we sign off for today? >> I guess we want to take a close look at Oracle next and see how their roadmap looks like in terms of applying these new technologies, iOT, machine learning, block chain. Because all of these can remake how you build a business. >> All right, that's George Gilbert from Wikibon. I'm Jeff Frick from the CUBE. We are covering ongoing coverage of SAP SAPPHIRE 2017. Thanks for watching, we'll be back with more after this short break. Thanks. (lively music)

(bombastic music) >> Narrator: It's theCUBE, covering Sapphire Now 2017. Brought to you by SAP Cloud Platform and HANA Enterprise Cloud. >> Lisa Martin: Journey to the Cloud requires empathy, requires transparency, and we've both kind of chatted about... Empathy is kind of an interesting thing. >> George Gilbert: Yeah. >> We don't necessarily hear a lot of CEOs talk about that. They also really talked about and drove home the point that software is now a strategy. Being open is a game-changer. So, a couple of things I kind of wanted to recap with you was there was two initiatives that they, SAP, launched, or announced, today, reinforcing the pledge to listen to customers. And one of them is the SAP Cloud Trust Center, this public website that offers real-time information on the current operations of Cloud solutions from SAP. Along the lines of empathy and transparency and really listening to the customers, what, in your take, is the SAP Cloud Trust Center, and what does it really mean? >> Okay, maybe start with an analogy. We used to call people who did not want to outsource their infrastructure, we called them "server-huggers," you know, they wanted to own their infrastructure. And part of allowing your software, mission critical software, to migrate off your... out of your data centers, off-prem, requires a certain amount of trust that takes awhile... takes awhile to earn, because you're going from infrastructure that you've tuned and that only supports your app to infrastructure in the Cloud that's shared. And that's a big change. So, essentially, SAP is saying, "We'll give you a window onto how we operate this, so that we can earn your trust over time." You know, sort of like a marriage: through thick and thin, richer or for poorer, because there are going to be hiccups and downtimes. But ideally, SAP is taking responsibility and risk off the customer. And over time, that should be... Since they know better how to run their software than anyone else, that should work. So they're taking what they believe is a very reasonable risk in saying, "We'll show you how well we do, and we'll show you we do it better than you." >> So there are, right now, there will be three operations, three services, that will be visible, where customers can see planned maintenance schedules, four weeks of historical data, as well as real-time availability, security, and data to privacy. You brought up a great point that I think in many, many contexts, this transcends industries. This transcends peoples. That trust has to be earned. Does this set SAP apart, or differentiate them, in the market? >> Gilbert: I actually think that this was the sincerest form of flattery in terms of copying Salesforce.com. >> Martin: Ah. >> Because they've had this for awhile. And SAP is far more mission-critical, because it's sort of your system of record. It keeps track of everything that happens in your business, whereas Salesforce, it's not really a transactional system. It's more of keeping track of your opportunities, you know, and your customers. If SAP goes down, your business goes down. >> Right. Right. So another thing that they announced regarding, or along the same lines of, this pledge to customers about being empathetic, about being transparent, is the Transformation Navigator. Now, this came actually directly out of comments that Bill McDermott made at SAP Sapphire 2016, where SAP really wanted to start looking at the world through the customer's perspective, through their lens. So talk to us about the Transformation Navigator. Who is it for, what does it do, and what can people or companies expect to get from it? >> I think that one way to look at it is SAP made a bunch of very large and very important acquisitions, like Concur for expense reporting, SuccessFactors for... HR measurement and talent management, and Ariba for procurement. And I don't think they had put together a compelling case for why you buy them all together. And I think that was the first objective of the Transformation Navigator, because it says that it outlines the business value, helps you with transformation services, explains how all the Cloud apps, which were the ones they bought, integrate with the existing ERP, whether on-prem or in the Cloud, and shows you a roadmap. So it sounds to me like it's their first comprehensive attempt to say, "Buy our product family." I would say that the empathy part, the Cloud Trust Center, is a much deeper attempt to say, "Hey, we're going to make all this stuff work together." The first is a value proposition. >> Martin: Right. We should mention that there are two sessions at SAP Sapphire Now that attendees can take advantage of under the auspices of the SAP Transformation Navigator. There is a session on digital transformation, a concept session, and there's also digital transformation deep-dive sessions. So if you're around and you've got time, check those out. Another thing that we talked a lot about today, and that we heard a good amount of today, George, was this expanded Leonardo. That was brought up in the keynote on main stage this morning. And we know that Leonardo was really the brand for IoT, but now it's got new ingredients, it's got these new systems of intelligence, machine learning, artificial intelligence, analytics, blockchain. What are the keys of getting value from these technologies with this new, expanded Leonardo capability? >> I guess one way to think about it is... So the SAP core, which they call, I believe they call the... either "digital core" or just "core," which is the old system of record, and then all these new capabilities around it, which is how to extend that system of record into a system of intelligence. Again, used to be just... Last year, it was IoT, but now there's so much more richness that goes around it. These are all building blocks that customers can sort of ultimately mix and match. Like, you could use blockchain as a way of ensuring that there's no tampering or fraud from the bananas in Peru, all the way till the grocery store in New Jersey. But if you use that in conjunction with supply chain, machine learning, replenishment, you get much better asset utilization. I guess... they're trying to say, "We have your system of record. We have your mission-critical data and business processes." Now it's easy to build around on the edges, around the edge of that, to add the innovative processes. >> So it sounds like, from a value perspective, by embedding Leonardo into business applications... >> Gilbert: Yeah. >> There are innovations that customers can achieve, asset management, you talked about that, so there's clear business value. As you mentioned, it's maybe like a pick-and-choose that customers can decide which of these new systems of intelligence that they need, but there's clearly a business value derivation there. >> You could think of... Yeah, where all these new services enable transformative business outcomes, the old system of record was more, as we've talked about before, was about efficiency. So it makes sense to position these capabilities as transformative. And to say that they leverage the system of record, core, makes SAP appear to be the more natural provider of these new services. >> So in this route, they did announce that they are partnering with Deloitte. What do you think they're doing here? What's the advantage that provides to SAP's install base? >> When you're... embarking on these transformational business outcomes, there is... severe, challenging change management that has to be done. It's not just that it's... We always have products, processes, and technologies, or people, products, and technologies. Here, your processes and your people have to go through much more radical change than they would in an efficiency application, which was the old system of record. We all remember back when SAP R/3 was taking off, the big system integrators got spectacularly wealthy over the change management requirements to do the efficiency roll-outs. Now, to do the transformational ones are far more challenging right now. >> So, another thing that we chatted about earlier was that SAP has embedded machine learning into a new wave of applications. What are those applications, and what is this really for SAP as a business? >> Well, my favorite analogy is something I guess I heard from one of the SIs back in the heyday of the original SAP R/3, which was, you know... Traditional business intelligence and reporting was really about steering a ship by looking backwards at its wake. And machine learning is all about predictive... answers and solutions. So you pivot now, and we've heard a lot about this concept of "software's eating the world," but now data is eating software, because it's the data that programs the software about how to look forward. And some of those forward-looking things are figuring out how to route a service ticket, like, if something goes wrong, where does it go into the support organization? A really important top-line one is customer retention, where you predict if a customer is about to churn, what type of offer do you have to make? >> Martin: Right. >> Then there's a cash application, which, to me, is kind of administrative, where it makes it easy to match a receivable, like an invoice, with a bank statement. Still kind of clerical, and yes, you get productivity out of it, but it's not a top-line thing like the customer churn function. There's a brand impact one where it's like, "I've spent x amount to promote my brand at a sporting event, used machine vision to find out how many logos were out there, and did it have impact that I can measure?" There are a whole bunch of applications like this, and there will be more. And when I say more, I think the more impactful ones that relate to, like, supply chain, where it's optimizing the flow of goods, choosing strategic suppliers... >> So this may be, with SAP embedding machine learning into this new wave of apps, is, like, a positive first step, entry level, for them to get up the chain of value? >> Gilbert: Yeah. The first... Yes. Yes. Yes. The first ones look to be sort of like baby steps, but SAP is in a position to implement more impactful ones. But it's worth saying, though, that in the spirit of "data is eating software," the people who have the most data are not the enterprise application vendors. They're the public Cloud vendors. >> Martin: Right. >> And they are the... sort of... unacknowledged future competitors, mortal competitors, for machine learning apps. >> Okay. Interesting. So, another thing that I wanted to switch gears, see if we could get a couple more topics in before we wrap here... The digital twin for IoT devices. So the relaunching of Leonardo as SAP's digital brand, they've expanded this definition. What does that mean? What is the digital twin? >> Okay, so digital twin is probably the most brilliant two-word marketing term that's come out of our industry in awhile. >> (chuckling) >> Because GE came up with it to describe, with their industrial Internet of Things, any industrial asset or device where, you took a physical version, and then you created a very high-fidelity software representation of it, or digital representation. I don't want to say replica, because it'll never be that perfect. >> Martin: Okay. >> But they would take the design information from a piece of CAD software, like maybe PTC or Autodesk. So that's as designed. There would be information from how it was manufactured. That particular instance, in addition to, let's say all aircraft engines of this... (sudden musical interlude) ...track, each instance. >> (coughing) Excuse me. >> Then, how it was shipped or who it was sent to, how it was operated, how it was maintained, so then you could... The aircraft engine manufacturer could provide proactive fleet maintenance for all the engines. It would be different from the... very different from having the airlines looking in their manuals, saying, "Okay, every 50,000 miles I got to change the oil." Here, the sensors and the data go back to the aircraft engine manufacturer. And they can say, "Well, the one that's been flying in the Middle East is exposed to sand." So that needs to be proactively maintained at a much shorter interval. And the one that's been flying across the Atlantic, that gets very little gunk in it, can have a much larger maintenance window. So you can optimize things in a way that the current capabilities wouldn't allow you to. >> And they showed an example of that with the Arctic Wind pilot project, which is very interesting. >> Yeah. Where it showed windmills, and not just the wind farm. You saw the wind farm, but you also see the different wear and tear, or the different optimizations of individual windmills. >> Martin: Right. >> And that's pretty interesting. Because you can also reorient them based on climate conditions, microclimate conditions. >> Exactly. So last topic I wanted to dig in with you today is blockchain. So you and I chatted about this, kind of chatted about... What is blockchain, this distributed ledger technology? In the simplest definition, a reliable record of who owns what, and who transacts what. So from what we heard today, and from our conversation, it seems like maybe SAP is dipping a toe into the water here. Give us a little bit of insight about what it is they're doing with blockchain, and maybe a couple of key use cases that they shared in supply chain, for example. >> Okay. So the definition you gave, I think distills it really well, with one caveat. Which is, if it's a record of who owns what, who's done what, in the past we needed an intermediary to do that. The bank. Like, when you're closing on your house, you know, someone puts the money in, you know, someone signs the contract. And only when both are done does it exchange hands. With a blockchain, you wouldn't need someone in the middle because the transaction's not complete until, on one part of the ledger, someone has put the money in, and, on the other part, someone's put the title in. And, not to sound too grandiose, but I've heard people refer to this as the biggest change in how finance and trust operates since Italian double-entry bookkeeping was invented in, like, the 1300s, or somewhere way, way back. And so, if we take it to a modern usage scenario, we could take... foodstuffs that are grown, let's say in Southeast Asia, they get put in a container that's locked. And then we can know that it's tamper-proof, because any attempt to open that would be reflected as a transaction in the blockchain. There are other, probably better, examples, but the idea is, we can have trust in so many more scenarios without having a middleman. And so the transaction costs change dramatically. And that allows for much more friction-free transactions and business processes than we ever thought possible. Because having someone like a bank or a lawyer in the middle is expensive. >> Right. And I'm glad that you kind of brought that back to trust as we wrap up. That was kind of the key theme that we heard today. >> Gilbert: Yeah. >> And a lot of great announcements. So George, thanks so much for spending the day with me, analyzing day one of SAP Sapphire Now 2017. >> Gilbert: Thank you, Lisa. >> And we thank you for watching. George and I will be back tomorrow analyzing day two and talking about great things that are going on, again, coverage from SAP Sapphire Now 2017. For George Gilbert, I'm Lisa Martin. We'll see you next time. (fanfare)

[Narrator] It's The Cube. Covering SAPPHIRE NOW 2017. Brought to you by: SAP Cloud Platform, and HANA Enterprise Cloud. >> Welcome back everyone live here in Palo Alto for our studio coverage of SAP SAPPHIRE NOW 2017. I'm John Furrier of The Cube. Three days of SAPPHIRE NOW coverage from our 4500 square foot studio in Palo Alto covering all the action news on the ground in Orlando, Florida where SAP SAPPHIRE NOW is taking place. The big news and big story of SAPPHIRE is the cloud, multi-cloud strategy and what it means for customers. This is part of SAP's Cloud Platform. I had a chance to sit down with the leader of that team, Dan Lahl, who is the Vice President of Product Marketing. I asked Dan to break down the big news for SAP Cloud Platform. Here's the conversation with myself and Dan Lahl. >> What we're announcing at SAPPHIRE this week is we are going to be running SAP Cloud Platform not only in SAP data centers, but also in AWS data centers, in Azure data centers and in GCP data centers. So, we really now are above the fray of the infrastructure wars. >> It's actually, we also talked with your team at SAP Cloud Platform around Google Next. >> Dan: Yeah. >> And, you guys had a significant announcement. The folks flew in from Germany, the big entourage on-stage with Diane Greene's team at Google, and I was scratching my heading saying I didn't even see this coming, you kind of kept it from me. (chuckles) I knew you had something up your sleeve. Significant presence with Google. So I ping the Amazon folks and say hey what's going on, you lose Hensburg? They said no, no we're doing a lot of great stuff with SAP. Of course, Google is trotted out there as a big win. But this is the strategy for SAP, and Andy Jassy was in San Francisco a while back and he said look, we are winning with more services, more services. But, he made a point. The lock-in spec of the old, and he also talked about the, you can't fight gravity. The old way to buy infrastructure is just taking it down. >> It's dead, it's dead. And our view is we're going to be a software company, right? We're not going to play at the hardware layer, we're going to play above that and differentiate with business services above that. Let the customers decide what they think the best hyper-scale vendor is. We'll give them great software, business services above those layers. >> So, I think multi-cloud is the hottest trend that nobody's talking about. You guys are talking about it obviously, but in the press corps, in the media, no one's actually really digging into this because it's very nuanced. It's an industry kind of thing. But having multi-cloud is like interoperability back in the networking days. >> Dan: That's right. >> And just to be clear, you guys are still behind a hundred percent with AWS, Amazon Web Services, >> Dan: Absolutely, yep. >> and Microsoft Azure. >> Yep, and GCP as well. And then you want to run it at an SAP data center you can do that too, and we'll give customers one cockpit, one piece of glass to manage all those different environments. >> So your PaaS is on Google Cloud Platform >> Yep. >> At Microsoft Azure, and Amazon Web Services. >> To be perfectly clear, GA on AWS, beta on Azure and we're doing a pilot showcase on GCP. That's cool -- >> So that's platforms of service. >> That's right. >> Now that's a completely different strategy than say Oracle. >> Yeah, let's lock you in one more time. Let's lock you in to cloud. >> But they have hardware, and they're going frontal attack against Amazon and vice versa. There's a war going on between the two. That's not what SAP's trying to do, I don't see you making any noise out there. >> To me that's a race to the bottom. That's a race to the bottom. So we're going to provide business services above that hardware layer with the PaaS and then business services above that to help customers. >> So, managing Cloud Workloads is also another topic and this is being talked a lot in context to hybrid clouds. So hybrid cloud obviously is a big deal. A lot of people are moving to public cloud and Andy Jassy says they're happening much faster. I kind of disagree with Andy on this point. I think he's got momentum for sure, and I love what they're doing, but I don't think they're moving as fast. Still got a lot of on-premise. This is your world as well at SAP, so you have to kind of build the connectors if you will. Connectors or API. So, a lot of customers want to know what to do, and then so multi-cloud I think's going to be super important. >> Dan: Yes. >> But I still got the on-premise investment in systems of record, systems of software, that need to enable opportunities for new app development and what-not. How do you talk to customers about that? >> That's not going away. That is not going away for ten years. So, hybrid cloud's going to be with us. So our strategy is we will provide integration services, whether that be at the data layer, whether it be at the process layer, or whether that be through API or microservices. We're going all-in on all of those. So, if you want to connect a business process that you've built in Cloud Platform with an on-premise system, you can do that whether that's SAP or a not SAP. If you want to use APIs and use that infrastructure, we're exposing more and more APIs. In fact, this week we're announcing over a hundred APIs being exposed for S/4HANA, in the finance area for Ariba, for SuccessFactors, for Fieldglass. And then we're adding actually specific APIs for specific business functions. So, do a billing off an invoice, collect data, collect information off a purchase order. We're exposing those higher level services as well. So, integration is huge and again we've been in the data services as well, so you want to move data to the cloud we're providing services to do that too. >> So, two things that are jumping out at me looking at what you guys are doing this week at SAPPHIRE is this API connector. So you're connecting the SAP world into the cloud. And certainly the platform is a service that you have in the platform, the cloud platform is fundamental. But, there's a big buzz around marketplaces. So talk about some of the new things you're doing there because I think this where it gets kind of interesting and it lets us get your perspective on what you guys are announcing, and your thoughts on this notion of the apps center, marketplace, I mean Amazon Web Services is doing a lot of great things. They think that the consumption pattern in the future will all be driven by some sort of app center. You guys are in the software business. I'm assuming that's a big part of what you got doing, what's new? >> Yeah, very exciting for marketplace as well. So, we're extending the value of the app center for our customers. So today you want to look at a partner application, you can go look at it, you can discover it, but you really can't do more than that off the app center. So, today what we're announcing, or this week at SAPPHIRE, the ability discover, to learn, to try, to buy, and to use all directly off the app center. And in further on to that, we'll manage the application for the partner and for the customer. So, if the partner updates their application, automatically gets downloaded and updated through the marketplace, through the app center. >> I've been reading a lot of stuff on the cloud and AI and use the line 'talk to me like I'm a, pretend I'm a five-year old.' People have been using that quote a lot. So, pretend that I'm a customer, I'm not a five-year old, but a customer that's not under the hood, might not be following all the trends. Here's my challenge. I'm on-prem, I'm moving to the cloud, and I just haven't decided yet who I want to look at and John hasn't posted his competitive matrix yet, so I don't know he feels, and I got that coming out, a little plug for my upcoming research, (Dan laughs) but they have a relationship with Microsoft, I have a relationship with SAP, I love Google's got the Mojo with TensorFlow and Machine Learning and all the smart engineers they have. And Amazon is just awesome. I just don't know yet which ones. Can I just choose from the app center? >> Absolutely. >> John: Cloud, any cloud that I want? Or -- >> Well, it's really for any partner that's built on the cloud platform today. So, as we move forward with the multi-cloud you're going to see that happening. >> John: But that's a trend you guys see. >> We definitely see that. And you're right, we want to make it like a five-year old. You want to discover, you want to try, you want to use. That's what we do with the app center today. >> So the other thing I liked about Mobile World Congress when we did chat last, you guys announced in Barcelona at Mobile World Congress this notion of Workflow. What is the new with that? Cause there's some news around some new things you're doing with Workflow. What do you have? >> Yeah, so we're extending Workflow with actually a rules system as well, so we've added a new service to go along with Workflow called Business Rules. So, now you can mash up workflows as we've talked before, mash up some business processes. But now you can actually use the rules system to open up each business process, add logic into that, and as a business analyst it's really if-then type of capability. So pretty easy. Put that, close it back up, now you have a whole new business process or an extended business processes in using Workflow and Rules together. >> So you make it more flexible for the Workflow to get -- >> Let the business analysts deliver more value in their job, and extend business processes more easily. >> What about the app developer? I'm an app developer, I want to take advantage of all the greatness of SAP. What mechanisms are you guys announcing or talking about at SAPPHIRE this year that make my life easier? Without being an expert on SAP, is there any mechanism for me to say hey I want some Rules and app goodness coming into my app? >> Yeah, we have all-new tooling that we're going to be talking about at SAPPHIRE, so we have some relationships we're building with other partners to do high-productivity application work. And then we're extending our Web IDE development tool to be a full stack development environment. Whether you want to do it via the web, whether you want to do it via mobile, if you want to integrate other combinations, other technologies like Slack or other technologies in there. You can do all that in the Web IDE development tool. >> So I can add business services into the API. >> Into the Web IDE, and you can extend the Web IDE like we've done with Slack. So, you just create another tab and import that tool into the Web IDE. So, very easy for developers now to create applications that will run seamlessly on Cloud Platform. >> Let's just take a step back while you're on this topic. This is interesting, DevOps has been the movement that has gone mainstream now with things that we're talking about here. Your philosophy with the developer is what, to just give them SAP all day long? What's the main value proposition for the platform as a service that you have for the developer? >> So, my joke is with Cloud Platform we're able to talk to developers under 40 because it's a Java-based environment. So, what we get with the Cloud Foundry work that we've done with the multi-PaaS and that's how we're doing -- >> John: Oh yeah, everyone over 40 still likes Java too, so we learned about Java >> Me too. (both laugh) So anyway, what we're delivering through multi-cloud we're doing it through Cloud Foundry, and that gives the ability to have multiple run-times. So for those folks that want to use no doT.js they can use that. They want to use different languages like Ruby, Python, Perl, Go, those languages, they can use those as well. So, our view is whatever language, whatever run-time you want to bring to the party, SAP will have this environment where you can develop and deploy in that. And we bring all the mobile technology that we've had for years and years and years if you want to deploy on mobile you can do that too. So I think where we've been lacking in the past is some of the high-productivity tools. So we're adding high-productivity capabilities for our mobile development as well as for core development too. >> Bottom line me on how you would package this up, because there's so much going on at SAPPHIRE. What's the net, net, net? What's the bottom line, because how, gimme the elevator pitch real quick. What's the big news that -- >> Here's the real sound bite. >> -- to set SAP Cloud Platform. >> Yeah, the real sound bite is we're accelerating choice, accelerating adoption, and accelerating ease of use for our customers to be able to adopt cloud. So you get your choice through multi-cloud. You get your choice of different applications that you can do business directly on, and then you're getting choice and capabilities through all of the services. >> What are you most excited about, to point to one thing say look at this new feature. >> It's multi-cloud. We think multi-cloud, as you said, it's the hottest thing going today. We are all-in on multi-cloud. And you'll see us deliver more and more capabilities and services that run on whatever infrastructure provider you want to run on. So, again we're a software company. We're not going to participate at the hardware layer. We're going up, not going down. >> I recently interviewed the CTO of Analytics at Accenture here on one of my shows. He got a huge amount of views. There's a huge interest in analytics. Obviously not something new to you guys, but Accenture's a partner. And that brings up the question, this is all great, you got the cloud relationship so essentially you guys look at cloud the same way you looked at hardware vendors in the past. They're partners, SAP doesn't really change your game, you're still doing the software, still provide all that business intelligence to your customers through software. But I got to ask you the impact to partners, cause they're changing. >> Dan: They are changing. >> Accenture, Deloitte, all of them that, all the top guys out there are changing. >> They're having to become ISVs. It's pretty amazing. They're having to do more than just coming in with a big pitch saying a million dollars in two years. So what we see Accenture, Deloitte, others doing, is providing actual full applications now as an ISV and Deloitte and Accenture have actually done that both through cloud platform. And they're also becoming prototyping and PoC specialists as well. So, they'll come in, they'll do a design thinking with our customer, they'll prototype it, they'll PoC it on the Cloud Platform, do something in four weeks, prove out a concept so that they can then go to the next level, the next step on the agreement. >> Yeah, they're becoming much more strategic with the customers. Well, they always had been, I'm not saying they hadn't in the past. >> But not just implementation, right? It's actually proving that they can do something new in digital transformation, for example. >> I mean, back in the old days SAP ERP roll out in the 80s and early 90s. It was a gravy train for the integrators. >> Yeah. >> You know, the time tables were multi-year. And to your point, the world has changed with Agile that they have to then break down these milestones and have proof of value. Time to value is much shorter, so it's still lucrative, but just different execution cadence. Can you talk about that? >> And just think about that, with the value they're providing they're actually bringing a prototype or a PoC that's a proof point, a proven part of the application that they're going to show to the customer so that they can get to that next level of application development with the customer. So it's really much more of a partnership, and we get to be the platform on which they're running which is the cool part for us. >> Dan, thanks for coming. This Cube conversation's special on SAPPHIRE what's happening around all the new announcements. What should people be looking at this week? What cool things have you got going on on the ground in Orlando? >> Yeah, come to our campus. Come see all the cool things we're doing. Not just what I've talked about, but also IoT that runs on Cloud Platform, Machine Learning AI that runs on Cloud Platform, big data that runs on Cloud Platform. All of the new applications we're bringing that are part of Cloud Platform as well that run on top of the Platform. So, we are truly becoming a pretty cool cog in the SAP wheel. >> Well, great strategy, I'll say it's really brilliant. It's actually mapped the old SAP onto a modern world with cloud as infrastructure. You got the multi-cloud vision, I think that's very relevant. I still, it's still early, early innings stage, but certainly great with the PaaS applied from as a service. The API in the app center, all the new services, great for partners, great for SAP. And again, you're not Oracle. Oracle's fighting all the cloud guys directly. You guys are, you're Switzerland here. >> Exactly. >> Congratulations, thanks for spending the time and breaking it down, appreciate it. >> Dan: Thank you John, appreciate your time today. >> Hi, I'm John Furrier, this is a Cube conversation about SAPPHIRE 2017 with SAP Cloud Platform's Dan Lahl, who's the Vice President of Product Marketing. I'm John Furrier, thanks for watching. (tech music)

>> Hey, welcome back everybody. Jeff Rick here with the Cube. We are live in downtown San Jose at the historic Pagoda Lounge, part of Big Data SV, which is part of Strata + Hadoop Conference, which is part of Big Data Week because everything big data is pretty much in San Jose this week. So we're excited to be here. We're here with George Gilbert, our big data analyst from Wikibon, and a great guest, Gaurav Dhillon, Chairman and CEO of SnapLogic. Gaurav, great to see you. >> Pleasure to be here, Jeff. Thank you for having me. George, good to see you. >> You guys have been very busy since we last saw you about a year ago. >> We have. We had a pretty epic year. >> Yeah, give us an update, funding, and customers, and you guys have a little momentum. >> It's a good thing. It's a good thing, you know. A friend and a real mentor to us, Dan Wormenhoven, the Founder and CEO of NetApp for a very long time, longtime CEO of NetApp, he always likes to joke that growth cures all startup problems. And you know what, that's the truth. >> Jeff: Yes. >> So we had a scorching year, you know. 2016 was a year of continuing to strengthen our products, getting a bunch more customers. We got about 300 new customers. >> Jeff: 300 new customers? >> Yes, and as you know, we don't sell to small business. We sell to the enterprise. >> Right, right. >> So, this is the who's who of pharmaceuticals, continued strength in high-tech, continued strength in retail. You know, all the way from Subway Sandwich to folks like AstraZeneca and Amgen and Bristol-Myers Squibb. >> Right. >> So, some phenomenal growth for the company. But, you know, we look at it very simply. We want to double our company every year. We want to do it in a responsible way. In other words, we are growing our business in such a way that we can sail over to cash flow break-even at anytime. So responsibly doubling your business is a wonderful thing. >> So when you look at it, obviously, you guys are executing, you've got good products, people are buying. But what are some of the macro-trends that you're seeing talking to all these customers that are really helping push you guys along? >> Right, right. So what we see is, and it used to be the majority of our business. It's now getting to be 50/50. But still I would say, historically, the primary driver for 2016 of our business was a digital transformation at a boardroom level causing a rethinking of the appscape and people bringing in cloud applications like Workday. So, one of the big drivers of our growth is helping fit Workday into the new fabric in many enterprises: Vassar College, into Capital One, into finance and various other sectors. Where people bring in Workday, they want to make that work with what they have and what they're going to buy in the future, whether it's more applications or new types of data strategies. And that is the primary driver for growth. In the past, it was probably a secondary driver, this new world of data warehousing. We like to think of it as a post-modern era in the use of data and the use of analytics. But this year, it's trending to be probably 50/50 between apps and data. And that is a shift towards people deploying in the same way that they moved from on-premise apps to SAS apps, a move towards looking at data platforms in the cloud for all the benefits of racking and stacking and having the capability rather than being in the air-conditioning, HVAC, and power consumption business. And that has been phenomenal. We've seen great growth with some of the work from Microsoft Azure with the Insights products, AWS's Redshift is a fantastic growth area for us. And these sorts of technologies, we think are going to be of significant impact to the everyday, the work clothing types of analytics. Maybe the more exotic stuff will stay on prem, but a lot of the regular business-like stuff, you know, stuff in suits and ties is moving into the cloud at a rapid pace. >> And we just came off the Google Next show last week. And Google really is helping continue to push kind of ML and AI out front. And so, maybe it's not the blue suit analytics. >> Gaurav: Indeed, yes. >> But it does drive expectations. And you know, the expectations of what we can get, what we should get, what we should be moving towards is rapidly changing. >> Rapidly changing, for example, we saw at The New York Times, which as many of Google's flagship enterprise customers are media-related. >> Jeff: Right. >> No accident, they're so proficient themselves being in the consumer internet space. So as we encountered in places like The New York Times, is there's a shift away from a legacy data warehouse, which people like me and others in the last century, back in my time in Informatica, might have sold them towards a cloud-first strategy of using, in their case, Google products, Bigtable, et cetera. And also, they're doing that because they aspirationally want to get at consumer prices without having to have a campus and the expense of Google's big brain. They want to benefit from some of those things like TensorFlow, et cetera, through the machine learning and other developer capabilities that are now coming along with that in the cloud. And by the way, Microsoft has amazing machine learning capability in its Azure for Microsoft Research as well. >> So Gaurav, it's interesting to hear sort of the two drivers. We know PeopleSoft took off starting with HR first and then would add on financials and stumble a little bit with manufacturing. So, when someone wants to bring in Workday, is it purely an efficiency value prop? And then, how are you helping them tie into the existing fabric of applications? >> Look, I think you have to ask Dave or Aneel or ask them together more about that dynamic. What I know, as a friend of the firm and as somebody we collaborate with, and, you know, this is an interesting statistic, 20 percent of Workday's financial customers are using SnapLogic, 20 percent. Now, it's a nascent business for them and you and I were around in the last century of ERP. We saw the evolution of functional winners. Some made it into suites and some didn't. Siebel never did. PeopleSoft at least made a significant impact on a variety of other things. Yes, there was Bonn and other things that prevented their domination of manufacturing and, of course, the small company in Walldorf did a very good job on it too. But that said, what we find is it's very typical, in a sense, how people using TIBCO and Informatica in the last century are looking at SnapLogic. And it's no accident because we saw Workdays go to market motion, and in a sense, are following, trying to do the same thing Dave and Aneel have done, but we're trying to do the same thing, being a bunch of ex-Informatica guys. So here's what it is. When you look at your legacy installation, and you want to modernize it, what are your choices? You can do a big old upgrade because it's on-premise software. Or you can say, "You know what? "For 20% more, I could just get the new thing." And guess what? A lot of people want to get the new thing. And that's what you're going to see all the time. And that's what's happening with companies like SnapLogic and Workday is, you know, someone. Right here locally, Adobe, it's an icon in technology and certainly in San Jose that logo is very big. A few years ago, they decided to make the jump from legacy middleware, TIBCO, Informatica, WebMethods, and they've replaced everything globally with SnapLogic. So in that same way, instead of trying to upgrade this version and that version and what about what we do in Japan, what do we do in Sweden, why don't you just find a platform as a service that lets you elevate your success and go towards a better product, more of a self-service better UX, millennial-friendly type of product? So that's what's happening out there. >> But even that three-letter company from Walldorf was on-stage last week. You can now get SAP on the Google Cloud Platform which I thought was pretty amazing. And the other piece I just love but there's still a few doubters out there on the SAS platform is now there's a really visual representation. >> Gaurav: There is. >> Of the dominance of that style going up in downtown San Francisco. It's 60 stories high, and it's taken over the landscape. So if there's ever any a doubt of enterprise adaptation of SAS, and if anything, I would wonder if kind of the proliferation of apps now within the SAS environment inside the enterprise starts to become a problem in and of its own self. Because now you have so many different apps that you're working on and working. God help if the internet goes down, right? >> It's true, and you know, and how do you make e pluribus unim, out of many one, right? So it's hilarious. It is almost at proliferation at this point. You know, our CFO tapped me the other day. He said, "Hey, you've got to check this out." "They're using a SAS application which they got "from a law firm to track stock options "inside the company." I'm like, "Wow, that is a job title and a vertical." So only high growth private venture backed companies need this, and typically it's high tech. And you have very capable SAS, even in the small grid squares in the enterprise. >> Jeff: Right, right. >> So, a sign, and I think that's probably another way to think about the work that we do at SnapLogic and others. >> Jeff: Right, right. >> Other people in the marketplace like us. What we do essentially is we give you the ERP of one. Because if you could choose things that make sense for you and they could work together in a very good way to give you very good fabric for your purposes, you've essentially bought a bespoke suit at rack prices. Right? Without that nine times multiplier of the last century of having to have just consultants without end, darkened the sky with consultants to make that happen. You know? So that, yes, SAS proliferation is happening. That is the opportunity, also the problem. For us, it's an opportunity where that glass is half-full we come in with SnapLogic and knit it together for you to give you fabric back. And people love that because the businesses can buy what they want, and the enterprise gets a comprehensive solution. >> Jeff: Right, right. >> Well, at the risk of taking a very short tangent, that comment about darkening the skies, if I recall, was the battle of the Persians threatening the 300 Greeks at the battle of Thermopylae. >> Gaurav: Yes. >> And they said, "We'll darken the skies with our arrows." And so the Greek. >> Gaurav: Come and get 'em. >> No, no. >> The famous line was, he said, "Give us your weapons." And the guy says, "Come and get 'em." (laughs) >> We got to that point, the Greek general says, "Well, we'll fight in the shade." (all laughing) But I wanted to ask you. >> This is the movie 300 as well, right? >> Yes. >> The famous line is, "Give us your weapons." He said, "Come and get 'em." (all laughing) >> But I'm thinking also of the use case where a customer brings in Workday and you help essentially instrument it so it can be a good citizen. So what does that make, or connect it so it can be a good citizen. How much easier does that mean or does that make fitting in other SAS apps or any other app into the fabric, application fabric? >> Right, right. Look, George. As you and I know, we both had some wonderful runs in the last century, and here we are doing version 2.0 in many ways, again, very similar to the Workday management. The enterprise is hip to the fact that there is a Switzerland nature to making things work together. So they want amazing products like Workday. They want amazing products like the SAP Cloud Suite, now with Concur, SuccessFactors in there. Some very cool things happening in the analytics world which you'll see at Sapphire and so on. So some very, very capable products coming from, I mean, Oracle's bought 80 SAS companies or 87 SAS companies. And so, what you're seeing is the enterprise understands that there's going to be red versus blue and a couple other stripes and colors and that they want their businesspeople to buy whatever works for them. But they want to make them work together. All right? So there is a natural sort of geographic or structural nature to this business where there is a need for Switzerland and there is a need for amazing technology, some of which can only come from large companies with big balance sheets and vertical understanding and a legacy of success. But if a customer like an AstraZeneca where you have a CIO like Dave Smoley who transformed Flextronics, is now doing the same thing at AstraZeneca bringing cloud apps, is able to use companies like SnapLogic and then deploy Workday appropriately, SAP appropriately, have his own custom development, some domestic, some overseas, all over the world, then you've got the ability again to get something very custom, and you can do that at a fraction of the cost of overconsulting or darkening the skies in the way that things were done in the last century. >> So, then tell us about maybe the convergence of the new age data warehousing, the data science pipeline, and then this bespoke collection of applications, not bespoke the way Oracle tried it 20 years ago where you had to upgrade every app tied into every other app on prem, but perhaps the integration, more from many to one because they're in the cloud. There's only one version of each. How do you tie those two worlds together? >> You know, it's like that old bromide, "Know when to hold 'em. "Know when to fold them." There is a tendency when programming becomes more approachable, you have more millennials who are able to pick up technology in a way. I mean, it's astounding what my children can do. So what you want to do is as a enterprise, you want to very carefully build those things that you want to build, make sure you don't overbuild. Or, say, if you have a development capability, then every problem looks like a development nail and you have a hammer called development. "Let's hire more Java programmers." That's not the answer. Conversely, you don't want to lose sight of the fact that to really be successful in this millennium, you have to have a core competence around technology. So you want to carefully assemble and build your capability. Now, nobody should ever outsource management. That's a bad idea. (chuckles) But what you want to do is you want to think about those things that you want to buy as a package. Is that a core competence? So, there are excellent products for finance, for human capital management, for travel expense management. Coupa just announced today their for managing your spend. Some of the work at Ariba, now the Ariba Cloud at SAP, are excellent products to help you do certain job titles really well. So you really shouldn't be building those things. But what you should be doing is doing the right element of build and buy. So now, what does that mean for the world of analytics? In my view, people building data platforms or using a lot of open source and a lot of DevOps labor and virtualization engineering and all that stuff may be less valuable over time because where the puck is going is where a lot of people should skate to is there is a nature of developing certain machine language and certain kind of AI capabilities that I think are going to be transformational for almost every industry. It is hard to imagine anything in a more mechanized back office, moving paper, manufacturing, that cannot go through a quantum of improvement through AI. There are obviously moral and certain humanity dystopia issues around that to be dealt with. But what people should be doing is I think building out the AI capabilities because those are very custom to that business. Those have to do with the business's core competence, its milieu of markets and competitors. But there should be, in a sense, stroking a purchase order in the direction of a SAS provider, a cloud data provider like Microsoft Azure or Redshift, and shrinking down their lift-and-shift bill and their data center bill by doing that. >> It's fascinating how long it took enterprises to figure out that. Just like they've been leveraging ADP for God knows how many years, you know, there's a lot of other SAS applications you can use to do your non-differentiated heavy lifting, but they're clearly all in now. So Gaurav, we're running low on time. I just want to say, when we get you here next year, what's top of your plate? What's top of priorities for 2017? Cause obviously you guys are knocking down things left and right. >> Thank you, Jeff. Look, priority for us is growth. We're a growth company. We grow responsibly. We've seen a return to quality on the part of investors, on the part of public and private investors. And you know, you'll see us continue to sort of go at that growth opportunity in a manner consistent with our core values of building product with incredible success. 99% of our customers are new to our products last quarter. >> Jeff: Ninety-nine percent? >> Yes sir. >> That says it all. >> And in the world of enterprise software where there's a lot of snake oil, I'm proud to say that we are building new product with old-fashioned values, and that's what you see from us. >> Well 99% customer retention, you can't beat that. >> Gaurav: Hard to beat! There's no way but down from there, right? (laughing) >> Exactly. Alright Gaurav, well, thanks. >> Pleasure. >> For taking a few minutes out of your busy day. >> Thank you, Jeff. >> And I really appreciate the time. >> Thank you, Jeff, thank you, George. >> Alright, he's George Gilbert. I'm Jeff Rick. You're watching the Cube from the historic Pagoda Lounge in downtown San Jose. Thanks for watching.

>> Voiceover: Live from Orlando, Florida, it's theCube, covering Sapphire Now. Headline sponsored by SAP HANA Cloud, the leader in platform-as-a-service, with support from Consul, Inc, the Cloud internet company. Now here are your hosts, John Furrier and Peter Burris. >> Everyone, we are live in Orlando, Florida for a special presentation of theCube at SAP Sapphire Now's theCube SiliconANGLE's flagship program. We go out to the events and extract the signal from noise. I'm John Furrier, with my co-host Peter Burris Want to give a shout out to our sponsors. Without them, we would not be here. SAP HANA Cloud Platform Console Inc, Capgemini and EMC, thanks for your support, really excited to be here. Wall-to-wall coverage, three days. Over forty videos going to be hitting YouTube: SiliconANGLE.com/youtube. Our next guest is Dan Lahl, VP of SAP HANA Cloud Platform Product Marketing, welcome to theCube, thanks for having us. >> Thank you, John. You got all that out without a stumble. That was fantastic. >> I memorize it. >> That's great. >> Without our sponsors, we wouldn't be here, thank you very much. Thanks to you, and it's a been great support from you and your team. Really appreciate it, welcome to theCube. >> Love being here. You guys have something very unique in how you bring a play-by-play but from an analyst's perspective, very, very unique. >> Someone called me Pat Summerall, and Peter, John Madden yesterday, which was a great compliment because our lives are ESPN of tech. >> And I like it because it means I'm the better looking one. >> Exactly. >> NFL Gameday, but the game is on. >> Peter: Who's a guy? >> John: Boom! (laughs) >> Boom the Cloud is here! >> It's the whiteboard. But all seriously, great conversation. One of the things that's emerging out of the whole HANA Cloud Platform Ecosystem play is that it's really buzzing, and it's not like sizzle, but it's steak on the grill as well. So, just a lot of meat on the bone and the thing that we're seeing is that SAP has been putting themselves out there with tech. And not trying to do the land grab, not saying, hey, we're SAP and this is all a marketing program to get more SAP share for our other stuff. There's clear separation between SAP stuff, whether it's, whatever the customers are buying, and then an open way for developers; both SAP developers and, now, mainstream developers, iOS and Apple so, huge shift. And the Ecosystem's super excited, so I got to ask you, how do you guys separate out the market? Explain to the folks out there how this all fits in because the HANA Cloud platform is more open, it's really non-SAP, in a way. And there's other clouds out there, and let's face it, you guys weren't getting the buzz. A little bit late to the party, and you've got the product in good position right now. But you got Amazon out there, as your Microsoft was here, you know, doing relationship with you, your partnering with Apple, IBM was on, Cisco, all the big guys are here working with you. Separate out what it means. >> So let me back up, let me back up and give you all the HANA buzzwords, we've been very confusing to the market on how we brand it to different HANA products. There's the HANA database, data managing platform, we came out with that in 2011; very similar to Oracle from SQL Interface standpoint, very different from a technology standpoint. All in memory, and everybody knows that by now. Then, we have another initiative called S/4HANA. That's taking all of the applications, putting them onto the HANA data management platform. So that's the app stack. So business suite is now S/4HANA. So data management was HANA, S/4HANA, app stack. Then we have something called the HANA Enterprise Cloud, and that's just basically a managed service. You want to take your landscape, give it to our data center, let us manage for you. >> For SAP stuff? >> SAP stuff. Yeah, not any of the red stuff or anybody else's apps but >> But some of the partner extensions? >> But some of the partner extensions, yes. And that has to be certified, but basically it's a managed service. So you want to give your data center over to SAP? Guarantee that it will run, we'll upgrade all of the apps and enhancement packs and that kind of thing. So that's HANA Enterprise Cloud. And then finally, HANA Cloud Platform is something different altogether. It really is our offer, open platform as a service. So, any of the applications that SAP is shipping today, whether that be business suite, S/4HANA, Success Factors, Ariba, Concur, Cloud for Customer, you name it, can be extended or integrated using HANA Cloud Platform. Okay, so HANA data management, HEC, the managed service, S/4HANA, the new app stack, HCP, really the extension platform for that SAP Ecosystem. Okay? Now I say that, it's an open platform. It's Java-based, can you believe it? It's not ABAP-based, it's Java-based. Node.js, all open systems. We announced at the show that we're shipping Cloud Foundry with Node.js runtimes scripting languages like Ruby and Python and PHP and Go. Databases like Mongo and Postgres and Redis, it's open systems, baby, right? >> All the tools that they are offering. >> Exactly, they can do that. Yeah. So, any programmer under 30, we can now approach and have a conversation with. They don't have to learn a German programming language, right? Now, whether it's good or bad, it doesn't make any difference, it's open systems, right? And so that's kind of the framework of what we announced. >> What's that mean to developers? Let's take that forward, okay, open cloud platform, okay, great, under 30, or, just open source is so good now all the Q&A, all the questions are on Stack Overflow and all these Node.js and technology out to be used, so that's what people want. Okay, what's the impact to me? I'm the developer. What does it mean? What's in it for me? Do I have access to all the SAP stuff? I'm used to dealing with all these different tools to put systems together. >> That's the beauty, John, is all of those tools that you use, as an open systems developer, you can now, through HANA Cloud Platform, get to the back end systems that we didn't expose before, expect through an ABAP stack. Right, you don't have to learn BAPIs, you don't have to learn ABAP. You can use your Java capabilities, using Eclipse if you want, if you want to do it on your desktop device, or use a web IDE that's Java-based, right? >> But you're exposing these through API? >> Exactly, exactly, through either APIs or through integration services, through a direct connect back to the back ends. And we not only expose data, but also processes as well, so you can take advantage of a process. One of the things we announced this week was the API Business Hub. So now, we're going to deliver a catalog of APIs, where we'll publish into and an open system developer can say Oh, what's with that management accounting services? That hooks back into S/4HANA, I just need to call the API and take advantage of those management accounting services. Very cool. >> So on the Apple relationship, which is an iOS-based thing, the developer can then go to the Enterprise customer, so this is the Ecosystem now, okay I'm a developer. I have a whitespace, I see some unique thing, a problem that my customer has, that I can solve, or I'm an entrepreneur and say Hey, you know, I have a unique idea, I want to solve that problem. I code it but I might rely on SAP data, say an ERP, I could tap that-- >> You can now tap it. >> John: And integrate it in seamlessly? >> Yes, and show it natively on an iOS device. That's what we're delivering through the ACP software development kit SDK. So you're an Apple developer today. Well, you could develop the next SnapChat or some consumer-to-consumer app. But interesting, the bulk of Apple devices or the bulk of devices in the Enterprise, are Apple devices. They're not Android devices. Apple's done some work on that, upwards of 75% are actually Apple devices. So now, you're a developer, you want to get access to all of those different applications that SAP has, delivered in beautiful 1990s master detail today. >> Let's face it, I mean, we had this comment on theCube which we concur with, the user experience of Enterprise software is dated, and old, and people are bringing their phones to work. >> That's really kind of you to say dated and old, okay? I would have said old and crappy, okay? >> No one wakes up and says, hey I can't wait to download my Enterprise app and use it on the weekend. It's like root canal, don't love it, but you need it. >> Part number 000743xp, okay so now they can get into all of those processes without having to know the back end process. Through the SDK, we're going to expose all of those. >> Share some data on some of the onboard. I know you had a lot of early adopters and now the program's ramping up. We've talked over the past year and you guys are tweaking the product. You want to make sure the product was solid, that was key. Might have been delayed a little bit, but the timing of the Apple announcement, perfect. But I can imagine that the developers are excited because certainly in the Ecosystem out there, in Silicon Valley and beyond, there's a softening, it's kind of a bubble bursting, if you will, on the consumer stuff, so there might not be a couple more unicorns. The few unicorns that come along at every cycle of innovation. But the Enterprise is hot, so the buzz on the street is the Enterprise is hot, that's where you make money. As everyone works for a revenue model, you got to break even, so, there's a big focus on that in the entrepreneurial ecosystem. So, is there an uptake that you can share or any stats on the kinds of new onboarding that you guys are doing. >> Yeah, so just this week, we also announced that IBM is taking all of their MobileFirsts for iOS applications. They're going to participate in the SDK and they're going to move all of their applications onto the HANA cloud platform. They had a beautiful UI that they built for a hundred little mobile apps that were enterprise ready, but not enterprise connected. So now they're going to connect all those hundred little apps like Find&Fix, and Parts Manager and that kind of thing. >> I can see the slogan now. Enterprise: Ready to Connect. >> Exactly. >> Connecting. >> It's pretty decent validation of some of the things we're talking about here. >> Exactly, and the HCP play in it, for SAP is that's the gearbox to get them back to all of the SAP apps. Whether they be On Premise business suite, On Premise S/4HANA, Workforce Management, with Success Factors and Fieldglass. It's the gearbox to get them back to all of those. >> So let me ask the question, you're in a private market so you've got your eye on the prize in the market, you're forward-facing, but also you've got to work with the product teams and deal with that. Do you see a window of opportunity right now? Because the timing of having the product ready with HANA Cloud Platform plus the Apple relationship and the IBM stuff, which is more validation, a window of opportunity, the wind is at your back. This window, you've got a short window to kind of go out and win. Are you worried about that? Are you guys investing heavily now, do you see now a time to throttle it up and pedal to medal, straight and narrow, 90 miles an hour? >> You know, I actually see it as the wave is forming. Okay, I don't think our customer base knows that much about HANA Cloud Platform, it really has its coming out party at TechWave, last October. It's now exposed to the business group. We had the techie outage, now its the business outing. I see the wave starting to form, okay? And we've got to catch the wave and we got to ride the crap out of it. And there's a lot of stuff on the product side we have to deliver. There's a lot more that we have to do for integrating into our existing systems. We have to provide more direct, not direct connections, we've already got that piece, but more integration with the processes. We're not all the way there yet. So we have to push our product, our product management and engineering teams to do that. And that's not always easy at a big company like SAP that has all these different divisions building processes. And then the other hard part is, you got to make sure our sales reps are introducing us into every single customer account as a gearbox, as the agility platform. So that's starting to happen. So I wouldn't even say we're on the wave yet. We're starting to catch the wave. >> So let me build on that. I have two questions. I don't want to say they're quick. But here's the first one, here's what our CIO clients are telling us. One of the advantages of everything you said, platform, a lot of entry points, means that their business can pick their own road map for how they go to S/4HANA, as opposed to having single one-way, and that's the only way in, that'll extend the adoption cycle. Do you see that being a positive thing ultimately for not only SAP, in getting this message, and getting this product out, but also all the partners and the Ecosystem to drive this whole thing forward? >> Let me answer the customer part of that first. The way we have set up S/4 and HCP, is S/4 is the core that you really don't want to touch that much, you don't want to customize that much, you don't want to extend, you do that in HCP. Why would you want to do that? Well, as we deliver new enhancement packs, and we're delivering every couple of quarters, on the S/4 platform. Every time you do a customization inside the app, when you have to upgrade, you have to do regression tests, you got to check to customizations against the new rev. It becomes, in technical terms, a hairball. It becomes a huge hairball. Take that off the plate, just do it on HANA Cloud Platform. And so that's the customer angle to it, the partner angle to it is very simple, and it's a win-win for partners and for us. They can, and for customers as well, they can build a little app on the platform, snap it into S/4, Success Factor, and make it look like an app that's part of our SAS application, okay? The customer doesn't have to provision anything. The customer takes a tile and puts it on their Success Factor application. We win, because they're consuming it on HCP, so we're monetizing that too. So the partner has an easy path, the customer gets something easy, we help monetize on that. >> It's a great story and a lot of folks are looking forward, so for example, some of our clients are telling us, We are looking at the S/4platform, the S/4HANA platform, we came to it through analytics. So here's an interesting question Dan, you've got a lot of background in database. So the old way of thinking about building a database application is you didn't want to write an application required more than 80, 90, 100 disk I/Os. >> Yeah. Now we're talking about in-memory databases, calmative organization, provide any number of different straight-forward, common interfaces from a few standpoints back to the application. We're talkin' about what used to be or the equivalent of tens of thousands, maybe even hundreds of thousands of I/Os. What does that mean to the types of applications that we're going to be able to build in the Ecosystem over the course of the next few years. >> So you're right in that all data's immediately available in-memory ready to go. But here's the cool thing that I think you were getting at. You can build a structure one time, you build a table structure one time. On top of that, you just build views, logical views. And then your queries or your application looks at the logical view. Now logical views aren't somethin' new. It was just horrible to do it on a disk-based databse. >> Yep, very digital. >> You have to do tons of optimizations. In a memory database, it doesn't matter. It's all there. You just look at the logical view. So we're going to see people stacking up more and more and more logical views. Specifically in the analytics case, we see that all the time. From a partner standpoint, they're going to build their table structure, and then mix and match different application types using logical views. And you know, in HANA, we provide calc views and attribute views. So even better ways to do that. >> But the bottom line is the way you get to that ability to take a tile and drop it into a system and add that functionality, is because that underlying platform can support that view in an almost unlimited way. >> Exactly, whether the data is in HANA in the Cloud, or whether the data is still on premise through a direct connection back in the existing HANA system on premise. >> Of course unstructured data complicates the database equation, but also they have to coexist with the schemas and the structured databases out there. Has that thrown a curve ball at you guys at all? Or not a problem at all with HANA? >> So you know we've got an answer for that with Vora. I don't know if you've talked to any of the Vora folks, but you know what Vora brings to the party is it brings in-memory capabilities. It's an in-memory indexer for dup data. So instead of pointing your sequel query or building a MapReduce or using Hive or one of those technologies-- >> Or data lakes-- >> Or whatever, you just point it at Vora, and it's already indexed in memory. So our plan and our hope is that soon Vora will be on the HANA Cloud Platform. So that's just another piece of technology-- >> Peter: Way of generating a view. >> It's another service that we provide for generating a view on top of the dup data. >> Yeah, that's key. So talk about the Ecosystem innovation. Because one of the things I loved in McDermott's opening keynote, and I love the term, business model innovation. 'Cause that just really speaks to a whole new level of innovation. Usually it's tech innovation. >> Yeah. >> You get destructive enablers, platforms. At the end of the day, the application of the tools and platforms, however they're developed, by whomever, impact something. That's the business. That's the revenue. These new processes that are emerging. IoT is a great example. It's kind of an unknown process. It's hard to automate that workflow because it's evolving in real time. What innovations can you point to that you see, and that SAP sees as key mile markers, if you will, that shows that these things are being innovated on the business model side with the Ecosystem? >> Yeah, I'll give you two examples, one that's kind of just a speed up. And then I'll give you one that's a business model. So Hamburg Port Authority is the Port Authority for Hamburg, the second largest port in Europe. For them to keep up with the competition, they're going to have to double and triple in the next 15 years, the amount of goods going through their port. They have nowhere to build out. They cannot make their port bigger. It's surrounded by a city. There's nowhere for them to go. So they're using HANA Cloud Platform to basically create a grid. They're creating a utility or a cell network grid of all the containers that are sensorized, all of the trucks that have telematics information in the trucks. And they're also bringing in traffic information so that when the container comes in, they can bring the exact truck in that needs to get it in the right path into the port. If you think about that, that's a cellular network. And that's what they built using HANA Cloud Platform. So it's a semi-change in business model for the technology-- >> So minutes matter to them. >> Seconds matter to them, literally. The faster they can match up the container with the truck that's going to move that container, the better off they are. >> They got to clear the inventory. Sounds like a business problem. >> Exactly, exactly right? And think about it, they're probably going to sensorize the ships as well. They're going to stage those guys coming in over time. >> John: What's the other example? >> The other example is really interesting. This small company in Germany that builds forklifts, There can be nothing more pedantic than a forklift. It picks up a pallet, it moves the pallet, it puts it down. So here's what this company's done. It's called Still Forklifts. They are using HANA Cloud Platform to match up their order system, which is an SAP with the forklifts that are sensorized on HANA Cloud Platform so that the order system will send the order to get picked by the forklift. And the forklift and the order system have the maps of where everything is in the warehouse. >> The client's order system. >> The client's order system. And they've also now, they haven't done it yet, but they're working on a forklift to forklift integration so that if this guy's over in this part of the warehouse he has to pick something up over here. This forklift is over here. They meet in the middle. Trade some product, get it out to the docking station. >> So the forklift is an IoT device to the order system. And it opens up the possibility of greater automation within the warehouse floor. >> And they've changed their business model. They're no longer selling forklifts. They're selling pounds of goods moved within the warehouse. From in the warehouse to shipped. And they're billing on a monthly basis based on pounds of goods shipped. They're not selling forklifts anymore. That is pretty cool. >> So that's a complete shift. >> That's a business model shift. >> It's an outcome shift. >> Yeah, absolutely. >> They're selling the outcome. >> Exactly, exactly. And they had to think differently about their business. They had to think, we are not a forklift operator. We're a goods mover operator. >> Or to your business model, we were a forklift operator. Now we're a goods mover, an in-warehouse goods mover. >> Exactly, exactly. >> That's a great example and also a huge innovation. Because now, as the keynotes were saying, people are afraid to go out of business. And so the opportunity for the Ecosystem is, put one of those guys at check. They'll get the check. If they don't move, you take their territory. >> Exactly. >> So it's a nice cycle, SAP wins on both sides. >> On both sides, yeah, very cool. >> All right Dan, I got to ask you the question. Plans for this year, you got the Apple. You got the Cloud Platform. You have all this goodness goin' on. What's the plans for the year. Give us a taste of some of the things that you want to achieve this year, out in the market. And what KPIs are you looking at-- >> Yeah, what are we going to be talking about this time next year? >> I think we're going to be talking about what did you guys do in the area of Cloud Foundry. Have you guys really delivered on your Cloud Foundry promise of going opensource and moving toward portability? So next year, if we're fortunate enough to speak again, That's what I want you to ask me. Where are you guys on delivering Cloud Foundry? Pushing opensource, open development for developers even further as we talked at the outset of the interview. And then secondly, where are we on the API business hub? What is SAP doing to expose the thousands of business services that we have to our customers? To be able to use the HANA Cloud Platform with a catalog of business services that we're exposing to help them extend or modify or build that new application. >> And new onboarding numbers, having numbers showing both. >> That's right. Now what that means from a revenue standpoint, it means, you know we got to double or triple our business next year. We're not talkin' a 10%, 15% growth. We're talking an order of magnitude growth for our part of the business. >> And so you'll be investing more in marketing, training, tools. >> All of the above, all of the above. >> Hey, companies want to get into the enterprise, and the existing enterprise suppliers want to stay in the enterprise. >> Exactly, exactly. >> John: So it's a good time to be an arms dealer. >> Exactly, and we'll supply it with the HANA Cloud Platform. >> John: Dan, thanks so much for sharing your insight here on theCube. Really appreciate it, and great to meet your team. >> As well. >> And everyone here has been fantastic. We are live, here in Orlando. The theme is live, here at SAP this year. And of course we got the live coverage from theCube. This is theCube, I'm John Furrier, with Peter Burris. We'll be right back. You're watchin' theCube. (soft electronic music)

>> Voiceover: The Cube, covering SAPPHIRE NOW. Headlines sponsored by SAP HANA Cloud, the leader in platform as a service. With support from Console, Inc., the cloud internet company. Now, here are your hosts, John Furrier and Peter Burris. >> Okay, welcome back. We are here live in Orlando winding down day two of three days of wall-to-wall coverage, of live coverage of SAPPHIRE NOW. This is The Cube, SiliconANGLE's flagship program. We go out to the events and extract and sift through the noise. I want to give a shout-out to our sponsors who allow us to get here and do all this massive programming, SAP HANA Cloud platform, Console, Inc., Capgemini, and EMC. Thanks to our sponsors, we really appreciate it. Our next guest is Roger Quinlan, Senior Vice-President, global head of the partner-managed cloud at SAP Thanks for joining us, welcome to The Cube. >> Thanks for having me, this is great. >> We love it, so explain what is the partner, partner managed cloud, just to kind of make sure we get the definition out there because you get the partner ecosystem, but this is the managed cloud, the partner managed cloud. >> Right. >> John: Explain what that is. >> So basically it allows, it allows our partners to create cloud offerings, private cloud offerings that they can offer to their clients as software as a service. And obviously SAP technology enables the inside of that, the guts of it. And we typically structure the agreements in, you know, anywhere from two to seven year. Most of them are five year agreements so it's a long-term agreement, good for the partners, helps our clients get into the cloud quickly and easily. >> Explain who those partners are and give an example of how that works because SAP, you had partners, many, many years delivering the apps. But now this platform game with the cloud changes the business models. Who are some of the people that are implementing this? >> Yes, so Capgemini is a great example of one, NTT, Accenture, you know the players that you might think of right there. And there's even some smaller ones, some smaller SIs that are maybe not household names but are doing very good work. >> Specialty boutique kind of, domain expertise. >> Yeah, and even some that are fairly large but are not maybe household names in the US but are big names in Europe, like T-Systems as an example. >> Great, and the vision around this was just to get simplified on the delivery cycle, so with cloud, the goodness of SAP now can be tailored for the end client 'cause these guys are smart, they have data scientists, they have a lot of programming capabilities, they have a cloud knowledge. But they have to deliver a solution to the customers 'cause they are a trusted advisor to your customers. Is that the main reason? What's the push behind all this? >> Yeah, their main reason for us is really to allow us to get into market niches that we don't serve today. So if you think, I'll give you a great example. There was a niche with hospitals, smaller hospitals in southern Africa. And they needed infrastructure to manage the operations of a hospital. They wanted to modernize. They wanted to do the digital transformation, to use the modern buzz-word. And so one of our partners had a very good relationship with a couple of these hospitals and went out and said, hey, you know, if we built a solution, would you use it? And they said sure, so they went out and built it, and you know they started off with one, two, by the time they had it all built they had three. Quickly, they had seven. They're now up to 16 hospitals. It allows us to provide great technology to these hospitals. They can provide better healthcare to their constituents in a market that we otherwise would not be able to serve. So that's one good example of accessing a market that maybe SAP would not have access to. But the integrator, which was T-Systems in this case, that, you know, has great relationships in that community, so it really is leveraging a relationship they already have. >> So I can see the benefits to the customers and the partners 'cause it's clear. Partners can make more money, can have great differentiation to their customers. What's the impact of the SAP sales force? Do they get comped on it? Is there a channel conflict? Because that's going to probably come up. >> It's funny, so you know our market space well enough to know if that's an issue now, right? And it always is, right? So what we've decided to do is, basically the sales organization that has the end customer, they get, basically they get compensated on it. >> So they're incented to play ball. >> Absolutely, there's no disincentive. It's kind of the same if they sold it directly themselves. >> How does the partner managed cloud support the new S/4HANA 'cause that's the big story here. You're talking about ERP, modernized up. It's a big, all the discussions around that, everyone's jazzed up about it. All the hardcore SAP customers are all like, okay, wow. How does that impact this? >> Yeah, so S/4 becomes the technology that most of our partner-managed cloud offerings are utilizing. So what we find a lot is customers out there want, they want to do something new. Maybe they're a Hybris customer today, or they're an Ariba customer today, but now they need to modernize their core. They need to do an ERP. Maybe they didn't have one, or maybe they had an old one and they want to modernize it. S/4 is a perfect way to go deliver that in the cloud to the end client. And so I would say you know maybe a third or 40% of the transactions that we're doin' in the partner-managed cloud space are S/4. >> A lot of your partners, especially some of these big guys, are trying to evolve their business models away from ours-- >> Roger: Yes. >> To IP, so I presume a big part of this is to try to get them to build that IP, proximate to the SAP platform. >> Roger: Yes >> How are you encouraging them to do that? Are you underwriting? Are you financing it in any way? Are you sharing it? How are you getting them, other than just the raw business opportunity, what kind of new business models are you putting in place so the value accretes to your platform from these guys faster? >> Yeah, we're really focusing on verticals and on geographies, so that we don't have overlap. That way it creates a unique differentiator for that particular systems integrator. I talked about the example in southern Africa, but another example would be in Japan in the real estate market. We did a similar thing with a totally different systems integrator, and that allows them to have a unique approach to the real estate market inside of, primarily inside of Tokyo. So what we try and do is try and make sure that we don't have a lot of overlap in geographies and overlap in solution areas, so they get some sort of a competitive advantage and get some runway to run with this for awhile. >> And at what point in time do you find yourself, John asked the question about at least channel conflict with your sales guys but the goal is to have the entire ecosystem work really well together without being encumbered with enormous transaction costs of how these different parts come together. At what point in time does SAP start to have a direct relationship with some of these folks? For example, are you taking responsibility for sending down updates? Are you working to bring new extended or extending the ecosystem into a customer? Or is all that going through the partners that you're working with. >> So I'll answer that in a couple of different ways. So first of all the primary relationship is really between the partner and the end-client. It is their kind of SaaS offering to the client. We provide the technology underneath. So that's one way we do it. The other part of it that kind of keeps this close to SAP is the backend, the maintenance and support. Level one, Level two is still handled by the partner, but we handle level three. So there's still a relationship, when they get stuck and things go wrong or something needs to be fixed, we end up getting involved. But the primary support happens between, with the partner and most of them are very well skilled at being able to handle that level of support. >> But are you also then bringing your ecosystem and your set of partners to them as well? >> Absolutely, yeah, so it's not just the SI world right? So some of these partners really want to be in this game, but they don't have hosting capabilities so we'll do Azure or we'll bring in AWS, and that's a mechanism that's already in a good place for us. >> Well and also, they have a multi-vendor view anyways so they're going to broker the different clouds and intercloud them together. I think, to your point there, I think it's worth double-down on because that was important. Virtustream came out of that concept, so when Virtustream was sold to EMC for billions of dollars, a billion dollars, that ultimately filled the same gap that you guys are doing with this program. They essentially did SAP Cloud and did some tooling up. Now, you're offering, essentially, SAP tech to everybody. Okay, that's cool, so that's just for the folks out there just want to make sure they catch it 'cause that's how big it is in my opinion. >> Can I follow up with one quick point though, John? So let's say the extension, the partner extension programs that you guys have that allow your sales force to sell third-party software from the SAP ecosystem into customers. If a large customer, or if a large partner is a partner of yours and you're standing them up, are they also able to piggyback in those arrangements and start bringing, or do they all have to have separate business arrangements with everybody in the ecosystem, or is there kind of a master agreement that you're bringing to bear so that everybody plays better together because you're kind of overriding the whole thing? >> Yeah, so we like to make this as easy as possible, so we take into the 4,000 items or whatever on our price list, we enable that through this partner managed cloud, that way they don't have to go get individual agreements if they want to, maybe they want to do OpenText or something like that. >> So you're bringing the whole portfolio to their cloud? >> Roger: Yes. >> Tell how the IoT, how this plays in 'cause that's a real sexy market everybody's going after. We heard that's going to be on the second-half of the year. You mentioned some things around that. That's a big focus and a lot of people are using the, I say hype cycle now, which it's legitimate hype, but the apps are coming on a couple of years down the road so the architecture's going on now so people are setting the table for IoT today. Does that fit into this? >> Absolutely, it does, and you heard a little bit about when you talked to Mark right before I came on. He talked a lot about the platform, on a cloud platform that his group is responsible for and really that becomes a leverage point. So on a cloud platform can be a part of this, and oftentimes they want to do the enablement on top of that kind of cloud platform because they want to be able to extend. The great part about S/4 is that it's standard, and it's industry specific, and it's simple to operate. But that also means that some companies have a lot of customizations that need to be part of their solution to their end-clients. And so how do you do that? You do that with HANA cloud platform, and sometimes that becomes an IoT play as well. >> Yeah, that enable them to at least have some headroom. >> Yes. >> (laughs) Future proofing, whatever term they want to use. Okay, tell about the vision of digital transformation because this really becomes an interesting business model question. How does a digital transformation vision that SAP as a company is going down relate specifically to your area, and how does that relate to the business model of the customers? What are you guys doing? Is there any kind of new things? Is it an incentive comp, obviously the sales gets comped but options to the customer? Where's the margins? Is it a discounted sliding scale? All of these are the questions that are popping through my head right now. I'm the partner, what's in it for me? I got to make some cash so-- >> Yeah, so what's in it for the partner is they get a long-term relationship with the end-client, and oftentimes they bring a relationship with that client already, and now they're extending it, and it's a very sticky relationship because when you start on an SAP program, that's not something you switch in and out every couple of years. So that's one of the benefits to the partner. And I will say the part about digital transformation, everyone wants to transform their business. Not everyone is able to, but most companies want to do that. This becomes the digital core, right? You use S/4 as the digital core, and you can get into it quickly. And if it's an industry based solution that this partner is now providing to multiple clients, they can implement it quicker. >> They can standardize on it. >> Yeah, they can standardize on it, and then they can do hospital one, hospital two, all the way to hospital 16 a lot quicker, right? One or two maybe take you some time, but by the time you get to the 16th or 17th, it's going really fast, so it enables a faster time to market for the end-client, and you know that digital is all about speed. >> Yeah, if they're building Lego blocks, and they build their own, they cast it out and they build more of them and just ship them out. >> You mentioned another item. You know there are some customers that have been using SAP Solutions for a long time, and maybe they're not using all of them any more or maybe they've gone off maintenance, that's a topic. We've been able to use this tool as a way to bring the customers back. So maybe they ran ERP way back when it was release four or 4.5 back, you know, back in the 90's. They got away from it for whatever reason, but now they're really excited about S/4 and they want to come back. This is a mechanism to allow us to do it and do it quickly. >> And also they get basically rebooted or reset on the new platform. >> Yep. >> But also you get net new customers out of this. >> Absolutely. >> So it's not like you're recycling the same SAP customers, certainly the churn might be helped a little bit. Now, that's the thing that I'm going to look at is those new customers, and I think they're going to be attracted to things like the Apple announcements. How does that impact you? Are you affected by that? Certainly the glowing afterglow of the announcement will be good. >> It's pretty cool, isn't it? >> John: But does it directly affect your business? >> It will absolutely affect it because the whole concept about that agreement is to develop applications that enhance the user experience and to the extent that we can leverage all of that better user experience, in a faster time to market, get to the cloud quicker, that's all good news for the end client. >> We're finally going to have a remote desktop on the phones that actually works, seamlessly. >> Yeah, real rendering, as opposed to shadow rendering. >> All right, final question, what's your take on SAP this year, thoughts share with the audience who couldn't make it. They might be watching this live or on-demand. What's 2016 SAPPHIRE NOW all about? >> Well 2016 SAPPHIRE NOW, in a lot of the keynotes, was really about kind of exposing a more, you know, a more honest, a more upfront conversation. We saw it in they keynotes. You know, Bill McDermott, our CEO, put his e-mail address out on a keynote with 30,000 people in the crowd and then you know a 100,000 or so watching, right? That's a pretty bold thing to do. And so I think you're trying to see, you're seeing SAP trying to become more human, trying to have more empathy. You know, we're a big company. We do some very cool things. We run a serious business, right? But being able to do that in a very human way is what I'm seeing here on the show floor. >> Final question, final, final question 'cause that was the second final question, what KPIs are you going to look at on the scoreboard to benchmark your success where you say, hey, we hit a grand slam? You know, is it the number of partners? What are the simple metrics that give you an indicator that you're winning, you're achieving your objectives? What are some of the things you look at to kind of get a feel for if it's working or not? >> Yeah, I want to see multi-client agreements that we put together where they have more than one client, where we've established what the multi-client agreement is going to be and we actually are executing against that. That's one. Two, I want to see customers going live and getting productive results out of it. And revenue growth is obviously always something we watch, but that's kind of tertiary to the first two. And if we do the first two, the partners are going to be successful. They'll get sticky with their clients. The clients will be happy because they get a faster time to market and that's how this grows. >> So it's really who stands up what solutions is really going to be the benchmark. >> And focus on, it is all new markets for us I think. >> John: Roger Quinlan, thanks so much for coming on The Cube. Really appreciate the insight. You got a big job, exciting. I think it's going to be a greenfield opportunity with your existing clients in a new way, a new business model innovation, congratulations. >> Great, thanks for having me. >> Okay, we're in The Cube here. You're watching day two coverage of SiliconANGLE Media's The Cube. I'm John Furrie with Peter Burris. Thanks for watching. >> Voiceover: They'll be millions of people in the near future that want to be involved in their own personal well-being and wellness. Nobody wants to age in a way that we're bound to a chair or a bed.