(bright upbeat music) >> Hello, wonderful Cloud community and welcome back to our wall-to-wall coverage of AWS re:Invent here in Las Vegas, Nevada. I'm Savannah Peterson, joined by the brilliant John Furrier. John, how you doing this afternoon? >> Doing great, feeling good. We've got day three here, another day tomorrow. Wall-to-wall coverage we're already over a hundred something videos, live getting up. >> You're holding up well. >> And then Cloud show is just popping. It's back to pre-pandemic levels. The audience is here, what recession? But there is one coming but apparently doesn't seem to be an unnoticed with the Cloud community. >> I think, we'll be talking a little bit about that in our next interview in the state of the union. Not just our union, but the the general global economy and the climate there with some fabulous guests from Software One. Please welcome Neil and Bernd, welcome to the show, guys. How you doing? >> Great, thank you. >> Really good. >> Yeah, like you said, just getting over the jet lag. >> Yeah, yeah. Pretty good today, yeah, (laughing loudly) glad we did it today. >> I love that Neil, set your smiling and I can feel your energy. Tell us a little bit about Software One and what you all do. >> Yeah, so Software One we're a software and Cloud solutions provider. We're in 90 countries. We have 65,000 customers. >> Savannah: Just a few. >> Yeah, and we really focus on being close to the customers and helping customers through their software and Cloud journey. So we transact, we sell software in Cloud, 10,000 different ISVs. And then on top of that we a lot of services around the spend optimization FinOps we'll talk about as well, and lots of other areas. But yeah, we're really a large scale partner in this space. >> That's awesome. FinOps, cost optimization, pretty much all we've been talking about here on the give. It's very much a hot topic. I'm actually excited about this and Bernd I'm going to throw this one to you first. We haven't actually done a proper definition of what FinOps is at the show yet. What is FinOps? >> Well, largely speaking it's Cloud cost optimization but for us it's a lot more than for others. That's our superpower. We do it all. We do the technology side but we also do the licensing side. So, we have a differentiated offering. If you would look at the six Rs of application migration we do it all, not even an Accenture as it all. And that is our differentiation. >> You know, yesterday Adams left was on the Keynote. He's like waving his hands around. It's like, "Hey, we got if you want to tighten your belt, come to the Cloud." I'm like, wait a minute. In 2008 when the last recession, Amazon wasn't a factor. They were small. Now they're massive, they're huge. They're a big part of the economic equation. What does belt tightening mean? Like what does that mean? Like do customers just go to the marketplace? Do they go, do you guys, so a lot of moving parts now on how they're buying software and they're fine tuning their Cloud too. It's not just eliminate budget, it's fine tune the machine if you will... >> 'make a smarter Cloud. >> Explain this phenomenon, how people are tackling this cost optimization, Cloud optimization. 'Cause they're not going to stop building. >> No. >> This is right sizing and tuning and cutting. >> Yeah, we see, of course with so many customers in so many countries, we have a lot of different views on maturity and we see customers taking the FinOps journey at different paces. But fundamentally what we see is that it's more of an afterthought and coming in at a panic stage rather than building it and engaging with it from the beginning and doing it continuously. And really that's the huge opportunity and AWS is a big believer in this of continued optimization of the Cloud is a confident Cloud. A confident Cloud means you'll do more with it. If you lose confidence in that bill in what how much it's costing you, you're going to retract. And so it's really about making sure all customers know exactly what's in there, how it's optimized, restocking, reformatting applications, getting more out of the microservices and getting more value out the Cloud and that will help them tighten that belt. >> So the euphoric enthusiasm of previous years of building water just fallen the pipes leaving the lights on when you go to bed. I mean that's kind of the mentality. People were not literally I won't say they weren't not paying attention but there was some just keep going we're all good now it's like whoa, whoa. We turn that service off and no one's using it or do automation. So there's a lot more of that mindset emerging. We're hearing that for the first time price performance being mindful of what's on and off common sense basically. >> Yeah, but it's not just that the lights are on and the faucets are open it's also the air condition is running. So the FinOps foundation is estimating that about a third of Cloud spend is waste and that's where FinOps comes in. We can help customers be more efficient in the Cloud and lower their Cloud spend while doing the same or more. >> So, let's dig in a little bit there. How do you apply FinOps when migrating to the Cloud? >> Well, you start with the business case and you're not just looking at infrastructure costs like most people do you ought look at software licensing costs. For example, if you run SQL on-premise you have an enterprise agreement. But if you move it to the Cloud you may actually take a different more favorable licensing agreement and save a lot of money. And these things are hidden. They're not to be seen but they need to be part of the business case. >> When you look at the modernization trend we had an analyst on our session with David Vellante and Zs (indistinct) from ZK Consulting. He had an interesting comment. He said, "Spend more in Cloud to save more." Which is a mindset that doesn't come across right. Wait a minute, spend more, save more. You can do bet right now with the Clouds kind of the the thesis of FinOps, you don't have to cut. Just kind of cut the waste out but still spend and build if you're smart, there's a lot more of that going on. What does that mean? >> I mean, yeah I've got a good example of this is, we're the largest Microsoft provider in the world. And when of course when you move Microsoft workloads to the Cloud, you don't... Maybe you don't want a server, you can go serverless, right? So you may not win a server. Bernd said SQL, right? So, it's not just about putting applications in the Cloud and workloads in the Cloud. It's about modernizing them and then really taking advantage of what you can really do in the Cloud. And I think that's where the customers are still pretty immature. They're still on that journey of throwing stuff in there and then realizing actually they can take way more advantage of what services are in there to reduce the amount and get even more in there. >> Yeah, and so the... You want to say, something? >> How much, just building on the stereotypical image of Cloud customer is the marketing person with a credit card, right? And there are many of them and they all buy their own Cloud and companies have a hard time consolidating the spend pulling it together, even within a country. But across countries across the globe, it's really, really hard. If you pull it all together, you get a better discount. You spend more to save more. >> Yeah, and also there's a human piece. We had an intern two summers ago playing with our Cloud. We're on a Cloud with our media plus stack left a service was playing around doing some tinkering and like, where's this bill? What is this extra $20,000 came from. It just, we left a service on... >> It's a really good point actually. It's something that we see almost every day right now which is customers also not understanding what they've put in the Cloud and what the implications of spikes are. And also therefore having really robust monitoring and processes and having a partner that can look after that for them. Otherwise we've got customers where they've been really shocked about not doing things the right way because they've empowered the business but also not with the maturity that the business needs to have that responsibility. >> And that's a great point. New people coming in and or people being platooned through new jobs are getting used to the Cloud. That's a great point. I got that brings up my security question 'cause this comes up a lot. So that's what's a lot of spend of people dialing up more security. Obviously people try everything with security, every tool, every platform, and throw everything at the problem. How does that impact the FinOps equation? 'Cause Dev SecOps is now part of everything. Okay, moving security at the CICD pipeline, that's cool. Check Cloud native applications, microservices event-based services check. But now you've got more security. How does that factor into the cost side? What you guys look at that can you share your thoughts on how your customers are managing their security posture without getting kind of over the barrel, if you will? >> Since we are at AWS re:Invent, right? We can talk about the well architected framework of AWS and there's six components to it. And there's reliability, there's security cost, performance quality, operational quality and sustainability. And so when we think about migrating apps to the Cloud or modernizing them in the Cloud security is always a table stakes. >> And it has to be, yeah, go ahead. >> I really like what AWS is doing with us on that. We partner very closely on that area. And to give you a parallel example of Microsoft I don't feel very good about that at the moment. We see a lot of customers right now that get hacked and normally it's... >> 'yeah that's such a topic. >> You mean on Azure? >> Yeah, and what happens is that they normally it's a crypto mining script that the customer comes in they come in as the customer get hacked and then they... We saw an incident the other day where we had 2,100 security incidents in a minute where it all like exploded on the customer side. And so that's also really important is that the customer's understanding that security element also who they're letting in and out of their organization and also the responsibility they have if things go bad. And that's also not aware, like when they get hacked, are they responsible for that? Are they not responsible? Is the provider... >> 'shared responsibility? >> Yeah. >> 'well that security data lake the open cybersecurity schema framework. That's going to be very interesting to see how that plays out to your point. >> Absolutely, absolutely. >> Yeah, it is fascinating and it does require a lot of collaboration. What other trends, what other big challenges are you seeing? You're obviously working with customers at incredible scale. What are some of the other problems you're helping them tackle? >> I think we work with customers from SMB all the way up to enterprise and public sector. But what we see is more in the enterprise space. So we see a lot of customers willing to commit a lot to the Cloud based on all the themes that we've set but not commit financially for all the PNLs that they run in all the business units of all the different companies that they may own in different countries. So it's like, how can I commit but not be responsible on the hook for the bill that comes in. And we see this all the time right now and we are working closely with AWS on this. And we see the ability for customers to commit centrally but decentralized billing, decentralized optimization and decentralized FinOps. So that's that educational layer within the business units who owns the PNL where they get that fitness and they own what they're spending but the company is alone can commit to AWS. And I think that's a big trend that we are seeing is centralized commitment but decentralized ownership in that model. >> And that's where the marketplaces kind of fit in as well. >> Absolutely. >> Yeah, yeah. Do you want to add some more on that? >> I mean the marketplace, if you're going to cut your bill you go to the marketplace right there you want single dashboard or your marketplace what's the customer going to do when they're going to tighten their belts? What do they do? What's their workflow, marketplace? What's the process? >> Well, on marketplaces, the larger companies will have a private marketplace with dedicated pricing managed service they can call off. But that's for the software of the shelf. They still have the data centers they still have all the legacy and they need to do the which ones are we going to keep which ones are we going to retire, we repurchase, we license, rehouse, relocate, all of those things. >> That's your wheelhouse. >> It's a three, yes is our wheelhouse. It's a three to five year process for most companies. >> This could be a tailwind for you guys. This is like a good time. >> I mean FinOps is super cool and super hot right now. >> Not that you're biased? (all laughing loudly) >> But look, it's great to see it because well we are the magic quadrant leader in software asset management, which is a pedigree of ours. But we always had to convince customers to do that because they're always worried, oh what you're going to find do I have an audit? Do I have to give Oracles some more money or SAP some more money? So there's always like, you know... >> 'don't, (indistinct). >> How compliant do I really want? >> Is anyone paying attention to this? >> Well FinOps it's all upside. Like it's all upside. And so it's completely flipped. And now we speak to most customers that are building FinOps internally and then they're like, hold on a minute I'm a bank. Why do I have hundred people doing FinOps? And so that's the trend that we've seen because they just get more and more value out of it all the time. >> Well also the key mindset is that the consumption based model of Cloud you mentioned Oracle 'cause they're stuck in that whoa, whoa, whoa, how many servers license and they're stuck in that extortion. And now they got Cloud once you're on a variable, what's the downside? >> Exactly and then you can look at all the applications, see where you can go serverless see where you can go native services all that sort of stuff is all upside. >> And for the major workloads like SAP and Oracle and Microsoft defined that customers save in the millions. >> Well just on that point, those VMware, SAP, these workloads they're being rolled and encapsulated into containers and Kubernetes run times moved into the Cloud, they're being refactored. So that's a whole nother ballgame. >> Yes. Lift and shift usually doesn't save you any money. So that's relocation with containers may save you money but in some cases you have to... >> 'it's more in the Cloud now than ever before. >> Yeah >> Yeah, yeah. >> Before we take him to the challenge portion we have a little quiz for you, or not a quiz, but a little prop for you in a second. I want to talk about your role. You have a very important role at the FinOps Foundation and why don't you tell me more about that? You, why don't you go. >> All right, so yeah I mean we are a founding member of the Finops organization. You can tell I'm super passionate about it as well. >> I wanted to keep that club like a poster boy for FinOps right now. It's great, I love the energy. >> You have some VA down that is going to go up on the table and dance, (all laughing loudly) >> We're ready for it. We're waiting for that performance here on theCUBE this week. I promise I would keep everyone up an alert... >> 'and it's on the post. And our value to the foundation is first of all the feedback we get from all our customers, right? We can bring that back as an organization to that also as one of the founding members. We're one of the only ones that really deliver services and platforms. So we'll work with Cloud health, Cloud ability our own platform as well, and we'll do that. And we have over 200 practitioners completely dedicated to FinOps as well. So, it's a great foundation, they're doing an amazing job and we're super proud to be part of that. >> Yeah, I love that you're contributing to the community as well as supporting it, looking after your customers. All right, so our new tradition here on theCUBE at re:Invent 'cause we're looking for your 32nd Instagram reel hot take sizzle of thought leadership on the number one takeaway most important theme of the show this year Bernd do you want to go first? >> Of the re:Invent show or whatever? >> You can interpret that however you want. We've gotten some unique interpretations throughout the week, so we're probing. >> Everybody's looking for the superpower to do more with less in the Cloud. That will be the theme of 2023. >> Perfect, I love that. 10 seconds, your mic very efficient. You're clearly providing an efficient solution based on that answer. >> I won't that much. That's... (laughing loudly) >> It's the quiz. And what about you Neil? Give us your, (indistinct) >> I'm going to steal your comment. It's exactly what I was thinking earlier. Tech is super resilient and tech is there for customers when they want to invest and modernize and do fun stuff and they're also there for when they want to save money. So we are always like a constant and you see that here. It's like this is... It's always happening here, always happening. >> It is always happening. It really can feel the energy. I hope that the show is just as energetic and fun for you guys. As the last few minutes here on theCUBE has been thank you both for joining us. >> Thanks. >> Thank you very much. >> And thank you all so much for tuning in. I hope you enjoyed this conversation about FinOps, Cloud confidence and all things AWS re:Invent. We're here in Las Vegas, Nevada with John Furrier, my name is Savannah Peterson. You're watching theCUBE, the leader in high tech coverage. (bright upbeat music)

>> Announcer: It's The Cube covering SAPPHIRE NOW 2017. Brought to you by SAP Cloud Platform and HANA Enterprise Cloud. >> Hey, welcome back everybody, Jeff Frick here with The Cube with ongoing coverage of SAP SAPPHIRE 2017 in Orlando. And we're excited to have Floyd Strimling on the phone, he is the global vice president SAP Cloud Platform and he is running around the Orange County Convention Center. So, Floyd, how you doing today? >> I'm doing great, thanks for having me, and I hope you can hear me as it's quite loud in the convention center. >> I can hear you perfectly. So, first off, we actually were just doing a kind of a keynote analysis of Hasso today. You know, we see a lot of keynotes, we go to a ton of conferences, and I thought he was just spectacular. Touched on so many topics and really seems to be on his game. >> And you know what if you go to Sapphire, unless you attend the Hasso Plattner keynote, you never know what's going to be on the agenda. You never know which way he's going to take it, but I thought today he hit all the big points. I mean, whoever thought you would see Hasso doing a lecture on DBUs and core conversion as far as what's going on in computing? So I thought he hit all the great topics, talked about what the class was doing, what were doing with S/4HANA Cloud, how we're really taking the company to the next level, and his honesty is always so refreshing when you look at people up there on stage talking. >> Absolutely, 'cause on of his quotes, and I was live-tweeting during the keynote, was you know, "We want to get as fast to the cloud as possible," and you guys are backing that up with action with all the announcements with AWS and Google Cloud Platform. I think you have Azure underway, so you're offering your customers a bunch of public cloud choices. And then you've rebranded and now you've also got a couple flavors of the SAP Cloud. So I wonder you know, clearly you guys are all-in on this Cloud thing. >> You know I think it's interesting, when you look at what's going on in Cloud, I like to say that the first wave was dominated by infrastructure vendors, and I think the software vendors like SAP have a very big stake in this and are ready to take leadership, but what is our vision? How does that impact the customers? And that's really looking at much more of a multi-Cloud approach. So not sitting here saying we're going to go on one vendor, but staying agnostic and, like you said, we're working with AWS. I saw Diane Green on stage with Google Cloud Platform. We continue to work with Azure. So you know these are key partners to us, but we're the software vendor of that agnostic nature of our customers to be able to move workloads on to any of those platforms, on top of our Cloud Platform, as a major piece is critical. And I think it's given us enormous scale and advantage over what some other people are doing in the industry. >> Yeah, 'cause I mean you have such a great installed base and you're in so many mission-critical applications, obviously with the ERP background, but the other thing that really struck me, Floyd, was Hasso's conversation about a new way to develop applications and you know no more instruction manuals, and intelligent design, and sharing our road-map with our customers, and having customers participate in that road-map. I mean that was definitely not SAP's reputation back in the day. It was you know, "The SAP way or the highway. "We know best. It's a big monolithic application." That is completely turned upside down, and maybe I haven't been paying attention as to when that started to happen, but you know that was a very clear message that he's changing the way that you guys build, deliver, and develop software for your customers. >> I think this has been happening a lot longer than people realize. And when we launched out S/4HANA, and the transformation that provides to really take the core convert to the company and project it beyond even the next decade, that puts you into this real-time notion. And now with that type of technology you need a way to then put more agility, faster app development, better UI experience, better interaction, ability for our customers to take their data and to monetize it in new and different ways, and build ecosystems around them, that's why we have the SAP Cloud Platform. It's designed to be very modern, to be very Cloud-first, the Cloud-data way of developing applications, and really taking our customers to get the speed of innovation to where they need. You know, really SAP is going to help our customers make that. You know we call it the digital transformation, but I like to call it the innovation curve. To help them bend that curve so they can start doing more and more. And if you listen to Bill's keynote, when he said that you have two companies dropping out of the S&P 500, I think he said every week. That's an amazing statistic and something that our customers has, facing destruction at such a high rate, that we've got to be here to help make this transformation. And that's what we're doing. >> Yeah the other part too, again there are so many angles in that keynote this morning, was just the whole machine-learning and artificial intelligence, because it's one thing to talk about it kind of in the abstract, but Hasso was very clear you know you've had airplanes having self-pilots for a long time, but more importantly, you guys have so much data in your systems that you can start to apply the machine-learning and the AI in these new intelligent applications and the machine can learn by doing thousands or millions of repeated scenario processes and start to affect really what on some level might seem like mundane or simple processes, like invoice matching, to actually very, very powerful. If you can actually match 94% of the invoices without having a human touch, you know that's a tremendous business impact. >> Well this is true. AI machine-learning is critical us. I know that he's talked about we're going to put this into all the rest of these applications, and we're going to offer this to our customers in new and interesting ways that change the way you interact with the system. I don't know if you saw some of the of the things we were talking about, about co-pilot and the way that you can actually interact with SAP systems, but changing it from the ground-up, adding this ability to have the system itself kind of answer, like you're saying, self-answer these questions, be more interactive with you in new and interesting ways and really free up our customers to innovate and start doing more with their data than they every thought. I think what you're going to see is that, you know machine-learning and AI right now most of it, what you see in the market all around, more of the consumer based versions, kind of like what you're doing for ad placement and all those types of things. How you apply that same technology to business is a little bit different, and who better than us then to actually it to the business itself? To actually get value out of it, because it's not enough just to have it. Customers have got to get and realize huge business value, which we know is there. And you're going to see a slew of applications. I know Hasso said by next year we'll have 50 of them. But the ones that are coming out there, they're very interesting. They're very unique and innovative, and they can be extended by our customers to specific use cases for themselves. >> Yeah, the other great analogy that he used today was you know kind of comparing Tesla to I presume Mercedes, he didn't call it out by name, but that not only is it a different way to have control knobs and this-and-that in terms of software versus even a beautifully designed and ergonomically proper dashboard, but it's also a different buying experience and just a different experience in general. And really using that as kind of a comparison for really this transformative way that things are being done now that's different from before, and really it's a software-enabled, and software-powered, intelligent design, no-manual way of looking at things. So again, just very impressed by the fact that he's poking fun at one of the best German brands that makes really fine products saying, "Yeah that's great, but software defined is "a whole different way to approach the world "and that's what we are going towards." >> We thought, he's big key is all our user experience, changing that user experience, and really who does read a software manual these days? I don't think any of us do. So the big advantage and the change of what he's really talking about, I love his analogy too because you know he's poking fun at one of the major brands, was that ability to deliver innovation free of fear or risk to that user. So that when you download that application you're not worried. That's doing testing, no one's testing that locally to make sure the test was going to start in the morning, and then changing that ability to innovate at a rapid pace. And I think you're seeing us do this with your idea of S/4HANA being that digital core and then around it the Cloud Platform being the agile, the innovation engine that would deliver in all of these really cool applications that pop up that could be delivered at a much faster pace, and customers then could pick and choose which ones they use. And that's all going to be delivered much quicker. I think that the days of waiting for that big update going over months and months of testing are over. We got to get people moving quicker, but we got to be able to react to what's going on in the industry faster. And that's the whole reason why we transformed the company. I mean we are, and we're seeing our customers have huge benefits as they make this journey with us. >> So Floyd, I know you're kind of up against it on the time. It's busy there in Orlando. So I just want to give you the final say. Any special surprises, funny chatter coming off the floor? What's kind of the vibe there in Orlando on the floor? >> You know the vibe has been interesting because you start off with the keynote from Bill, and then you have Intel, Google on stage talking about their solution sets. And you have Michael Dell coming there talking about the importance of IT again. And then you have the Wladimir Klitschko come out there when Bernd was talking, and the stark message he was talking about about recreating yourself and watching your path. And then you follow that up with Hasso's keynote today, which was outstanding, about just where the company is. I think the buzz really is that SAP now is really going to tell everybody what we're doing in the Cloud. We are committed to this. We have a clear strategy, a clear vision. You can see from our performance we're doing extremely well right now. And we want to really take all of our customers with us, and then add a (phone beeps) lot on the way as we make this transformation. I think people were always wondering what we're going to do, and I think it's out there right now. We're going to be a multi-Cloud company. We're going to offer innovative applications. We're going to have accelerated (phone beeps) bundles of the applications with Leonardo and then we're going to finish this off with the best digital core on the planet with S/4HANA. I think it's exciting times here to be at Sapphire. It's exciting times to be at SAP and exciting times for our customers. >> Alright Floyed, well I think that's a great summary, and you know I think you're fortunate you still have that founder DNA, you've still got a really strong founder that obviously drives that culture, and the fact that he has embraced these mega trends going forward is only good and clearly reflected in the performance of the company. So thanks for taking a few minutes of your time and I'll let you get back to the action there on the floor in Orlando. >> Voiceover: Alright thank you, appreciate your time. >> Alright, thanks a lot. That's Floyd Stremling from Orlando. He is the global VP of SAP Cloud Platform. I'm Jeff Frick; you're watching The Cube on our ongoing coverage of SAP SAPPHIRE 2017. Thanks for watching.

(click) >> Hey, welcome everybody, Jeff Frick here with theCUBE. Well, it is an excited day and we're really happy to be covering big announcements coming out of Google Next today. And we wanted to get right down here to SAP Silicon Valley Headquarters and talk to Sam Yen and get his take on what's happening up in San Francisco today. So, first off, Sam great to see ya. >> Yeah, great to see you as well. >> So, Sam you are the Managing Director of SAP Silicon Valley. Obviously, you guys have a big presence in Philly, and a big presence here in Paulo Alto. And also the Chief Design Officer. So, let's just jump into it. So, Bernd Leukert was onstage with Diane Green this morning kicking off the Google Next Conference and talking about this new relationship between SAP and Google. >> I think, first of all, it's the trend in what the industry's happening right now. If you look at companies, companies are more and more willing to go to the public cloud in terms of helping them with their infrastructure needs. The market is actually really going to double between now and 2020. So, with that we have three major announcements that we announced today. The first one was SAP's flagship products running on GCP, Google's Cloud Platform. The first one is HANA. If you know anything about SAP, HANA's been our data processing engine, memory processing engine for the last number of years. It's our flagship product that we've been talking about. And that's now certified for GCP. The second thing is really more for the, it's still part of the first announcement, but for the development community bringing HANA Express which is a downloadable version of HANA that you can put on your laptop and really get to know what HANA's all about and see how easy it is to develop on top of HANA. So, that's now available on Google Cloud Launcher. Also, SAP's cloud platform is also going to be, we're working very closely together to co-innovate together with Google. The second part of the second announcement, is taking infrastructure as a service to the next level. SAP has always had a multi-cloud strategy offering customers choice in where they want to deploy on public cloud. And Google is now available from that perspective. But beyond just infrastructure to service, we want to partner with Google to take things like data privacy and protection to the next level by offering transparency over how customers monitor and understand what's going on from the governance, risk and compliance perspective on their information. The last thing, which is really exciting as well, is bringing together productivity tools together with SAP. Google's G Suite, things like Mail and Sheets and Hangouts and things like that, and making that integrate seamlessly into the SAP backend system. >> So, so many layers to these announcements. And thank you for laying it all down. The first one, just at a high level, is clearly enterprises are comfortable with public cloud. There's now more enterprisy software firm out there than SAP. And for you guys to really get together with Google and Google Cloud, that really shows that the conversation is no longer about, "Should I go to the cloud?" or "Is the cloud safe?" or "Is it appropriate for enterprise?" But enterprises are fully all in. >> That's definitely the trend. Customers are different in their journey but more and more we're seeing that. And the numbers that I talked about in terms of the investment and spend for public cloud is growing through the roof. At the end of the day, SAP from an SAP perspective, and also from a Google perspective, we want to provide as many options for customers as we can. And we think that by doing this we're providing the best potential solutions for where a customer thinks they need to be today and tomorrow. >> Right, and it's really about workloads, right? It's not even specifically about customers. 'Cause you guys still have Google Cloud, or excuse me, SAP Cloud, recently the HANA Cloud platform recently renamed. So, you still have your own cloud if they want their own kind of enterprise cloud that you're going to run for them. Obviously, they can run SAP on their own internal cloud now you're saying they can run SAP on Google's cloud. But it's really more workload and application and use case specific as opposed to a company. >> Yeah, and I think ultimately options for the customer in terms of their particular situation. Yes, SAP will continue to have our own hosting, our own cloud as well. But you also mentioned SAP Cloud Platform. So, there's many, many different ways from a platform as a service perspective, enterprise services that we provide from a SAP perspective running on Google's infrastructure. And also leveraging the Google services that they provide on their Cloud Platform as well. >> Right, another piece that you said kind of towards the end of many, many announcements happening today, is really the developer angle. Every show, we cover a hundred shows a year, and every one is fighting for the attention of the developer, and really trying to cater to the developer. 'Cause that's where the power is. And you want a robust developer ecosystem because that's what moves things forward. So, this is a pretty interesting announcement now that developers can basically download a version of HANA onto their laptop to have an appeal to help them develop more stuff for you. >> Yeah, and I think the broader statement here is we're combining the power of the SAP development ecosystem with the millions and millions of people also in the Google development ecosystem to build solutions for customers. At the end of the day, the power of your offering is really the power of your ecosystem. And it's kind of interesting, being here in a German company actually in Silicon Valley from an SAP perspective, enterprise seems to be the new black right now. There are more consumer brands that are looking at going into the enterprise. And SAP's starting to become more and more an on-ramp into the enterprise for these companies. >> And it's interesting because public clouds, traditionally, years ago weren't really thought of as a true enterprise solution or maybe test but you'd never run your production workloads. But clearly now that's going away. That said, there's a lot of very specific issues that you have to deal with with the enterprise security, compliance, the rules around the world that are different for data sovereignty, etc. So, you guys bring a real depth of experience in those areas to this new announcement. >> Yeah, I think that's the power of the partnership if you think about Google and the public cloud, the scalability, the availability, the reach of the Google public cloud and their expertise in terms of the infrastructure and the operations. And then you combine that with SAP's experience in terms of what works from a governance, risk and compliance perspective. We have an understanding both with customers and their needs. And also working with local governments and the policies that need to be in place. So, I think it's a beautiful combination of the two companies. >> Now, the next kind of big trend that cloud is helping even accelerate more is A.I. and machine learning and you know, we're kind of going to Phase Two of what was formerly known as Big Data and Hadoop and now were moving to a much more sophisticated version of that enabled by cloud. Obviously, Google's got a ton of expertise in machine learning and A.I. You guys have been doing it on the enterprise side. Again, coming together, one plus one makes three? >> Absolutely, this is one of the exciting things that we're also, we've also talked about and announced, that we are partnering with Google to really take machine learning to the enterprise use cases. There's so much information that's going through enterprise systems. More and more information as things like Big Data, and Internet of Things, and social things are bringing information in. This is really, really fruitful area where think there's a lot of collaboration. Also, from a design perspective, once you have this information, how do you expose this stuff to the users that makes sense and really amplify human capabilities when we're talking about all this technology. >> Right, so you're sitting 6,000 miles from Waldorf, 3,000 miles from Philadelphia. How does this change things for you? You said you've been at SAP for a number of years now. You're sitting in the heart of Silicon Valley. What does this mean to you, kind of personally, and to SAP's presence in Silicon Valley to do this partnership with Google who's just right down the road and clearly one of the main powers. >> Yeah, I think it really talks about the importance of SAP's presence here in Silicon Valley. Again, as an on-ramp into the enterprise. There's lots and lots of partners that want to expand their business and figure out how they can bring their services also to the enterprise. It's almost like consumerization of IT if you will. And really, that's SAP's purpose and reason for being here. >> All right, well Sam I'll give you the last word. Great event today. Really exciting but before we know it SAP Sapphire will be upon us. I presume you guys will keep working tomorrow and have something new and special for us in Sapphire. >> Yeah, Google and SAP, we're in it for the long term. This is just the beginning. And look out for exciting announcements coming in Sapphire as well. >> All right, super. He's Sam Yen, I'm Jeff Frick. You're watching theCUBE. Thanks for watching. (energetic, techno music)

>> Voiceover: It's theCUBE, covering SAPPHIRE NOW. Headline 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, we are live back here at SAPPHIRE NOW. This is SiliconANGLE Media's flagship program, theCUBE, where we go out to the events and extract the signal from the noise, and I want to do a shoutout to our sponsors that helped us get here and present the great content, SAP HANA Cloud Platform, Console, Inc, Capgemini, EMC, thank you very much for the sponsoring. I'm John Furrier with Peter Burris. Our next guest is Rodolpho Cardenuto, who is the President of Global Channels company wide for SAP, as well as the general business, which is the SME as they talk about in the industry. Welcome to theCUBE. >> Thank you, John, thank you, Peter. Good to be here. >> So one, congratulations. We've had a lot of your folks on theCUBE and this area of the floor is buzzing with action, but real meat on the bone, as we say. It's real, it's a sizzle and the steak is here, so they had beer here yesterday, so German company, so we always like to see the Heineken beer out here. >> Peter: (mumbles) back here. (Rodolpho laughing) >> It was good to have Heineken out there, it's good, some good beer. So give us the update. I mean, you guys have had growth. Share with us and the folks watching, just from where you guys have come from, because SAP has always had a strong ecosystem. You go back to the ERP days back in the late '90s, certainly that revolution is 25 years ago when SAP came out of the woodwork and you got Oracle, all these companies were born. They had an ecosystem, they had people deploying and delivering software. It's changed now, so the dynamics are different. Talk about the dynamics and some of the growth that you guys have. >> I think it's better to position the organization, GB, as you've well said, general business, the SME space. Our ecosystem that we built historically was very focused on the enterprise to support the business suite and to support the enterprises to implement, et cetera, and now we are building in the last 10 years, we started to build a very focused, strong ecosystem, ecosystem for the SME space, that's why we're doing it, and I was just sharing with you, we just kicked off SAPPHIRE NOW last Monday with 2,000 of our partners with us, kicking off the SAPPHIRE, 2,000 of GB partners that serve this segment for us. >> So I said yesterday in the close, and I mentioned this to you, you correct me, I want to get this out there and then can clarify the record, I said that you bolt on the partner summit with the end user conference, which is a huge show, 25,000 plus, whatever the number is, massive, why everyone is here is what makes sense, and I was saying that this is being so important that you should break out your own partner event so people feel like a first-class citizen in that partner world, and you had to correct me. So share the correction that you guys do partner events, (mumbles) the big tent event, so why not have everything here for that? But you guys are doing events. Just clarify that. >> Just to give you an idea, I said we came up from the partner summit last Monday with 2,000 of our partners kicking off the SAPPHIRE NOW, but we do have a partner summit here in North America in the US. We have partner summits in Latin America. By the way, the next one is going to be in Punta Cana, (speaking Spanish) we have partner summits in Europe, APJ, Greater China, we do have a series of partner summits-- >> Do you do those partner summits in native tongue, or can theCUBE come there? >> The native tongue, that cannot, if I speak, yes. (John and Peter laughing) >> We have to get a whole new crew for theCUBE. We're looking for some hires down there, if you're watching, since now you brought that up. Okay, so let's get down and dirty. Channels are great. The leverage of channels, the leverage of the cost per order dollar for SAP, from your perspective, it's phenomenal, and that's great business, indirect sales combined with direct sales, phenomenal approach. What's changing, though? Because at the end of the day, people in the channel have an attitude of, "What's in it for me?" They're running a business. They also serve on the front lines with customers. What's changed in the channel today? Is it the same challenges, training, product? Is it different? Do you see different configurations? >> Well, it's changing a couple of things, and I'll try to summarize here, but the fundamentals are changing from on-prem to cloud, because we were, you very well said, historically an on-prem company, the fundamental of the on-prem are changing now to the fundamentals, the economics are changing from on-prem to the cloud, and the second thing is specialization. We were a company that was built on the ERP, and now we are a company as you saw here from Bill McDermott to Rob Enslin, Bernd Leukert, et cetera. We are (mumbles) HCM, Ariba, or supply manufacturer SRM, or CEC, so we have a lot of specialization. So the economics are changing for the channel as much as they are changing for us, and the specialization. You require a lot of specialization. One of the things that we are hear, listening clearly from our customers, is the specialization with integration. You saw, you'll hear from Bill McDermott and Rob Enslin and Bernd Leukert talking today about this integration, and we are doing a lot of our effort, with our channels also, to specialize, but at the same time to integrate them with SAP core. >> So there's something in application development that's been around for probably 40, 50 years called Conway's law, which suggests that the application that gets built is, or the complexity of the application that gets built is a reflection of the complexity of the organization that built it. When we talk about all enterprises of all sizes wanting simpler, faster, more integrated, more convenient, more natural to use, a lot of your partners are at the vanguard of thinking about how to make it simple because they don't have the institutional and organizational complexity to make it complex. >> Rodolpho: Yeah. >> So, is SAP learning from your partners as opposed to just your partners learning from SAP as we move into this digital world that has such a focus and emphasis on simplification? >> Peter, a great insight. I think that now only learning, we have to listen to them and react to that, because if we react in a complex way to serve our partners, they cannot serve our customers, because in the end, they're serving our customers, and as you said, they don't have the infrastructure or they cannot afford complexity, period. They cannot afford. So they need to be simple by nature, and if we are complex to serve them, they're not going to work with us. They're going to pick another one, the application and everything, so we need to build an organization that is fast and agile and is simple enough to work with our channels. I'm not saying we are there. We're not there yet. But we are in our... For instance, our theme is partners first, run light, and win together. Partners first is all about the partners. Everything that I do in my organization, all programs, products, solutions, is with the partner mentality. Is this good for the partner? Is this good with business models, simple enough for them-- >> John: It's a business partnership. >> And is it partner ready? Because if it's not partner ready, it doesn't fit my model. Run light is about the customer, and win together, it's SAP, the partner, and the customer. The customer should be comfortable enough that we are serving them with this partnership. >> Take us through some meetings internally at SAP, because that's a really great point. You got to meet the channel's requirements on how they do business, because they have a business and you have a partnership. So that means you're the favorite guy in town inside the company. Hey, here's my product. Go sell it through the channel. >> Rodolpho: Yes. (Rodolpho laughs) >> I'm oversimplifying, I'm not saying they said it, but that's the knee jerk reaction. >> That's the historical norm. >> That's a historical norm, "Hey, boom, here's the product. "Go just do some training." >> Keep her. >> But now you have to hold the line. You're the safeguard for the customer. So what are some of those conversations? Because you now have to be a forcing function to the product groups, and we've so much transformation, SAP S/4 HANA, HANA Cloud Platform, all these enabling technologies is a gold rush for the partners. So you have to hold the line. Share some internal color. You won't get in trouble. >> No, no, and I have no problem being in trouble, but I'm going to illustrate that with a simple case you just mention, S/4 HANA. S/4 HANA is the flagship of a product for the large enterprise. You saw Nestle up today with Rob Enslin. Nestle, one of the largest corporations in the world, 350,000 employees, $80 billion worth of, pretty large, pretty large by any metric, pretty large, and they use S/4 HANA. My job, and I have an organization, my organization, we package, we price, we enable, and we support the channel to sell and to support the S/4 HANA for the SME market. We are 60% of the S/4 HANAs for SAP. If you get all the S/4 HANAs, 60% goes through the channel that we manage. So, we package-- >> Peter: Is that the number of installations? >> Yeah, yeah, 60% of the S/4 HANAs today that we sold are sold through the channels that we manage in the SME, in the GB space. So that's the job. It's my job to package, to price-- >> John: You're giving money away. You're handing people money. Here, here's some business. >> It's my job to package, to price, to enable the channel, and to support the channel, to actually make S/4 HANA available for the GB space. So that's what we do. So we do that two folds. Of course, I have an organization to do that and I have it also to educate the other organizations. As you said, "Oh, here's my product. "It's perfect for SME. "Go and sell." Okay, let's have a conversation. Let's package, let's price-- >> Is the channel ready? >> Exactly. >> So run light, that means it's got to be turnkey. >> Yeah, we call it the package, price, enable, and support, because you need a different package, it needs to be much more simpler than the enterprise. You cannot go to a Chinese menu for the GBs, so it has to be templates. Price, very specific price for the GB. It needs to enable the channels. Who's going to enable the channel? Technically, pre-sale, sales, et cetera. And we need to support a channel once they sell or during the process. This is my organization, that's why I educate the other organizations. >> So there is not a company on the planet that has mastered the fine art of reaching-- >> Other than us? >> Other than you. Well, you said you got more work to do. (Rodolpho laughs) There's not a company on the planet, you're getting closer, that has mastered the fine art of reaching the general business population of companies. Increasingly also, as we move more into digital business, your biggest customers want to use software in digital interfaces and technologies to reach their small, medium sized business customers. Are they coming to you and saying, "How can we start bringing your platform, "your go-to business, and coupled with our SAP back end "to facilitate the process of helping to reach..." In other words, are you going to be able to catalyze a global change in the approach to reaching small businesses because of the SAP platform? >> Well, I don't know if we can do that, but I think it's a good vision for us to pursue, Peter. We do have an organization that has inside sales, digital sales, social sales, we use social to reach out to our customers. We use digital to reach out to our customer who have feet on the street, direct sales. We have our 12, today, I think 13,000 partners, ecosystems that reach also to our customers, and they are divided by territory, by industry, by solution, so we can map, get the world and map it by territory, by solution, by industry, the partners that we have, and we use a lot of our new methodologies and our social sales, digital sales, a lot of things. So we are building the infrastructure to support any kind of the products from SAP. We are very well serving them support for you, for the market, from SAP, so we have a lot to digest. >> So one of the things, we talked about, a lot of channel partners, SIs down to the ISVs-- >> Resellers. >> DABs, VARs, as you call, and we hear the following from them. I want to get your take on this and how you're addressing this. "We want a partner that's going to be with us "from cradle to grave, through the life cycle "with our partnerships," the things you said. The other thing that was interesting was, "We want to increase our gross profit," and services is 100% gross profit, so me as the partner, I make money on professional services, whether that's quick fix in the old days or architecting clouds, integration, so that's a big part of their revenue. So they want to make money, that's code word for money. So how will you guys shift in the economics to enable the partners to wrap their own unique services. It certainly makes sense in foreign markets, but across the globe, that's a big challenge. How are you rolling out for them, at the same time, bringing the big accounts to them? So how are you enabling me to wrap my services around them? >> And that's (mumbles) going back to your point or to your first question when I said the economics are changing, so we need to follow up the new economics. The channels, as you said, they make a good part of their business is about implementation. Once you go to the cloud, though, this part of the business reduces by one third, because in the cloud, you have less of a share of this service. So the service share is reduced by one third. So what you need to do is to compensate that with what we call an ARR, annual recurrent revenue, from the cloud. So we are building business model, and I launched that last Monday, our cloud business partner new business model, which is give the partners a ARR, annual recurrent revenue, because service is good because it's recurrent revenue. Once you sign a service SLA, a service contract, you don't have anything, but you have a recurrent revenue with that, but this is going to be reducing in a cloud, so we will compensate that, and that's the idea-- >> So you're shifting the dollars into the same consumption model, the cloud, with some sort of subscription-like or recurring revenue model. >> I'm willing to cut a share of my revenue with my partners, from the cloud. >> Well, you might be able to get it back longer term, but it's that up front. >> Yes, yes. >> Peter: So typically you sell up front, you pay for the sales guy up front, and a lot of these partners say, "I can afford to wait for the--" >> Now it's more of a recurrent revenue battle, so I'm willing to get a share of that to split that with my partner for more business. >> So you're financing their business model transition? >> Rodolpho: That's it, yeah. Transition, that's the word. >> Their fear that this transition, because they're on paper, they're getting cut, so they have to have an immediate pop, change, so you're financing that over the long term for the relationship. >> Well we are willing to have this conversation, and the new business models that we are developing, and we introduce it here, they actually address that in a very, very programmatic way. It's not a one-by-one, it's not opportunistic, and by the way, you said the channels, we are getting channels, we have only 15% of our business from the channel. My business, only 15% is opportunistic, that you come with a transaction, 85% is predictable. 85% is loyal, it's about loyalty. >> Great base. >> Exactly, I want to invest in the channels that are here for the long run. >> Peter: So it will support that business model transition? >> Yes, yes. >> So that's a good loyal base, so they probably give you very candid feedback. >> Yes, please. >> What did they say, no they do, if you have a loyal base, they'll tell you the truth, right? What are they saying? What's the feedback on the new business model? What are some of the examples? >> After I presented on stage and we had the conversation, I had, as you can imagine, a dozen conversations with specific partners that are willing to adopt and sign off. It's just for us to start to roll out, of course, to roll out the new business models you need to think about countries, a lot of the other specifics, but we expect in the next six month to have the whole world covered. >> That's great, and you have the events coming. Thanks for clarifying that. Well, we really appreciate (mumbles), coming on theCUBE and sharing your insights. >> Thank you. >> You're very dynamic, and great guest to come on theCUBE, certainly, we'd love to have you again, and if you need us down in the other summits, let us know. >> Rodolpho: It would be my pleasure, thank you. >> We'd be happy to bring theCUBE. Channel is big, the ecosystem is a competitive advantage, and you guys are looking good as they off the T. This is theCUBE here, live in Orlando. I'm John Furrier with Peter Burris. You're watching theCUBE. We'll be right back. 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