>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hi, everybody, welcome to this CUBE conversation. My name is Dave Vellante. You know the software industry is going through dramatic change. Obviously cloud is a piece of that. The drive towards simplification. Gone are the days of multi tens of millions of dollar implementations that take years and years with highly-customized software modifications. Those days are gone. People wanna simplify. They wanna be agile. Carter Lloyds is here. He's with QAD, an ERP manufacturing software specialist. Carter, thanks so much for coming on theCUBE. >> Thanks for having me here. I'm excited to talk to ya. >> Yeah, so I'm learning more about your company. Love the story and I'd like you to share it with our audience. Give us the brief overview of who QAD is. >> Absolutely, so maybe we should start with where we came from. So, it was about 40 years ago in 1979. Karl Lopker, our founder, and Pam Lopker, our co-founder, were in Santa Barbara, California. Karl had a company that was making sandals and he was running into some manufacturing problems and he needed some help and he needed some software to make it easier for him to manufacture. Pam came along, she wrote some software for him. He was very successful. That company turned into Deckers which now owns Uggs and is doing some great things and they decided along the way that although sandals are interesting, they thought software was more interesting. So they founded QAD and for 40 years we've been very focused on helping to make manufacturing easier through cloud ERP software now. >> That's a great story, so Pam is the coder. She's the alpha geek. >> Exactly. >> And they solved their own problem and then said, okay, let's take this to market. >> Exactly and that's why manufacturing, it's in our DNA. It's in our roots and it's what we're passionate about. >> Well so the obvious question that people are gonna have is how do you compete with the big whales in the market, particularly SAP? >> Okay, fantastic. I heard a quote recently that I've really locked onto and it's from the founder of the World Economic Forum and the quote is that in the old days, it used to be the big fish that would eat the small fish but in today's world, it's the fast fish that eats the slow fish and we see that not only as a metaphor for our position within the ERP industry, but what our customers are going through right now. That with all the rapid change that's going on, it's not about how big you are in economies of scale. It's about how resilient you are and how fast you can adapt. >> Well, that's interesting. So you're a smaller company, obviously, than the multi tens of billions of dollars that SAP and Oracle and others, but you're talking like a startup. >> Yep. >> Agile, speed. Is that how you think about yourselves? >> Absolutely, I think a startup mentality is always great to have, but rapid, agile, and effective. We believe that those are the requirements of our customers within the manufacturing business and that's what we need to be able to provide. >> So let's talk more about the differentiation. I mean you can't be all things to all people as a smaller company and a company that wants to be agile so what are some of the areas that you're focused on where you're having successes. >> Okay, absolutely, so historically, we focused on manufacturing, but that's too broad so we're focused on six verticals within manufacturing. So it's automotive, life sciences, food and beverage, consumer-packaged goods, electronics, and high tech. I'm sorry, industrial. So those are the main areas that we're focused on right now but within that, we're seeing a lot of challenges for manufacturers within that area. Again, it's this concept of change. We believe that the only constant is change and legacy ERP systems simply weren't designed for change. If there was no change, the system that you installed eight years ago would work just as well today as it did eight years ago, but that's not what's happening. We're seeing a disconnect between the business requirements and what the systems are able to provide. >> Now is your strategy to sort of build greater functionality into the software that sort of maps to companies' business processes or is it that the software is super flexible and can be adapted? Maybe you could describe that a little bit. >> It's both. So to start with, we want to not deliver to our customers a framework on which they need to build out their processes but realize that there are best practices and there are common processes within, amongst companies within a particular niche and so we want to come to the table with the very best industry best practices that we can and we do that. We also recognize, though, that each company is slightly different and to simply say adopt best practices and you must do that is not the right way to go. So we believe that our software can get our customers to 90% of their requirements and that's world-class but for that last 10%, don't ignore them. If that's where your competitive advantage is, where your differentiation is, then we need to give you a way to be able to meet those requirements and a way that is simple and does not lock you in to the software that you currently have. >> Mh-m, okay so Carter you're a global company. Maybe you could give us a sense of the sort of scope of your operations. >> Absolutely, so our customers are global and they've taken us global. We support over 65 countries in terms of the regulatory requirements so that out of the box, our software is able to do that. We believe that's industry-leading. We have operations all around the world, direct and through partners. >> So you guys have been around for a while. When you step back and think about some of the big trends, obviously cloud, everything is becoming, you know, about server size, what are the factors that you look at that are, you're trying to make tail winds for your company? >> Absolutely, so we've spent a lot of time over the last couple of years thinking about disruptors. So what are the common themes in these changes that our customers are facing and we've narrowed that down to three top disruptors. So the first one is anything is a service. So end users now are demanding not just products but what that product can do and the classic example is people don't want drills. They want holes. Why are we selling them drills? And we're seeing that sweep across manufacturing. We've got a customer that delivers industrial equipment to fast food chains and they don't wanna simply buy fryers. They want to be able to fry things so they're asking that vendor to be able to provide it as a service to be able to monitor and intervene so that they have more fryer up time which makes sense. That's the first one. The second one that we see is make to scale it order or mass customization. People want things the way that they want them and that's getting more pervasive throughout the supply chain. And then the third one is the digital transformation of manufacturing which many people call Industry 4.0. >> So on that last piece, very data-oriented >> Yes. >> And so maybe talk a little bit about how your customers are using data to transform their business and what role you guys play. >> Sure. It's absolutely critical when we think about how data has transformed the world of the consumer, it's incredible. What you are now able to do on the internet, even tied to anything as a service. The concept that we don't own movies anymore. We don't own music. We get it delivered as a service to us but the first step in doing that is to really digitize manufacturing. So it starts with the acquisition of company data and value chain data and then using that to be able to measure and optimize process to improve performance. >> So cloud is obviously another big trend in your business. You guys have moved to a cloud operating model whether it's on-prem or in your cloud but talk about your cloud strategy and what you guys are doing there, maybe some of your product portfolio. >> Absolutely, so we were very early to the cloud. Our first product went to the cloud in 2003 before it was even called the cloud. I think we called it on demand then and that was a supplier collaboration tool. We moved our flagship ERP system to the cloud in 2007 and since then, we've been building it for the cloud, optimizing, designing and it was an incredible experience for us that really had customer benefits because once you start to become a service-provider rather than a product-provider, you see it through your customers' eyes. So, depending on your viewpoint, you're either eating your own dog food or drinking your own champagne and it led us to understand some of the pains that people have in implementing ERP systems and upgrading them and then to design fixes so the software goes in faster, easier, and can be upgraded to a much greater extent. >> And so if you're gonna be in the cloud, your customers obviously wanna avoid a lot of custom modifications. We heard earlier that's sort of one of your differentiations and am I getting that right? As your customers move to the cloud, they're minimizing the need to do custom mods? >> So I would caveat that a little bit. I think the need still exists for that last-mile functionality to meet the individual requirements of the company but we think that customizations are evil. We want to eliminate customizations but still give them the ability to deliver on that need through extensions and new applications that are written in a non-intrusive way and can float above the system and therefore the system can be upgraded without breaking those connections. >> We're having to go back inside to the guts of those what you just called the last mile, right? >> Absolutely, so our customers are in the manufacturing business. They're not in the software business and part of the cloud-value proposition is allowing our customers to do what they do best which is to make great products and serve their customers and let us do what we do best which is delivering software through the cloud to them. >> And so your cloud products and your on-prem products are sort of identical from a code-based standpoint. Is that correct? >> They are, exactly. We do not believe that cloud should be a compromise. Our customers demand full-functionality ERP. That's what we had delivered previously on-premise and that's what we deliver on the cloud so it is identical software. >> So go back to this digital transformation for a minute 'cause you do a lot of conferences with theCUBE. You hear that. What does that mean to your customers? It's not just a buzz word. Every customer you talk to saying, digital, digital, digital. It's the number one driver of our business. What does that mean to your customer base? >> Absolutely, so for us it's not about the technology itself. It's about the use case and how it can make them better manufacturers and make manufacturing easier. So there are a couple of different areas that we've been exploring and we do that through a very pragmatic approach and we call that QAD Labs where we work with our customers around their use cases and how we can apply technology to it. So one of the areas that we're working on right now is around machine learning and it's to help automotive suppliers to take some of the signals that they're receiving from the OEMs in terms of what the requirements are and make sense of it so that what they are planning on delivering closely matches what the ultimate requirement will be from the OEMs. The OEM signals often jump around quite a bit and through machine learning, we can make better sense and not necessarily replace the planner, but provide additional information suggestions to the planner to make them more efficient. >> So the outcome is better predictability, sort of less heavy-lifting? >> Absolutely, so, much better customer service, less expediting of materials, and then also lower inventory. >> Talk about QAD Explore. It's coming up in May. When is it? What can people expect? What's it look like? >> Absolutely, so we have our user conference. Our global user conference in New Orleans, Louisiana, May sixth through ninth. It's a fantastic event. We get very excited about it. I guess we could say we get jazzed about it since it's in New Orleans. It allows us to really think about our customers, to meet with our customers, to have our customers network with each other, learn best practices, and see what we're doing and how we're trying to help them. >> What's the format of Explore? Like you've got obviously keynotes. Is it one-day, two-day? Maybe describe that a little bit. >> Absolutely, so it's a three-day event. The keynotes are fantastic. We try to do short, TED talk-type events with some of our executives so you can hear about our strategy and what we're releasing. We bring in industry experts and experts around the future of manufacturing and the future of business so that our customers can start to see where their area might be headed so that they can start to make decisions about where we're going and then in the afternoons we tend to go into breakouts where we can do deep dives into our solutions and businesses so that they can really understand the benefits that are available to them. >> So customers obviously attending. Will they present as well? >> We do have customers presenting. That's one of the main reasons our customers come actually is to hear from their peers and how they're solving problems. It's really a fantastic event. >> Well the Big Easy in May is a good place to be. It's a fun town. >> It's not a bad place to be and it actually starts the day after Jazz Fest so we can't complain about that either. >> Alright Carter Lloyds thanks so much for coming to theCUBE. >> Thank you very much for your time. >> And giving us the overview of QAD. Alright and thank you for watching everybody. This is Dave Vellante. We'll see ya next time. You're watching theCUBE. (light techno music)