>> Narrator: From the Cosmopolitan Hotel in Las Vegas, Nevada, it's theCUBE, covering Coupa Inspire 2019, brought to you by Coupa. >> Welcome to theCUBE, Lisa Martin on the ground at Coupa Inspire'19 from the Cosmopolitan in Vegas. And I'm pleased to be joined by one of Coupa's spend setters from Highmark Health, Gary Foster, VP of Procurement. Gary, welcome to theCUBE. >> Thank you, it's pleasure to be here. >> So we're here with about 2,300 folks or so I think this is the eighth Coupa Inspire. Lots of energy and excitement this morning in the general session as Rob kicked that off. There is some of the interesting things that I've learned about Coupa in the last short while including this morning was that there's now $1.2 trillion of spend going through being managed by the Coupa platform. Tremendous community of data. And so imperative as the role of Chief Procurement Officer is changing, the CFO is changing. You are a veteran in the procurement industry. Before we talk about Highmark Health, give me a little bit of an overview of some of the things that you've seen change in procurement and where you think we are today in terms of that role being not only very strategic, but very influential to the top line of a business. >> Okay, it's a great question. I have spent a little over three decades in procurement. We've come a long way from back then. There was a lot of carryover from the industrialization era, and post-World War II and Korean War era, et cetera. Where really wasn't even called procurement it was purchasing. And there was a bit of the darling in the manufacturing industry, because that had such a high impact on the cost of goods sold. And as you got into other organizations, it was kind of relegated to a back office function, very transactional, very administrative, very clerical. So it really took someone with a lot of guts and a lot of vision to say we can be more than that. We can provide insights, we can deliver efficient transaction work and free up people to do more advisory type of roles. So I'm pleased to say I experimented with that early on in my procurement career. And that has been the shift that I think is continuing on. The whole buzz around digitization is another enabler to free up the talent that we have, that we can put into providing insights and predictions and becoming true strategy advisors to the business. So when the most recent, I've had for teams that I've taken over to either completely transform or build from the ground up. And this most recent one, I've sort of mashed up a lot of things that I've learned over the past three decades, to try to prepare them for where I believe that the profession is going, where I believe the function is going. Back to your original question. It's really evolved a lot from that back office transactional, just focus on price, a little bit on supply reliability, if it was in manufacturing, to slowly but surely started evolving to, what can you do to help us with some business objectives? And do we trust you with some important strategic initiatives that we need to accomplish as a company or in my business? >> Right, so it sounds like early on that you had this awareness of, there's pockets, there's silos of spend and purchasing happening there that we don't have the visibility into, 'cause we're talking a lot about that today with, that's what today's CPO and CFO really need is that visibility and control. >> Gary: Right. >> Especially as all of these forcing functions or disruptors happen, the more regulatory requirements or companies growing organically or inorganically. And suddenly, there's many, many areas within a business that are buying and spending. >> Right. >> And if they don't have that awareness and visibility into it, not only is it obviously, it's a cost issue, but one of your points to the resource utilization perspective. There's a lot of opportunities miss. So it sounds like you kind of saw that early on in your career, that there are things going on, we need to get visibility into all of this. >> Yes, yes. And it's, that's probably the, that's one of the foundational building blocks is to get a good handle on where's the money going. So the financial side of the house understands it from their journal entries and from their cost centers. But procurement, really great world class procurement, brings a different lens that the business doesn't think of. And that the financial industry, financial segment of the business doesn't think of. So that's, but you're really kind of a chicken and egg thing, you can't really provide the insights, if you don't have your hands on the information. And the information is got to be usable, right? Data versus information-- >> Absolutely. >> Quandary. That's very much the case with procurement. But you can't get bogged down and going for perfection, because then you'll just, analysis paralysis. You won't get out of that cycle and you'll never be able to provide. So you have to know, you have to have a gut feel that this is enough, this is directionally correct. Let's take this to the next level. Let's start moving with, here are the patterns that we see, here's what we think is happening, here's where we think there are issues, right? So those are, I think, are some of the foundational pieces to the spend analysis question. >> So talk to us a little bit about Highmark Health. What you're doing there and how you guys are really focused on changing America's approach to healthcare? Which I think would be welcomed by a lot of people, by the way. >> (chuckles) Yes, we have a very, very ambitious goal. We believe we can be a catalyst to change healthcare in America. >> Lisa: How so? >> Well, first of all, we think that the model was wrong. If you think about the way that the healthcare industry has grown up in the US, you went to a hospital because you were either sick or injured. You had to go to those locations. You had to follow those procedures. You had to fill out those forms. You had to, you went to where the care was, and you had to bend to your schedule to whatever was available, right? We've all experienced trying to get an appointment with a doctor, and it's four months out, right? So we're doing, this was a year and a half ago, we introduced same-day appointments. So we have both a hospital system and an insurance company. So we can see the whole value chain-- >> Lisa: Okay. >> Through the healthcare experience. And one of the fundamentals that we're doing is, we're trying to bring a retail mindset to healthcare. >> Where the wellness comes to- >> You, as opposed to you having to go somewhere to access your health or to get connected with experts that can advise you or for checkups, et cetera. You're wearing an Apple Watch, that's only one of those Fitbits, et cetera. There's a multitude of wearables that are coming. The combination of IoT, and healthcare and big data is intersecting at a rapid rate where we will be, we are already able to look at millions of records, of chart information about patterns of diagnoses. And we know that the data tells us that if we can get people to engage in their health and make small changes, and just learn more, be educated and learn more about how, we know that the long-term costs of their healthcare will go down. So we are looking to partner, obviously, can't do this all on our own. >> Right. >> So this is not a David and Goliath kind of a thing. So we're looking actively to partner with breaking company, lead companies and breaking technology companies to be partners with us on this journey of how do we bring health to people and help improve their health, lower their disease rates, provide a better quality of life, lower their cost of health care, lower all the complications, you can see the graphs, right? It all runs, as you get as you get older, if you don't take care of yourself. >> Lisa: Right. >> The complications of healthcare issues just go exponentially up. And we know we can bend that curve down if we can transform the way that health is thought of and delivered to people in the country. >> Well, I'm already signed, you got me. So talk to me, though, about from a technology perspective. If we think about all the emerging technologies, you mentioned IoT, millions and millions of devices, we are sometimes overly connected. >> Gary: Yes. >> What is the opportunity that Highmark is working on with Coupa to be able to start changing that mindset and bringing that retail model to healthcare? How are they hoping to ignite that? >> Well, it's not on a direct connection with Coupa. Coupa is our procuring platform. So it enables us to provide efficient transactions and we get data insights. Coupa is very much an enabler for us in this process. What I would say is, and this goes back to the evolution of procurement as a profession, by having Coupa and other technologies at the fingertips of my team, it frees them to immerse themselves into their clients' business as well as their categories. So if they're, if I have someone who's a category manager of digital marketing, they can immerse themselves into that, and they can work that, my folks go, they attend senior level staff meetings, they have one on ones with executive VPs, they co-locate with the client on a regular basis. We really immerse ourselves into it. What Coupa is doing is it's allowing us to spend less time on transactions and process, and more time learning the business, more time understanding the industries that they operate in, looking for innovation, and bringing those innovative partners to the business that wouldn't necessarily have happened on its own. We have this incredible network, particularly if we have people that really, really have a passion for procurement, and really have a passion for being intimate with the customer. I know it's an overused phrase, but the trusted advisor status is definitely where we should be. That's an, the Coupa org, the Coupa platform, and tools enable my team to have, to bring those insights and those opportunities to the business. And we've gotten tremendous accolades from the CEO through the entire C-suite, about the level of business partnership that the procurement organization has, with all of the various areas of the Highmark organization. >> So you have this visibility now that you didn't have before with Coupa? >> Yeah. >> This control. Sounds like your resources and different parts of the organization are much better able to use their time to be strategic on other projects and to really start bringing that retail experience out there. Coupa kind of as, you mentioned, as an enabler is really foundational to that. I know you've actually won some awards. I think, Rob Bernstein actually mentioned this on stage this morning that you took top honors at the Procurement Leaders, Inaugural America's Procurement Awards. >> Gary: Yes. >> You've also been recognized as a Procurement Leader of the Year for transforming Highmark Health. What I love about the story is that showing how procurement, not only has it transitioned tremendously to be very strategic, but you're helping to transform an industry by getting this visibility on everywhere, where there's spend there, that operationally, Highmark Health seems to have a big leg up. >> Yes, yeah. No one could be everywhere at once. And if we can earn that trust, then the people in the business who are hired to play certain roles, strategy, development, or whatever, if they're, if they will, let us help them with our expertise, they can spend, they're more effective in their role. >> Right. >> Because they're not doing procurement work. They're not talking to suppliers. They're not negotiating deals. They're not looking, then let us provide that service, that professional service to them, really, as a consultant, as an advisor, and bring companies that, the more we get in depth into understanding the industries that we're buying in, the more we're learning about emerging companies. Who are the innovators? Who are the disruptors? Bringing those organizations because we're studying that in our markets, to our business partner, and making that introduction, which sparks an idea, which sparks an opportunity for the two to work together collaboratively on something new, or to resolve an issue that has not been addressed and no one found an answer to in the past. >> Well, you've put this really strong foundation in place that not only gives you the visibility and control, but it's going to allow Highmark Health on this ambitious goal, as you mentioned, about bringing wellness to us. And of course, there's the whole, there's the human in the way. So maybe tomorrow, Deepak Chopra, who's keynoting, will be able to give you guys some insight into how to help these people. And it's all of us people, right? Really embrace mindfulness, to be able to focus more on our passions. But what you guys are doing to transform healthcare is really inspirational so Gary, thank you-- >> Thank you very much. >> For joining me on theCUBE today. >> It was a pleasure. >> Likewise. For Gary Foster, I'm Lisa Martin. You're watching theCUBE from Coupa Inspire'19. Thanks for watching. (upbeat music)

(techy music) >> Announcer: Live from Las Vegas, it's theCUBE, covering Dell Technologies World 2018. Brought to you by Dell EMC and its ecosystem partners. >> We're back in not-so-sunny Las Vegas. You're watching theCUBE, the leader in live tech coverage. We're here at day three, wall-to-wall coverage of Dell Technologies World, the Inaugural Dell Tech World. I'm here with Tom Sweet, who's the CFO of the 80 billion dollar Dell Technologies empire. Thanks for coming to theCUBE. >> Happy to be here. >> So, really thrilled to have you on. I think it's the first time you've been on theCUBE. >> You guys usually don't let me on, so you know, they're letting me out a little bit, I guess. >> Well, I say, we're happy to have you. So, a lot going on, obviously, in your business. I mean, let's start with, you know, we're a couple of years into the integration, you guys, obviously, you dug in. You've got a pretty good handle on this, like I said, 80 billion. When it started, you guys were in the low 70's, I believe, so you've seen some growth. Not a lot of growth in this business, but you guys are growing. So, give us the rundown of your business. How should we think about the Dell empire, as I called it? >> Look, I think that we're very happy with the progress that we've made since the integration, which was back in September of 16, so over the last 20 months, we've been focused on building velocity within the business, and particularly, as you think about our major tranches of product, if you will. So, you know, our client business is growing quite nicely, as we evidenced by last year, 21 consecutive quarters of share gain. Pleased with our server velocity. Last year, we were number one in servers. Storage has been a bit of a work in process, as you know, but I think we're beginning to see a little bit better velocity in that business. Clearly, we have VMware, and we have Pivotal. So, what's been really interesting is how the companies have come together, and the offerings have come together in a much more integrative fashion, which has been fun to watch and fun to sort of help put this thing together. The customer buy-in and the customer acceptance of the vision and the story has been pretty remarkable, from my perspective. >> And, the client's side of the business surprised me anyway. It's like the gift that keeps on giving. >> Well, you know, what was it, 10 years ago, they said the PC was dead, you know, and today it's roughly half of our revenue and growing nicely. I think the secret, as always, as you know, is work gets done on a keyboard. The tablet and the phone become an and device, a notebook and a tablet, a notebook and a phone. We keep innovating form factors or innovating the interfaces with the device, so we're pretty excited about it. It's just a really good, really great business for us. >> I think what Michael said in his keynote, when IBM announced the end of the PC era, since then there's been four, I think he said four billion PCs shipped. >> Yes, exactly. >> It's astounding. >> Clearly, the overall market for PCs is flat to slightly down, it's going to be in that range, but in that type of market, our point of view, as you well know, is you have to take share, you have to grow. The team's done a nice job. Jeff Clark and his product team have done a really nice job around form factor innovation, 87 CES awards this year for PCs, so really good business. >> And, from a CFO's perspective, it's throwing off cash, you're comfortable with, what is it, a 5% to 6% operating margin, basically? >> We typically think of that as about a 5% op inc business, but it provides huge amount of scale for us, if you think about our supply chain, our ability. It's a nice, predictable, really strong cash flow business for us, so it's a good business. >> And, the higher end, the server business and the storage business is what now, around 7% op inc, and there's a lot of upside there, potentially? >> Yeah, it's a little bit higher than that, but there is upside there as we continue to drive the business and drive efficiency in that business and, as you know, we're doing a lot of work right now in our storage area in terms of how, over time, do we evolve that road map around the solution set, and working more in an integrative fashion with VMware around the convergence of hardware and software, into more thoughtful and more smarter designs or in the storage platforms. So, you know, that business is, that's going to be a really interesting business for us over the next year or so. >> Well, really, VMware, people look at Dell as a hardware company, but VMware is not a hardware company. It's software, marginal economics. It throws off 50% roughly of your operating cash, I mean, it's a gem. >> We're actually huge fans of VMware. It's a great company, growing very nicely, and extraordinarily well-positioned, as you think about the world of Multi-Cloud. And, what we're doing and how they're thinking about any device to any device, any Cloud to any Cloud, that whole story is resonating, and from a CFO perspective, you got to like software margins. It's a good business. >> So, let's talk about the debt a little bit, because I think there are a lot of misconceptions out there. You paid down $10 billion in debt, I think it's roughly around 40 billion now. Is that about right? >> A little bit higher than that, because we've added some debt related to our GFS business, but I think the way you ought to think about our debt load is that very manageable, we're right on the schedule we thought we were going to be on, in terms of debt paydown, and we'll continue to pay down debt, from a capital allocation focus. You know, 60-70% of our capital is focused on debt paydown, doesn't mean we're not investing in the business properly, 'cause I think we are, and we're continuing to fuel those investments, and then we're going to add some debt, because our DFS, or financing business, we use debt to fund that business, but that's a little bit different sort of perspective. We think about that debt separately and different than the core debt of the business, and our analyst community and the credit rating agencies think about that debt differently. And the GFS business is growing very nicely in terms of originations, and it's a great tool for our sales force to help in terms of the financing capacity and credit capacity for our customers. So, it's a good business. >> And, let's talk taxes for a second. I know it's kind of off the normal CUBE interviews, but a lot of people talk about that. All the legislation tax, legislation, that's bad for Dell, you can't write off that debt, but essentially, from what I've read, it's a net neutral to you guys. >> It's generally neutral to maybe slightly negative, as we understand the debt regulatory environment today, with the US tax reform. They did put some limits on how much interest, and there's transition rules around how much you can deduct, but you know, you got to lower corporate tax rate in the US, you also have the immediate expensing of CapX, and then you've got the repatriation toll charge, but when you throw it all together, slightly negative, but it's not a big cash dynamic for us, it's not a driver of, geez, we've got to go do something with our capital structure as a result of that. So, that's just a misconception that's out there right now. >> And then, you've told me earlier that the Pivotal move was not about delevering, it was a move that you guys have been planning for a while. I mean, that was in the works before the merger. Talk about that. >> Look, I mean, Pivotal's done, their growth at Pivotal and the acceptance of Pivotal's been remarkable. So, that conversation around should we IPO, when should we IPO, has been in the works for over a year, and Pivotal needed to continue to grow and mature a little bit in some of its processes and making sure that when you decide to go public that you're ready to go public. For that last year, that's what they've been working on. But in terms of the actual, to go public and the proceeds from that, that's all about giving Pivotal their own capital to fund their business growth and dynamic. We could have done it at the Dell level, Dell technology level, but I thought it was more appropriate, the size of company they are, that they have their own capital. They're doing business with over half of the Fortune 500, so they need some substance, and it's a great retention to 'em, in terms of having currency for their employee base, for both their attracting talent and retaining talent. >> A Silicon Valley company with its own, I've visited those offices. It's not the normal corporate office down on Howard Street, right? >> No, you know, they're doing the huddles in the morning, but that's what's interesting about Dell technology, the family of businesses, the different cultures, the different capabilities, it's a pretty remarkable set of companies with it. >> The market's booming right now, hope it continues, knock wood here, but what are the assumptions you're making in your business, maybe the economy, you could touch on that. >> We look across the top 45 economies right now, where we do business. They're all growing, GDP's growing, so we feel pretty good about the overall economic environment. Interest rates are slightly rising, but not a big issue for us, even with our debt load. We're about, roughly 70% fixed, 30% floating, so the fact that LiveBoard's up a little bit isn't a big deal. Currency's relatively stable, so we're positive, and companies and institutions are spending on IT, the round of innovation that's being driven, the round of investments and the changes in business models. Typically, one of the first things they go do is they invest in IT to help with that digital transformation, that IT transformation. We're bullish on the economics, so it's a good platform for us. >> One of the things I've said for quite some time now is that the merger between Dell and EMC was inevitable. You had these pressures of Cloud, you needed a company who was comfortable, with a lower margin business and had a profitability model that could thrive, and it made a lot of sense. But, you don't have a public cloud, and you're comfortable with that, but you've done a lot of work with, I'll call, utility pricing. Can you talk about that a little bit? >> Well, one of the feedback things we got from our customers is, hey, look, I like the economics of the Cloud. I like this pay-as-you-consume, pay-as-you-grow, that flexibility to scale up, scale down, so through our Dell Financial Services and using our own balance sheet, we have put together flexible consumption models, so I can offer you a pay-as-you-grow, pay-as-you-consume, or we can do a straight out utility where the assets are on my balance sheet and you're paying a monthly fee, if you will. So, all we're trying to do there is to normalize the economics for our customers, say, hey, I want you to take economics out of your decision about whether you want to go to the Cloud or not, because we can offer that capacity and capability. And, let's really talk why, and what's the purpose, and what's the work load, what's the problem that you're trying to solve? >> And, you obviously recognize that as radical revenue. >> Yeah, absolutely. >> I'm guessing it's not meaningful, like a software company shifting from a perpetual model, or is it? >> Well, I think over time you're going to see the rise in these types of models. Customers are interested, as a service models. So, there is interest in that, and I think you'll see that piece of the business grow over time, but I don't think it's going to be a step function change. But, again, it's just another example, I think, of Dell Technologies offering customers what they want and in different and innovative ways to do business with us. >> One of the things that EMC did, was they did a lot of M&A. That's kind of how EMC innovated, no offense to my friends from EMC, but they fill gaps. And, a lot of times, those gaps created huge overlaps. You guys are addressing that carefully, I understand that. How has the merger, the debt, affected your ability to do M&A? How critical is that to you guys, because you are very acquisitive, obviously, as well? >> We are still very active, as we look at the technology trends and what type of capabilities and new technologies are on the horizon, so we haven't done a lot of M&A since the acquisition of EMC. We've principally focused on the integration, but if you look at VMware, they've done acquisition, we've done a couple of really small tuck-ins within the family, but we'll continue to look at that. And, one of the other tools in our tool chest, as you know, is Dell Technologies Capital. I think we've got roughly over 81 investments in technology startups, principally on the West Coast, but some overseas, and very focused on security, AI, machine learning, next-generation storage capabilities, and so we get exposed to that type of technology, and we put our R&D teams together with them, so I feel like we're in a reasonable position, and as the business tells me they need something, we'll go evaluate it. >> I want to ask you a question about your peers, the CFOs. I'm getting to know you a little bit. I think you're a rock star CFO. One of our analysts said to us the other day, Tom Sweet is a stud, I said, yeah, it's the make-up on theCUBE. >> I don't know about that. >> So, what's going on in the, well, you've got a big job, and you've got a really good handle on what's going on here. What's going on in the world of CFOs these days? I mean, obviously, you've got stuff like GDPR that gets in there, but digital transformation is obviously a huge theme among the C-Suite. Security is a board level issue. What kind of discussions are you having with your peers these days? >> Look, I mean, most of the conversations tend to be around two or three different areas. One is how do you think about how does the finance function and our capabilities change over the coming three, five years, right? How do you think about the use of AI, machine learning, and in the processes of the company? And, what is everybody doing to innovate around that? That's a pretty common conversation we're having. You know, security cyber is a huge conversation point in terms of how is your board looking at it, how are you thinking about it. Since we're CFOs, we're always talking about how much money, what's that investment profile you need to have there, in terms of what's the right amount? As you well know, you can spend a lot of money there. Are you guaranteed of a perfect defense? Absolutely not, so that tends to be a common area, but more importantly, there's this whole comment, this whole big data conversation that's also happening around how do you help the business make better decisions? How do you add and drive value back to the business? How are you using advanced analytics to drive insight back into the business, the various businesses? So, pretty much the same sort of conversations we're having with our customers, we're having internally, or amongst the CFO community. >> A lot of risk management, obviously, >> Yeah, absolutely, absolutely. >> goes into that equation. >> I mean, inside of tech or outside of tech, are there companies or CFOs that you sort of follow, admire, kind of models that you look at? >> Look, there's some great CFOs that I've had the opportunity to have interactions with. You know, Mark Hawkins at Salesforce is a great CFO, also a good friend, Amy up at Microsoft, really doing a really nice job up there, and then Bob Swan at Intel. So, we tend to sort of be industry-organized, just because that's how we interact, but they're all doing nice jobs and really interesting innovative things within the context of their companies' business models. >> Have you changed the sources of where you guys get information? Obviously, your peers is probably number one, but as the digital world comes forward, have you sort of changed the sources, or still sort of the Wall Street Journal every day? >> Well, it's guys like you, right? We're all watching the blogs and, look, the amount of data and information that's flowing these days can be overwhelming, so I tend to be, I'm looking at industry publications, I'm looking at some of the online blogs in terms of trying to understand where are our competitors headed, where is the industry headed, what are the themes out there? You know, Michael's got a perspective with his leadership team that, hey, he wants us out in front of customers, so I spend roughly 30% of my time with customers and partners. You have to be aware of, obviously, what's going around in the industry, not only to be thoughtful and intelligent, but to also help think about where do you position the company, three and five years down the road? And, helping Michael in that thought process, and helping the leadership team in that thought process. >> Well, Tom, it's been a real pleasure getting to know you a little bit, and watching you guys in action. Wish you best of luck. >> I appreciate it. >> Thank you so much for being on theCUBE. >> It was a lot of fun. >> All right. Keep it right there, buddy. We'll be right back with our next guest, right after this short break. You're watching Dell Technologies World, live on theCUBE. (techy music)