>> From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from the cube in ETR. This is Breaking Analysis with Dave Vellante. >> On Friday, December 10th, Oracle announced a strong earnings beat and raise, on the strength of its licensed business, and slightly better than expected cloud performance. The stock was up sharply on the day and closed up nearly 16% surpassing 280 billion in market value. Oracle's success is due largely to its execution, of a highly differentiated strategy, that has really evolved over the past decade or more, deeply integrating its hardware and software, heavily investing in next generation cloud, creating a homogeneous experience across its application portfolio, and becoming the number one platform. Number one for the world's most mission critical applications. Now, while investors piled into the stock, skeptics will point to the beat being weighed toward licensed revenue and likely keep one finger on the sell button until they're convinced Oracle's cloud momentum, is more consistent and predictable. Hello and welcome to this week's Wikibond CUBE insights powered by ETR. In this breaking analysis, we'll review Oracle's most recent quarter, and pull in some ETR survey data, to frame the company's cloud business, the momentum of fusion ERP, where the company is winning and some gaps and opportunities that we see. The numbers this quarter was strong, particularly top line growth. Here are a few highlights. Oracle's revenues that grew 6% year on year that's in constant currency, surpassed $10 billion for the quarter. Oracle's non-gap operating margins, were an impressive 47%. Safra Catz has always said cloud is more profitable business and it's really starting to show in the income statement. Operating cash and free cash flow were 10.3 billion and 7.1 billion respectively, for the past four quarters, and would have been higher, if not for charges largely related to litigation expenses tied to the hiring of Mark Hurd, which the company said would not repeat in the future quarters. And you can see in this chart how Oracle breaks down its business, which is kind of a mishmash of items they lump into so-called the cloud. The largest piece of the revenue pie is cloud services, and licensed support, which in reading 10Ks, you'll find statements like the following; licensed support revenues are our largest revenue stream and include product upgrades, and maintenance releases and patches, as well as technical support assistance and statements like the following; cloud and licensed revenue, include the sale of cloud services, cloud licenses and on-premises licenses, which typically represent perpetual software licenses purchased by customers, for use in both cloud, and on-premises, IT environments. And cloud license and on-prem license revenues primarily represent amounts earned from granting customers perpetual licenses to use our database middleware application in industry specific products, which our customers use for cloud-based, on-premise and other IT environments. So you tell me, "is that cloud? I don't know." In the early days of Oracle cloud, the company used to break out, IaaS, PaaS and SaaS revenue separately, but it changed its mind, which really makes it difficult to determine what's happening in true cloud. Look I have no problem including same same hardware software control plane, et cetera. The hybrid if it's on-prem in a true hybrid environment like exadata cloud@customer or AWS outposts. But you have to question what's really cloud in these numbers. And Larry in the earnings call mentioned that Salesforce licenses the Oracle database, to run its cloud and Oracle doesn't count that in its cloud number, rather it counts it in license revenue, but as you can see it varies that into a line item that starts with the word cloud. So I guess I would say that Oracle's reporting is maybe somewhat better than IBM's cloud reporting, which is the worst, but I can't really say what is and isn't cloud, in these numbers. Nonetheless, Oracle is getting it done for investors. Here's a chart comparing the five-year performance of Oracle to some of its legacy peers. We excluded Microsoft because it skews the numbers. Microsoft would really crush all these names including Oracle. But look at Oracle. It's wedged in between the performance of the NASDAQ and the S&P 500, it's up over 160% in that five-year timeframe, well ahead of SAP which is up 59% in that time, and way ahead of the dismal -22% performance of IBM. Well, it's a shame. The tech tide is rising, it's lifting all boats but, IBM has unfortunately not been able to capitalize. That's a story for another day. As a market watcher, you can't help but love Larry Ellison. I only met him once at an IDC conference in Paris where I got to interview Scott McNealy, CEO at the time. Ellison is great for analysts because, he's not afraid to talk about the competition. He'll brag, he'll insult, he'll explain, and he'll pitch his stories. Now on the earnings call last night, he went off. Educating the analyst community, on the upside in the fusion ERP business, making the case that because only a thousand of the 7,500 legacy on-prem ERP customers from Oracle, JD Edwards and PeopleSoft have moved Oracle's fusion cloud ERP, and he predicted that Oracle's cloud ERP business will surpass 20 billion in five years. In fact, he said it's going to bigger than that. He slammed the hybrid cloud washing. You can see one of the quotes here in this chart, that's going on when companies have customers running in the cloud and they claim whatever they have on premise hybrid, he called that ridiculous. I would agree. And then he took an opportunity to slam the hyperscale cloud vendors, citing a telco customer that said Oracle's cloud never goes down, and of course, he chose the same week, that AWS had a major outage. And so to these points, I would say that Oracle really was the first tech company, to announce a true hybrid cloud strategy, where you have an entirely identical experience on prem and in the cloud. This was announced with cloud@customer, two years, before AWS announced outposts. Now it probably took Oracle two years to get it working as advertised, but they were first. And to the second point, this is where Oracle differentiates itself. Oracle is number one for mission critical applications. No other vendor really can come close to Oracle in this regard. And I would say that Oracle is recent quarterly performance to a large extent, is due to this differentiated approach. Over the past 10 years, we've talked to hundreds literally. Hundreds and hundreds of Oracle customers. And while they may not always like the tactics and licensing policies of Oracle in their contracting, they will tell you, that business case for investing and staying with Oracle are very strong. And yes, a big part of that is lock-in but R&D investments innovation and a keen sense of market direction, are just as important to these customers. When you're chairman and founder is a technologist and also the CTO, and has the cash on hand to invest, the results are a highly competitive story. Now that's not to say Oracle is not without its challenges. That's not to say Oracle is without its challenges. Those who follow this program know that when it comes to ETR survey data, the story is not always pretty for Oracle. So let's take a look. This chart shows the breakdown of ETR is net score methodology, Net score measures spending momentum and works ETR. Each quarter asks customers, are you adding in the platform, That's the lime green. Increasing spend by 6% or more, that's the fourth green. Is you're spending E+ or minus 5%, that's the gray. You're spending climbing by 6%, that's the pinkish. Or are you leaving the platform, that's the bright red retiring. You subtract the reds from the greens, and that yields a net score, which an Oracle's overall case, is an uninspiring -4%. This is one of the anomalies in the ETR dataset. The net score doesn't track absolute actual levels, of spending the dollars. Remember, as the leader in mission critical workloads, Oracle commands a premium price. And so what happens here is the gray, is still spending a large amount of money, enough to offset the declines, and the greens are spending more than they would on other platforms because Oracle could command higher prices. And so that's how Oracle is able to grow its overall revenue by 6% for example, whereas the ETR methodology, doesn't capture that trend. So you have to dig into the data a bit deeper. We're not going to go too deep today, but let's take a look at how some of Oracle's businesses are performing relative to its competitors. This is a popular view that we like to share. It shows net score or spending momentum on the vertical axis, and market share. Market share is a measure of pervasiveness in the survey. Think of it as mentioned share. That's on the x-axis. And we've broken down and circled Oracle overall, Oracle on prem, which is declining on the vertical axis, Oracle fusion and NetSuite, which are much higher than Oracle overall. And in the case of fusion, much closer to that 40% magic red horizontal line, remember anything above that line, we consider to be elevated. Now we've added SAP overall which has, momentum comparable to fusion in the survey, using this methodology and IBM, which is in between fusion and Oracle, overall on the y-axis. Oracle as you can see on the horizontal axis, has a larger presence than any of these firms that are below the 40% line. Now, above that 40% line, you see companies with a smaller presence in the survey like Workday, salesforce.com, pretty big presence still, Google cloud also, and Snowflake. Smaller presence but much much higher net score than anybody else on this chart. And AWS and Microsoft overall with both a strong presence, and impressive momentum, especially for their respective sizes. Now that view that we just showed you excluded on purpose Oracle specific cloud offering. So let's now take a look at that relative to other cloud providers. This chart shows the same XY view, but it cuts the data by cloud only. And you can see Oracle while still well below the 40% line, has a net score of +15 compared to a -4 overall that we showed you earlier. So here we see two key points. One, despite the convoluted reporting that we talked about earlier, the ETR data supports that Oracle's cloud business has significantly more momentum than Oracle's overall average momentum. And two, while Oracle is smaller and doesn't have the growth of the hyperscale giants, it's cloud is performing noticeably better than IBM's within the ETR survey data. Now a key point Ellison emphasized on the earnings call, was the importance of ERP, and the work that Oracle has done in this space. It lives by this notion of a cloud first mentality. It builds stuff for the cloud and then, would bring it on-prem. And it's been attracting new customers according to the company. He said Oracle has 8,500 fusion ERP customers, and 28,000 NetSuite customers in the cloud. And unlike Microsoft, it hasn't migrated its on-prem install base, to the cloud yet. Meaning these are largely new customers. Now this chart isolates fusion and NetSuite, within a sector ETR calls GPP. The very giant, public and private companies. And this is a bellwether of spending in the ETR dataset. They've gone back and it correlates to performance. So think large public companies, the biggest ones, and also privates big privates like Mars or Cargo or Fidelity. The chart shows the net score breakdown over time for fusion and NetSuite going back to 2019. And you can see, a big uptick as shown in the blue line from the October, 2020 survey. So Oracle has done a good job building and now marketing its cloud ERP to these important customers. Now, the last thing we want to show you is Oracle's performance within industry sectors. On the earnings call, Oracle said that it had a very strong momentum for fusion in financial services and healthcare. And this chart shows the net score for fusion, across each industry sector that ETR tracks, for three survey points. October, 2020, that's the gray bars, July 21, that's the blue bars and October, 2021, the yellow bars. So look it confirms Oracles assertions across the board that they're seeing fusion perform very well including the two verticals that are called out healthcare and banking slash financial services. Now the big question is where does Oracle go from here? Oracle has had a history of looking like it's going to break out, only to hit some bumps in the road. And so investors are likely going to remain a bit cautious and take profits off the table along the way. But since the Barron's article came out, we reported on that earlier this year in February, declaring Oracle a cloud giant, the stock is up more than 50% of course. 16 of those points were from Friday's move upward, but still, Oracle's highly differentiated strategy of integrating hardware and software together, investing in a modern cloud platform and selectively offering services that cater to the hardcore mission critical buyer, these have served the company, its customers and investors as well. From a cloud standpoint, we'd like to see Oracle be more inclusive, and aggressively expand its marketplace and its ecosystem. This would provide both greater optionality for customers, and further establish Oracle as a major cloud player. Indeed, one of the hallmarks of both AWS and Azure is the momentum being created, by their respective ecosystems. As well, we'd like to see more clear confirmation that Oracle's performance is being driven by its investments in technology IE cloud, same same hybrid, and industry features these modern investments, versus a legacy licensed cycles. We are generally encouraged and are reminded, of years ago when Sam Palmisano, he was retiring and leaving as the CEO of IBM. At the time, HP under the direction ironically of Mark Hurd, was the now company, Palmisano was asked, "do you worry about HP?" And he said in fact, "I don't worry about HP. I worry about Oracle because Oracle invests in R&D." And that statement has proven present. What do you think? Has Oracle hit the next inflection point? Let me know. Don't forget these episodes they're all available as podcasts wherever you listen, all you do is search it. Breaking Analysis podcast, check out ETR website at etr.plus. We also publish a full report every week on wikibon.com and siliconANGLE.com. You can get in touch with me on email David.vellante@siliconangle.com, you can DM me @dvellante on Twitter or, comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights. Powered by ETR. Have a great week everybody. Stay safe, be well, and we'll see you next time. (upbeat music)

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

>> Announcer: From theCUBE Studios in Paolo Alto and Boston, it's theCUBE covering empowering the autonomous enterprise. Brought to you by Oracle Consulting. >> Hi everybody, welcome back. You're watching theCUBE. We go out to the events, we extract the signal from the noise. This is a very special digital event and we're really covering the transformation not only of the industry, but the transformation of Oracle Consulting and its rebirth. Mike Owens is here, Group VP of Cloud Advisory and GM of Oracle Elevate which is a partnership that Oracle announced last Open World with Deloitte. And Don Schmidt is here, who's a Managing Director at Deloitte. Gents, good to see ya, welcome. >> Good to be here, Dave. >> So Don, I want to start with you. Transformation, everybody talks about that. There's a lot of trends goin' on in the industry. What do you guys see as the big gestalt transformation that's going on? >> Yeah, I think there's an inflection point right now. Everybody's been saying they want to get out of their data centers, though leaps haven't really been taking place. They've been kind of moving in small bits. We're now at the point where large transformation at scale of getting out of your data centers is now here. So we are here to try to help our clients move faster. How can we do this more effectively, cost-efficiently, and get them out of these data centers so that they can move on with their day-to-day business? >> So data centers just not an efficient use of capital for your customers is what you're saying. >> No, no there's lots of ways to do this a lot faster, cheaper, and get onto innovation. Spend your money there, not on hardware, floor space, power, cooling. >> Two very well-known brands, you guys get together. So what was the sort of impetus to get together? How's it going? Give us the update on that front. >> Oracle has been really technology focused. It was really created by technologists. And back to the point of what we're trying to do with the Cloud when you're trying to do larger transformation, those aren't some of the skills that we have. We've been bringing in some of those skills in DNA, but if you look at it as why would you try to recreate the situation? Why would you not partner with an organization if it does large business transformation, like a Deloitte? And so the impetus of that is how do we take the technology with a business transformation, pull that together, and back to the one plus one equals three from a customer. That's what they really want. So how to we actually scale that and do really big things and get big outcomes for our customers? Our partnership is not about trying to take a bunch of customers and move a couple application workloads. Our job, what we're really chartered to do is really make huge transformational leaps for our customers using the combined capabilities of the two organizations. So it's a huge paradigm for us to kind of do this. >> And in our collaboration with the two organizations, just the opposite for what Mike just said. So Deloitte wasn't really big in big IT. Business-led transformation is kind of what Deloitte's been known for, along with our cyber practice and so we needed the deep skills of the technical experts. >> So you just described what I would think of as wave one and as you keep peeling, you got the applications, you got the business process, you might have reorganizations. That's really where you guys have expertise, right? >> There's a lot of things you have to sort through and that's where the combined alvic program really synergizes itself around the tools that we have. We both have tools will help make sure we get this right. Deloitte has a product called ATADATA, Oracle has a product called Soar, they marry together properly into this transformational journey to make sure we get the discovery done right and we get the migrations done right, as well. >> Take me through a typical engagement, typical, I know, in quotes, and then how long? Take me to the point at which you start to get business value. What do I got to do to get there? >> So we see two different spectrums on a transformation and it really aligns to what are your objectives. Do you just need to get out of the data center because you're on archaic, dying hardware? Or do you want to take your time and make a little bit more of a transformational journey? Or do you want to play somewhere in the middle of that spectrum? But in either one of those we'll come in and do a discovery conversation. We'll understand what's in your data center, understand what the age or the health of your data center is, help put the customers through a business case, a TCO, how fast or how slow the journey needs to be for them, create what we call wave groups of how fast and we're going to sequence those, over time, to get out of their data center. In parallel, we're going to be doing, as Mike was saying, around all the operational aspects. So while we're doing that discovery, we want to start standing up their Cloud center of excellence. Getting Cloud operations into the organization is a different skillset for IT to have. They're going to need to retrain themselves, retool themselves in the world of Cloud. So we kind of do that in parallel. And then what we want to do is when we start a project, we want to start with a little POC or small, little group of safe applications and we can proof out the model works, move those into the Cloud and then what we want to do is we want to scale that out at its large pace, get the IT savings, get the cost cuts out of the organization. >> Do you guys have specific plays or campaigns that I can do to get started? Maybe do a little test case? Any particular offerings that? >> It's all under the program of Elevate. We've got a couple of campaigns. So the biggest one we've been talking about is around the data center transformation, so that's kind of the first campaign that we're working on together. The next one is around moving JD Edwards specific applications to Oracle's Cloud. And then the third one is around our analytics offering that Deloitte has and how we're going to market to genera, put that in it, as well. Those are our three major campaigns. >> The JDE migration, so you've got what? Situations where people have just broken systems? >> Yeah, I would say it's more of a JDE modernization. So you have an organization, right? They may have a JD, a JDE or JD Edwards instance that's really, it's older. They may be on version nine or something like that. They don't want to go all the way to SaaS 'cause they can't simplify the business processes. They need to do that but they also want to take advantage of the higher level of capabilities of Cloud computing: IoT, mobile, et cetera. So as a modernization, one of the things we're doing is an approach it together. We work with customers, depending on where they're goin' and going, "Hey, great, you can actually modernize "by taking it up to this version of JDE "through an upgrade process," but that allows you then to move it over to Oracle Cloud infrastructure which allows you to tap into all those platform services, the IoT and stuff like that to take to the next level. Then you can actually do the higher level analytics that sits on top of that. So it's really a journey where the customer wants to get. There's a various, kind of four major phases that we can do, or entry points with a customer on the JDE modernization, we kind of work them through. So that's a skill of some of the capabilities that Deloitte has is a deep JDE and as well as Oracle Consulting, and we actually are going to market that together. Matter of fact, we're even at conferences together talking about our approaches, here and in our future. >> In the analytics campaign, so it seems to me a lot of companies don't have their data driven. They want to be data driven, but they're not there yet and so their data's in silos and so I would imagine that that's all about helping them understand where the data is, breaking down, busting down those silos, and then actually putting in sort of an analytics approach that drives them from data to insight. Is that fair? >> Yeah, fair. Yeah, it's not just doin' reporting and dashboards, it's actually having KPI driven insights into their information and their data within their organizations. And so Deloitte has some pre-configured applications for HR, finance, and supply chain. >> Guys, two powerhouses. Thanks so much for explaining in theCUBE and to our audience it. Appreciate it. >> Appreciate it. >> All right, thank you everybody for watching. We'll be right back with our next guest. You're watching theCUBE from Chicago. We'll be right back after this short break. (soft electronic music)

>>from the Cube Studios in Palo Alto and Boston. It's the Cube covering empowering the autonomous enterprise brought to you by >>Oracle Consulting. Everybody, this is Dave Vellante. We've been covering the transformation of Oracle consulting and really, it's rebirth. And I'm here with Chris Fox, who's the group vice president for Enterprise Cloud Architects and chief technologist for the North America Tech Cloud at Oracle. Chris, thanks so much for coming on the Cube. >>Thanks too great to be here, >>So I love this title. You know, years ago, this thing is a cloud architect. Certainly there were chief technologist, but so you really that's those are your peeps, Is that right? >>That's right. That's right. That's really in my team. And I That's all we dio. So our focus is really helping our customers take this journey from when they were on premise. You really transforming with cloud? And when we think about Cloud, really, for us, it's a combination. It's it's our hybrid cloud, which happens to be on premise. And then, of course, the true public cloud, like most people, are familiar with so very exciting journey and frankly, of seeing just a lot of success for our customers. You know what I think we're seeing at Oracle, though? Because we're so connected with SAS. And then we're also connected with the traditional applications that have run the business for years. The legacy applications that have been, you know, servicing us for 20 years and then the cloud native developers. So with my team and I are constantly focused on now is things like digital transformation and really wiring up all three of these across. So if we think of, like a customer outcome like I want to have a package delivered to me from a retailer that actual process flow could touch a brand new cognitive site of e commerce it could touch essentially maybe a traditional application that used to be on Prem that's now in the cloud. And then it might even use new SAS application, maybe for maybe Herman process or delivery vehicle and scheduling. So when my team does, we actually connect all three. So what? I was mentioned, too. In my team and all of our customers, we have field service, all three of those constituents. And if you think about process flows, so I take a cloud. Native developer we help them become efficient. We take the person use to run in a traditional application, and we help them become more efficient. And then we have the SAS applications, which are now rolling out new features on a quarterly basis and the whole new delivery model. But the real key is connecting all three of these into your business process flow. That makes the customers life much more vision. >>So I want to get into this cloud conversations that you guys are using this term last mover advantage. I asked you last I was being last, You know, an advantage. But let me start there. >>People always say, You know, of course, we want to get out of the data center. We're going zero data center and how we say, Well, how are you going to handle that back office stuff, right? The stuff that's really big Frankie, um, doesn't handle just, you know, instances dying or things going away too easily. It needs predictable performance in the scale. It absolutely needs security. And ultimately, you know, a lot of these applications truly have relied on Oracle database. The Oracle database has its own specific characteristics that it means to run really well. So we actually looked at the cloud and we said, Let's take the first generation clouds but you're doing great But let's add the features that specifically a lot of times the Oracle workload needed in order to run very well and in a cost effective manner. So that's what we mean when we say last mover advantage, We said, Let's take the best of the clouds that are out there today. Let's look at the workloads that, frankly, Oracle runs and has been running for years. What are customers needed? And then let's build those features right into this, uh, this next version of the cloud we service the Enterprise. So our goal, honestly, which is interesting is even that first discussion we had about cloud, native and legacy applications and also the new SAS applications. We built a cloud that handles all three use cases at scale resiliently in very secure manner, and I don't know of any other cloud that's handling those three use cases all in. We'll call it the same pendency process. Oracle >>Mike witnesses. Why was it important for Oracle? And is it important for Oracle on its customers that have to participate in IAS and Pass and SAS. Why not just the last two layers of that? Um What does that mean from a strategic advantage standpoint? What does that do for >>you? Yeah, great question. So the number one reason why we needed to have all three was that we have so many customers to today are in a data center. They're running a lot of our workloads on premise, and they absolutely are trying to find a better way to deliver lower cost services to their customers. And so we couldn't just say, Let's just everyone needs to just become net new. Everyone just needs to ditch the old and go just a brand new alone. Too hard, too expensive at times. So we said, You know, let's kill us customers the ultimate amount of choice. So let's even go back against that developer conversation and SAS Um, if you didn't have eyes, we couldn't help customers achieve a zero data center strategy with their traditional applications will call it PeopleSoft or JD Edwards, Revisit Suite or even. There's some massive applications that are running on the Oracle cloud right now that are custom applications built on the Oracle database. What they want is, they said, Give me the lowest. Possibly a predictable performance. I as I'll run my app steer on this number two. Give me a platform service for database because, frankly, I don't really want to run your database. Like with all the manual effort. I want someone automate, patching scale up and down and all these types of features like should have given us. And then number three. You know, I do want SAS over time. So we spend a lot of time with our customers really saying, How do I take this traditional application, Run it on eyes and has and the number two Let's modernize it at scale. Maybe I want to start peeling off functionality and running in the cloud Native services right alongside, right? That's something again that we're doing at scale. And other people are having a hard time running these traditional workloads on Prem in the cloud. The second part is they say, you know, I've got this legacy traditional your api been servicing we well, or maybe a supply chain system ultimately want to get out of this. How do I get to SAS? You say Okay, here's the way to do this. First bring into the cloud running on IAS and pass and then selectively, I call it cloud slicing. Take a piece of functionality and put it into SAS. We're helping customers move to the cloud at scale. We're helping them do it at their rate, with whatever level of change they want. And when they're ready for SAS, we're ready for them. >>How does autonomous fit into this whole architecture Wait for that? That that description? I mean, it's a it's nuanced, but it's important. I'm sure you haven't discussed this conversation with a lot of cloud architects and chief technologist. They want to know this stuff. They want to know how it works. Um, you know, we will talk about what the business impact is, but but yeah, it's not about autonomous and where that fits. >>So the autonomous database, what we've done is really big. And look at all the runtime operations of an Oracle database. So tuning, patching, sparing all these different features and what we've done is taken the best of the Oracle database the best of something called Exit Data right, which we run in the cloud which really helps a lot of our customers. And then we wrapped it with a set of automation and security tools to help it. Really, uh, managing self tune itself. Patch itself scale up and down, independent between compute and storage. So why that's important, though, is that it? Really? Our goal is to help people run the Oracle databases they have for years, but with far less effort and then even not letting far less effort. Hopefully, you know a machine. Last man out of the equation we always talk about is your man plus machine is greater than man alone, so being assisted by, um, artificial intelligence and machine learning to perform those database operations, we should provide a better service to our customers. Far less paths are hoping goal is that people have been running Oracle databases, you know, How can we help them do it with far less effort and maybe spend more time on what the data can do for the organization? Right? Improve customer experience at Centra versus maybe like Hana Way. How do I spin up the table? It >>so talk about the business impact. So you go into customers, you talk to the the cloud Architects, the chief technologist. You pass that test now, you got to deliver the business impact. We're is Oracle Consulting fit with regard to that? And maybe you could talk about that where you were You guys want to take this thing? >>Yeah, absolutely. I mean, so you know, the cloud is a great set of technologies, but where Oracle Consulting is really helping us deliver is in, um, you know, one of the things I think that's been fantastic working with the Oracle consulting team is that, you know, Cloud is new for a lot of customers who've been running these environments for a number of years. There's always some fear and a little bit of trepidation saying, How do I learn this new cloud of the workloads? We're talking about David, like tier zero, tier one, tier two and all the way up to Dev and Test and, er, um, Oracle consulting. This really couple things in particular, Number one, they start with the end in mind, and number two that they start to do is they really help implement these systems. And, you know, there's a lot of different assurances that we have that we're going to get it done on time and better be under budget because ultimately, you know, again, that's a something is really paramount for us and then the third part of it. But sometimes a run book, right? We actually don't want to just live in our customer's environments. We want to help them understand how to run this new system. So training and change management. A lot of times, Oracle Consulting is helping with run books. We usually well, after doing it the first time. We'll sit back and say, Let the customer do in the next few times and essentially help them through the process. And our goal at that point is to leave only if the customer wants us to. But ultimately our goal is to implemented, get it to go live on time and then help the customer learn this journey to the cloud and without them. Frankly, uh, you know, I think these systems were sometimes too complex and difficult to do on your own. Maybe the first time, especially cause I could say they're closing the books. They might be running your entire supply chain. They run your entire HR system, whatever they might be, uh, too important, leading a chance. So they really help us with helping a customer become live and become very confident. Skilled. They could do themselves >>of the conversation. We have to leave it right there. But thanks so much for coming on the Cube and sharing your insights. Great stuff. >>Absolutely. Thanks for having me on. >>All right. You're welcome. And thank you for watching everybody. This is Dave Volante for the Cube. We are covering the oracle of North American Consulting. Transformation. And it's rebirth in this digital event. Keep it right there. We'll be right back.

from the cube studios in Palo Alto in Boston it's the cube covering empowering the autonomous enterprise brought to you by Oracle consulting everybody welcome back you're watching the cube we go out to the events we extract the signal from the noise it's a very special digital event and we're really covering the transformation not only the industry but the transformation of Oracle consulting and its rebirth Mike Owens is here group VP of cloud advisory and GM of Oracle elevate which is a partnership at Oracle announced last open world with Deloitte and Don Schmidt is here as a managing director but Deloitte Jets good to see you welcome good to be here today so don't I want to start with you transformation right everybody talks about that there's a lot of trends going on in the industry what do you guys see is the big gestalt transformation that's going on yeah I think there's an inflection point right now all right everybody who didn't say and they want to get out of their data centers the leaves haven't really been taking place right they've been kind of moving in small bits we're now at the point where large transformation and scale of getting out of your data centers is now here so we are here to try to help our clients move faster how can we do this more effectively cost efficiently and get them out of these data centers so they can move on with their day-to-day business so data center is just not a efficient use of capital for your for your customers no no there's lots of ways to do this a lot faster cheaper and get on to innovation spend your money they're not on hardware floor space power cooling two very well-known brands you guys get together so what was the sort of impetus to get together how's it going give us the update on that front oracle has been really technology focused it was really created by technologists right and back to the point of what we're trying to do with the cloud you're trying to do larger transformation those aren't some of the skills that we have we've been brain and some of those skills in DNA but if you look at it is why would you try to recreate this situation why would you not partner with an organization who does large business transformation like a toy right and so the impetus of that is how do we take the technology with the business formation pull that together and back to the one plus one equals three for my customer right that's what they really want so how do we actually scale that and do really big things and get big outcomes for our customers our partnership is not about trying to take a bunch of customers and move on a couple application workloads our job well we're really charted to do is really make huge transformational leaps for our customers using the combined capabilities of the two organizations so there's it's a huge paradigm for us to kind of do this and in our collaboration with two organizations just the opposite for what Mike just said right so the white wasn't really big in big IT right business led transformations kind of with toys it's been known for along with our cyber practice and so we needed the the deep skills of the technical experts so you just described what I would think of as wave one and then as you keep paling you got the applications you got the business process you might have you know reorganizations that's really weird guys have expertise right there's a lot of things out to sort through right and that's where the combined elevate program really synergizes itself around the tools that we have we both have tools will help make sure we get this right right Deloitte has a protocol out of data oracle has a product called soar they marry together properly into these transformational journey to make sure we get the discovery done right and we get the migrations done right take me through a typical engagement typical and their own quotes and then how long they take me through the point at which you get start to get business value what am I got to do to get there yeah so we see two different spectrums on on a transformation and that really aligns to what are your objectives do you just need to get a data center because you're on archaic dying hardware or do you want to take that take your time and make a little bit more of a transformation journey or do you want to play somewhere in the middle of that spectrum but yeah neither one of those will come in and we'll do a discovery conversation we'll understand what's in your data center understand what the the age or the health of your your data center is help the customers through a business case TCO how fast or how slow that journey needs to be for them create will create call wave groups of how fast and we're going to sequence those over time to get out of their day Center in parallel we're going to be doing is my co-sign around all the operational aspects so while we're doing that discovery we want to start standing up there cloud center of excellence getting caught operations into their organization is it's a it's a different skill set for IT to have right they are gonna need to retrain themselves retool themselves in the world of cloud so we kind of do that in parallel now what we want to do is when we start a project we wanna start with a little POC or small little group of safe applications that we can proof out the model works move those into the cloud and then what we want to do is we want to scale at it it's a large space right get the IT savings get the cost cuts part of the organization so under the program of elevate we've we've got a couple of campaigns so the biggest one we we've been talking about is around the data center transformation so that's kind of the first campaign that we're working on together the next one is around moving JD Edwards specific applications to torquas cloud and then the third one is around our analytics offering that Deloitte has and how we're going to market do - jinora put that in as well those are three major campaigns the jde migration so you've got what situations where people have yeah it's actually more of a jte modernization or okay so you have an organization right they may have a JD at JD e or JD JD Edwards instance that's really it's older they may be on version 9 or something like that they don't want to go all the way to SAS because they can't simplify the business processes they need to do that but they also want to take advantage of the higher level capabilities of cloud computing right IOT mobile etc right so as a modernization one of the things we're doing is an approach together we worth customers depending where they go and going hey great you can actually modernize by taking up to this version of jde through an upgrade process but that allows you to then to move it over to Oracle cloud infrastructure which allows you to actually tap into all those platform services the IOT and stuff like that to take to the next level then you can actually do the higher little analytics that sits on top of that so it's really a journey where the customer wants to get there's various kind of four major phases that we can do or entry with a customer on the jde modernization we kind of work them through so that's a skill of some of the capabilities that Deloitte has as a DJ te and as well as Oracle consulting and we actually are going to market that together matter of fact we're even at conferences together talking about our approaches here at the inter future in the analytics campaign so it seems to me that a lot of companies don't have their data driven you know they want to be data-driven but they're not you're not there yet and so their data is in silos and so I would imagine that that's all about helping them understand where the data is breaking down busting down those silos and then actually putting in sort of an analytics approach that that drives their drives are some data to insights is that fair yet fair yeah it's not just doing reporting and dashboards it's it's actually having KPI driven insights into their information and their data within their organizations and so the Deloitte has some pre-configured applications for HR finance and supply chain guys from powerhouses thanks so much for explaining in the cube and to our audience appreciate it Chris Dave all right okay thank you everybody for watching we're right back with our next guest you're watching the cube from Chicago we're right back right after this short break

>> Narrator: From theCUBE studios in Palo Alto in Boston, it's theCUBE! Covering empowering the autonomous enterprise. Brought to you by ORACLE Consulting. >> Back to theCUBE everybody, this is Dave Vellante. We've been covering the transformation of ORACLE Consulting, and really it's rebirth, and I'm here with Chris Fox, who's the Group Vice President for Enterprise Cloud Architects and Chief Technologist for the North America Tech Cloud at ORACLE. Chris, thanks so much for coming on theCUBE. >> Thanks Dave, glad to be here. >> So, I love this title. I mean, years ago, there was no such thing as a cloud architect. Certainly there were chief technologists, but so, you are really, those are your peeps, is that right? >> That's right, that's right. That's really my team and I, that's all we do. So, our focus is really helping our customers take this journey from when they were on-premise to really transforming with cloud, and when we think about cloud, really, for us, it's a combination. It's our hybrid cloud, which happens to be on-premise, and then, of course, the true public cloud, like most people are familiar with. So, very exciting journey and, frankly, I've seen just a lot of success for our customers. You know, Dave, what I think we're seeing at ORACLE though, because we're so connected with SaaS, and then we're also connected with the traditional applications that have run the business for years, the legacy applications that have been, you know, servicing us for 20 years, and then the cloud needed developers. So, what my team and I are constantly focused on now is things like digital transformation and really wiring up all three of these across. So, if we think of, like, a customer outcome like I want to have a package delivered to me from a retailer, that actual process flow could touch a brand new cloud-native site from eCommerce, it could touch, essentially, maybe a traditional application that used to be on-prem that's now on the cloud, and then it might even use a new SaaS application, maybe, for maybe a permit process or delivery vehicle and scheduling. So, what my team does, we actually connect all three. So, what I always mention to my team and all of our customers, we have to be able to service all three of those constituents and really think about process flows. So, I take the cloud-native developer, we help them become efficient. We take the person who's been running that traditional application and we help them become more efficient, and then we have the SaaS applications, which are now rolling out new features on a quarterly basis and it's a whole new delivery model, but the real key is connecting all three of these into a business process flow that makes the customer's life much more efficient. People always say, you know, Chris, we want to get out of the data center, we're going zero data center, and I always say, well, how are you going to handle that back office stuff? Right? The stuff that's really big, it's cranky, doesn't handle just, you know, instances dying or things going away too easily. It needs predictable performance, it needs scale, it absolutely needs security, and ultimately, you know, a lot of these applications truly have relied on an ORACLE database. The ORACLE database has its own specific characteristics that it needs to run really well. So, we actually looked at the cloud and we said, let's take the first generation clouds, which are doing great, but let's add the features that specifically, a lot of times, the ORACLE workload needed in order to run very well and in a cost effective manner. So, that's what we mean when we say last mover advantage. We said, let's take the best of the clouds that are out there today, let's look at the workloads that, frankly, ORACLE runs and has been running for years, what our customers needed, and then let's build those features right into this next version of the cloud which can service the enterprise. So, our goal, honestly, which is interesting, is even that first discussion we had about cloud-native and legacy applications and also the new SaaS applications, we built a cloud that handles all three use cases at scale, resiliently, in a very secure manner, and I don't know of any other cloud that's handling those three use cases all in, we'll call it the same tendency for us at ORACLE. >> My question is why was it important for ORACLE, and is it important for ORACLE and its customers, to participate in IaaS and PaaS and SaaS? Why not just the last two layers of that? What does that give you from a strategic advantage standpoint and what does that do for your customer? >> Yeah, great question. So, the number one reason why we needed to have all three was that we have so many customers who, today, are in a data center. They're running a lot of our workloads on-premise and they absolutely are trying to find a better way to deliver lower-cost services to their customers and so we couldn't just say, let's just, everyone needs to just become net new, everyone just needs to ditch the old and go just to brand-new alone. Too hard, too expensive, at times. So we said, you know, let's give us customers the ultimate amount of choice. So, let's even go back again to that developer conversation in SaaS. If you didn't have IaaS, we couldn't help customers achieve a zero data center strategy with their traditional application, we'll call it PeopleSoft or JD Edwards or E-Business Suite or even, there's some massive applications that are running on the ORACLE cloud right now that are custom applications built on the ORACLE database. What they want is they said, give me the lowest cost but yet predictable performance IaaS. I'll run my apps tier on this. Number two, give me a platform service for database, 'cause frankly, I don't really want to run your database, like, with all the menial effort. I want someone to automate patching, scale up and down, and all these types of features like the cloud should have given us. And then number three, I do want SaaS over time. So, we spend a lot of time with our customers really saying, how do I take this traditional application, run it on IaaS and PaaS, and then number two, let's modernize it at scale. Maybe I want to start peeling off functionality and running them as cloud-native services right alongside, right? That's something, again, that we're doing at scale and other people are having a hard time running these traditional workloads on-prem in the cloud. The second part is they say, you know, I've got this legacy traditional ERP. It's been servicing me well, or maybe a supply chain system. Ultimately I want to get out of this. How do I get to SaaS? And we say, okay, here's the way to do this. First, bring it to the cloud, run it on IaaS and PaaS, and then selectively, I call it cloud slicing, take a piece of functionality and put it into SaaS. We're helping customers move to the cloud at scale. We're helping 'em do it at their rate, with whatever level of change they want, and when they are ready for SaaS, we're ready for them. >> And how does autonomous fit into this whole architecture? Thank you, by the way, for that description. I mean, it's nuanced but it's important. I'm sure you're having this conversation with a lot of cloud architects and chief technologists. They want to know this stuff, and they want to know how it works. And then, obviously, we'll talk about what the business impact is, but talk about autonomous and where that fit. >> So, the autonomous database, what we've done is really taken a look at all the runtime operations of an ORACLE database, so tuning, patching, securing, all these different features, and what we've done is taken the best of the ORACLE database, the best of something called Exadata, right, which we run on the cloud, which really helps a lot of our customers, and then we've wrapped it with a set of automation and security tools to help it really manage itself, tune itself, patch itself, scale up and down independent between computant storage. So, why that's important though is that it really, our goal is to help people run the ORACLE database as they have for years but with far less effort, and then even not only far less effort, hopefully, you know, a machine plus man, kind of the equation we always talk about is man plus machine is greater than man alone. So, being assisted by artificial intelligence and machine learning to perform those database operations, we should provide a better service to our customers with far less cost. Our hope and goal is that people have been running ORACLE databases. How can we help them do it with far less effort, and maybe spend more time on what the data can do for the organization, right? Improve customer experience, etc. Versus maybe, like, how do I spin up (breaks up). >> So, let's talk about the business impact. So, you go into customers, you talk to the cloud architects, the chief technologists, you pass that test. Now you got to deliver the business impact. Where does ORACLE Consulting fit with regard to that? And maybe you could talk about where you guys want to take this thing. >> Yeah, absolutely. I mean, the cloud is great set of technologies, but where ORACLE Consulting is really helping us deliver is in the outcome. One of the things, I think, that's been fantastic working with the ORACLE Consulting team is that, you know, cloud is new. For a lot of customers who've been running these environments for a number of years, there's always some fear and a little bit of trepidation saying, how do I learn this new cloud? I mean, the workloads we're talking about, Dave, are like tier zero, tier one, tier two and, you know, all the way up to DEV and TEST and DR. ORACLE Consulting does really couple of things in particular. Number one, they start with the end in mind, and number two that they start to do, is they really help implement these systems and there's a lot of different assurances that we have that we're going to get it done on time and better be under budget, 'cause ultimately, again, that's something that's really paramount for us. And then the third part of it, a lot of times it's runbooks, right? We actually don't want to just live in our customers' environments. We want to help them understand how to run this new system, so in training and change management, a lot of times ORACLE Consulting is helping with runbooks. We usually will, after doing it the first time, we'll sit back and let the customer do it the next few times and essentially help them through the process, and our goal at that point is to leave. Only if the customer wants us to, but ultimately our goal is to implement it, get it to go live on time, and then help the customer learn this journey to the cloud. And without them, frankly, I think these systems are sometimes too complex and difficult to do on your own maybe the first time, especially 'cause like I say, they're closing the books. They might be running your entire supply chain. They run your entire HR system or whatever they might be. Too important to leave to chance. So, they really help us with helping the customer become live and become very confident and skilled 'cause they can do it themselves. >> Well Chris, we've covered the gamut. Loved the conversation. We'll have to leave it right there, but thanks so much for coming on theCUBE and sharing your insights. Great stuff. >> Absolutely, thanks Dave, and thanks for having me on. >> All right, you're welcome, and thank you for watching everybody. This is Dave Vellante for theCUBE. We are covering the ORACLE of North America Consulting transformation and its rebirth in this digital event. Keep it right there, we'll be right back.

>>From the cube studios in Palo Alto in Boston. It's the cube covering, empowering the autonomous enterprise brought to you by Oracle consulting. >>Hi buddy. Welcome back. You're watching the queue. We go out to the events, we extract the signal from the noise. This is a very special digital event and we're really covering the transformation, not only the industry but the transformation of Oracle consulting and its rebirth. Mike Owens is here, group VP of cloud advisory and GM of Oracle elevate, which is a partnership that Oracle alone announced last OpenWorld with Deloitte and Don Schmitt and Sierra was a managing director, but to like Jen. Good to see you. Welcome. Good to be here today. So Don want to start with you. A transformation, right? Everybody talks about that. Uh, there's a lot of trends going on in the industry. What do you guys see as the big gestalt transformation that's going on? >>Yeah, I think there's an inflection point right now, right? Everybody has been saying they want to get out of their data centers. Um, the leaps haven't really been taken place, right? They've been kind of moving in small bets. We're now at the point where large transformation at scale of getting out of your data centers is now here. So we are here to try to help our clients move faster. How can we do this more effectively, cost efficiently and get them out of these data centers so they can move on with their day to day business. >>So data center is just not an efficient use of capital for your, for your customers. >>No, no. There's lots of ways to do this all at faster, cheaper, um, and get onto innovation. Spend your money there, not on hardware floor space, power, cooling, >>two very well known brands you guys got together. So what was the sort of impetus to get together? How's it going? Give us the update on, on that front. >>Oracle has been really technology focused. It was really created by technologist, right? And back to the point of what you're trying to do with the cloud and you're trying to do larger transformation. Those aren't some of the skills that we have. We've been bringing in some of those skills in DNA. But if you look at it as why would you try to recreate this situation? Why would you not partner with an organization who does large business transformation like a Deloitte? Right? And so the impetus of that is how do we take the technology with the business transformation, pull that together and back with the one plus one equals three for my customer, right? That's what they really want. So how do we actually scale that into really big things and get big outcomes for our customers? Our partnership is not about trying to take a bunch of customers and move on a couple application workloads. Our job we're really charted to do is really make huge transformational leaps for our customers using the combined capabilities of the two organizations. So there's, it's a huge paradigm for us to kind of do this and I, and our collaboration with two organizations, just the opposite for what Mike just said, right? So delight wasn't really big in big it, right? Business led transformation is kind of what Deloitte has been known for right along with our cyber practice. And so we needed the deep skills of the technical experts. >>So you just described what I would think of is wave one and then as you keep peeling, you got the applications, you got the business process, you might have, you know, reorganizations. That's really what do you guys have expertise. >>There's a lot of things I have to sort through. Right? And that's where the combined, um, elevate program really synergizes itself around the tools that we have. We both have tools or help make sure we get this right. Right. Uh, Deloitte has a product called added data. Oracle has a product called soar. They marry together properly into these transformational journey to make sure we get the discovery done right and we get the migration's done right. >>Take me through a typical engagement, typical, I know quotes and then how long, like take me through the point at which you get start to get business value. What am I going to do to get there? Yeah. >>So we see two different spectrums on, on a transformation and it really aligns to what are your objectives, objectives? Do you just need to get out of the data center because you're on her kick dine hardware or do you want to take that, take your time and make a little bit more of a transformation journey? Or do you want to play somewhere in the middle of that spectrum? Um, but yeah, on either one of those we'll come in and we'll do a discovery conversation. We'll understand what's in your data center, understand what the, the age or the health of your, your data center is helping the customers through a business case, a TCO, how fast or how slow that journey needs to be for them. Create what we call wave groups of how fast in we're going to sequence those over time to get out of their data center. >>In parallel we're going to be doing as was Microsoft around all the operational aspects. So while we're doing that discovery, we want to start standing up their cloud, uh, center of excellence. Getting caught operations into the organization is, uh, it's a, it's a different skill set for it to have, right? They are going to need to retrain themselves, retool themselves in the world of cloud. So we kind of do that in parallel. And then what we want to do is when we start a project, we want to start with a little POC or small little group of safe applications that we can prove out the model works, move those into the cloud. And then what we want to do is we want to scale that it at it's large pace, right? Um, let's get the it savings, get the cost cuts out of the, uh, organization. It was, so under the program of elevate, we've, we've got a couple of campaigns. So the, the biggest one we we've been talking about is around the data center transformation. So that's kind of the first campaign that we're working on together. Um, the next one is around moving JD Edwards, um, specific applications to, uh, to Oracle's cloud. And then the third one is around our analytics offering that Deloitte has and how we're going to market to, to genera. Put that in as well. Those are our three major campaigns, >>the JDE migration. Um, so you've got what situations where people have just, >>yeah, and I would say it's actually more of a JDE modernization or Hey, so you have an organization, right? They may have a JD at J D or J D J D Edwards instance. That's really, it's older. They maybe version nine or something like that. They don't want to go all the way to SAS cause they can't simplify the business processes. They need to do that. But they also want to take advantage of the higher level capabilities of cloud computing, right? IOT, mobile, et cetera. Right. So as a modernization, one of the things we're doing is an approach it together. We work with customers depending on where they're go and going, Hey great. You can actually modernize by taking it to this version of JDE through an upgrade process. But that allows you to then to move it over to Oracle cloud infrastructure, which allows you to actually tap into all those platform services, the IOT and stuff like that to take to the next level. Then you can actually do the higher level analytics that sits on top of that. So it's really a journey where the customer wants to get, there's various kind of four major phases that we can do or entry points with a customer on the JDE modernization. We kind of work them through. So that's a skill of some of the capabilities that Deloitte has as a deep JDE. Um, and as well as Oracle consulting. Um, and we actually are going to market that together. Matter of fact, we're even at conferences together talking about our approaches here >>and the analytics, uh, campaign. So it seems to me that a lot of companies don't have their data driven. You know, they, they want to be data-driven, but they're not, you're not there yet. And so their data is in silos. And so I would imagine that that's all about helping them understand where the data is breaking down, busting down those silos, and then actually putting in sort of a, an analytics approach that, that drives their drivers from data to insights. Is that fair? >>Yeah. Fair. Yeah. It's not just doing reporting and dashboards. It's, it's actually having KPI driven insights into their information and their data within their organizations. And so the Deloitte has some pre-configured, uh, applications, uh, for, uh, HR, finance and supply chain >>six guys, two powerhouses. Thanks so much for explaining in the cube and to our audience. Appreciate it. Alright, thank you everybody for watching. We'll be right back with our next guest. You're watching the cube from Chicago right back, right after this short break.

>> Narrator: From theCUBE studios in Palo Alto in Boston, it's theCUBE! Covering empowering the autonomous enterprise. Brought to you by ORACLE Consulting. >> Back to theCUBE everybody, this is Dave Vellante. We've been covering the transformation of ORACLE Consulting, and really it's rebirth, and I'm here with Chris Fox, who's the Group Vice President for Enterprise Cloud Architects and Chief Technologist for the North America Tech Cloud at ORACLE. Chris, thanks so much for coming on theCUBE. >> Thanks Dave, glad to be here. >> So, I love this title. I mean, years ago, there was no such thing as a cloud architect. Certainly there were chief technologists, but so, you are really, those are your peeps, is that right? >> That's right, that's right. That's really my team and I, that's all we do. So, our focus is really helping our customers take this journey from when they were on-premise to really transforming with cloud, and when we think about cloud, really, for us, it's a combination. It's our hybrid cloud, which happens to be on-premise, and then, of course, the true public cloud, like most people are familiar with. So, very exciting journey and, frankly, I've seen just a lot of success for our customers. You know, Dave, what I think we're seeing at ORACLE though, because we're so connected with SaaS, and then we're also connected with the traditional applications that have run the business for years, the legacy applications that have been, you know, servicing us for 20 years, and then the cloud needed developers. So, what my team and I are constantly focused on now is things like digital transformation and really wiring up all three of these across. So, if we think of, like, a customer outcome like I want to have a package delivered to me from a retailer, that actual process flow could touch a brand new cloud-native site from eCommerce, it could touch, essentially, maybe a traditional application that used to be on-prem that's now on the cloud, and then it might even use a new SaaS application, maybe, for maybe a permit process or delivery vehicle and scheduling. So, what my team does, we actually connect all three. So, what I always mention to my team and all of our customers, we have to be able to service all three of those constituents and really think about process flows. So, I take the cloud-native developer, we help them become efficient. We take the person who's been running that traditional application and we help them become more efficient, and then we have the SaaS applications, which are now rolling out new features on a quarterly basis and it's a whole new delivery model, but the real key is connecting all three of these into a business process flow that makes the customer's life much more efficient. People always say, you know, Chris, we want to get out of the data center, we're going zero data center, and I always say, well, how are you going to handle that back office stuff? Right? The stuff that's really big, it's cranky, doesn't handle just, you know, instances dying or things going away too easily. It needs predictable performance, it needs scale, it absolutely needs security, and ultimately, you know, a lot of these applications truly have relied on an ORACLE database. The ORACLE database has its own specific characteristics that it needs to run really well. So, we actually looked at the cloud and we said, let's take the first generation clouds, which are doing great, but let's add the features that specifically, a lot of times, the ORACLE workload needed in order to run very well and in a cost effective manner. So, that's what we mean when we say last mover advantage. We said, let's take the best of the clouds that are out there today, let's look at the workloads that, frankly, ORACLE runs and has been running for years, what our customers needed, and then let's build those features right into this next version of the cloud which can service the enterprise. So, our goal, honestly, which is interesting, is even that first discussion we had about cloud-native and legacy applications and also the new SaaS applications, we built a cloud that handles all three use cases at scale, resiliently, in a very secure manner, and I don't know of any other cloud that's handling those three use cases all in, we'll call it the same tendency for us at ORACLE. >> My question is why was it important for ORACLE, and is it important for ORACLE and its customers, to participate in IaaS and PaaS and SaaS? Why not just the last two layers of that? What does that give you from a strategic advantage standpoint and what does that do for your customer? >> Yeah, great question. So, the number one reason why we needed to have all three was that we have so many customers who, today, are in a data center. They're running a lot of our workloads on-premise and they absolutely are trying to find a better way to deliver lower-cost services to their customers and so we couldn't just say, let's just, everyone needs to just become net new, everyone just needs to ditch the old and go just to brand-new alone. Too hard, too expensive, at times. So we said, you know, let's give us customers the ultimate amount of choice. So, let's even go back again to that developer conversation in SaaS. If you didn't have IaaS, we couldn't help customers achieve a zero data center strategy with their traditional application, we'll call it PeopleSoft or JD Edwards or E-Business Suite or even, there's some massive applications that are running on the ORACLE cloud right now that are custom applications built on the ORACLE database. What they want is they said, give me the lowest cost but yet predictable performance IaaS. I'll run my apps tier on this. Number two, give me a platform service for database, 'cause frankly, I don't really want to run your database, like, with all the menial effort. I want someone to automate patching, scale up and down, and all these types of features like the cloud should have given us. And then number three, I do want SaaS over time. So, we spend a lot of time with our customers really saying, how do I take this traditional application, run it on IaaS and PaaS, and then number two, let's modernize it at scale. Maybe I want to start peeling off functionality and running them as cloud-native services right alongside, right? That's something, again, that we're doing at scale and other people are having a hard time running these traditional workloads on-prem in the cloud. The second part is they say, you know, I've got this legacy traditional ERP. It's been servicing me well, or maybe a supply chain system. Ultimately I want to get out of this. How do I get to SaaS? And we say, okay, here's the way to do this. First, bring it to the cloud, run it on IaaS and PaaS, and then selectively, I call it cloud slicing, take a piece of functionality and put it into SaaS. We're helping customers move to the cloud at scale. We're helping 'em do it at their rate, with whatever level of change they want, and when they are ready for SaaS, we're ready for them. >> And how does autonomous fit into this whole architecture? Thank you, by the way, for that description. I mean, it's nuanced but it's important. I'm sure you're having this conversation with a lot of cloud architects and chief technologists. They want to know this stuff, and they want to know how it works. And then, obviously, we'll talk about what the business impact is, but talk about autonomous and where that fit. >> So, the autonomous database, what we've done is really taken a look at all the runtime operations of an ORACLE database, so tuning, patching, securing, all these different features, and what we've done is taken the best of the ORACLE database, the best of something called Exadata, right, which we run on the cloud, which really helps a lot of our customers, and then we've wrapped it with a set of automation and security tools to help it really manage itself, tune itself, patch itself, scale up and down independent between computant storage. So, why that's important though is that it really, our goal is to help people run the ORACLE database as they have for years but with far less effort, and then even not only far less effort, hopefully, you know, a machine plus man, kind of the equation we always talk about is man plus machine is greater than man alone. So, being assisted by artificial intelligence and machine learning to perform those database operations, we should provide a better service to our customers with far less cost. Our hope and goal is that people have been running ORACLE databases. How can we help them do it with far less effort, and maybe spend more time on what the data can do for the organization, right? Improve customer experience, etc. Versus maybe, like, how do I spin up (breaks up). >> So, let's talk about the business impact. So, you go into customers, you talk to the cloud architects, the chief technologists, you pass that test. Now you got to deliver the business impact. Where does ORACLE Consulting fit with regard to that? And maybe you could talk about where you guys want to take this thing. >> Yeah, absolutely. I mean, the cloud is great set of technologies, but where ORACLE Consulting is really helping us deliver is in the outcome. One of the things, I think, that's been fantastic working with the ORACLE Consulting team is that, you know, cloud is new. For a lot of customers who've been running these environments for a number of years, there's always some fear and a little bit of trepidation saying, how do I learn this new cloud? I mean, the workloads we're talking about, Dave, are like tier zero, tier one, tier two and, you know, all the way up to DEV and TEST and DR. ORACLE Consulting does really couple of things in particular. Number one, they start with the end in mind, and number two that they start to do, is they really help implement these systems and there's a lot of different assurances that we have that we're going to get it done on time and better be under budget, 'cause ultimately, again, that's something that's really paramount for us. And then the third part of it, a lot of times it's runbooks, right? We actually don't want to just live in our customers' environments. We want to help them understand how to run this new system, so in training and change management, a lot of times ORACLE Consulting is helping with runbooks. We usually will, after doing it the first time, we'll sit back and let the customer do it the next few times and essentially help them through the process, and our goal at that point is to leave. Only if the customer wants us to, but ultimately our goal is to implement it, get it to go live on time, and then help the customer learn this journey to the cloud. And without them, frankly, I think these systems are sometimes too complex and difficult to do on your own maybe the first time, especially 'cause like I say, they're closing the books. They might be running your entire supply chain. They run your entire HR system or whatever they might be. Too important to leave to chance. So, they really help us with helping the customer become live and become very confident and skilled 'cause they can do it themselves. >> Well Chris, we've covered the gamut. Loved the conversation. We'll have to leave it right there, but thanks so much for coming on theCUBE and sharing your insights. Great stuff. >> Absolutely, thanks Dave, and thanks for having me on. >> All right, you're welcome, and thank you for watching everybody. This is Dave Vellante for theCUBE. We are covering the ORACLE of North America Consulting transformation and its rebirth in this digital event. Keep it right there, we'll be right back.

(upbeat music) >> Welcome back to theCUBE everybody. This is Dave Vellante. We've been covering the transformation of Oracle Consulting and really its rebirth. And I'm here with Chris Fox, who's the Group Vice President for Enterprise Cloud Architects and Chief Technologist for the North America Tech Cloud at Oracle. Chris, thanks so much for coming on theCUBE. >> Thanks Dave, glad to be here. >> So I love this title. I mean years ago there was no such thing as a Cloud Architect, certainly there were Chief Technologists but so you are really-- Those are your peeps, is that right? >> That's right. That's right. That's really, my team and I, that's all we do. So our focus is really helping our customers take this journey from when they were on premise to really transforming with cloud. And when we think about cloud, really for us, it's a combination. It's our hybrid cloud which happens to be on premise and then of course the true public cloud like most people are familiar with. So, very exciting journey and frankly I've seen just a lot of success for our customers. >> interesting that you hear conversations like, "Oh every company is a software company" which by the way we believe. Everybody's got a some kind of SaaS offering, but it really used to be the application, heads within organizations that had a lot of the power, still do, but of course you have cloud native developers etc. And now you have this new role of Cloud Architects, they've got to align, essentially have to provide infrastructure and capabilities so that you can be agile from a development standpoint. I wonder if you can talk about that dynamic of how the roles have evolved in the last several years. >> Yeah, you know it's very interesting now because as Oracle we spend a lot of our time with those applications owners. As a leader in SaaS right now, SaaS ERP, HCM. You just start walking through the list, they're transforming their organizations. They're trying to make their lives, much more efficient, better for their employees or customers etc. On the other side of the spectrum, we have the cloud native development teams and they're looking at better ways to deploy, develop applications, roll out new features at scale, roll out new pipelines. But Dave, what I think we're seeing at Oracle though, because we're so connected with SaaS and then we're also connected with the traditional applications that have run the business for years, the legacy applications that have been servicing us for 20 years and then the cloud native developers. So what my team and I are constantly focused on now is things like digital transformation and really wiring up all three of these across. So if we think of like a customer outcome, like I want to have a package delivered to me from a retailer, that actual process flow could touch a brand new cloud native site from e-commerce. It could touch essentially, maybe a traditional application that used to be on prem that's now on the cloud and then it might even use some new SaaS application maybe for maybe a procurement process or delivery vehicle and scheduling. So what my team does, we actually connect all three. So, what I always mention to my team and all of our customers, we have to be able to service all three of those constituents and really think about process flows. So I take the cloud native developer, we help them become efficient. We take the person who's been running that traditional application and we help them become more efficient. And then we have the SaaS applications which are now rolling out new features on a quarterly basis and the whole new delivery model. But the real key is connecting all three of these into a business process flow that makes the customer's life much more efficient. >> So what you're saying is that these Cloud Architects and the sort of modern day Chief Technologists, they're multi tool players. It's not just about cloud, it's about connecting that cloud to, whether the system's on prem or other clouds. Is that right? >> It is. You know and one thing that we're seeing too Dave, is that we know it's multi cloud. So it could be Oracle's cloud, hopefully it's always Oracle's cloud, but we don't expect that. So as architects, we certainly have to take a look at what is it that we're trying to optimize? What's the outcome we're looking for? And then be able to work across these teams, and I think what makes it probably most fun and exciting, on one day in one morning, let's say, you could be talking to the cloud native developer team. Talking about Kubernetes, CI/CD pipelines, all the great technologies that help us roll out applications and features faster. Then you'll go to a traditional, maybe Oracle E-Business suite job. This is something that's been running on prem maybe for 20 years, and it's really still servicing the business. And then you have another team that maybe is rolling out a SaaS application from Oracle. And literally all three teams are connected by a process flow. So the question is, how do we optimize all three on behalf of either the customer, the employee, the supplier? And that's really the job for the Oracle Cloud Architect. Which I think, really good, that's different than the other cloud because for the most part, we actually do offer SaaS, we offer platform, we offer infrastructure and we offer the hybrid cloud on prem. So it's a common conversation. How do we optimize all these? >> So I want to get into this cloud conversation a little bit. You guys are used to this term last mover advantage. I got to ask you about it. How is being last an advantage? But let me start there. >> Yeah, that's a great question. I mean, so frankly speaking I think that-- So Oracle has been developing, what's interesting is our SaaS applications for many, many, many years, and where we began this journey is looking at SaaS. And then we started with platform. Right after that we started saying how do we augment SaaS? This OCI for us or Oracle Cloud Infrastructure Gen 2 could be considered a last mover advantage. What does that mean? We join this cloud journey later than the others but because of our heritage, of the workloads we've been running, right? We've been running enterprise scale workloads for years, the cloud itself has been phenomenal, right? It's easier to use, pay for what you use, elastic etc. These are all phenomenal features, fell. And based on our enterprise heritage it wasn't delivering resilience at scale, even for like the traditional applications we've known on prem forever. People always say, "Chris we want to get out of the data center. "We're going zero data center." And I always say, "Well, how are you going to handle that back office stuff?" Right? The stuff that's really big, it's cranky, doesn't handle just, instances dying or things going away too easily. It needs predictable performance. It needs scale. It absolutely needs security and ultimately a lot of these applications truly have relied on an Oracle database. The Oracle database has it's own specific characteristics that it needs to run really well. So we actually looked at the cloud and we said, let's take the first generation clouds, which are doing great, but let's add the features that specifically, a lot of times, the Oracle workload needed in order to run very well and in a cost effective manner. So that's what we mean when we say, last mover advantage. We said, let's take the best of the clouds that are out there today. Let's look at the workloads that, frankly Oracle runs and has been running for years, what our customers needed and then let's build those features right into this next version of the cloud, we can service the enterprise. So our goal, honestly what's interesting is, even that first discussion we had about cloud native, and legacy applications, and also the new SaaS applications, we built a cloud that handles all three use cases, at scale resiliently in a very secure manner, and I don't know of any other cloud that's handling those three use cases, all in, we'll call it the same tendency for us at Oracle. >> Let's unpack that a little bit and get into, sort of, trying to understand the strategy and I want to frame it. So you were the last really to enter the cloud market, let's sort of agree on that. >> Chris: Yup. >> And you kind of built it from the ground up. And it's just too expensive now. The CapEx required to get into cloud is just astronomical. Now, even for a SaaS company, there's no sense. If you're a new SaaS company, you're going to run it in the cloud. Somebody else's cloud. There are some SaaS companies that of course run their own data centers but they're fewer and further between. But so, and I've also said that your advantage relative to the hyper scalers is that you've got this big SaaS estate and it somewhat insulates you, actually more than somewhat. Largely insulates you from the race to the bottom. On compute and storage, cost per bit kind of thing. But my question is, why was it was it important for Oracle, and is it important for Oracle and it's customers, that it had to participate in IaaS and PaaS and SaaS? Why not just the last two layers of that? What does that give you from a strategic advantage standpoint and what does that do for your customer? >> Yeah, great question. So the number one reason why we needed to have all three was that we have so many customers to today that are in a data center. They're running a lot of our workloads on premise and they absolutely are trying to find a better way to deliver a lower cost services to their customers. And, so, we couldn't just say let's just-- everyone needs to just become net new. Everyone just needs to ditch the old and go just to brand new alone. Too hard, too expensive at times. So we said, let's give us customers the ultimate amount of choice. So, let's even go back again to that developer conversation in SaaS. If you didn't have IaaS, we couldn't help customers achieve a zero data center strategy with their traditional application. We'll call it Peoplesoft, or JD Edwards or E-Business suite or even-- there's some massive applications that are running on the Oracle cloud right now that are custom applications built on the Oracle database. What they want is they said, "Give me the lowest ASP to get predictable performance IaaS" I'll run my app's tier on this. Number two, give me a platform service for database 'cause frankly, I don't really want to run your database, like, with all the manual effort, I want someone to automate, patching, scale up and down, and all these types of features like the pilot should have given us. And then number three, I do want SaaS over time. So we spend a lot of time with our customers, really saying, "how do I take this traditional application, run it on IaaS and PaaS?" And then number two, "let's modernize it at scale." Maybe I want to start peeling off functionality and running them as cloud native services right alongside, right? That's something again, that we're doing at scale, and other people are having a hard time running these traditional workloads on prem in the cloud. The second part is they say, "You know, I've got this legacy traditional ERP. Been servicing we well or maybe a supply chain system. Ultimately I want to get out of this. How do I get to SaaS?" And we say, "Okay, here's the way to do this. First, bring into the cloud, run it on IaaS and PaaS. And then selectively, I call it cloud slicing. Take a piece of functionality and put it into SaaS." For ERP, it might be something like start with GL, a new chart of accounts in ERP SaaS. And then slowly over a number of your journey as needed, adopt the next module. So this way, I mean, I'll just say this is the fun part of as an architect, our jobs, we're helping customers move to the cloud at scale, we're helping them do it at their rate, with whatever level of change they want. And when they're ready for SaaS, we're ready for them. And I would just say the other IaaS providers, here's the challenge we're seeing Dave, is that they're getting to the cloud, they're doing a little bit of modernization, but they want PaaS, they also want to ultimately get to SaaS, and frankly, those other clouds don't offer them. So they're kind of in this we're stuck on this lift and shift. But then we want to really move and modernize and go to SaaS. And I would say that's what Oracle is doing right now for enterprises. We're really helping them move these traditional workloads to the cloud IaaS and PaaS. And then number two, they're moving to SaaS when they're ready. And even when you get to SaaS, everyone says, "You know what, leave it as as vanilla as possible, but I want to make myself differentiated." In that case, again, IaaS and PaaS, coupled alongside a SaaS environment, you can build your specific differentiation. And then you leave the ERP pristine, so it can be upgraded constantly with no impact to your specific sidebar applications. So, I would say that the best clouds in the world, I mean, I think you're going to see a lot of the others are trying to, either SaaS providers trying to grow a PaaS, or maybe some of the IaaS players are trying to add SaaS. So, I think you're going to see this blending more and more because customers are asking for the flexibility For either or all three. But I will say that-- >> How can I get PaaS and SaaS-minus. >> Absolutely, I mean, what are you doing there? You're offering choice. There's not a question in my mind that Cisco is a huge customer of ours, they have a product that is one of their SaaS applications running Tetration on the Oracle Cloud. It actually doesn't run any Oracle. It's all cloud native applications. Natively built with a number of open source components. They run just IaaS. That's it, the Tetration product, and it runs fast. The Gen 2 cloud has a great architecture underneath it, flattened fast network. By far, for us, we feel like we really gotten into the guts of IaaS and made it run more efficiently. Other customers say, "I've got a huge Oracle footprint in the data center, help me get it out." So up to the cloud that they go, and they say I don't want just IaaS because that means I'm writing all the automation, like I have to manage all the patching. And this is where for us platform services really help because we give them the automation at scale, which allows their people to do other things, that may be more impactful for the business. >> I want to ask you about, the automation piece. And you guys have made the statement that your Gen 2 cloud is fundamentally different than how other clouds work, Gen 1 clouds. And the Gen 1 clouds which are evolving, the hyper scalars are evolving, but how is Oracle's Gen 2 cloud fundamentally different? >> Yeah. I think that one of the most basic elements of the cloud itself was that for us, we had to start with the security and the network. So if you imagine that those two components really, A, could dictate speed and performance, plus doing it in a secure fashion. The two things that you'll see an awful lot about for us, is that we've embedded not only security at every level. But we've even separated off what we call, every cloud, you have a number of compute instances and then you have storage, right? In the middle, you have a network. However, to become a cloud, and to offer the elastic scale and the multiple sharing of resources, you have to have something called a control plane. What we've done is we've actually extracted the control plane out into its own separate instance of a running machine. Other clouds actually have the control plane inside of there running compute cores. Now, what does that do? Well, the fact of the matter is, we assume that the control plane and the network should be completely separate from what you run on your cloud. So if you run a virtual machine, or if you run a bare metal instance, there's no Oracle software running on it. We actually don't trust customers, and we actually tell the customers don't trust us, either. So by separating out the control plane, and all the code that runs that environment off of the running machine, you get more cores meaning like you have-- There's no Oracle tax for running this environment. It's a separate conmputer for each one, the control plane. Number two, it's more secure. We actually don't have any running code on that machine, if you had a bare metal instance. So therefore, there's no way for one machine in the cloud to infect another machine if the control plane was compromised. The second part of the network, the guys who have been building this cloud, Don Johnson, a lot of the guys came from other clouds before and they said, "yYou know the one thing we have to do is make a we call it Flattened Fast Clause Network that really is never oversubscribed." So you'll constantly see and people always ask me same question, "Dave, why is the performance faster if its the same VM shape? "Like I don't understand why it's going faster, like high performance computing." And the reason again a lot of times is the network itself is that it's just not oversubscribed. It's constantly flowing all the data, there's no such thing as congestion on the network, which can happen. The last part, we actually added 52 terabytes of local storage to every one of those compute nodes. So therefore, there's a possibility you don't even have to traverse the network to do some really serious work on the local machine. So you add these together, the idea is make the network incredibly fast, separate out the control plane and run the software and security layer separate from the entire node where all the customers work is being done. Number three, give the customers more compute, by obviously having us offload it to a separate machine. And the last thing is put local storage and everything is what's called NVMe storage. Whether it's local or remote, everything's NVMe, though the IOPS we get are really off the charts. And again, it shows up in our benchmarks. >> Yeah, so you're getting, atomic access to memory. But in your control plane, you describe that control plane that's running. Sorry to geek out everybody. But I'm kind of curious, you know. You got me started, Chris. So that's control-- >> Yeah, that's good. >> the Oracle cloud or runs. Where's it live? >> It's essentially separated from the compute node. We actually have it in between, there's a compute node that all the work is done from the customer, could be on like a Kubernetes container or VM, whatever it might be. The control plane literally is separate. And it lives right next to the actual compute node the customer is using. So it's actually embedded on a SmartNIC, it's a completely different cores. It's a different chipset, different memory structure, everything. And it does two things. It helps us control what happens up in the customers compute nodes in VMs. And it also helps us virtualize the network down as well. So it literally, the control plane is separate and distinct. It's essentially a couple SmartNICS. >> And then how does Autonomous fit into this whole architecture? I'm speaking by the way for that description, I mean, it's nuanced, but it's important. I'm sure you having this conversation with a lot of cloud architects and chief technologists, they want to know this stuff, and they want to know how it works. And then, obviously, we'll talk about what the business impact is. But talk about Autonomous and where that fit. >> Yeah, so as Larry says that there are two products that really dictate the future of Oracle and our success with our customers. Number one is ERP-SaaS. The second one is Autonomous Database. So the Autonomous Database, what we've done is really taken a look at all the runtime operations of an Oracle database. So tuning, patching, securing all these different features, and what we've done is taken the best of the Oracle database, the best of something called Exadata which we run on the cloud, which really helps a lot of our customers. And then we've wrapped it with a set of automation and security tools to help it really manage itself, tune itself, patch itself, scale up and down, independent between compute and storage. So, why that's important though, is that really our goal is to help people run the Oracle database as they have for years but with far less effort, and then even not only far less effort, hopefully, a machine plus man, out of the equation we always talk about is man plus machine is greater than man alone. So being assisted by artificial intelligence and machine learning to perform those database operations, we should provide a better service to our customers with far less costs. >> Yeah, the greatest chess player in the world is a combination of man and machine, you know that? >> You know what? It makes sense. It makes sense because, there's a number of things that we can do as humans that are just too difficult to program. And then there are other things where machines are just phenomenal, right? I mean, there's no-- Think of Google Maps, you ask it wherever you want to go. And it'll tell you in a fraction of a second, not only the best route, but based on traffic from maybe the last couple of years. right now, we don't have autonomous cars, right, that are allowed to at least drive fully autonomous yet, it's coming. But in the meantime, a human could really work through a lot of different scenarios it was hard to find a way to do that in autonomous driving. So I do believe that it's going to be a great combination. Our hope and goal is that the people who have been running Oracle databases, how can we help them do it with far less effort and maybe spend more time on what the data can do for the organization, right? Improve customer experience, etc. Versus maybe like, how do I spin up a table? One of our customers is a huge consumer. They said, "our goal is how do we reduce the time to first table?" Meaning someone in the business just came up with an idea? How do I reduce the time to first table. For some of our customers, it can take months. I mean, if you were going to put in a new server, find a place in the data center, stand up a database, make the security controls, right and etc. With the autonomous database, I could spin one up right here, for us and, and we could start using it and it would be secure, which is utmost and paramount. It would scale up and down, meaning like just based on workload, as I load data into it, it would tune itself, it would help us with the idea of running more efficiently, which means less cores, which means also less cost. And then the constant security patches that may come up because of different threats or new features. It would do that potentially on its own if you allow it. Obviously some people want to watch you know what exactly it's going to do first. Do regression testing. But it's an exciting product because I've been working with the Oracle database for about 20 years now. And to see it run in this manner, it's just phenomenal. And I think that's the thing, a lot of the database teams have seen. Pretty amazing work. >> So I love this conversation. It's hardcore computer science, architecture, engineering. But now let's end with by up leveling this. We've been talking, a lot about Oracle Consulting. So let's talk about the business impact. So you go into customers, you talk to the cloud architects, the chief technologist, you pass that test. Now you got to deliver the business impact. Where does Oracle consulting fit with regard to that, and maybe you could talk about sort of where you guys want to take this thing. >> Yeah, absolutely. I mean, so, the cloud is great set of technologies, but where Oracle consulting is really helping us deliver is in the outcome. One of the things I think that's been fantastic working with the Oracle consulting team is that cloud is new. For a lot of customers who've been running these environments for a number of years, there's always some fear and a little bit of trepidation saying, "How do I learn this new cloud?" I mean, the workloads, we're talking about deeper, like tier zero, tier one, tier two, and all the way up to Dev and Test and DR, Oracle Consulting does really, a couple of things in particular, number one, they start with the end in mind. And number two, that they start to do is they really help implement these systems. And, there's a lot of different assurances that we have that we're going to get it done on time, and better be under budget, 'cause ultimately, again, that's something that's really paramount for us. And then the third part of it a lot of it a lot of times is run books, right? We actually don't want to just live at our customers environments. We want to help them understand how to run this new system. So training and change management. A lot of times Oracle Consulting is helping with run books. We usually will, after doing it the first time, we'll sit back and let the customer do it the next few times, and essentially help them through the process. And our goal at that point is to leave, only if the customer wants us to but ultimately, our goal is to implement it, get it to go live on time, and then help the customer learn this journey to the cloud. And without them, frankly, I think these systems are sometimes too complex and difficult to do on your own, maybe the first time especially because like I say, they're closing the books, they might be running your entire supply chain. They run your entire HR system or whatever they might be. Too important to leave to chance. So they really help us with helping the customer become live and become very competent and skilled, because they can do it themselves. >> But Chris, we've covered the gamut. We're talking about, architecture, went to NVMe. We're talking about the business impact, all of your automation, run books, loved it. Loved the conversation, but to leave it right there but thanks so much for coming on theCUBE and sharing your insights, great stuff. >> Absolutely, thanks Dave, and thank you for having me on. >> All right, you're welcome. And thank you for watching everybody. This is Dave Vellante for theCUBE. We are covering the Oracle North America Consulting transformation and its rebirth in this digital event. Keep it right there. We'll be right back. (upbeat music)

(upbeat music) >> Hi everybody, welcome back. You're watching theCUBE, we go out to the events we extract the signal from the noise. This is a very special digital event and we're really covering the transformation not only the industry, but the transformation of Oracle Consulting and its rebirth. Mike Owens is here Group VP of Cloud Advisory and GM of Oracle Elevate, which is a partnership that Oracle announced last Open World with Deloitte, and Don Schmidt is here, who is a Managing Director at Deloitte. Gents, good to see you, welcome. >> Good to be here Dave. >> So, Don I want to start with you. Transformation, right? Everybody talks about that, there's a lot of trends going on in the industry. What do you guys see as the big gestalt transformation that's going on? >> Yeah I think there's an inflection point right now. Everybody have been saying they want to get out their data centers. The leaves haven't really been taking place, right? They've been kind of moving in small bits. We're now at the point where large transformation at scale, of getting out of your data centers, is now here. So, we are here to try to help our clients move faster. How can we do this more effectively, cost efficiently, and get them out of these data centers so they can move on with their day to day business? >> So data centers is just not an efficient use of capital for your customers. >> No, no there's lots of ways to do this a lot faster, cheaper, and get on to innovation. Spend your money there, not on hardware, floor space, power cooling, those fun things. >> Well you guys are spending money on data centers though right? So this is a good business for you all. >> Mike: We do it on behalf of other customers though. Right? >> Yeah and that's what's happening right? My customers, they essentially want to take all this IT labor cost and shift it into R&D get them on your backs and your backs right? Is this that what you see it? You know where are we in terms of that? I mean it started ten plus years ago but it really has started to uptake right? What's driving that? What's the catalyst there? >> You know so from my perspective, I've been doing this a while. A lot of it is either organizations are driving costs or what you're also seeing is IT organizations are no longer the utility in the organization and taking the orders, you're using them to try to top line value, but to do that, they actually have to take their business and change the model of it, so they can take that money and reinvest it in what Don had talked about, investment or continuous investment. So you're starting to hit those inflection points, you know years ago a CIO would be in his job for 15, 20 years, the average tenure for a CIO is you know three to five years on average, and it's because if they're not driving innovation or driving top line growth with an organization, organizations are now starting to flip that around so you're seeing a huge inflection point, with organizations really looking for IT not to be just a back office entity anymore, to truly drive them they have to transform that back to Don's point, because that inflection point, this large data center move over is a good sort of lever to kind of get them and really use it as opportunity to transform their organization. >> And the transformations are occurring, you know within industries, but at different pace. I mean some industries have transformed radically. You think about Ride shares, and digital music and the like others are taking more time, financial services, health care, they're riskier businesses, and you know there's more government in public policy so what do you see in terms of the catalyst for transformation and is there any kind of discernible, industry variance? >> Yeah there definitely is and he's mentioned some of the more start-up kind of organizations where Cloud was right for them at the early stages. These other organizations that have built these large application stacks and have been there for years, it's scary for them to say, "Let me take this big set of equipment and applications, and move it to the Cloud." It's a big effort. Starting from scratch with start-ups, that's a little different story right? So we are kind of at a different point, there are different stages within different industries, some are faster adopters than some of the others with government regulations and some of the technologies that have to kind of catch up to be able to provide those services. >> Do people generally want to take their sort of mission-critical apps which are largely running often on Oracle infrastructure database, they want to move that into the Cloud but do they want to bring that sort of Cloud-operating model to their on-prem and maybe reduce their overall data center footprint but preserve some of that? What are you guys seeing? >> So, two different probably viewpoints. So my viewpoint is, depends on the organization, depends on the regulatory they have, and there's a lot of factors in there. But I would say, as a standard organization would take their journey, mission-critical systems are historically not the first one in there. 'Cause back to the point of changing the operating model the way you want to do business and be effective, you don't go with the crown jewels first, historically, take some other work loads learn how to work in that operating model, how you're doing things change and then you evolve some of those pieces over time. There are organizations that basically, pull the band-aid off and just go right into it, right? But a lot of large enterprises sort of that's why we talk about Cloud as a journey, right? You take this journey you have to make the journey based on what's going on back what Don had talked about the regulatory requirements in history are the right controls in place for what they need at that point. If not, okay so what's an interim step to the journey? Could you bring Cloud in those capabilities on-prem and then have some of the other stuff off-prem? So it's really situational dependent, and we actually walk a customer through and now Don's organization does the same thing. You walk them through what makes best for their journey for where they're at in the industry and what they have today and what they're trying to achieve. >> So Don Deloitte doesn't just do IT it does business transformation, right? So it's like a chicken and egg, let's say that what comes first? The chicken or the egg? The IT transformation or the business transformation? >> I don't think it's an or it's an and. So have the total conversation of where's your Cloud journey for your entire enterprise, and then decide how that's going to be played out in both in IT and in the business. How the joint conversation from an enterprise perspective. >> So let's talk a little bit about the partnership, to your very well known brands, you guys get together, so what was the sort of impetus to get together? How's it going? Give us the update on that front. >> Yeah you know so from Oracle standpoint, Oracle has been really technology focused. It was really created by technologists, right? And back to the point of what we're trying to do with the Cloud and trying to do larger transformation, those aren't some of the skills that we have. We've been bringing in some of those skills in DNA, but if you look at it as why would you try to recreate this situation? Why would you not partner with an organization who does large business transformation like Deloitte? Right? And so the impetus of that is, how do we take the technology with the business transformation, pull that together and back of the one plus one equals three for my customer, right? That's what they really want, so how do we actually scale that into really big things and get big outcomes for our customers? Our partnership is not about trying to take a bunch of customers and move a couple application work loads. Our job, what we're really charted to do is make huge transformational leaps for our customers, using the combined capabilities of the two organizations. So this it's a hug paradigm for us to kind of do this. >> And in our collaboration with the two organizations just the opposite from what Mike just said right? So Deloitte wasn't really big in big IT, right? Business led transformations kind of what Deloitte's been known for, along with our cyber practice, and so we needed the deep skills of the technical experts. >> Right, so take me through what transformation engagement looks like. They don't call you up and say, "Hey want to buy me some transformation." Right? Where does it start? Who are the stake holders? How long does it take? I mean it could be multi year, I presume and never ends maybe but you want to get to business value first, so let's shorten up the time frame. Take me through typical engagement. Typical I know in quotes. And then, how long like take me through the point at which you start to get business value. What do I got to do to get there? >> Yeah so we see two different spectrums on a transformation. And it really aligns to what are your objectives. Do you just need to get out of the data center because you're on archaic dying hardware? Or do you want to take that, take your time and make a little bit more of a transformation journey? Or do you want to play somewhere in the middle of that spectrum? But on either one of those we'll come in and we'll do a discovery conversation. We'll understand what's in your data center, understand what the age or the health of your data center is, help the customers through, business case, TCO, how fast or how slow that journey needs to be for them, crave look our wave groups of how fast and we're going to sequence those over time to get out of their data center. In parallel we're going to be doing as Mike was saying running all the operational aspects. So while we're doing that discovery, we want to start standing up their Cloud center of excellence. Getting Cloud operations into the organization is a different skill set for IT to have, right? They're going to need to retrain themselves, retool themselves in the world of Cloud. So we kind of do that in parallel and then what we want to do is when we start a project, we want to start with a little POC or small little group of safe applications that we can prove how the model works. Move those into the Cloud, and then what we want to do is we want to scale at it, its large pace, right? Get the IT savings, get the cost cuts out of the organization. >> So I cleaned out my barn this weekend and the first thing I did is I got a dumpster. So I could throw some stuff out. So, is that part of the equation like getting rid of stuff? Is that part of the assessment? You know what's not delivering value that you can live without? >> Absolutely right, so there is kind of things that are just going to not go to Cloud, right? No longer need it, it's just laying around in the side, just get rid of that and move forward. >> And earlier one you'll see there's models depends you hear there's the 6 Rs, the 7 Rs and it's really the journey to Cloud it's almost you look at your status is it going to get re-platformed, is it going to get re-hosted, is it going to get retired back to your point. And if it's had something that's an appliance, right? That's something you're not going to put out to Cloud. Okay keep that in your data center. I have something that's so old, I hope it dies in the next two years. Don't spend the money move it to Cloud, let it die over the next two years. So back to the point, you kind of take this discovery and you go, where do things fall on the spectrum? And each one actually has a destination and a lever that you're going to pull, right? And if you're going to retire things okay so out of the business case, those are status quo for the next you're going to kill it over three years, right? Re-platform re-host means different things that they're going to take, right? Whether they do just to infrastructure or take advantage of PaaS or they'll go, "I'm going to blow up the entire application who directed to Cloud native services." Right? As you go through that journey you kind of map that out for them through the discovery process, and that tells you how much value you're going to get based on what you're going to do. >> But boy, this starts to get deep I mean as you used to peel the onions. So you just described what I would think of as wave 1. And then as you keep peeling you got the applications, you got the business process, you might have, reorganizations that's really where you guys have expertise, right? >> Well combined right? 'Cause yeah we're on the organizational side of things, but yeah there's a lot of things you have to sort through, right? And that's where the combined Elevate program really synergizes itself around the tools that we have. We both have tools that will help make sure we get this right, right? Deloitte has a product called Atadata, Oracle has a product called Soar, they married together properly into this transformational journey, to make sure we get the discovery done right and we get the migrations done right as well. >> Well you also have a lot of different stake holders, than you know, let's face it P&L Managers are going to try to hold on to their P&L. So you've got to bring in the senior executives. Clearly the CIOs involved is the CFO, CSWE. Who are the stake holders that you bring together in the room to kick this thing off? >> Depends on the message and depends on the outcome right? So if it's I need to get out of my data center, my data center strategy, historically the CIO. If it's there's an overall cost reduction and I want to re-implement my cost into innovating the business, sometimes that starts the CEO, CFO levels, right? >> Dave: Sure. >> So depends on that one but it is absolutely, back to your point of, the people want to hold their P&L huggers or kind of hold the cost or whatever. And one of the things, if you're not having the right conversations with people at the right level, the analogy that I've used for years is sometimes you're talking to a turkey about thanksgiving, right? So if you're trying to actually help transform and the entity is feeling that they're impacted by that negatively, even though there's a senior direction, so working through the right levels the organization to make sure you're showing how you're enabling them, it's key it's part of this journey. Helping them understand the future and how it's valuable, 'cause otherwise you'll get people that push back, even though it's the right thing for the company. We've seen that time and time again. >> Well it's potentially a huge engagement, so do you guys have specific plays or campaigns that you know I can do to get started maybe do a little test case, any particular offerings that-- >> Mike: I think-- >> Do you want to talk about the campaigns? >> So ]s under the program of Elevate, we've got a couple of campaigns. So the biggest one we've been talking about is around the data center transformation, so that's kind of the first campaign that we're working on together. The next one is around moving JD Edwards specific applications to Oracle's Cloud. And then the third one is around our analytics offering that Deloitte has and how we're going to market through to general put that in as well. Those are our three major campaigns. >> So data center transformation we hit it pretty hard. I'm sorry the third one was Cloud-- >> Analytics. >> Sorry analytics right okay which is kind of an instate that everybody wants to get to. The JDE migration, so you've got what, situations where people have just, the systems. >> And I would say it's actually more of a JDE modernization, alright? >> Okay. >> So you have an organization, right? They may have a JDE or JD Edwards instance that's really it's older, they're maybe on version nine or something like that, they don't want to go all the way to SaaS 'cause they can't simplify the business processes. They need to do that, but they also want to take advantage of the higher level capabilities of Cloud computing, right? IOT, Mobil, et cetera right? So as a modernization, one of the things we're doing is an approach together we work with customers depending where they're going and go hey great, you can actually modernize by taking up this version of JDE through an upgrade process, but that allows you then to move it over to Oracle Cloud infrastructure, which allows you to actually tap into all those platform services, the IOT and stuff like that to take to the next level. Then you can actually do the higher level analytics that sits on top of that. So it's really a journey where the customer wants to get. There's a various kind of four major phases that we can do or entry points with the customer on the JDE modernization, we kind of work them through. So that's a skill of some of the capabilities that Deloitte has as a deep JDE, and as well as Oracle Consulting, and we actually are going to market that together, matter of fact, we're even at conferences together, talking about our approaches here and our future. >> Okay. So that'll allow you to get to a Cloud PaaS layer that'll allow you to sort of modernize that and get out of the sort of technical debt that's built up. >> Where customers are not ready to maybe move their entire data center, right? This gets them on the journey, right? That's the important pieces. We want to get them on the Cloud journey. >> In the analytics campaign, so it seems to me that a lot of companies don't have their data driven, they want to be data driven, but they're not there yet. And so, their data's in silos and so I would imagine that that's all helping them understand where the data is, breaking down, busting down those silos and then actually putting in sort of an analytics approach that drives their, drives us from data to insights. Is that fair? >> Yeah fair. Yeah it's not just doing reporting and dashboards it's actually having KPI-driven insights into their information and their data within their organizations. And so Deloitte has some pre-configured applications for HR, finance, and supply chains. >> So the existing EDW for example would be fitter into that, but then you've got agile infrastructure and processes that you're putting in place, bringing in AI and machine intelligence. That's kind of the future state that you're in. >> And it also has, they look at the particular that's one of the things we like about the other stuff that Deloitte has done. They've actually done the investment of the processes back into those particular business units that they do and actually have KPI-driven ones it prebuilt configurations that actually adds value. These are the metrics that should be driving an HR organization. Here's the metrics that should be driving finance. So rather than doing better analytics, hey help me write my report better. No, we're going to help you transform the way you should be running your business from a business financial transformation, that's why the partnership with Deloitte. So it's really changing the game of true analytics, not better BI. >> Right okay, guys, two power houses. Thanks so much for explaining in The Cube and to our audience, appreciate it. (mumbling) >> Alright, thank you everybody for watching we'll be right back with our next guest you're watching The Cube, from Chicago. We'll be right back right after the short break. (upbeat music)

(upbeat music) >> Reporter: From Chicago, it's The Cube. Covering Oracle transformation date 2020. Brought to you by Oracle Consulting. >> Hi everybody, welcome back. You're watching theCUBE, we go out to the events we extract the signal from the noise. This is a very special digital event and we're really covering the transformation not only the industry, but the transformation of Oracle Consulting and its rebirth. Mike Owens is here Group VP of Cloud Advisory and GM of Oracle Elevate, which is a partnership that Oracle announced last Open World with Deloitte, and Don Schmidt is here, who is a Managing Director at Deloitte. Gents, good to see you, welcome. >> Good to be here Dave. >> So, Don I want to start with you. Transformation, right? Everybody talks about that, there's a lot of trends going on in the industry. What do you guys see as the big gestalt transformation that's going on? >> Yeah I think there's an inflection point right now. Everybody have been saying they want to get out their data centers. The leaves haven't really been taking place, right? They've been kind of moving in small bits. We're now at the point where large transformation at scale, of getting out of your data centers, is now here. So, we are here to try to help our clients move faster. How can we do this more effectively, cost efficiently, and get them out of these data centers so they can move on with their day to day business? >> So data centers is just not an efficient use of capital for your customers. >> No, no there's lots of ways to do this a lot faster, cheaper, and get on to innovation. Spend your money there, not on hardware, floor space, power cooling, those fun things. >> Well you guys are spending money on data centers though right? So this is a good business for you all. >> Mike: We do it on behalf of other customers though. Right? >> Yeah and that's what's happening right? My customers, they essentially want to take all this IT labor cost and shift it into R&D get them on your backs and your backs right? Is this that what you see it? You know where are we in terms of that? I mean it started ten plus years ago but it really has started to uptake right? What's driving that? What's the catalyst there? >> You know so from my perspective, I've been doing this a while. A lot of it is either organizations are driving costs or what you're also seeing is IT organizations are no longer the utility in the organization and taking the orders, you're using them to try to top line value, but to do that, they actually have to take their business and change the model of it, so they can take that money and reinvest it in what Don had talked about, investment or continuous investment. So you're starting to hit those inflection points, you know years ago a CIO would be in his job for 15, 20 years, the average tenure for a CIO is you know three to five years on average, and it's because if they're not driving innovation or driving top line growth with an organization, organizations are now starting to flip that around so you're seeing a huge inflection point, with organizations really looking for IT not to be just a back office entity anymore, to truly drive them they have to transform that back to Don's point, because that inflection point, this large data center move over is a good sort of lever to kind of get them and really use it as opportunity to transform their organization. >> And the transformations are occurring, you know within industries, but at different pace. I mean some industries have transformed radically. You think about Ride shares, and digital music and the like others are taking more time, financial services, health care, they're riskier businesses, and you know there's more government in public policy so what do you see in terms of the catalyst for transformation and is there any kind of discernible, industry variance? >> Yeah there definitely is and he's mentioned some of the more start-up kind of organizations where Cloud was right for them at the early stages. These other organizations that have built these large application stacks and have been there for years, it's scary for them to say, "Let me take this big set of equipment and applications, and move it to the Cloud." It's a big effort. Starting from scratch with start-ups, that's a little different story right? So we are kind of at a different point, there are different stages within different industries, some are faster adopters than some of the others with government regulations and some of the technologies that have to kind of catch up to be able to provide those services. >> Do people generally want to take their sort of mission-critical apps which are largely running often on Oracle infrastructure database, they want to move that into the Cloud but do they want to bring that sort of Cloud-operating model to their on-prem and maybe reduce their overall data center footprint but preserve some of that? What are you guys seeing? >> So, two different probably viewpoints. So my viewpoint is, depends on the organization, depends on the regulatory they have, and there's a lot of factors in there. But I would say, as a standard organization would take their journey, mission-critical systems are historically not the first one in there. 'Cause back to the point of changing the operating model the way you want to do business and be effective, you don't go with the crown jewels first, historically, take some other work loads learn how to work in that operating model, how you're doing things change and then you evolve some of those pieces over time. There are organizations that basically, pull the band-aid off and just go right into it, right? But a lot of large enterprises sort of that's why we talk about Cloud as a journey, right? You take this journey you have to make the journey based on what's going on back what Don had talked about the regulatory requirements in history are the right controls in place for what they need at that point. If not, okay so what's an interim step to the journey? Could you bring Cloud in those capabilities on-prem and then have some of the other stuff off-prem? So it's really situational dependent, and we actually walk a customer through and now Don's organization does the same thing. You walk them through what makes best for their journey for where they're at in the industry and what they have today and what they're trying to achieve. >> So Don Deloitte doesn't just do IT it does business transformation, right? So it's like a chicken and egg, let's say that what comes first? The chicken or the egg? The IT transformation or the business transformation? >> I don't think it's an or it's an and. So have the total conversation of where's your Cloud journey for your entire enterprise, and then decide how that's going to be played out in both in IT and in the business. How the joint conversation from an enterprise perspective. >> So let's talk a little bit about the partnership, to your very well known brands, you guys get together, so what was the sort of impetus to get together? How's it going? Give us the update on that front. >> Yeah you know so from Oracle standpoint, Oracle has been really technology focused. It was really created by technologists, right? And back to the point of what we're trying to do with the Cloud and trying to do larger transformation, those aren't some of the skills that we have. We've been bringing in some of those skills in DNA, but if you look at it as why would you try to recreate this situation? Why would you not partner with an organization who does large business transformation like Deloitte? Right? And so the impetus of that is, how do we take the technology with the business transformation, pull that together and back of the one plus one equals three for my customer, right? That's what they really want, so how do we actually scale that into really big things and get big outcomes for our customers? Our partnership is not about trying to take a bunch of customers and move a couple application work loads. Our job, what we're really charted to do is make huge transformational leaps for our customers, using the combined capabilities of the two organizations. So this it's a hug paradigm for us to kind of do this. >> And in our collaboration with the two organizations just the opposite from what Mike just said right? So Deloitte wasn't really big in big IT, right? Business led transformations kind of what Deloitte's been known for, along with our cyber practice, and so we needed the deep skills of the technical experts. >> Right, so take me through what transformation engagement looks like. They don't call you up and say, "Hey want to buy me some transformation." Right? Where does it start? Who are the stake holders? How long does it take? I mean it could be multi year, I presume and never ends maybe but you want to get to business value first, so let's shorten up the time frame. Take me through typical engagement. Typical I know in quotes. And then, how long like take me through the point at which you start to get business value. What do I got to do to get there? >> Yeah so we see two different spectrums on a transformation. And it really aligns to what are your objectives. Do you just need to get out of the data center because you're on archaic dying hardware? Or do you want to take that, take your time and make a little bit more of a transformation journey? Or do you want to play somewhere in the middle of that spectrum? But on either one of those we'll come in and we'll do a discovery conversation. We'll understand what's in your data center, understand what the age or the health of your data center is, help the customers through, business case, TCO, how fast or how slow that journey needs to be for them, crave look our wave groups of how fast and we're going to sequence those over time to get out of their data center. In parallel we're going to be doing as Mike was saying running all the operational aspects. So while we're doing that discovery, we want to start standing up their Cloud center of excellence. Getting Cloud operations into the organization is a different skill set for IT to have, right? They're going to need to retrain themselves, retool themselves in the world of Cloud. So we kind of do that in parallel and then what we want to do is when we start a project, we want to start with a little POC or small little group of safe applications that we can prove how the model works. Move those into the Cloud, and then what we want to do is we want to scale at it, its large pace, right? Get the IT savings, get the cost cuts out of the organization. >> So I cleaned out my barn this weekend and the first thing I did is I got a dumpster. So I could throw some stuff out. So, is that part of the equation like getting rid of stuff? Is that part of the assessment? You know what's not delivering value that you can live without? >> Absolutely right, so there is kind of things that are just going to not go to Cloud, right? No longer need it, it's just laying around in the side, just get rid of that and move forward. >> And earlier one you'll see there's models depends you hear there's the 6 Rs, the 7 Rs and it's really the journey to Cloud it's almost you look at your status is it going to get re-platformed, is it going to get re-hosted, is it going to get retired back to your point. And if it's had something that's an appliance, right? That's something you're not going to put out to Cloud. Okay keep that in your data center. I have something that's so old, I hope it dies in the next two years. Don't spend the money move it to Cloud, let it die over the next two years. So back to the point, you kind of take this discovery and you go, where do things fall on the spectrum? And each one actually has a destination and a lever that you're going to pull, right? And if you're going to retire things okay so out of the business case, those are status quo for the next you're going to kill it over three years, right? Re-platform re-host means different things that they're going to take, right? Whether they do just to infrastructure or take advantage of PaaS or they'll go, "I'm going to blow up the entire application who directed to Cloud native services." Right? As you go through that journey you kind of map that out for them through the discovery process, and that tells you how much value you're going to get based on what you're going to do. >> But boy, this starts to get deep I mean as you used to peel the onions. So you just described what I would think of as wave 1. And then as you keep peeling you got the applications, you got the business process, you might have, reorganizations that's really where you guys have expertise, right? >> Well combined right? 'Cause yeah we're on the organizational side of things, but yeah there's a lot of things you have to sort through, right? And that's where the combined Elevate program really synergizes itself around the tools that we have. We both have tools that will help make sure we get this right, right? Deloitte has a product called Atadata, Oracle has a product called Soar, they married together properly into this transformational journey, to make sure we get the discovery done right and we get the migrations done right as well. >> Well you also have a lot of different stake holders, than you know, let's face it P&L Managers are going to try to hold on to their P&L. So you've got to bring in the senior executives. Clearly the CIOs involved is the CFO, CSWE. Who are the stake holders that you bring together in the room to kick this thing off? >> Depends on the message and depends on the outcome right? So if it's I need to get out of my data center, my data center strategy, historically the CIO. If it's there's an overall cost reduction and I want to re-implement my cost into innovating the business, sometimes that starts the CEO, CFO levels, right? >> Dave: Sure. >> So depends on that one but it is absolutely, back to your point of, the people want to hold their P&L huggers or kind of hold the cost or whatever. And one of the things, if you're not having the right conversations with people at the right level, the analogy that I've used for years is sometimes you're talking to a turkey about thanksgiving, right? So if you're trying to actually help transform and the entity is feeling that they're impacted by that negatively, even though there's a senior direction, so working through the right levels the organization to make sure you're showing how you're enabling them, it's key it's part of this journey. Helping them understand the future and how it's valuable, 'cause otherwise you'll get people that push back, even though it's the right thing for the company. We've seen that time and time again. >> Well it's potentially a huge engagement, so do you guys have specific plays or campaigns that you know I can do to get started maybe do a little test case, any particular offerings that-- >> Mike: I think-- >> Do you want to talk about the campaigns? >> So ]s under the program of Elevate, we've got a couple of campaigns. So the biggest one we've been talking about is around the data center transformation, so that's kind of the first campaign that we're working on together. The next one is around moving JD Edwards specific applications to Oracle's Cloud. And then the third one is around our analytics offering that Deloitte has and how we're going to market through to general put that in as well. Those are our three major campaigns. >> So data center transformation we hit it pretty hard. I'm sorry the third one was Cloud-- >> Analytics. >> Sorry analytics right okay which is kind of an instate that everybody wants to get to. The JDE migration, so you've got what, situations where people have just, the systems. >> And I would say it's actually more of a JDE modernization, alright? >> Okay. >> So you have an organization, right? They may have a JDE or JD Edwards instance that's really it's older, they're maybe on version nine or something like that, they don't want to go all the way to SaaS 'cause they can't simplify the business processes. They need to do that, but they also want to take advantage of the higher level capabilities of Cloud computing, right? IOT, Mobil, et cetera right? So as a modernization, one of the things we're doing is an approach together we work with customers depending where they're going and go hey great, you can actually modernize by taking up this version of JDE through an upgrade process, but that allows you then to move it over to Oracle Cloud infrastructure, which allows you to actually tap into all those platform services, the IOT and stuff like that to take to the next level. Then you can actually do the higher level analytics that sits on top of that. So it's really a journey where the customer wants to get. There's a various kind of four major phases that we can do or entry points with the customer on the JDE modernization, we kind of work them through. So that's a skill of some of the capabilities that Deloitte has as a deep JDE, and as well as Oracle Consulting, and we actually are going to market that together, matter of fact, we're even at conferences together, talking about our approaches here and our future. >> Okay. So that'll allow you to get to a Cloud PaaS layer that'll allow you to sort of modernize that and get out of the sort of technical debt that's built up. >> Where customers are not ready to maybe move their entire data center, right? This gets them on the journey, right? That's the important pieces. We want to get them on the Cloud journey. >> In the analytics campaign, so it seems to me that a lot of companies don't have their data driven, they want to be data driven, but they're not there yet. And so, their data's in silos and so I would imagine that that's all helping them understand where the data is, breaking down, busting down those silos and then actually putting in sort of an analytics approach that drives their, drives us from data to insights. Is that fair? >> Yeah fair. Yeah it's not just doing reporting and dashboards it's actually having KPI-driven insights into their information and their data within their organizations. And so Deloitte has some pre-configured applications for HR, finance, and supply chains. >> So the existing EDW for example would be fitter into that, but then you've got agile infrastructure and processes that you're putting in place, bringing in AI and machine intelligence. That's kind of the future state that you're in. >> And it also has, they look at the particular that's one of the things we like about the other stuff that Deloitte has done. They've actually done the investment of the processes back into those particular business units that they do and actually have KPI-driven ones it prebuilt configurations that actually adds value. These are the metrics that should be driving an HR organization. Here's the metrics that should be driving finance. So rather than doing better analytics, hey help me write my report better. No, we're going to help you transform the way you should be running your business from a business financial transformation, that's why the partnership with Deloitte. So it's really changing the game of true analytics, not better BI. >> Right okay, guys, two power houses. Thanks so much for explaining in The Cube and to our audience, appreciate it. (mumbling) >> Alright, thank you everybody for watching we'll be right back with our next guest you're watching The Cube, from Chicago. We'll be right back right after the short break. (upbeat music)

>>from Boston, Massachusetts. It's the Q covering I. F s World Conference 2019. Brought to you by I F s. Hi, buddy. Welcome to Boston. You're watching the cubes coverage of I s s World in the Heinz Auditorium in Boston. I'm Day Volonte with my co host, Paul Gill and Paul. This is the the largest enterprise resource planning software company that our audience probably has never heard of. This is our second year covering I f s World. Last year was in Atlanta. They moved to Boston. I f s is a Swedish based company. They do about $600 million in annual revenue, about 3700 employees. And interestingly, they have a development center in Sri Lanka, of all places. Which is kind of was war torn for the last 15 years or so, but nonetheless, evidently, a lot of talent and beautiful views, but so welcome. >>Thank you, Dave. I have to admit, before our coverage last year, I had never even heard of this company been around this industry for more than 30 years. Never heard of this company. They've got 10,000 customers. They've got a full house next door in the keynote and very enthusiastic group. This is a focus company. It's a company that has a lot of ah ah, vision about where wants to go some impressive vision documents and really a company that I think it's coming out of the shadows in the U. S. And it will be a force to be reckoned with. >>So I should say they were founded in the in the mid 19 eighties, and then it kind of re architected their whole platform around Client server. You remember the component move? It was a sort of big trends in the in the nineties. In the mid nineties opened up offices in the United States. We're gonna talk to the head of North America later, and that's one of the big growth areas that growing at about three. They claim to be growing at three x the overall market rate, which is a good benchmark. They're really their focus is really three areas e r. P asset management software and field service management, and they talk about deep functionality. So, for instance, they compete with Oracle ASAP. Certainly Microsoft and in four company we've covered in four talks a lot about the last mile functionality. That's not terminology that I f s uses, but they do similar types of things. I'll give you some examples because, okay, what's last mile? Functionality? Things like, um, detailed invoicing integration, contract management. Very narrow search results on things like I just want to search for a refurbished parts so they have functionality to allow you to do that. Chain. A custom e custody chain of custody for handling dangerous toxic chemicals. Certain modules to handle FDA compliance. A real kind of nitty gritty stuff to help companies avoid custom modifications in certain industries. Energy, construction, aerospace and defense is a big area for that. For them, a CZ well as manufacturing, >>there's a segment of the e r P market that often is under uh is under seeing. There's a lot of these companies that started out in niches Peoples off being a famous example, starting out on a niche of the market and then growing into other areas. And this company continues to be very focused even after 35 years, as you mentioned, just energy aerospace, a few construction, a few basic industries that they serve serve them at a very deep level focused on the mid market primarily, but they have a new positioning this year. They're calling the challengers for the challengers, which I like. It's a it's a message that I think resonates. It's easy to understand there position their customers is being the companies that are going to challenge the big guys in their industries and this time of digital transformation and disruption. You know, that's what it's all about. I think it's a great message of bringing out this year. >>Of course I like it because the Cube is a challenger, right? Okay, even though we're number one of the segments that we cover, we started out as a sort of a challenger. Interestingly, I f s and the gardener Magic Corners actually, leader and Field Service Management. They made an acquisition that they announced today of a company called Asked. He asked, U S he is a pink sheet OTC company. I mean, they're very small is a tuck in acquisition that maybe they had a They had a sub $20 million market cap. They probably do 25 $30 million in revenue. Um, Darren rules. The CEO said that this place is them is the leader in field service management, which is interesting. We're gonna ask him about that to your other point. You look around the ecosystem here that they have 400 partners. I was surprised last night. I came early to sort of walk around the hall floor. You see large companies here like Accenture. Um and I'm surprised. I mean, I remember the early days when we did the service. Now conferences 2013 or so you didn't see accent. You're Delloye E Y p W c. Now you see them at the service now event here that you see them? I mean, and I talked to essential last night. They said, Yeah, well, we actually do a lot of business in Europe, particularly in the Scandinavian region, and we want to grow the business in the U. S. >>Europe tends to be kind of a blind spot for us cos they don't see the size of the European market, all the activities where some of the great e. R. P. Innovation has come out of Europe. This company, as you mentioned growing three times the rate of the market, they have a ah focus on your very tight with those customers that they serve and they understand them very well. And this is a you can see why it's centuries is is serving this market because, you know they're simply following the money. There's only so much growth left in the S a P market in the Oracle market. But as the CEO Darren said this morning, Ah, half of their revenues last year were from net new customers. So that's that's a great metric. That indicates that there's a lot of new business for these partners to pursue. >>Well, I think there's there's some fatigue, obviously, for big, long multi year s AP integrations, you're also seeing, you know, at the macro we work with Enterprise Technology Research and we have access to their data set. One of the things that we're seeing is a slowdown in the macro. Clearly, buyers are planning to spend less on I T in the second half of 2019 than they did in the first half of 2019 and they expect to spend less in Q four than they expected to in July. So things are clearly softening at the macro level. They're reverting back to pre 2018 levels but it's not falling off a cliff. One of the things that I've talked to e t. R about the premise we put forth love to get your thoughts is essentially we started digital transformation projects, Let's say in earnest in 2016 2017 doing a lot of pilots started kind of pre production in 2018. And during that time, what people were doing is they were had a lot of redundancy. They would maintain the legacy systems and they were experimenting with disruptive technologies. You saw, obviously a lot of you. I path a lot of snowflake and other sort of disruptive technology. Certainly an infrastructure. Pure storage was the beneficiary of that. So you had this sort of dual strategy. We had redundancy of legacy systems, and then the new stuff. What's happening now is, is the theory is that we're going into production. Would digital transformation projects and where were killing the legacy stuff? Okay, we're ready to cut over >>to a new land on that anymore, >>right? We're not going to spend them anymore. Dial that down. Number one. Number two is we're not just gonna spray and pray on all new tech Blockchain a i rp et cetera. We're gonna now focus on those areas that we think are going to drive business value. So both the incumbents and the disruptors are getting somewhat affected by that. That slowdown in that narrowing of the focused. And so I think that's really what's happening. And we're gonna, I think, have to absorb that for a year or so before we start to see new wave of spending. >>There's been a lot of spending on I t over the last three years. As you say, driven by this need, this transition that's going on now we're being going to see some of those legacy systems turned off. The more important thing I have to look at, I think the overall spending is where is that money being spent is being spent on on servers or is it being spent on cloud service is, and I think you would see a fairly dramatic shift going on. They're so the overall, the macro. I think it's still healthy for I t. There's still a lot of spending going on, but it's shifting to a new area there. They're killing off some of that redundancy. >>Well, the TR data shows couple things. There's no question that server and storage spending is has been declining and attenuating for a number of quarters now. And there's been a shift going on from that. Core infrastructure, obviously, into Cloud Cloud continues its steady march in terms of taking over market share. Other areas of bright spots security is clearly one. You're seeing a lot of spending in an analytics, especially new analytics. I mentioned Snowflake before we're disrupting kind of terror Data's traditional legacy enterprise data warehouse market. The R P. A market is also very hot. You AI path is a company that continues to extend beyond its its peers, although I have to say automation anywhere looks very strong. Blue Prison looks very strong. Cloudera interestingly used to be the darling is hitting sort of all time lows in the E. T R database, which is, by the way, that one of the best data sets I've ever seen on on spending enterprise software is actually still pretty strong. Particularly, uh, you know, workday look strong. Sales force still looks pretty strong. Splunk Because of the security uplift, it still looks pretty strong. I have a lot of data on I f s Like you said, they don't really show up in the e t R survey base. Um, but I would expect, with kind of growth, we're seeing $600 million. Company hopes to be a $1,000,000,000 by 2022 2021. I would think they're going to start showing up in the spending >>service well again in Europe. They may be They may be more dominant player than we see in the US. As I said, I really had not even heard of the company before last year, which was surprising for a company with 10,000 customers. Again, they're focused on the mid market in the mid market tends to fly a bit under the radar. Everyone thinks about what's happening in the enterprise is a huge opportunity out there. Many more mid market companies and there are enterprises. And that's a that's been historically a fertile ground for e. R. P. Companies to launch. You know J. D. Edwards came out of the mid market thes are companies that may end up being acquired by the Giants, but they build up a very healthy base of customers, sort of under the radar. >>Well, the other point I wanted to make I kind of started to about the digital transformation is, as they say, people are getting sort of sick of the big, long, ASAP complicated implementations. As small companies become midsize companies and larger midsize companies, they they look toward an enterprise resource planning, type of, of platform. And they're probably saying, All right, wait. I've got some choices here. I could go with an an I F. S, you know, or maybe another alternative. T s a p. You know, A S A P is maybe maybe the safe bet. Although, you know, it looks like i f s is got when you look around at the customers, they have has some real traction, obviously a lot of references, no question about it. One of things they've been digging for saw this gardener doing them for a P I integrations. Well, they've announced some major AP I integrations. We're gonna talk to them about that and poke it that a little bit and see if that will So to solve that criticism, that what Gardner calls caution, you know, let's see how real that is in talking to some of the customers will be talkinto the executives on members of the ecosystem. And obviously Paul and I will be giving our analysis as well. Final thoughts >>here. Just the challenge, I think, is you note for these midmarket focus Cos. Has been growing with their customers. And that's why you see of Lawson's in the JD Edwards of the World. Many of these these mid market companies eventually are acquired by the big E R P vendors. The customers eventually, if they grow, have to go through this transition. If they're going to go to Enterprise. The R P you know, they're forced into a couple of big choices. The opportunity and the challenge for F s is, can they grow those customers as they move into enterprise grade size? Can they grow them with with E. I. F s product line without having them forcing them to transition to something bigger? >>So a lot of here a lot of action here in Boston, we heard from several outside speakers. There was Linda Hill from Harvard. They had a digital transformation CEO panel, the CEO of soo say who will be on later uh PTC, a Conway, former PeopleSoft CEO was on there. And then, of course, Tony Hawk, which was a lot of fun, obviously a challenger. All right, so keep it right there, buddy. You're watching the Cube live from I F s World Conference at the Heinz in Boston right back, right after this short break.

>> Narrator: The Cube presents On The Ground. (techno music) >> Hello and welcome, I'm Peter Burris With SilconANGLE Media Wikibon, and we're here today doing an on the ground, very important on the ground at Oracle's headquarters. This segment we're talking to Bhagat Nainani who is the group vice president of product development in Oracle's IOT organization. Welcome to The Cube. >> Thank you Peter. >> Now we've got a lot to talk about and because IOT is obviously at the fore front of many people's minds. It's one of the major initiatives happening in business, although a lot business people tell us that when somebody starts throwing IOT concepts at them they're not quite sure exactly what the parameters or what it means. So let's start here. A lot of hype about IOT, what does it mean to Oracle and Oracle's customers. >> Yes so there is definitely a lot of buzz about IOT and it is effecting a lot of industries whether it be manufacturing, transportation, home automation, fleet management, and we expect around 50 billion devices to be connected in the next two to three years and even the devices already connected to the edge and reading over 5 zettabytes of data and very little of that is actually-- >> Peter: Zettabytes. >> Exactly. >> So zettabytes is, megabytes, gigabytes, terabytes. >> Exabytes, then zettabytes. >> Lot of data. >> Lot of data and very little of that is being actually used. And if you look at top any analyst, it's they project somewhere between a one to five trillion dollar market right. But you know numbers aside, there is real business value here. I mean some companies are looking at IOT to improve operational efficiencies. Others want to use IOT to improve the customer experience or create new business models and new revenue streams. So there are clear opportunities here and that's what's affecting a lot of these organizations to the IOT. >> Now as a company tries to do something as complex as introducing a business model, they're going to need a lot of new technology as well as a lot of new good ideas. So what is Oracle's approach to engaging customers in this market place? >> So if many of our customers are going through these digital transformation or industry for all initiatives if you will. And there's some common factors in which in when it comes to IOT. Things like machine safety, productive, productive maintenance. Production reliability, worker productivity. Supply chain optimization. And all of these need extensions to existing applications or new types of applications. So Oracle's approach to IOT is to provide IOT enabled smart applications for things like manufacturing, fleet management, asset monitoring, equipment prognostics things like that. >> But that's much more than Oracle is currently providing right now. >> Exactly. >> So tell us a little bit about how this IOT ecosystem which is very broad, very complex, touches a lot of different parts of business, is embracing Oracle and how Oracle's trying to set up this appropriate partnerships so that customers can in fact get a complete solution. >> Sure, so, if you look at companies embarking on a journey to IOT, we see them go through sort of multiple phases. They start with just connecting their assets. You know so they have assets sitting on the field not connected to the business systems. They start connecting them so that they can get real time visibility for the assets and they can react more quickly to any problems that occur. So now they've reduced the time to react to any issues. That gives them sort of immediate ROI. But soon after they want to move to more of a proactive monitoring. So they're collecting information from all these assets and they want to do predictive analytics, and reduce unplanned down time and predict failures before they actually happen. Once they do that, then they want to transition to using IOT data into their core business processes. Whether it be back office, supply chain processes, ERP processes, or customer facing processes like CRM. Where they start to use IOT data to provide differentiated experiences. And the IOT offerings that we provide essentially help them go through this journey from connected assets all the way to service excellence. >> So when we're talking about connected assets, we're talking about the machinery, as well as the other resources at least that are either handling or running operations but also handling customer engagement. Now this suggests that there is going to be an intimate relationship between the technologies that are collecting all this data, sensing all this data, transmitting all this data, and the systems that are actually responsible for turning these feeds into something that is recognizable by the business as capable of generating a decision. Tell us a little bit about the relationship as you see it between IOT and big data. >> So recently we released an IOT Cloud service and the main difference in our approach to IOT versus many of the other vendors is we look at it from the applications out, as you said from the business out. We want to take the insides from these devices that data coming and make that actionable within your enterprise business processes all right. So the goal of IOT Cloud service is to actually bridge this gap between the operational technology and the IT world. And we do this be providing out of the box applications as well as platform components. I talked about applications like asset monitoring earlier. So there we have a out of the box app that helps you answer questions like how are my assets being used, where they're held. Do they need to be serviced. You look at it monitoring it's about how are my systems doing on the factory floor. Collect data from them constantly so that I can decide which ones to service in the next maintenance window right. Now I'm collecting all this data. This has to be backed by sort of platform components and the platform components fall in sort of this three broad categories right. Connect, analyze, integrate. So the connect part is where you bring the device, on board the devices. And provide bi-directional connectivity to them. So we have this concept called device virtualization which really simplifies how you interact with these devices. And provides a softer representation of those devices in the Cloud so now any application interacting with it doesn't need to know the gateways and the protocols that are used. On the analyze side there are two types of analysis. There is real time analysis which is done on the event stream. And then there's big data analysis that's done where you combine the real time stream along with contextual data sitting in your data lakes or your ERP systems. And then you apply predictive algorithms on top of it. We have a bunch of capabilities here. We provide business user friendly interfaces to model these event crossing functions. And we also provide built in algorithms using our big data services for things like equipment efficiency, remaining useful life, things like that. Right so, big data and IOT are quite related. If you look at the big data techniques like Spark, Hadoop, or some of these services, the type of data they all put it on, data with high velocity, high volume, high variety, IOT data has all the same characteristics of big data right. Now once you've analyzed this data, you also want to integrate it with your back end systems and that's where we provide out of the box connectivity with our SaaS apps as well as our E-business suite and our JD Edwards applications which are commonly used by our enterprise customers. You have the connectivity piece, you have the analytics, and you have the integration. You use these capabilities along with some of our other PaaS services like our business intentions Cloud service or our mobile Cloud source ability or IOT application. >> So you mentioned that these tools are easy to use. You also mentioned the distinction between IT and OT. This combination of IOT and big data analytics is touching a lot of different parts of the business. You have to be able to talk to operational technology people, IT people, you have to be able to talk to developers, you have to be increasingly be able to talk to business people. Historically, this all comes together when developers are engaged to create value out of all these piece parts. Talk a little bit about how Oracle is bringing greater sport to that developer community to bring this all together and turn it into value for a corporation. >> Sure so let's take an example here. Let's take the manufacturing example and then we'll I'll talk about manufacturing and then talk about some of the challenges there and how we enable that. You know we follow it up with community. In manufacturing world when you're doing these IOT kind of solutions, there's a common analysis done called a five M analysis. Man, machine, method, material, measurements. Now if you look at man, method, materials, all of this information is sitting in your ERP system or your databases. Where you have who operated on this system, what training did they receive, what techniques did they use, what raw material was used, who was the supplier. You look at machine and measurements, this is raw data coming from the equipment IOT data and measurements around the tests that were done on the system. You need to combine both of these to create a real predictable analytics solution for manufacturing right. Now today a lot of this has to be done using sophisticated sort of data scientists and you need sophisticated developers who can operate on these various big data components, whether it be Spark, Kafka, Cassandra, all of these. What we are doing at Oracle is trying to provide sort of tools and frame works that abstract away some of that and are targeted towards the citizen developer or the business users. So you don't need to have sophisticated data scientists. Right, we have tools such as big data discovery, big data prep, and other tools such as Apache learning which make it easy to build these kind of models. Now if you are a developer who wants to write all of this from scratch, you will then when you're dealing with different types of structure and unstructured store, you need an abstraction layer that simplifies how you interact with this, how you query it. And so we are providing sequel like interfaces that they're already familiar with. So whether it's a structured store or unstructured store and well, it doesn't matter which native query interface I suppose. You provide a standardized list so that they easily operate on that data. Now even that takes a long time to build an IOT solution so that's where our out of the box applications come in and by providing these out of the box applications for specific use cases around asset monitoring, equipment prognostics, supply chain, we are really trying to reduce the time it takes for you to deploy an IOT solution because these applications already have those built in algorithms. All we are doing is configuring them, providing some parameters, but you don't need to write the algorithm. You take your industrial gateways, connect the devices, and you're ready to go. >> So do you think that there's going to be new applications utilizing some of these new methods or models, or is it going to be just an extension of a lot of the traditional, more operational, financial oriented applications that are already in place. >> It's a combination. So when it comes to things like you know existing maintenance applications, or existing service applications, the interfaces of them used to be you know manual where someone would get a call and they would enter an order into a system or a work order. With IOT those are being extended to have new channels. So for example in our service Cloud, we have added a new channel with IOTs so now the equipment itself reports a problem and when the service technician gets a work order, they already know which part has gone bad. So the whole manual step is taken away. There are other areas where companies are trying to transition to this product as a service model, right. And so those need new ways of monetizing, new types of application for your capture and utilization. There you will need some new application. So it is a combination of the two. >> Now you mentioned earlier the five M model. Man, materials, machines. >> Method. >> Measurement. And method. Just to give you to date myself, the first class on technology I took talked about the four M plus I model. Men, materials, machines, money, and information. So didn't have method. But let's come back to at least what we think at Wikibon, SiliconANGLE, is still the most important piece, men. Or people, the individuals. We're talking about the, we're talking about IOT here, but presumably we're going to also start bringing in those crucial interfaces so that people become a more engaged feature of how these loops are working. Between sensing, and analyzing and printing models, and enacting something in the market place. Tell us a little bit about how Oracle sees the role that people are going to play in these transitions that we're talking about. >> So if you look at the service industry people right. I mean this I give you the example of automatically creating a work order. But with IOT enabled devices, it is transitioning to more of a self service, model or assisted service model where now people have much more information available to them at their fingertips when they are actually looking at problems. Whether it be some part that has failed or a customer has reported an issue, now you can interact with these devices remotely and so now you have significant reduced the time to actually act on any problems and overall improve the customer experience. There is the people part in sort of creating those models and providing sort of information to enrich those models because you know a data scientist can get all the information from the devices and create the models, but you also need the experts who know you know how these systems are supposed to behave. How they were designed, how they behave under certain environment conditions. You take that into account along with the real data that you're getting and that way you can predict how this particular equipment will behave in the field right. >> So Oracle open world is just around the corner. One quick idea. What are you looking for from an Oracle IOT perspective. >> From an Oracle IOT perspective, one of the things we were really looking forward to is the applications that you know we are launching as well as many other applications within Oracle who have now embedded IOT within their offering. So to make those applications smarter and you hear a lot about that at open world. >> And that is one of their key tests of adoption is how fast that happens. Bhagat Nainani thank you very much for being here. Group vice president for IOT product development at Oracle. Again, Peter Burris from The Cube. Thank you very much. >> Baghat: Thank you Peter. (techno music)