>> Announcer: Live from Boston, Massachusetts, it's theCube. Covering IFS World Conference 2019. Brought to you by IFS. >> Welcome back to Boston everybody you're watching theCube, the leader in live tech coverage. This is day one of the IFS World Conference. I'm Dave Vallante with my co-host Paul Gillen. Melissa Di Donato is here, she's the CEO of SUSE and Jon Roskill is the CEO of Acumatica. Folks, welcome to theCube. >> Thank you so much. >> So you guys had the power panel today? Talking about digital transformation. I got a question for all of you. What's the difference between a business and a digital business? Melissa, I'll give you first crack. >> Before a regular old business and a digital business? Everyone's digital these days, aren't they? I was interviewing the, one of the leaders in Expedia and I said, "Are you a travel company "or are you a digital company? "Like where do you lead with?" And she said to me, "No no, we're a travel company "but we use digital." So it seems like the more and more we think about what the future means how we service our customers, customers being at the core everyone's a digital business. The way you service, the way you communicate the way you support. So whether you're a business or none you're always got to be a digital business. >> You better be a digital business and so-- >> I'm going to take a slightly different tact on that which is, we talk about digital and analog businesses and analog businesses are ones that are data silos they have a lot of systems, so they think they're digital but they're disconnected. And, you know, part of a transformation is connecting all the systems together and getting them to work like one. >> But I think the confict other common thread is data, right? A digital business maybe puts data at the core and that's how they get competitive advantage but, I want to ask you guys about your respective businesses. So SUSE, obviously you compete with the big whale RedHat, you know, the big news last year IBM $34 billion. How did that or will that in your view affect your business? >> It's already affecting our business. We've seen a big big uptake in interest in SUSE and what we're doing. You know, they say that a big part of the install based customers that RedHat and IBM currently have are unhappy about the decision to be acquired by IBM. Whether they're in conflict because we're a very big heavily channel business, right? So a lot of the channel partners are not quite happy about having one of their closest competitors now be, you know, part of the inner circle if you will. And other customers are just not happy. I mean, RedHat had fast innovation, fast pace and thought leadership and now all of a sudden they're going to be buried inside of a large conglomerate and they're not happy about that. So when we look at what's been happening for us particularly since March, we became an independent company now one of the world's largest independent open source company in the world. Since IBM has been taking over from RedHat. And, you know, big big uptake. Since March we became independent we've been getting a lot of questioning. "Where are we, where are we going, what are we doing?" And, " Hey, you know, I haven't heard about SUSE a while "what are you doing now?" So it's been really good news for us really, really good news. >> I mean, we're huge fans of RedHat. We do a lot of their events and-- >> Melissa: I'm a huge fan myself. >> But I tell you, I mean, we know from first hand IBM has this nasty habit of buying companies tripling the price. Now they say they're going to leave RedHat alone, we'll see. >> Yeah, like they said they'd leave Lotus alone and all the others. >> SPSS, you saw that, Ustream, you know one of our platforms. >> What's your view, how do you think it's going to go? >> I don't think it's about cloud I think it's about services and I think that's the piece that we don't really have great visibility on. Can IBM kind of jam OpenShift into its customers you know, businesses without them even really knowing it and that's the near-term cash flow play that they're trying to, you know, effect. >> Yeah, but it's not working for them, isn't though? Because when you look at the install base 90% of their business it's been Linux open source environment and OpenShift is a tag-along. I don't know if that's a real enabler for the future rather than, you know, an afterthought from the past. >> Well, for $34 billion it better be. >> I want to ask you about the cost of shifting because historically, you know if you were IBM, you were stuck with IBM forever. What is involved in customers moving from RedHat to SUSE presumably you're doing some of those migrations style. >> We are, we are doing them more and more in fact, we're even offering migration services ourself in some applications. It depends on the application layer. >> How simple is that? >> It depends on the application. So, we've got some telco companies is very very complex 24/7, you know, high pays, big fat enterprise applications around billing, for example. They're harder to move. >> A lot of custom code. >> A lot of custom code, really deep, really rich they need, you know, constant operation because it's billing, right? Big, fat transactions, those are a little bit more complex than say, the other applications are. Nonetheless, there is a migration path and in fact, we're one of the only open source companies in the world that provides support for not just SUSE, but actually for RedHat. So, if you're a RedHat, for or a well customer that want to get off an unsupported version of RedHat you can come over to SUSE. We'll not just support your RedHat system but actually come up with a migration plan to get you into a supported version of SUSE. >> If it's a package set of apps and you have to freeze the code it's actually not that bad-- >> It's not that bad, no. >> To migrate. All right, Jon I got to ask you, so help us understand Acumatica and IFS and the relationship you're like sister companies, you both the ERP providers. How do you work together or? >> Yeah, so we're both owned by a private equity firm called EQT. IFS is generally focused on $500 million and above company so more enterprise and we're focused on core mid-market. So say, $20 million to $500 million. And so very complementary in that way. IFS is largely direct selling we're a 100% through channels. IFS is stronger in Europe, we're stronger in North America and so they see these as very complementary assets and rather than to, perhaps what's going on with the IBM, RedHat discussion here. Slam these big things together and screw them up they're trying to actually keep us independent. So they put us in a holding company but we're trying to leverage much of each other's goodness as we can. >> Is there a migration path? I mean, for customers who reach the top end of your market can they smoothly get to IFS? >> Yeah, it's not going to be like a smooth you know, turn a switch and go. But it absolutely is a migration option for customers and we do have a set of customers that are outgrowing us you know, we have a number of customers now over a billion dollars running on Acumatica and you know, for a company, we've got one that we're actually talking to about this right now operating in 41 countries global, they need 24/7 support we're not the right company to be running their ERP system. >> On your panel today guys you were talking about, a lot about digital transformations kind of lessons learned. What are the big mistakes you see companies making and kind of what's your roadmap for success? >> I think doing too much too fast. Everyone talks about the digital innovation digital transformation. It's really a business transformation with digital being the underpinning the push forward that carries the business forward, right? And I think that we make too many mistakes with regards to doing too much, too fast, too soon, that's one. Doing and adopting technology for technology's sake. "Oh, it's ML, it's AI." And everyone loves these big buzz words, right? All the code words for what technology is? So they tend to bring it on but they don't really know the outcome. Really really important at SUSE were absolutely obsessed with our customers and during a digital transformation if you remain absolutely sick of anything about your customer at the core of every decision you make and everything you do. Particularly with regards to digital transformation you want to make sure that business outcome is focused on them. Having a clear roadmap with milestones along the journey is really important and ensuring it's really collaborative. We talked this morning about digital natives you know, we're all young, aren't we? Me in particular, but, you know I think the younger generation of digital natives think a little bit differently perhaps than we were originally thinking when we were their age. You know, I depend on that thinking I depend on that integration of that thought leadership infused into companies to help really reach customers in different ways. Our customers are buying differently our customers have different expectations they have different deliverables they require and they expect to be supported in different way. And those digital natives, that young talent can really aid in that delivery of good thought leadership for our businesses. >> So Jon, we're seeing IT spending at the macro slow down a little bit. You know, a lot of different factors going on it's not a disaster, it's not falling off the cliff but definitely pre-2018 levels and one of the theories is that you had this kind of spray-and-pray kind of like Melissa was say, deal was going too fast trying everything and now we're seeing more of a narrow focus on things that are going to give a return. Do you see that happening out there? >> Yeah, definitely some, I mean people are looking for returns even in what's been a really vibrant economy but, you know, I agree with Melissa's point there's a lot of ready, shoot, aim projects out there and, you know, the biggest thing I see is the ones that aren't, the fail that aren't the ones that aren't led by the leadership. They're sort of given off to some side team often the IT team and said, "Go lead digital transformation of the company." And digital transformation you know, Melissa said this morning it's business transformation. You've got to bring the business part of it to the table and you've got to think about, it's got to be led by the CEO or the entire senior leadership team has to be on board and if not, it's not going to be successful. >> So, pragmatism would say, okay, you get some quick hits get some wins and then you got kind of the, you know, Bezos, Michael Dell mindset go big or go home, so what's your philosophy? Moonshots or, you know, quick hits? >> I always think starting you know, you've got to understand your team's capabilities. So starting is something that you can get a gauge of that you know, particularly if you're new and you're walking into an organization, you know. Melissa, I don't know how long you've been in your role now? >> Melissa: 65 days. >> Right, so there you go. So it's probably a good person to ask what, you know, what you're finding out there but I think, you know, getting a gauge of what your resources are. I mean, one of the things you see around here is there are, you know, dozens of partner firms that are, or can be brought into, you know supplement the resources you have in your own team. So being thoughtful in that is part of the approach. And then having a roadmap for what you're trying to do. Like we talked this morning about a customer that Linda had been talking about. Have been working on for six or seven years, right? And you're saying, for an enterprise a very large enterprise company taking six or seven years to turn the battleship maybe isn't that long. >> Okay, so you got the sister company going on. Do you have a commercial relationship with IFS or you just here as kind of an outside speaker and a thought leader? >> I'm here as an outside speaker thought leader. There is talk that perhaps we can you know, work together in the future we're trying to work that out right now. >> I want to ask you about open source business models. We still see companies sort of struggling to come up with, not profitable but, you know, insanely profitable business models based on open source software. What do you see coming out of all this? Is there a model that you think is going to work in the long term? >> I think the future is open source for sure and this is coming from a person who spent 25 years in proprietary software having worked for the larger piece here in vendors. 100% of my life has been dedicated to proprietary software. So whilst that's true I came at SUSE and the open source environment in a very different way as a customer running my proprietary applications on open source Linux based systems. So I come with a little bit different of a, you know, of an approach I would say. The future's open source for sure the way that we collaborate, the innovation the borderless means of which we deliver you know, leadership within our business is much much different than proprietary software. You would think as well that, you know the wall that we hide behind an open source being able to access software anywhere in a community and be able to provide thought leadership masks and hides who the developers and engineers are and instead exacerbates the thought leadership that comes out of them. So it provides for a naturally inclusive and diverse environment which leads to really good business results. We all know the importance of diversity and inclusion. I think there is definitely a place for open source in the world it's a matter providing it in such a way that creates business value that does enable and foster that growth of the community because nothing is better than having two or three or four or five million developers hacking away at my software to deliver better business value to my customers. The commercial side is going to be around the support, right? The enterprise customers would want to know that when bump goes in the night I've got someone I can pay to support my systems. And that's really what SUSE is about protecting our install base. Ensuring that we get them live, all the time every day and keep them running frictionlessly across their IT department. >> Now there's another model, the so-called open core model that holds that, the future is actually proprietary on top of an open base. So are you saying that you don't think that's a good model? >> I don't know, jury's out. Next time that you come to our event which is going to be in March, in Dublin. We're doing our SUSECON conference. Leave that question for me and I'll have an answer for you. I'm pontificating. >> Well I did and-- >> It's a date. The 12th of March. >> It's certainly working for Amazon. I mean, you know, Amazon's criticized for bogarting open source but Redshift is built on open source I think Aurora is built on open source. They're obviously making a lot of money. Your open core model failed for cloud era. Hortonworks was pure, Hortonworks had a model like, you know, you guys and RedHat and that didn't work and now that was kind of profitless prosperity of Hadoop and maybe that was sort of an over head-- >> I think our model, the future's open-source no question. It's just what level of open source within the sack do we keep proprietary or not, it's the case maybe, right? Do we allow open source in the bottom or the top or do we put some proprietary components on top to preserve and protect like an umbrella the core of which is open source. I don't know, we're thinking about that right now. We're trynna think what our future looks like. What the model should look like in the future for the industry. How can we service our customers best. At the end of the day, it's satisfying customer needs and solving business problems. If that's going to be, pure open source or open source with a little bit of proprietary to service the customer best that's what we're all going to be after, aren't we? >> So, there's no question that the innovation model is open source. I mean, I don't think that's a debate, the hard part is. Okay, how do you make money? A bit of open source for you guys. I mean, are you using open source technologies presumable you are, everybody is but-- >> So we're very open API's, who joined three years ago. We joined openapi.org. And so we've been one of the the leading ERP companies in the industry on publishing open API's and then we do a lot of customization work with our community and all of that's going on in GitHub. And so it's all open source, it's all out there for people who want it. Not everybody wants to be messing around in the core of a transaction engine and that's where you get into you know, the sort of the core argument of, you know which pieces should be people modifying? Do you want people in the kernel? Maybe, maybe not. And, you know, this is not my area of expertise so I'll defer to Melissa. Having people would be able to extend things in an open source model. Having people be able to find a library of customizations and components that can extend Acumatica, that's obviously a good thing. >> I mean, I think you hit on it with developers. I mean, that to me is the key lever. I mean, if I were a VM where I'd hire you know, 1000, 2000 open source software developers and say, "Go build next-generation apps and tools "and give it away." And then I'd say, "Okay, Michael Dell make you a hardware "run better in our software." That's a business model, you can make a lot of money-- >> 100% and we're, you know, we're going to be very acquisitive right now, we're looking for our future, right? We're looking to make a mark right now and where do we go next? How can we help predict the outcome next step in the marketplace when it pertains to, you know, the core of applications and the delivery mechanism in which we want to offer. The ease of being able to get thousands of mainframe customers with complex enterprise applications. Let's say, for example to the cloud. And a part of that is going to be the developer network. I mean, that's a really really big important segment for us and we're looking at companies. Who can we acquire? What's the business outcome? And what the developer networks look like. >> So Cloud and Edge, here got to be two huge opportunities for you, right? Again, it's all about developers. I think that's the right strategy at the Edge. You see a lot of Edge activity where somebody trying to throw a box at the Edge with the top down, in a traditional IT model. It's really the devs up, where I think-- >> It is, it is the dev ups, you're exactly right. Exactly right. >> Yeah, I mean, Edge is fascinating. That's going to be amazing what happens in the next 10 years and we don't even know, but we ship a construction edition we've got a customer that we're working with that's instrumenting all of their construction machinery on something like a thousand construction sites and feeding the sensor data into a Acumatica and so it's a way to keep track of all the machines and what's going on with them. You know, obviously shipping logistics the opportunity to start putting things like, you know, RFID tags on everything an instrument to all of that, out at the Edge. And then the issue is you get this huge amount of data and how do you process that and get the intelligence out of it and make the right decisions. >> Well, how do you? When data is plentiful, insights, you know, aren't is-- >> Yeah, well I think that's where the machine learning breakthroughs are going to happen. I mean, we've built out a team in the last three years on machine learning, all the guys who've been talking about Amazon, Microsoft, Google are all putting out machine learning engines that companies can pick up and start building models around. So we're doing one's around, you know inventory, logistics, shipping. We just release one on expense reports. You know, that really is where the innovation is happening right now. >> Okay, so you're not an inventor of AI you're going to take those technologies apply 'em to your business. >> Yeah, we don't want to be the engine builder we want to be the guys that are building the models and putting the insight for the industry on top that's our job. >> All right Melissa, we'll give you the final word and IFS World 2019, I think, is this your first one? >> It's my first one, yeah-- >> We say bumper sticker say when your truck's are pulling away or-- (laughs) >> A bumper sticker would say, "When you think about the future of open source "think about SUSE." (laughing) >> Dave: I love it. >> I'd say in the event, I mean, I'm super-impressed I think it's the group that's here is great the customers are really enthused and you know, I have zero bias so I'm just giving you my perspective. >> Yeah, I mean the ecosystem is robust here, I have to say. I think they said 400 partners and I was pleasantly surprised when I was walking around last-- >> This is your second one, isn't it? >> It's theCubes second one, my first. >> Oh your first, all right, well done. And so what do you think? Coming back? >> I would love to come back. Especially overseas, I know you guys do a bunch of stuff over seas. >> There you go, he wants to travel. >> Dublin in March? >> March the 12th. >> Dublin is a good place for sure so you're doing at the big conference? >> Yep, the big conference center and it's-- >> That is a great venue. >> And not just because the green thing but it's actually because (laughs). >> No, that's a really nice venue, it's modern It's got, I think three or four floors. >> It does, yeah yeah, we're looking forward to it. >> And then evening events at the, you know, the Guinness Storehouse. >> There you go. >> Exactly right. So we'll look forward to hosting you there. >> All right, great, see you there. >> We'll come with our tough questions for you. (laughing) >> Thanks you guys, I really appreciate your time. >> Thanks very much. >> Thank you for watching but right back, right after this short break you're watching theCube from IFS World in Boston be right back. (upbeat music)