>> Live from Washington, D.C., it's theCUBE! Covering Inforum D.C. 2018. Brought to you by Infor. >> Good afternoon, and welcome back to the Walter Washington Convention Center, we're at Inforum 2018, here live on theCUBE, John Walls with Dave Vellante, and it's a pleasure now to welcome the CEO of Infor, Charles Phillips with us. Charles, good to see ya! >> Good to see you guys again, another year. It's great, it's great. >> Yeah, I tell ya, you are a man of demand aren't you? I mean, tell me about the week so far for you, how it's gone, and just your overall thoughts about the show? >> Yeah, it's been a fun Inforum for 2018 here. Great attendance, and a lot of energy level, and the common feedback we get is you guys just keep innovating and bringing new things, this is great, and that's why they come, they want to see what we're working on and kind of dream the art of the possible. We know what you, what we think you get a couple years ago, but if we don't have someone pushing us and painting a picture of what we could be doing, and we just think we might be missing it, so we want to hear it first hand. So that's what the conference is about, and hopefully they got that. >> Well, certainly thematically, human potential, you talk about that, you see that on the keynote stage, that's been a very consistent theme with our guests here, we've heard that a lot, you hear it down on the show floor. Talk about the theme if you would, a little bit, in terms of it's development, where that came from, and in how you think that's being expressed here this week. >> Well, we're one of the few companies that build mission critical operational systems, be it manufacturing or hospital operations, but we're also in HCM in a big way. And so we were talking to kind of both sides of the house, for some applications you're talking to the line of business manager, but for HCM you're talking to the CHRO, and rarely were those two people talking, and we saw obvious synergies. Don't you want to know how your people are doing, how to allocate people, and how they're performing, how they're changing the outcomes on a manufacturing floor or in a hospital, and a lot of HR directors weren't thinking like that because they think of HR, and they have their own world, they go to HR conferences and that's it. And the manufacturing guys are the same thing, and so we're trying to bring these two worlds together and say "Actually, you're in the same business, it's the same goals, and you actually could help each other a lot." And so by focusing on putting the employee at the center of all these applications and mapping all these operational processes to HR data, it's a different way of thinking about the role of HR. They can actually help drive the business, not just be an administrative function, and so it's resonating with a lot of the CHROs we met with, 'cause they want a seat at the table, they want to be more strategic, and this is a way for them to do that and at the same time the operational people want to know how their people are doing, want to develop talent, and want to know what are the tools out there I could be doing differently, and how am I doing, and which employees are working the best So, I think we can bring both sides together. >> So I first met Infor through AWS, at re:Invent, Pam Murphy came on, and we were like Infor? Back then it was like 2012, 2013 was kind of Infor who? And then we were invited to New Orleans, and then started to learn more about your micro-vertical strategy and a little bit about the platform, it was somewhat opaque to me. And now, fast forward last year and this year it's really starting to come in to view. The OS, the platform vision, the Birst acquisition, and of course Coleman, and I'm a sucker for platform plays especially when there's real R&D behind it that's actually having a business impact. So I wonder if you could talk about that piece of the strategy, I love the stack, was that sort of always your vision and now you're getting aggressive in it, did it sort of come together serendipitously, how'd we get here? >> Having our own stack and a platform was always the vision, but it's a lot harder to do than it sounds like, and it takes time. And so, when we arrived almost eight years ago, there were different applications, all had their own separate stacks and would say "This is not going to work." So, we need, just to be able to scale, to be able to serve multiple industries with different products, we can't have every development organization building their stack as well. So we set about taking that away from the development groups we're going to do this as a shared service, but it takes time, and as we build it you will adopt components of it. So what's changed is we've built out the entire stack, so, starting with ION, with integration, then we added document management, workflow, analytics, now AI and a lot of other services, Mongoose, platform as a service, on and on and on, in collaboration, those things took time, they're all on a single platform, federated security, single siloed across it all, and now it makes the developers job who's developing apps so much simpler. So they have Infor OS for the immediate platform, for cloud services they have AWS, I don't have to worry about any of those things anymore, just go and develop industry functionality. So, it's come together nicely, but the fact that we had the time to do it and the money to do it, and we weren't public, and we told our investors "This is the only way this is going to scale, this is the future, and it'll pay out later, you just got to trust us." And now that we've gotten there, they're seeing the synergy and go "Okay, now we see why you did that." >> So, Michael Dell's been on theCUBE many times, he used to talk about the 90 day shot clock, we obviously see what he's done in terms of transforming; but I want to talk about your business a little bit, because you've had that patient capital, I mean you're a quasi-public company in the sense that you do report so we can see the numbers on the income statement, but the income statement doesn't really tell the whole story It's about three billion in revenue, several hundred billion dollars on the balance sheet, but if you look at the SaaS component of it it looks rather small, maybe about 25% of the business, but from a booking standpoint I'm sure it's much, much larger than that. So how should we interpret the income statement in terms of the momentum in your business, where is all the action? >> So as a percentage of our sales, it's the highest of any of our competitors, so, about 70% of our new sales are on SaaS, we have about a $700 million SaaS business, so it's growing. There's nothing we can do about the maintenance piece of it, if it's related to perpetual, so if you take that out, it's a big percentage of our business. And over time the maintenance will turn into SaaS, so that's one of our big opportunities to look at that maintenance space and say "Move those over to cloud customers." and that's usually a financially lucrative thing for us to do, because we do even more for them, because they usually add on four or five other products when they move, they replace these third party products and so we get a bigger suite of products if they decide to move to the cloud. So that's part of the strategy, that's what UpgradeX is, let's move you from on-premise, so that maintenance revenue will turn into SaaS revenue, but bigger SaaS revenue over time. >> So let me make sure I understand, so it's not the classic case where you see a lot of software companies that are going from a perpetual model to a ratable model, you're goin' from a maintenance model which is ratable to a ratable model which is SaaS, but there's cohorts sales which increase the top line, is that correct? >> Exactly. So usually, because of what we do, we're doing something mission critical. So if you're going to take that, then you should do ACM financials, all the other things around it. So why would I move to core and leave the edge on-premise? So, almost by definition we have to do the whole suite. So when we do that it expands the deal, 'cause on-premise we may have been one vendor with 30 other ones existing, but the whole reason they want to get out of all of that is to move to the cloud and simplify. So we can't take all that with us, so we have to have the full suites, we've built that now. So now we can move them, but, it expands the size of the deal because we're replacing all these other products. >> Okay, and then some of the stats, just correct me if I don't get this right. Your SaaS business grown 50% faster than Oracle's, growing at a rate, I'd say 2X SAP's and a rate comparable to Workday, are those correct figures? >> Those are correct, and profitable. >> Oh, and profitable. >> Throw that in. (all laugh) >> Right, so okay. And then last year Koch Industries invested, so you kind of recap the company, you've made a big deal about that. One of the things that we've noted is you're seeing a tailwind there in terms of guys like Accenture and Capgemini, we've asked them "Do you guys service Koch Industries?" they said "Yep!" they helped us see the opportunity, and they said "Look, look for something substantive, we're not going to try to force you to do something, but we want you to take a look." So that's been helpful. Talk about that and maybe other things Koch has brought to the table? >> It's a, the relationship with the integrators is evolving, it probably was not a plus for us in the first four, five years. More recent years we've won enough deals where they had to say "Okay, we can't keep losin' these deals." And where they wanted to get engaged. Koch helped, because they had relationships and they wanted to run that business, that's why they're implementing our products globally, and so, they're a large customer for all of these guys, and one of the largest for Deloitte for instance, but what's really more-- that helped, but it was more the, what was happening in the market, the fact that we're in a Liberty Steel and replace SAP, or that we're in a Travis Perkins interview with SAP and Microsoft, so, if you're on the wrong side of those deals enough times your manager starts to ask you what's goin' on, and you got all these people on the bench here, okay, we train them for Infor if they're winning in that region, or in that industry. So, we just had to earn our way into it, our initial strategy was not one that, at least on the surface, looked like it was integrator-friendly because we were trying to take all those mods they like to do and put 'em in the product, and that's the whole thesis, let's the take the vertical industry features and let's put it in there once, I don't want everybody customizing my apps, we do that. And so now they've had to move up, okay we can do other things, configuration, changed management, there's AI, there's other things you can do, but you're not going to do that. So now that they've accepted that, there's a basis for us to work together, and, it just had to take time to get there. >> What can you tell us about where you want to go with this? I mean you've presided over public companies before, you know that business well, you were a rockstar analyst, is there an advantage to being a public company, is that something that you eventually want to do? >> I would say there are pluses and minuses, our board is evaluating that, that's going to be their call. The upside is, it would solve probably our biggest challenge which is brand recognition, almost instantly, because would be a top 10 tech IPO. It makes it a little easier to hire people because they can see public currency, they can value more quickly, and it gives you some acquisition currency; so those are the positives. But then you're on the 90 day cycle, and we're kind of on that anyway, 'cause we report publicly and we have publicly traded bonds. So for us it's, in some sense we have the worst of all worlds, right? We have the discipline of being a public company, and the scrutiny, without the capital, (laughs) and the branding, so. I think that's what everybody's evaluating. Every bank on Wall Street's visiting us telling us to go now, the window's great, you have the numbers. >> Oh, of course. (Dave and John laugh) >> And so, so we could do it, I just don't know what their decision's going to be. The advantages to being private as well, you have a little more flexibility obviously, and, we don't need the capital, we have plenty of capital coming from Koch and others who want to invest. >> Well, the flip side of that too, is you get to write your own narrative, right? >> Yeah. >> I mean, we're talkin' about the nuances of the income statement, the Street is obviously right now hooked on growth heroin, and if you got the transition in the base it doesn't become a tailwind, so, no rush from that standpoint. I want to pivot to the theme of this event, which is the human potential. My understanding is you sort of were instrumental in coming up with that. HCM this year got a big play on stage, where's that come from? >> Yeah, just as I talk to CEOs who are struggling to find talent, like I mentioned on stage 6.7 million jobs that are unfulfilled. It's not like we don't have people here, we have people here with their own skills, so, you're not going to fill those jobs any other way, we're not doing immigration to any degree and scaling more, that's been shut down. We have an aging population with the baby boomers, so the most logical thing that you would do is train people who are already here who want to work. And, let's take people who have jobs that they probably aren't thrilled about, and give them different skills so they can fill these 6.7 million jobs. So to do that, you have to make these applications easier to use, and I felt like we're probably in the best position to do it because we actually know what they do for a living, 'cause we wrote all those last features in those industries, we understand what they do. And if you're just doin' HR replication or financials, you actually have no idea what they do. So, we had to learn those jobs to automate those jobs, so we can find ways to use our HCM applications to better train people, professional development, coaching, take all these HR skills, and put them as part of the applications in the context of while you're working. >> We had Anne Benedict on just a little bit ago talking about really a test case that you can be for yourself. So how are you putting these things to practice yourself, and how are you working out maybe some kinks before you take them out to somebody else? And so, you can leverage your own success for your own success, and also learn from mistakes too I would think. >> We do. So we have this program called Infor at Infor, where everything we do, we want it to be on an Infor product, which was not the case when we arrived. Like a lot of companies, a mish mash of different things, and so we've implemented not only HR Financials of course, Birst, but the big innovation has really been talent science, that every employee we hire has to take that test, and all the executives have taken it as well. And what we've discovered is, is that, when people hire and go against the talent science recommendation, 68% of the time they end up being wrong. So it's better at judging people than people are sometimes, and you can't use it exclusively, but it'll tell you these are the things you should look into, some questions you might want to ask, here's how they rate on certain skillsets, they're very well meshed for this job, they look like they'd see their best performance in this area, but ask these questions. And so people don't know how to interview and how to think about this, and so, having a guide to go into an interview is actually pretty helpful. We hire much better people now by using that. >> So it's like StrengthsFinder in a way? >> No, it's different from that, this is AI, it's kind of Moneyball for business people. >> Well you're talking about that today, almost there. >> Yeah so it's 39 personality attributes, behavioral attributes we call them, so, empathy, resistance to authority, do you have the ambition or not, and depending on the job, you think all those things are good, depends on the job, so. For some jobs, it's actually better to have low ambition because, a lot of our customers who have low wage, fast food service jobs, people who have ambition are going to leave in four months, right? They're not going to stay, so, okay we're not going to be here long, at least know that going in, and know who wants to get promoted, and other people are fine with it. And so it depends on the mix of skills, just like I said, 39 attributes, and for that job role, you tune it to the people who like that job, they look like this. And, we've also found that it's 60% more diverse when you hire using science, because you don't know that when you're looking at the data, what they look like. >> It must've been super interesting getting those reports. You took it, obviously right? >> Yeah I took it. >> How'd you do? (laughs) >> Uhhh, nobody really likes their profile. (all laugh) >> I was going to say, I imagine I would be really defensive about this, oh I don't know. >> This can't be right! >> That is not me! I am not like that! (all laughing) >> Every person on our executive team said the same thing so. That's what it's for is to, you have certain perceptions even about yourself, and it calls it out, right? And there's no gaming the system because the questions have no right or wrong answer, it just puts you in scenarios that you answer what would you do, how do you feel about this? You're not clear what they're trying to get at, and you only have 27 minutes or 22 minutes to do the test. >> So you can't game it? >> You can't game it. >> Data doesn't lie! >> And we built the science, we know when someones trying to game it, they're taking to long on multiples, and changing their answers too much, so it's-- And we've now, I think we've tested some 200 million people over time, over years, so we have 20 years of data about people. >> That's, I mean, sounds unique, certainly unique of being infused into enterprise software, I've not seen anything like this from another enterprise software company. Can you confirm that, or? >> Yeah, so, we're the only ones that do this at scale, there's a few startups trying to do it, but they're trying to do it all facial recognition which is, we think pretty ridiculous, we're trying to get away from physical attributes not use that. So there's a company out there doing that, depending on your facial movements, but this is, we're eliciting responses about your personality in response to situations that we give you, and have a bunch of scientists that crunch the data and they basically shape it to the job role. And they test your best performance, and you get a DNA profile for your best performance for that job role, and then, that's what you're matching, and it's highly accurate. So we had a company on the Las Vegas Strip use it, because they have to hire in volume a lot, and essentially what they wanted to do was get better blackjack dealers. You need somebody that's good at math, good under pressure, not too emotive, don't give away anything; and so we did that, fine tuned the test, they call us back nine months later and said "We need you to change the test." We said "We did exactly what you wanted, what happened?" He said well, the winnings went up 30%, but everybody's leaving the hotel in 24 hours 'cause they lost all their money, so we don't need them to be that good. (all laugh) >> Dial it down a little bit. >> Which we did. And so that's part of the service is we fine tune it, you tell us what your goals are, and we'll tune to that. >> That's a great story. The other surprise for me this week has been the emphasis on robotic process automation, it's a space that we've kina looked at. And a lot of people are scared about software robots replacing humans, but if you talk to people who are using RPA, they love it. It's taking away these mundane tasks, I didn't realize that you guys had such capabilities there? >> Yeah, so we built that as part of a Coleman RPA platform, and not only can we automate and use RPA for ourselves, but we've built a whole development environment for our customers to build their own, 'cause we can't think of every process that they might want to automate, and we gave that platform to our partners as well, so. We don't want them doing database schema work anymore, and they used to get paid for that, there's other things you can do up the stack in AI, here's what we want you to focus on. So we had that meeting on Monday with the partners, and they all agreed that's what we're going to do. But there's tons of mundane things that people shouldn't be spending time on, and they can be much more productive, it makes them more loyal to the company, they're enjoying their job more, and they're thinking and innovating more. So I don't see it as replacing people, as making people better. And giving that engagement that I talked about during the keynote, they're engaged now, because they can do things that are more value adding now. >> So, back to New Orleans next year? That's the first Inforum that theCUBE was ever at was in N'Orleans, and, jazz, you like jazz, obviously, right? >> I like jazz, I met with the mayor when I was down there, Mitch Landrieu at the time, and he became a customer after that meeting, so the city of New Orleans runs on Infor software, it's another reason to go there; so thank you. >> You've get--nice. >> Yeah, thank you Mitch, so that worked well. And so as a thank you we're going back down there, they're a big customer now, and it's always fun, you know what I mean, you know. >> That's great. >> Just, before you go, you mention, I watched in the keynote this morning, Brooks Koepka. >> Yes. So you're working with him. I do a little bit of work on the golf side as well, so I was just intrigued because, he's not the, well he's not Tiger, right? >> Yeah. >> U.S. Open Champion, twice over. What was the attraction to him, and then can you play in the golf world a little bit, and with those brands, and is that an entry into that world? >> Well, we always like to bet on the scrappy guy, the next up and coming generation guy, and that's kind of our brand that's what we are, the Brooklyn Nets, someone who's not quite there yet, but they're moving up, that's kind of our scrappiness, that's why we like the whole Brooklyn image as well. And we started talkin' to him, like I said, before he won the U.S. Open, because he was ranking pretty high, moving up, but wasn't well known. A quite guy, very personable when you meet him, we thought he'd be good in front of clients, let's bet on his career, and we're going to work with him; and literally three weeks later he wins the U.S. Open, we go "Okay." (all laugh) >> Good grab! >> We'll take it! (laughs) So, we didn't even think it'd happen that quickly, and now he's a rockstar so. We were planning on hosting a CX event with him, and, we're not sure how many people are going to come, but when that happened, now, everybody RSVP'd right away of course. So now it's doing exactly what we wanted. >> Do you play golf? >> I don't play golf, I just started playing, 'cause we were doing these golf tournaments with customers over the last year, but I haven't had enough time to get out there yet. >> I'll bet Brooks would give you a lesson or two. (laughs) >> Yeah, he, a lot of people want to lesson from him. >> Charles thank you >> Alright, thank you guys, >> for the time, great show. >> Good to see ya again. See ya in New Orleans. >> Thank you, yeah. >> Congratulations. >> Alright guys, see ya. >> Wonderful week here in Washington, D.C. Back with more live on theCUBE here from D.C. right after this. (bubbly music)