theCUBE presents an exclusive on the ground conversation with Oracle CEO Mark Hurd.  Mark sat down with John Fourier at Oracle's redwood city campus. >> Hello everyone welcome to a special presentation of theCUBE. I'm John Furrier   the founder of SiliconANGLE and we're here with Mark Hurd the Co-CEO for a one-on-one exclusive conversation , Mark welcome to theCUBE on the ground welcome.    >> Thanks John >> OpenWorld we were there with theCUBE >> So at Oracle and we were on Howard Street , we talked to 48 folks from Oracle executives and we learned a lot and we've been there covering it for six years and one of the striking things was Oracle's cloud message wasn't really well received by the press in the sense of they consider you kind of not in the top two. It's Amazon , Amazon it's this, that & the other thing. You guys had been doing cloud for awhile and I want to explore that conversation with you about Oracle's cloud your business startup landscape competition but one of the things that struck me was your interview on CNBC with John Ford he said are you determined to be in the cloud and you kind of had a shock back response and said determined we're in the cloud we're winning and quoted some stats give us the update you guys are in the cloud we watched that we learned that it's end to end what's the current status of Oracle's cloud play right now.    >> Thanks John,  well I think the way I would describe it numerically is not only in the cloud were a multi-billion dollar player in the cloud and so we started really several years ago in the application part of the cloud or SAS we've had tremendous success across the pillars of our SAS products or the pillars of applications in the industry we've added a platform capability or paths to that portfolio and now we've added infrastructure as a service so we're actually the only player in the cloud now today in infrastructure in pass and platform and in application so a complete portfolio differentiated by its by its scope and also differentiated by each of the pieces we believe to be Best of Breed and it's resulted in bookings I think that's out in the marketplace but I'll reiterated today. We'll book more business in the cloud  than this year than anybody else in the industry.  >> One of the things about the cloud that people love is the fact that it's fast it's got great economics but it has a scale component that customers are attracted too,  yet a lot of the folks who provide cloud technologies have different approaches.  Larry Ellison was on stage at Oracle OpenWorld saying he's long in the cloud game and you've reiterated that. What does that mean you know and the business folks out there they love this but they don't want to have different technologies that become outdated they want to have just solutions so every vendor's got different approaches why is Oracle well-positioned for this long win or the long players Larry's and you talked about.  >> Well first John we've been in this business a long time and so the fact is I think nobody's provided solutions at the depth and breadth that Oracle has over the past 20-some years so we've got a lot of experience in this business and that experience really as at the enterprise level so experience is is deep. That said to your point most of our customers spend a lot of money on IT and most of them have to go do this themselves. One of the promises of cloud is all of the things you said plus the fact it's it's simpler it's easier and you're actually not you're actually moving your innovation from your IT budget to Oracle's R&D budget and that's very attractive not just economically, it is ,attractive economically to your point but it's very attractive now to get in an area like HR. We have almost 2,000 programmers coming to work every day feature stringing that application would you rather be doing that on your IT staff or have that done by 2,000 people coming every work today who's on our payroll not yours to drive your innovation. >> global. Cloud is a global phenomenon  >>  The other impact is Obviously the geographic regions is hear now that as a key table stakes but you know it also brings in some economics on the economy side. What's your take on the global economy outlook right now in the world right now and and how does that affect customers decisions and buying patterns you know right now >> If you look over and when you say right now I'll look at it over the past couple of years. Revenue growth across the global economy the S&P 500 is fairly flat so you've had about one percent revenue growth of the S&P 500 over the past five years or so. Earnings growth though is about 5% and you've seen that reflected a bit to a degree in the stock market and the run-up of the stock market over the past several years so with revenue flat and earnings up that tells you that people are cutting expenses people are being very careful what they spend in what they invest and that gets reflected in IT and you see this in the IT industry and some of the results of the companies in it so companies are very much being very careful what they spend. I think companies overall are comfortable with their cost structures. They wish they could grow faster and it becomes the reason why cloud not just as a technology but as a business approach in a business model is extremely attractive to our customers into the broader market >> So they were there see expenses they don't only have to spend aggressively but they need to perform as well so it's also top-line >> John, it's a bigger problem than that it's a bigger problem than that because I'm worried about cost but at the same time many of our customers face competition. They face competition from startups new entrants into their industries and so they have to be innovative so it can't be just cut cost for cutting costs sake because if they do they can easily get disintermediated from their customer from their market and therefore they wind up not being competitive so the attractiveness back to the point about innovation and cloud is yes it's it's lower cost it's better economically yes it's simpler but it also drives more innovation at the same time and it's really the combination of all these factors that do the trick >> I put a question on my Twitter feed and Facebook I was interviewing you and I got a question I want to read to you as it says 'Marks on the road constant of customers then coming back to the ranch to meet Larry and Safra and the teams,  what is he hearing what is the consistent need from his customers and CEOs he's talking to who position themselves'  what's the common thread what's the holy grail for the customer that you're hearing from from consistently in the pattern that you're seeing your customer visits?  >> Help us get from here to there and and I think when you know you're in our industry you get a lot of people talking about cloud you know let's go to the cloud well if you're if you're not in the tech industry and you hear that you're like what does that mean and and then more importantly how do I get there so it's easy for us to talk about you know where we are. Most of our customers are stuck in where they are today and most of that is an on-premise many of those are older applications their homegrown applications so the process of not just telling us telling them where they could go but how do I help you get there.  At Oracle again we feel uniquely positioned and we're not just big in the cloud multibillion-dollar cloud player but we have a heritage on-premise and I see that as a very very strong asset and the ability now to bring those two worlds together and help our customers operate some of their IT on-premise, some of their IT in the cloud and be able to work those move those workloads back and forth seamlessly. >> you know you understand the athletes world >>  Timing is everything you  play tennis, being at the right spot the right time is really the business focus with customers and so when they hear cloud or hey this is a new technology from Silicon Valley think how well is that real so this isn't not so much as scared of the Silicon Valley innovation you're seeing you know for Tesla innovating things like GM and Ford but a lot of mainstream businesses want to have an answer to their problems not so much the shiny new technology. How do you balance the timing of delivering new cloud technologies with that next big thing in R&D or what not I mean what's the secret and what do customers look for is the timing issue of having the right solution at the right time what's your philosophy on that what's your take on that >> Well of course you're right I mean the fact is you know as we sit here in the Silicon Valley we tend to invent words every couple of years they're gonna solve all of the customers problems cloud big data whatever it may be whatever your problem is we're gonna we have a solution for it and the reality is most customers want to solve their business problem they're concerned about growing their revenue they're just they're concerned about becoming more efficient with their processes and so therefore we have to help them get that done so to your point we have to come in with real solutions, our solutions are baked around things as simple as running your HR system. You know running running your core accounting your core ERP and your core sales organization and being able to be able to automate those applications. I think you'll see  a tremendous workload coming around dev test. You know 30% of all of IT for example today is really done in developing and testing applications, it's all done on premise, it's all done with very little governance around it,  that whole process. Think of that, if Enterprise IT is a billion dollars,  Dev-Test at 30% is let's see I think 300 million dollars. How efficient do you think that spend is? Let's pretend it was 50 percent efficient,  which I believe is very high. A hundred and fifty billion dollars of opportunity for our customers to no longer have data centers,  computers, operating systems, databases,  people and be able to move all that to the cloud be able to access all of that capability from the cloud build and test their applications directly from the cloud and if they even want they can move those workloads to their on-premise production for their on premise production applications. So these are tremendous opportunities to change the way we think of IT and your point the timing has to be right there has to be an openness and an excitement about embracing these opportunities and I think that time is now. >> on that because it can be scariest shit >> What are you hearing from customers into the cloud and and and they might hey Oracle you know all you know you have your stuff and I hear the shiny new toy in Silicon Valley new technologies but what's in it for me that's the customer I've but I think mentality what's in it for me my problems as you said what it what is that issue for that for customers for your standpoint how do you how do they get over that fear to take that leap will the parachute open when they go to the cloud that that's the kind of mindset the customer I hear and I thought to what >>   >> various different people that have >> Well I mean they're different opinions I think many of those initial perceptions are beginning to change so I think you're getting more customers more openness and we're sitting here in the United States I think if you went back to to Europe and Western Europe there was always concerns about various issues security etc data sovereignty many of those issues I believe we're beginning to tackle and to resolve. But at the end of the day that the the real excitement is about the core things we started with,  this just costs less, this is simply driving more innovation,  and it's easier at the end of the day, and those are three fantastic benefits for customers.  >> So now there's a new class of buyers entering the market your customers and some of them are younger and you know we see some of them don't have voicemail setup, they don't really use email. Is Oracle's success generational and how are you guys bridging the gap or if no how are you bridging the gap to reach these new demographic of buyers who understand mobile and cloud have some that love that some are kind of you know as I mentioned earlier crossing the chasm on their own but this new generation of buyers what are you seeing >> there are you seeing a new demographic >> are you seeing a new class of buyers?  >> So it's a complex issue you bring up because the new generation in people sometimes generalize about these generations called Millennials,  etc.   They are both employees and customers and to a large degree they interrupt much of the status quo they work differently they also buy differently. Now at the same time remember that our customers have multiple generations of workers and multiple generations of customers so this actually gets quite quite interesting.  So if you take workers somebody my generation I like to might think of self myself as young and I'm in the technology etc but that the actual data says I'm not and I still work I still work in a workflow basis I use pieces of paper like you have today and and I look at those pieces of paper.   Not my kids. They work differently. They also work more collaboratively they work in groups but now I'm still in the company and so are a whole lot of Millennials that work at Oracle so we have to put processes and tools together that not only deal with what I do but what they do and make sure that we can all then work together that's a lot of work that's a lot of technology and it's actually made the business problem that we're talking about harder. Same thing from a customer perspective those same employees that work differently, they buy differently and you better be prepared to engage them where they want to be engaged,  how they want to be engaged, and that gives an opportunity for Oracle to help our customers innovate to give them better applications, better tools to go >> meet those customers and employees. >> Brings up a great point I mean it gets getting more complex on the business logic and business model and also the consumption and technology but isn't IT supposed to get easier?  I mean it once was easy compared to what it seems to be now what's your take on that it's got to get simpler what's your strategy. >> part of the issue is the data set >>   First of all the part of the continues to grow so the data set continues to grow and that drives tremendous desire for more information this while in some degree more data creates complexity it also creates tremendous amount of insight. The things we can do today we would never have thought of 10 years ago I mean there are things think about, can you imagine the  world 15 years ago where we couldn't search for anything.   We didn't have,  think of all the tools we have today that we use every day that we didn't have think about it this way applications the average age of an application in this country is about 21 22 years old meaning they were built in 1993 1994 1995 pre-search pre-mobile pre- social pre everything,  that  we're used too, so as a result you have this really old infrastructure trying to support this this new world and that's part of the promise I think of these new applications. They're engineered with mobile integrated into the applications themselves,  they're integrated with collaboration tools from the ground up,  and this world will get continue to get easier.  >> One of the questions we're asking our on our wikibon analyst team to our surveys and our customers is which vendor will provide the value fastest for getting the most out of the data. This seems to be a question that's kind of buried a little bit in some of the conversations out in the marketplace but it seems to be consistent. The value of the data is seems to be really really important. Who's gonna build the tooling and the automation and the integration capabilities to maximize the data whether it comes from some integration on an iPhone or collaborative document or an ERP system it could cover them anywhere and or mixing and matching data that seems to be the focus what's your thoughts on that and getting the most out of the data and what is Oracle doing >> with that in that regard? >> Yeah well listen historically in our industry you basically had applications that produced data, you then taken that data extracted it from the transaction application and warehoused it or  marted or used whatever term you wanted to use, and then create a bunch of analytics through some very very experienced scientific users who then would distribute reports out to the rest of the company that's the history of sort of data analytics. I did that for a good part of the earlier part of my career and I would say things are changing now that those analytics have to have to move right next to the application itself, they have to become real-time,  they have to be integrated into the core applications.  So we see happening today in Oracle applications is no longer do you have to take data out of the application you have to integrate it directly into the application so you can now get real-time insights. The ability now to integrate structured data and unstructured data and do it in near real-time so that you can now make a decision on something based on early indicators and then merge it and integrate it with the core way that you run a company and that's how you'll see analytics evolve,  the ability to take massive amounts of unstructured data but it's not gonna be good enough just to analyze that unstructured data that's social data,  you're gonna have to be able to merge that data where the system that can now do something with it.  >> And customers telling you that there and you're hearing that from customers as well? >> to, I want data that allows me to make >> Listen the fundamentals come back the right decision at the right time with the right customer the right employee to optimize my business. How do I get through all of this massive amount of data that you've been talking about so that I can make the optimal decision at the right time to benefit my business. That's the key.   >> the trends in the industry that you're >> Let's talk about trends, competing in the technology landscape has been very robust over the past few years and specifically past three years. What's your take on the landscape now I mean obviously the table stakes that the bar that the bar to get into the game that they're at entry what is the technology landscape like today from your perspective as a CEO co-ceo of Oracle with your competitors and your customers >> Well I think the shift is significant to your point I think this forget the overused term of cloud but that method of computing at the application layer the platform layer and the infrastructure layer is clearly where this industry is  Oheaded I made a presentation at OpenWorld that I felt by 2025, I predicted that 80% of that workload will be in the cloud. And I think I associated I made this statement then that I may be slow,  it may go faster and and that shift has a seismic impact on on our industry and it will happen and the reason it will happen is because of the reasons I've keep coming back to it when the customer can get better economics,  the customer can get more innovation, and they can get something done more simply, they're gonna they're gonna go do it . That's gonna cause losers and that's going to cause winners and that's why we've made the investments we have,  that's why we've built out all the data centers around the world that we have,  it's why Oracle has rewritten all of its applications from the ground up hundred percent >> all of our products now have basically >> 100 percent all of our been cloudified, they've been rewritten from the ground up to be cloud ready. And it's critical for us John because we believe this is and Larry started on this a decade ago so this isn't something we we thought about like 18 months ago and said hey why don't we go do this this this this came back a long time ago even before the term cloud was popular so it's this is this whole method and approach to computing which which which is key and frankly we started out getting into the SAS business the applications business and it was clear when you're in the applications business to really do that right you had to be in the platform business and then really to be in the platform business you had to be in the infrastructure business and that's why when you look at the barrier to entry John the ability to build out all three layers of the cloud the ability  R&D wise to do that or from a financial capital perspective to acquire all that good luck trying to do that then to build the infrastructure the data center infrastructure and the capital and remember John you have to do all this in advance think of it as to get into the cloud business from a IT perspective it's like building a hotel and you have to build a hotel before you can rent a room nobody can stay in the hotel til it's built think of that on a much bigger scale as being what it takes to get into the global cloud business >> So it's not winner-take-all it's winner take most or >> listen I was public in my view that I >> They'll be a couple of winners I think think that they'll be probably a couple of application providers I predict Oracle will be one I don't know right now today there is no other company in the industry who has got a complete suite of SAS applications Oracle's the only one somebody eventually will get will get that done I believe and I believe you'll have a couple of providers in that part of the industry I think probably likely at the platform level you have a couple of platforms that survive you'll also find the ability for those platforms to work together and I think like anything you'll see a couple of providers two three providers at the infrastructure layer >> Is Oracle a one big cloud or is it a company of many clouds I mean saw an  acquisitions this week, AddThis, and  I saw the word datacloud  sounds good great good marketing data cloud but it makes sense it's social data you see marketing cloud and social cloud you get in your are they a collection of clouds or does it matter is it labeling as the long tail distribution?  >> are clearly a set of capabilities in the >>  Well it's branding I mean they Oracle public cloud. Those capabilities are a marketing cloud a sales cloud they are not if you will architected as separate clouds they are built on as I said earlier they are architected on the same platform everything is built on Fusion Middleware common platform common base common infrastructure that can work together. >> You talked about in your prediction here that you know all data >>   You talked about in your prediction here that all  enterprise data we stored in the cloud faster and cheaper you also announced that pricing was or might have been earlier that cheaper than glacier and Amazon is that consistent the trend that you see pushing the price down lower and lower for the data storage.  >> think at the infrastructure layer we've >>   Yes I mean I looked at that world as more of a commoditized world that you know basically the infrastructure is a service there you're selling compute and you're selling storage and we think that market will continue to decline in in price and we expect to be very aggressive with our pricing in that market >> the cycle cycle styves kenzan flow as >> I want to get a take on startups we've seen in the 90s when I did my first startup it was really hard to get into the business you're the provision of data center buy router,  buy a Sun box at that time was very expensive it was also hard to get customers if you were starting up an enterprise customer in this case and then the world shifted easy to get customers with open source what seemed to be shifting back around where it's hard for startups to get enterprise customers because of the scale and integration challenges and the SLA is and the global requirements compliance and the list goes on and on do you agree with that statement or do you see it differently that it's gonna be harder and harder for startups it might be easy to start building stuff but they actually come in and compete and win enterprise customers what's your take of the the appetite of >> and John you're talking about tech startups  >> or tech startups that sell say you know how cells store take and I've just invented an all flash array and it's kick-ass and it's gonna you know eat into Oracle Exadata and EMC and all these those guys and I'm gonna go sell it to GM or I have a software product that I want to sell to company so again getting into the enterprises used to be hard and then it got easy it seems to be getting hard again what's your take of the state of that >> a long a subject that's got that's got >> So again quite a bit to it I think first I don't think companies are gonna buy all stick on the application layer for a second and talk about application startups I don't think customers are gonna buy from a hundred different companies for their cloud applications I I think when you're looking at applications specifically you think about automating a vertical process but companies also have to work together horizontally not just vertically so I think in the end they will they will have fewer cloud providers I mentioned sort of to could a company have three or a four a couple best to breeds maybe but they're not going to have they're not gonna make the on-premise complexity and just move that complexity to the cloud this is an opportunity to make things simpler to your to your earlier point I think that's what will happen now we happen to be we acquire quite a bit as I know you know and so we actually get to look at a lot of startups and I would say you're right that that we see with many startups is they start off trying to as inexpensively as possible which is I don't think I try to do it as expensively as I could try to try to build a capability and then many run into problems with eventually scaling and being eventually being able to build out we see this as we as we are I think for startups one of the real attractiveness of the cloud is that no longer any of those costs you described a few minutes ago exist I can now go do the remember that dev test I talked about that dev test I talked about for the big company is the same thing you could do on the cloud you can go get Java you can get the Oracle database you can only use or pay for what you use no longer you have to buy a Sun server that you describe or get a license and you can build on the most industrial strength commercial capability in the world Oracle and you can do that now as a start-up and be enterprise-grade from the first piece of code you write. >> So being a world-class leader might be harder for start to crack that nut versus becoming part of an ecosystem >> think that's right I think what you said >> I is right and I was trying to address both I think as a start-up you have an opportunity to to build on on commercial-grade tools from from the beginning and I do think you're right that being part of an ecosystem almost assuredly will be necessary as this market matures.  >> week at CES before GM announcing >>  A lot of commentary this Lyft could deal with Lyft and big investments try to be like Uber and Tesla electronic cars to in-car entertainment so I'm going to say that the car is one big gadget smartphone Internet of Things device which is true that big data problem that brings up the question GM and Ford or incumbent leaders in Detroit and the automotive industry are shifting radically this digital transformation is that something that you see similar in other verticals that >>  Well I'll stick with that vertical for a second I mean that vertical has shifted dramatically over the years I mean it used to be those companies made money selling cars they no longer made money selling cars years ago they then made money on service now they don't make much money on service now it's going to become the services that sit in the car with those are entertainment services or whatever they may be and so it's gonna be very interesting in that industry how they innovate do they outsource those services to another technology company in the Silicon Valley or do those become the core differentiators of those companies and and it's it's going that disintermediation occurs industry by industry by industry we've now talked about tech and what the implications are for the cloud on tech same things occurring in virtually every vertical.  >>  So you said early it's you know they're an enabler or it's gonna freak people out it's it >> Well this is what happens with innovation when time comes this is why we've done Oracle what we've done.  We've moved as quickly to the cloud as we possibly could.  It doesn't mean our on-premise business isn't strategic and important to us of course it is and I think the combination of the two capabilities gives us a huge differentiator. But that said for us to move quickly was critical we think to our long-term success and that's why we've been as fast moving as we can and I believe that true in every industry.  If you spend doing words like balance protect all of those sort of verbs they don't lend themselves to long-term success.  >> Let's talk about the company now that you're leading with the team. The number one question I get to ask I was told to ask you was ask them how the Co-CEO job is going and I'd like to know what it's like in the day in the life of Mark Hurd with Safra Catz, Larry Ellison take us through some color around what goes on behind the curtain >>  No.  I think well first of all we've been together awhile so so this is not like a new new phenomena so we we think we have sort of a capability that we can do a lot of things at the same time I don't know that that there is a broader team in terms of experiences I'm not trying to say we're great or try to be arrogant about it at all but it gives us the capability to touch a lot of things at the same time.  I've been a CEO multiple times and I can tell you it's a lonely job it's a hard job and it has a lot of responsibilities associated with it the fact that you can get a team that brings with it different skills different capabilities and you get the right personalities that that blend together that's that's a blessing and if you can get it take it . >> That's not just at the top tier of the management team also it's a >> company's pretty strong you know it's a >> I'm glad you brought that up John because I get questions like that a lot about Larry or Safra or they get questions about about all that but the reality is we're 140 thousand people in this company so we're a we're a large company with an enormous number of talented people I mean Thomas Kurian who runs our software development organization John Fowler runs our hardware development organization Dave Donatelli are people running regions we have we have a lot of very very skilled people come our Chief Architect Edward Screven I mean we just have a lot of depth at >> oracle and so it's a lot bigger than >> And the newly hired Dave Donatelli who is a shark when it comes to infrastructure he is strong and how's he working out I mean how's the that's a big >> listen and Dave is really leading the >> I think Dave's done great I mean product management go-to-market efforts around all of our all of our systems team which is going through its own transformation because we see the way infrastructure is now being used today and it's going through a lot of changing and Dave's just a great addition to Oracle >> He should me he knows it he knows the EMC playbook and certainly they have their challenges so I ought to ask you a question another one is that the hardware middleware market is about integration you mentioned that horizontal integration how how challenging is that for you guys and is this part of the transformation message that you guys have done internally because you're asking customers to transform and so can you give an example where you've transformed yourself >> Well when you talk about the middleware market I actually you mentioned the middleware market at least in some of the transformation I actually think with all of the data that we described earlier the opportunity to integrate that data and to integrate that data in the cloud is a huge opportunity for us we introduced an Oracle OpenWorld integration cloud services Oracle integration cloud services and the opportunity now for us to bring that to market and bring that capability to customers you know fantastic opportunity >> Let's talk about competition my favorite subject HP split up EMC sold to Dell , IBM is trying to make a run at it what does all this mean for the marketplace and specifically customers because you know those are big those are big companies that are transitioning or struggling as I'm saying what should what does all that mean connect the dots for the industry dynamics for those >> Well I think the industry our industry is no different than any other industry it's looking for revenue growth it's got leaders that that are are being driven to to grow revenue to grow or means to grow cashflow and in many times when you realize you you can't do that or they they find that they they're not in a position to do that they change and and change is inevitable and that's all you're seeing here is the change of what we described earlier you've got a certain market that behaved a certain way for a long time that market is now interrupted it's going to cause certain people to fail it's going to cause certain people to combine and as a result that change is going to occur and if you're not able to do the things I described the things that Oracle's done so if you will cross the chasm then change is coming and I don't think >> you've seen the end of it John. >> And a lot of these folks made big bets years ago going back a decade what bets do you see not paying off and what bets should people be making to be competitive in this new era >> believe what I said about our strategy I >> Well I think if you're not first in the cloud to begin with you're not gonna be long for this industry point one point two if you don't have enough breath in the cloud and you're just a single player with a point solution you're probably not long for this world so in the end companies want more from fewer people they want help with innovation they want better economics and that's going to prove in the end to come from a few companies in my opinion I think you'll see the same cycle that we've seen before that you'll see companies that frankly remember if you went back to the 80s think about how many great companies were in this industry in the 80s when I started in the industry I'm shame to have to admit that a shame but I hate to have to admit I'm old enough so I started yeah and therefore you look good well they're all gone yeah I mean Wang is gone the Digital's gone Data General is gone this Prime Computer is gone I mean this happens a lot and and this is just us going back to the future where we've got an interruption in the industry it's gonna cause winners and losers and it's the reason John that we've made the investments we've we have we could have easily done none of this invested none of this capital and harvested our existing business and it would look great for a while yeah not long run.    >> Yeah and you and you guys invested in the future at the right time seems it's working great for you guys the numbers are good how do you invest in R&D of some of the numbers in the cloud in terms of revenue book asking . l >> don't we don't give out you know all of >> Welll we our data forward-looking projections but what we did in our last quarter was we talked about our growth in the cloud virtually double our bookings year-over-year we've now got a chance to be in the ball well I won't give numbers out right now because I was already gonna make a forward projection but think of us now as multiple billions of dollars in revenue in  PAS platform and SAS growing and as our revenue has grown John our growth rate has actually gone up we say one more time the revenues grown and the growth rate has increased and so I think this comes down to the fact that we've just gotten better and better at this we've added more people from a salesperson perspective more of our products have become available in the market to the point of the percent of our portfolio that's now available in the cloud and we've now got lots of references and so it's an exciting time for us >> I've got to ask about Amazon Web Services obviously they've been going to have to work with our database and saying they can suck all that in and it'll come up in a second but I interviewed the former CTO of EMC who's now doing a storage startup on his own and he had a comment and I said well  Amazon's winning he says well we always debate what inning are we in in the industry and  Dave Vellante and I'm my cohost argued that he thinks were in the seventh inning I think we're in the first inning and so the guests said no you guys were both wrong,   Amazon won Game one of the doubleheader Game two is about the enterprise and it's not even started so I wanna get your thoughts Amazon certainly did well and doing well and numbers are pretty clear with public cloud now they're aggressively moving into the enterprise and it's just different ballgame talk about the dynamics their vis-a-vis Oracle you're targeting much more business approach understanding the IT side of the business Amazon is kind of do-it-yourself you know launching new stuff every day what's the distinction between the two some love Amazon people love the success you know good job Amazon people you know we cover them we like them they have a good product but it's not the end game to your message what's the difference in the two >> All right I'm gonna stay away from all the baseball analogies I think that they nstarted out as a retailer they had an IT infrastructure to support a retailer I think very clever they needed a lot of IT capacity when retail season was at its height during the holidays they said we've got a bunch of used capacity during other parts of the  un year we'll go rent it to people so they can leverage it makes sense now as you start to move into other workloads as you start working into enterprise workloads and dealing with all of the issues that come up there are more complexities to come up I think that we are in the I'll just say early stages and and by the way remember one thing I mentioned to you I think earlier just before we started and started this interview it doesn't take much of a change in it to have a dramatic effect on the revenue of the industry so I mentioned earlier about this dev test thing 30% of the industry three hundred billion dollars if only 5% of that moves its 15 billion dollars 15 billion goes from somewhere some companies that are supplying that today to somebody else and that's the very beginning of this see I actually don't think very little of this workload today has moved compared to what it will be five to six to seven years from that so - from that just a sheer numerical dimension we're in the very beginnings the very early phases of this the ability to get the bulk of this market is the ability to move massive amounts of workloads from some of the most complicated jobs >> so we're just scratching the surface of what it means >> just beginning >> ok so talk about the customers that you have because you have a lot of customers you guys have a zillion customers Oracle is a dominant player for many many generations of IT and computing we've seen that but I'm sure some of them have Amazon presence or they're kicking the tires doing some shadow IT through some things how are you guys do that because you kind of partner with Amazon on one hand but you also have cuffs cuz you have customers there how is how is that conversation going with Oracle and Amazon you say hey whatever or is there >> no I think that customers can chose to take their Oracle licenses and run them on Amazon they can also get those same capabilities directly out of the Oracle cloud we can take jobs between Amazon and Oracle and have them work together so it's it's really the customer's choice as to what's best for the customer my general view would be that if a customer is doing a platform job writing an application in Java I'll probably get infrastructure from the same person I'm getting Java from so I'm more likely to buy that infrastructure from Oracle if I'm buying that application from Oracle or using that platform from Oracle but if a customer says I'd really like to do my platform job on Oracle and store some of that up on Amazon that's customer's choice >> Okay Amazon is on the list of competitors Larry said one of the things is seeing new competitors he's SAP and IBM now new names yes Amazon, Microsoft Azure seems to be doing well we don't see vmware on that list yet but i mean as you're speaking in a little bit of some of the other players market share and cloud people have different cloud visions Amazon certainly has their in incumbent business Microsoft's what's your take on them visa vie Oracle which one Microsoft Microsoft Microsoft for that >> I'd say Microsoft done a good job I think Microsoft has moved its it's estate to the cloud not very dissimilar from from Oracle their applications is Microsoft the competitor of Oracle I think the answer to that would be sort of but but in many cases not directly their applications are really different from our applications my guess is many of the people using infrastructure from Microsoft are using infrastructure because they use their IP and their platform and/or their applications so I think therefore they they're doing the job that strategically that you see Oracle's multiple billion dollar cloud business doing as well which is moving many of its core capabilities from on Prem to to to the cloud they also have the capability now to merge and on Prem business and a cloud business which again I think it's a really key differentiator as we move forward >> differentiation seem to be dependent >> It seems to be the upon what people had or have going on either past or present so with that there's different approaches so I got to answer the question I'm a customer pretend I'm a customer hey Mark how do I evaluate all this stuff in the day is this like I need a matrix of like who's got one no wonder one's got checkboxes what criteria should I use to decide who >> I think John it comes back to the core stuff of you know who's got the best stuff you know whose stuff really in the end does does the best job for you starting at the application layer through through the platform layer through through the infrastructure layer and then the fact that you can now get this stuff in the cloud is a huge advantage for all the reasons we've been talking about for the past past several minutes but it's still gonna be about who's got the best IP but whoever's got the best IP in the end probably matters - I mean you know performance security I can go through a lot of other issues John but let's start with who's got the best IP I promise you promise you we will perform from a performance perspective I promise you we will have the best security now that said so a customer has done a license on Amazon Web Services are certainly probably doesn't run as good as an Oracle listen I mean obviously I believe the IP you have I believe that we're pretty good at running Oracle workloads I actually believe we're the best in the world at running Oracle workloads and and and and and I think you're gonna see that get yet even better as we >> I can attest theCUBE  interviews on the 48 interviews we did it was pretty clear that Oracle is very well optimized for Oracle on Oracle no doubt and clearly the performances order of magnitude significant >> and our cloud will also be capable of >> But John let me add handling non Oracle workloads so you know we think in the end while we'd love the whole world to run on Oracle we believe there'll be a portion of the world that doesn't and the fact that you can run those capabilities on the Oracle cloud along with your Oracle workload becomes critical as well >> Yeah I want to drill down on that because one of the things that I've observed over the past decade and past five years in particular there's been kind of a Oracle huge community because you have huge customer base but it's always been like you know redstack its proprietary and it's kind of like some whether it's truthful not that's been kind of a narrative but now it's with my sequel you got a lot of open technologies this Oracle OpenWorld it became very clear that integration it's not about redstack anymore referring to Oracle's you know their boxes and brand it's Oracle runs great on Oracle but if you don't have Oracle  you can still be an Oracle customer so talk about that dynamic this is a significant opportunity for Oracle news business >> You know maybe the narrative is the way you describe the narrative and you lowered your voice you know I got a certain impression and from the words you said now that said Oracle's always run hybrid workloads multiple applications around the Oracle database SAP runs in the Oracle database lots of applications run on the Oracle database so I think Oracle's always been if you will open from that perspective while continuing to build a complete stack now I'd make the argument that the cloud in many ways is of any cloud provider is a proprietary stack I mean insert name here is what is by the way that you know what the middleware is that Salesforce uses or the database or the middleware that Workday uses or day you can go down company by company and and at the end of the day you really though don't know what's behind that it is really totally provided to you by that provider and that is what you see being shifted in the cloud you can make the argument and this gets very into another interesting debate much of IT has been the do-it-yourself sort of approach I'm gonna if I will as an IT staff become an R&D organization and if you're a CEO and not a tech CEO but as CEO of a company with an IT organization you have to ask yourself is that really what I want to do do I really want to glue an operating system to a server build anything from scratch sure support it and do all this work and and or would I rather have somebody do it for me now as long as the economics are right and as long as I have trust in that in that in that partner and I'm secure and all the things we've talked about but at the end of the day transferring a lot of work that doesn't give me a lot of economic value add and moving that as I've mentioned earlier to Oracle's R&D budget I think becomes really attractive for a whole suite of >> I think it's great I'll rephrase the question so Oracle has a business as great business and you have customers they have Oracle software and contract value increases they renew they buy a new license new technology you grow your customer base but with cloud native what we with the web skills you pointed out a lot of companies were successful building their own stuff because they didn't have the cash but they had expertise so they would build their own caching and myself and they support it and pick up that cost but now as IT moves to cloud native that's a huge deal they don't want the build there also I agree with you you're looking at me >> I will say this and I don't mean to interupt you but there still is quite a debate in big companies and this is one of these transitions we've talked about the transition really from a tech industry perspective but inside the customer inside IT organizations the cloud is a threat so when you when you look at it as like the mainframe guys many computers were threatened exactly yeah so I'm now in an IT organization you know this do-it-yourself thing this is quite a bit of job security I wrote this application I've got to glue this to this and this is all really complicated and if you talk to a CEO and not get a non tech CEO and you say listen you really don't want to mess with all this because this is really complex and I'm the only one that really knows how to do this this whole thing work we're gonna transfer that complexity to somebody else has its own degree of threat to IT organizations so that debate you described that debate today John is still not over >> I think the Holy Grail whoever can provide a cloud native scalable turnkey infrastructure will probably of course you're right win that business of course right >> this is why these these these moves to your point about what in inor we in or what phase are we in these things have have multiple episodes so >>  are we in that cloud native phase right now are we for the for the new customer comes to Oracle hey you know what I'm I'm growing I've been doing stuff in the cloud with Amazon I've been doing this over here got my bootstrap data center I really want to go to cloud in a big way and we're growing leaps and bounds >> I'll stick with what I said we're in the very beginning of this and and we're in the beauty of this that the amount of IT John the suite of applications you go to any of these big banks in the United States around the world they have just sores of applications most of which were homegrown many of which sit on those mainframes you say we're threatened 25 or 30 years ago this whole move is a big set of moves that will take you know several years and you know use my discussion of 10 years out where I think I'll had it it'll take time like that to move now what customers are gonna want again one more time is I'm not going to be able to take that whole on-prem capability and just say thank you move it over here it's not gonna work so therefore the ability to move this thing job by job and then to be able to coexist these hybrid environments over a period of time become a become a key issue for our customers >> move at their own pace basically not >> so have them happy for examples and I think devtest is a as as >> I think customers I give you much work as has to get done to do that is is a sort of an intellectual layup I I think you're gonna see a lot of devtest move quickly I think you're gonna see applications particularly those applications that don't differentiate the enterprise customer facing application that you think is your unique sacred sauce you may keep that as homegrown on-prem but those commercial applications that don't differentiate me I mean me being the company I will move to the cloud as as quickly as I can >> Great excitement at Oracle OpenWorld this year the theme of integration and we talked to some customers and they were excited by that it's a big problem so that's that's one thing I'd like to talk about the second thing is what confidence can you share with the customers around new growth stretch I was the organic M&A and  organic growth versus M&A your a big buyer you're not afraid to go out and pay a premium for world-class IP but also you're doing IP internally tie those two together integrations the big themes continue to advance the product side as well as the growth strategy around organic growth and buying companies that might fit into >> Sure we spend a fair amount of R&D starting with your second question when I came I think we started spending 3.8 billion and in R&D we'll probably spend 5.2 billion this year in R&D so we we are we invest but not all of it is date we have a few hundred million dollars of our as well so we spent R&D and in in addition to the D the way I like to think about the innovation of Oracle is it's the D it's the art and it's what we acquire and so we have not built everything we've had very much a buy and build strategy we bought in some capabilities that we weren't building and we've merged those to create the portfolio that we have today and yeah we're not gonna stop that's continuing that's the cadence of Oracle right just continue yeah I won't put anything but I will so stop and I will say that we're very focused and and and not at all hesitant when we see something that we think is strategic to us to bring it in and add it to the portfolio you mentioned something early I want to drill down and horizontal integration and growth and vertical integration sometimes people think that mutually exclusive horizontal industry standard commodity hardware was a rage with open-source that helped grow a lot of the market and the web-scale days now vertical integration where hey it works it's kick-ass high-performance you are I don't really care what's in there it works Oracle support set is also working Oracle was kind of people were kind of poopoo in this whole appliance thing go back up you know five years ago good call working so by the way that is the same strategy that's called the class hey so when you really look at vertical integration the cloud is the ultimate in vertical integration because somebody's done now all the work for you when you buy a I try to explain this to customers all the time that when when somebody buys an application in the cloud they have actually procured a hardware database middleware services a data center floor space security they've bought all of that at the same time and so this this shift to the cloud really is the ultimate testimony to to vertical integration and horizontal they're not mutually exclusive you don't see them that's why I mentioned earlier what I said about why I think there will not be a hundred cloud providers supplying to our customer because integration we just talked about it in the vertical sense we want an HR implication that's completely integrated or in the ERP application that's completely integrated but those applications have to work horizontally as well as vertically so I would actually like my ERP application to talk to my HR application it might be nice if my marketing service applications talk to my ERP applications so I really can't I don't want to spend a munch of money on my IT staff horizontally integrating a hundred clouds I'd like somebody to do that for me and that's why having you know Oracle having the suite that we have in terms of applications platform and infrastructure is so important and that's really the trick balancing both really making that happen it seems to be you've got to do both I mean I'm a firm believer that you really have to have that full suite of capability ok so David lanthum IKOS and she'd want to get a question and so I told him I'd read a question for him he says and this is around the on-prem thing your strategy to create seamless experience between on Prem off principle is obviously your customers can't get there overnight how far along on the completion bar are you and your customers to achieving that vision of integration of allogram and off Prem and off prep seamless experience between seamless experience between off Prem and on-premise solutions today you can have an Oracle job running in the cloud you can have an Oracle job running on-premise with Oracle Enterprise Manager you can manage both jobs seamlessly and move workloads back and forth between on Prem in the cloud and you can do that today if we talk a lot about you know mainframes minis going back and looking at history total cost of ownership is a word that's been used in the computer industry going back to technology is a great way to justify things so let's talk about total cost of ownership but also want to get your take on what does patchwork IT mean to you that notion of patchwork IT in context well you've got a lot of terms you'd like to use I I would stick strategically what I said earlier I I think of much of what happened over the last seven eight years as a lot of do-it-yourself work whether you want to call that whatever term you want to use it the whole view of it for example in this valley if you drove up and down one you would see a slew of companies who individually are trying to sell you an IT organization of a company a piece part be sort of like driving up and down and buying a muffler and then buying a bumper and buying all kinds of stuff and putting it together in your driveway this is really now a shift in the industry away from you know patching together all these systems that are extremely complex and moving to a simpler more fully integrated tested optimized environment and it completely increases the complexity of tossa cost of ownership you said increases the complexity decreases the complexity and decreases total cost of ownership even in the industry through many cycles of innovation does that mean I'm old here at the peak of your career thank you very much people are freaking out some people are winning and happy because they're on one side of the disruption era or the other what does this innovation cycle mean to you right now compare and share your color a personal opinion around what's going on right now in the industry compared to other ones and then and how big seismic differences are there or there is it a big shift little shift compare contrast this much I think it's so exciting I think the most exciting things have in our industry in a long time I think the fact is this industry isn't now in a position and evolving into a position where we can really help customers we can get them out of this very complex world that we the industry have created and and like many industries simplify the way our customers get access to a fabulous intellectual property and make it easier and I think this is an opportunity that if you're if you're in this game if you're not listen let's face it out of colleges we haven't there we haven't had the excitement in the tech industry in years the fact is now with a new game to play this is a tremendous change with tremendous set of winners and and you know frankly there's gonna be the losers involved at the same time that's what makes it exciting and cloud is the better mark security was huge an Oracle OpenWorld I gotta ask you this question this came from a source on our wiki bond team top killer tech announcement Oracle OpenWorld was was security but with the Isis Massacre and the France thing the encryption has become a bad word was debated about four years encryption was a top topic in in the conversation that was a key message at Oracle overall everything could be encrypted beyond on encryption all the time as Larry said you guys are talking about what is the state of security right now with encryption and Oracle does that change your security angle with the products or what's what's going on with security right now so we're talking very much now about enterprise applications and and you know I think there's the cloud of all you know we we talked about this little earlier about the perception that I'm now going to take my data that is is very safe in my data center and on prime which we could debate and I'm now gonna move it to a cloud and therefore I feel vulnerable I feel vulnerable that my data is now in the hands of some other entity and and for us I think one big advantage Oracle has is the fact that that we're very good at data we've managed data since the beginning of the company I mean our first customer was yeah well in the CIA was our first customer they remain a customer today and so security has always been at the core of Oracle's DNA now the one of the reasons we have an encrypted database is four years is because when you encrypt them it the performance of the database actually slows so it's been years of evolution years in terms of Exadata development in terms of all the memory that's now I won't go into all the details of the technology but now we can fully encrypt the database and get incredible performance so what you have no hidden performance no I'm not you ready in great job none none incredible performance and the same theme you have an encrypted database now let me tell you what that means that means that when when a customer's HR data is in our cloud our people that are moving around the customers data don't see the customers data they see frankly gibberish they have files the key to that encrypted data can sit with the customer so when that those files come back across the network the customer can decide when where to use the key to open to open that encrypted file so therefore when you're in the Oracle cloud and I listen I encourage everybody ask our competitors how they deal with this ask ask them what their options are how do they deal with that data is is somebody whose nature or provider are there are there people looking at the customers data as they move files around well we've decided that we think the most important thing we can do is secure that data so let's pretend and by the way I don't think this would ever happen but if somebody actually got access to those there's nothing to have access to it's all encrypted talk about the implications for cloud on a global basis data sovereignty is a huge issue with cloud yeah does this impact at all there's a help it does no it does and so that's it's the reason we've had to one of one of the reasons that we've put data centers in many locations as we have so we do have customers that by law have operate in Germany and in the UK and employee data can't be of a UK employee cannot be in Germany and vice versa well we have we now have the ability because of our data center capability in Germany and our data center in the UK to actually make that capability work and so this this issue of data sovereignty like security is a big issue and you're helping the data sovereignty problem with this Robert yes we've had to address it we've had to address it we've had to embrace it and we've had to help it and it's the same thing with security so now you can have a fully secure capable capability in you know 19 20 different countries to help deal with that with that with that data sovereignty and security issue Barker thanks taking the time here for the cube 101 conversation thank you very much thanks John appreciate it you're watching special one-on-one exclusive conversation with Mark Hurd CEO of Oracle here on the cube on the ground here at Oracle's headquarters you

>> 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)

>> From the SiliconANGLE media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hi, everybody, welcome to this CUBE Insights, powered by ETR. In this episode of the Breaking Analysis, we're going to take a look at SAP. Thursday, October 10th, SAP surprised the Street, they announced early, they preannounced their earnings, and at the same time they timed that with the announcement that CEO, longtime CEO Bill McDermot was stepping down, his contract was up for renewal in January of 2020, and he decided that he's going to turn it over to a co-CEO structure that I'll talk about a little bit, so that was big news. Spending on SAP has been holding pretty steady over the last several quarters, I'll share some ETR data with you. It's been quite a run by Bill McDermott, he started out as CEO, I think it was February of 2010, as co-CEO with Jim Hagemann Snabe, and then two years later was named the sole CEO and I'll share some data on that in terms of the performance of SAP during his tenure. But the bottom line is, we expect, based on the spending data, some continued momentum from SAP, I'll show you some data that shows a little bit of a mix in the numbers, ETR basically just dropped a report on Friday that I'll share with you as well, but the bottom line is we see some major challenges ahead for SAP, specifically from a technology integration point that I'll talk to you, and it really is not showing up yet in the spending numbers, but it's something that we're keeping an eye on, and it's something that we want to share with you, our community. So Alex, if you wouldn't mind bringing up the first slide, here. I'll make some key points, really around SAP's Q3 earnings and the CEO news. So as they say, they pre-announced earnings on October 10th after the close, 10% revenue growth, which is a nice, healthy double digit revenue growth, cloud was up considerably, Bill McDermott made the big emphasis when he was doing the rounds on how their cloud revenue is growing faster than competitors, 33%, but definitely from a smaller base, but their license revenue, their traditional on-prem businesses continues to be under pressure and decline, it's got a, SAP is a strong services business, services and maintenance business, and they're up to 12,000 customers with HANA, I'll make some comments on HANA in a little bit later. This may have some implications for Europe, we've been saying that Europe is over-banked, that banking is soft based on the ETR spending data, so this may be a little bit of a bright spot for Europe. Of course SAP with its ERP business of strong manufacturing, anybody who has a supply chain, so this may be a good sign for Europe, that's something that we're watching. And then, say McDermott steps down, we're going back to the dual CEO structure. Jennifer Morgan, who headed the cloud business, is a longtime SAP employee, and she essentially is going to be taking that role of the customer-facing CEO. Christian Kline is really, has history as product development and HANA, he did a stint in finance at SuccessFactors, and is really an operations guru, so back to that dual CEO role that you saw with Snabe and McDermott, where McDermott was really the front-facing, sales-facing individual, and Snabe was the product person. So that's kind of an interesting structure, we see that, we saw that in Oracle before Mark Hurd stepped down with Safra Catz as co-CEO, so it's not a unique structure, although it's not, certainly not common in the industry. The next thought I want to share with you is one that you may have seen before, every time that ETR does a survey, and this is data, fresh data from the October survey, every time they do a survey, they take spending intentions and they ask folks, "Are you spending more, "are you spending less, are you spending the same, "are you adding to the platform, "are you subtracting from the platform?" So they essentially ignore the, for this net score that I'm showing you now, they ignore the people that aren't spending, that are staying the same, flat, and they take the more minus the less, subtract amount, you get a net score, and the net score here is 27%. This is not uncommon for, from the data that I've seen out of ETR for a large company established legacy provider like SAP. Net score 27% is not great, but it's a holding steady score, it's not in the negatives, it's not in the red zone, and so you can see here that 32% of the survey respondents were saying they're going to spend more, 54% basically flat, but only a smaller number, 6%, saying they're going to spend less, so it's reasonable for SAP, but if you look at the trendline, Alex, bring up the next slide, look at the spending trendline from the survey for SAP since the July 16 survey, they do this every quarter, and so the blue is the net score, that green minus the red that I've talked about in the past, and you can see that sort of steady decline, but this is not a disaster, what it is, is it's a sign of spending momentum relative to previous years or previous quarters, and you can see the yellow line is also declining, that's market share, what that means is market share in terms of spend relative to other initiatives, so the categories that SAP participates in, enterprise software, et cetera, spending on SAP relative to other sectors has been in decline. If you look at, Alex, if you bring up the next slide, look at the SaaS business, you'll see that it's a much happier story. SAP's made a number of acquisitions that I'll talk about in a moment, of cloud/SaaS players, so you can see their SaaS position has been holding firm, ETR cites Concur, SuccessFactors, Ariba, Callidus, they kind of remaining stable versus a year ago, and you can see the market share's kind of ticking up, so pretty solid from the new growth, that high growth area, and that's something that the Street really pays very close attention to. The next data point that I want to show you on the next slide is actually quite fascinating, so SAP beat its forecasts, so it didn't beat and raise expectations for the rest of the year, but so what this shows is ETR's regression analysis, what the quants at ETR do, is they crunch the numbers, and they compare them to the consensus on Wall Street, and they actually forecast higher or lower, where they think that earnings are going to come in based on their spending data, so you can see here that green, you see that little RPM meter, they're in the green, that's where you want to be, 359 basis points ahead of the median forecast, so they're saying, so the ETR second half spending 10.4% versus consensus of 6.8%, very positive sign. I think it's no coincidence that SAP records B for the quarter, so based on that data collected in that October survey, it looks like there's some momentum for SAP. Now the next slide I want to show you is the stock chart, this is kind of the scorecard, if you will, for Bill McDermott's tenure, and you can see, so I went back to 2010, as I say, he started in 2010, as a co-CEO with Jim Snabe, and then look at the performance here, I mean it's been pretty solid. And so you see today it's up around 10%, as I say, they announced the earnings beat, they announced their revenue beat, and they basically affirmed expectations, maybe raised them a little bit going forward. The reason why the stock is up is the beat, but also McDermott has put in place sort of an efficiency improvement and a restructuring. They've made a promise to improve operating margins by 1% a year over the next five years. They've made a promise to get cloud gross margins to 75% by 2023. They've done a restructuring, I think it affects around 4400 people, and they're hiring data scientists and AI experts and machine learning people, and RPA folks, they acquired an RPA company a while ago, and kind of just threw that in 'cause it's such a hot space. Software coders all around the world, China, US, Europe, all over the place. And so that restructuring, the Street loves when you restructure, you cut the dead wood, so to speak. With all due respect to the folks that might be affected by this, but the Street loves that. So you're seeing the combination of the beat, and the uptick or the efficiencies taking place in the quarter, and they timed that with the McDermott announcement because they wanted to, I'm sure, time it with some positive news, so you can see the stocks up today, so that's kind of a scorecard on Bill McDermott, I have to say, pretty impressive performance over the last 10 years, or nearly 10 years. But here's the thing, we see some major challenges coming forth with SAP, and I want to talk about that a little bit. Before I do, Alex, if you would play the video from Bill McDermott answering a question that John Furrier asked several years ago, and then we'll come back and talk about it. >> I had a meeting with the CEO yesterday, and this is a very common conversation. He grew his business by acquisition, and now he's got a federation of a whole bunch of companies, and he feels like a holding company. What he wants to do is consolidate these businesses onto a common platform. He won't do it overnight because you can't shut down businesses, but the vision over the next few years is consolidate everything onto one common SAP platform, and take all the databases out and standardize everything on HANA. >> Now here's what's ironic. The core success of SAP historically has been what? It's been that they have a single, unified system, the general ledger and all the financial data and all the supply chain data, all of that is in the same place, accessible, single version of the truth if you will. What's ironic is SAP's made 31 acquisitions in the last nearly 10 years under the tenure of Bill McDermott. So in a way, SAP is becoming a tech holding company, kind of picking up on some of the things that Bill McDermott said in his little clip there. In our view, SAP's big technical challenge is to get all this stuff working together. As you all know, it's nontrivial when you make a lot of acquisitions, billions and billions of dollars of acquisitions, which by the way, they promised to stop that torrid pace of multibillion dollar acquisitions, very difficult to pull those together. Let's look at some of those acquisitions that they've made, Ariba, Concur, SuccessFactors, SuccessFactors is interesting because SuccessFactors was kind of talent management, you had kind of core HR from SAP and it's kind of been a challenge to put those things together. Think about the legacy R3 and R4 and all the on-prem manufacturing stuff that SAP still runs, that customers still run. Acquisition of Sybase, Callidus, so... SAP's answer to all this integration is to put everything in memory in HANA. So the motivation for HANA, however, in many ways was to compete more effectively with Oracle and not have to rely so much on the Oracle database and get people off Oracle. But here's the thing that SAP didn't do that Oracle did do, and I think, my opinion, Oracle got right. Oracle did Fusion, they bit the bullet and did Oracle Fusion, it took the better part of a decade, it actually took more than a decade, but every time Oracle buys a company, and every SAS application that it jams into the Red Stack, runs Fusion middleware, and runs the Oracle database. So, it's not the case with HANA. So it's kind of an integration nightmare, it's very very complex what SAP has got handed to the new regime. I think this is a daunting task, and I think this might be in part why the timing of Bill McDermott stepping down, I mean he sees that this is going to be a heavy lift, it's going to need more of a product-focused leadership team, that's why I think it's smart that SAP has maybe gone back to that two-headed monster of two CEOs, one that's customer-facing and one that's more product-oriented and R&D-oriented because they have a major integration challenge ahead of them. So as I say, SAP has promised to stop making these multibillion dollar acquisitions, they got to get to work on integration, which is going to be a major portion of the task in the next five years, so spending data from ETR shows some positive momentum relative to consensus, now remember, the Street works in a quarter, so they're on a quarterly shot clock, so if the Street says, "You're going to do this for earnings," and they do this, well, that means higher EPS, so the stock's going to go up. If you do this and you come in below, that means the stock's going to go down, so these are very tactical kinds of things. We're talking here about more longer terms, this could be a five to seven year integration challenge if not more, remember, it took Oracle 10 years plus in terms of integrating Fusion, so that's something that you need to keep an eye on, especially if you're a customer and you're getting pitched all these different services and cloud services, just got to think about the architecture for integration. Okay, this is Dave Vellante with CUBE Insights powered by ETR, thanks for watching, we'll see you next time. (techno music)

from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hi everybody welcome to this special edition of cube insights powered by ETR this is Dave Volante and we've been running these breaking analysis segments and it's timely because oracle last night announced earnings ahead of expectations they were expected to announce today a Friday but they announced early ostensibly because Co CEO Mark Hurd is taking a leave of absence for medical reasons so of course we we wish him the best hope everything's okay with him but but but that looks like they pre announced or announced ahead of schedule in order to get that out of the way and prepare for Oracle OpenWorld Larry Ellison and Safra Catz are going to be filling in during mark heards absence but so this is a breaking analysis on Oracle's earnings I would call this you know can expect more of the same so Alex if you kind of bring up the financial overview of Oracle we'll dig into it a little bit so Oracle is a company with around 40 billion dollars in annual revenue it's growing it you know single digit growth maybe you know 1% of the top line last quarter they've got a large market cap 187 billion dollars so they consistently trade in the four and a half to 5x revenue range and they've got an outstanding margin of operating margin of 42% is very high you know their software company and very very profitable software company that is a non-gaap margin their free cash flow is also very strong they throw off about 14 12 to 14 billion dollars annually in a trailing 12-month basis in free cash flow and the other thing about Oracle I made this point many many times in the cube is Oracle spends money on R&D they spend about fifteen percent of revenue on on R&D they've got a lot of cash they got you know over thirty five thirty six billion dollars in cash and short-term investments but they of course also have a some long term debt over 50 well over fifty billion dollars in long-term debt now that doesn't bother me some people point to that as a concern but if you look at Oracle's EBIT it's many many times greater than its interest payments I think you know 3x is kind of the benchmark they're an Oracle you know whose well well over that de miel 6 7x be bit relative to its interest payment so that's really not a concern of mine but definitely is interest on the debt is oftentimes its tax deductible and so it can be a good source of capital it's cheap cheap debt and of course Oracle's got to compete with some of the cloud suppliers building out more data centers they just had an announcement in that in that regard and so it needs capital even though it you know it can't spend nearly as much as Amazon Google and Microsoft not even close it would take Oracle years and years and years to spend what what Google does in four months but but nonetheless they need cash to compete in their business Oracle's got a shifting business mix from kind of lower margin hardware you know the remnants of the Sun business and and really shifting to a higher margin cloud services and support Oracle has really gone all-in on on cloud again even though it's really it's cloud is not competitive with the hyper scalars but it's sort of the Oracle cloud the redstack cloud but in that that business is growing it's around growing at around 4% from a constant currency standpoint this past quarter it's shifting Oracle's shifting toward an annual recurring revenue model and it's license business is declining and so you saw that last quarter declined around 6% and you're seeing a major shift from on-prem to cloud with Oracle ERP cloud ERP is where the action is for Oracle and I'll show you some data on that from from ETR it's really fusion fusion ERP and NetSuite they're growing it you know combined well over 30 percent last quarter and as I say they get the news here is Mark Hurd is going on a leave of absence we got Oracle OpenWorld coming up next week and you know they're going to be talking about what we call cloud 2.0 Larry Ellison I'm sure is gonna be talking about autonomous database there's gonna be I'm sure some Exadata announcements and I'll talk a little bit more about why that's important now I want to share with you some spending intentions from ETR we've been last couple of months we've been sharing enterprise technology research data we've partnered with them to do these breaking analysis and these cube insights ETR has a panel of about 4,500 CIOs IT practitioners and they go out quarterly and do spending intention surveys and I'm showing you data now from the july 2019 survey focused on spending intention intentions for the second half of 2019 you can see the number of survey respondents was 1068 out of that 4,500 panel what this slide shows is if you look in the left-hand side you can see the the the products or the categories of spend so there's on the reading top to bottom fusion Oracle Fusion NetSuite Oracle overall and an Oracle on Prem so these are the categories some of the categories that ETR captures and what we're showing here is is the calculation of net score and I'll share with you how net score is is calculated so if you look on the left hand side you'll see the dark red that is we're leaving the platform the light red is we're gonna spend less the gray is spending as flat the dark green is we're gonna spend more and the lime green is we're adding the platform so if you take the green minus the red you get net score so let's look down as I said fusion and NetSuite are where the action is for Oracle you see the net score here is 14% for fusion 12% for NetSuite Oracle itself is 7% and Oracle on-premise minus 4 these are not great scores we shared with you just recently snowflake and its net score snowflakes and net scores you know 81 percent we shared with you some data are around UI path that's also 80 percent plus net score these are much smaller companies but they're growing very very fast and I'll share some other scores from Oracle competitors in just a moment I also want to point out the shared accounts what the shared accounts are is the number of mentions that these platforms received in within that n of 1068 so you can see the fusion and NetSuite in a relatively small at 80 and 87 but still statistically significant Oracle itself very very large you know huge install base 1329 and then Oracle on Prem at 282 so there you have it I mean this is not barn burning this to me underscores that Oracle is losing share and now and I'll show you that in context in this next slide so again same kind of format with the the net score calculation but what I've done is compared Oracle to service now workday salesforce an SI p now look at service now service now is a net score 53% with a number of shared accounts of 358 so a very large sample inside of that 10 sec 1068 I'll show you some time series at a moment service now obviously very strong company they get a valuation now that's up actually higher than workday believe or not we've talked a lot about the the CEO transition and on and on and on and we've covered the service now shows for many years but some very strong very strong install both growing their Tam it's a into new markets and so you can see their and their workday as well extremely strong now Oracle will often you know give examples of how its beating workday I think in the earnings call yesterday Ellison talked about how they beat you know workday at McDonald's you know when you peel the onion and those things oftentimes it's one division or but who knows you know it's very possible that that you know Oracle swept the floor of workday but but regardless workday is growing much much faster than Oracle it's taking share from Oracle despite you know the examples that Oracle gives Salesforce as well same with Salesforce it's growing much much faster than Oracle if you look at ServiceNow workday and Salesforce even s ap look at sa pees net score 31% which frankly we consider neutral and it's not like sa pees you know burning the bar and I they're but much much stronger than Oracle 7% net score so again I say it's some sort of more of the same Oracle its earnings are kind of mad I mean it's throws off great cashflow it's got great earnings but there's no growth there and and as a result you know people are down in the stock a little bit today and that combined with the herd news and then the stock should be down based on the earnings announcements a little bit of a disappointment or of course Oracle focus is on on the profit and today people are rewarding growth that may change and I'll talk more about that in a moment but before I do that I want to show you a time series so this is the same competitor service network day sales force s AP and Oracle all the way back to January 2017 the January 2017 survey so you can see that ETR takes these surveys in January April July and October they're just now running the the October survey so we'll have some you know up-to-date results there but you can see the net score is what I just showed you 53% 52% 44% for those leaders those growth leaders very very strong these are the share gainers s ap holding at 31% you can see Oracle down in the single digits each of these companies is actually kind of holding serve if you will but again ServiceNow workday Salesforce growing much much faster than the market growing much much faster than that Oracle so let me summarize look so again mark hard leaving a leave of absence for medical reasons Ellison Larry Ellison and Safra Catz are filling in for heard I'm sure you're gonna hear some more talk about that at Oracle OpenWorld this week Oracle's losing share in the enterprise software space despite what they tell you that's the fact they are a company around around cash flow EPS and stock buybacks that's how they're keeping the stock up it's an effective technique everybody does it Oracle make stuck in acquisitions here and there I've been very aggressive over the years and it's going hard after cloud it's an Oracle cloud it's it's it really is around their database which the Oracle remains the leader for mission-critical Database Oracle has the best database for mission-critical but it's under attack in all those non mission-critical areas with whether it's Mongo we showed you the snowflake data the other day I mean there's this dozens and dozens of database competitors that are going after Oracle at in the periphery but they remain the core leader in mission-critical database fighting it out with with with Microsoft and IBM and and others but Oracle is by far and away the leader their exadata is the key to Oracle's lock spec in our opinion because Oracle's got a fight for you know for straight database they've got to fight all these other database competitors once a once a customer decides on Exadata Oracle's Gotham and so that's why Oracle is putting so much effort into exadata I'm sure at Oracle OpenWorld this week you're gonna hear a lot about exadata and autonomous and all kinds of stuff that they're doing at exadata and try to make it a an increasingly competitive platform Orgel also has a very strong apps business and that's really the linchpin to its it's cloud its cloud in our view is not even closely competitive with with the cloud infrastructure at Amazon Google and Microsoft and those companies spend much much more on capex they have you know a much greater infrastructure as a service Microsoft's in Microsoft's case got very strong software estate at applications business Google a massive scale so from a just a cloud infrastructure standpoint you know really Oracle is is playing catch-up just like IBM is and probably will never catch up or go over all again it's sort of a story of man more the same until the market sentiment shifts toward cash flow and earnings its stock is in my view is gonna trade inside a range I'm not a stock picker I don't make stock recommendations but I'm you know kind of a fundamental analysis and observer you know I just don't see that that stock breaking out there's really no growth story there and the markets rewarding growth now if and when the market does turn down let's say there's a recession people will reward companies like Oracle you have the cash who can you know do the buybacks or companies that pay dividends and so Oracle holding serve making a lot of right moves you know Larry Ellison is you know leading the ship obviously a very smart person don't bet against that individual fact is they're losing share but at the same time they're running a playbook that's working and it's working from the standpoint of EPs and cashflow and I think that story is going to continue so they have it that's our analysis thanks for watching everybody we'll see you next time this is Dave wante with cube insights powered by ETR

>> From the SiliconANGLE media office, in Boston, Massachusetts, it's the CUBE. Now, here's your host, Stu Miniman. Hi, CUBE nation, I'm Sam Kahane. Thanks for watching the CUBE. Due to popular demand from the community, I will be interviewing the legendary Stu Miniman, here today. He is S-T-U on Twitter. Stu and I are going to be digging in to the 2019 predictions, and also recapping 2018 for you here. So, Stu, let's get into it a little bit. 2018, can you set the stage? How many events did you go to? How many interviews did you conduct? >> Boy, Sam, it's tough to look back. We did so much with the CUBE this year. I, personally, did over 20 shows, and somewhere between 400 and 450 interviews, out of, we as a team did over a 100 shows, over 2000 interviews. So, really great to be in the community, and immerse ourselves, drink from the fire hose, and some of the data. (laughs) >> So, over 400 interviews this year, that's amazing. What about some of the key learnings from 2018? Yeah, Sam,my premise when I'm going out is, how are we maturing? My background, as you know, Sam, I'm an infrastructure guy. My early training was in networking. I worked on virtualization, and I've been riding this wave of cloud for about the last 10 years. So, about two years ago, it was, software companies, how are they living in these public clouds? Amazon, of course, the dominant player in the marketplace, but we know it will be a multi-cloud world. And the update, for 2018, is we've gone from, how do I live in those public clouds, to how are we maturing? We call it hybrid clouds, or multi-cloud, but living between these worlds. We saw the rise in Kubernetes, as a piece of it, but customers have lots of environments, and how they get their arms around that, is a serious challenge out there, today. So, how are the suppliers and communities, and the systems integration, helping customers with this really challenging new environment, that we have today. >> I'd love to hear any OMG moments from you. What surprised you the most this year? >> It's interesting, when I wanna think about some of the big moves in the industry, I mean, we had the largest software acquisition in tech history. IBM, the company you used to work for, Sam, buying Red Hat, a company I've worked with, for about 20 years, for 34 billion dollars. I mean, Red Hat has been the poster child for open source, and the exemplar of that. It was something that was like, wow, this is a big deal. We've been talking for a long time, how important developers are, and how important open source is, and there's nothing like seeing Big Blue, a 107-year-old company, putting in huge dollars, to really, not just validate, cause IBM's been working in open source, working with Linux for a long time, but how important this is to the future. And that sits right at that core of that multi-cloud world. Red Hat wants to position itself to live in a lot of those environments, not just for Linux, but the Middleware, Kubernetes is a big play. We saw a number of acquisitions in the space there. Red Hat bought CoreOS for $250 million. VMware bought Heptio, and was kind of surprised, at the sticker shock, $550 million. Great team, we know the Heptio team well. We talked to them, some of the core people, back when they were at Google. But, some big dollars are being thrown around, in this space, and, as you said, the big one in the world is Amazon. One of the stories that everybody tracked all year was the whole hq2 thing. It kind of struck me as funny, as Amazon is in Seattle. I actually got to visit Seattle, for the first time, this year, and somebody told me, if you look at the top 50 companies that have employees in Seattle, of course, Amazon is number one, but you need to take number two through 43, and add them together, to make them as big as Amazon. Here in Boston, there's a new facility going up, with 5,000 employees. I know they're going to have 25,000 in Long Island City, right in the Queens, in New York City, as well as Crystal City, right outside of DC, 25,000. But, the realization is that, of course, Amazon's going to have data centers, in pretty much every country, and they're going to have employees all around the world. This doesn't just stay to the US, but Amazon, overall. So, Amazon, just a massive employer. I know so many people who have joined them. (laughs) Some that have left them. But, almost everything that I talk about, tends to come back to Amazon, and what there are doing, or how people are trying to compete, or live in that ecosystem. >> You're always talking to the community. What are some of the hottest topics you're hearing out there? >> So, living in this new world, how are we dealing with developers? A story that I really liked, my networking background, the Cisco DevNet team, led by Suzie Wee, is a really phenomenal example, and one of my favorite interviews of the year. I actually got to talk to Suzie twice this year. We've known her for many years. She got promoted to be a Senior Vice President, which is a great validation, but what she built is a community from the ground up. It took about four years to build this platform, and it's not about, "Oh, we have some products, and developers love it.", but it's the marketplace that they live in, really do have builders there. It's the most exciting piece of what's happening at Cisco. My first show for 2019 will be back at Cisco, live in Barcelona, and Cisco going through this massive transformation, to be the dominant networking company. When they talk about their future, it is as a software company. That actually, it blew my mind, Sam. You know, Cisco is the networking company. When they say, "When you think of us, "five to ten years from now, "you won't think of us as a networking company. "You'll think of us as a software company." That's massive. They were one of the four horsemen of the internet era. And, if Cisco is making that change, everything changes. IBM, people said if they don't make this move for Red Hat, is there danger in the future? So, everything is changing so fast, it is one of the things that everybody tries to sort out and deal with. I've got some thoughts on that, which I'm sure we'll get to later on. >> (laughs) As is Suzie Wee one of your top interviews of 2018, could you give your top three interviews? >> First of all, my favorite, Sam, is always when I get to talk to the practitioners. A few of the practitioners I love talking to, at the Nutanix show in New Orleans this year, I talked to Vijay Luthra, with Northern Trust. My co-host of the show was Keith Townsend. Keith, Chicago guy, said, "Northern Trust is one "of the most conservative financial companies", and they are all-in on containerization, modernized their application. It is great to see a financial company that is driving that kind of change. That's kind of a theme I think you'll see, Sam. Another, one, was actually funny enough, Another Nutanix show, at London, had the Manchester City Council. So, the government, what they're doing, how they're driving change, what they're doing with their digital transformation, how they're thinking of IOT. Some of my favorite interviews I've done the last few years, have been in the government, because you don't think of government as innovating, but, they're usually resource-constrained. They have a lot of constituencies, and therefore, they need to do this. The Amazon public sector show was super-impressive. Everything from, I interviewed a person from the White House Historical Society. They brought on Jackie O's original guidebook, of being able to tour the White House. So, some really cool human interest, but it's all a digital platform on Amazon. What Amazon is doing in all of the industry-specific areas, is really impressive. Some of these smaller shows that we've done, are super-impressive. Another small show, that really impressed me, is UiPath, robotic process automation, or RPA, been called the gateway drug to AI, really phenomenal. I've got some background in operations, and one of the users on the program was talking about how you could get that process to somewhere around 97 to 98% compliance, and standardize, but when they put in RPA, they get it to a full six sigma, which is like 99.999%, and usually, that's something that just humans can't do. They can't just take the variation out of a process, with people involved. And, this has been the promise of automation, and it's a theme. One of my favorite questions, this year, has been, we've been talking about things like automation, and intelligence in systems, for decades, but, now, with the advent of AI machine learning, we can argue whether these things are actually artificial intelligence, in what they are learning, but the programming and learning models, that can be set up and trained, and what they can do on their own, are super-impressive, and really poised to take the industry to the next level. >> So, I wanna fast forward to 2019, but before we do so, anything else that people need to know about 2018? >> 2018, Sam, it's this hybrid multi-cloud world. The relationship that I think we spend the most time talking about, is we talked a lot about Amazon, but, VMware. VMware now has over 600,000 customers, and that partnership with VMware is really interesting. The warning, of course, is that Amazon is learning a lot from Vmware, When we joke with my friends, we say, "Okay, you've learned a lot from them means that "maybe I don't need them in the long term." But in the short term, great move for VMware, where they've solidified their position with customers. Customers feel happy as to where they live, in that multi-cloud environment, and I guess we throw out these terms like hybrid, and multi, and things like that, but when I talk to users, they're just figuring out their digital transformation. They're worried about their business. Yes, they're doing cloud, so sassify what you can, put in the public cloud what makes sense, and modernize. Beware of lift and shift, it's really not the answer. It could be a piece of the overall puzzle, to be able to modernize and pull things apart. An area, I always try to keep ahead of what the next bleeding-edge thing is, Sam. A thing I've been looking at, deeply, the last two years, has been serverless. Serverless is phenomenal. It could just disrupt everything we're talking about, and, Amazon, of course, has the lead there. So, it was kind of an undercurrent discussion at the KubeCon Show, that we were just at. Final thing, things are changing all the time, Sam, and it is impossible for anybody to keep up on all of it. I get the chance to talk to some of the most brilliant people, at some of the most amazing companies, and even those, you know, the PhD's, the people inventing stuff, they're like, "I can't keep up with what's going on at my company, "let alone what's going on in the industry." So, that's the wrong thing. Of course, one of the things we helped to do, is to extract the signal from the noise, help people distill that. We put it into video, we put it into articles, we put it into podcasts, to help you understand some of the basics, and where you might wanna go to learn more. So, we're all swimming in this. You know, the only constant, Sam, in the industry is change. >> Absolutely. (laughing in unison) >> So, things are changing. The whole landscape, as you said, is changing. Going into 2019, what should people expect? Any predictions from you? Any big mergers and acquisitions you might see? >> It's amazing, Sam. The analogy I always use is, when you have the hundred year flood, you always say, "Oh gosh, we got through it, "and we should be okay." No, no, no, the concern is, if you have the hundred year flood, or the big earthquake, the chances are that you're going to have maybe something of the same magnitude, might even be more or less, but rather soon. A couple of years ago, Dell bought EMC, largest acquisition in tech history. We spent a lot of time analyzing it. By the way, Dell's gonna go public, December 28. Interesting move, billions of dollars. As Larry Ellison said, "Michael Dell, "he's no dummy when it comes to money.' He is going to make, personally, billions of dollars off of this transaction, and, overall, looks good for the Dell technologies family, as they're doing. So, that acquisition, the Red Hat acquisition, yeah, we're probably gonna see a 10-to-20 billion dollar acquisition this year. I'm not sure who it is. There's a lot of tech IPOs on the horizon. The data protection space is one that we've kept a close eye on. From what I hear, Zeam, who does over a billion dollars a year, not looking to go public. Rubrik, on the other hand, somewhere in the north of 200 million dollars worth of revenue, I kind of remember 200, 250 in run rate, right now, likely going to go public in 2019. Could somebody sweep in, and buy them before they go public? Absolutely. Now, I don't think Rubrik's looking to be acquired. In that space, you've got Rubrik, you've got Cohesity, you've got a whole lot of players, that it has been a little bit frothy, I guess you'd say. But, customers are looking for a change in how they're doing things, because their environments are changing. They've got lots of stuff in sass, gotta protect that data. They've got things all over the cloud, and that data issue is core. When we actually did our predictions for 2018, data was at the center of everything, when I talked about Wikibon. It was just talking to Peter Burris and David Floyer, and they said there is some hesitancy in the enterprise, like, I'm using Salesforce, I'm using Workday I'm using ServiceNow. We hear all the things about Facebook giving my data away, Google, maybe the wrong people own data, there's that concern I want to pull things back. I always bristle a little bit, when you talk about things like repatriation, and "I'm not gonna trust the cloud." Look, the public clouds are more secure, than my data centers are in general, and they're changing and updating much faster. One of the biggest things we have, in IT, is that I put something in, and making changes is tough. Change, as we said, is the only thing constant. It was something I wrote about. Red Hat, actually, is a company that has dealt with a lot of change. Anybody that sells anything with Linux, or Kubernetes, there are so many changes happening, on not only weekly, but a daily basis, that they help bring a little bit of order, and adult supervision, to what most people would say is chaos out there. That's the kind of thing we need more in the industry, is I need to be able to manage that change. A line I've used many times is, you don't go into a company and say, "Hey, what version of Azure are you running?" You're running whatever Microsoft says is the latest and greatest. You don't have to worry about Patch Tuesday, or 08. I've got that things that's gonna slow down my system for awhile. Microsoft needs to make that invisible to me. They do make that thing invisible to me. So does Amazon, so does Google. >> What's your number one company to watch, this upcoming year. Is it Amazon, Sam? Look, Amazon is the company at the center of it all. Their ecosystem is amazing. While Amazon adds more in revenue, than the number two infrastructure player does in revenue. So, look, in the cloud space, it is not only Amazon's world. There definitely is a multi-cloud world. I went to the Microsoft show for the first time, this year, and Microsoft's super-impressive. They focus on your business applications, and their customers love it. Office 365 really helped move everybody towards sass, in a big way, and it's a big service industry. Microsoft's been a phenomenal turnaround story, the last couple of years. Definitely want to dig in more with that ecosystem, in 2019 and beyond. But, Amazon, you know, we could do more shows of the CUBE, in 2019, than we did our first couple of years. They have, of course, Amazon re:Invent, our biggest show of the year, but their second year, it's about 20 shows, that they do, and we're increasing those. I've been to the New York City Summit, and the San Francisco Summit. I've already mentioned their Public Sector Summit. Really, really, really good ecosystems, phenomenal users, and I already told you how I feel about talking to users. It's great to hear what they're doing, and those customers are moving things around. Google, love doing the Google show. We'll be back there in April. Diane Greene is one of the big guests of the year, for us this year. I was sorry to miss it in person, 'cause I actually have some background. I worked with Diane. Back before EMC bought VMware. I had the pleasure of working with Vmware, when they were, like, a hundred person company. Sam, one of the things, I look back at my career, and I'm still a little bit agog. I mean, I was in my mid-20s, working in this little company, of about 100 people, signed an NDA, started working with them, and that's VMware, with 600,000 customers. I've watched their ascendancy. It's been one of the pleasures of my career. There's small ones, heck. Nutanix I've mentioned a couple of times. I started working them when they were real small. They have over a billion in revenue. New Cure, since the early days. Some companies have done really well. The cloud is really the center of gravity of what I watch. Edge computing we got into a bit. I'm surprised we got almost 20 minutes into this conversation, without mentioning it. That, the whole IOT space, and edge computing, really interesting. We did a fun show with PTC, here in Boston. Got to talk to the father of AI, the father of virtual reality. It's like all these technologies, many of which have been bouncing around for a couple of decades. How are they gonna become real? We've got a fun virtual reality place right next door. The guy running the cameras for us is a huge VR enthusiast. How much will those take the next step? And, how much are things stalling out? I worry, was having conversations. Autonomous vehicles, we're even looking at the space. Been talking about it. Will it really start to accelerate? Or have we hit road blocks, and it's gonna get delayed. Some of these are technologies, some of these are policies in place, in governments and the like, and that's still one of the things that slows down crowded options. You know, GDPR was the big discussion, leading into the beginning of 2018. Now, we barely talk about it. There's more regulations coming, in California and the like, but we do need to worry about some of those macro-economical and political things that sometimes get in the way, of some of the technology pieces. >> I'd love to put something out into the universe, here. If you could interview anyone in the world, who would it be? Let's see if we can make it happen. It's amazing to me, Sam, some of the interviews we've done. I got a one-on-one with Michael Dell this year. It was phenomenal, Michael was one. It took us about three or four years before we got Michael on the program, the first time. Now, we have him two or three times a year. Really, to get to talk to him. There is the founder culture John Furrier always talks about. Some of these founders are very different. Michael, amazing, got to speak to him a couple of times. There's something that makes him special, and there's a reason why he's a billionaire, and he's done very well for himself. So, that was one. Furrier also interviewed John Chambers, who is one of the big gets I was looking at. I was jealous that I wasn't able to get there. I got to interview one of my favorite authors this year, Walter Isaacson, at the shows. When I look at, Elon Musk, of course, as a technologist, is, I'm amazed. I read his bio, I've heard some phenomenal interviews with him. Kara Swisher did a phenomenal sit-down on her podcast with him. Even the 60 Minutes interview was decent this year. >> The Joe Rogan one was great >> Yeah, so, you'd want to be able to sit down. I wouldn't expect Elon to be a 15-minute, rapid-fire conversation, like we usually have. But, we do some longer forms, sit down. So he would be one. Andrew Jassy, we've interviewed a number of times now. Phenomenal. We've got to get Bezos on the program. Some of the big tech players out there. Look, Larry Ellison's another one that we haven't had on the program. We've had Mark Hurd on the program, We've had lots of the Oracle executives. Oracle's one that you don't count out. They still have so many customers, and have strong power in new issues, So there are some big names. I do love some of the authors, that we've had on the program, some thought leaders in the space. Every time we go to a show, it's like, I was a little disappointed I didn't get to interview Jane Goodall, when she was at a show. Things like that. So, we ask, and never know when you can get 'em. A lot of times, it's individual stories of the users, which are phenomenal, and there's just thousands of good stories. That's why we go to some small shows, and make sure we always have some editorial coverage. So that, if their customers are comfortable sharing their story, that's the foundation our research was founded on. Peers sharing with their peers. Some of the most powerful stories of change, and taking advantage of new technologies, and really transforming, not just business, but health care and finance, and government. There's so much opportunity for innovation, and drivers in the marketplace today. >> Stu, I love it. Thanks for wrapping up 2018 for us, and giving us the predictions. CUBE nation, you heard it here. We gotta get Elon Musk, Jeff Bezos, and Larry Ellison on the CUBE this year. We could use your help. Stu, thank you, and CUBE nation, thank you for watching. (electronic techno music)

>> It's theCUBE, covering AWS Summit, New York, 2018, brought to you by Amazon Web Services and its ecosystem partners. >> Here in New York City, we're live at Amazon Web Services AWS Summit. This is their big show that they take on the road. It kind of originates at Amazon re:Invent in Las Vegas, their big kickoff show for the year, and then goes out to the different geographies and goes out and talks to the customers, and actually rolls out all the greatest of the cloud from Amazon's perspective. Of course theCUBE covering it, wall-to-wall cloud coverage, I'm John Furrier, co-host with Jeff Frick here today in New York City for special coverage. Jeff, Amazon obviously continue to dominate, but competition is heating up, Google Nexus next week, we'll be there live. Microsoft's got a big show, Azure's gaining market share, Amazon's still racing ahead. They got a book they're giving out here called Ahead in the Cloud, Best Practices for Enterprise IT. Amazon, clearly we talk about this all the time, they've cleared the runway from winning the startups, small, medium-sized growing business in the cloud native, to actually putting big dent in the market share for acquiring large enterprise customers. That has been their mission, that's Andy Jackson's mission, that's the team. Their head count is growing, Jeff Bezos is the richest man in history of the world. Pretty impressive story, we've been covering it since 2012, >> What's crazy is it's barely got started, John. I mean, just looking up some numbers before we came on, Gardener has a bunch of projected public cloud cans, anywhere from 180 billion to 260 billion. So even with Amazon at the head of the pace, I can't remember their last statement, I think it was 18 billion run rate, and everybody's saying Microsoft's brewing so fast. They barely still scratch the surface, and that I think is what's really scary. There'll be 50,000 people probably at re:Invent, there's 10,000 here in New York, they have these summits all over the country, all over the world, and so as impressive as the story is, what I think is even crazier is we've barely just begun. You were just at Public Sector, that's a whole 'nother giant tranche that's growing. >> Well you started to see the ecosystem develop nicely, and cloud native certainly is a tailwind for overall Amazon. Obviously the have the winning cloud formula, they've been ahead for many, many years. But again, competition's keeping up. But if you look behind us, you probably can't see in the cameras, it doesn't give justice, but this show, it's in New York City, it's a regional kind of like event. Its now looking the size of what re:Invent was just a few years ago. Public Sector Summit, which is the global public sector that Teresa Carlson runs, in really its third year roughly since it got big, started out a couple years ago. That's now morphing into the size of re:Invent, so pretty massive. >> And they said there's 10,000 people here. I don't know how many were at Public Sector. 138 sponsors, just some of the numbers that Werner shared in the keynote. 80 sessions, really an education session, it's a one-day event. We're excited to be here, but what's amazing is even though pretty much every enterprise has something going on in the public cloud, in terms of the vast majority of the workload, still most of 'em are not, and you know, really an interesting play. We were there when the AWS VMware announcement was made a couple of years back in San Francisco, as kind of this migration path, that's both been really good for VMware, and also really good for Amazon, 'cause now they have an answer to the, kind of the enterprise legacy question. >> I mean Jeff, did you look at the big picture? If you want to squint through the noise of cloud, what's really going on is, one, the analysts that are looking at market share, I think are looking at old data. It's hard to know who's really winning when you look about revenue, 'cause everyone can bundle in, Microsoft bundles Office revenue in. So it's actually, that's hard to understand, but if you look at the overall big picture, the landscape that's happening is that the enterprise and IT market has moved from being consumerization of IT to digital transformation. Those are the two buzzwords. But really what's happening is the operational model of cloud has created two real personas in the enterprise from a technical perspective. The developers who are building apps, and operators who are running the infrastructure, running the software, running the dashboards, running the operations. And so you start to see that interplay between operators and developers working together but yet decoupled, different personas. These are the ones that are changing how work gets done. So the future of how work and computing is going to be applied for end user benefits, user benefits, consumers, whether it's B2B or B2C companies, the cloud is the power engine of innovation, and new apps are coming on faster, and the roles are changing, and this is causing a shift of value. This is what the analysts at Wikibon, theCUBE, insights team has been looking at is that this is really the big thing. And machine learning, and AI, really take advantage of that, and you're going to start to see IoT, security, AI, start to be the critical apps to take advantage of this power of the cloud, and as enterprises transform their operations and their development frameworks, then I think you're going to see a whole new level of innovation. >> Right. They just had Epic Games on, the company that makes Fortnite which is a huge global phenomenon. If you don't know anything about it, ask somebody who's under the age of 15, they'll tell you all about it. >> 135 million gamers. >> The core value proposition of cloud is still the same, its flexibility, its global reach, its ability to scale up and scale down, and we've asked this question before and we're getting closer and closer with each passing day, is if we live in a world, John, with infinite compute, infinite bandwidth and infinite store, basically priced at zero, asymptotically approaching zero. What could you build? And if you could get that to the entire world instantly, what could you build, and we're really getting closer and closer to that and it's a very different way to think about the world than where you have to provision at 50% overhead, and you got to buy it and plug it in and turn it on. You know, that world is over. We're not going back, I don't think. >> If you look at the cloud players you've got Microsoft, Amazon, Google, and then we throw Alibaba, that's more of a China thing. Those are the main ones, you got Oracle for Oracle and IBM in there. You look at the companies, and look at the ones that have consumer experience, and look at the ones that don't. Microsoft has failed on the consumer business, although they have some consumer stuff, really not really been successful. Oracle and Microsoft, IBM have been business to business companies. Google and Amazon have been consumer companies that have bolted on a cloud just to run their operations. So to me what's interesting is, which one of those sides of the street, which one will emerge as the victorious cloud platform. I think I would bet on the consumer side. I like Google, I like Amazon better than Azure and Oracle and IBM, mainly because they have consumer experience, they understand the ultimate end user, and built clouds for that, and now are rolling that business. So the question is will that be the better model than having Azure or Oracle or IBM, who know the business model-- >> Right. >> But yet, will the devices matter? So this is going to be a big thing that we're going to watch on theCUBE is, which cloud play will win, or does it matter? Is it winner take all, winner take most? >> Yeah. >> This is the questions. >> Pretty interesting. You know you interviewed Mark Hurd many moons ago, for a long time, and he talked about cloudifying all the Oracle applications. The problem is, Clayton Christensen's book, Innovator's Dilemma, is still the best business book ever written. It's really hard to knock off your own core business, especially when it's profitable. That I think is Oracle's biggest problem. The other thing I think they have is, they're a sales culture, it's built around a sales culture. People are going out and it's a hard sell. That's not what the cloud is all about. It's really the commercialization of shadow IT. I need it, I turn it on, I activate it, I don't need it anymore, I turn it down, I turn it off, I turn it over. So I think Oracle's in a tough position to eat their own business. IBM is you know, continues to try different things and you know, with The Weather Company and Ustream, and they're doing a lot of things. But the core three have such momentum, Google we'll see, we're excited to be there next week and kind of get an update on what their story is, but still in the enterprise they barely scratch the surface of the available workload. >> I think that's the main story, the surface is just being scratched. If this is like the first or second inning of this game, or the second game of a double header, as Matt Dew has said on theCUBE many times, he'll come on today, it's interesting because if you think about the clouds that are best position to take advantage of new technologies, like AI, like blockchain, like token economics, those are the ones that have to be adaptable and flexible enough to take on new things, because if we're just scratching the surface, the new things that are going to come out have to scale, have to be data driven, have to be mobile, have to use AI, have to have the compute power. If you're kind of stuck in the old model and you have a ME2 cloud, it's going to be always hard to ratchet up and kind of always rearchitect and change, you need an architecture that will essentially be flexible and be adaptive. To me I think that's what we're going to look for here in the interviews today, and of course, security, Jeff, continues to be the number one conversation, at AWS re:Invent, and AWS Public Sector Summit. Security is getting better and better in the cloud and some say it's better than on-premises security. >> I think the resources that can be applied at a company like AWS, the security teams, the technology, the hardening, the private fiber connections, I mean so many things that they can apply because they have such scale, that you just can't do as a private enterprise. The other thing, right, is that people usually take better care of their customers than their own, and we know a lot of security breaches and data breaches are just from employees or somebody lost a laptop. They're these types of things where if you're an actual vendor for someone else and you're responsible for their security, you're going to be a little bit different, a little bit more diligent than kind of protecting once you're already inside the wall. >> And it changes the infrastructure, I mean just in the news this week, obviously Trump was in Helsinki, all I can see in my mind is, the servers, where are the servers, where are the servers? With the cloud you don't need servers. The whole paradigm is shifting. If you use cloud you can get encryption, you can get security. These are things that are going to start that I think be the table stakes for security, the idea of having a server, provisioning a server, managing servers per se, unless you're a cloud service provider, at some level, you're tier two or tier one, you don't need servers. This is the serverless trend. Again, Lambda functions, AI, application developers, all driving change. Again, two personas, operators and developers. This is what the swim lanes are starting to look at, we're starting to get the visibility. And of course we'll get all the data here in theCUBE, and share that with you this week. Today in New York City, live theCUBE, I'm John Furrier with Jeff Frick. Stay with us for coverage here for AWS Summit 2018. We'll be right back.

(intense orchestral music) >> Hello everybody welcome to theCUBE, special announcement here, exclusive coverage. Covering Oracle NetSuite SuiteWorld with some special news, we're here with Jason Maynard, Sr. Vice President of Marketing and Strategy at Oracle NetSuite, and Jim McGeever, EVP, Second to Vice President at Oracle NetSuite. Thanks For joining this special CUBE coverage. >> Thanks... - Thank you. >> Great to be here. So we've got some exclusive news around SuiteWorld going on, so let's get down and dirty, so you got four major announcements goin' on: Oracle NetSuite global, vertical IntelligenceSuite, and new SuiteCommerce, let's get into the hard news. What's the big story around the news? >> The big story is we're going global, and in a big way, it's one of the big advantages of the Oracle acquisition, we could never have afforded to go to as many countries as fast as we can, and now with Oracle, we'll really be able to go really fast. And as a result, we're building a lot of new international features. So 2018, we've really turned the developmentship to build out deep localizations for most of the major economies around the world. >> NetSuite's had a great track record, obviously everyone kind of has well documented history, obviously now with Oracle. What's the stride look like, what's, what're you guys, you guys are hitting a stride. What's is look like, what's different about it, if anything, what's the big highlight here at SuiteWorld? >> Well, we've really put the foot on the gas petal, so we're actually growing much faster now than we were when we were independent. And a lot of it is due to the international growth, I mean, for example in China, China we didn't have a market presence, it's now our fourth biggest market after only a year. And that's just starting, it's amazing how fast that it's grown. >> Talk about the international global piece, because global has become kind of like a, a whitewash term for some, but it's hard to do. Especially China you mentioned that one, so you have China, and then the rest of international. There are issues with Cloud, you've got regions, you've got data privacy, obviously GDPR's on the horizon, and it's got some teeth to it I would argue, relatively, you know, sharp in some areas, not in others, but it's a challenging dynamic, but the upside is it's a very lucrative opportunity. What's different about international now, then say just five-six years ago? >> Oh, there's two major differences. So one is the data privacy rules, GDPR, I mean that's just amazing how, what an impact that has on businesses, and also the data residency rules. So we're having to build our data centers around the globe, which we never would've had to do before. Now this is, thankfully we have a company that has data centers around the world, so it's becoming a lot cheaper and easier for us to do that. But that's really tough for a business to be able to do that themselves. >> So, you know, the theme I want to get out there is, is that, you know people want to do more with less, that's a classic consolidation message. There's some consolidation going on, when you look at Cloud, how people are trying to figure out Cloud on premise in the, in Cloud. But it's not a consolidation market, it's a massive growth market. Jason what does more mean? I mean people want more, they might have to do with less, but there's an upside, growth component. How are you guys talking with that one challenge? Cuz there's challenges, and there's opportunities at the same time. >> You know, it's an interesting time, I think a lot of folks say it's easier than ever to start a business. But the flip side is, is it's harder than ever to actually scale and grow. So when we're out talking to our customers, and were getting, you know, into what they're trying to solve. The biggest issue they have, is how do I overcome this issue of breaking these barriers of growth. So, it could be going global, It could be doing more with less, right? How do I automate my business so I can reinvest into things that are going to make me more successful? Like acquiring new customers. Those are the type of challenges that we see out there, it's more with less, get me to where I need to be, and frankly, stop doing the things that are sort of counterproductive and inefficient, and really drive, top lane. >> I think that's one nuance that's missed a lot in the analysis is that, it's not so much more with less, it's more efficiency with Cloud, you get more leverage than software. That's always been the case with software economics. How does that translate to the business strategy for you guys as you guys go global? Talk about some of news around the, the verticals, vertical integration, cuz that's going to be a big part of it, with either the developer community and/or your partner ecosystems. >> Sure, so what we're seeing is, if you look at our product, what people use. When we looked at our customer base, customers who are international, customers who use vertical features grow much faster than customers who are single domestic. So we looked across the board, and so what we're really focused on is how we can help those companies grow even faster. So how do you go international quicker? But every business is not a generic business, so they all have these vertical features, some have inventory, some have projects. So what they really need is features that can help them execute their business better. So we go deep by vertical, and in fact, our whole company is organized vertically, our sales teams, our development teams, and so when we go to market we go vertically, and so we're doing some really cool stuff. Especially in the product-based area, uh, that's the new supply tower control center, which really helps enable people to get product to their customers on time. >> Well I'd like to get both of you to weigh in on the hard question, right? Bringin' the heat now. >> Jim: Okay. >> Jason: Alright. >> Everyone wants to know, okay, what's it like with Oracle? Is that helping you, is it hurting you? Oracle has a reputation, they're moving to the Cloud very quickly, but again they're an incumbent, okay in the old, in the Cloud way. So, you know hards pers putting up some numbers, you can talk to folks at amazon like whoa, you know, they're Oracle. So there's a lot of uncertainty around who's going to be the modern player. So the question is: How are you guys, working in that environment? Obviously Oracles numbers are up, they're moving to the Cloud model, they're stats are flying, at a pace that, they're moving as fast as they can. But you guys have always had a different perspective. How is the NetSuite/Oracle relationship working, and how do you talk to customers about that? >> Sure. So we're, they've run us really independently, so we're a global business unit inside of Oracle. So all sales, development, marketing, product, all report up through me, Evan, and Jason, and we report into the CEO of Oracle. So we're really run purely independently. The only other thing I'll add, so really not that much has changed, other than we get to leverage a lot of their global scale, and as Mark Hurd says, and try to avoid the negatives of the scale. But they are all in on Cloud, this is, when you're in a meeting with the senior leadership at Oracle, it's not a fake thing, it's a not a, a marketing message they truly believe at their core, that in the Cloud, or that everything's moving to the Cloud. So there's, we get the same incentives to sell to an Oracle owned premise customer as we do to an SAP owned premise customer. >> Jason to add to that, I want to get your perspective. We were talking before we came on around, the scale piece, that Jim just mentioned. Talk about the profile of the kind of customers that you guys have here as SuiteWorld. Is the profile of your customer changing? Take a minute to explain who is the NetSuite customer, cuz the global thing is interesting, if you're growing, soon to be multi-national, or you're already multi-national company, this matters. So, and then the scale matters as well, so, what is the profile of the customer, how does that help, how does that weave into the Oracle scale? >> So we have over 40 thousand organizations globally running NetSuite. It's a pretty interesting mix. Obviously a lot of small/mid-sized companies, and we have a few, you know, a good decent percentage of our base are multi-billion dollar companies. We see an interesting, I think, dynamic, which is: the most successful NetSuite customers, are the ones that have gone global. They grow faster like Jim said, than the domestic only. I think the one other hallmark that I would point out to the NetSuite customer, the customer base. You see sort of an innovative group of entrepreneurs. So we see all sorts of great stories with the customers, you know, in Jim's keynote, Kara Goldin, the founder of Hint, right? She started off with a mission to stop folks from drinking soda water and drink actual water. Started with, you know, 10 years ago, and is now on an amazing trajectory. So we find-- >> John: You guys get a lot of growth companies. >> Yeah, we get a lot of the growers, we get a lot of the, really kind of the entrepreneurs who start small with us, and then scale with us, all the way to becoming a multi-billion dollar company. >> And this is where the international piece matters, right? >> Oh yeah. >> So let's talk about that and then we'll move onto the the next set of news. So if I'm a growing company, and we're expanding crazy, I care about localization, I care about data in regions, certainly Cloud, as you mentioned Oracle's really serious about what they are, they care about regions, this is an issue. So talk about the benefits of me, a growing company, how do I take advantage of localization, what do you guys offer, what's the playbook? (laughing) >> It's, we just make it easy. I mean, our whole focus is: if you're a business, it's hard enough to go international, and figure out your value proposition, and what makes you unique and what makes you differentiated, the last thing you need to be worried about are your IT systems, and spending your time on infrastructure, and selling it all up. So our kind of job is, we'll just take care of that, if you want to go to Germany, you will literally flip a switch inside the system, and you have a German enabled application. >> And what's the alternative, if I don't go with you guys? >> You have to go find someone in Germany, to go buy an application, install it, then you implement it, then you integrate it. I mean that's a multi-month, if not year process. >> John: And expensive. >> Very expensive-- >> You've got to find people, you got to know the nuances, the local issues. (laughing) >> Right. And so you've got to learn all that. We come fully localized, and we don't do it just in a way that is, it's a starting point. We have all the German tax forms built-in to the system, when you log onto NetSuite and once you flip this switch, you go to page, all the German tax forms are there, and we will automatically fill them out for you. >> Jason, I want to get your perspective, because local marketing is a big deal. You guys are in hundreds of countries, I know that from, from doing the research and watching you guys grow. But where do you have actual presence and where does presence matter, can you just highlight, the NetSuite, cuz I think this is going to where, people going to want to know, okay, there's hundreds of countries out there, but where are you, where's the core going to be? >> So it's an interesting point because it's, I think it's not just about product, right? It's not just about having a product that's localized for a specific country, it's about having everything else, right? It's having, making sure the support is in the local language, it's making sure that we have people who speak the language, making sure we have facilities, sales, service people, having a localized data center-- >> John: You guys are committed to that. >> We are 100% committed, this is, you know you asked the question earlier about what, what has been the benefit of Oracle? I don't think, as a standalone company, we'd have been able to pull off what we're pulling off and announcing this week. Without the backing of, and the Oracle resources, because the have the global reach, that we can easily tap into. So when we do local now, we're doing it with everything that a customer needs to be successful. >> Okay, so the next set it is, I want to dive into the hard news is the, new SuiteCommerce kind of vibe, sweet success for SuiteCommerce. It's a new e-commerce solution that gives customers the freedom to grow and evolve their digital commerce business. So this is basically commerce, you're talking about like, doing business. What is this news about, gives us the quick summary, and let's discuss. So our previous commerce product was actually very advanced, we actually started at the top first. We enabled you to touch every pixel on the page, customizing in any way, shape, or form you wanted. What we've done with SuiteCommerce is now we've taken it, and came out with an entirely pre-packaged, pre-built websites. So you can be up and running, with a very complex, fully featured website, in 30 days or less. And it's point and click choose, and this is not going to a basic colors and theme choices, we have complex features that enable you to run your business. So you can come to us, and we will have you running, with commerce enabled, integrated with your back office, with less, in 30 days. >> Jason, I can see two use-cases for this, one is, you know, I need turnkey guys, here's the keys to the kingdom, build it for me, I'll give you all my raw materials, we're up and running, you know, classic turnkey. Then there's the more of the dev ops Cloud model, which is, hey I need access to APIs, I have my own development team. Okay, how do you talk to both those guys, and there's also hybrids in the intersection of both those. So there's two modes of use-cases, how do you guys address the developer? It's interesting, I think the way we look at it is, we can be the first system you buy, and we can also be the last system you'd ever buy, right? And that's that freedom to grow and evolve. So, you may want to start out with us because you're an emerging retailer, and you're launching just in the US. But as you evolve to six more countries in a year and a half because you've got the hit product or you're selling, and you want to start to then expand your sophistication, then we can migrate you to some of the more advanced capabilities, but. What we're delivering today is that ability to have a packaged, out of the Cloud, easier to use, on ramp, to get the value of of NetSuite. >> And the horizontally scalable Cloud is obviously, with developers like, what's the developer story here? Can you guys share the developer perspective for your customer, if I have a team of developers? >> So we use the exact same technology, so SuiteCommerce and SuiteCommerce advanced is the exact same technology. One, we've been the developer, and pre-packaged it, and delivered it to the customer. But if you start with that, you can instantly switch over, and take over the development yourself. So either stay with us, we'll work with you, we'll develop it. Or you can just take that as a starting point and develop it going forward. >> John: Awesome. >> Literally, I think something is 75-80% of our customers, literally customize NetSuite in some shape or form, so you can imagine-- >> John: So you guys are totally open to let developers completely develop them. >> Yeah, there's a platform as a service offering, inside of NetSuite, which is something, that as customers evolve and grow they tend to consume and use more of those platforming features. >> So one of the things I'm reading here in the news, that I want to dive into, that I like. You know I like... (stammering) I like new things. So the latest edition you guys are doing have this concept of micro verticals, that span a variety of industry. So that means data potentially could fly around, certainly. In cyber security we were covering at RSA just recently, the role of data sharing is huge, you obviously got the other end on the policy side of, you know the data protection. So you can't have, you got to have a combination of data sharing to make machine learning, and make, you know, some of these new AI capabilities work. At the same time, you got to have policies around that. But these micro verticals will have to operate in a new way. So, what does a micro vertical mean, and how are you helping customers saying you know, I played a little bit of media, I play a little bit in financial, you know have a lot of different requirements that may cross verticals. How do you guys handle that? >> Well we started off with industries, so we used to think of wholesale distribution as a whole series of vertical features, you need a warehouse, you need all the management, there's all these things that you needed in order to make that work. And now we're going into verticals within that, such as food and beverage, or health and beauty. Then we get down food and beverage, now you have cold storage, so that's where we get to the micro vertical level, and the requirements there are actually quite different than you may get from a generic health and beauty vertical. So what we build are those micro vertical features, to enable this business. >> So you guys drill down into the verticals and segment them down, and, rather than some general purpose solution that's, you know, tryin' to hit, so there's some requirements changes. >> And all the regulatory and compliance requirements that go with those micro verticals, those are engineered as part of the process. >> And what's the impact of the customers, talk about the customer impact, what's the benefit for them? They get better product, they're happier, they get it quicker, and they get it cheaper. So it's kind of the more we do, and the less you do, the happier the customer is going to be. >> Alright philosophical question now, this is really what customers want, they want to have, they want to feel like it's a personal experience customized for their business. How do you make that work in this new Cloud world, what's the secret sauce that you guys bring to the table to make customers get the flexibility, the agility, obviously the scale of Oracle helps, on the foundational level. But as you guys roll out the NetSuites next generation customer environment, what's the secret? >> Well we've always had a platform, a deep platform, and so people have always customized our product. So we're using the exact same customization technologies to deliver these micro verticals that customers and developers have been able to do for years so it's just about leveraging what everyone can do to make it a better solution for those customers. >> Final question now, I mentioned machine learning and AI before, so the IntelligenceSuite is news here. Let's get into that. If you're not doing AI you're not relevant these days, everyone's throwing AI around like it's like at, oh we're AI-ing this so it's machine learning. But this is real, I mean software has to drive efficiencies. There's scale involved in software. Machine learning and artificial intelligence is a great path to operationalize, and automate, and create insights. So what is IntelligenceSuite about, can you share the news there? >> Sure, so we're not building a generic AI tool, Oracle's got a massive investment in that, and I'm sure at some point we'll leverage it. We're actually looking at very specific use-cases within our application, that customers can use right now. And so we're actually taking solutions such as: what is the quickest way to get your inventory to your customer, and using some machine learning to help actually route, and pick the right inventory items, and the right location to get the quickest delivery time to your customer. So we're taking very specific use-cases, and we're building that intelligence in, around that. We're not coming out with a generic AI tool that will, solve all potential questions, answer all potential questions even if you don't know what the questions are, that will come a little bit later. But right now, this is really-- So you guys are taking the low-hanging fruit, drilling down in known use-cases for your customers, and bringing that kind of automation to the table? I think, we basically take the attitude of, machines and humans together are generally a better answer than either by themselves. So we'll give you all the choices, and give you the recommendations, and let you pick the way you want to go. >> Jason how do you market that to a customer? Cuz this is really, I think, a big point. Humans and machines clearly are involved, you look at all the success of machine learning. This is now becoming known, you look at Facebook in front of the United States lawmakers, you know, they don't even know how Facebook works so, you know, you've got an enterprise, they're learning about data, they want real answers and they need to have it digged out for them. >> Jason: I think AI and machine learning could perhaps be, you know, the new planking, the most overused, over-hyped, you know, thing out there right now, and every vendor has to come up with a, like a sort of a perceived AI strategy, so I think it's overwhelming for a lot of customers. Because at the end of the day, these customers are trying to figure out how do I solve really specific problems. They don't have AI problems, they have tangible business problems. And so we took this approach to build this from scratch, inside of NetSuite, we didn't acquire, you know, some random startup, and try and plug and graph that onto NetSuite, we built it with the same though process, around how do we solve that problem, make it more efficient, so. Our conversations with our customers are not about technology, they're about, hey how do we get you, you know, better turns on your inventory, how do we solve a specific business problem, and that resonates, that makes it a lot easier, cuz that's what they know. >> Yeah, there's a shiny new toy, kind of thing, hey look it we got some new tools, and there's a place for that kind of, from a developers standpoint I can see it being a great sandbox. But you guys are taking a different approach, add known customer problems, that you can automate away and create insights, is that right? >> That's it. >> Yeah, absolutely. >> To wrap up, I want to get the thoughts of SuiteWorld, what's going on here, what's the main conversations, what're you guys promoting, what's the message, what's some of the conversations, and what's next for NetSuite? >> You know the biggest conversation is customers talking to each other about how they grow and scale their business. And so we try and create an environment at SuiteWorld where these customers can learn from each other, they can talk to each other. Obviously we share our insights and perspectives, but it's really about them, and how they figure out, and really learn from other experiences to solve what they're trying to accomplish. >> Jim top level message to customers, next 10 years, what's the NetSuite 20 mile stair look like for you guys? >> You know the great thing about NetSuite, we've been around almost 20 years, we've been on the same mission, the same product, and we look at the confusion that's out there in the marketplace. I think people feel very grateful that we're on the path and we know where we're going, and we're delivering them real value, real deliverables, and we're not forcing them to change their business. We change for them, not the other way round. >> From a tech perspective, tech enablement, and outcome perspective, what's the main themes of the show this year. >> It's mostly about or international rollout, our new commerce products, our vertical features, our micro vertical features, and our intelligence assistance. >> Cloud, IOT, AI, software all powerin' this, guys thanks so much for the insight. Exclusive news coverage here on Oracle NetSuite SuiteWorld, big announcements here, this is theCUBE, thanks for watching. (intense orchestral music)

>> (Narrator) Live from Madrid, Spain it's theCUBE. Covering HP Discover Madrid 2017. Brought to you by Hewlett Packard Enterprise. >> We're back in Espana. theCUBE, the leader in live tech coverage is here covering HPE Discover Madrid, day one. I'm Dave Villante with my cohost, Peter Burris. Well, it's all coming into focus, Peter. >> It is, it actually is. >> It is, I mean, it better be after five or six years. It's taking longer than I had hoped. But, the story is consistent now. The last four Discovers, despite some of the distractions of spin merges and so forth the story of hybrid IT, the Intelligent Edge, bringing automation is somewhat new to the data center. Services lead starts to actually make sense. >> Peter: Through private cloud. >> Yep, and you know, we talked about at the top of the show today, the spectrum. We're running AWS re:Invent, we got a big presence there. Obviously its affected the entire industry, and then you've got HPE, the likes of HPE, Dell EMC, to a certain extent IMB basically not given up, say wait a minute, these are our customers, they want Cloud on prem, we're gonna deliver to them. They want Cloud in the Cloud, we'll help them get there. >> Peter: Oracle. >> Oracle as well. Oracle, different strategy. We should talk about that a little bit. But, summarize, you know synthesize your take on the day, and where we're at with HPE. >> So I would say that the... What we talked about this morning was, when Meg first took over the reins, she stopped a whole bunch of stuff, and HP stopped spending and behaving like a company that believed that it had to get scale as fast as possible because that was the only way to win. And she ended up going back to, look, lets focus on the customers and what the customers are trying to do, and not how we're trying to leverage our assets. And it kind of took a pause, and for a while you could kind of see them start putting things back together, and you kind of had a sense of where it was all gonna go. But this has been kind of the coming out party for what the last five years have been about. As you said, I think we've seen the three core messages that certainly line up, you know, with a little bit of cavat here. Their story is very much aligned with what we think the industry needs to see right now. At least, our research suggests. Gonna need true private Cloud, the ability to put the Cloud service where your data requires, and not force your business to move it's data to some Clouds location. You're gonna need increased automation within your IT organization, because you're not going to be able to support these more complex workloads if you don't find ways to increase the productivity of your people, and even more importantly, dramatically reduce even the possibility of a failure, and that's what AI inside IT's all about. And very importantly, the idea that you gotta put more intelligence at the Edge, that that interface between the real world and the digital world is really what's gonna drive the dynamic in the computing industry over the next few years. And HP has shown up and they're not just talking about it, they're showing it. And it's nice to be there. >> Well it's interesting, Meg Whitman came by and was talking to us, and we were talking about the Aruba acquisition. She said, look, we bought this because it was a nice business, it could show some growth. And it was, you know, a way to compete with Cisco and differentiate, because, hey were trying to compete head to head with Cisco and it was going okay, but not great. Aruba gave them a clear differentiator. And then all of the sudden, the Edge became this tailwind. And it kinda got them there early. >> Well, lets remember what Mark Hurd talked about. He said, well, why are you going after the network world. I like their 67% gross margins. Okay, so... >> Dave: Talking about 3Com. >> He's talking about 3Com, he's talking about all the things that HP did as it tried to get into the networking business. >> Dave: Cisco, right, yeah. >> It was purely driven by gross margin. They didn't quite have the customer story down. Aruba has always been a great customer story. They've always say, look, this is your business challenge. You know, are you sick and tired of dropping your connection as you go from one conference room to another. This is your security issues. On, and on, and on. They had three or four concrete value propositions that just worked for customers. That acquisition at that time it happened, it happened about the same time that HP was starting to rededicate itself back to thinking about it's customer base. So, it's not surprising to me that that integration, or that merger has been one of the more successful that HP's undertaken. >> So again, the spectrum. You know, you got Andy Jassy on one end who started this whole thing, and you got the likes of HPE on the other end. And you're right, it does align with a lot of things that we've been saying around true private cloud and so forth. Jassy doesn't buy it. He flat out says, this is old guard thinking trying to hang on to the past. But, our analysis suggests it's not just old guard thinking. It's customer thinking because they can't just move their business into the Cloud. Thoughts. >> Totally agree. So I'd say there are a couple of things about it. It's customer thinking based on the realities of the data assets that they're trying to leverage as they transform into a digital business. Data is real, and it has, it's gonna weigh in on how your infrastructure looks. And the Edge is gonna have characteristics that mean you're gonna have to do automation right there, right where the action is. You're not gonna be able to send it up to the Cloud all the time. There's gonna be a lot of business events that take place in that core, in that second tier. So, it's not that it's... It's not that it's old versus new guard. And here's why I say that, Dave. It's because in many respects, we're giving some props to HP right now, which is great. But, in many respects, the story that HP is telling today is a story that is still being largely, has largely been told, largely fashioned by what AWS has done over the last 10 years. And that is, here's what the Cloud experience is. And now HP's adding, "And you want that Cloud experience whatever your data demands." The difference, therefore, between the old guard and and the new guard, or the old way and the new way, on premise, is that it used to be, it was pretty clear to me, and I think it was pretty clear to us, that the old, that the talk about private Cloud was simply a way of thinking about how to put new marketing spin on the enhancement, upgrade, replacement cycle for servers and storage. And that did not work. It just flat out didn't work. >> Well it worked in the sense that it froze the market a little bit. >> Eh, it froze the market a little bit. But, overall, for the past five or six years our growth has been slowing down pretty dramatically. So, I would say, that the data is pretty unassailable. You're not gonna move everything to a central location. But, you're gonna want that Cloud experience. And so, the question is, are we gonna see great Cloud experience where the physics, the legality, and inertia property governance demands that you put your data. >> Well, I thought Jesse St Laurent was gonna talk about the next wave. He mentioned Multi-Cloud. >> Peter: He's CTO of... >> Of SimpliVity, now HPE Hyperconverged. >> Peter: Right. >> I thought he was talking about, he said the next wave is Hyper-V. Okay, check. I mean, like, that's like to me a feature of the product. And then he sort of talked about Multi-Cloud. And that really where I thought he was gonna go, because when you look at what AWS is doing, and I've always contended, they're years ahead, we can debate how many. Five, seven, three. Probably closer to five than three. But where they're headed is serverless, you know, functional programming. Stateless, new programming models. It's all about the developer to those guys. And that's the parlance that they speak in. The Hyperconverge guys all talk in VM terms. And that's not how Amazon talks or thinks. So, you know, the question is, is that a next wave, and can the Enterprise guys >> Peter: Talk developer? >> Yeah, can they catch that wave? >> So, I think... Look, lets be honest. AWS is a great company. There's no question about it. They've done things that a lot of old style infrastructure jocks thought couldn't be done. And they did it. And they continue to, they continue to demonstrate that they are really engaging their customers and turning that insight and knowledge into great services. So, this is not, this is not a knock on AWS. But what ultimately has to, and I think AWS is recognizing this as well, because they're starting to talk a lot about IoT and their approach to IoT, recognizing that not all the data is gonna be sourced up in the Cloud. The data is gonna be generated in a lot of other places and they have to participate there as well. So, from our perspective ultimately, we would say that Multi-Cloud, the ability to, the ability to naturally place your data where the data needs to be placed, which is increasingly is gonna be closer to the event that needs to be automated, that needs to have that high quality experience, is gonna be the way, is gonna be the dominant factor in determining the characteristics of the application infrastructure that you put in place. And, we'll see what happens. Serverless, yeah, serverless is great. You can do a lot with it. But, you can also still build junky applications with serverless. Microservices are great, yeah. But you can still build junky applications with Microservices. >> A lot of those services aren't so micro as Neil Raden would say. >> That's exactly right. So you can still do bad stuff in the Cloud. So, at the end of the day, the whole point is to get a new compact between business who have the vision of the digital services and digital capabilities they want, IT professionals and developers who are gonna generate, create that value, and then infrastructure people who are not who are allowing the data and the workload to fall where is naturally should fall, and then making it possible for the industry to work together, because that's what users want. >> Okay, so let me ask the question differently. You agree that the Cloud guys generally, Amazon specifically, is ahead of the Enterprise guys when it comes to infrastructures and servers. >> Peter: Yeah, there's no question there. >> Okay, is the lead extending, or is it dwindling. Amazon's lead in your view. >> Well, so look, you have Amazon's lead, first of you have to think about Amazon's lead relative to Microsoft, Oracle, and others. And, they're not as far ahead as, they're not that far ahead of Microsoft. >> Dave: Right. >> So there's a real battle raging there. Google has at least as good a relationship with a lot of developers as Amazon does. When you think about what a lot of developers are building in the Cloud experience, they're using Kubernetes, they're using TensorFlow, they're increasingly going to use Istio. I mean, so, it's not, There's gonna be increased energy being put forward to try to talk about how that Cloud innovation's gonna happen. >> So those are the three Hypercloud guys. >> Those are three Hypercloud guys. And, as we talked about, they are increasingly defining what the Cloud experience is. I think what we're seeing now, is the Enterprise guys stepping back and saying, you know what, we have to define our roll in the Cloud experience, and not presume that we're gonna tell everybody what the Cloud experience is. Which is what they were doing for many years, and they failed at it. >> And you could make an argument that HPE as a smaller company with less assets to encumber them, can actually deliver that through partnerships, maybe not as profitably, most definitely not as profitably, but actually can deliver that outcome for customers as a more agile customer. >> We'll see, we'll see, because... >> Dave: You could make that argument is all I'm saying. >> Well, you could make that argument, but remember, we're moving from, and even HP announced some stuff today with Greenlake, moving from a product orientation increasingly to a service orientation. And there's demonstration that you can do things with your business model that may allow you to do things in different levels of profitability at somewhere, you know, when you take more of a services approach to things. So, I think the most important message that we can leave from today is that, our observation on that notion of a spectrum, from, you know, public put it on public, to a true private orientation which is hybrid where an on premise play is gonna be essential. That spectrum seems to be real, number one. Number two, however, it doesn't mean that AWS in particular is not going to be successful at driving the definition of the Cloud experience, and number three, we're now seeing at least one company, but we're also starting to see indications of others, acknowledge that their roll in all of this will be to take whatever the leaders in Cloud are talking about and make it possible, that experience possible where the data requires and that will include on premise. >> So, and I agree with you, AWS is defining that Cloud experience. So, as Ana Pinczuk was speaking, I just wrote down, I jotted down, AWS Cloud experience, which they've defined, and HPE Cloud experience. So I've got pay as you go, you know this kind of flex capacity, kind of. I mean it's as close as you can probably get. >> Peter: Greenlake. >> Yeah, Greenlake Kind of. >> Something we all need to learn more about. But, it's getting there, it's getting there. >> But it will never get there entirely, right? Because, they're gonna require to be, you know, buy a years worth of capacity, thresholds, you're gonna have thresholds above and threshold below. >> Except, we also heard, again I think there's more, I don't wanna, I think you're right. >> It's nuanced, it's not 100% of the way there. >> You start throwing the balance sheet and finances in there and how you're gonna do it. >> We'll come back to that. So, elastic? Again, kind of. You know, to a point. Integrated services? Like tons of them, like thousands a year? Some of those, but as I was saying before, HP's ecosystem play, allows them to pick and choose. >> Yeah, but remember Dave, okay keep going, keep going. >> Security, sort of, let's call it the Amazon way. Here's our security, it's good. But take it or leave it. And then, the HP approach is your way. HPE, you have security your way. If that's the edict of the organization, we can map to that. One Cloud versus Multi-Cloud. Obviously, HPE has a Multi-Cloud strategy, Amazon doesn't. They don't care about managing Multi-Clouds. They care about managing their Cloud. And then services as a service. HPE can deliver that and, Amazon I got a question mark, it's their ecosystem that's delivering those services. So I guess the point is, that I'm making is, maybe it's not the exact replica of the Amazon experience, but there are attributes of it, which appeal to Enterprise IT. >> Peter: That's right. >> Which Amazon is really not interested in delivering. >> Peter: Right. >> Ergo, the assumption is, my assumption is that, that business, that on prem business will be here for a long, long time. >> Peter: Absolutely. >> Indefinitely. >> And we would agree with that. In fact we think, ultimately, that there's gonna be enough uniqueness about how businesses use their data and treat their data that we expect to see this notion of true private Cloud actually be a bigger overall piece of the marketplace than the one size fits all, with a degree of customization possible, that Amazon's providing. But, again, this is, we have to be careful here. Because as analysts, we're sort of naturally falling into this trap of setting up AWS and HPE or any of these folks in opposition. There are companies that have very, very different opposed visions of how this is gonna play out. Specifically, we can talk about Amazon saying it's all gonna be IaaS, we're gonna out paths in there. And then, increasingly obviously, Microsoft and Oracle saying, oh no, we're gonna have application Clouds. You're gonna buy and application Cloud, and you're gonna do a whole bunch of stuff in that. What we see today is not in opposition, >> Dave: Right. >> to the AWS vision, it's not. It is a, okay, great. But for this type of work, this type of data, this type of workload, this type of reality, chances are, you're gonna need to put this type of stuff here, and have it fit into the overall motion of Cloud experience, and it doesn't have to be a complete substitute. It just has to work for that class of workload. >> Well, but, bringing it back to HP, and we gotta wrap, is HPE does not have an application Cloud, right? >> Peter: They don't. >> And as a result, it's going to be in a knife fight. With Amazon, with Dell EMC, and with China. >> It's gonna be in a knife fight with companies that are like it. China, you know, Huawei, Dell EMC, Cisco. >> You're right, you're right. Amazon's setting the pricing tone and the business model tone. >> Look, right now it's Amazon and Microsoft, are helping to set the stage of what this is all gonna look like. >> So, again, bottom line is, it's not a 60% gross margin company, Mark Hurds vision of going to compete with Cisco. It's a 25 to 32% gross margin business. >> Peter: That's really focused on customer problems. >> Focus on customer problems throws off a couple billion dollars of cash, it can eke out a little bit of growth. You know, that's what it is. >> Not a bad business. >> No, it's a great business, actually. Alright, Pete, thanks the wrap on day one. We'll be back tomorrow 8:30 am local time, right? >> Man: Sure. >> Roughly. >> Man: 8:45. >> 8:45 local time. Check out theCUBE.net, where you'll see this show, you'll see the other shows that we're doing including re:Invent John Furrier and the crew are over there today. That's a wrap for day one, this is theCUBE. We'll see you tomorrow. (upbeat music)

>> Announcer: Live from San Francisco, it's theCUBE! Covering Informatica World 2017. Brought to you by Informatica. >> Welcome back, everyone. We're live in San Francisco for CUBE's exclusive coverage of Informatica World 2017. I'm John Furrier, SiliconANGLE. Our next guest, Anil Chakravarthy who's the CEO of Informatica, CUBE alumni multiple times, but the chief executive officer leading the charge of a great private company doing very well. Welcome back to theCUBE. >> It's great to be here, John. Thanks very much. >> We've got a couple of things to talk about, but I want to just jump in. Behind us you see the new logo, Informatica. Really kind of the last leg of the stool, if you will, you guys have gone private, >> Yep. >> Great product work over the years. You know I've been pretty complimentary of you guys, although we've had a critical analysis session yesterday. But all the big bets were very well done playing off. You've got a great product team, great leadership team, new CIO hire. But the last leg of the stool is the brand. >> Anil: That's right. >> You guys haven't been showboating much. Now you got to kind of brag and be humble about it and get the word out. New marketing program, what's that all about? >> Yeah that's exactly right. So you just said, the transformation that we are going through, three big steps is the transformation. The product portfolio transformation, we've been talking about that. This is all driven by cloud, by big data, and machine learning, and all of that. Then the transformation of the business model, from license to subscription and cloud services. And now the brand transformation. And we see the brand transformation as actually catching up to where the company actually was. We were just talking about that right before we got started. We actually have done a lot of things. Like for instance, did you know that we are doing 1 trillion transactions a month in the cloud? I mean, very few people knew about that. >> Yeah, what's more impressive on that, I found that out earlier it was 1 billion in January. >> Anil: It's unbelievable. It's-- >> I mean how do you do that? It's a growth hockey stick, straight up. >> It's a hockey stick, it's huge, it's huge growth, and that's driven by the fact that we are the leader in cloud data management for the biggest ecosystems, for Salesforce, for Amazon, for Azure, and that drives a lot of the data volume across the cloud. >> Before we get in the keynotes, on that note, one of the big bets you know I've been very impressed on is the cloud play, right? The data architecture of things, the winning formula. But you got cloud presses, you had Amazon Web Services. Google just announced span or horizontally scalable database, generally available. You were on the of the three data partners on the front end of that. >> Anil: That's correct. >> And part of the launch of Google. >> That's correct, yeah. >> I didn't know that. >> So you know, the way we think of the world is from our customer's perspective. It really is the best way to think about it is as the enterprise cloud. Put it together. All the data you have in the enterprise that you have generated over the years, that's still very valuable data. And then the data you have in the cloud. And you can't think of those two things as separate. For instance, you could have customer data, the same customer. John, you're the customer of a retailer. Some of that data about you is in their on-premises systems, and some of the data may be in a cloud system, but it is all interconnected data and you can't have two separate silos. We believe that we are the only ones that can really manage that. And that's why we are supporting every major cloud platform or cloud system, just like we are supporting every major on-premises system. >> Yeah, you guys call it Switzerland. It was a great way to describe it. But really to me it puts bigger than that, is that you guys make data ready. And that's really the value of what I call the tier two data layer that's building, where you've got stuff in memory, I get that, it's some odyssey streaming stuff, and things going on there. But now, then you have third tier, archive, but data tier two is just like all the data: IoT, structured data. That's growing, but the cost of storage is getting lower and lower. Now companies are incented to store. How is that impacting your business? We heard that at DellEMC World over and over and obviously they're in the storage business, but the tier two storage is significantly growing. >> Well data is still growing at over 25% a year. That's a huge number given all the way the size that you have, so it's going to be within by 2020, it'll be over 15 zetabytes, and a zetabyte, for those of you who are interested, is 10 to the 21. That's a huge amount of data. And what we're seeing is, the value comes from being able to first of all see your way through the data, being able to understand what data is valuable and what's not, and then connect the data. If you have customer data, product data, location data, et cetera, being able to put all of that together. That's really where the value comes from. >> So I've got to ask you about your keynote. You talk about the digital transformation's unfolding and data is the critical foundation for digital transformation. Okay, we've heard digital transformation. I mean, I'm not to say it's played, I know you guys have your theme, but this business transformation going on. So digital transformation is a known trend, but it kind of is played in my mind. I want to know what's different about Informatica now. Why is it unfolding now versus two years ago when we started talking about digital transformation? What's the most relevant thing now? >> Well I think the biggest relevance is, two years ago, as you exactly said, people were talking about digital transformation. Now they're doing digital transformation. Now you're seeing, you know, we talk about our own customers like Tesla or GE or Amazon doing it, but lots of other customers are actually doing the digital transformation. Now when you first take the first step toward the digital transformation, that's when you realize, my data, I got to fix the data foundation. If I can't have a data foundation, then I just, you know, everybody cares about a good customer experience. If I can't tell all the interactions a customer has with my company, and that data is in different places, there is no way I can provide a good customer experience because the customer knows what they're doing with me and I don't know what they're doing with me. And that's really the foundation for the data foundation. >> I want you to take a minute to just re-explain that because this is something comes up all the time and I get different answers and people have different definitions. What does it mean to have a digital data foundation and what are some of the impacts to the customers when they do have that? >> Think of it the simplest way. Let's say you have a customer and a lot of the new customers are like that. You are a bank, and you have a customer who doesn't want to talk to anybody. They only want to do everything through a mobile application. They want to file a loan application through the mobile, they want to check their balance through mobile, they want to deposit a check through mobile, et cetera, et cetera. If they have a problem, they might talk to somebody through a chat on a mobile, but they don't really want to talk to a live person. And this is, by the way, a common scenario now. Now they are doing probably 20 different things through the mobile. But when you get into your back end, that's the front end. You can put 20 things on the mobile, but the back end you've got 20 different things. But you have to have a single picture across those 20 things. When did the customer interact with us? What did they do? What is the pattern of that customer? How do you profile what the customer is doing? If you don't have that picture, everything that you do with the customer is going to just appear disconnected to them. It's going to frustrate them even more. And that's really the reason we have to have the data foundation. >> Okay, so, that's kind of a data layer, I get that, and believe me, horizontally-scalable data, making it accessible only helps the apps. The question to you is, your reaction to people saying, "Hey, Anil, I got to be innovative. "I got to free the data up and I got to let it grow "and you know a thousand flowers bloom, all this goodness. "But hey, I got to control it." So that's a huge issue. I've got governance, I've got compliance, there's laws now. So am I stuck in the mud? I want to be innovative and go fast, but now I've got to govern it and control it. How do you answer that question? >> You can do both now and that's the reason why we're announcing CLAIRE and all these innovations that we announced this. The advent of machine learning and metadata let's you do both. You basically say, look, I can use all these new technologies to find out what data I have. It's not going to slow you down. In fact, if you set up something like an intelligent data lake, because it has the metadata layer, you are actually opening up the data you have to the end user without having to come through IT for every piece of data, which means they can go faster. That's where the innovation happens. So you can do both. >> John: So it's a control catalog, basically. >> It's exactly right. It's a controlled catalog and you basically get to define different levels of trust. You can say, this data is curated data, it's trusted data and we can vouch for it. And maybe other data that's just shared collaboratively, and you can just flag it and then that way the user knows, okay here's data that I'm getting from a central system and this is what I need to use when I'm talking about something like revenue. And I'm tying something like a trend of what's going on. I might be able to use other data and that's the key there. >> Talk about the trend around CLAIRE. A lot of buzz here at the show. CLAIRE stands for clairvoyant. It's got the word AI in it. It's a name. SAP's got Leonardo, Salesforce has Einstein, all these different terms, but it's a clever way to point to AI, augmented intelligence, and machine learning. >> Anil: Correct. >> What does that mean for Informatica as a company? Certainly it kind of humanizes it. >> Anil: Correct. >> Shows the access of data should be democratized. What does it mean for you guys and the customers? How does that play out in your mind as the CEO? What do you see CLAIRE doing? >> Well the three big points I'll make about CLAIRE. First of all, when we built CLAIRE, we did not invent the artificial intelligence or the machine learning. A lot of that is already available. So we took a lot of the best algorithms in machine learning and applied them to metadata and applied them to data management. That's the secret sauce. It's not the building the AI itself, it's the use of the AI for data management. That's number one. Second, we defined CLAIRE very clearly and we said it's not a product. It's an engine, it's an AI-powered engine. In fact, I call for CLAIRE, I say it's cloud-scale, AI-powered real time engine, that's CLAIRE. Right, so it's an acronym, but it's the engine that powers other products. The third big thing is we're telling customers, you're going to get the benefit of CLAIRE, but you don't need to deploy CLAIRE. When you buy any of our products that are powered by CLAIRE or any of our solutions that are powered by CLAIRE, that will automatically come in there. So it means once you have any product like our enterprise information catalog or our secured source or data governance, you're starting to use CLAIRE and then you can use CLAIRE for other use cases as well. >> What's been the reaction? You know, and obviously you get nervous, CEO, probably got these things out there, probably wonder what the reaction is. What's your take on the reaction? >> People are very intrigued. I know that's what they, they look at CLAIRE and go, what is CLAIRE? How are you guys using it? I think people are asking us, tell us a little bit more about how AI is being used in the world of data and data management. So it's absolutely the reaction we wanted. >> So I got to ask you this question. I asked Mark Hurd the same question at the Oracle media day a few weeks ago. I want to ask you the same question. Everyone's number one at everything now. You guys are number one in six quadrants. Oracle's number one, the Dell E's. Everyone's number one at something. So the question really is, not so much about being number one, congratulations, you've got some magic quadrant wins that was highlighted in the keynote. But you guys are going through a transformation. You're telling your customers that they're going through a transformation. Wouldn't it make sense that the transformation scoreboard looks different than the old way? And I want to get your thoughts on this because, not that we have the answer, but there's one answer in customer wins, but as this new world transforms and unfolds, what's the scoreboard look like? How, because it's not as clean to say, this is the category, you're starting to see a little blending, as you mentioned how data is evolving. What's the new scoreboard look like? >> Is it the scoreboard for us or for the customer? >> John: You guys, the industry. How do I know if you're doing well? Obviously customer wins is obviously number one. >> Yeah, I think the best way to. I'll give you a couple of metrics, financial and nonfinancial, okay. From a nonfinancial perspective, as you said, a couple of key metrics. One is customers. How many new customers, how many new customers, reference customers do we have? Second one that you want to look at is just mind share or when people think about digital transformation, do they think of, hey, Informatica, they have a key role in my digital transformation. Just looking at mind share and so on, because that's a good leading indicator. In terms of the nonfinancial, or the financial metrics for us, obviously as more customers do what we call enterprise cloud data management, you're going to see our subscription revenue grow dramatically and you know, that's something that when you look at our subscription revenue, you'll see that impact of the enterprise cloud data management. >> And you guys made the move to subscription, obviously went private. Bruce Chizen and Jerry Held, your board members talked about this. You can do a lot of things 'cause it doesn't, it impacts the P&L but that it's still baking out, it's evolving, you're private, not public, but you want to get it right before you go public. >> That's correct. >> How do you feel about the progress on that front now? >> Oh we're making fabulous progress. We're very pleased with where we are. From my perspective, we are ahead of where we thought we would be by this time. I think customer buying behavior has converged really nicely with where we are in terms of where we want to go. So I think that's definitely been a big plus. >> Sally Jenkins, your new CMO, you got to feel good about her coming on the board-- >> Anil: Oh she's done a great job. >> High impact. She said on theCUBE that you guys are the hottest privately held pre-IPO startup. >> Anil: That's right. >> Twenty years in the making, whatever. I mean, but you guys are private. >> Billion dollar startup. >> But you act like a startup, which is why we like you guys a lot. You guys are like a very hustling like a startup. But now you're growing and you're getting beyond the 200 million, over a billion dollars now. When's the IPO coming? >> Yeah, I mean, you know look, I can tell you the factors that will be the lead to the perfect timing for the IPO. When those factors come together, I don't have a crystal ball right now, but I can tell you it weighs both on us and the market. From our perspective, we are making this big shift in the business model. We want to make sure that we can say, hey look, now the shift is very clear and stable and we can see where they where you know we'll be able to project out our own forecast for the next three, four quarters. So that's one key indicator for us. The second key indicator that we look at is the total revenue growth of the company and what percent of the growth of the revenue is recurring revenue for us. So we're going to be looking at those two factors. And of course from the market perspective, we want to make sure that the market wants to, continues to be. >> If you wait four years til we have a new president, and then heard all the politics from the Kara Swisher thing was, got a lot of people stirred up, in the conversation. But in all seriousness now, you also have private equity so you have to make the company worth money after they go public so you've got to have some growth left in you, right, I mean you guys are, you feel good about the? >> Oh we really do because you know, we look, that's where these six categories that we talked about make a lot of sense. You look at data integration, data quality, master data management, these are all categories that are well established. We know the patterns and we are seeing very good growth in those categories. Then you look at the new categories: cloud, big data management, data security. Those are all coming into their own right now. So that's why when you look at our portfolio, you go, wow, there are some that you already have great, well established and going well. These other ones, they're well established but they also have a lot of promise and future growth. >> Great chatting with you. You're a great, insightful, and inspiration. You guys have done a great job. But I've got to ask you the question because I think you have an interesting role. I mean, you have, you're acting like a startup, but you're not a startup. You went private from a public company. You've got a great board of directors. You've got Jerry Held and Bruce Chizen on there, but you've also got private equity sharks on the board. So, that's my definition, I won't say you said that. >> No, no, but I was actually in the private equity world, to my pleasant surprise, I've seen the whole spectrum of investors and our guys on the board are very much growth-oriented. They know that the value gets created for them through growth so it's well aligned. >> Yeah, but you're not sitting back having pizza and drinking wine. These PE guys, they're financially driven. >> Anil: That's right. >> So the question is, advice to other startups, whether they're venture backed or other companies going through innovation strategy. How do you manage the success of having such good product excellence? I know you've got good people, so that's an easy one answer. How as a CEO do you maintain the disciple to have the cadence of the financial performance? Because those guys look, they're probably not going to give you, hey how we doing? Numbers matter, but you're transforming technology and products. >> That's right, so what we do is-- >> How do you do it? >> We have a scorecard which has both the short term and the longterm metrics and we look at both of those. You know, we do monthly business reviews. So the pulse of the company has definitely quickened. We're operating at a new level of intensity. But when we look at the scorecard, it's not just the immediate financial metrics. It's things like, for example, are we building the back end infrastructure to be a subscription company? That doesn't get done in a month. >> John: That's an IT challenge, right? >> That's an IT challenge, a process challenge, it takes 12 months, 18 months, the kind of things that you talk with Graeme about. But that is an example of, you can have a scorecard. You don't necessarily have to look at a scorecard just for the short term metrics. You look at it for both short term and what makes you successful over the longterm. And that's, you know, that's what we're doing is just keep our eye on the ball, focus on a few things, both short term and longterm, and make sure we're doing them well. >> How about customer wins? To me, that's the scoreboard ultimately as we look at it at our team. How are you doing on customer wins? Can you share some, I see you have a lot of great customers. I met a few last night, obviously big wigs, big names. >> Anil: Yeah, exactly. >> What are some of the big wins look like and why are you winning? >> Well you know, we have 7,000 plus customers. We have a great customer base. Just at this show we've had 85% of our sessions here at the show have had customer or partner speakers. That gives you a sense of customers want to talk about us. A couple of ones that I would highlight for example, which are fairly recent for example, Amazon is one. They just spoke at the show and in fact the CMO of Amazon was here, Ariel Kelman. And he spoke about he is a customer of Informatica and how he's using Informatica for his own marketing systems and the marketing data analytics that he is doing. Another example is Tesla. You know, we talked about them at the show. >> I got a test drive on Friday with one. >> There you go, exactly, and then they are using us for the Tesla and the Solar City acquisition and driving synergies there. So lots of great examples. >> John: Tough customers, by the way, very, very finicky. >> Oh they are very demanding, very demanding customers and we are really proud to be serving them. >> Okay, final question, Anil. What's next? How do you look forward. Obviously this event, congratulations on getting the branding out. Peggy and the team did a great job. Sally and the team did a great job. What about next? What's next? >> Yeah, you know, what's next for us is simply work with customers to first of all get our story out, understand their priorities, and make sure that they understand that we can be a great partner for them. So we believe that this is the beginning of that journey. We talked about digital transformation and how we help them. Now we take the show on the road to our customers, make sure that we help them at their pace to transform. >> So bring the message out, build the brand. >> Absolutely. >> That's the key priority. >> And then continue. >> Product side, what's going on the products? >> Well on the product side, for instance, you saw a teaser of all the big trends. Machine learning, cloud, big data, security, all of these have full-fledged roadmaps that we're going to be working on over the course of the next six months. >> Anil, great to see you. Congratulations, you can tell, you're still intense. You've got the intensity, it's not going to stop by the way. >> Anil: No it's not. >> It's not like you're not going to get more intense as you guys grow. And congratulations. >> Thank you for having me on your show. >> We are here live in San Francisco for Informatica World 2017 with the CEO here, Anil Chakravarthy, inside theCUBE. I'm John Furrier. Thanks for watching. Stay with us for more coverage from Informatica World after this short break. (techno music)

(soft music) (soft music) >> Narrator: Live from Las Vegas. It's the Cube. Covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. >> Okay welcome back everyone. We're live in Las Vegas. This is the Cube. SiliconAngles flagship program. We got out to the events and extract the (mumbles). Been here two full days of wall to wall coverage. I'm John Furrier. My cohost Peter Burris. Peter really good to see Oracle really move from modern marketing experience, the old show name, to a cleaner broader canvas called Modern CX. Which is modern customer experience. And you startin to see the new management which took the baton from the old management. Kevin Akeroyd. Andrea Ward who did a lot of work. I mean they basically did a ton of acquisitions. We talked last year if you remember. Look they have a data opportunity and we spelled it right out there and said if they can leverage that data horizontally and then offer that vertical specialism with differentiation, they could have their cake and eat it too. Meaning the pillars of solutions in a digital fabric with data. That's what they did. They essentially did it. >> Yeah they did. And it's been, it was a. We came here hoping that that's what we would see and that's what we saw John. Oracle not only has access to a lot of data but a lot of that first person data that really differentiates the business. Information about your finances. Information about your customers. Information about orders. That's really, really crucial data. And it's not easy to get. And if you could build a a strategy for your customers that says let's find ways of bringing in new sources of data. Leveraging that data so that we can actually help you solve and serve your customers better. You got a powerful story. That's a great starting point. >> And one of the things that I would observe here is that this event, the top story was that Mark Hurd came down and talked to the customers in the keynote. And also made a cameo visit to the CMO, some which they had separately. But really kind of basically putting it transparently out there. Look we got all this technology. Why are we spending all of this technology and effort to get a one percent conversion rate on something that happens over here. Let's look at it differently. And I think the big story here is that Oracle puts the arc to the future. Which I think is a very relevant trajectory. Certainly directionally correct using data and then figuring out your process and implementing it. But really looking at it from a people perspective and saying if you can use the data, focus your energies on that data to get new things going. And not rely on the old so much. Make it better but bring in the new. >> I think that's the one thing that we need to see more from Oracle in all honesty. At shows, this show, and shows like this. Is that and we asked the question to a couple quests. What exactly is modern marketing? Technology can allow a company to do the wrong things faster and cheaper. And in some cases that's bad. In marketing that's awful. Because more of the wrong thing amplifies the problem. That's how you take down a brand. You can really annoy the hell out of your customers pretty quickly. >> Well I think you made that point interesting I thought. On that just to reiterate that, validate that, and amplify. Is that if you focus more on serving the business as a marketer versus now it's about the customer. Okay which is why I like the CX and I know you do too. You can create enterprise value through that new way. Versus hey look what team. I'm helping you out with some leads and whatever. Support, content. Marketing now owns the customer relationship. >> Well marketers talk about a persona all the time John. They say what's the persona? It's a stylized type of customer, and now with data we can make it increasingly specific. Which is very, very powerful. I think Oracle needs to do the same thing with the marketing function. What is that marketing function persona that Oracle is, it's self driving to. Driving it's customers to. And trying to lead the industry into. So I would personally like to see a little bit more about what will be the role of marketing in the future. What exactly is the modern. What exactly is modern marketing? What is the road map that Oracle has, not just for delivering the technology, but for that customer transformation that they talk about so much. It's clear that they have an idea. I'd like to see a little bit more public. Cause I think a lot of marketers need to know where they're going to end up. >> I was a bit skeptical coming in here today. I was a little nervous and skeptical. I like the team though, the people here. But I wasn't sure they were going to be able to pull this off as well as they did. I'd give them a solid letter grade of an A on this event. Not an A plus because I think there's some critical analysis that's worth addressing in my opinion. In my opinion Oracle's missing some things. It's not their fault. They're only going as fast as they can. Not to get into your perspective too, but here's my take. They don't know how to deal with video. That came up as technical issue. But Jay -- >> But nobody really does. >> But nobody really does. And that's just again because we're in the video business it jumped out at me. But Jay Baer was on. Who's hosted the CMO Summit. And he's out there too like us. Content is a big thing. And I haven't heard a lot about the content equation in the marketing mix. So if you look at the modern marketing mix, content is data. And content is instrumental as a payload for email marketing. And we're in the content business so we know a lot about the engagement side of it. So I just don't see a lot of the engagement conversations that are happening around content. Don't see that dots connecting. >> And I think you're right. I think you're right John. And part of the reason is, and again I think Oracle needs to do a better job at articulating what this means. From our perspective, it's my perspective but you agree with me. I'll put words in your mouth. Is that marketing has to be a source of value to customers. Well what do customers find valuable? They find information in easily digestible, consumable chunks as they go on their journey. What are those chunks? Those chunks, in fact, are content. So to tie this back and show how crucial this is. At the end of the day, consumers, businesses need to learn about your brand. Need to learn about next best action. All that other stuff. In consumable interesting, valuable chunks. And it ultimately ends up looking like content. So your absolutely right to talk about how this all comes together and show how, that content is the mechanism by which a lot of this value's actually going to be delivered. Is really crucial. >> And now to give the praise sandwich, as we say in positive coaching alliance, two positives and then the critical analysis in the middle. That's the praise sandwich. So to give them some praise around the criticism. I will say that Oracle validates for me, and this is why I think they got a good strategy. That there's no silver bullet in marketing. Okay there's no silver bullet. This product will get you more engagement. This will do that. They do show that data is going to be an instruble part of creating a series of collections of silver bullets. Of bullets if you will. To create that value. And I think that's the key. And then the second praise is, this is kind of nuance in their analysis. But the third party data support, is a big deal in my mind. I want to expand more on that. I want to learn more about it. Because when you have the first party data, which is very valuable, and access to more data sources. That becomes increasingly interesting. So the extensibility for getting content data or other data can come in through third party. I think that opens the door for Oracle to innovate on the area we gave the criticism on. So I think that's a positive trend. I think that's a good outlook on having the ability to get that third party data. >> Yeah but it's also going to be one of the places where Oracle is going to have to compete very, very aggressively with some other leaders who are a little bit more oriented towards content. At least some of their marketing clients are a little bit more content oriented. I'm comfortable Oracle will get there because let's face it. At the end of the day, marketing's always done a pretty good job of created, creative, using data to figure out what creative to use or create is nice. Very important. But what we're really talking about is customer experience. Will the customer get something out of every interaction? And while content's crucial to that the end result is ultimately, is the customer successful? And Oracle is showing a better play for that. So I'll give you, I like the way you did it on the grading. I'll give them a B plus. But I'm not disagreeing with you. I think we saw A talent here. We saw an A minus story. And they're a year in. So there's still some work that needs to be done, but it's clearly -- >> Why you weighted as a B plus >> I give them an A on vector. And where they're going. >> I would agree with that. >> And the feedback that we've gotten from the customers walking the show floor. There's a lot of excitement. A lot of positive energy. The other thing that I would say -- >> Oh the band. I'd give the band, the band was a B minus. (Peter laughs) Yeah that takes it. That's going to kill the curve. >> What was the band last night? >> I don't even remember. We missed the good one, I know that. We had dinner so we came late. It was a good band. It wasn't like, it wasn't like Maroon 5 or One Republic. Or Imagine Dragons or U2. >> Or one of the good ones. Sting. C minus. But the other thing that I think is really important is at least it pertains to modern customer experience. Is that they are, they are absolutely committed to the role the data's going to play. And we talked about that right at the front. But they are demonstrating a deep knowledge of how data and data integration and data flows are really going to impact the way their customers businesses operate. And I think that there were a couple of, I'll give a really high point and one that I want to hear more about in terms of the interviews we had. Great high point was one, we talked a lot about data science and how data science technologies are being productized. And that we heard, for example, that Oracle's commitment to it's marketplace is that they are going to insure that their customers can serve their customer's customers with any request within 130 milliseconds anywhere in the world. That's a very, very powerful statement that you can only really make if you're talking about having an end to end role over, or influence -- >> Like we commented, that's a good point. Like we commented that this end to end architecture is going to be fundamental. If you read the tea leaves and look at other things happening, like at Mobile World Congress. Intel I think is a bellwether on this with 5G. Cause they have to essentially create this overlay for connectivity as well as network transformation to do autonomous vehicles. To do smart cities. To smart homes. All these new technologies. It's an end to end IPR (mumbles). It's connected devices. So they're super smart to have this connected data theme which I think's relevant. But the other one, Ron Corbusier's talked about this evolution. And I find some of these, and I want to get your reaction to this statement. So Ron was kind of like, "oh it's an evolution. "We've seen this movie before." Okay great. But when you talk to Marta Feturichie, who was a customer from Royal Phillips. >> Peter: Great interview. >> She's head of CRM. Now she's doing some other stuff. So okay. What does CRM mean? So if you think evolution. What the customers are doing. Time Warner and Royal. It's interesting. Certain things are becoming critical infrastructure and other things are becoming more dynamic and fluid. So if you believe in evolution, these are layers of innovation. So stuff can be hardened as critical infrastructure, say like email marketing. So I think that what's happening here is you start to see some hardening of some critical infrastructure, aka marketing technology. MarTech (mumbles). Maybe some consolidation. AdTech kind of comes together. Certain things are going to be hardened and platformized. >> Let's take the word hardened and change it cause I know what you mean. Let's say it's codified. Now why is that, why is that little distinction a little bit interesting is because the more codified it gets, the more you can put software on it. The more you can put software on it the more you can automate it. And now we're introducing this whole notion of the adaptive intelligence. Where as we start to see marketing practices and processes become increasingly codified. What works, what doesn't work? What should we do more of? What should we do less of? Where should we be spending out time and innovating? Versus where should we just be doing it because it's a road activity at this point in time. That's where introducing this adaptive intelligence technology becomes really interesting. Because we can have the adaptive technology elements handle that deeply codified stuff where there really is not a lot of room for invention. And give the more interesting ongoing, customer engagement, customer experience -- >> Right on. And I think we should challenge Oracle post event and keep an eye on them on this adaptive intelligence app concept. Because that is something that they should ride to the sunset cause that is just a beautiful positioning. And if they can deliver the goods on that, they say they have it. We'll expand on that. That's going to give them the ability to churn out a ton of apps and leverage the data. But to the codified point you're making, here's my take. One of the things that I hear from customers in marketing all the time is a lot of stuff if oh yeah mobile first all that stuff. But still stuff's web presence based. So you got all these coded URL's. You got campaigns running ten ways from Sunday. DNS is not built to be adaptive and flexible. So it's okay to codify some of those systems. And say, "look we just don't tinker with these anymore." They're locked and loaded. You build on top of it. Codify it. And make that data the enabling technology from that. >> Peter: Without it become new inflexible (mumbles). >> Yeah I can't say, "Hey let's just tweak the hardened infrastructure "to run an AB test on a campaign." Or do something. No, no. You set this codified systems. You harden them. You put software on top of them. And you make it a subsystem that's hardened. And that's kind of what I mean. That's where the market will go because let's face it. The systems aren't that intelligent to handle a lot of marketing. >> Peter: They're still computers. >> They're still computers. People are running around just trying to fix some of this spaghetti code in marketing. And as the marketing department gets more IT power. Hey you own it. They're owning now. Be afraid what you wish for you might get it. So now they own the problem. So I think Oracle on the surfaces side has a huge opportunity to do what they did with Time Warner. Come into the market and saying, "Hey we got that for you." And that's what Hurd's kind of subtle message was on his keynote. Hey we're IT pros, but by the way you don't need to be in the IT business to do this. We fix your problems and roll out this -- >> We're going to talk to you in your language. And your language is modern customer experience. Which is one of the reasons why they've got to be more aggressive. And stating what they mean by that. >> And we have all the data in our data cloud. And all the first party data in our Oracle database. >> Right, right exactly right. >> That system of record becomes the crown jewel. Oracle has a lock spec on the table. You think it's a lock spec? >> Uh no. And that's exactly why I think they need to articulate where this is all going a little bit. They have to be a leader in defining what the future of marketing looks like so they can make it easier for people to move forward. >> Alright putting you on the spot. What do you think a modern marketing looks like? And organization. >> We talked about this and the answer that I gave, and I'll evolve it slightly, cause we had another great guest and I thought about it a little bit more is. A brand continuously and always delivers customer value. Always. And one of the -- >> Kind of cliche-ish. >> Kind of cliche-ish. >> Dig into it. >> But modern marketing is focused on delivering customer value. >> How? >> If they're deliver - well for example when the customer has a moment in a journey of uncertainty. Your brand is first is first to the table with that content that gets them excited. Gets them comfortable. >> Lot of progression. >> Makes them feel ready to move forward. That your, and well I'll make another point in a second. And I would even say that we might even think about a new definition of funnel. At the risk of bringing up that old artifact. Historical funnel went to the sale. Now we can actually start thinking about what's that funnel look like to customer success. >> Well there's two funnel dynamics that are changing. This is important, I think. This is going to be one of those moments where wow the Cube actually unpacked a major trend and I believe it to be true. The vertical funnel has collapsed. And now the success funnel is not >> Peter: It's not baked. >> Not big. It's decimated from this perspective of if the sale is the end game of the funnel, pop out that's over. Your point is kind of like venture funding for starter. That's when the start line begins. So here it's, okay we got a sale. But now we have instrumentation to take it all the way through the life cycle. >> And you know John. That's a great way of thinking about it. That many respects when you, when you introduce a customer to a new solution that has complex business implications that you are jointly together making an investment in something. And you both have to see it through. >> I mean sales guys put investment proposal on the -- >> That's exactly right. And so I think increasingly. So I would say modern marketing, modern marketing comes down to customer success. A prediction I'll make for next year is that this session is called, you know we'll call it the modern marketing modern customer experience show. But the theme is going to be customer success. >> Heres what I'm going to do. Here's what we're going to do this year Peter. We're going to, we will, based upon this conversation which we're riffing in real time as we analyze and summarize the event. We, I will make it my mission. And you're going to work with me on this as a directive. We're going to interview people, we're going to pick people that are truly modern marketing executives. >> Peter: That's great. >> We're going to define a simple algorithm that says this is what we think a modern marketing executive looks like. And we're going to interview them. We're going to do a story on them. And we're going to start to unpack because I think next year. We should be coming here saying, "we actually did our work on this." We figured out that a modern marketing organization and an executive behave and look this way. >> Right I think it's a great idea. So I'll give you one more thought. Cause I know you'll like this one too. Doug Kennedy. The partner. The conversation that we had. >> Very good. >> Talking about clearly a grade A executive. Seven weeks into the job. But that is going to be, you know for this whole thing to succeed he's got a lot of work in front of him. It's going to be very interesting to see how over the course of time this show and other Oracle shows evolve. >> I have a lot of partner experience. You do too. He's got a zillion years under his belt. He's a pro. He did not have any deer in the headlights look for seven weeks on the job. He's been there. He's done that. He knows the industry. He's seen the cycles of change. He's ridden waves of innovation up and down. And I think Oracle has a huge opportunity with his new program. And that is Oracle knows how to make money. Okay Oracle knows how to price things. They know how to execute on the sales side and go to market. And partners relationships are grounded in trust. And profitability. I would say profitability first and trust second. And it's kind of a virtuous circle. >> But John they've got to start getting grown in customer experience right? >> John: Yeah, yep. >> And that's not, it's doable but it's going to be a challenge. >> Well we talk about swim lanes with his interview, and I thought that was interesting. If you look at a center for instance, Deloy, PWC and all the different players. They're picking their swim lanes where their core competency is. And that's what he was basically saying. They're going to look for core competency. Now I think they're not there yet. The major SI's and potential partners. So he's going to have to put the spec out and put the bar there and say this is what we got to do. But you got to make the channel serve the customer. It has to be profitable. And it has to be relevant. And the only dangerous strategy I would say is the co-selling thing is always dicey. >> Especially if one has customer experience as a primary. >> It requires equilibrium in the ecosystem. >> You got it, you got it. >> It isn't there. >> And also it's a multi-partner go to market. It's not just one or two now. >> So he's going to have to really spread the love at the same time have hardened rules. Stick to his knitting on that one. Okay Peter final word. What do you, bottom line the show. Encapsulate the show into a bumper sticker. >> Well we heard Amazon released today. Google released today. Beat their numbers. Two companies that are trying to build an ecosystem from their core of the cloud. And the question is. Is Oracle who has customers with applications and with that first person data. Are they going to be able to cloudify, sorry for using that word, but are they going to be able to gain that trust that this new operating model they're really committed to for the future. Before Amazon and Google can create applications to their platform. Because Oracle has the end to end advantage right now. And in the world where digital's important. Speed's important. The fidelity of the data's important. The customer experience is important. That end to end has a window of opportunity. >> And I would also add two other companies reported, Microsoft and Intel and missed. So you have Amazon and Google. New guard, newer guard. Old guard Intel, Microsoft. Oracle is considered old guard even though they have some modernization going on from CX and the cloud. But Oracle is cloud a hundred percent in the cloud. Their SAP, for instance, is going multi-class. So the wild card in all this is, if the multi-cloud game evolves. >> Think end to end. End to end. Because that has advantages. When you're talking data, one of the things that Jack Brookwood said. He said, "you know why we can hit that 150 millisecond target?" >> Cause you don't have to move the data around. >> Cause sometimes we don't have to move the data around. >> This can be very interesting. And this going to be fun to watch and participate in. Of course the Cube will covering Oracle, well we'll be there again this year. We don't have the exacts specifics on that, but certainly if your interested in checking us out. Were siliconangle.com. Peter's research is at wikibon.com as well as SiliconANGLE on the front page. SiliconAngle.tv has all the videos. And well will be documenting and following the modern marketing experience with people and companies. And documenting that on the Cube and SiliconANGLE. So that's a wrap from day two at Oracle Modern CX. Thanks for watching. (electronic music)

>> Announcer: Live, from Las Vegas. It's theCUBE! Covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. >> Okay, welcome back, everyone. We are here live, in Las Vegas, the Mandalay Bay Convention Center, this is SiliconANGLE Media's theCUBE, our flagship program where we go out to the events and extract the signal from the noise. I'm John Furrier with my co-host, Peter Burris, Head of Research at siliconANGLE and wikibon.com. Our next guest is Jennifer Renaud, who's the CMO/Global Marketing Lead for Oracle Marketing Cloud. She's the brains behind this show, underneath Laura Ipsen, who was on yesterday, General Manager, SVP. Great to see you, Jennifer. >> Thanks, it's great to see you. >> John: Thanks for coming on, I know you're super busy, thanks for spending the time to come on theCUBE. >> Thank you for having me, I'm really happy to be here. >> So we talked last year. You guys were new. Laura popped into the position, took over the helm at Oracle Marketing Cloud, you joined the team. It's been quite a transformation over the past year. A lot of great feedback on the show. I mean, the Markies was like the Golden Globes, was glammed up, and people screaming, you mentioned. And then now, the conversations in the hallways, certainly great feedback on the sessions, and people in there saying, "Hey, I'm getting great, qualified people walk through, having great conversations." What happened? Between last year and this year. Give us some insight into what was the big shift. >> The big shift? Well, we've had a big shift in our team. You know, during that time period. (both laughing) Which is really interesting. >> And as manifest by the show, a big shift in direction. >> Yeah, a big shift in direction. You know, two things I think, seriously, there was a big shift in the team, overall, you know, my marketing team, we've made a lot of changes, we're relooking at how we do the work that we do. Really looking at the stories that we tell. You know, there's been a lot of change in that, as well. And then, how we tell our stories together with the rest of our CX team. That's been really important. I spend a lot of time with the rest of my CX peers, you know, that are here also. >> It's interesting, we've been following Oracle, this is our eighth year covering Oracle as Oracle proper, and two years covering Marketing Cloud, with theCUBE, and it was interesting, we were observing that how you guys got here, or there, last year, a lot of great acquisitions and integrated pretty well. But the question was, man, if you can just put all this together. Which you guys were kind of smiling, smirking, but you were doing that, so you have now this cohesive story and platform. You still have pillars of solutions, but, yet integrated under one customer experience. Give us some insight into where that is, and what's next, and how that's going. >> So, the connection with the entire customer experience cloud? >> John: Yeah. >> You know, we've been sharing that message for a while. You know, across Oracle. And I think you probably heard it the first time at Open World, which is where I met you, this last year, and we made some announcements then, but we are continuing to drive that total experience, you know, for our customers to engage with their customers. And, you know, I think probably the best way to look at that, and we were just talking about this a few minutes ago, you know, when I was thinking back in marketing 25 years ago. I've been reminiscing a lot lately. And I was looking back at re-reading the one-to-one future. And at that time, they were really saying, you know, the great thing you can do is engage with a customer in a way where you're a learning organization. So every touchpoint has the right reaction. I might call it, maybe, the physics of marketing. You know, we're going to have the energy that goes with this, so, you know, if I talk to you, if my last engagement with you is a services conversation, then the next marketing message better be in reaction to the last services conversation. And I think now with the ability for us to connect everything that we do in customer experience, and be able to connect our data, and be able to connect our interactions, our transactions, we have the ability to have a really great experience for our customers as result of having this connection. >> And the Marketing Cloud has gotten some good props, too. But I want to ask you about the CMO summit that you guys had in parallel here at the Mandalay Bay, we didn't get a chance to cover it, we were busy doing interviews all day yesterday, but we heard some good feedback. Mark Hurd came in and laid down some, like, "We have all this technology, why are we getting a 1% conversion improvement?" Or, I mean, all that tech. So it makes you rethink about CMO roles. And I want to ask you specifically, what was the conversation like when marketers were trying to think of progressive ways to get modern? What were some of the conversations around where they turn things upside down, what are some of the conversations that the CMOs were having, and saying, look, we know the future's the certain direction, directionally correct data, what do I got to do? >> Yeah, well, it's interesting, we talked a lot about data. We talked a lot about hiring people who can govern data, integrate data, manage data. Several of the companies said, you know, we're in merger and acquisition all the time, and it's a huge issue for us, because a whole new data set comes in. And it may have the same customer touchpoints. You know, the same customers. And now we have to figure out how to match the IDs. And so they said it's a huge challenge for them, you know, to be able to merge all of that. >> It's a great marketing opportunity for you to go to startups saying, hey, if you want to get by the big company, and they're on Oracle, make sure you're on Oracle! >> Jennifer: Make sure to call us. >> But that's a good point. >> Peter: Extends the ecosystem. >> Jennifer: Yeah, exactly. >> But that, the whole system of record, this brings up the integration challenges of moving fast and integrating in data. >> Right, and one of the things that came out of that, which was fascinating, is, the question was asked, is IT doing that, or is business doing it? And, without fail, almost all the marketers said, we own this now. This is our thing. You know, it's the customer touchpoint, business has to own it. >> What percentage of that is ownership by the marketing folks? Because I would say that I see a similar pattern where the digital end-to-end life cycle, from beginning to moment of truth is owned by the marketer. >> Yeah, well, it's happening more and more all the time, of course. >> John: 50/50? 60/40? 70/30? >> I mean, in reality? >> Yeah, reality. Middle America, middle of the world, not Silicon Valley. >> Let's see, in reality, it's maybe 50/50, maybe. I mean, I think we have a long way to go. >> John: Well had the commerce folks on earlier, saying that, 'cause we interviewed her, two years ago at Open World, 50% now are on the cloud vs. on-prem. >> Jennifer: Right. >> On commerce cloud. That's pretty significant. >> Oh yeah, big move. But I think as far as, you know, going back to the question on managing the data, how many people, how this is happening, and who owns it yet? I think there's probably still tension across all the businesses on who owns it and how you do that. If you could drop that tension and say we really do want that customer experience, we are going to focus on the customer. >> But are seeing that, and it's an interesting point, are people battling for control of the process, or are people battling for the control of the data, or both? 'Cause there's a difference. >> I think they are controlling the data. I don't think they're controlling the process, and it would be really great if they got to just obsessing about the customer instead. 'Cause if you did that, then the question of process or owning the data would go away. 'Cause you would do what was right for your business. >> So how has that relationship been between, the crucial relationship between sales and marketing starting to evolve? 'Cause in many respects, marketing used to be in service to sales, especially in the B2B universe, and now what we've heard today, and what we agree with, is marketing needs to be put in service to the customer. You need to do valuable things for the customer, otherwise you're not going to get any business, and you're not going to get any data back. So how is the marketing/sales relationship evolving as both of you try to focus on the customer? >> Well, you know it's interesting. Of course I'm doing that in my own role. Not just watching what's happening with my customers, but in my own role, my relationship is evolving with our salespeople. And, you know, relooking at what happens with the lead? And when we get a lead, what kinds of customers are we doing this with, and how do we want to engage with our customers? And we're completely changing how we've been doing this. I think, in the past, and I think it's really easy for customers to follow the numbers. >> What changes are you guys making right now that you can talk about that would be notable business practice wise that has been based upon data? >> So right now, just reducing our numbers of leads. Making sure that they are the right ones, and match the sales models we have. >> You're still taking a lot of inquiries you're more than happy to have pour in. But you're doing a better job of qualifying. >> We have a lot of demand. Making sure the demand becomes the right lead and opportunity, I think is the most important piece of this. You know, it's interesting language. We call it MQL, a lead score lead that comes out of Eloqua. And, to me, that's not really a qualified lead. I feel like there needs to be human interaction for it to be qualified. So I think it's interesting that the industry, over time, has started calling it an MQL. To me, it's an ML. >> Is the funnel changing now? 'Cause now we also observed and had conversations here on theCUBE where, if there's now super omnichannels, not just omnichannel, but like, every channel's open. There's been a flattening of channels. So you can have anything could be a channel. The entry point to the cloud for you guys could be Marketing Cloud, it could be commerce, it could be something else. Either way, the market is involved. So there's so many channels out there, so what does that do for the funnel? Because, if you're using third party data, which you guys have announced here, with the first party data, that's a compelling, game-changing shift in thinking. So the vertical funnel to your point of, you know, what's at the top. >> There's no such thing as a vertical funnel anymore. I mean, it just doesn't exist that way. Really, if you think about how we are engaging with customers, or consumers, you know, all the time. We talk about the omnichannel world, just like you just said, you can't look at it and say, "I'm going to go out and target someone" and wait for that to come in. People are searching all the time. They're picking up their phone. We just released that CMO Club whitepaper today, you know, talking about mobility. I was laughing, because we said people look at their phones 150 times a day, and I thought, seriously, I do it 150 times an hour. I can't even imagine. >> You're the first CMO that I've ever met that has agreed with me on this one. You're awesome. All right, so the funnel is sideways, it's all over the place, it's everywhere. That brings up the data question. And I think I know where you're going with this, so I'm going to try to see if I can lead you on there. So if that premise is there, which I agree is true, 'cause we have a lot of data that we're putting out there. That's our engagement data with siliconANGLE and all of our assets. The question is, it's the data. So, if the funnel was built for a certain reason, to track things, but that's to get the data, now the data's everywhere, so this brings the question up: how do you find the right data? So is the data available? 'Cause you mentioned the customers are talking, they're doing things. >> Data's available. We have it all over, we just have to make sure we're aggregating it in the right way. So, you know, for us, we're using our DMP, we're connecting it to our third party data, which I think is a great way to do this. You can know more about your customers. In some cases, maybe more than they might know about themselves. We're learning a lot about them as a result. And I think, with that, as we talked about earlier, I want more data. I don't want less data. I want more data. I want to know more about-- >> That's counterintuitive to what most people think about it. >> Exactly, I think it's very counterintuitive. I'm really excited about IOT for that reason. I would love to be marketing to people in space and time. I want to know where you are and what you're doing so that the conversation and the dialogue I'm having with you is exactly relevant to what's happening at that moment. >> You might be an outlier, maybe, but because you work for Oracle, you got a big net. You walk on the tightrope, but you got a net called Oracle. A lot of marketers might not have that support. So you're data-driven, you want more data, bring on the data is what you're saying. >> Yeah. >> Which is good, 'cause you can make sense of it. How does a company get to that position where they would have the courage and confidence to say "bring it on, bring on the data"? What would they-- >> Find the right partnerships. I mean, you can get that data, you have your own first party data, you can get second party data with other groups. There's no reason why you can't go in and say, hey I want to partner with another business on this. Companies have loyalty programs. You can go and share, you know, anonymized data with another group like that and learn more about your potential customer base. There are ways to get at this. >> And you guys are opening up the data cloud to them. Is this a true statement? Oracle customers can get access to the data cloud? Which is all the data that you guys are providing, third party data? >> They can purchase the data. >> John: Well, they can subscribe to it. >> Yeah, they get it with purchasing DMP as well. Yeah, they can subscribe to the data. Yeah, any customer can get access to it. >> I have two questions about what you've said thus far. One was, I heard you say, I want to make sure I heard it, that it's an ML, it's not an MQL until it touches a person. Because that, at a conference where everybody's talking about AI and everyone's talking about automation, that is counterintuitive. Totally agree with you, but want to hear what you mean by that. >> Okay, so we'll distinguish what I think AI will do versus what happens when a lead comes out from Eloqua that's lead scored. So, when a lead is lead scored, you know, it's still human interaction right now that says how do I come up with a lead score? You know, so my team, we spend a lot of time, like, which metric should we be using to make sure we figure out, is truly a lead that should come out of Eloqua at this point. We spend a lot of time, and then we run the data, and we look at it and figure out what's going to be the right mix. >> So you're, in many respects, training Eloqua. Just in a very labor-intensive way. >> Jennifer: Yes, it is a labor-intensive way. >> John: That's a human-curated algorithm. >> It is a human-curated algorithm, yes, and we talk to all of our global teams, we look at absolutely every way we should do this, and then we start testing it and making sure that we get the right leads that are coming out of this. At the right rate. That matches the number of people that we have that can serve the leads, as well. Too many doesn't help us if I don't have enough salespeople. Too few doesn't help me if my salespeople are sitting there not doing anything. >> So the readiness is the knob you're turning. So that the flow of leads are popping out in capacity to fulfill them. >> Exactly, exactly. It's an interesting mix. You know, we've been doing the model that says more is better, more is better, more is better. And after while you say, you know, how are this many people going to service this x many times leads that come out of this? But lead scoring is still based on my less than perfect -- >> Peter: Discretionary observation on what this actually means. >> Jennifer: What this actually means, exactly. >> That's great, that's great-- >> So I still need a human to pick up the phone and call the person and say, you know, are you actually a perspective customer? Are you a student, or are you, you know. >> So you're using some of the inside to then validate and use your judgment, it can be very quick, and very simple, but it's a central feature of the whole process, and it's the ultimate data. It's the ultimate first person data. Did you talk to someone, are they there? That's great. Second question-- >> John: I'm not sure I agree-- >> Now we can go to the AI, I think, which is the other part of that question, which is the predictive analytics that's coming out of this now. So now we have predictive analytics are coming out of this, that are looking at this and saying, hey we can look at this a little differently and do a little more listening and see how people are really engaging. Do we have different search patterns? We're saying, do we see search patterns inside of a company that might say there really is a buying activity happening here? So, great way to look at it from a B2B perspective. Now that begins to change what's happening with the lead. >> So it sets priorities on who they should be calling. Do you still anticipate that that customer's going to get a phone call? >> Jennifer: Yes, yeah. >> Okay great, second question-- >> Hold on, I'm going to push back on that side. One little caveat I have. I agree with your statement, in the all-digital world, the users are self-serving, so you can imagine a scenario where there's no human involvement at all. I'm flying around the web, I'm surfing, I'm discovering, and I'm a person, and I'm into some marketplace, and I'm buying, I'm buying. No human touched me at all. I'm a qualified lead, but I get link-baited, or I get tracked into a discovery pattern that is completely digital. There's no human involvement in that. >> In a B2B sense, though, it's setting up the contract so someone can buy off a contract, for example. So the buying activity may be set up. >> John: Oh, you're talking about B2B? >> Yeah, B2B, always. >> Yeah, and B2C I think it's a totally different scenario. >> When was the last time you got a call from somebody at Amazon? >> John: Never. >> Yeah. So second question, and I think this a great point, it ties back to the conversation we had earlier about partners. The partner often is the weakest chain. Weakest link in the chain. In a world where digital is both informing the customer about what's good and what's bad, but also you're sharing data. You run the risk that that partner defines the quality of the entire chain. So you've got to start sharing more data, you got to start sharing. How is the role of data impacting and influencing the activity of bringing on, nurturing, measuring, ultimately managing, partnerships? >> I think you guys talked to Doug Kennedy yesterday. >> John: He's a pro. >> Yeah, he's fantastic. From a marketing standpoint, in the same way, we are going to continue to share with our partners. So if we're looking at the numbers of partners that we engage with. Could they be the weakest link? I would probably challenge you on that, I think our partners can be our strongest link in what we're doing, and are probably closer to our customers than we are, in marketing, by a long shot. So I count on my partners to bridge that gap that way, absolutely, but will we share data so we can absolutely have a better relationship, from a selling perspective? Yeah. >> First let me qualify, that when you have multiple partnerships involved, and typically a solution, a complex solution like the Marketing Cloud, what we're talking about, is going to have multiple partnerships involved. You may have three phenomenal partnerships, and one good partnership. But that one good partner could have an enormous influence over the three very good partners. That's what I mean. So the second thing is, what I'm talking about is, does Oracle compete, or does Oracle utilize its willingness to use data, especially through tooling like Marketing Cloud, and the customer experience cloud, as a way of making Oracle more attractive to partners? >> Yes, absolutely. We would absolutely want to do that. We haven't been doing a lot of it, but we are moving forward that way, absolutely. We want to have that engagement. Absolutely, we want to have that engagement with our partners. I think, especially in marketing, we don't want them to just buy technology. I mean, they need to buy the really great creativity that comes with our partners, as well. And so we have to share as much data as possible to create that great experience for our customers, through our partnerships. >> Jennifer, I want to thank you for coming on theCUBE. Appreciate you coming on, sharing the insight into your role as CMO from Oracle Marketing Cloud. Appreciate it. Just share what's up for next year. Will there be another, bigger Markies? What's on the agenda for in between this event and next year, what's the plans between event windows? What do you got going on, what's the plan? >> Okay, so, when the 12th annual Markies happens next year, roughly about this time. I think it's almost the same week. Which will be fantastic. In the meantime, we're going to do a lot of storytelling. You will hear a lot about the Markies nominees and Markies winners. We have some incredible stories to tell, it gives us a great opportunity, actually, to talk about the people. You know, for us, the heroes, that created all of these great stories for us. The technology. And how they were using the technology to really make all of this happen, and the partners that they were using. >> Yeah, Doug rolled out his new strategy to the partners, he's been seven weeks on the job, back to Oracle from Oracle in the old days. So he's a pro. >> Jennifer: Yeah, oh yeah, he's great. I worked with him at Microsoft. >> And integrating into the Oracle cloud, still part of the plan? >> Jennifer: Yes. >> Cool. >> Just staying connected with the rest of Oracle, absolutely, we are Oracle. >> We will keep track of the stories with you guys. So we'll be tracking them. >> We'll be telling them with you, all year. >> We'll be documenting them. Jennifer, thank you so much for coming on theCUBE. Congratulations on the very successful event. >> Thank you very much. >> We're looking forward to hearing the data stories that you're using, and expanding on that next time. It's theCUBE live here at Las Vegas, at Mandalay Bay, for Oracle Modern CX show, #modernCX, this is theCUBE, I'm John Furrier with Peter Burris, more after this short break.

(energetic upbeat music) >> Host: Live from Las Vegas, it's The CUBE. Covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. >> Welcome back, everyone. We are here live in Las Vegas at the Mandalay Bay for Oracle's Modern CX show, Modern Customer Experience. The Modern Marketing Experience converted into the Modern CX Show. I'm John Furrier with The Cube. My co-host Peter Burris. Day two of coverage. Our next guest is Catherine Blackmore, Global Vice President, Customer Success, Global Customer Success at Oracle Marketing Cloud. Catherine, welcome back to The CUBE. Great to see you. >> Thank you so much for having me here. It's been an incredible week, just amazing. >> Last year we had a great conversation. Remember we had. >> Yes. >> It was one of those customer focused conversations. Because at the end of the day, the customers are the ones putting the products to use, solving their problems. You were on stage at the keynote. The theme here is journeys, and the heroes involved. What was the summary of the keynote? >> Sure. As you say, this theme has really been around heroic marketing moments. And in a way, I wanted to take our marketers and the audience to an experience and a time where I think a lot of folks can either remember or certainly relate where, what was the beginning of really one experience, which was Superman. If you think about heroism and a superhero, well, Superman will come to mind. But I think what was interesting about that is that it was created at a time where most folks were not doing well. It was actually during the Great Depression. And most folks wouldn't realize that Superman almost never came to be. It was an image, an icon, that was created by two teenage boys, Jerry Shuster and Joe Siegal. And what they did is they got audience. They understood, just as two teenage boys, my parents, my family, my community is just not doing well. And we see that folks are trying to escape reality. So we're going to come up with this hero of the people. And in doing so, what's interesting is, they really were bold, they were brave. They presented a new way to escape. And as a result, DC Comics took it up. And they launched, and they sold out every single copy. And I think it's just a really strong message about being able to think about creativity and being bold. Jerry and Joe were really the heroes of that story, which was around. My challenge to the audience is, who's your Superman? What is your creative idea that you need to get out there? Because in many ways, we need to keep moving forward. At the same time, though, balance running a business. >> It's interesting, you did mention Superman and they got passed over. And we do a lot of events in the industry, a lot of them are big data events. And it's one little insight could actually change a business, and most times, some people get passed over because they're not the decision maker or they may be lower in the organization or they may just be, not be knowing what to do. So the question on the Superman theme, I have to ask you, kind of put you on the spot here is, what is the kryptonite for the marketer, okay, because >> (laughing) Yes. >> there's a lot of obstacles in the way. >> Catherine: It is. >> And so people sometimes want to be Superman, but the kryptonite paralyzes them. >> Catherine: Yeah. >> Where's the paralysis? >> It's funny that you say that. I think I actually challenge folks to avoid the kryptonite. There was three things that we really talked about. Number one is, Modern Marketing Experience, it's just an incredible opportunity for folks to think ahead, dream big, be on the bleeding edge. But guess what, we're all going to go on flights, we're going to head home, and Monday morning's going to roll around and we're going to be stuck and running the business. And my inspiration and, really, challenge to the audience and to all of our marketers is how do we live Modern Marketing Experience everyday? How do we keep looking ahead and balance the business? And, really, those heroic marketers are able to do both. But it doesn't stop there. We talked a lot about this week, about talent. Do we have the right team? Kryptonite is not having the right people for today and tomorrow, and then in addition to that, you can't just have a team, you can't just have a vision, but what's your plan? Where actually having the right stakeholders engaged, the right sponsorship, that's certainly probably the ultimate kryptonite if you don't. >> The sponsorships are interesting because the people who actually will empower or have empathy for the users and empower their people and the team have to look for the yes's, not the no's. Right. And that's the theme that we see in the Cloud success stories is, they're looking for the yes. They're trying to get that yes. But they're challenging, but they're not saying no. That's going to shut it down. We've seen that in IT. IT's been a no-no, I was going to say no ops but in this digital transformation with the emphasis on speed, they have to get to the yes. So the question is, in your customer interactions, what are some of those use cases where getting to that yes, we could do this, What are some of the things, is it data availability? >> Catherine: Absolutely. >> Share some color on that. >> I think, So I actually had a wonderful time connecting with Marta Federici, she met with you earlier. And I love her story, because she really talks about the culture and placing the customer at the center of everything they're doing, to the extent that they're telling these stories about why are we doing this? We're trying to save lives, especially in healthcare. And just to have stories and images. And I know some companies do an amazing job of putting the customer up on the wall. When we talk to our customers about how do we actually advance a digital transformation plan? How do we actually align everyone towards this concept of a connected customer experience? It starts with thinking about everyone who touches the customer every day and inspiring them around how they can be part of being a customer centric organization. And that's really, that's really important. That's the formula, and that's what we see. Companies, that they can break through and have that customer conversation, it tends to align folks. >> Interesting. We were talking earlier, Mark Hurd's comment to both the CMO Summit that was happening in a separate part of the hotel here in the convention center, as well as his keynote. He was saying, look, we have all this technology. Why are we doing this one percent improvement? And he was basically saying, we have to get to a model where there's no data department anymore. There never was. >> That's right. >> And there shouldn't be. There shouldn't be, that department takes care of the data. That's kind of the old way of data warehousing. Everyone's a data department, and to your point, that's a liberating, and also enables opportunities. >> It does. We talked a lot. Actually, the CMO Summit that we had as well this week, a lot of our CMOs were talking about the democratization of data. And Elissa from Tableau, I think you also talked to. We talked about, how do you do that? And why, what are those use cases, where, Kristen O'Hara from Time Warner talked about it as well. And I think, that's where we have to go. And I think there's a lot of great examples on stage that I would like to think our marketers, and quite frankly, >> Which one's your favorite, favorite story? >> My favorite story. >> John: Your favorite story. >> Wow, that's really putting me on the spot. >> It's like picking your favorite child. I have four. I always say "well, they're good at this sport, or this kid's good in school." Is there? >> I guess one. >> John: Or ones that you want to highlight. >> Well one that I, because we talked about it today. And it was really a combination of team and plan. Just really highlighting on what Marta's driving. If you think about the challenges of a multinational >> Peter: Again, this is at Philips. >> John: Marta, yeah. >> Catherine: This is Philips, Royal Philips. So Marta, what she's really, her team has been trying to accomplish, both B to C and B to B, and it speaks to data, and it talks about obviously having CRM be kind of that central nervous system so that you can actually align your departments. But then, being able to think about team. They've done a lot of work, really making certain they have the team for today and the future. They're also leveraging partners, which is also key to success. And then, having a plan. We spent time with Royal Philips actually at headquarters a number of weeks ago and they are doing this transformation, this disruptive tour with all of their top folks across, around the world that running their different departments, to really have them up and them think differently which is aligning them around that culture of looking out to the future. >> Peter: Let's talk a bit about thinking differently. And I want to use you as an example. >> Catherine: Sure. >> So your title is Customer Success. Global Vice President, Global Customer Success. What does that mean? >> Sure. I know a lot of folks, I'd like to think that, that's just a household name right now in terms of Customer Success. But I realize it's still a little new and nascent. >> We've seen it elsewhere but it's still not crystal clear what it means. >> Sure, sure. So when I think of Customer Success, the shorter answer is, we help our customers be successful. But that, what does it really mean? And when I think about the evolution of what Customer Success, the department, the profession, the role, has really come to be, it's serving a very important piece of this Cloud story. Go back a decade when we were just getting started actually operationalizing SaaS and thinking about how to actually grow our businesses, we found that there just needed to be a different way of managing our customers and keeping customers, quite frankly. Cause as easy as it is to perhaps land a SaaS customer, and a Cloud customer, because it's easier to stand them up and it's easier for them to purchase, but then they can easily leave you too. And so what we found is, the sales organization, while, obviously understands the customer, they need to go after new customers. They need to grow share. And then in addition to that, in some organizations, there still are services to obviously help our customers be successful. And that's really important, but that is statement-of-work-based. There's a start and a stop and an end to that work. And then obviously there's support that is part of a services experience, but they tend to be queue-based, ticket-based, break-fix. And what we found in all of this is, who ultimately is going be the advocate of the customer? Who's going to help the customer achieve ROI business value and help them ensure that they are managing what they've purchased and getting value, but also looking out towards the future and helping them see what's around the corner. >> Catherine I want to ask the question. One of the themes in your keynote was live in the moment every day as a modern marketing executive, build your team for today and tomorrow, and plan for the future. You mentioned Marta, who was on yesterday, as well as Kristen O'Hara from Time Warner. But she made an interesting comment, because I was trying to dig into her a little bit, because Time Warner, everyone knows Time Warner. So, I was kind of curious. At the same time, it was a success story where there was no old way. It was only a new way, and she had a pilot. And she had enough rope to kind of get started, and do some pilots. So I was really curious in the journey that she had. And one thing she said was, it was a multi-year journey. >> Catherine: Yes. >> And some people just want it tomorrow. They want to go too fast. Talk through your experience with your customer success and this transformation for setting up the team, going on the transformational journey. Is there a clock? Is there a kind of order of magnitude time frame that you've seen, that works for most companies? >> Sure. And actually I want to bring in one more experience that I know folks had here at Modern Marketing, which was, also, Joseph Gordon-Levitt, he actually talked about this very thing. I think a lot of folks related to that because what he's been doing in terms of building out this community and creating crowd-sourced, or I should say, I think he would want to say community-sourced content and creativity. It was about, you can't really think about going big. Like I'm not thinking about feature film. I'm thinking about short video clips, and then you build. And I think everyone, the audience, like okay I get that. And Kristen's saying, it took many little moments to get to the big moment. I think folks want to do it all, right at the very beginning. >> John: The Big Bang Theory, just add, >> Absolutely. >> Just add water, and instant Modern Marketing. >> It is, it is. >> John: And it's hard. >> And what we have found, and this is why the planning part is so important, because what you have to do, and it might not be the marketer. The marketer, that VP of Marketing, even that CMO may know, it's going to be a three year journey. But sometimes it's that CEO, Board of Director alignment that's really required to mark, this is the journey. This is what year one's going to look like. This is what we're going to accomplish year two. There may be some ups and downs through this, because we need to transform sales, we need to transform back in operations in terms of how we're going to retire old processes and do new. And in doing so, we're going to get to this end state. But you need all of your stakeholders to be engaged, otherwise you do get that pressure to go big because, you know what Mark was saying, I've got 18 months, we need to be able to show improvement right away. >> We were talking about CIOs on another show that I was doing with Peter. And I think Peter made the comment that the CIO's job sometimes doesn't last three years. So these transformations can't be three years. They got to get things going quicker, more parallel. So it sounds like you guys are sharing data here at the event among peers >> Catherine: Yes. >> around these expectations. Is there anything in terms of the playbook? >> Catherine: Yes. >> Is it parallel, a lot of AGILE going on? How do you get those little wins for that big moment? >> So I think this is where the, what I would call, the League of Justice. You got to call in that League of Justice. For all you Superman out there. Because in many ways you're really challenged with running the business, and I think that's the pressure all of us are under. But when you think about speeding up that journey, it really is engaging partners, engaging, Oracle Marketing Cloud, our success and services team. I know you're going to be talking to Tony a little bit about some of the things we're building but that's where we can really come in and help accelerate and really demonstrate business value along the way. >> Well one more question I had for you. On the show floor, I noticed, was a lot of great traffic. Did you guys do anything different this year compared to last year when we talked to make this show a little bit more fluid? Because it seems to me the hallway conversation has been all about the adaptive intelligence and data is in every conversation that we have right now. What have you guys done differently? Did it magically just come to you, (Catherine laughing) Say, we're going to have to tighten it up this year? What was the aha moment between last year and this year? It's like night and day. >> I would like to think that we are our first and best customer, because as we ourselves are delivering technology, we ourselves also have to live what we tell our customers to do every day. Look at the data, look at the feedback. Understand what customers are telling you. How can you help customers achieve value? And we think of this as an important moment for our partners and our companies, that are here spending money and spending time to be here, achieve value. What we've done is really create an experience where it's so much easier to have those conversations. Really understanding the flow of traffic, and how we can actually ensure people are able to experience our partners, get to know them, get to know other customers. A lot of folks, too, have been saying, love keynote, love these different breakout sessions, but I want to connect with other folks going through that same thing that I am, so I can get some gems, get some ideas that I can pick up. >> And peer review is key in that. They talk to each other. >> Exactly. That's right, that's right. And so we've really enabled that, the way that we've laid out the experience this year. And I know it's even going to be better next year. Cause I know we're going to collect a lot more data. >> Well last year we talked a lot about data being horizontally scalable. That's all people are talking about now, is making that data free. The question for you is, in the customer success journeys you've been involved, what's the progress bar of the customer in terms of, because we live in Silicon Valley. So oh yeah, data driven marketer! Everyone's that. Well, not really. People are now putting the training wheels on to get there. Where are we on the progress bar for that data driven marketer, where there's really, the empathy for the users is there. There's no on that doubts that. But there's the empowerment piece in the organization. Talk about that piece. Where are we in that truly data driven marketer? >> Oh, we're still early days. It was obvious in talking to our various CMO's. We were talking about talent and the change, and what the team and the landscape needs to look like to respond to certainly what we've experienced in technology over the last number of years and then even what was introduced today. That level of, I need to have more folks that really understand data on my team but I'll tell you, I think the thing that's really interesting though about what we've been driving around technology and specifically AI. I love what Steve said, by the way, which is if a company is presenting AI as magic, well the trick's on you. Because truly, it's not that easy. So I think the thing that we need to think about and we will work with our customers on is that there's certainly a need and you have to be data driven but at the same time, we want to be innovation ready and looking and helping our customers see the future to the extent that how we think about what we're introducing is very practical. There's ways that we can help our customers achieve success in understanding their audience in a way that is, I wouldn't say, it's just practical. We can help them with use cases, and the way the technology is helping them do that, I think we're going to see a lot of great results this year. >> AI is great, I love to promote AI hype because it just makes software more cooler and mainstream, but I always get asked the question, how do you evaluate whether something is BS in AI or real? And I go, well first of all, what is AI? It's a whole 'nother story. It is augmented intelligence, that's my definition of it. But I always say, "It's great sizzle. Look for the steak." So if someone says AI, you got to look on the grill, and see what's on there, because if they have substance, it's okay to put a little sizzle on it. So to me, I'm cool with that. Some people just say, oh we have an AI magical algorithm. Uh, it's just predictive analytics. >> Catherine: Yes. >> So that's not really AI. I mean, you could say you're using data. So how do you talk to customers when they say, "Hey, AI magic or real? How do I grok that?" How do I figure it out? >> I think it's an important advancement, but we can't be distracted by words we place on things that have probably been around for a little while. It's an important way to think about the technology, and I think even Steve mentioned it on stage. But I think we're helping customers be smarter and empowering them to be able to leverage data in an easier way, and that's what we have to do. Help them, and I know this is talked a lot, not take the human and the people factor out because that's still required, but we're going to help them be able to concentrate on what they do best, whether it's, I don't want to have to diminish my creative team by hiring a bunch of data scientists. We don't want that. We want to be able to help brands and companies still focus on really understanding customers. >> You know, AI may be almost as old as Superman. >> Catherine: (laughing) I think you're right. >> Yeah, because it all comes back to Turing's test of whether or not you can tell the difference between a machine and a human being, and that was the 1930s. >> Well, neural networks is a computer science. It's a great concept, but with compute and with data these things really become interesting now. >> Peter: It becomes possible. >> Yeah, and it's super fun. But it promotes nuanced things like machine learning and Internet Of Things. These are geeky under-the-hood stuff that most marketers are like, uh what? Yeah, a human wearing a gadget is an Internet of Things device. That's important data. So then if you look at it that way, AI can be just a way to kind of mentally think about it. >> That's right, that's right. >> I think that's cool for me, I can deal with that. Okay, final question, Catherine, for you. >> Catherine: Yes. >> What's the most important thing that you think folks should walk away from Modern CX this year? What would you share from this show, given that, on the keynote, CMO Summit, hallways, exhibits, breakouts, if there's a theme or a catalyst or one? >> Peter: What should they put in the trip report? >> It's all about the people. I think that, if I were to distill it down, you think about that word bubble chart, that's people. I think that's the biggest word that came out of this. As much as technology is important, it's going to enable us, it's going to enable our people, and it's going to put a lot of attention on our talent and our folks that are going to be able to take our customers to the next level. >> And then people are the ones that are generating the data too, that want experiences, to them. >> Catherine: That's right. >> It's a people centric culture. >> Catherine: It is. >> Catherine Blackmore here on site, The CUBE, at Modern CX's The CUBE, with more live coverage here from the Mandalay Bay in Las Vegas, live after this short break. (electronic music)

>> Narrator: Live from Las Vegas, it's theCUBE, covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. >> Okay, welcome back here. We're here live in Las Vegas. This is SiliconANGLE Media's theCUBE. It's our flagship program. We go out to the events and extract the signal from the noise, talk to the influencers, the experts, thought leaders, CEOs, entrepreneurs, anyone we can that has data we can share with you. I'm John Furrier, Peter Burr is my co-host for the two days here. Our next is Jay Baer from Convince and Convert, CUBE alumni, great guy, super influential, knows his marketing stuff, perfect guest to summarize and kind of package up what the hell Modern CX means here at the Oracle show. Welcome back, good to see you. >> Jay: Good to see you guys, welcome. >> So you were hosting the CMO Summit that was going on in parallel they had the Marquise Awards which is their awards dinner. >> 11th annual Marquise Awards it's like a thing. >> It's amazing, it looked like the Golden Globes. >> It was beautiful this year, it was like, legit. >> Peter: Is that the one with the O on the top? >> And they delivered an award with a drone. It was a great night. >> Awesome stuff. So give us the package, what's going on, tease out the story here. >> Yeah, I think the story is two-fold. One, Oracle's got an interesting take on the marketing software space because they really are trying to connect it between the overall customer service experience initiative, and then marketing as a piece of that. This event in particular, the Modern Customer Experience event has tracked almost full conferences for marketing, for customer service, for sales and for commerce. So all four of those are the verticals underneath this umbrella and that's a really unusual conference setup but I think it reflects where Oracle's head is at from a thought leadership standpoint. That like, look, maybe were going to get to a point where marketing and customer service really are kind of the same. Maybe we're going to get to the point where sales and marketing really are kind of the same. We're not there yet, by any stretch of the imagination. But I think we all feel that convergence coming. And my world the marketing side, CMO's are starting to get more and more responsibility inside organizations and so if that happens, maybe we do need to start to align the software as well. It's and interesting take on the market, and I think it's sort of prescient for where we're going to head. >> It's interesting you mention of all those different silos, or different departments or different functions in a digital end-to-end fabric experiences are all about the customer, it's one person, they're going to have different experiences at any given time on that life cycle, or product spectrum or solution spectrum. So the CMO has to take responsibility of that. >> Well, I feel like somebody has to be responsible for it. Mark Hurd said this in one of his remarks over the course of the show, the CEO of Oracle said look, there is no data department, everybody has to be responsible for data but somebody has to figure what the ins and the outs are and maybe that's the CMO, maybe it's the CXO, I don't think we've fully baked that cake yet. But we're going to have to get to the point where the single record of truth about the customer and their customer journey has to exist and somebody's got to figure out how to wire all those together. We're gettin' there. >> It's so funny, I was joking, not here on theCUBE, but in the hallways about the United Airlines snafu and I'm like, to me as a kind of a developer mindset software should have solved that problem. They never should have been overbooked to begin with. So if you think about just these things where the reality of a consumer at any given time is based upon their situation. I need customer support, I need this, I need that. So everyone's got to be customer ready with data. >> Talk about relevance, relevancy is the killer app, that's it, right. Relevancy is created by technology, and with people, people who actually know how to put that technology into practice in a way that the customers actually care about. So, one of the things that Mark said, he said look, here's the issue, it's not about data, nor is it about clout, it's not about any of that. It's about taking that data and creating understanding out of it. But he said a really interesting thing, he said what we have to do is push those understandings out to the front lines where somebody on the front lines can do something with it that actually benefits the customer. I think that's a really smart point because so often right now we're talking about, oh we've got these data stores, and we've got DMP's and we've got all these things. That's great but until that gets manifested at the front lines, who cares, you've just got a big pile of numbers. >> We had Katrina on from the commerce side, it's funny, she was making a retail comment look, they don't care about the tech, they don't care about blockchain and all the speed and feed, they have to do a transaction in the speak of the consumer. And the language of the customer is not technology. >> No they don't care, solve my problem right. Just solve my problem, and I don't care how you solve it, what sort of magic you have behind the scenes, if I want a sweater, I want this sweater, and I want it right now. >> OK, Jay, share with the audience watching right now and us conversation hallways you've had, that's always the best because you had a chance, I'll see ya on the big stage doing your hosting thing, but also you get approached a lot people bend your ear a lot, what's happening? >> You know what's been an interesting theme this week is we've made such great advances on the technology side and I think we're starting to bump up against okay well now we've got to make some organizational changes for that technology to actually flourish. Had a lot of conversations this week with influencers, with CMO's, with attendees about, I really want to do this I really want to sort of bring sales and marketing together or commerce and sales, et cetera. But our org chart doesn't support that. The way our company thinks, the way our people are aligned, does not support this convergence. So I think were it an inflection point where we're going to have to like break apart some silos, and not data silos, but operational, what is your job, who manages you and what is your bonus based on? There is a lot of legacy structures, especially at the enterprise that do not really facilitate. >> John: Agile. >> Cross-departmental circumstances that we're looking for. So a lot people are like, oh wow, we're going to have to do some robust organizational change and that ain't easy. Somebody's going to have to drive that. Your marketing practitioners, which is my world, they can't drive that. That's got to come from up here somewhere. >> And also people got to be ready for the change. No one likes change. But we were taking about this yesterday called Add the Agile process into development being applied to marketing, really smart. >> Oh, all the time so many marketing teams now are using Agile and daily Scrum and Stand-ups and all those kind of things as opposed to Waterfall which everybody's used forever I think it's fantastic. >> Yeah, and that's something that we're seeing and Roland Smart had to point, he had a book got a signed copy Peter and I, but this is interesting, if you of Agile, to your point, you just can't read the book you've got to have a commit to it, organizational impact is Agile. >> One of the things we had a CMO Summit, we had 125, 150 CMO's from all around the world and one of the things we talked about in that session yesterday was, jeeze, we need to start taking people or hiring people out of a software development world, people who have Agile experience and put them as PM's on a marketing team. Which is going to put that group of people have the Agile background in even greater demand. Because they won't just be doing tech roles for project management but also marketing project management and sort of teaching everybody how Agile works. I think it's really interesting. >> But they've been doing that for a while. I mean the Agile, Agile started in software development but moved broader than that when it went to the web. >> No question, but a lot of these CMO's do not have those type of skills on their team today. They're still using a Waterfall. >> Or they don't recognize that they have the skills. Because most of them will have responsibility for website, website development, so it's that they don't again, it goes back to. >> Web versus marketing. >> Yeah, they probably have it somewhere, they just don't appreciate it and elevate it. >> It's silo'd within the marketing team. >> It's silo'd within the marketing team. So there's going to be, these are the consequence of changes. We'll see the degree to which it really requires a whole bunch of organizational stuff. But at the end of the day, you're right, it's a very very important thing. What are some of the other things you see as long as we're talking about it, other than just organizational. >> Actual other sort of baseline skills. It wasn't that long ago that your social media teams and contact marketing teams, it was manifestly a written job you made things that were rooted in copy. Now we talked a lot about, you have to have like a full video team on your marketing org chart because the core of the realm now is video content and while companies are getting there it's still a struggle for a lot of them. Should we have our agency do this, should we get somebody else to do it, they're like now I got to have all these people, I got to have video editors and camera crew. >> It's expensive. >> Of course it is, yeah. Not everybody can be theCUBE. >> We'll they're tryin'. No, but I think video's been coming down to the camera level you see Facebook with VR and AR certainly the glam and the sex appeal to that. Then you got docker containers and software development apps, so I call that the app culture, you've got the glam, apps, and then you've got cloud. So those things are going on so are the marketing departments looking to fully integrate agency-like stuff in house or is the agency picking up that? What's your take on the landscape of video and some of these services? >> It depends on how real-time they're thinking about video. We're starting to Facebook Live in a public relations circumstance. You saw when Crayola announced the death of the blue crayon or whatever it was a few weeks ago. They did a press release on that, but the real impetus for that announcement was a Facebook Live video. Which puts Facebook and live video as your new PR apparatus. That's really interesting. So in those circumstances the question is do we do that with the agency, is it easier to do it in-house. I think ultimately my advice would be you have to have it in both places. You have to be able to do at least some things in-house you have to be able to turn it quickly and then maybe for things you have more a lead time, you bring in your agency. >> One of the things we're seeing and just commenting while we're on this great subject, it's our business as well, is content is hard. Good, original content is what we strive for as SiliconANGLE, wikibon and theCUBE is something that we're committed to serving the audience at the same time, we collaborate with marketers in this new, native way so that the challenge that I see, and I see in this marketing cloud, is content is a great piece of data. >> Content is data. >> Content is data. >> And it also helps you get more data because there is a lot of data exchanged. >> So a lot of companies I see that fail on the content marketing side, they don't punch it in the red zone. The ball's on the one yard line all they got to do is get it over the goal line, and that's good content, and they try to fake it. They don't have authentic content. >> Another way of saying that John. >> John: They blew it on the one yard line. >> Yeah, another way of saying that is the historically agencies have driven the notion of production value. They have driven the notion of production value, to make the content as expensive as possible because that's how they make their money. What we're talking about is when we introduce a CX orientation into this mix now we're talking about what does the customer need in context, how can video serve that need? It's going to lead to, potentially, a very very different set of production value. >> You bring up a good point, I want to get Jay's reaction on it because he sees a lot too. Context is everything so at the end of the day what is engaging, you can't buy engagement, it's got to be good. >> What serves the customer. >> John: And that is defined by the customer, there is nature of reality silver bullet there's no engagement bullet. >> Sometimes you can argue that the customer values a lower fidelity content execution because it has a greater perceived authenticity. >> You may not know this Jay, I'm going to promote us for a second. A piece of video that's highly produced in the technology industry generates attention for a minute and a half to a minute and 45 seconds. theCUBE can keep attention for 12 or 13 minutes, why? >> John: We have interesting people on. >> If we were a digital agency. >> I would say the hosts, obviously. >> The hosts, the conversation. >> It's back to relevancy. >> It informs the customer. And that's what, increasingly, these guys have to think about. So in may respects, we'll go back to your organization and I want to test you in this, is that in many respects that the CMO must heal thyself first. By starting to acknowledge that we have to focus on the customer, and not creative and not the agency, and rejigger things so that we can in fact focus on the customer and not the agency's needs for us to spend more. >> There was, one of the great conversations in the CMO Summit was this point that, look, with all this technology we have all the opportunities and darnit, all we're doing is finding other ways to send people a coupon. Like isn't there something else that we could use this technology for. And what if we just flip the script and said what do customers genuinely want? Which is knowable and certainly inferable today in a way that has never been historically why don't we use that data to give them what they want, when they want it, how they want it, instead of constantly trying to push them harder. >> Focus on value and not being annoying. >> I mean I wrote a while book about it. >> Well your key point there, is that you're going to infer and actually get signals that, we've never been there before. Chatter signals. >> But let's use them for good not evil I think is the subtext there. >> Yeah, don't jam a coupon down their throat. >> But as Mark says it's hard because CEO's are under tremendous pressure to raise top line in an environment that is not conducive to that. You're going to have to take share. The economy is not growing so fast that you can just show up and grow your company. CEO's have tons of pressure, they're then droppping that pressure on the CMO who then says you need to grow top line revenue. So the CMO says we've got all this technology I guess we'll just send out more offers we'll have a stronger call to action and as opposed to using this information, the inferences, the data, to be more customer focused. I think in some cases we're being less customer focused which, if anything is short-sighted and at worst is a cryin' shame. >> So the solution there is to use the data to craft relevant things at the right time to the right people. >> And it will work but it requires two things that a lot of organizations simply don't have. Time and courage, right. It requires time and courage to purposely push less hard. Because you know it will payoff eventually you've got to buy into that, and that ain't easy always. Sometimes it's not even your decision. >> What we don't want is we don't want to automate and accelerate bad practices. At the end of the day what CMO's are learning, this conversation came out yesterday is, jeeze maybe marketing really isn't that good. Maybe we have to learn ourselves from what this technology is telling us, what the data is telling us and start dramatically altering the way we think about marketing, the role that marketing plays. The techniques we use, the tactics we use, that will lead to organizational changes. I'm wondering, did you get a sense out of the session that they are in fact stepping back and saying we got to look in the mirror about some of this stuff. >> Absolutely, absolutely. I thought it was remarkable, considering who runs this company, Mark Hurd, came in and did a little Q&A at the CMO Summit and he said, And this is the guy who runs Oracle, who's puttin' this who thing together and is sellin' tons of marketing software and says look guys, I'm not even sure if what we're doing here is right because we've got all this technology we have been doing this for a long time, we've got all these smart people and still, what's our conversion rate, 1%? If we've got the greatest technology in the history of the world, we supposedly know all this about customer service and customer journey mapping and our conversion rate is still 1%. Maybe something identified fundamentally broken with how we think about marketing. I thought for somebody in that role to come in and just drop that on a group of CMO's, I was like whoa. >> I think he's right. >> Totally right. >> But to have a CEO of a company like this just walk in and say here's what I think. >> This is a question for you and I'll ask it by saying we try to observe progressive CMO's as a leading indicator to the comment you mentioned earlier, which is flip things upside down and see what happens. What are you seeing for those progressive CMO's that have the courage to say ya know what, we're going to flip things upside down and apply the technology and rethink it in a way that's different. What are they doing? >> One of the markers that we see on the consulting side of my business is CMO's who are thinking about retention first. Not only from a practical execution layer, but even from a strategic layer. Like, what if we just pulled back on the string here a little bit and just said how can we make sure that everyone who's already given us money, continues to give us money and moreso. And essentially really turn the marketing focus from a new customer model, to a customer retention and customer growth model, start there. Start with your current customers and then use those inisights gained and then do a better job with customer acquisition. As customer service and marketing start to converge, mostly because on online. Online customer service is very brand driven and more like marketing. As this two things are converging we're seeing smart CMO's say well what if we change the way we look at this and took care of our own first. Learn those lessons and then applied them outwardly. I think that's a real strong marking signal. >> It's a great starting point and it's almost risk free from a progressive standpoint. >> It's not always risk-free inside the organization. >> I mean it's harder to get new guinea pig customers to like see what works, but go to your existing customers and you have data to work with. >> But wouldn't you also say that the very nature of digital which is moving the value proposition from an intrinsic statement of the values in the product and caveat emptor, towards a utility orientation where the value's in the use of it, and we want to sustain use of it. We're moving more to a service to do that and digital helps us to do that. That the risk of taking your approach goes down because at the end of the day, when you're doing a service orientation you have to retain the customer because the customer has constantly got the opportunity to abandon you. >> Yes the ability to bail out is very very easy these days I completely agree. But what find is that it makes sense to us. It makes sense to us on theCUBE, but in the real world it's not. Not everybody's drinkin' that punch yet. >> John: And why? >> I don't know. >> Sounds like courage. >> It is definitely courage is one of 'em because you're essentially saying look, I've been taught to do marketing one way for 40 years or 20 years. >> Yeah, I'm going to lean on my email marketing all day long. >> Yeah, I'm going to keep pressing send. It's easy, there's almost no net cost. So there's that. And also just the pressure from above, I think. From the CEO to grow top line, net new customer revenue, I think that's certainly part of it. And some if it, I think we went back to earlier about org charting and skills and resources. There's a heck of a lot more people out there at every level of the marketing organization who are trained in customer acquisition moreso than customer retention. How many MBA's are there in customer retention are there? Zero. How many MBA's are there in marketing and sales? >> Lot of 'em at Amazon. >> A thousand? >> A lot of 'em at Apple. >> Yeah, but they were trained there. They didn't come in like that, so they trained them up. >> Jay, great to have you on theCUBE. Great insight as usual, and I think you're right on the money. I think the theme that I would just say for this show, and agree with you is that if you look at Oracle, you look at IBM, you look what Amazon is doing Microsoft in some way maybe a little bit, but those three, data's at the center of the value proposition. Oracle is clearly saying to the marketers, at least we want to say digital it's end to end if you use data, it's good for you. This is the new direction. If you think data-driven CMO, that seems to be the right strategy in my mind. >> The best quote in the CMO Summit, you guys need a CUBE bumper sticker that you can manufacture with this. Data is the new bacon. I was like, oh I love that, that's the best right. >> Who doesn't love bacon. Jay, great to see you. Real quick, what's up with you, give us a quick update on you're opportunities what you're going these days. >> Things are great, running around the country doing fantastic events just like you guys are. Working on a new content marketing master class for advanced marketers on how to take their content marketing strategy to the next level. That launches in a couple of weeks. Continue to do four or five podcasts a week, a new video show called Jay Today where I do little short snippets three minutes a day. JayToday.tv if you want to subscribe to that. >> Beautiful, Jay Baer, great on theCUBE great thought leader, great practitioner, and just a great sharer on the net, check him out. I'm John Furrier with Peter Burr here at Oracle Marketing CX more live coverage after this short break.

>> Announcer: Live from Las Vegas, it's the Cube! Covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. (light, upbeat music) >> Hey, welcome back everyone. We're here live in Las Vegas at the Mandalay Bay. This is the Cube. Silicon Angle's flagship program, where we go out to the events and extract the noise. I'm John Furrier with my co-host Peter Burris, Head of Research at Silicon Angle, Wikibon.com. And our next guest is Steve Krauss, Group Vice President of Product Management for Oracle Marketing Cloud. Great to see you again, welcome back to the cube. >> Thank you John. >> So a lot of great announcements today. I want to just jump into it. First of all, you've got a great job. You've got the product side. You've been busy this year, so congratulations. Some announcements I want to get your reaction to that we saw today. The Adaptive Intelligence, love that. I love how it speaks to the data in motion, real time needs of applications. >> Peter: 150 milliseconds >> 150 milliseconds boot shot. We got that on the queue, so it's on the record. It's going to be good, it's going to be good. And also the chat bot thing, which big fan of chat bots as an illustration of what's coming. Not so much as chat bots by themselves, but it does speak to the new user interactions, the new interfaces, new ways to notify and inform as part of that experience. This is some heavy tech, so I want, the first question is AI. Everyone seems to be washing thereselves. Oh, we've got A.I. >> Yeah, Yeah. >> Well that's just predictive analytics, that's been done before. >> Steve: M-Hmm. But Augmented Intelligence or Artificial Intelligence and Neural Networks have been around for a while. What are you guys doing specifically on the product side? Because this is super exciting announcements, to make Adaptive Intelligence work, what's the key tech? >> Steve: Yeah, Well there's a couple things. In fact, I think often when people talk about AI, they want to go immediately to the algorithms and think that somehow that is the only secret sauce. And the reality is, you know, like a lot of things in the world of computing, you put bad data into one of these things and you get bad results out. You put good data, you get good results. You put better data, that's when things start getting really interesting. And so one of the neat things about the marketing version of Adaptive Intelligence is called Adaptive Intelligence Offers, is that it has the ability to not just take the data that the marketer has, but it can reach into something called the Oracle Data Cloud and get additional data to drive better signal into the AI algorithms to make them run better. So we're bringing a data advantage to the table, and then probably as you've heard from the AI apps people, there's already a heritage at Oracle for building these real time decisioning systems. And so you've got these algorithms that are real time, that can adapt every click, update themselves, make the models go better. If you've tracked data mining for a long time, data mining contests, honestly the winner in second place is usually a very small margin. We think really that data piece is going to be the thing that's going to be the biggest differentiator. Because there's a lot of smart people with really great adaptive algorithms. So we're bringing both to the table. >> John: Okay, data or algorithms, there's always been the chicken in the egg syndrome. >> Yeah. >> Is it algorithms or the data, data or algorithms? A lot of people are voting in the crowd, that conversation we're involved in, data trumps algorithms. >> Steve: I would vote that way as well. I think there's far greater variance in what you can do with data if you collect it in a smart way. And in the case of Oracle, we've assembled this massive data cloud. It's not something someone else can casually do. The reality is with a lot of the algorithms, Google's open sourcing a lot of tents are slow, and so we'll see. I mean, it's not like we are chumps with the algorithms. We take that stuff very seriously, but the data itself just make everything more better. >> John: But the right tool for the right job is the same premise, you articulate for algorithms. Pick your tool, pick your algorithm, but if you don't have the data, you're SOL anyway. >> Peter: As you've mentioned John, the algorithms have been around a long time. What's new is that we now have so many more data sources, so we have data for the first time. >> John: And massive compute. >> And now we have massive compute that can be set up easily, so we actually do something with it. I want to point out, I want to test ya on this, we had Jack Berkowitz on honorly which is the source the 150 millisecond. Jack noted that Oracle aspires to be able to have the right answer anywhere in the world inside 150 milliseconds. Which is an amazing, amazing vision, and for most people who think of the cloud, they think of data flying all over the place. >> Steve: Yeah. For you guys, Jack said something very interesting, and I want to, as a proof point, Jack said, "Yeah but sometimes you don't have to move the data." >> Steve: Yes. >> And one of the advantages that you guys have, I think, which is what I want to test you on, is that by having a relatively complete, installed set of capabilities, you have that primary person data-first person data, and there is an advantage to not having to move it. Could you just articulate that a little bit? What does that... >> John: Is that true? >> First of all, is that true, and what kind of possibilities does that open up for Oracle and Oracle customers if it is true? >> Steve: Well yeah, I think you are onto something. Oracle obviously has the long heritage of having many enterprises and government's data in Oracle systems already in the first place. And those investments have been made. And so when you start talking about, "Let's add to that, let's add applications like Adaptive Intelligence offers." Well instead of saying we have to do these massive data transfers it may well be the case at this point that that data is resident an Oracle data center in the first place, and of course Oracle owns its own data centers. These are all world wide, so there's a bunch of advantages to the Oracle scale here. And one of them is that we don't have to move the mountain. Right? The mountain is already in the Oracle database, and we can go and put these services next to it that allow an ease of integration. And John, we were talking about this before we started here. It matters to make this stuff work fast when its a year long project to see if maybe its going to fly. That's no longer a reasonable thing, and so agility matters. Having the data where you already need it is great. >> John: Well and also the trend is system of record database and mountains of corpuses of stuff that you can tap into which you are pointing out, but also, I believe that the winner of all this will use a term that's used in the cloud industry: Standing Up Apps. >> Steve: Uh-huh. And I think that one of the things that's very clear to me if you look at the SAS marketplace where it's, and I think Mark Hurd said this, "There is no past, it's a SAS." So, in infrastructure, so and you kind of see in the separation, you have to have stuff done in weeks-apps. And I mean literally, not months, weeks. >> Steve: Yeah. >> And I would argue that minutes become it. So with that as a backdrop, how do you look at microservices? Because now, if look at, out of the move the data, so I might want to compose something and send it somewhere else, and move an app to the edge of the network or have a retail lab or do something in email. So now I can compose an app from data here and then move it so that brings up orchestration, microservices, and some of these cloud native concepts. How do you guys deal with that? >> Steve: Yeah, well let me give you the marketing part of this in terms of the Oracle Marketing Cloud. Because there are so many parts of Oracle, they have their own versions. For us, one of the big things we want is to have this concept called Orchestration that says if I'm a marketer, I should be able to reach my customer wherever he or she welcomes my messaging. These days, it no longer is just email. These are people who getting mobile messaging, they're potentially interacting with things like chat bots, it's become very fragmented. And so what Oracle wants to do is provide these Orchestration systems that allow apps plug in some that we build, but others that third parties build. So that as this complexity increases and there's more ways you can communicate, we can keep up with this in an agile way either ourselves or with others who do this really well. So that's one of the theories. >> John: It's the marketing cloud plus it's broader Oracle suite-cloud suite. >> Steve: Beautiful, yes. It's the Oracle Cloud suite which includes Oracle CX. It also includes something that we call the Oracle Marketing App Cloud, which is this third party ecosystem. Because we're Oracle, we have a lot of customers, we have hundreds of companies that say, "Yeah, I would love my stuff to get in the hands of Oracle's customer base." The way I'm going to do it is I'm going to make a turn key integration. So that when they buy it from me, they can just request turn it on for Oracle, and it will, again as you said, "Don't make it weeks, make it minutes." It's minutes when the integration is already done. >> So software business Larry Ellison, founder of Oracle, still around one of the legends of the industry. Larry, if you're watching, you're still hanging around, taking names and kicking butt. Started off with shrink wrap software, then download on the internet, then you SAS, now you have SAS plus coming on. Which is smarter apps, smarter customer experience. So it begs the question on this next journey for customers, it's going to be really cloud all the way right. >> Steve: Yeah. >> So you're going to have to have this cloud component, you guys have a strategy there. Isn't Oracle moving away from, a smarter CX's data by the way, so Oracle's no longer a software company. You're a data company. >> Steve: M-hmm. >> Data is eating the world. Yeah no, software is eating the world, which Marc Andreessen wrote, now data is eating software. >> Steve: Uh-huh. How do you view that because some people say that software is never going to go away. But data is becoming much more of a front burner issue, vis-a-vis just like software was in software development. >> Steve: Sure, well I think some of this is just semantics as where software leave off and data begin. But a great example is the thing you talked about earlier, Adaptive Intelligence, where part of the power of this, what makes it different from what you can get elsewhere is that it comes with data included that is different data then is available from anyone else. And so, in fact, you know Oracle, when it made the big investment in the data cloud, people I think thought, "What are you doing, you just set up a vending machine for data? Is that what Oracle's going to be about?". And the answer there is no. I mean there is a good data business, but where it gets profound is when that strategic asset, all that data, all of the sudden enables new products like Adaptive Intelligence Offers to be fundamentally different than came before. >> John: It's an enabling technology. >> It can be absolutely, yes. >> John: Data is enabling. It brings to life apps and then offers new apps opportunities. That's what you said. >> Steve: Yes, and marking data very much is the fuel for the marketing engine. So you get richer fuel, you will get richer results. >> John: Alright, so we're getting down the weeds here, so bottom line, let's up level it up for the person that's watching and saying, "Hey, I got the message." >> Steve: Yeah. >> "Data is super important." >> Steve: Yeah. Bottom line, what is happening this week here in Modern CX that's important for the person that has to scratch their head, isn't inside the ropes in the industry? What's going off of their world? What should they be thinking about? How should they be planning their life moving forward in this new modern era of marketing? >> Steve: Yeah, so I think the big things announced this week definitely involves things like a new level of being able to do recommendations of offers and products using the Oracle Data Cloud. It involves conversational user interfaces such as the new chat bot's platform. And in the case of the marketing cloud, we've got a series of products that have come out that allow a greater degree of self service for both marketers as well as their stakeholders like sales people. So how does the sales person get the output of a marketing automation system? Sales people aren't necessarily known for assiduously going and looking for marketing assets. We've got some new things around, for example, content portals. We've got some new things around features that let people be more autonomous in getting their own work done rather than needing to go to some other system somewhere. >> John: Awesome. And the customer we had on this morning from Royal Philips, really was the head of CRM. So customer relationship management is not a new concept obviously, you guys have a big chunk of business there in the software side of it. But customer relationship management, that is marketing cloud now >> Steve: M-Hmm. >> and customer experiences. So you're starting to see that really go to the next level. What's the big take away for the person at home? Watching in their businesses as they go on their journeys. How should they be thinking about the customer relationship? >> Peter: Well, that's a big question. I think for a CRM oriented person who maybe started out in something like database marketing, where you had a list, and you somehow try to learn about people on the list, that world has gotten a lot bigger now. Where it used to be you learned about someone once they became your customer. These days, though various advertising technologies, you can learn about people you don't yet know, but you know of their existence. And you can start creating that relationship, hoping to draw them in maybe with ads to the point where they do self identify. So there's this whole front end to CRM that is showing up in ad tech with things like DMP's-Data Management Platforms, that solve the same problem, but do it in these whole other realms. >> John: And new channels. Adaptive Intelligence, I think, is an awesome position. Love that Adaptive Intelligence Apps, Apps being stood up on a platform. You guys have it. >> Steve: Yes. >> Where's the next level? Take us through, you run the product rode map. You know, share with the folks, what's on the road maps? What should they be expecting more from Oracle, where are you going to be doubling down, where's the work you filling the white spaces, and what should they expect of the next year? >> Steve: Sure. Well, at least in my key note this morning which again focused on marketing, we had four themes. One was intelligence, we already talked about that one quite a bit. Another is mobile, and that's not just mobile like chat bots, but it's actually mobilizing the experience of our customers' customers for the marketing. So example of this, we have a product called the Eloqua which lots of email can be sent. They have a new email designer that inherently builds responsively designed emails. So those are the ones you open up on your phone that look good, you open on the desktop they look good. That's how it all should work. Unfortunately, it's not for a lot of folks today. So just having that be part of the tooling, big deal. So that's the mobile part. We talked a bit about self service, that's theme number three. And the fourth theme is actually a bit of a sleeper, it's about taking another pass through some of the core technologies we already have that people use the most, and being able to find... >> John: Like what? >> Maximizer a test and targeting a personalization tool. Used by a lot of our customers, the fundamental thing you do inside maximizer is you live in a campaign designer. And it allows you to adjust various parts of a webpage for testing, targeting, and personalization. We've got an entirely new way to do that that's based on an analysis of what do people do when they use this and how can we shave off some number of clicks per session? How can we make it less error prone when people are deciding what to do? How can we make more performant? You talked about 150 milliseconds, how about if we just eliminate the save button altogether so that anything you do automatically saves in the background. You don't have to reload anything. That kind of stuff comes from watching people use the product and realizing, wow, they're in there all day long. If we can just make all of those things a little better, over a course of a year, that's huge. >> John: So basically, we're looking at the core jewels and the platform and making it simpler, reducing the steps to do things, just end up being more efficient in some of the proven tools. >> Steve: Exactly, and in the speech this morning, we said, "Hey look, we don't talk about this enough." >> John: That's not a sleeper that's good. >> The tendency is to come out here, and we all want to talk about everything that's new like AI and the people who are our actual customers. They're seeing pearls rain from the sky when all of the sudden something that took them 12 minutes to do at a time now takes eight, and they do that 2000 times a year. >> John: I always say it's a great business model by, you know, making things simpler, reducing the time to do things and steps >> Steve: Yeah >> and making things intuitive and easy to use. Which it sounds like you're doing, but now let's talk about the glamor side of it. Because I think AI and chat bots speaks to the future, what other glam do you see happening out there right now? Obviously, AI is hot right now. >> Steve: Yeah, I think the other glam at this point is a little more speculative at least as it applies to my area with marketing like Augmented Reality, Virtual Reality, and so on. There's also internet of things. Certainly that world is changing. There are more devices of various types that can talk to the network. We've got a customer, you may be familiar with it, a sleep number bed company, the ones that have the bed where you can pick your number. That's actually a connected device, and so there's some interesting things that can be done there with careful discretion about what data you're collecting. But when we started thinking about, incidentally, so many things that in the past used to be a inert objects are generating data. That can feed into various applications whether it's marketing or other areas. >> John: And more data's coming in, it's just not stopping. >> And it's great for Oracle because if Oracle is good at anything it's good at dealing with very large scale data. That's been the business for a long time, and the trend won't change. There will continue to be larger and larger scale data. >> Steve, final point, what's the theme of the show this year besides the messaging that you have? What do you seeing that's happening here that's evolving? What's the top story here? >> Steve: Well, you know we did a customer advisory board meeting here for the marketing cloud, and I think if I were going to ask the customers what their top story is, I think their top story is they themselves want to continue becoming more customer centric. Everybody talks about it. Well of course, we should be that way. But so many companies grew up doing things like focusing on the thing we're selling, they're being offer centric. And so organizationally changing, using the technologies like we have so they can create the kinds of experiences, we call them the connected customer experience that they themselves want to have. It's a bit challenge, and so their permissions are to say transform ourselves to be from the tech down to the organizational incentives, truly customer centric. >> John: Steve Krauss, Group Vice President of Product Management Oracle Marketing Cloud. Great to see you. Thanks for sharing the insight of the real road map and all the exciting stuff happening here and your clean up this morning, congratulations. I'm John Furrier and Peter Burris. More live coverage coming up here at the Mandalay Bay in Las Vegas with the Cube after this short break. (live upbeat music)

>> Narrator: Live from Las Vegas, it's theCUBE, covering Oracle Modern Customer Experience 2017, brought to you by Oracle. (bright, lively music) >> Hello and welcome back to a CUBE coverage of Oracle's Modern Customer Conference here at the Mandalay Bay in Las Vegas. I'm John Furrier with SiliconANGLE, theCUBE, with my co-host this week, Peter Burris, head of research at Wikibon.com, part of SiliconANGLE Media, and our next guest is Austin Miller, Product Marketing Director for Oracle Marketing Cloud. Welcome to theCUBE conversation. >> Thank you very much for having me. >> This coveted post-launch spot. >> Yeah, we have a lunch coma kicking in, but no, seriously, you have a really tough job because you're seeing the growth of the Platform Play, right, really robust horizontal platform, but how you got here through some really smart acquisitions but handled well, and integrated, we covered that last year. You guys are seeing some nice tailwinds with some momentum certainly around the expectations of what the customers want. >> Yeah, I think that one of the best things when we start thinking about, to your point, product integration, it's also the way that we are talking to our customers about how they can use the products together. It's not really enough just to have maybe one talk to another, but unless we prove out the use cases, you don't get the utilization, and I think this year what we've really seen is getting those use cases to actually start getting some traction in the field. >> So this integrated marketing idea seems to be the reality that everyone wants. >> Where are we on that progress bar, because this seems to be pretty much unanimous with customers, the question is how to get there, the journey, and the heroes that are going to drive and the theme of the conference. But the reality is this digital transformation is being forced for business change. >> Austin: Absolutely. >> And marketing is part of that digital fabric. >> I think that one of the most interesting things about this is if you look at kind of the history of when did the stacks start becoming actually part of the story, it was at a point where we didn't really necessarily even have the capabilities to do it. As a result many marketers who thought they were maybe buying into a stack approach got a little bit burned. I think now we are actually at that place where that value is not only something that they can see inherently and say "oh, I'd like all these applications to talk together," but it's actually feasible, it's something that they're going to be able to use, and they can be optimistic about, frankly. >> Where are they getting burned, you mentioned that, from buying into a full stack of software for a point solution, is that kind of what you meant? >> No, I think that in the marketing realm, when you're talking to marketers, it is very easy to think about all the horrible things that they have to deal with on a daily basis, all these problems. And the reality is that oftentimes you've had to have this conversation with them that says, you know, there are not going to be easy answers to hard problems. There are usually hard answers to hard problems. We can help alleviate some of that friction, especially when we start talking about data silos or things about interoperability, so being able to not just have integration, but pre-built function within these particular platforms, but realistically, it just wasn't something that we necessarily in the market in general were able to deliver on until somewhat recently. >> So, I am very happy that I heard you use the word "use cases," especially at a launch, because that's been one of the biggest challenges of both marketing technology when we think about big data, there's been such a focus on the technology, getting the technology right, and then the use cases and how it changed the way the business or the function did things, kind of either did or didn't happen. Talk about how a focus in use case is actually getting people to emphasize the outcomes, and how Oracle is helping people then turn that into technology decisions. >> This may sound almost counterintuitive, but in reality the way that use cases we see helping us the most is that it really helps spur about the organizational changes that we need in order to actually have some of this happen, 'cause it's very easy to say, "we have all this technology marketer and you should be using it all," but if you don't actually prove it out and how that's going to impact let's say the way that they're creating their marketing messages, on even a kind of not exciting basis, like how are you creating your emails, how are you creating your mobile messaging, how are you doing your website, and then start talking about those in actual use cases, it's very hard for people to organize their organizations around this kind of transformation. They need something tangible to hold onto. >> And the old way with putting things in buckets, >> Austin: Exactly. >> Right, so so hey we got one covered, move on to the next one ... >> Peter: Or by channels even. We got an email solution, or we got a web solution and as the customer moves amongst these different mechanisms, or engages differently with these mechanisms, the data then becomes, we've talked a lot about this, becomes the integration point, and that as you said affects a significant change on how folks think about organizing, but what do you think are going to be some of the big use cases if people are going to be ... you're providing advice and counsel to folks on the 2017. >> Yeah, so I think that talking about marketing-specific use cases is really important, especially when we start thinking about how am I using my first-party data that I may have within a particular channel. And I'm using that to contextually change the way I'm communicating to somebody on another channel. But if we kind of take that theme, and we think about let's not just expand it to marketing but let's really talk about customer experience, because as a customer, I go in-store, I go on email, I go on your mobile app, I don't view those as different things. That's just my experience with your brand. And even as we start getting to maybe some of the service things, am I calling a call center? The way that we're really thinking about marketing is not only bringing all this information across our traditional marketing channels, but how are we helping marketers drive organizational change beyond the traditional bounds of even their own marketing department into service, into sales, into on-store, because in reality that's where kind of the next step is. It's not just about, to your point, promotional emails. It's about how are we bringing this experience across the full spectrum. >> So it's really how is first-person data going to drive the role of marketer differently, the tasks of marketing as a consequence, and therefore how we institutionalize that work. >> Absolutely, and I think that you can see this in the investments that we've made in the ODC, Oracle Data Cloud. It's first step, let's start thinking about how we can start moving around on first-party data, that'll be a nice starting point, but then afterwards, how are we taking third-party data let's say from offline purchases, starting to incorporate that and that store's third-party data, 'cause then we really start getting to that simultaneously good experience or at least consistent experience across digital, across in-store, we start piecing together, but we really need to start at that baseline. >> A lot of people have been talking about the convergence of adtech and martech for years, and we had a CUBE alumni on our CUBE many years ago, when the Big Data movement started to happen, and he was a visionary, revolutionary kind of guy, Jeff Hammerbacher, the founder of Cloudera, who's now doing some pioneering work in New York City around science. He's since left Cloudera. But he said on theCUBE what really bothered him was some of the brightest minds in the industry were working on using data and put an ad in the right place. And he was being kind of critical of, use it for cooler things, but we look at what's happening on martech side, when you have customer experience, that same kind of principle of predictive thinking around how to use an asset can be applied to the customer journey, so now you bring up the question of A.I. If you broaden the scope of adtech and martech to say all things consumer, in any context, at any given time, you got to have an A.I. or machine learning approach to put the right thing at the right place at the right time that benefits the user >> Austin: It's not scalable. That's the reality of it. To you point, if you're going to start thinking about this across all these different channels, including advertising as well, the idea of being able to do these on a one-off basis, from a manual perspective, it's completely untenable, you're completely correct, but to that point, where you're talking about the best minds in the industry maybe dedicated to figuring out, "if I put a little target here, am I going to get somebody to click on that ad one time, or how am I placing it," that is very much the way that we were at the very beginning parts of marketing technology, where it was bash and blast messaging, how can we just kind of get the clicks and the engagement, and how do we send out >> John: spray and pray >> Exactly. And now I think that we are getting to a much more nuanced understanding of the way that we advertise because it's much more reliant on context, it's not just how can I get my stuff in front of somebody's eyeballs, it's how am I placing it when they're actually showing some sort of intention for maybe the products I already have. >> Adaptive intelligence is interesting to me because what that speaks to is, one, being adapted to a real time, not batch, spray and pray and the old methodology of database-driven things, no offense to the main database cache at Oracle, but it's a system of record, but now new systems of data are available, and that seems to be the key message here, that the customer experience is changing, multiple channels, that's omnichannel, there needs to be ... everyone's looking for the silver bullet. They think it's A.I., augmented intelligence or artificial intelligence. How do you see that product roadmap looking, because you're going to need to automate, you're going to need to use software differently to handle literally real time. >> Completely. I think that this is a really important distinction about the way that we view A.I. and how it factors into marketing technology and the way that I think a lot of people in the industry do. I think that once again this theme of there aren't easy answers to hard problems, it is very pleasant to think that I'm just going to have one product that's going to solve everything, from when I should send my next email, to if there's clean water in this particular area in a third-world country, and that's just something that maybe sounds nice, but it's not necessarily something that's actually tangible. The way that we view A.I. is it's something that's going to be embedded and actually built into each of these different functions so that we can do the mission-critical things on the actual practical level, and kind of make it real for marketers, make it something that's isn't just "oh, buy this and it will solve all your problems." >> So I'm going to ask you the question, the old adage, "Use the right tool for the right job, and if you're a hammer everything looks like a nail." A lot of people use email marketing that way, they're using it for notifications when in reality that's not the expectation of the consumer, some are building in a notification engine separate from email. All that stuff's kind of under the covers, in the weeds, but the bigger question to you is, I want to get your insight on this because you're talking to customers all the time, is as customers as you said need to change organizationally, they're essentially operationalizing this modern era of CX, customer experience, so it's a platform-based concept which pretty much everyone agrees on, but we're in the early innings of operationalizing this >> Austin: Oh yeah. >> So how do you see that evolving and what do you want customers to do to be set up properly if they're coming in for the first inning of their journey, or even if they're midstream with legacy stuff? >> I think that that's a really good perspective, because you don't want to necessarily force people to go through excruciating organizational change in preparation if we're in maybe the first inning, but it is really just about setting up the organization to adjust as realistically we get into the middle innings and into the later innings. And really the kind of beginning foundation of this is understanding that these arbitrary almost like tribal distinctions between who owns what channel, who's the email marketer, or who's the mobile person, they need to be broken down, and start thinking about things instead of these promotional blasts to your point, or even maybe reactionary notifications. How is this contributing to the number of times your brand is touching me in a day, or the way that I'm actually communicating, so I think that it's an interesting kind of perspective of how we were organizationally set up for that, but the short answer is that A.I. is going to fundamentally change the way that marketers are operating. It's not going to fundamentally change maybe everything that they're doing or it's not going to be replacing it. It's going to be a complementary role that they need to be ready to adjust to. >> So you are, you're in product, product management. >> Austin: Product marketing >> Product marketing. So you are at that interface between product and marketing, both moving more towards agile. How are you starting to use data differently and how would you advise folks like you in other businesses not selling software that might not have the same digital component today but might have a comparable digital component in the future, what would you tell them to do differently? >> So, I think that the first step is to actually have an honest assessment of what we have and what we don't have. I think that there's a lot of people who like to kind of close their eyes or maybe plug their ears and just sort of continue down the path of least resistance. >> Peter: Give me ... >> Oh, an honest assessment of what kind of data we do have today, what kind of data we might actually need, and then most importantly, is that actually feasible data to get. Because you can't >> you can wish it but you can't get it >> You can wave a magic wand and say these are the numbers that I need on this particular maybe interest level of these particular ... >> John: The fatal flaw is hoping that you're going to get data that you never get, or is ungettable. >> Or, this is really something that I think a lot, would resonate more with marketers is that we have now set up all these different points of interaction that are firehoses of data spraying it at me, I may be able to retroactively look at it and maybe garner some kind of insight, but there's just no real way for me to take that and make it actionable right away. It is a complete mess of data in a lot of these organizations. >> And that's where A.I. comes in. >> Austin: Absolutely. It's able to automate that, reaction ... >> Peter: Triage at a bare minimum. >> Correct >> So the first starts with data. What would be the second thing? >> So it's data, presume that you're going to need help on the triage and organizing that data. Is there a third thing? >> I would say that you're going down the right path with the steps there, but once again, we're all talking about these concepts that do require a great deal of specialization and a lot of actual understanding of the way we're dealing with data. So honest assessment is definitely that first part, but then do I have the actual people that I need in order to actually take action on this? Because it is a specialized kind of role that really hasn't traditionally been within marketing organizations. >> I know you guys have a big account-based, focus-account-based marketing, you know, doing all kinds of things, but I'm a person, I'm not a company, so that's a database saying "hey, what company do you work for?" And all the people who work for that company and their target list. I'm a person. I'm walking around, I've got a wearable, I might be doing a retail transaction, so the persona base seems to be the rage and seems to be the center and we heard from Mark Hurd's keynote, that's obviously his perspective and others as well so it's not like a secret, but how do you take it to the next level? An account base could help there too, but you need to organize around the person, and that seems to open up the identity question of okay, how do I know it's John? >> I think that goes beyond just personal taste, but into what does this person actually do at this company, because I can go in and give a headspinning presentation to maybe a C-level executive and say, "look at all this crazy stuff you can do," and meanwhile the guy who might be making the buying decision at the end of the table's looking at that and being like, "there's no way we can do that, we don't have the personnel to do that, there's no chance," and you have already dissension from the innards of the actual people who are making the buying decisions. The vision can't be so big that it resonates with no one. And you need to understand on a persona level what is actually resonated with them. 'Cause feasibility is a very important thing to our end user, and we need to actually incorporate that into our messaging, so it's not just so pie-in-the-sky visioning. >> I did a piece of research, sorry John, I did a piece of research a number of years ago that looked at the impact of selling mainly to the CIO. And if you sell successfully to the CIO, you can probably guarantee nine months additional time before the sale closes. >> Austin: Yeah. Because the CIO says "this is a great idea," and then everybody in the organization who's now responsible for doing it says "hold on, don't put this in my KPIs while I take a look at it and what it really means and blah blah blah. Don't make me responsible for this stuff." You just added nine months. >> Absolutely. I even have a very minute example for something that we rolled out. This was a great learning opportunity. Because we rolled out a feature called multi-variant testing. It's not important what exactly it is for the purposes of this, but basically it's the idea of you can take one email and eight versions of it, test it, and then send out the best one. Sounds great, right? I'm an executive, I'm like boy, I'm going to get every last ounce of revenue from my emails, I'm only going to send out the best content. If you don't pitch that right, the end user, all they hear is wait, the thing that I do one of, I have to create eight of now? Am I going to get to see my kids ever again? That's just the way you have to adjust ... >> And seven of 'em are going to be thrown away. I'm going to be called a failure. >> Exactly. So it's just not something that you can take for granted because marketers have a variety of different roles and a variety of firm responsibilities. >> And compound that with everything's going digital. >> Exactly. >> So (mumbles) Austin, great to have you on theCUBE. Spend the last minute though, I'd like you just to share for the last minute, what's the most important thing happening here at #ModernCX besides the simplicity of the messaging of modern era of customer expectations, experiences, all that's really awesome, but what should people know about that aren't here, watching. >> I'd just say that the one thing that at least resonates most with me, and this is once again coming from a product and sort of edging on marketing, is that the things that we've been talking about with not only A.I. but even just simple things like having systems that are communicating to each other, they're actually real and we're seeing that as real. You can actually see them working together in products and serving up experiences to customers that we're even doing now as part of the sales process and saying "hey, this is how you would actually do this," as opposed to just "here's our Chinese menu of different options. Pick what you want and then we can just kind of serve it up." Because I think that there's something that's very heartening to maybe marketers who have a little bit of, I don't know, doubt about whether or not this is real. It is real, it's here today, and we're able to execute on it. >> And that's the integration of a multi-product and technology solution. >> I would almost say that it's slightly different from that though, in terms of, it's not just integration of these pieces, it's integration that's pre-built, so we actually have it pre-built together and then we also have these tremendous, new, innovative features and functionality that are coming with those integrations. It's not just portability, it's actual use cases. >> Would you say that it's as real as the data? >> It's as real as the data. I think that that's ... >> If you have the data, then you can do what you need to do. >> That's a very, a very good point. >> Austin Miller, Product Marketing Director at Oracle Marketing Cloud. Thanks for sharing the data here on theCUBE where we're agile, agile marketing is the focus. I'm John Furrier, Peter Burris. More coverage from day one at Mandalay Bay for Oracle Modern Customer Experience show. We'll be right back with more after this short break. (bright, lively music)

>> Voiceover: Live, from Las Vegas, It's theCUBE. Covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. (techno beats) >> Hello everyone, welcome to SiliconANGLE's theCUBE, with flagship programming, we go out to the events, and extract the signal and noise. I'm John Furrier with Peter Burris, my cohost this week at Oracle Modern Customer Experience, in Las Vegas. A lot going on in Las Vegas, at the NAB Show, down the street where the Cube is, also we're here, for the second year in a row at the Oracle Modern Customer Experience, #ModernCX. Tweet at us @theCUBE. I'm John Furrier with Peter Barris. Kicking off two days of wall-to-wall coverage, we have some amazing guests. We have the top executives at Oracle Marketing Cloud, as well as some of their customers, as well as some other guests in the industry. Peter, we've been covering this marketing cloud kind of, as part of the bigger picture of the systems of engagement that is growing out of cloud infrastructure and big data. There's really a collision going on between accelerating applications with infrastructure, powered by the cloud, powered by hybrid cloud, and data's at the center of the value proposition, and literally is the key point in all this. So, I want to get your thoughts, and we talked about this last year, what's different from last year to this year, with Oracle Marketing Customer Experience, from your perspective? >> Well, I think there's three things that are different, John. The first thing that's different is that, the reality of how difficult it is to integrate technology into the marketing function is setting in, in a lot of marketers. So, we're not hearing anymore comments or promises about how marketing expenditure is going to exceed IT expenditures for technology. So, there's a reality set in about, what does it really mean to incorporate technology in the working market? The second thing that's happening is AI. We're going to hear a lot about AI, we're going to hear a lot about these new ways of taking big data and making them more useful to the business, and that's going to have an enormous impact on marketing, for a variety of different reasons. When you talk about next best action, predicting customer experience, prognosticating value propositions, all those other things, AI is going to have a role to play. How fast it gets adopted, we'll see, but we're going to hear a lot about it. >> John: It's interesting, we always talk on the cube here, if you follow the Cube you know, we always kind of, always pontificate on this notion of horizontally-scalable, and we talked about it last year, but there's an era of specialization, that you need to have vertically-oriented into some of these industries. But what's interesting, Pete, and I want to get your thoughts on this, because I was commenting last year at the show that, marketing was always a silo, and Oracle has had a integration strategy that's been kind of horizontal, and the trends in cloud computing and data is horizontal-scalability, with value propositions differentiate at the applications So, this begs the question, what does that mean for marketing in a digital business? If you go digital all the way, from the beginning of the journey to the moment of truth to the customer, sales or conversion, it's all digital, marketing's in every piece of the equation along the way, and that's what Mark Hurd was saying yesterday. >> Peter: Well, customer engagement's in every piece of the equation along the way and then the question is, is marketing going to evolve to become primary in customer engagement? It's not going to be just your direct sales force, customers are going to move amongst different channels. We've heard a lot about on the channel, so, to what role, to what degree will marketing become primary? And the third point I was going to make, John, is related to this, and that is, one of the big changes between this year and last year, is that Oracle has really thrown the tiller over, and tacked towards the cloud. And it's going to be interesting to see whether or not the cloud customer experience story, or the marketing cloud customer experience story, in the cloud, is lining up with the rest of Oracle's cloud story. >> John: It's as with, Don Clien, from our team, who last night in the hallway conversations here, in the Mandalay Bay with the convention, that the conference is happening, it's interesting, we were talking about the role of platforms, and you can't see in the news these days, anything from Facebook's relative to fake news, to some of the killings on Facebook Live, to YouTube and moderating comments, these emergence of platforms has been a very interesting dynamic, but at the end of the day, content needs to have an authentic piece to it. So, you now blending in a marketing and conversion, with customers, we're living in a content world. I'm wearing a wearable, my content is my interface to wherever I am in real time. My experience at the rental car dealership, or wherever I'm at, is going to be all about, the content is not some siloed, "Hey, hello, buy this." It's everything is content-driven. >> Well everything is value-driven, right? And the question is, is the content going to be valuable? And if there's a big, going back to that first point, what's the big issue about marketing? We thought that if we just through technology, we could automate the same ways that marketing is already, always done stuff, but the reality is marketing does a lot of stuff that is not valuable to customers. It may be valuable to the organization or their ways, but it's not valuable to customers. And often it's really annoying, and so marketing has to decide, if in fact they are going to take a primary role in engagement across channel over time, as customers move amongst organizations, then they're going to have to start dedicating themselves to creating content that's valuable to the customer, in the form that the customer needs, when the customer needs it, where the customer needs it. And that's a challenge. >> And the engagement piece is critical, I love that angle, but let's take it to the next level. Every example of marketing cloud or any kind of digital experience use case has data in it. It's data-driven. Even Mark Hurd, on his keynote, talked about his experience at the rental car place, that's data-driven. You got to know, that's the CEO of Oracle. So, this is again, the data is at the center of this. It's flowing through all the apps, and has to be available, has to be real time, this is fundamental. >> Peter: And digital assets are data as well, and applications, when you go back to what computer science says, applications themselves are data. So, increasingly, it's all data. Customers want to be engaged digitally. They want to be able to take their digital experience, whatever channel, the data has to follow them. You have to anticipate what data you're going to generate in the form of content. You have to be able to capture data without annoying them. So, in many respects, John, this all comes down, the challenge for marketing is, how do we capture data without being annoying? How do we provision data in a way that's valuable, so that we increase the view of the brand. >> John: I want to put you on the spot, because I know marketing's a lot of different components to it, but one of the things that everyone in the industry is talking about, is the role that salesforce.com has taken in its SaaS cloud platform, vis-a-vis an app, where you just put your contacts in, and you manage your relationships, and how that's grown and shifted over to being a SaaS platform. And here's the question I want to ask, and get your thoughts on, and just riff here in real time. Back in the old days, analog sales needed a system to provide automation for those sales guys. Boom. Salesforce.com is born. Marketing would provide email marketing and content, here's a package of content, if you're interested, click on it and we'll get you more information. Marketing department sends those leads to the analog sales team. The leads aren't good enough, the leads are crap. Glengarry, Glen Ross kind of thing going on there. Now that's shifted with the digital fabric, end to end, from initiation to moment of truth. Digital. That kind of goes away. So, sales cloud and marketing cloud are blurring, yes or no, what're your thoughts on the role of sales kind of thing, and the marketing piece? >> Well, it all comes down to, and again this is one of the precepts of the whole notion of customer experience, it all comes down to the customer is on a journey to solve a problem, to generate some utility out of the purchase that they're making, whether it's a product or service. They go through discovery process, they go through a buying process, they go through a utilization process. All of that requires engagement. And so the data, and they way you provision your resources, to that customer has to fit naturally in the way the customer does stuff. So one of the reasons why this is blurring is because customers themselves are demanding that they be treated digitally in some coherent manner. Now, institutionally and organizationally, there's still a lot of tensions, as you said, between sales and marketing, and it's not enough to just say we're going to do a marketing cloud because there's marketing budgets, and we're going to do a sales cloud, because the sales budgets, and a product cloud because of product budgets, etc. This has to come together. We have to render this coherently in front of customers, or in front of businesses because businesses have to render themselves coherently in front of customers as they go through their journey. >> Great observation, I would just add that this notion of a platform is an indicator of where the market's going. Certainly we're seeing in the mainstream some things are being tweaked, and Facebook admitted in the New York Times that they're working on it. They're going to work on these things. But let's bring that platform, if what you say is true, which I believe it is, everything has to come together, because it's not one or the other, there's not mutually exclusive. Now, sales guys had the data from the old days, but now it's all digital, so the question is, that shifts the scales, because in the old days, marketing was to provide value to the organization, the enterprise itself, the business value of the enterprise, and that comes from selling something. >> Peter: Right, right, right, right. >> John: And so, to your value point, which I think that this market shifts the value to the marketing team because they have a broader perspective in that journey. Or have more touch points in the engagement of the customer. >> Peter: And that's key. The question is can they be the orchestrator of a coherent and holistic engagement strategy with a customer. >> John: So, I'm a CIO, I'm looking at a complete replatforming. I think that's a better approach than trying to take Salesforce and make it work over here, and if you look at Salesforce, they've done a bunch of different acquisitions, not always kind of tightly coupled, a little bit of awkwardness here, chatter, all these components. Oracle's taking a different approach, they're saying we're going to integrate all this stuff, and you pick and choose. I think, if I'm a CIO, I might want to take a more holistic view from initiation, to moment of truth with the customer, and the lifecycle that journey. There's more marketing touch points in there, so I'm probably designed that way, your thoughts. >> Peter: Well, so, it's interesting John. The whole CRM industry went through an extremely challenging birth. One of the biggest challenges is that, as you said, we used to be analog. Sales people would go on a call, they'd write up a trip report, they'd hand it to and administrator, and the administrator would do the data entry, and we'd get it into the system someway. But the minute you start automating that, now the sales guys are doing data entry. And if you talk to sales organizations today, one of the biggest problems is how much time are my folks doing data entry, how much time are my folks generating content for customers, how much time are they doing all these other things, and not selling, and that's an issue. So, when we think about where this is going to go, at the end of the day, Salesforce has done the best job of presenting CRM to the marketplace, for a variety of different reasons. But it still is a let's capture sales activity kind of a platform. The question is, are we actually going to get to a platform that is truly able to provide coherent, holistic value at the moment that the customer wants it, and that includes delivery. And I think Oracle has an opportunity in all of this. It's to actually utilize their various clouds, to provide a way of engaging customers across the entire journey, because they can do the discovery piece, they can do the sales piece, and they can also do digital products, and digital capabilities anyway, the delivery piece. >> Well, Peter Burris from Wikibon.com, head of research over there. Check out some of the work they're doing with the digital, role of the digital business and assets, digital experiences, they're all assets, whether it's content, engagement, or an experience that someone has, it's all a data asset, it's a digital asset, and that needs to be harnessed and looked at holistically in a way. You got some great research over at Wikibon.com, check it out. I'm John Furrier, here for two days at Oracle Modern Customer Experience Show. Should be great, really cutting edge stuff, really as the world replatforms in the cloud, content and experiences will be fundamental, and data's at the center of it. We'll bring you all the coverage here. We'll be right back with more great coverage after this short break. (techno beats)

>> Announcer: Live, from Las Vegas. It's theCUBE. Covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. >> Okay. Welcome back. And we're live here in Las Vegas at the Mandalay Bay Convention Center. This is SiliconANGLE's theCUBE. This is our flagship program where we go out to the events and extract the signal from noise. I'm John Furrier, the co-founder of SiliconANGLE, with Peter Burris, head of research at SiliconANGLE's wikibon.com team. Our next guest is Marta Federici, who's with Royal Philips, who, head of CRM. So CRM, Customer Relationship Management. The old way to do things, now transitioning to modern customer experience. Welcome to theCUBE. You look fabulous. >> Thank you. >> John: Thanks for joining us. >> Thank you for inviting me, pleasure to be here. >> Great to have you on. Because you know, one of the things that we're really focused on with our research that Peter's doing, is the practitioners. How they're thinking about executing the customer experience. And on our reporting side, we're seeing huge reports that these platforms are providing great value. But at the edge, the customers' expectations are higher than the value that the platforms are delivering. >> Marta: Yeah. >> We're seeing with fake news, we're seeing it all over the place. People want authentic experiences, relevant to them. This is the whole purpose. >> Marta: Yeah, yeah. Exactly. >> It's the people factor. >> Marta: Yeah. (laughs) >> That's what you're going to be on stage tomorrow morning. >> Tomorrow morning at 9 a.m. Yeah, indeed. So, I would say to be authentic, to be genuine toward your customers, you always need to be relevant to them, you need to listen, you need to learn. You need to know what they need. You need to be ahead of what can they possibly do. You need to start. You need to focus on the insides. You have to really connect all the dots. I think one of the biggest challenges that we have as a company, but I think can be a shared challenge with many other companies across the globe, is that sometimes you not always have the opportunity to break the silence within a large organization. And work really horizontally. And this is something that we really strive to do. Especially when we have specific projects, or innovation-related project, innovation-driven technology project as well. So we try to build a multifunctional team that really can work hand-in-hand, together, to deliver the higher ROI, the better results, the best customer engagement. And be always relevant when it's needed for our customers, for our consumers, and even for our patients, by the way. >> So let's talk about your team then, and how your team fits within Royal Philips. Describe how you've constituted it, how you've put it together, and how it connects into some of the other functions necessary to drive customer experience. >> Yeah, so by the way, I'm very proud of my team, I would say as a start. We, I mean, I build this team in the past three years. And my team is composed in a particular way. I have a portion of the team that is focusing on business-to-consumer CRM, a portion of the team on business-to-business CRM, and then I have, I would say, two layers in between. One is about CRM technology that spans across both domains. And one is about insights. I would say all of them work together. And I really like the fact that, also, the business-to-consumer and the business-to-business team, they can enrich each other. Sharing challenges and really learning from one another. When I think about my, I would say, my product owner, actually we work very, very closely through his team, with the IT department on one end. Because also we own. >> This is the technology person. >> Exactly. The technology side of the story, I would say. Because we own, for example, the market information tooling, Eloqua, that we leverage for any additional campaign management activity on both B2C and B2B. As well as the identity system, et cetera. And, on the other hand, through the insight team, we also work very, very much closely together with enterprise information management teams. So any team who works with databases, with reporting, with advanced analytics, and predictive analytics. So through them and through the more business side of my team, we can build quite nice stories for our experts. >> So you got a B2B practice, a B2C practice, supported by technology and analytics. >> Technology and insights. Exactly, exactly. That's the structure of the team. >> How did you build the team? I mean, talk a little bit about, we talked about the customer journey and CRM and related technologies needing to intercept and serve customers as they seek their solutions and the value propositions that they want to build. How did this play out at Philips? How did it, where did it start, how did it evolve over time to get to where you are? And obviously at some point and time we're going to ask ya, "And where do you think it's going to go?" >> (laughs) Sure. >> But how has it gotten to where it is? >> Sure. I would say, when I started, I had a white, a blank page, a totally blank page. And I started hiring some experts in key areas. Actually, the first expert I hired, where on the technology side. Because we were supposed to, to deploy Eloqua first, for the first time, on a global level. So that was the first piece of the puzzle, together with the insights team, and also with some key expert in terms of B2C and B2B business domains. So then I started realizing, Okay, but this structure needs to make some sense. They need support, they need help. We enable as a, I would say, CRM, a corporate team, any countries across the globe, and any businesses, B2C or B2B. So we deal with a lot of stakeholders. We have multiple stakeholders, and we run and manage multiple projects at the same time. So let's say I started then figure it out, Okay, what are the talents that I need on a business perspective to really make sure that we design the right journeys, that we build the right campaigns, that we can interpret the data properly? So piece by piece I started really filling out all the boxes that I had in my mind. And now, I think this organization is really working. So the team is very motivated, very committed, very passionate. And in the past month, actually also recently, we deliver quite some best practices. So yeah, award-winning best practices. >> Marta, talk about the learnings. You're in a transformation, and CRM certainly is important as you move and transform into the modern era of relationship management with customers. What is the learnings that you have taken away that you can share with folks that are either on a different part of the journey path than you are, or just anything that you would like to share, that would be helpful. >> Yeah, yeah. So when I think about, also what Laura Ipsen, for example, talked about this morning, the marketing heroes. I think, technology is very-- >> Now, Laura Ipsen is the, runs all the modern marketing products that you're holding. >> Yes, exactly. >> She's the head honcho. She's the head honcho, as they say. (laughs) >> SVP of Oracle Marketing Cloud. So when I listen to her, this morning, she was talking about those marketing evils. Also, while talking to Time Warner CMO, and I think in order to start, and to succeed in any transformation, any additional transformation that you want to carry forward with, you really need the right talents, with the right attitudes, with the right skills, with the right mindset, by the way. And I think on one end technology can really help you, can really be a game-changer, a key enabler, but without the right people on your company's side, and also on your vendor's side, that work together with you on a daily basis, you can not achieve great results. >> And what about the partners? You know, Oracle obviously has a good team. We've been following them now for multiple years. It's our eighth year covering Oracle. We've seen the transformation within Oracle. But also they have partners too. I mean, do you interface with them? And what's your advice for folks that are trying to sort their partnership component out with the vendor? >> Yeah, let's say one particularity of my team and what we do everyday, is that we work daily with Oracle and we also like to embrace any other partners that they suggest us to work with. For example, in a recent campaign we beat a huge Black Friday best practice for our North American market and we also scale it globally, achieving great results, and we partnered up on one end with Oracle. Strategic services, expert services, but also with Return Path. Which is one of their, also, I would say, preferred partners. To make of this campaign something really, really good and to ensure a very good broadcasting performance. On the other hand, we also partnered with some of their additional partners that can be related to some apps specifically or some talents that they have internally. And no matter if it's about consultancy, strategy, technical expert. So, yeah, we're pretty much open, very open-minded. And very, I would say we embrace any inputs, any good inputs. Also because, on one end, what is important for us is to share the challenge that we have with our vendors, with our partners, and of course asking for help. But at the same time, we like to onboard them. To make them understood about what's the real challenge. How do we feel about it? We need to have a common sense of purpose. If we really want to, I mean, to take a project to the next level and make it a success. >> So you implement these tools, and put these relationships in place, the productivity and the effectiveness of marketing goes up. >> Marta: Yep. >> How is, therefore, the role of marketing starting to change within Philips as a basis of these new competencies and these new capabilities that, presumably, the rest of the organization finds valuable? >> Let's say, Philips has a great mission. So, we-- >> And one that's transforming, has gone through a lot of change over the last few years. >> Marta: Exactly. >> Pretty successfully, you might add. >> Exactly, exactly. We are a health technology company. We employ 70,000 people across the globe, across a hundred countries. Our mission is to improve people life. Through meaningful innovation that matters to our consumers and to our customers. So I would say this is a huge challenge. We say that we would like to improve three billions people life by 2025. It's a huge mission. And how are we going to do that? Through innovation, through one-on-one customer relationships. So, and this is where, I mean, we also recently, we started focusing more and more on our customer, we started being truly obsessed. No matter if we talk about consumers on B2C domain, or if we talk about customer. So customer obsession is really at the core of any of our marketing activity right now. And it will be even more. By the way, in the past six-to-nine months, we also had the opportunity to have CRM, as well as our, I would say, shop capabilities, becoming core marketing capabilities. Of course this come with a lot of pressure, a lot of, I would say, attention, also-- >> Some sleepless nights. >> Exactly, exactly. But it is quite exciting. And we also would like to continue to invest on our connected proposition. So we also build products, which are connected to apps, and what's the best way to engage? CRM. So what's the best tactics, or strategy, or how can we build a consistent and long-lasting engagement that delivers the higher results and the higher ROI? So that's, I mean, CRM can be really a game-changer there. >> So Philips is quite legendary. And perhaps because of it's Dutch heritage, 'cause the Dutch had to engage a lot of people from a lot of different backgrounds and a lot of places to make their businesses great. And Philips is quite legendary at being responsive to and responsible, responsive to and responsible to a lot of different people on a global basis. How are some of those cultural values being amplified inside Philips as you bring more of this customer obsession to bear? >> Yeah. Yeah. So let's say, Philips is at quarter in the Netherlands. And in the Netherlands, I would say, Dutch people are always ready to listen. You need to always find a sort of consensus before you can move forward with any strategy, or with any project or program. You always listen also to any inputs. Because you want to really make sure that your idea, on one hand, is agreed, on the other hand, is re-analyzed into the least of the details. So what we do is is really try to understand all perspectives, because any point of view can enrich an initial idea that you have. And I would say our business is also so diverse. If you look at all the business units that we have, and sometimes can be difficult to understand Philips as a whole, but in the end every single of our business units really incorporate together to the greater goal of innovation that matters in improving people lives. So you will find this through any of our stories, any of the products that we deliver, that we build, also together with our customers. So I would say, Philips is, has many, but also, can be also be just one at same time. >> It's transforming, as GE says, you know, they went to bed an industrial company one night and woke up a software analytics company. >> Marta: (laughs) Yeah. >> That's really what's happening. >> Exactly. And, you know what, we are also focusing on delivering services and delivering information. Because what we also strive to do, is to work within the health continuum from prevention, to diagnosis, to care, also home care. And this is what we are really aiming to do, at this stage, also, establishing a connection in between a consumer that can also be a patient on the other side, and delivering the right information to the hospital to take care of them. So in this health continuum story it's really a game-changer, I think, within, I would say, a health tech industry. >> And having the data is critical. Marta, final question for you. Take a minute to share what's exciting here at this event. Why is the modern customer experience show this year so important? There's a big buzz around this platform. There's a big buzz about the early days we're in with modern customer experience being thought differently with AI and seeing this beginning trajectory. What should people get excited about? What's the most important thing in your mind? >> I think the first thing I noticed while coming here, okay, first of all, this year the event is a new vibe. I think this event is even more inspiring than the past edition that I have been to. And I think the fact that they renamed also the event into Modern Customer Experience instead of Modern Marketing Event is really a signal that something is changing. Also on Oracle side. And this is what I notice at the first sight and in the end, when yesterday, during Mark Hurd, I would say, keynote, opening keynote, he mentioned the artificial intelligence, I was pretty pleased to see this focus through their, I would say, app environment. Where if you looked at the services that this app is going to be linked to, you won't see the marketing cloud anymore. You see the CX. So it's all about the CX in the end. And this is, in the end, the core. >> They're bringing it together. >> Marta: Yeah, they're bringing it together. >> Well, the technology is the marketing cloud, the outcome is the CX. >> Marta: Yeah. Exactly. So and I think they are going to focus more and more on that. Also, I mean, technology-wise it doesn't make sense to have silos anymore. >> Yeah, what does this mean for you? How does, when you see that, what's the impact to your world? >> I can be only happy. Because we are always challenged to look at the CX, to start with the CX, to produce an even more announced one. So if I look at the opportunity this can bring to us, I can only be very, very positive. Also the focus on AI is truly important. The focus on data, also this morning, Laura Ipsen was talking a lot about the importance of insight and data and how this is going to be a game-changer. And also this morning with Mark Hurd at breakfast, he mentioned data is the new currency. No way. We were also discussing a bit, Okay, third party data, who are the biggest player? And he said, of course, Facebook and Google. (laughs) Of course. But still, the value that every company should build along is owning his own data. Every company should really care to build an extremely good database to start with. Because anyone can have access to third-party data, but this is, can be just an easy escape, easy or fast. >> So you feel-- >> It's first-person data that's going to determine your differentiation. >> Marta: That is the game-changer, for sure. >> And you're excited by the, by Mark Hurd's comments this morning at breakfast. >> Definitely. (laughs) >> He's been on theCUBE, oddly enough. >> Which means he's now excited too. (laughter) >> Mark, if you're watching, we need you back on theCUBE, he's good. He gets the marketplace, he understands the pulse. But he's also a data-driven guy. >> Yeah, pretty much. >> You know, he's old school like us, but Marta, thank you so much for coming on theCUBE. Marta Federici, Head of CRM. Thank you so much, for sharing your perspective and insight and data with us. >> Thank you, thank you. >> This is theCUBE, I'm John with Peter Burris. We'll be back with more from Oracle Modern Customer Experience after this short break. (electronic music)

(upbeat synth music) >> Narrator: Live from San Francisco, it's The Cube, covering Oracle OpenWorld 2016. Brought to you by Oracle. Now, here's your hosts John Furrier and Peter Burris. >> Hey, welcome back, everyone. We are here live in San Francisco for Oracle Open World 2016. This is SilconANGLE Media. It's The Cube, our flagship program, where we go out to the events and extract the signal from the noise. I'm John Furrier, the co-CEO of SiliconANGLE Media, joined by my co-host this week, Peter Burris, head of research at SiliconANGLE Media as well as the General Manager of Wikibon Research. Our next guest is Hari Sankar, who's the group Vice President of Enterprise Performance. Welcome to The Cube. >> Thank you. >> Thanks for joining us today. So, one of the things that you're in is performance management but in a different way, kind of a CFO perspective. >> Hari: That's right. >> Which this show is all about, ROI, total cost of ownership. But Oracle has a lot of software, finance software. First, take a step back and spend a minute to describe what is performance management and your role at Oracle. >> So traditionally, performance management is really about how finance sort of manages the overall business performance of a company. It's about things like forward-looking things like planning, forecasting, and budgeting. It's about, sort of, backward-looking things like okay, our quarter is done, how do we close the books and how do we report the numbers both internally, for management recording purposes, and externally, to the street and various stakeholders. So there is the compliance side to it. There is a strategy side to it, and these things have been traditionally what is performance management. What we are seeing now is that kind of discipline is now going beyond finance into operating lines of businesses, sales and marketing and manufacturing and so on. >> The, the-- >> One of the things, sorry, John, I think one of the things that is really interesting, especially in light of this show, is as we go through a process of digital transformation, where data becomes one of the most important assets in the business, that means that the asset specificity, to use a finance term, the degree to which an asset has only one use, starts to go down because you can program it. So marketing, sales, all the assets, intellectual property, data-oriented, that they've been developing over the years now can be bought under the umbrella of Enterprise Performance Management. >> That is absolutely true. That is absolutely-- >> So how is that happening? >> So part of how this is happening is let's say you are a marketing organization. You are spending $50 million on digital marketing. Now, there is a desire from the part of the marketing department to sort of manage that spend more diligently with more discipline and drither, just like finance manages any other line item in the budget. There's more desire to provide transparency to the business, in terms of here's where we are spending it and here's where we are getting returns, here's where we are perhaps not getting returns. So that is the planning part of it, and then there is also the reporting part of it, where we are seeing the emergence of the concept of narrative reporting, where you are saying hey, look, I'm not just going to distribute numbers and charts to my stakeholders, whether it's inside the company or outside, I'm going to give them context, I'm going to give them commentary on these numbers. If there is a variance, I'm going to tell them why is this there. Do I expect this variance to be there next quarter? What am I doing about it? So, it sort of brings those numbers to life and avoids that back and forth that typically happens. >> How much is the Performance Management moving out of the CFO function, and I want to get your take on how the costs in IT is becoming not just a functional shared resource but IT is now integrated across the whole company. Mark Hurd had tweeted yesterday on Twitter, "As more CEOs and CFOs understand "the potential of the cloud, "CIOs are going to get a lot more help," implying Oracle is going to help them. But it brings up the point that the CIO now is brought into the CFO conversation, they always have in facilities and what not, but now from a business perspective their contribution is significant and now co-mingled is it. Do you see that trend happening and what does that mean for the software side of it? >> We're definitely seeing that trend happening. For example, the most important new term to come out in finance in some time is the notion of digital finance. >> John: The notion of what? >> Digital finance, right? So this is really about whether you call it digitalization or not, digital finance, digital marketing, digital sales. So this digital business idea sort of elevates this role of the CIO because, as you said, data becomes a very, very important asset in terms of how you fundamentally drive innovation in your business, and so that digital notion is sort of elevating the role of the CIO. And in the context of Performance Management, as you see this spread beyond finance into other lines of businesses, other lines of businesses are starting to be more disciplined and rigorous in how they sort of measure their performance, how they manage their performance. There's also a need to connect the dots across. You know, if I'm doing a marketing plan, which is an important element of my overall spend, if there is a fluctuation or change, a big change in my marketing spend, that needs to be reflected back in the finance budget. So connecting the dots and aligning the plans across different functions is becoming a big priority as well. So you're seeing a lot of important changes happening. >> You just said a few things that's just gotten me standing up and getting all excited. Peter and I looked at each other, digital business, digital assets, digitizing your business, these are the mega-- >> Data value. >> Data value, this comes back down to what we've been talking about all week here on The Cube and for the past year. This is now what was once a come together, have a meeting, share, cross-pollinate, somewhat automated but in the end manual, to fully integrated. This is probably the biggest business problem in digital transformation right now. How come we're not hearing more? This is a-- >> Yeah, I think that's a great point, John. At the end of the day and what we've been talking about is that so this is is a little bit of SiliconANGLE Media, Wikibon, we believe that digital business, full-stop, is how you use data to differentially create sustained customers. >> Absolutely. >> That is digital business. You can say all kinds of new channels and all this other stuff, but it all boils down to are you using data as an asset better than your competitors? >> Yep. >> So that as a basis, two things. First off, interesting that Mark Hurd, we talked about it earlier, this is a quick aside, Mark Hurd talking about how CIOs are going to get more help. Remember when we talked about how Oracle's going to have to bring a lot of the IT group forward in its new transformation. >> This is it right here. >> Absolutely, but I'm going to throw you a little bit of a curve ball. I hope I'm not going to throw you a curve ball but its a very, very important point. As the IT organization, or as increasingly, the methods that we use to create digital assets, and increasingly also products, they're iterative, they're empirical, they're opportunistic, they're agile. That the traditional, year-long budget that says you have a certain money to spend, and you spend it or it goes away and you better not fail with this money, comes under attack by Agile, and I know a lot of CIOs that I talk to are trying to reconcile the impedance mismatch between Agile and Sprints, and being opportunistic and recognizing when something isn't working, and the CFO who's still talking about annualized releases of money. So I've always felt that you could not reconcile those. You could not bring those two points of view forward without EPM. Are you seeing that as well and how are you helping it? >> Yeah, we're definitely seeing this because this older, you're absolutely right. The old notion of let's make a budget once a year, get it right, and execute on it for the rest of the year, we are seeing that seeing that fading really fast. What people are saying is, look, plans are made only to be changed. Let's not fixate on getting the perfect plan in place. Let's start with a reasonable plan with the assumption that it's going to tweak and iterate and change many, many times over the year. So the focus is now on, less on getting it right the first time, more on how do we make dynamic changes to it in an agile fashion, just to your point. >> And reflect those changes throughout the entire cost-- >> And into finances-- >> Back into finance. >> It all comes back to finance. >> It comes back to finance because at the end of the day, let's say, take a simple example of a manufacturing company-- >> Paul: Finance is the language of business. It still is. >> End of the day, your business performance is measured in dollars and cents. I mean, period, right? So, let's say, your product mix changes because your customer demand is changing. That needs to be reflected back into finance, in terms of, okay, are we making more money or less money? Is it more revenue or less revenue? That needs to be reflected back, and so we're definitely seeing, in fact, the tagline for Enterprise Performance Management that we use these days is enabling business agility. So two parts to that, driving agile decisions, to your point, the second is, once you drive those agile decisions. Let's say I decided to expand into a new business and I did an acquisition. Fast forward six months, you need to reflect the results of that combined entity into your financial results, do it quickly, do it in a way that is correct and you're confident about the results and that's the job of finance. So it's agility of operations, agility in decision making, those two have to sort of come together. >> So here's my question then. I love this conversation because I think this speaks to the full-closed loop of Cloud and DevOps and the innovation around Agile. How much flexibility is built into the software, and I'm kind of going with the database route for a second, systems of records, schemas in database 'cause business plans can say it once a year and it's failing, I agree, I can see that failing. But, also, fixed schemas, can fail too. Well, I don't want to add the new data in 'cause the database can't handle it. I've heard that from developers before. Again, it slows the things down, so as you move from systems of record, which can be fixed and tweaked, the engagement data is the business engagement gestures. So how is that factoring into your software? You guys see that and is this AI Bot revolution and the machine learning, the smart software after engagement. Can you thread that through and explain how that fits? >> Let's start simple and sort of get a little more sophisticated quickly. The first things is we are seeing a lot more people come into the planning process than before. The old model was finance did the planning for other people. Now, people are doing their own plans, then sort of feeding it into the overall plan. People intentionally are pushing that because they want plans and decisions to be made closer to the point of action. Secondly, there is a greatest emphasis on driving fact-based decisions. For instance, we are working with some large consumer goods companies where they are saying, look, don't come here and tell me that I'm going to spend 10% less on this large line item compared to last year, Throw the last year's budget out and do a zero-based budget. I mean, zero-based budgeting is not a new concept. It's been around, but it's getting a new lease of life because in industries where profits are on the squeeze, they are saying "Look, I don't want "to do the traditional budgeting. "I want to go to a zero-based budget." >> Because they get facts that are surfacing faster. Is that kind of the premise? >> Facts, but more over to the performance of the business. >> That is definitely true. The facts that are surfacing faster, and, therefore, I want to give the tools to make use of those facts to the people who are closer to where they are surfacing. >> John: This is a digitized business in that scenario. >> Definitely true. >> Everything's instrumented. >> Good value. >> Hari: Yeah, definitely true. >> We always say on The Cube, I mean, this is the first time in the history of business in the world that you can actually measure everything. >> That is absolutely true. >> If you want to measure everything, you actually can do it. >> That is absolutely true. >> Now the CFO, which was once the measurement system, has to get integrated in. Am I getting this right? >> You are getting this right. You are getting this right. And the other part of your question is about okay, how is intelligence coming into, so some of these decisions over time, if you see a pattern, they can be perhaps automated. Plan adjustments can be, maybe some elements of plan adjustments can be automated, but I don't see finance going that far. That may be taken as an input. Maybe a recommendation comes from automated intelligence, and people will sort of take a look at it and say, "Hey, I want to go with this because it makes sense, "or I'm going to override it this way "because this doesn't take into account "what I'm planning for in the next quarter." >> Yeah, what scares me, though, in the whole bot thing, I mean, this is not a dis on Larik, I love the vision, it's got me all excited, is if they try to get too AI before they actually build the building blocks, they really can get ahead of themselves. So, you can see that head room, for sure, but a lot of companies are kind of in that planing mode. Is that true? What's this progress bar of customers right now who are into this, are in the software? I mean, track bots are great for certain things, but you can't really automate AI yet and everything. Or can you? >> I think there is probably a class of decisions that can be automated, but when it comes to finance, and finance tends to be conservative and for good reason, they definitely see the value of recommendations based on data, based on real-time data, but they still want to have the controls. >> [John} Got It. >> So that's kind of the mindset that we have seen. >> So real options valuations could really, really be helped by AI. But at the end of the day, you have to be able to close the books, and you don't need AI to help you close the books. >> This is a fascinating conversation. >> If I can add one quick conversation, just a quick point, as Enterprise Performance Management starts to weave its way into other parts of the business, institutionally, does that mean we're going to see controllers start to end up in different functions? >> Hari: (laughs) IOD of controllers? >> As a human interface that goes along with the system so that it works together. >> It's a definite possibility, right? Because if you're planning as rigorously in marketing as in finance and if you aremeasuring and reporting as rigorously in sales as you're doing in finance, maybe there's a sales controller function that becomes a legitimate need. But at the end of the day, today, you focus so much attention on reporting your numbers to the street. You focus attention on precision and accuracy and confidence in all of that. Why is that not a requirement for internal Reporting? >> It's the same argument when we talk about the technology of a structure. You move the computer to where the data is. You could move the controller where the action is, to your point earlier. It's a fascinating conversation, Hari. Thanks for sharing the insight. Love to do a follow-up on this because I think this really connects the language of business and kind of validates the digital fabric of digitization. But quick, I want to give you the last minute to give an update on the business, how you guys are doing. This is a pretty big deal. How's your business results, what's down the roadmap, what's the sales going to be like next month? I'm only kidding, I know. (all laugh) >> Sure, sure. I think the cloud has been a really game changer in this business. What the cloud has done has lowered the bar where we're seeing many mid-sized businesses start using Performance Management best practices, just like larger companies. We are seeing divisions or functions inside of larger businesses using Performance Management software for the first time. So there's a big market expansion, and we are seeing an expansion across other lines of businesses outside of finance. We are certainly seeing that. We are seeing that, you know, we introduced our first Cloud software in Enterprise Performance Management about two and a half years ago. At that time, we were not sure how the market update was going to be because we said finance tends to be conservative. Are they going to be comfortable doing their aggregated planning in the cloud, or are they going to be comfortable doing, reporting things in the cloud? We've been sort of pleasantly surprised by the willingness of finance, helped in part by the success the companies have had in deploying HR software in the cloud or CRM software in the cloud and so on. So the cloud has taken off. We have well north of 1,000 customers that have picked up EPM software in the cloud. We are very happy to see 100, 150 deployments go live every quarter, and we are seeing use cases in marketing, we are seeing use cases in HR of strategic workforce planning or marketing spend planning happened using EPM-style software. So, happy to see mid-sized businesses see real value from planning. >> John: Good integration capabilities? >> Good integration, I'm glad you mentioned it. Very good integration back into, for example, if you have financials in the cloud and EPM in the cloud, there are nice linkages between the two. So four teams are very important to us. We are seeing pervasive use of EPM software. We are seeing agile operations helped by EPM software in the cloud. We are seeing connected operations, whether it's the backbone systems or across functions. And we are seeing people take a sort of a comprehensive view of this, whether it's across functions or across processes. >> This is fascinating. We could go another hour. This is a really interesting topic because I think it really highlights a fact that, what we always say in The Cube is, you can provision technology faster and you get time to value certainly as the customers start to be creative and implement it. They get to actually put it to work and get the data around and behind. So thanks so much for spending the time on the insights on the EPM. We appreciate it, thank you so much. >> Thank you, I enjoyed the conversation. >> Okay, you're watching The Cube, live coverage here in San Francisco at Oracle OpenWorld 2016. I'm John Ferrier with Peter Burris. Thanks for watching. (upbeat synth music)