>>from around the globe. It's the Cube with coverage of Susic on digital brought to you by Susan. >>Right? Hi. I'm Stew Minuteman. And welcome to the Cube's coverage of Susic on Digital 20. Rather than gathering together in Dublin, we have a larger audience online watching everything digitally, really helping a happy to have on the program. Back to the program. One of our cube alumni. She is fresh off the keynote stage. Melissa DiDonato. She is the CEO of Tuesday. Melissa. So good to see you. Wish it could all be in person. But, you know, thanks for having the Cube in. Ah, >>thank you very much for joining us as well. My third time on the show. I'm really, really pleased to be an important part of our digital experience with Susie. Conditional. So still what? Nice to see you. >>All right. So last time you were on the program, you spoke to Dave. Dave a lot today about how you know you're keeping your employees safe and keeping them productive. The note I heard clearly from you in your keynote presentation is really a sense of optimism. So, like, if you could bring us a little bit inside. You know, I'm sure you're talking to a lot of your customers. What is it even then in these unprecedented Well, I'm giving you that sense of optimism. >>Yeah, there's no denying where we are in the world with Kobe. 19. We have a whole different way of looking at the world. Every business in every industry has been impacted, and not just the working life but our family life. The way we communicate, the way we run our homes, our environments at work is it's been very much integrated now. It's a very different way of adding a whole different level of stress that we didn't have in our business life just a couple of months ago. And I think, as I told Dave, the most important thing for me is number one to make sure that our employees remain self safe and healthy. That's number one, And I think that as we experience negativity across the world of news and social media, etcetera, that my hope is that the community and the Susan family remain optimistic and you know, why do we have the ability to remain optimistic when everyone else is experiencing a lot of doom and gloom. One White House, because you rightly so said, Let me talk about Sousa and how we wouldn't in our community. Our thesis is the power of many. This power of many in a virtual community really drives innovation. We're not like proprietary software and many other tech companies where you have to resign the building to make sure that we maintain and evangelize innovation that you live and deliver to your customers. For us, it's very different. Our community is the basis for innovation. It's the pillar of our community, of our company, our ethos in our value. So it's Susa. This spirit of collaboration and integration is live today more than ever before, with 99% of our employees working from home being engaged a very different way than maybe they're used to. But not so unlike engaging the innovation that we get out of our community. I think you mentioned something else do that's really important. That's productivity. We've moved away as of the first of March and measuring productivity in exchange for measuring the way that we integrate and elaborate and engage with our place. So instead of productivity, we're measuring engagement. Our employees are becoming much more engaged with each other with our customers and our communities. And of course, our partners they're giving back to their community. They're measuring the engagement they're successful means of delivering or how much they can give back to their communities. So we've seen a huge rise and are employees giving back to their communities around them. For example, I met an employee who is donating a very big part of his bonus percentage to a hospital to pay for lunches for frontline health workers near his his home, our nerve of Germany office. They're giving their lunch vouchers and donating that to all of the homeless people around their community. And then we've got employees around Italy, one in particular that's created a virtual classroom for a son school and the community around him. So you know, everyone's really pitching in, I think finally, from a community perspective, we're also sponsoring a numerous amount of hackathons. For example, in Germany, the government has recently held a hackathon for community based solutions to combat code. In 19 our employees participated in engaged with their one day off. We give every employee one day off a year to engage for charitable cause and the results of this hackathon is a better understanding of the data per states about code in 19 across the country. So I think all in all, everything that we're doing is really trying to, you know, utilize the community as we always have, is open source. Open source is developed in a community that often times does not sit together. And now we're trying to really engage with that community as much as possible to keep innovation alive, to keep collaboration alive and not just for the purpose of innovation, but for the purpose of combating the virus and giving hope and first gratitude to this community and across all of our population across the world. I really do believe that in challenging times like today, it's the best way to realize the innovation that we can put together, triggering innovation for good. But also bringing out the best in humanity is it's amazing to see what you know. Thousands and thousands of people in the open source world are giving and delivering and collaborating in which to solve the worlds Problems Cove in 19 but also innovation problems for today and tomorrow >>Yeah, Melissa said some great stories that you have there, you know, we, of course, are huge supporters of communities in general. I've had a great pleasure not only recently but over the last 20 years, watching Linux communities on what's happening in open source. One of the key constituencies, obviously, to your audience, our developers. There are quite a few announcements that I talked about on the keynote stage was wondering if you could help walk through Ah, for our audience. You know, the primary announcements and especially, you know, the impact that it will have on the developer developer community. >>Yeah, that's right. So the developers are entranced, obviously, as part of Susa, where deep open source roots and they're ingrained in our culture. So we just recently focused on a new developer community with content specifically targeted to developer use cases for application platform offering. So over the next couple of months, we're gonna roll out content analytics, open source, Dev >>ops. All >>these things that you are sure loves to micro services, containers, kubernetes edge and and the like. So a lot of innovative technologies as our content. Now what we are offering in the developer community is the SuSE Cloud application platform developer sandbox. We wanted to make it easy for these developers who just spoke of to benefit from the best practices that evolved from the cloud native application delivery that we offer every day. Of course, the customers and now for free to our developers, we want them to be able to easier, easily apply their skills to create applications that can run anywhere, anywhere from on Prem Private Public Cloud and the access is and the developers to get access and hands on experience. That SuSE cloud application platform without having to spend all of their own environment is it is a big test or commitment to the developer community that can explore tests and develop without having any hardware services themselves. It's a really I've signed up myself. Hopefully, you will, too, and join the community and give some feedback and engage in this open source community. For developers, it's really important for everybody. You can find it at developer dot cisco dot com, in addition to the sandbox is I just mentioned you'll also find there are developer forums. It's got getting started guides and other useful examples of how to accelerate the adoption of the cloud application platform and all of the demo tools you can use. It's I can't express the importance enough that we put in place in our developers. Our developer community is a really important part to reach the innovation that we so hoped and live for every day. So we need to provide them the tools to be successful. So I think when you're gonna see Studio is a lot more engagement with our developer community and a lot more integration with them, a collaboration with them. As time goes on, it's a big part of our focus coming in now to 2020 and, of course, the second half of the year. >>So, Melissa, one of the other point that you made in your keynote is that Souza is now, you know, fully independent. It's always been an open source company, a long history there. But what does this one year of independence mean for your customers and that partner ecosystem? >>Yeah, it's a big deal for us, so it's a really big deal. We swung away from micro focus a year ago and mark so just now, Pastor, one year we're now in control of our destiny and the future is very, very bright. I think going forward in the next year, what you can expect from Susan is continued focus and support our customers, of course, the digital transformation efforts that we need to put into helping them go through this transformation. I saw a cartoon, You know, the other day everyone probably saw who's leading your digital transformation. Experts efforts your CEO, your see Iot or Corona virus. And I think we all agree that Corona viruses, but a new effort and focus on the digital transformation of our companies and our customers need to go through. So I think we need to be sure that with this new independence that we focus on that digital transformation effort. Couple that with our open source innovation and no matter where our customers are on their journey, that we give them the enabling tools to get there. We start with simplifying, modernizing and accelerating our customers journey, and you're gonna hear a lot about that in the keynote that I just did, um, simplifying first. So simplifying and optimizing our customer's applications and the data to exist in I T Environment. That's going to help them go on the journey to modernize, modernizing everything about the I T infrastructure as well as their legacy applications, to utilize modernizing, modernized technologies like containers or edge or cloud, or for the like. By simplifying and modernizing, our customers can then begin to accelerate. They can accelerate innovation. They can accelerate growth. They can accelerate delivery of whatever services and applications they want to deliver, for example, capabilities around AI and edge. And they can scale their companies to bring markets product to market faster and even at a lower cost. So I think when you think about Susan our independence, I want our customers to know and understand that our focus will always be to simplify, modernize and accelerate, but also to remain nimble, how our customers, our partners, our community, innovate faster based on customer business requirements and to solve problems of today and tomorrow, not just what we knew before. So we're much more connected with our customers and ever before, and we want to be able to offer them the flexibility that they heard that learned to love it. Enjoy from Susa more some now than ever our customers agenda. Su is our only agenda in a world where everyone wants to be the best at everything. The only thing we want to be number one with is customer satisfaction. We will say number one in the market because we love servicing our customers. We love being maniacally focused on our customers, needs their business problems and creating solutions that are tailored with services that make them more successful. I think you can expect Souza to enter new markets like powering, for example, autonomous vehicles with safety certified legs and other really innovative technologies that were developed every single day in our community with our developers to solve customer business problems. I say to the teams every day, you know, we're big enough for scale, and we're small enough to be nimble and to be flexible to service our customers first. So expecting that from Susa in our independence, but always, of course. >>Yeah, Melissa, you talk about things like ai and Ed and innovation, and you just brought up autonomous vehicles. So, you know, not only is a cool area, but really highlights uh, you know, a lot of these waves coming together. You announced up onstage. Really cool looking company. Electro bit. I noticed there, Green almost matched. Your companies do So. Tell us about this. This is a partnership. Why? It's important. And you know what? What others can learn about it. >>Yeah, sure. So Electra bit. We just partnered with that. Made the announcement today in the keynote there, the leading Internet global international provider of embedded software solutions for automotive. So it's a whole new area for US safety certified Linux is the first for Susan in this industry. I recently met virtually with Alexander coaching the CEO Electra bit to learn more about his company innovation, that we're gonna drive together. We've got a whole session at Susan Con Digital in the platform to talk about what we're doing with safety certified Lennox and what we're doing with Elektra bit. I can't wait to tell you more about, and I've got a 1 to 1 fireside chat with Alex, and I think you're gonna love to learn more about, you know, maybe something else. Wei mentioned in the keynote they may want to know about. And that's the artificial intelligence solution that I specifically talked about launching next quarter. This is I'm super excited about as well. I mean, it's really easy to be excited here, Susan, when you have constant rolling innovation in our community and delivering that to our customers. But this is also an exciting space. The solution that we're launching next quarter is going to benefit both data scientists and I t operations teams by simplifying the integration of key AI building blocks that are going to be required to develop quickly test and then deploy the next generation of intelligence solutions. So keep your eyes open for that to we're gonna have some game changing solutions for Susan and all of our customer promise ai solution next quarter. So two big announcements for us here exclusively. It's music on digital. I can't wait to share all the details Next order with AI, but also with Alex in the fireside chat I had with him during the week. >>Alright, So great, Melissa, A couple of big announcements that you talked about give >>us a >>little bit of a look forward. So, you know, you talked about what? One year of it, and it means what should people be looking at? What goals do you have for the community and the company actually look through the rest of 2020 >>as we look to the rest of 2020. I think, um, it's been a hard year already, and I couldn't have predicted when I took over a CEO of this great company nearly 10 months ago that we'd be having the hard times that we currently have. I can honestly say that there's no place I'd rather be. The fact that we are in the best company in the best industry, with open source at our roots at our heart that will never change but you can expect from us is consistent and constant innovation. You could look for us to be nimble, dependable. You can look for us for growth and there ever were a recession proof company that delivers the best solutions to our customers. I think Susie's in fact, I know it is. We're going to double in size and three years, so we're going to go from just under 1/2 a 1,000,000,000 to a 1,000,000,000 in revenue and what in three years time and we've got the constant trajectory and the means of which to do it. We're really looking from a strategic perspective. The rest of this year. How can we simplify, modernize, accelerate the solutions delivered to our customers to ensure we constantly focus on innovative technologies, keeping open source of value's and ethos to our core? And then also consider how do we ensure a safe, stable quality environment that's building on tools such as optimizing and automating their environment to get the best out of their technology stack? And that's when you should expect to see from some of the rest of this year as we go obviously into 2021. You're gonna want to watch the space to stay tuned for the look at Susa. We're growing like a rocket ship, and we have still intention of going through the crisis and, of course, going into the back half of 2020. But we're accelerating with pace going into 2021. >>Alright, well, Melissa, I'm definitely looking forward to talking to some of your customers, some of your partners in some of your team. So thanks again for joining us, definitely looking forward to catching up with you further down the line. >>I look forward to it. Thank you so much for the time today, and obviously the focus on, Susan. We're super excited to share where we're going, where we've come from and what the journey looks like Ahead. So thanks for the excitement that you're sharing with us throughout this week. Really appreciate you. Thank you. >>Alright. And be sure to stay with us. We've got wall to wall coverage Susic on digital money. Even if we're not at a physical event, we get to do them all remotely digitally. That global digital experience. I'm stew Minimum. And thank you for watching the Cube. >>Yeah, Yeah, yeah, yeah, yeah.

>> Announcer: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Hi everybody, this is Dave Vellante with theCUBE, and welcome to this special CUBE conversation. I've been running a CEO series for the last several weeks, talking to leaders about how they're dealing with the COVID-19 crisis and really, trying to understand how they've been navigating through and communicating to their employees, and their customers. I'm really excited to have Melissa Di Donato here, she's the CEO of SUSE. Melissa, great to see you again. >> Great to see you, thank you for having me. >> You're very welcome, and you and I met last September and one of the reasons I've been looking forward to this interview, I'm a fanboy. I threw the kitchen sink at you last year, and you batted everything out of the park. We were talking about digital transformation, digital business, and you were really one of my favorite guests of the year. So, >> Thank you. >> Talk about kitchen sink. This COVID-19 thing came out of nowhere, when did you see it coming? And what was your first move as a leader? >> Well, so for us, we had a really unique position, Dave, because we have a number of people staying in China, so we've got more than 250 employees sitting in China, so for us COVID-19 is not new, we've been dealing with this for quite a long time, since December when first started becoming ill in China, realizing that there was an issue. As of the seventh of January we had to move very quickly when China went onto lockdown, we had to find a way to get our employees to be able to work from home very quickly, and taking a couple of hundred of employees that are sitting in China and being able to empower them and enable them to work from home very quickly, nearly overnight, was no short task, so we took all of that learning back in January, and then we were able to respond as the countries fell ill, and the government requirements went in place around the world since then. So for us, this is nothing new, we were really fortunate that we had the mechanisms in place to handle the pandemic first in China, now as it came across Europe, and then of course into the US. >> Yeah so, you had the canary in the coalmine, so to speak, Well before >> Kind of, something like that >> Yeah, well before you had to start making decisions about SUSECon in Dublin, which was scheduled to be in March, so that was your other big decision point, wasn't it? >> Yeah, it was really difficult for us, because obviously, we had customers, we had partners, all wanted to come to Dublin, in fact, we were scheduled to be there together as well, and we had to give them enough time to be able to make alternate arrangements, but at the same time, we had to wait to see what the government was going to do in Ireland, because obviously that has a very big impact on the structure, the cost, et cetera. But we made a early decision, as early as we could, and that was the beginning part of March, to make the decision to unfortunately move it to a digital event, which was not an easy solution. The first time in our history, bringing a big, annual conference that's physical and in person, to a virtual event that's in digital, it wasn't an easy over-the-night kind of process and decision to make, so it was a hard one, but we're really confident, and May 20th is the announcment and the start of our SUSECon digital event, so not too long away from where we are now. >> Melissa, how have you altered, enhanced, your communications to your employees, your team, and ultimately your customers and partners? Have you increased the cadence? How have you altered? >> Yeah, so much so. I do a video with my team that I announce and push out every Monday, so every Monday I give them a business update, I tell them what's happening in the industry, what's happening with SUSE, what's happening with our customers. That happens every week, once a week. That's for every employee, and its a video call, something like this, almost. Then what we do is weekly updates on the great things that are happening around SUSE. You know, we've got a lot of amazing employees here in the open source community, but also employees as well. We've had employees in Italy who created virtual classrooms for their employees, we had an employee in the US who dedicated 30% of his bonus to give back to his local school, he's bought lunches for all the people at his hospital locally, we've had our entire Nuremberg, Germany office give all of their lunch vouchers to the homeless in Germany, so we also like to publicize all the good work that all of our employees are doing, to give back to their local communities and globally, so the cadence has definitely been increased. We just ran a survey this last week that closed yesterday. We got very, very favorable results. And that was definitely geared towards communication, no more so than now, do the employees and the customers need to be aware of what's going on. You probably feel the same thing, and through me and probably loads of other interviews, know that we're not a magician, we're not a scientist here that could predict necessarily the future. I think the scientists themselves don't even know what's going to happen, but we're doing our best to take outlook, and take a lot of concerted approach to educate our employees and our customers with what they can expect. Now for us, I'm in the very fortunate position that before COVID-19, 38% of our employees work remotely, so working from home for us is quite easy, it's quite natural for our community and our open source community as well as a whole. So for us to make that transition, we were uninterrupted in way of dealing with our customers. I've been communicating with them as well, through emails and phone calls and other means, pretty much at least once a month, if not every other week or so, to communicate what we're doing for them, but again, you said it, being proactive and being communicative right now, it's never been more important. >> So you, it sounds like, are maintaining productivity. A lot of organizations are actually seeing a productivity hit, and they're having trouble getting work-from-home infrastructure up and spun a bit. People joke on Twitter that's the new tissue paper, you can't, I don't know what it's like in London, but you can't get toilet paper (laughs) on the shelves here, so work from home infrastructure, laptops, VDI, et cetera, But it sounds like you really haven't taken a productivity hit, it's sort of a natural progression for you. >> Yeah, you know when we met last September, we talked about the importance of open source, and we've been a business for nearly 30 years, and we've always run our business in open source community, and that is a community that's obviously geographically dispersed all over the world, so people have been working from home, working in their community, being transparent and collaborative, regardless of where they sit, so from an innovation perspective, we've had no impact to our business, so being able to work from anywhere, across any boundary, has been been uninterrupted, so that's been great. 99% of our workforce are now working remotely from home, versus up from 38% pre-COVID, it doesn't change the fact that things like hardware and software and the means that they need to actually operate from home is difficult, so we've made the concerted effort, for example, to make sure our employees in Germany have the capability to bring home their desk chairs, to bring home their monitors, to bring home their machines to set them up with the ability to be able to work from home. Building on the experience from China, we learned we needed to provision early, so what we did in the beginning part of February was to begin to procure software and hardware that enabled us to have a bench of technology that we could utilize, in case we had this pandemic run wild to support our employees to work from home, so I'm very happy to say we were well prepared. In our survey, we asked the question how prepared are you to be able to work from home? And it was extremely high, best practice in way of benchmarking for any employee survey, to be able to provide them the productivity tools necessary to be able to work from home, so we're very, very proud of that. >> I want to ask you about the recovery, nobody knows, we've never seen this >> No >> Forced shut down of the economy before. Saw Bill Gates this morning on TV, saying he thinks it's really through June that we're going to have to live with this, I know the president of the United States is saying we'd like to happen before that, but assuming there is a comeback, lets say June, start to bring back the economy in waves, how do you see open source in a downturn, some prolonged downturn, months, maybe as much as a year or even more, how do you see open source playing there? >> Yeah, that's a good question, I'm glad you asked it. I think that as the pandemic continues, and any crisis for that matter, open source adoption is going to accelerate, there's no doubt. There's a huge pressure we're all going to face, even those successful businesses like us here at SUSE, we're going to have to go under some crunch and consideration around cost. Open source adoption will accelerate digital transformation efforts, and will definitely speed up organizations to respond to the crisis, because they're able to utilize all the technology innovation, and standardization of Linux and other open source technologies, from anywhere. Whether it's on-premise, the cloud, utilizing Edge, they're going to look for innovations in constant uptick whilst gaining cost-saving at the same time. There's no better place to achieve that, besides being in an open source community, so we're very fortunate, I never would've predicted a pandemic, if I had I'd be a multi-millionaire, would've played the lotto by now, nonetheless, I think there's no place I'd rather be for sure, and I wouldn't want to run any other company besides an open source business right now, because we're seeing an uptick rather than having a decline. >> You know, I want to ask you about culture, because you've been in SUSE as the CEO less than a year, inside of a year, and you really have always focused on culture, you know, CEOs obviously got to worry about growth, you got to worry about profitability, productivity and the like, but I want to actually pull up something that I found on LinkedIn, it was from one of your newer employees, new to SUSE, he said "my first month here, amazing colleagues, high amount of trust, lots of collaboration, willing to help each other succeed, giving back to the less fortunate in the community, high amount of respect for diversity, amazing values, leadership is open, honest, trend-setting, industry defining, really smart, and genuinely superior." Wow, I mean >> (Melissa laughs) >> He said, "in short, best organization I've ever contributed my efforts to and been a part of." Your leadership, whether it's diversity, openness, transparency, you really have set from day one a cultural foundation, which I think is playing out well for you right now, but I wonder if you could talk about the culture that you're trying to drive with SUSE. >> Yeah I mean, wow I did read that post, and that's life -changing I think for leaders like myself, when you have employees that feel the sense of urgency around the criticality that they play, and the role they play in the company, you can't ask for more than that, really genuinely, and I think that when I came, I took it personal to make sure that we led the company leading with people first. We're probably one of the very few companies in the world that have one trademark, and our trademark is our SUSE Chameleon. We don't have any other trademarks or patents on any of our technology, because it is open. So the only thing I have is the people. The link to the world, and this business being successful, is our people, and there inevitably lies the importance that's pertaining to their culture. And I think that because we're community-based and open source, it's really important that we continually collaborate, that we're constantly giving back and giving insight and giving support in the community, and that needs to transcend the community and be living every single day in our company. You mentioned something in that post, which is the philanthropic side of who I am, I believe very whole-heartedly in the responsibility we carry as CEOs, executives, as companies, to give back to our community. When I started nearly year ago, I instituted the Month of Giving, which happens to be May, in conjunction with one day off every year for every single employee to give back to their local communities, or a charity of their choice. Now that's proven very well, particularly now. Folks are taking time off, they're donating their time to local hospitals, they're creating that sense of community giving and care that again, bleeds itself into the fabric of what this culture is. On top of that, recently you may have read the press, I'm sure you have, about us giving any medical device supplier, or any medical device, and not just manufacturer, but institution for research of COVID-19, we're giving them free software and support to run and develop technologies associated with solving this pandemic. And that is truly a gift, I feel incredibly privileged to be able to give back because you again well know we supply all the operating systems to many of our really important medical devices, like CAT scan machines and mammogram machines, in fact, probably most of the machines being used in the US today to combat many diseases are running on a SUSE operating system. We want to offer that back, again, to the community. The employees went wild over the fact that we were being able to give back on a big scale, to solve a problem like this, so I think when it comes down to who we are and what our culture is Dave, people are the most important thing to me. I did an interview recently, and they said you know, going from a CEO that's very focused on sales and like you said earlier, very focused on outcome and deliverables and forecasts and budgets and EBITDA, is that still the case? And I have to say confidently, no that's not the thing that keeps me up at night now. What keeps me up at night now, and how I wake up every morning is wondering about the health of my employees. We had a couple of employees, one that was quite ill in Italy, we were phoning him and calling and emailing him from his hospital bed, and that's what's really keeping me going, what's inspiring me to lead this incredible company, is the people and the culture that they've built that I'm honoring and taking forward, as part of the open source value system. >> Well I think those metrics, those business performance metrics, what I've learned is they're actually a symptom of a great culture, and so I'm really excited and amazed at what you're building there, and thank you. You know, in this day and age you hear, at least prior to COVID, you heard a lot of attacks on technology companies and big tech, on billionaires, and it's really refreshing to see technology companies stepping up, you mentioned the example of medical device, there are many, many examples, and so thank you for that, really appreciate it. >> Thank you too. >> Dave: All right Melissa, great having you, I hope we can talk again leading up to SUSECon virtual slash digital, thanks so much >> (Melissa laughs) >> For coming on theCUBE, great to see you again. >> It's been great to >> Stay safe. >> Thank you very much for having me again as well and inviting me back, I look forward to seeing you next month. >> All right ditto, and thank you for watching everybody. This is Dave Vellante for theCUBE, and we'll see you next time. (upbeat music)

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

>> From theCUBE studios in Palo Alto in Boston bringing you data driven insights from theCUBE and ETR. This is breaking analysis with Dave Vellante. >> Despite fears of inflation, supply chain issues skyrocketing energy and home prices and global instability caused by the Ukraine crisis CIOs and IT buyers continue to expect overall spending to increase more than 6% in 2022. Now, while this is lower than our 8% prediction that we made earlier this year in January, it remains in line with last year's roughly six to 7% growth and is holding firm with the expectations reported by tech executives on the ETR surveys last quarter. Hello and welcome to this week's wiki bond cube insights powered by ETR in this breaking analysis, we'll update you on our latest look at tech spending with a preliminary take from ETR's latest macro drill down survey. We'll share some insights to which vendors have shown the biggest change in spending trajectory. And we'll tap our technical analysts to get a read on what they think it means for technology stocks going forward. The IT spending sentiment among IT buyers remains pretty solid. >> In the past two months, we've had conversations with dozens of CIOs, chief digital officers data executives, IT managers, and application developers, and across the board, they've indicated that for now at least their spending levels remain largely unchanged. The latest ETR drill down data which will share shortly, confirms these anecdotal checks. However, the interpretation of this data it's somewhat nuanced. Part of the reason for the spending levels being you know reasonably strong and holding up is inflation. Stuff costs more so spending levels are higher forcing IT managers to prioritize. Now security remains the number one priority and is less susceptible to cuts, cloud migration, productivity initiatives and other data projects remain top priorities. >> So where are CIO's robbing from Peter to pay Paul to focus on these priorities? Well, we've seen a slight uptick in certain speculative. IT projects being put on hold or frozen for a period of time. And according to ETR survey data we've seen some hiring freezes reported and this is especially notable in the healthcare sector. ETR also surveyed its buyer base to find out where they were adjusting their budgets and the strategies and tactics they were using to do so. Consolidating IT vendors was by far the most cited tactic. Now this makes sense as companies in an effort to negotiate better deals will often forego investments in newer so-called best of breed products and services, and negotiate bundles from larger suppliers. You know, even though they might not be as functional, the buyers >> can get a better deal if they bundle together from one of their larger suppliers. Think Microsoft or a Dell or other, you know, large companies. ETR survey respondents also cited cutting the cloud bill where discretionary spending was in play was another strategy or tactic that they were using. We certainly saw this with some of the largest snowflake customers this past quarter. Where even though they were still growing consumption rapidly certain snowflake customers dialed down their consumption and pushed spending off to future quarters. Now remember in the case of snowflake, anyway, customers negotiate consumption rates and their pricing based on a total commitment over a period of time. So while they may consume less in one quarter, over the lifetime of the contract, snowflake, as do many other cloud companies, have good visibility on the lifetime value of a deal. Now this next chart shows the latest ETR spending expectations among more than 900 respondents. The bars represent spending growth expectations from the periods of December, 2021 that's the gray bars, March of 2022 survey in the blue, and the most recent June data, That's the yellow bar. So you can see spending expectations for the quarter is down slightly in the mid 5% range. But overall for the year expectations remain in the mid 6% range. Now it's down from 8%, 8.3% in December where it looked like 2022 was going to really be a breakout year and have more momentum than even last year. Now, remember this was before Russia invaded Ukraine which occurred in mid-February of this year. So expectations were a little higher. So look, generally speaking CIOs have told us that their CFOs and CEOs have lowered their earnings outlooks and communicated that to Wall Street. They've told us that unless and until these revised forecasts appear at risk, they continue to expect their budget levels to remain pretty constant. Now there's still plenty of momentum and spending velocity on specific vendor platforms. Let's take a look at that. >> This chart shows the companies with the greatest spending momentum as measured by ETRs proprietary net score methodology. Net score essentially measures the net percent of customers spending more on a particular platform. That measurement is shown on the Y axis. The red line there that's inserted that red dotted line at 40%, we consider to be a highly elevated mark. And the green dots are companies in the ETR survey that are near or above that line. The X axis measures the presence in the data set, how much, you know sort of pervasiveness, if you will, is in the data. It's kind of a proxy for market presence. Now, of course we all know Kubernetes is not a company, but it remains an area where organizations are spending lots of resources and time particularly to modernize and mobilize applications. Snowflake remains the company which leads all firms in spending velocity, but as you'll see momentarily, despite its highest position relative to everybody else in the survey, it's still down from its previous levels in the high seventies and low 80% range. AWS is incredibly impressive because it has an elevated level but also a big presence in the data set in the survey. Same with Microsoft, same with ServiceNow which also stands out. And you can see the other smaller vendors like HashiCorp which is increasingly being seen as a strategic cross cloud enabler. They're showing, spending momentum. The RPA vendors you see in there automation anywhere and UI path are in the mix with numerous security companies, CrowdStrike, CyberArk, Netskope, Cloudflare, Tenable Okta, Zscaler Palo Alto networks, Sale Point Fortunate. A big number of cybersecurity firms hovering at or above that 40% mark you can see pure storage remains elevated as do PagerDuty and Coupa. So plenty of good news here, despite the recent tech crash. So that was the good, here's the not so good. So >> there is no 40% line on this chart because all these companies are well below that line. Now this doesn't mean these companies are bad companies. They just don't have the spending velocity of the ones we showed earlier. A good example here is Oracle. Look how they stand out on the X axis with a huge market presence. And Oracle remains an incredibly successful company selling to high end customers and really owning that mission critical data and application space. And remember ETR measures spending activity, but not actual spending dollars. So Oracle is skewed as a result because Oracle customers spend big bucks. But the fact is that Oracle has a large legacy install base that pulls down their growth rates. And that does show up in the ETR survey data. Broadcom is another example. They're one of the most successful companies in the industry, and they're not going after growth at all costs at all. They're going after EBITDA and of course ETR doesn't measure EBIT. So just keep that in mind, as you look at this data. Now another way to look at the data and the survey, is exploring the net score movement over the last period amongst companies. So how are they moving? What's happening to the net score over time. And this chart shows the year over year >> net score change for vendors that participate in at least three sectors within the ETR taxonomy. Remember ETR taxonomy has 12, 15 different segments. So the names above or below the gray dotted line are those companies where the net score has increased or decreased meaningfully. So to the earlier chart, it's all relative, right? Look at Oracle. While having lower net scores has also shown a more meaningful improvement in net score than some of the others, as have SAP and Teradata. Now what's impressive to me here is how AWS, Microsoft, and Google are actually holding that dotted line that gray line pretty well despite their size and the other ironically interesting two data points here are Broadcom and Nutanix. Now Broadcom, of course, as we've reported and dug into, is buying VMware and, and of, of course most customers are concerned about getting hit with higher prices. Once Broadcom takes over. Well Nutanix despite its change in net scores, in a good position potentially to capture some of that VMware business. Just yesterday, I talked to a customer who told me he migrated his entire portfolio off VMware using Nutanix AHV, the Acropolis hypervisor. And that was in an effort to avoid the VTEX specifically. Now this was a smaller customer granted and it's not representative of what I feel is Broadcom's ICP the ideal customer profile, but look, Nutanix should benefit from the Broadcom acquisition. If it can position itself to pick up the business that Broadcom really doesn't want. That kind of bottom of the pyramid. One person's trash is another's treasure as they say, okay. And here's that same chart for companies >> that participate in less than three segments. So, two or one of the segments in the ETR taxonomy. Only three names are seeing positive movement year over year in net score. SUSE under the leadership of amazing CEO, Melissa Di Donato. She's making moves. The company went public last year and acquired rancher labs in 2020. Look, we know that red hat is the big dog in Kubernetes but since the IBM acquisition people have looked to SUSE as a possible alternative and it's showing up in the numbers. It's a nice business. It's going to do more than 600 million this year in revenue, SUSE that is. It's got solid double digit growth in kind of the low teens. It's profitability is under pressure but they're definitely a player that is found a niche and is worth watching. The SolarWinds, What can I say there? I mean, maybe it's a dead cat bounce coming off the major breach that we saw a couple years ago. Some of its customers maybe just can't move off the platform. Constant contact we really don't follow and don't really, you know, focus on them. So, not much to say there. Now look at all the high priced earning stocks or infinite PE stocks that have no E and divide by zero or a negative number and boom, you have infinite PE and look at how their net scores have dropped. We've reported extensively on snowflake. They're still number one as we showed you earlier, net score, but big moves off their highs. Okta, Datadog, Zscaler, SentinelOne Dynatrace, big downward moves, and you can see the rest. So this chart really speaks to the change in expectations from the COVID bubble. Despite the fact that many of these companies CFOs would tell you that the pandemic wasn't necessarily a tailwind for them, but it certainly seemed to be the case when you look back in some of the ETR data. But a big question in the community is what's going to happen to these tech stocks, these tech companies in the market? We reached out to both Eric Bradley of ETR who used to be a technical analyst on Wall Street, and the long time trader and breaking analysis contributor, Chip Symington to get a read on what they thought. First, you know the market >> first point of the market has been off 11 out of the past 12 weeks. And bare market rallies like what we're seeing today and yesterday, they happen from time to time and it was kind of expected. Chair Powell's testimony was broadly viewed as a positive by the street because higher interest rates appear to be pushing commodity prices down. And a weaker consumer sentiment may point to a less onerous inflation outlook. That's good for the market. Chip Symington pointed out to breaking analysis a while ago that the NASDAQ has been on a trend line for the past six months where its highs are lower and the lows are lower and that's a bad sign. And we're bumping up against that trend line here. Meaning if it breaks through that trend it could be a buying signal. As he feels that tech stocks are oversold. He pointed to a recent bounce in semiconductors and cited the Qualcomm example. Here's a company trading at 12 times forward earnings with a sustained 14% growth rate over the next couple of years. And their cash flow is able to support their 2.4, 2% annual dividend. So overall Symington feels this rally was absolutely expected. He's cautious because we're still in a bear market but he's beginning to, to turn bullish. And Eric Bradley added that He feels the market is building a base here and he doesn't expect a 1970s or early 1980s year long sideways move because of all the money that's still in the system. You know, but it could bounce around for several months And remember with higher interest rates there are going to be more options other than equities which for many years has not been the case. Obviously inflation and recession. They are like two looming towers that we're all watching closely and will ultimately determine if, when, and how this market turns around. Okay, that's it for today. Thanks to my colleagues, Stephanie Chan, who helps research breaking analysis topics sometimes, and Alex Myerson who is on production in the podcast. Kristin Martin and Cheryl Knight they help get the word out and do all of our newsletters. And Rob Hof is our Editor in Chief over at siliconangle.com and does some wonderful editing for breaking analysis. Thank you. Remember, all these episodes are available as podcasts wherever you listen. All you got to do is search breaking analysis podcasts. I publish each week on wikibon.com and Siliconangle.com. And of course you can reach me by email at david.vellante@siliconangle.com or DM me at DVellante comment on my LinkedIn post and please do check out etr.ai for the best survey data in the enterprise tech business. This is Dave Vellante for the CUBE insights powered by ETR. Stay safe, be well. And we'll see you next time. (soft music)

>> Announcer: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. >> Hi, I'm Stu Miniman coming to you from our Boston area studio and this is a special CUBE Conversation, we always love talking to startups around the industry, understanding how they're creating innovation, doing new things out there, and oftentimes one of the exits for those companies is they do get acquired, and happy to welcome back to the program one of our CUBE alumni, Sheng Liang, he is the cofounder and CEO of Rancher, today there was an announcement for a definitive acquisition of SUSE, who our audience will know well, we were at SUSECON, so Sheng, first of all, thank you for joining us, and congratulations to you and the team on joining SUSE here in the near future. >> Thank you, Stu, I'm glad to be here. >> All right, so Sheng, why don't you give our audience a little bit of context, so I've known Rancher since the very early days, I knew Rancher before most people had heard the word Kubernetes, it was about containerization, it was about helping customers, there was that cattles versus pets, so that Rancher analogy was, hey, we're going to be your rancher and help you deal with that sprawl and all of those pieces out there, where you don't want to know them by name and the like, so help us understand how what was announced today is meeting along the journey that you set out for with Rancher. >> Absolutely, so SUSE is the largest independent opensource software company in the world, and they're a leader in enterprise Linux. Today they announced they have signed a definitive agreement to acquire Rancher, so we started Rancher about six years ago, as Stu said, to really build the next generation enterprise compute platform. And in the beginning, we thought we're going to just base our technology based on Docker containers, but pretty soon Kubernetes was just clearly becoming an industry standard, so Rancher actually became the most widely used enterprise Kubernetes platform, so really with the combination of Rancher and SUSE going forward, we're going to be able to supply the enterprise container platform of choice for lots and lots of customers out there. >> Yeah, just for our audience that might not be as familiar with Rancher, why don't you give us your position in where we are with the Kubernetes landscape, I've talked about many times on theCUBE, a few years ago it was all about "Hey, are we going to have some distribution war?" Rancher has an option in that space, but today it's multicloud, Rancher works with all of the cloud Kubernetes versions, so what is it that Rancher does uniquely, and of course as you mentioned, opensource is a key piece of what you're doing. >> Exactly, Stu, thanks for the question. So this is really a good lead-up into describing what Rancher does, and some of the industry dynamics, and the great opportunity we see with SUSE. So many of you, I'm sure, have heard about Kubernetes, Kubernetes is this container orchestration platform that basically works everywhere, and you can deploy all kinds of applications, and run these applications through Kubernetes, it doesn't really matter, fundamentally, what infrastructure you use anymore, so the great thing about Kubernetes is whether you deploy your apps on AWS or on Azure, or on on-premise bare metal, or vSphere clusters, or out there in IoT gateways and 5G base stations and surveillance cameras, literally everywhere, Kubernetes will run, so it's, in our world I like to think about Kubernetes as the standard for compute. If you kind of make the analogy, what's the standard of networking, that's TCPIP, so networking used to be very different, decades ago, there used to be different kinds of networking and at best you had a local area network for a small number of computers to talk to each other, but today with TCPIP as a standard, we have internet, we have Cisco, we have Google, we have Amazon, so I really think as successful as cloud computing has been, and how much impact it has had to actually push digital transformation and app modernization forward, a lot of organizations are kind of stuck between their desire to take advantage of a cloud provider, one specific cloud provider, all the bells and whistles, versus any cloud provider, not a single cloud provider can actually supply infrastructure for everything that a large enterprise would need. You may be in a country, you may be in some remote locations, you may be in your own private data center, so the market really really demands a standard form of compute infrastructure, and that turned out to be Kubernetes, that is the true, Kubernetes started as a way Google internally ran their containers, but what it really hit the stride was a couple years ago, people started realizing for once, compute could be standardized, and that's where Rancher came in, Rancher is a Kubernetes management platform. We help organizations tie together all of their Kubernetes clusters, regardless where they are, and you can see this is a very natural evolution of organizations who embark on this Kubernetes journey, and by definition Rancher has to be open, because who, this is such a strategic piece of software, who would want their single point of control for all compute to be actually closed and proprietary? Rancher is 100% opensource, and not only that, Rancher works with everyone, it really doesn't matter who implements Kubernetes for you, I mean Rancher could implement Kubernetes for you, we have a Kubernetes distro as well, we actually have, we're particularly well-known for Kubernetes distro design for resource constrained deployments on the edge, called K3S, some of you might have heard about it, but really, we don't care, I mean we work with upstream Kubernetes distro, any CNCF-compliant Kubernetes distro, or one of many many other popular cloud hosted Kubernetes services like EKS, GKE, AKS, and with Rancher, enterprise can start to treat all of these Kubernetes clusters as fungible resources, as catalysts, so that is basically our vision, and they can focus on modernizing their application, running their application reliably, and that's really what Rancher's about. >> Okay, so Sheng, being acquired by SUSE, I'd love to hear a little bit, what does this mean for the product, what does it mean for your customers, what does it mean for you personally? According to Crunchbase, you'd raised 95 million dollars, as you said, over the six years. It's reported by CNBC, that the acquisition's in the ballpark of 600 to 700 million, so that would be about a 6X increment over what was invested, not sure if you can comment on the finances, and would love to hear what this means going forward for Rancher and its ecosystem. >> Yeah, actually, I know there's tons of rumors going around, but the acquisition price, SUSE's decided not to disclose the acquisition price, so I'm not going to comment on that. Rancher's been a very cash-efficient business, there's been no shortage of funding, but even amounts to 95 million dollars that we raised, we really haven't spent majority of it, we probably spent just about a third of the money we raised, in fact our last run to fundraise was just three, four month ago, it was a 40 million dollar series D, and we didn't even need that, I mean we could've just continued with the series C money that we raised a couple years ago, which we barely started spending either. So the great thing about Rancher's business is because we're such a product-driven company, with opensource software, you develop a unique product that actually solves a real problem, and then there's just no barrier to adoption, so this stuff just spreads organically, people download and install, and then they put it in mission-critical production. Then they seek us out for commercial subscription, and the main value they're getting out of commercial subscription is really the confidence that they can actually rely on the software to power their mission-critical workload, so once they really start using Rancher, they recognize that Rancher as an organization provide, so this business model's worked out really well for us. Vast majority of our deals are based on inbound leads, and that's why we've been so efficient, and that's I think one of the things that really attracted SUSE as well. It's just, these days you don't just want a business that you have to do heavy weight, heavy duty, old fashioned enterprise (indistinct), because that's really expensive, and when so much of that value is building through some kind of a bundling or locking, sooner or later customers know better, right? They want to get away. So we really wanted to provide a opensource, and open, more important than opensource is actually open, lot of people don't realize there are actually lots of opensource software even in the market that are not really quite open, that might seem like a contradiction, but you can have opensource software which you eventually package it in a way, you don't even make the source code available easily, you don't make it easy to rebuild the stuff, so Rancher is truly open and opensource, people just download opensource software, run it in the day they need it, our Enterprise subscription we will support, the day they don't need it, they will actually continue to run the same piece of software, and we'd be happy to continue to provide them with patches and security fixes, so as an organization we really have to provide that continuous value, and it worked out really well, because, this is such a important piece of software. SUSE has this model that I saw on their website, and it really appeals to us, it's called the power of many, so SUSE, turns out they not only completely understand and buy into our commitment to open and opensource, but they're completely open in terms of supporting the whole ecosystem, the software stack, that not only they produce, but their partners produce, in many cases even their competitors produce, so that kind of mentality really resonated with us. >> Yeah, so Sheng, you wrote in the article announcing the acquisition that when the deal closes, you'll be running engineering and innovation inside of SUSE, if I remember right, Thomas Di Giacomo has a similar title to that right now in SUSE, course Melissa Di Donato is the CEO of SUSE. Of course the comparison that everyone will have is you are now the OpenShift to SUSE. You're no stranger to OpenShift, Rancher competes against RedHat OpenShift out on the market. I wonder if you could share a little bit, what do you see in your customer base for people out there that says "Hey, how should I think of Rancher "compared to what RedHat's been doing with OpenShift?" >> Yeah, I mean I think RedHat did a lot of good things for opensource, for Linux, for Kubernetes, and for the community, OpenShift being primarily a Kubernetes distro and on top of that, RedHat built a number of enhanced capabilities, but at the end of the day, we don't believe OpenShift by itself actually solves the kind of problem we're seeing with customers today, and that's why as much investment has gone into OpenShift, we just see no slowdown, in fact an acceleration of demand of Rancher, so we don't, Rancher always thrived by being different, and the nice thing about SUSE being a independent company, as opposed to a part of a much larger organization like RedHat, is where we're going to be as an organization 100% focused on bringing the best experience to customers, and solve customers' business problems, as they transform their legacy application suite into cloud-native infrastructure. So I think the opportunity is so large, and there's going to be enough market there for multiple players, but we measure our success by how many people, how much adoption we're actually getting out of our software, and I said in the beginning, Rancher is the most widely used enterprise Kubernetes platform, and out of that, what real value we're delivering to our customers, and I think we solve those problems, we'll be able to build a fantastic business with SUSE. >> Excellent. Sheng, I'm wondering if we could just look back a little bit, you're no stranger to acquisitions, remember back when Cloud.com was acquired by Citrix, back when we had the stack wars between CloudStack and OpenStack and the like, I'm curious what lessons you learned having gone through that, that you took away, and prepared you for what you're doing here, and how you might do things a little bit differently, with the SUSE acquisition. >> Yeah, my experience with Cloud.com acquired by Citrix was very good, in fact, and a lot of times, you really got to figure out a way to adapt to actually make sure that Rancher as a standalone business, or back then, Cloud.com was a standalone business, how are they actually fitting to the acquirer's business as a whole? So when Cloud.com was acquired, it was pretty clear, as attractive as the CloudStack business was, really the bigger prize for Citrix was to actually modernize and cloudify their desktop business, which absolutely was like a two billion dollar business, growing to three billion dollars back then, I think it's even bigger now, with now everyone working remote. So we at Citrix, we not only continued to grow the CloudStack business, but more importantly, one of the things I'm the most proud of is we really played up a crucial role in modernizing and cloudifying the Citrix mainline business. So this time around, I think the alignment between what Rancher does and what SUSE does is even more apparent, obviously, until the deal actually closes, we're not really allowed to actually plan or execute on some of the integration synergies, but at a higher level, I don't see any difficulty for SUSE to be able to effectively market, and service their global base of customers, using the Rancher technology, so it's just the synergy between Kubernetes and Linux is just so much stronger, and in some sense, I think I've used this term before, Kubernetes is almost like the new Linux, so it just seems like a very natural place for SUSE to evolve into anyway, so I'm very very bullish about the potential synergy with the acquisition, I just can't wait to roll up my hands and get going as soon as the deal closes. >> All right, well Sheng, thank you so much for joining us, absolutely from our standpoint, we look at it, it's a natural fit of what Rancher does into SUSE, as you stated. The opensource vision, the community, and customer-focused absolutely align, so best of luck with the integration, looking forward to seeing you when you have your new role and hearing more about Rancher's journey, now part of SUSE. Thanks for joining us. >> Thank you Stu, it's always great talking to you. >> All right, and be sure, we'll definitely catch up with Rancher's team at the KubeCon + CloudNativeCon European show, which is of course virtual, as well as many other events down the road. I'm Stu Miniman, and thank you for watching theCUBE.

>> Narrator: From around the globe, it's theCUBE with coverage of SUSECON Digital brought to you by SUSE. >> Welcome back to theCUBE's coverage of SUSECON Digital '20. I'm Stu Miniman and happy to welcome to the program one of SUSE's partners, we have Marc O'Regan, he is the CTO of EMEA for Dell Technologies. Marc, it is great to see you, we all wish, I know when I talked to Melissa Di Donato and the team, everybody was really looking forward to coming to Ireland, but at least we're talking to you in Ireland so thanks so much for joining us. >> Stu, thanks very much for having me. I'm delighted to be here. You know, really looking forward to getting you guys here, unfortunately it wasn't a beaver, once we're all safe and well, great to talk. >> Yeah, absolutely, that's the important thing. Everybody is safe, we've had theCUBE a couple of times in Dublin. I'd actually, you know, circled this one on my calendar 'cause I wanted to get back the Emerald Isle but, Marc, let's talk first, you know, the Dell and SUSE relationship you know, disclaimer, you know, I've got a little bit of background on this. You know, I was the product manager for Linux at a company known as EMC back before Dell bought them, many moons ago, so I know that, you know, Dell and the Dell EMC relationship with SUSE go back a couple of decades, but, you know, bring us into, you know, what your teams are working together and we'll go from there. >> Yeah, sure, Stu, so, quite correct, nearly a two decade long relationship with SUSE and one that we hold very dear to our heart. I think what both organizations have in common is their thirst and will to innovate and we've been doing that with SUSE for 16, 17 years, right back to, you know, SUSE Enterprise Linux sitting on, you know, PowerEdge architecture way, way back in the day into you know, some of the developments and collaborations that we, that we worked through with the SUSE teams. I remember back 2013, 2014 doing a pretty cool program with our then Fluid Cache technology. So, when you look at, you know, OLTP kind of environments, what you want to kind of get away from is the, you know, the read-write, commits and latency that are inherent in those types of environments. So, as you start to build and get more users hitting the, hitting the ecosystem, you need to be able to respond and SUSE has been absolutely, you know, instrumental to helping us build an architecture then with our Fluid Cache technology back in the day, and the SUSE technology sitting around and under that and then of course, in more recent times, really extending that innovation aspiration, I guess, has been absolutely a pleasure to, to watch and to be involved with, see it mature so some of the cool platforms that we're developing with SUSE together it's a, it's pretty neat so I'm, you know, one of those being-- >> So, Marc, yeah, well, you know, bring us up to speed, you know, right in the early days, it was, you know, Linux on the SUSE side, it was, you know, servers and storage from the Dell side, you know, today it's, you know, microservice architectures, cloud native solutions. So, you know, bring us up to speed as to some of the important technologies and obviously, you know, both companies have matured and grown and have a much broader portfolio other than they would have years ago. >> Yeah, for sure, absolutely. So, I mean, what's exciting is when you look at some of the architectures that we are building together, we're building reference architectures. So we're taking this work that we're doing together and we're building edge architectures that are suitable for small, medium, and you know, and large environments. And the common thread that pulls those three architectures together is that they are all enterprise grade architectures. And the architectures are used as frameworks. We don't always expect our customers to use them, you know, by the letter of the law, but they are a framework and, by which they can look to roll out scalable storage solutions. For example, like the Ceph, the SUSE Enterprise Storage solution that we collaborate with and have built such a reference architecture for. So this is, you know, it's built on Ceph architecture under the hood, but, you know, both ourselves and SUSE have brought a level of innovation, you know, into an arena, where you need cost, and you need low latency, and you need those types of things that we spoke about, I guess a moment ago, and into, you know, this new cloud native ecosystem that you just spoke to a few moments ago. So on the cloud native side, we're also heavily collaborating, and near co-engineering with SUSE on their CaaS technologies. So here it's really interesting to look at organizations like SAP and what we're doing with data hub and SAP, it's all part of the intelligent enterprise for SAP. This is where SUSE and Dell Tech together really get, you know, into looking at how we can extract information out of data, different data repositories. You know, you may have Oracle you may have, you know, you may have HDFS, you may have Excel and you're trying to extract data and information from that data, from those different siloed environments and the CaaS technology brings its, you know, its micro, capability to the forum in that regard, our hardware architecture is the perfect fit to, to bring that scalar platform, cloud native platform into the ecosystem. >> So, you know, Marc, you've got the CTO hat on for the European theater there. When we, we've been talking to SUSE, when they talk about their innovation, obviously, the community and open-source is a big piece of what they're doing. You were just walking through some of the cloud native pieces, give us what you're seeing when it comes to, you know, how is Dell helping drive innovation, you know, and how does that connects with what you're doing with partners like SUSE. >> Yeah, well, you know, innovation is massively, massively important. So there's a number of different factors that, you know, make up a very good innovation framework or a good innovation program. And at Dell Tech we happen to have what we believe to be an extraordinarily good innovation framework. And we have a lot of R&D budget assigned to helping innovate and we get the chance to go out and work with SUSE and other partners as well. What SUSE and Dell Tech do really, really well together is bring other partners and other technologies into the mix. And, you know, this allows us to innovate, co-innovate together as part of that framework that I just mentioned. So on the Dell Tech framework, we'll obviously, you know, take technologies, you know, we'll take them, perhaps into the office of the CTO, look at new, you know, emerging tech and look at, you know, more traditional tech, for example, and we will blend those together. And, you know, as part of the process and the innovation process, we generally take a view on some of the partners that we actually want to get involved in that process. And SUSE is very much one of those partners, as a matter of fact, right now, we're doing a couple of things with SUSE, one in the labs in Walldorf in Germany, where we're looking at high availability solution that we're trying to develop and optimize there right now at this point in time. And another good example that I can think of at the moment is looking at how customers are migrating off, you know, older, more traditional platforms, they need to look at the cloud native world, they need look at how they can, platform for success in this cloud native world. And we're looking at how we can get smarter, I guess about migrating them from that, you know, extraordinarily stealthy world that they had been in the past but that needs to get from that stealthy world into an even stealthier scalable world that is, that is cloud native world. >> Yeah, Marc, you talk about customers going through these transformations, I wonder if you can help connect the dots for us as to how these types of solutions fit into customers overall cloud strategies. So, you know, obviously, you know, Dell has broad portfolio, a lot of different pieces that are on the cloud, you know, I know there's a long partnership between Dell and SUSE and like SAP solutions, we've been looking at how those modernize so, you know, where does cloud fit in and we'd love any of kind of the European insights that you can give on that overall cloud discussion. >> Yeah, sure, so, again, ourselves and SUSE go back on, in history, you know, on the cloud platforming side, I mean, we've collaborated on developing a cloud platform in the past as well. So we had an OpenStack platform that we both collaborated on and you know, it was very successful for both of us. Where I'm seeing a lot of the requirement in this multicloud world that we're kind of living in right now, is the ability to be able to build a performant scalable platform that is going to be able to respond in the cloud native ecosystem. And that is going to be able to traverse workloads from on-prem to off-prem and from different cloud platforms with different underlying dependencies there. And that's really the whole aspiration, I guess, of this open cloud ecosystem. How do we get workloads to traverse across, across those types of domain. And the other is bringing the kind of, you know, performance that's expected out of these new workloads that are starting to emerge in the cloud native spaces. And as we start to look to data and extract information from data, we are also looking to do so in an extraordinary, accurate and in an extraordinary performant way and having the right kind of architecture underneath that is absolutely, absolutely essential. So I mentioned, you know, SAP's data hub a little earlier on, that's a really, really good example. As is, a matter of fact, SAP's Leonardo framework so, you know, my background is HPC, right? So, I will always look to how we can possibly architect to get the compute engineering as close to the data sources as possible as we can. And that means having to, in some way get out of these monolithic stacks that we've been used to over the last, you know, for a number of decades into a more horizontally scaled out kind of architecture. That means landing the right architecture into those environments, being able to respond, you know, in a meaningful way that's going to ultimately drive value to users and for the users and for the providers of the services, who are building these type of, these type of ecosystems. Again, you know, as I said, you know, data hub, and some of the work that Dell Tech are doing with the CaaS platform is absolutely, you know, perfectly positioned to address those types of, those types of problems and those types of challenges. On the other side, as I mentioned, the, you know, the story solutions that we're doing with SUSE are really taking off as well. So I was involved in a number of years ago in the Ceph program on the Irish government network and, so these would have been very big. And one of the earliest to be honest, Ceph firm I was involved with probably around five, six years ago, perhaps. And the overlying architecture, funnily enough, was, as you probably have guessed by now was SUSE Enterprise. And here we are today building, you know, entire, entire Ceph scale out storage solutions with SUSE. So yeah, what we're seeing is an open ecosystem, a scalable ecosystem and a performant ecosystem that needs to be able to respond and that's what the partnership with SUSE is actually bringing. >> So, Marc, I guess the last thing I'd like to ask you is, you know, we're all dealing with the, the ripple effects of what are happening with the COVID-19 global pandemic. >> Sure. >> You know, I know I've seen online lots that Dell is doing, I'm wondering what is the impact that, you know, you're seeing and anything specific regarding, you know, how this impact partnerships and how, you know, tech communities come together in these challenging times? >> Yeah, that's a great question to end on, Stu. And I think it's times like we're living through at the moment when we see, you know, the real potential of, I guess of human and machine collaboration when you think of the industry we're in, when you think of some of the problems that we're trying to solve. Here we are, a global pandemic, we have a problem that's distributed by its very nature, and I'm trying to find patterns, I guess, I'm trying to model, you know, for the treatment of, you know, COVID-19 is something that's very, very close to our heart. So we're doing a lot on the technology side where we're looking to, as I said, model for treatment but also use distributed analytical architectures to collaborate with partners in order to be able to, you know, contribute to the effort of finding treatments for COVID-19. On the commercial side of things then Dell Tech are doing a huge amount so, you know, we're, for instance, we're designing a, we're designing a financial model or framework, if you will, where our customers and our partners have, you know, can take our infrastructure and our partners infrastructure and those collaborations that we spoke about today. And they can land them into their ecosystem with pretty much zero percent finance. And so it's kind of a, it's an opportunity where, you know, we're taking the technology and we're taking the capability to land that technology into these ecosystems at a very, very low cost, but also give organizations the breadth and opportunity to consume those technologies without having to worry about, you know, ultimately paying up front they can start to look at the financial model that will suit them and that will, that will, that will, hopefully, accelerate their time, their time to market, trying to solve some of these problem that we've been speaking about. >> Well, Marc, thank you so much for the updates. Definitely good to hear about the technology pieces as well as some of these impacts that will have a more global impact. Thanks so much for joining us. >> Stu, my pleasure. Thank you, take care and stay safe. >> Thanks, same to you. All right, I'm Stu Miniman, back with lots more covered from SUSECON Digital '20. Thank you, for always, for watching theCUBE. (gentle music)

>> Announcer: Live from Boston, Massachusetts, it's theCUBE. Covering IFS World Conference 2019. Brought to you by IFS. >> Welcome back to Boston everybody, you're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante, I'm here with my co-host Paul Gillin. This is IFS World Conference 2019, theCUBE's second year covering this conference. Michael Ouissi is here. He's the Chief Customer Officer at IFS. And Raul Sahas. Industry Partner, Enterprise Application Services at TCS, a platinum partner at IFS World. Gents, welcome to theCUBE. >> Thank you. >> Thank you for having us. >> You're very welcome. So last night I poked around the customer event and I was impressed with the number of partners here. I think the number is 400, is the public number. What is it about the ecosystem that's attracted to IFS? >> Well, first of all, I think the ecosystem has now understood that we have renewed our commitment to the ecosystem. That is something a shift in mindset in IFS that is demanded by our customers, that our customers actually ask of us especially while we're moving into also more global corporations, and win more business there. They appreciate the choice of either IFS or our partners, or a combination of our partners and IFS actually helping them deliver the value that they expect from an ERP solution. >> So Rahul, from your perspective, so TCS you're obviously platinum partner so you're making a big investment. Why, what's happening in the market place? Where's the momentum with the tailwind? >> If you look at TCS, TCS is obviously helping customers to become business 4.0 organization, which is all about harnessing the abundance of possibilities around digital technologies and getting more intelligent, better, lean, harmonized, standardized. And so that's where we believe we are partnering with, and we are trying to leverage the ecosystem and one of the ecosystem obviously partners are IFS, which is a strategy partnership for us. And we believe that the investments that IFS has made and some of the unique last-mile solutions are going to help us to deliver those different shaded offerings to the customer, and create newer partnerships with them. >> Michael your role is a net new role at IFS, did you get to write your own job description? I guess, what does a Chief Customer Officer do? >> Well, first of all, well, in a sense yes. We actually did specify exactly what that role is, and we did discuss what the best is for the journey we want to get on, when Darren asked me to take on the role. And what a Chief Customer Officer does, and there's a specific reason why we're doing it that way, a Chief Customer Officer really is heading up, and that's what I'm doing, is I'm heading up all customer-facing functions within IFS. So from sales, to pre-sales, to support, to services. So it's all the customer-facing functions, coming from how do we engage with a customer, pre-sales, and after sales. And the reason why we did it that way is we wanted to have complete ownership and accountability for the transformation that we underwent and that we wanted to go through because we really needed to make sure that all parts of the business were aligning around this transformation, and pulling in the same direction. And that's why this role got created newly. >> So what's the nature of the partnership, what the history of the partnership? How did it start, and where do you guys want to take it? >> Well I think we have a obviously longstanding partnership with IFS. And I think both of the organizations have a deep mutual respect. And I think that one thing that we are trying to see the centricity around our partnership is all about the customer. We keep the customer and we want to ensure that we help our customers. We're customer-first organizations. And obviously the investments that IFS made, especially in the field services area, ERP area. I guess those are the areas which is helping, because ERP, if you see, one of the strategic lever for an organization to elevate their digital agenda, and get the right infrastructure in place, the right partner in place, to ensure that they create a differentiation and create exponential value for the customer. And that's exactly where IFS and TCS are looking at the market, and ensuring that we are helping our customer create exponential value for themselves in the market. >> Michael: Yeah and I think that maybe adding to that, we share the same belief as well that actually the time of the monolithic ERP, one solution for a huge enterprise- >> Who are you talking about? (Laughter) >> They are gone, those days are gone. I think it's about blended solutions where the ERP is much more agile, it has to be much more open and allow for much more agile deployments and much more agile development around the core ERP. So that actually customers can digitally transform, because it's all about speed. And TCS sees it the same way so we've got the same view. >> But the cloud mindset has changed that right Paul? >> Absolutely. And Rahul I'm interested the companies like Tata historically have done a lot of custom development work for customers that we have been hearing from Darren on down today is no customization. What value do you add to a customer bringing in an IFS solution? >> See there are two things here, very simple. One is basically customers are moving from best in class to the sub-breed, that's quite evident. And secondly, while IFS brings the software expertise, we bring the industry expertise. We bring the domain expertise. We bring the SI, system integration expertise. And that's where, it's a very strategic combination. Strategic combination is helping the customer to get the right software, the right domain expertise, the right industry expertise. And together they're helping them to address their business requirements, business need, and last mile critical mile needs that they need to differentiate themselves in the marketplace. And, as a result, create exponential value, and also, a great customer experience for the customers. >> Paul: So, how does that engage and differ from a more traditional one where you would come in and you would build custom screens and custom processes? You're not doing that. Now, what does that relationship look like? >> Yeah so I think if you see the scratch approach, obviously it has really transformed over the course of time. Customers are wanting off the shelf, out of the box products. Best of the beat products to help them differentiate their business function, create exponential value for the customer for that business function as a matter of say, service. If I look at fin services as an example, and you talk about telcos, you talk about utilities. Where last mile delivery, last mile solution for that customer is very very important to create the positive customer experience. And the investments that IFS have made in there makes them a premium choice. And that's where I believe that developing something with scratch means you know you're boarding the entire ocean again. And whereas we have got softwares like, IFS build softwares which have invested their years of expertise, the years of, I would say, competency in building that. Getting the best of the breed solution, get the best KPIs into there in this solution, gives the customer a choice. A ready choice to take, to expedite their time to reality, time to value, and time to production reality. >> So, a few times now, Raoul, you've mentioned last mile solutions. I like that term, I think it has meaning. Especially deep in specific industries. And I think the intent is so that you don't have to do customizations. And I asked Aaron about tailoring, which he said, I wouldn't use that word. That wasn't my word, by the way, that was Christian's word. He used that in his keynote. So I'm trying to understand here. I think what Christian meant is look, we got this API platform to allow people to bring in whatever solutions they want, if it's a RPA solution, or a blockchain solution, or some AI module, they can bring that in and tailor it for their needs, as opposed to customizing the software. Is that correct? >> I think when you listen to Darren, what he's talking about is customizing the core, which very often has happened in the past, where customizations have gone into the core, have been mandated to be on the core platform, which then actually has customers being stuck at some stage on the platform upgrades becoming paid for. So with Christian's talk track around the APIs, API enabling the whole solution so that the core actually remains untouched. There will always be customizations, because customers need to differentiate. But they will be outside the core. There will be a level that you can upgrade the core solutions, you will have those maintained either application services, which will be custom out of the box solutions, best in breed, that actually tap into what we're doing. Or actually you'll have bespoke solutions that you will write yourself, and that is then a choice a customer can make, but without actually having the pain of not being able to upgrade the very stable, very performant transactional backbone. >> So the API announcements give you guys a real opportunity to do integrations, right? And it's been harder to do integrations. But that now, to your previous question, opens up I would think a whole new tam for you all. Can you comment? >> Oh absolutely. As I said, bringing exponential value means integrating and delivering a frictionless business. And that's where it'll fit in, rightly fit in, and obviously that would result in creating exponential value for the customer. Not only they can differentiate themselves from the market but also get their product faster to the market, and ensure that also focus on custom centers as we are. >> So the core can be, it should be, Evergreen. We want people to get the new version as soon as possible. Bug fixes, security updates, et cetera. >> New functionality. >> New functionality, avoid custom mods, but rely on service providers and partners to do further integrations that make sense. >> Rahul, I want to ask you the same question we just asked Melissa Di Donato about digital transformation. I'm sure your company does a lot of that kind of consulting work. What are the mistakes that companies make that we hear that these transformation products, most of them fail. What are the biggest mistakes that companies make? >> Let me put it this way. I think there are three elements to it. I think digital transformation, see I think creating the agenda for the digital transformation, what you're expecting out of it is very very important. Creating a charter, what you want to expect, what is the output of it. Where do you want to take it. What does a futuristic organization on a digital platform means? It's very very important. I think if you look at TCS, our vision has been helping the customer get into a business 4.0 enterprise. I think we have made the agenda very very very clear. Now how we can mass personalize the experience for the customer, how you can leverage the ecosystem, how you can basically help the customer embrace the risk, and obviously harness the abundance. I believe these are the pillars of any transformation, or digital transformation, that customers are taking. I believe if we can stick to these agendas, I think getting to the production reality, seeing the success has become more evident. If you're going to go to the nitty gritty, I think there are many things, looking at the processes, making sure that they are harmonized, standardized and rationalized, getting the right KPIs in the business. So I think these are things that is very very important as a precursor to our digital transformation. Once we do that, we know that roads ahead will be much smoother than what it looks like. >> Is it more important to do a transformation with the customer at the center, with operational efficiency at the center, or can it be either? >> The customer centricity is very very key to all our organization at this point of time, because if you look at any organization at this point of time, they're looking at the customer experience as the top most agenda. Keeping the customer experience on the agenda, when you're trying to keep that agenda, it means that you are trying to bring up a customer first organization. So customer first organization, it just doesn't mean that you have a very intelligent front office, but also have a very intelligent back office. And gluing this two together, very intelligent mid office. So I guess customer centricity has to be on the top of the agenda, and then you have to ensure that your processes are streamlined, harmonized, standardized, lean, to meet that objective. >> Makes sense. >> So I think, for customer centricity, so I feel as though, but part of that's cultural, you know? And it's true, you said this earlier this morning. Some companies are customer centrics, some are product centric, some are competitive. And you can kind of tell the difference, especially when you're a customer. But I think true customer centricity mandates data access as central to the philosophy, the core. And I think the role that ERP provider or vendor provides is you have a data pipeline that gives access to an organization such that a digital transformation allows them to put data at their core, and then build whatever processes around it. I think that's a real challenge for incumbents especially where data's all over the place, in different stove pipes and silos. But your thoughts on the role of data in terms of digital transformation, and IFS's role in that regard? >> Okay. >> A long-winded question, but I haven't heard enough about data I guess. >> Okay, (laughs) I'll try it, sweet and short. I think data is absolutely key to anything we do. Once you have and when you go into a digital transformation, what you need to start with in my humble view is you need to start with what business outcome do you want to achieve? Most of the time it's customer centricity, it's something centered around the customer which you want to achieve. That will define both the digital transformation agenda, the KPI's you're measuring to, but also the flow of data and processes. So you will need to build your digital transformation agenda around the targets you have, and then define where does data need to reside, which data do I need to fulfill on that outcome? And I think that consistency going through that whole chain is actually something that very often isn't at the moment taken into account, but it's very often isolated efforts to do something fast without actually looking at the implications of what kind of transactional engine do I need, what kind of data exits do I need, and how do I get through the process to the KPI that I want to influence? >> Okay, and let me peel the onion on that, and I'd love for your thoughts. To me when you talk to a C-suite executive, what that business outcome ultimately comes down to is I want to increase revenue, so I want to cut my cost. Now of course if you're in a different hospital, you want to save lives. But generally in a commercial business, increase revenue, cut cost. Now how I get there, I might want to have a better customer service organization to get cohort sales or follow on sales. I mean the strategy is different. But it comes back to data and how data affects the monetization of my organization, whether it's increasing revenue or cutting cost. Do you buy that premise, or am I just simplifying it too much? >> No, completely agreed. I think in a business world it's always either top line or bottom line, but the challenges are obviously very different from company to company and from industry to industry. So if you're looking at manufacturing companies, trying to actually be less commoditized and getting into a situation where they stabilize revenue streams, increase margins, servitization is the name of the game. Very different value proposition to, for example in the finance industry, in banking and insurance. So there are very different models here where there it's about ease of use and speed of actually interacting and transacting as a customer with the company. So very different value propositions, very different data streams you need to tap into. And things you need to know about your customer, and know about the service you're providing. So completely agree with it is always about revenue and cost, that's what businesses are in for. But eventually, data is at the core, but how to get that data, which data you need, that is then specific to each. >> And bringing it back to IFS, your ability to go that last mile as you've been saying Rahul allows companies to think, construction and engineering, supply chain, contractors, just more efficiently managing their ecosystem, their resources to either cut costs or do more business and scale. >> Exactly. And that's really where the whole idea of API, enabling the whole suite came from, enabling the reuse of services, the reuse of data within those services, exposing it transparently, making it available for customers to then use in their digital transformation effort. Whatever they need. We can't predict and we can't actually preempt what a customer will need, we'll just need to make it all available, and then with partners like TCS, make sure we actually go on to the right journey with a customer to digitally transform and use the right data streams. We can make it easy and accessible. >> And that's the different between a platform and a product. To the extent that you can deliver an API-enabled system, it becomes a platform that you can evolve versus a product that you install and manage. Final thoughts, Rahul? >> I think what we discussed obviously, I fully agree on that. And as I mentioned that our take is to ensure that we have the customer built future systems enterprises, and we believe our partnership with IFS is a very key and strategic partnership for us to achieve the same, and we have some early success, and we want to ensure that we scale that, we ensure we go to the market together, and create a differentiation for our customers. >> Michael, your thoughts. Where do you want to see this ecosystem go? >> Where do I want to see it go? Well I want to see it thrive. I want partners to be successful with their customers on IFS implementations. That's what our ambition is. We need to provide world class technology, a world class platform, as you said, that actually then can be used to help the digital transformation that all our customers will have to go through in one or the other way. >> Success is outcome driven. Good outcomes mean people come back, more business? >> Absolutely, absolutely. >> Exactly. >> That's core to our DNA, I'm sure core to DNA to IFS as well. Repeat customers. >> Congratulations on the partnerships, and good luck going forward. >> Thank you very much. >> Appreciate you coming on theCUBE, you're welcome. >> Thank you very much. >> Thank you. >> All right thank you for watching everybody, we'll be right back with our next guest, Paul Gillan and Dave Vellante. You're watching theCUBE. (electronic jingle)