(upbeat music) >> Thanks Adam from the studio. Dave, with the next interview, I had a great chance to sit down with Pete, from Microsoft Azure. Talk about 5G and all the advances in the innovation around Silicon and what's coming around under the hood. Obviously Microsoft big hyperscaler, top three cloud player. Let's hear from Pete my conversation and we'll come right back. (upbeat music) Well, we'll come back to the cubes coverage of Mobile World Congress 2021, we're onsite in-person and virtual. It's a hybrid event this year. It's in-person for the first time, since the winter of 2019 lots been passed, a lot's happened and theCube's got to cover it. Our next guest is Pete Bernard, senior director, Silicon and telecom at Azure edge devices, platform and services at Microsoft. Pete, thanks for coming on theCube for our remote coverage. Thanks for coming on. We'll be there live and as well as with the remote community. Thanks for coming on. >> Yeah, no, that's great to be here. I'm coming here from sunny Bellevue, Washington. I wish a wish I was going to be in Barcelona this year, but like, as you mentioned, I think the last time I was in Barcelona was 2019. So a lot has happened since then. Right? >> Well, let's get into it. First of all, we'll see you on the interwebs and the community, but let, let's get the content storyline after the number one story at mobile world. Congress is the rise of the modern developer overlay on top of this new infrastructure, 5g, what is the edge, super edge, AI edge, whatever we want to call it. It is an enabler. Okay. And it's also leveraging the assets of, of these telecom infrastructures and certainly the pandemic we've had great success, nothing crashed. It saved us. So what's your, what's your view on this? This is the big story. It's the most important story? What's your take? >> Yeah, I mean, as I mentioned, a lot has happened and there's been a lot of advancements in this area and I think, you know, the part of what's happened with the pandemic is companies have really accelerated their strategies in this area. In terms of, you know, we have tons of commercial customers that are trying to solve really difficult problems using AI and edge and, and 5g now. So the demand is tremendous and the technology has really advanced quite a bit. And you know, we're, my team is specifically focused on sort of the intersection of 5g edge and AI, and it's sort of bringing together these kinds of existing credible technology advances and it's unlocking some amazing new scenarios and business models for, for customers and partners. For sure. >> So let's get it under the hood a little bit and talk about some of the technical issues. Obviously 5g is enabling a lot of commercial benefits cloud providers like Microsoft Azure is having great edge capabilities now with, with bringing the cloud to the edge, which opens up the obvious gamers Mehta versus AI, AR VR kind of things, low latency, applications, cars, and all that good stuff, all the data coming in and then new use cases. So it's a data problem. It's a typology challenge. It's a new architecture, unpack that for us. What, where are we in this? So. >> So I mean, as you mentioned, I mean, it was kind of an infinite set of problems to be solved. And one of the things that we found was that there was actually a lot of friction out there. It's almost like so many different partners and typologies and ways to put things together. Quite often, we get with a commercial customer and they're like, look, we just need to solve this particular problem in retail or healthcare energy. And so one of the things that we introduced as part of our kind of Azure portfolio is something called Azure percept, which is an end to end system for edge AI development and deployment that now works over 5g and L PWA as well. And so a lot of what we're trying to do as a platform company is help customers and partners kind of expedite and speed that development and deployment of solutions. Because like I said, there's no shortage of demand, but they're quite complex. And as you mentioned, you could have, you know, on-prem solutions, you could have hybrid solutions that talk to on-prem hardware and then go to the cloud. You can go direct to the cloud. But the question is like, how do you put these things together in a secure way? And it get an ROI quickly out of your edge AI deployments. And that's been kind of an interesting challenge. And I think when I talked to a lot of partners, telco partners, especially Silicon partners, were all struggling with how do we expedite, expedite? Because you know, the sooner we can get people to deploy and solve their problems, obviously, you know, the sooner they're happy, the sooner we all get paid. Right? And so that's one of the things we have to be careful of is with all the new technology, how do we really sort of titrate down to, you know, what does it take to actually get things from a POC to deployment as quickly as possible? >> And one of the big things is happening is not seeing the developer ecosystem is coming hardcore into the telco cloud, whatever you want to call it. And it's interesting, you know, the word operators is used a lot, the carriers, the operators, you don't hear that in it and say, you don't say that's the operator, the operators writes it department. So you have cloud native and this operating cultures coming together, dev ops dev sec ops coming to what is a carrier grade operating model, which is like a steady build solid foundation. That's what they expect. So you kind of have this classic OT it collision. And this has been talked about in the edge. What's different though, because now you've got to move faster. You got to have a lot of it like cloud scale with automation and AI at the same time I need full Bulletproof operations. Yeah. >> And so it's, you know, we're trying to expose a consistent developer fabric, you know, to our community. I mean, Microsoft's got millions of developers around the world using lots of, lots of tool, tool chains, and frameworks. And we want to sort of harness the power of that whole developer community to bring workloads and applications onto the telco network, right. In, in environments that they're familiar with. And we're seeing also sort of, you mentioned sort of colliding worlds in the edge world. There's kind of traditional embedded developers that are building cameras and devices and gateways. And then there's a lot of data science, AI developers as well. And what we're trying to do is sort of help both communities sort of learn these skills so that, you know, you have developers that are enabled to do, you know, AI workloads and scenarios and all of the business logic around those things and develop it in an environment, whether it's cloud-based or edge based that they're familiar with. And, you know, so therefore a lot of the complexities of the teleco network itself get sort of obfuscated or abstracted for them. So the developer doesn't have to become a telco expert, right. To build a 5g based camera system for their retail stores. Right. And so that's, that's exciting when we start to merge some of these communities together. >> Yeah. So what would be your message to the operators this year? I mean, obviously the edge is not something you need to educate people on, but they are trying to figure out how to, you know, swap the engine of the airplane out at 35,000 feet, as I say, they got, they want to innovate and this year what's your message. Yeah. >> I mean, there's kind of two things going on. One is yes. I think we're, we are deeply involved helping telcos Cloudify their network and take advantage of 5g and virtualization. And, you know, we have recent acquisitions as a metal switching affirmed and hold that whole thing. So that's, that's that chunk of work that's ongoing. I think the other thing that's happening is really thinking about telcos. We're seeing as a hunger for solutions. And so telcos thinking of themselves as solution providers, not just connectivity providers and, you know, getting into that mindset of saying, we're going to come in and work with this city or this, you know, big retailer and we're going to help solve the problems for them. And we love working with partners like that, that are actually delivering solutions as opposed to pieces of technology. >> What solutions do you think Pete are showing the most promise for helping the telco industry digitally transformed? >> Well, I think on the NGI space, there's a couple of big verticals. I mean, you know, obviously places like agriculture are huge, you know, where you need a wide deployments. We're seeing a lot of areas in around retail, you know, retail environments when I would have leveraged like low latency 5g. One of the pieces of feedback we heard was a lot of retailers actually want less hardware in their physical store and they want to leverage 5g more to get back to the cloud. And then we're seeing, you know, energy sectors, you know, and mining and other kind of difficult to reach areas where you can leverage ciliary networks. So a lot of these verticals are, you know, turning onto the fact that they could get some of their conductivity and edge AI solutions combined together and do some amazing things. >> Right. You just made me think of a question while I got you. I got to ask this because you know, you've brought up 5g and back haul, you know, and people in the, in this business always know backhaul is always the problem. We all know we've been to a concert or a game where we've got multiple bars on wifi, but nothing's loading. Right. So we all know, right. We've seen that that's back haul. That's a choke point. If 5g is going to give me more back haul to essentially another exchange, how has the core of the internet evolved? Because as I started poking around and research and there's more direct connects now, there's not many exchanges. It used to be, we had my west and my east, those are now gone. I'm like, what's going on in the backbone? Does that simple? Is it better or worse? Is that still a good thing? >> Well, yeah. One of the exciting things around kind of the virtualization of what's going on with networking is that we're able to partner with telcos to sort of extend the Azure footprint to help with some of those congestion points, right? So we can, we can bring heavy edge equipment, pretty darn close to where the action is, and actually have direct connections into teleco networks to help them sort of expand their footprint, you know, even farther out to the edge and they can leverage our hyperscaler to, to do that. So that that's a benefit of one of the architectural improvements of 5G around virtualization. >> That's awesome. And I'm looking forward to following up on that great point. And I think it's, it sells a digital divide problem. That's been going on for over a decade, 15, 20 years, this digital divide. Now you got city revitalizations going on. You have, I mean, just the, just the, the digital revitalization in global communities is everywhere. And I think, I think this is going to be an influx point. That's not yet written about in the press now, but I think it's going to be very clear. So, so with all that, I got to ask you the importance of how you guys see an ecosystem for this transformation, because it used to be the telcos ruled the world, and now it's not going that way. They still have a footprint. I mean, everyone, the rising tide helps everybody, as they say, what's the importance of a strong ecosystem in order to drive this nutrient? >> Well, you know, it's definitely a team sport. It's definitely a team sport. And, and you know, Microsoft's been a big partner company for decades, and I think it's something like $8, a part of revenue for every dollar of revenue from the Microsoft generate. So we're heavily invested in our device, builder partners, our telco partners, the ISV community. And, you know, I think what we're trying to do is work with telcos to sort of bring those communities together, to solve these kinds of problems that customers are having. So yeah, it's definitely a team sport. And like I said, the new entrance with some really innovative software platforms, it's an opportunity for telcos, I think, to sort of reinvent and to kind of rethink about how they want to be more agile and more competitive. Again, this will be businesses. >> Okay, great. And have you on, I got it. I got ask you, we've talked about the most important story, obviously 5g edge in AI. I think you nailed it. You're you're in this cross hairs of probably one of the most exciting areas in the tech industry as distributed computing goes that last mile, so to speak pun intended, what, but what's, in your opinion, the most important story that not many people are talking about that should be talking about, what do you think is something that's being written about, but to talk about, but it's super important that that needs to be true. >> Well, you know, it's interesting. I mean, a lot of the marketing and talk about 5g is around phones, people talking about their speed on phones. And I think we're finally getting past the discussion of 5g on phones and talking about 5g for like more MTM communications and more, more kind of connecting really trillions of things together. And then that enabled me to is going to be a big, big deal moving forward. And I think that's, we'll start to see probably more coverage of that moving forward. We're on the inside of the industry. So we kind of know it, but I think on the outside of the industry, when people think 5g, they still think phones. And then hopefully that becomes, there's more of a story around all the other pieces being connected with 5g. >> Yeah. And I got to ask you about two quick things before we go open source, openness, interoperability, and security. What, how would you, what's your opinion on those two pillars? >> So I think security is kind of foundational for what we're we've been doing at Microsoft for a long time, whether it's Azure sphere that we're doing for end to end, you know, edge security or any of our security offerings that we have from services perspective. So we're trying to like with Azure percept, we actually build in like TPM encryption of AI models from edge to cloud, as an example of that. So security really is foundational to all of the stuff that we need to do. It cannot be something that you do later or add on it has to be designed in. And I think from an open source perspective, I mean, whether it's our, you know, stewardship of GitHub or the involvement in open source communities, you know, we're, we're totally excited about all the innovation that's happening there and you know, you got to let people participate. And in fact, one of the cool things that's been happening is the amount of developer reach in areas where maybe there isn't, you know, like we've had our build conferences and other Microsoft events. It enables everyone to participate virtually no matter where they are in the world, even if they can't get a ticket to Redmond Washington, and you can still be part of the developer community and learn online and be part of that. >> I think this whole embed developer market's going to come back in and massive volumes of new people as Silicon becomes important. And of course, I can't leave you without asking the Silicon angle question for our team. Silicon is becoming a competitive advantage for whether it's acceleration, offload and or core things, whether it's instance related or use case related, what's the future of Silicon and the telecom and cloud in general. >> For mine. Yeah. So I mean, the advances happening in the Silicon space are fantastic. Whether it's like process advances down to like five nanometers and below. So you're talking about, you know, much lower power consumption, much higher density, you know, packaging and, you know, AI acceleration built in as well as all these other, you know, containerized security things. So that's being driven by a lot by consumer markets, right? So more powerful PCs and phones. And that's also translating into the cloud and for some of the heavy infrastructure. So the leaps and bounds we're seeing even between now and the last MWC in person in 2019 in Silicon has been amazing. And that's going to unblock, you know, all kinds of workloads that could be done at the edge as well as incredible high-performance stuff to be done in the cloud. That's pretty exciting. >> Peter Love that word unblocked, because I think it's going to unblock them that big, you know, rock in the river. It's holding the water back. I think it's going to unleash creativity, innovation, computer science engineering down from Silicon to the modern application developer. Amazing opportunity. I think the edge is going to be the, an awesome area to innovate on. Thanks for coming on the cube. >> Sounds good. Thanks for having me. >> People in our senior director, silica telecom as your edge devices for platform services at Microsoft, a lot going on big cloud player, hyperscaler at the edge. This is the final area. In my opinion, that's called the accident habits going to be great innovation. It's part of the cloud cloud is creating massive change in telecom. We've got to cover here in the queue. Thanks for watching. Okay, Dave, that was a great interview with Pete Bernard, senior director, Silicon telecom, Azure edge devices, platform, and services. Microsoft's got all those long titles in the, in the thing, but Silicon is a key thing. You heard my interview wide ranging conversation, obviously with that kind of pedigree and expertise. He's pretty strong, but he, at the end there a little gym on the Silicon. Yeah. Okay. Because that is going to be a power source. You you've been reporting on this. You've been doing a lot of breaking analysis. Microsoft's a hyperscaler they're they're the second player in cloud, Amazon. Number one, Microsoft number two, Google number three, Microsoft. They didn't really say anything. They have something Amazon has got grab a ton, but big directional signal shift there. >> Well, I think it was interesting. It was a great interview by the way, and the things that struck me pizza, and they're focused on the intersection of 5g edge and AI. So AI is all about data-driven workloads. If you look at AI today, most of the AI in the enterprise is done in the cloud and it's modeling, but the future of AI is going to be inferencing at the edge in real time. That's where the real expenses today. And that's where you need new computing architectures. And you're right. I've written about this one of my last breaking analysis on AWS, a secret weapon, and that secret weapon is a new computing architecture. That's not based on traditional x86 architectures. It's based on their own design, but based on arm, because arm is higher performance, lower cost, better price, performance, and way cheaper. And so I guarantee you based on what you just said that, well, Amazon clearly has set the direction with nitro and graviton and, and, and, you know, gravitate on to Microsoft is I think following that playbook. And it's interesting that Pete has Silicon in his title and telecom and an edge they're going after that because it doesn't require new low powered architectures that are going to blow away anything we've ever seen on x86. >> Yeah. I mean, I think that's a killer point. You and I have been covering the enterprise, the old guard rack and stack the boxes. Amazon was early on that clearly winning low power, high density looks like a consumer, like feel in cloud scale, changes the game on economics. And then he also teased out if you squint, there's a lot of stuff to decode. We're going to unpack that video and write probably six or five blog posts there, but he said, 5g is going to change the direct connect. They're already doing it. Microsoft's putting that to the edge, that right in the same playbook as AWS, right on the almost right on the number, put the edge, make it powerful, direct connects connectivity. >> We've seen this before. The consumer piece is key. The consumer leads, we know this and the consumer apple is leading in things like AI and, and Tesla is leading at the edge. That's where you have to look for the innovation. That's going to trickle into the enterprise. And so in the cloud guys, I kicked the hyperscale. You and Sergeant Joe Hall talked about this at the startup showcase that we did was that the cloud guys, the hyperscalers, and a really strong position for the edge. >> I got to tell you, we are on this go to the siliconangle.com. Obviously that's our website, the cube.net. We are reporting on this. It's very nuanced point. But if you look at the cloud players, you can see the telco digital revolution telco. Dr. Is a digital revolution back to you, Adam, in the studio for more coverage, we'll be back at the desk shortly.

(funky music) >> Everyone, welcome to theCUBE studios here in Palo Alto for a CUBE Conversation, I'm John Furrier, we're here with a great guest, Balaji Sivasubramanian, did I get it right? Okay, okay, VP of product and business development at OpsMx, formerly with Cisco doing networking, now you're doing a lot of DevOps, you guys got a great little business there. Realtime hardcore DevOps. >> Absolutely, so we help large enterprises do the digital transformation to help them achieve that transformation. >> You know, Stu Miniman and I were talking about cloud-native, one of the reasons I wanted to bring you in was, we've been talking about cloud-native going mainstream. And cloud-native essentially codewords for cloud, microservices, essentially DevOps 2.0, whatever you want to call it, it's the mainstream of DevOps, DevOps for the past 10 years has been kind of reserved for the pioneers who built out using open source, to the fast followers, building large startups, to now larger companies, now DevOps is turning into cloud-native where you see in the cloud, born in the cloud, on-premises cloud operations, which is hybrid, and now the advent of multicloud, which really brings the edge conversation into view, really a disruption around networking, and data, and this is impacting developers. And pioneers like Netflix, used Spinnaker to kind of deploy, that's what you guys do, this is the real thread for the next 10 years is data, software, is now part of everyday developer life. Now bring that into DevOps, that seems to be a real flashpoint. >> Yeah, so if you look at some of the challenges enterprises have to get the velocity that they have, the technology was a barrier. So with the Docker option, with the Cloudred option, cloud basically made the infrastructure on demand, and then the Docker really allowed, Microsoft architecture allowed people to have velocity in development. Now their bottleneck has been, "Now I can develop faster, I can bring up infra faster, "but how do I deploy things faster?" Because at the end of the day, that's what is the last mile, so to say, of solving the full puzzle. So I think that's where things like Spinnaker or some of the new tools like Tekton and all those things coming up, that allows these enterprises to take their container-based applications, and functions in some cases, and deploy to various clouds, AWS or Google or Azure. >> Balaji, tell me about your view on cloud-native, you look at, just look at the basic data out there, you got AWS, you got KubeCon, which is really the Linux Foundation, CNCF, I mean the vendors that are in there, and the commercialization is going crazy. Then you got the cloud followers from Amazon, you got Azure basically pivoting Office 365 and getting more cloud action. They're investing heavily in Google GCP, Google Cloud Platform. All of 'em talk about microservices. What's your view of the state of cloud-native? >> Yeah, I think, I probably talked to hundreds of customers this last year, and these are large, Fortune 100, 200 companies to smaller companies. 100% of them are doing containers, 100% of them are doing Kubernetes in some fashion or form. If you look at larger enterprises like the financial sectors, and other, what do you call the more Fortune 100 companies, they do actually do OpenShift. RedHat OpenShift for their Kubernetes, even though Kubernetes is free, whatever, but they definitely look at OpenShift as a way to deploy container-based applications. And many of them are obviously looking at AKS, EKS and other cloud form factors of the same thing. And the most thing I've seen is AWS. EKS is the most common one, Azure some parts, and GKS somewhat, so I mean you know the market trend that's there. So essentially, AWS is where most of the developments are happening. >> What do you think about the mainstream IT, typical IT company that's driven by IT, they're transforming just a few, I'd say about a year ago, most hands were like "Oh, the big cloud providers are going to be "not creating an opportunity for the Splunks in the world, "and other people," but now with that shifting, mainstream companies going to the cloud, it's actually been good for those companies, so you're seeing that collision between pure cloud-native and typical corporation enterprise, that are moving to the cloud or moving to at least hybrid. That's helping these Splunks of the world, the Datadogs, and all these other companies. >> I think there's two attacks on those companies that you talk about. One is obviously the open source movement, it's attacking everything. So anything you have in IT is attacked by open source. Software is eating the world, but open source is eating software. Because software is easy to be open source. Hardware, you can't eat it, there's no open source, nobody's doing free hardware for you. But open source software is eating the software, in some sense, but anyway, so any software vendors are fully, everybody's considering open source first. Many companies are doing open source first, so if you want to look at Datadog or Prometheus, I may look at Prometheus. If I look at IBM uDeploy or Spinnaker, I may look at Spinnaker, so everything Kubernetes or maybe some other forms of communities. So I think these vendors that you talk about, one is the open source part of it, the other is that when you go to the cloud, the providers all provide the basic things already. If you look at Google Cloud, I was actually reading about Google networking a lot of things, lot of the load balancers, and all those things are inbuilt as part of the fabric. Things that you typically use, a router or a firewall or those things, they're all inbuilt, so why would I use a F5 load balancer and things like that? So I would say that I don't think their life is that easy, but there's definitely-- >> All right, so here's the question, who's winning and who's losing with cloud-native? I mean what is really going on in that marketplace, what's the top story, what's the biggest thing people should pay attention to, and who's winning and who's losing? >> I think the channelization of the cloud-native technology is definitely helping vendors like AWS, and basically the cloud vendors. Because no longer you have to go to VMware to get anything done, they have proprietary software that they had and you don't have to go there anymore, everybody can provide it, so the vendors, I would say the customers, obviously, because now they have more choices, they're not vendor locked in, they can go to EKS or AKS in a heartbeat and nothing happens. So customers and vendors are big winners. And then I would say the code providers are big winners. open source is really hurting some of the vendors we talked about earlier, I would say the big guys are the-- >> Cloud's getting bigger, the cloud guys are getting bigger and bigger, more powerful. What about VMware, you mentioned VMware, anything to their proprietary, they also run on AWS, natively, so they're still hanging around, they got the operators. But they're not hitting the devs, but they have this new movement with the Kubernetes, they acquired a company to do that. >> I would say that the AWS, VMware on AWS, essentially is, I would say almost a no-op for VMware in some sense, in some sense. They have to be, it's almost like a place to sell their ware. They used to be on-prem vendors already have the infrastructure, then VMware goes, sells to that customer A. Now the customer says that "I'm not using it on on-prem server A, "I'm on AWS, can you provide me the same software." So essentially, number one, by moving to the cloud, they're essentially selling to the same customers, the same stuff, number one. Number two is but once now I'm in the cloud, I would obviously PWA my workload to native AWS or Google, so I think in the long run, I would say that it's a strategy to survive, but I don't think it's a long-term successful. >> Operators don't move that fast, devs move much faster. I got to ask you, in the developer world, and cloud-native and DevOps 2.0, 3.0, what are the biggest challenges that's slowing it down, why isn't it going faster, or is it going fast, what's your view on that? >> Yeah, I think I would say that the biggest change is obviously, I just said, the people. In some sense, people have to transform, and in large organizations, there's a lot of inertia that allows people, they are deploying existing services the way they're deploying services, some of them are custom-built, the guy who wrote it and they no longer exist, they've moved on, and so some of them are built like that, but I think the inertia is basically now "How do I transform them over to the new model?" If the application itself is getting more broken into more microservices, then it's a great opportunity for me to migrate, but if it's not, then I'm not going to touch something that's actually there. So I would say is that technology's complex. Actually, every day we have people, there's a lot of interest, there's a lot of people learning, learning, learning new stuff, but I cannot hire one Kubernetes good engineer if I want to try hard, independently at least. Because it's hard. >> 'Cause they're working somewhere else, right? >> Well they work somewhere else, or the technology is still early enough that people are learning in droves, don't get me wrong there, but I think it's still fairly complex for them to digest all of that. I think in five years, fast forward five years, you would see that technology, knowledge would be more, so it would be easier to hire those people, because if we want to transform internally, let's say I have my enterprise, I want to transform, I need to hire people to do that. >> What are the use cases, what are the top use cases that you're seeing in your work and out in the field in the business that people are rallying around, they can get some wins, top three use cases for end to end cloud-native development? >> I would say the use cases are like if I'm doing any kind of container-based applications, obviously, I would like to do through the new model of doing things, because I don't want to build based on legacy technology, for sure. I would say that the other ones are new age companies, they're definitely adopting cloud first, and they're able to leverage the existing models, the new models more quickly. I mean obviously there are two things, I think that if I'm doing something new, I take advantage of that. >> Do you think microservices is overrated right now, or is it hyped up, or is it? >> No, I think it's real, absurdly real. >> And what's the big use case there? >> The velocity that people get by adopting microservices. Before, I used to work at Cisco, and there's a software release I have planned for six months to release a software because there's so many engineers, and developing so many features, they develop it over a period of time, and then when they actually integrate, there's two, three months of testing before it gets out, because the guy who wrote the code probably left the company already, by the time the software actually sees the light of day. >> Give some data from your perspective, you don't have to name companies, but for the people that are successful with DevOps, at an operating level, what kind of frequency of updates are they doing per day, just give us some order of magnitude numbers on what is a success in terms of it? >> Yeah, I mean the great examples are something like Netflix and all, 7000 deployments a day, but obviously that's in the top of the pyramid, so to say. Many of the other customers are doing, some are bringing in one to two a week, these are very good companies. This is for the service level, I'm not talking about the whole application. Because the application may have 10, 20, 50 services in some way, so there's a lot of updates going on every week, so if you look at a week timeframe, you may have 50 updates for that service, but I think individual service level, essentially it could be one or two a week, and obviously the frequency varies depending on-- >> Just a lot of software being updated all the time. >> Absolutely, absolutely. >> Well Balaji, great to have you in, and I got to say, it's been, we could use your commentary and your insight in some CUBE interviews, love to invite you back, thanks for coming in, appreciate it. I'm John Furrier, here in the CUBE Conversation we have thought leader conversations with experts. From our expert network theCUBE, CUBE alumni, and again, all about bringing you the data here from theCUBE studios, I'm John Furrier, thanks for watching. (funky music)

>> Announcer: Live from Las Vegas, it's theCUBE covering Magento Imagine 2019, brought to you by Adobe. >> Hey, welcome back to Las Vegas. Lisa Martin with Jeff Frick. We're coming to you live from Magento Imagine 2019. Welcoming to theCUBE for the first time Gary Specter, the VP of Commerce, Sales and Customer Success at Adobe. Gary, welcome to theCUBE! >> Thank you, I'm thrilled to be here. >> So there's about 3,500 people here, you guys have, from 60-plus countries. >> Gary: That's right. >> I think 100 sessions, 150 speakers. People coming down from ceilings, up from the floor. >> Gary: And we're streaming live. >> First ever live stream, yes. >> On the general set, first ever. That's right. Someone tweeted out that there are 35,000 people watching. >> Marketing probably loved that and then had a heart attack at the same time. >> Yeah, I'm sure they did. Not exactly accurate but I'll take what I can get. >> Tell us about the event, the spirit of the event. This is kind of, yesterday evening things kicked off. What of some of the things you've hearing from customers, partners, developers? >> So, I think the thing that's really unique about Imagine is that it does involve partners, the community, developers, along with Magento and our customers and our prospects. And it makes it really different because the developer community and our partners are so passionate about Magento. And I think everybody feels really good about the marriage of Adobe and Magento. You had technologies that were very well aligned, not overlapping. It enables us to extend the capabilities of what we can do from both the Adobe side or the Magento side. I like to say that the color palette got a lot bigger, and I think there's a lot of excitement around that and what that means to all of these people, developers, partners, the ecosystem, customers, prospects. So the energy is really high. I think obviously people are, what's next? And what does this mean for Magento? And I think it means investment, I think it means a higher rate of agility and an expansion of what we do. Acceleration of our roadmap. So I think people are very, very positive. And this is my fourth Imagine, and it's really, I've never felt the energy higher than at this Imagine. So it's exciting for me. >> Gary, one of the interesting ways that you talked about community and everybody wants developer communities, right? And you guys also have open source as a passion. But you phrased it in a way I've never heard before, is that you like going to sleep at night knowing that there's a whole bunch of other CEOs betting their business-- >> That's right. >> On this platform. >> Yeah. >> And it's not just you guys, so it's a really different way to think about open source. We often think of the developers and there's smart people outside your four walls contributing code. But it's not often couched in terms of the business terms. >> No. >> If there's are other people betting their business, thinking about how are they gonna help grow your business by building their business on top of Magento. >> That's what drives the passion of the community. These people realize that there's a symbiotic relationship here. If Magento successful, the ability for them to be successful is very broad. And if Magento's not successful, then you have to ask yourselves did I make the right bet? So a lot of our tech partners have build these great solutions on top of Magento, and it's a partnership. And you don't have that anywhere else, and again, I sleep better at night, to your point. I don't know where you got that quote, but it's actually mine, it's phenomenal. >> No, no, I think I got it from your Argentina 2017 talk perhaps. >> Actually, it's true. I know that all of these tech partners, these CEOs, they have my back. I'd like them to know I have theirs. And I don't think Adobe has any, there's no reason or rhyme why that would ever change. I think Adobe will enhance it. And I think that's why there so much excitement here. >> Well, and it's really a validation and what we talked about before, the prior segment, was now to bring the marketing tools, and the AI and all the power that's in that big building in San Jose, free the commerce transaction, really, to your point, adds so much more horse power to the total solution. >> Like I said, color palette just got a lot bigger. There's so many more things that we can do and so many more colors we can use to create these great experience for our brands and our customers, that we could've done before but it was a lot of work, but now we've got all of the makings of a platform that will enable that and we're already pretty far along in taking the Adobe experience cloud and making that work. And I'm just really excited about the future and what this offers for our customers and our brands. >> We've heard a number of guests that talk about just what you were referring to a minute ago, and that was really this symbiosis of Adobe, the power that Adobe brings, the data that Adobe brings, along with Magento, So a new Adobe commerce buy was just launched a couple of months ago, at Adobe Summit powered by Magento Commerce, but you look at it as analytics, advertising, marketing, commerce, fundamentals for managing what is a changing and highly demand customer experience, 'cause we want more and more things accessible from right here. So some of the feedback from customers, partners, developers since that announcement and now going "Ahh, okay now I can actually touch and see and play with this two symbiosis machines coming together." >> Yeah, I think it's not a hard thing to get. I think when the acquisition first happened, there's a little let's wait and see and make sure they get it right. And I think what I feel today, or what people have given to me today is the feedback that they're believers. They know that we're gonna execute on this strategy, and this strategy is gonna allow us to extend our lead on our competitors, which in return, allows these brands and these commerce players to extend their lead on their competitors. >> Let's talk about the small/medium business folks for a minute. When the announcement was made last year, the intention, right after Imagine 2018 I believe, for Adobe to acquire Magento, and then right after they acquired Marketo, there was some concern for is Adobe gonna kind of shift what Magento has been doing, so successfully for so long, away from focusing on those smaller merchants to the enterprise folks. Yesterday and today, we heard some great, exciting announcements with what you guys are doing with Amazon Sales Channel, with Google Shopping, and it sounded like the small and medium business size folks were going "Yes, this is what we need." Talk to us a little bit about that. >> I mean, you mentioned two, along with PWA and some of the other things that we're doing. While these can be leveraged in the enterprise, they were built for the mid-market in the SMB space. And there is no doubt that Adobe and Magento both understand how important SMB and the mid-market is. And in fact, we've seen acceleration in the SMB space since the acquisition, from the Magento side of the house. And Adobe is fully committed and knows that there's market share there to be had. And the application or the business problems that we solve at the enterprise, are still applicable for the mid-market and the SMB space. They're handled in a little bit different of a manner, but they have same aspirations. And the solution's gonna be able, when you look across everything that you're gonna be able to do, it plays for both markets. And Adobe has an incredible opportunity to really drive market share in this mid-market. They don't have a big footprint there today. Even if you capture just a small portion of it, and its our plans to capture a large portion of it, but even a small portion of it is gonna make a big impact on Adobe. So I think that we will see acceleration in the mid-market and in the SMB space with what we're doing, what we're developing together, and the different types of products that we can offer to those markets that Adobe has in its broader portfolio. >> And of course on the enterprise side, what we don't see here that we saw at Adobe Summit a couple weeks back are some of the really big integrators who have huge practices built around and on top of the Adobe tool set that now you get to leverage. I'm sure you're pretty excited about as running field. There's, again, a whole nother group of people, not necessarily CEOs, but managing partners, who have bet their jobs, bet their livelihood, bet their practices on this, and now you getta take advantage of those resources as well. >> Absolutely, and I think that a lot of the large integrators and partners, I think everybody's starting to understand that commerce is very different now than it was five or 10 years ago, right? I call it bite small, chew fast. And HP is a great example, where they started in some of the smaller APAC countries and then went to Brazil, and they're looking at the US last, but they're taking it a step at a time. One country, one country, one country. And a lot of our big retailers or brands that wanna expand globally are doing the same things, or companies that have portfolios of brands, one at a time. Bite small, chew fast. Launch, be successful, launch, be successful. And I think the SIs, including the large partners, understand that and they're changing the way that they look at businesses holistically. So I think right time, right place. >> Yeah, we had Gillian Campbell from HP on right after her keynote this morning, and it was an interesting kinda POC program. And I said what was some of the market dynamics that identified APAC as the right market to start in. And part of that, I think, was that from a historical legacy perspective of using Magento on the HP Inc. side. But some of the things I found interesting to them was that leveraging the data to understand the cultural e-commerce differences snd how different cultures interact with different social media platforms or purchasing platforms differently, and how important it is to really understand those commerce patterns and start to drive conversions from there there and then go success, roll it out, rinse and repeat. >> And she nailed it right? I mean, buy online, pick up in store versus having it delivered to your home, if you live in the middle of India, what's the reality of you getting that delivered in an hour? And if you look at country like Russia, which is very spread out, right, so there's not a high density outside of a lot of their major cities and you have a lot of the same issues. If you're gonna have it ship to your home, how long is it gonna take? It might be easier just to go pick it up in the store. And I think it's different in every region. And it's good to be able to have access to that data to get a good read on what are the things our customers want specifically to drive the experience they need within that region. >> Right, key for a company whether it's something the size of an HP Inc. or not, to be able to scale globally, but also have that sort of local market adaptation where you're able to react, understand the preferences in your markets, and deliver exactly what those consumers want. So having a tool like Magento as the power to enable that global scale regional adaptation, it's a driver. >> And I think you start to add complexity when you look at do they use their phone, do they use their computer? Do they use social networks and buy buttons? I have an interesting dynamic in my own house where I've got a 13-year-old, and the way that she would shop online is different than the way that my wife would shop online, which is very different from how I would shop online. I browse and go to the store. My wife uses her computer. My daughter shops on Pinterest, or Instagram, or Facebook. Very different journeys for the three of us, and we could be buying the same thing, and we're all gonna do it differently. So it crosses generations as well. >> So, Gary, it feels like kinda the dust has settled post-Adobe acquisition where everybody feels kinda comfortable, and it's been a year and everything didn't go bananas. So as you look forward now, after things have kinda settled, what are some of your priorities over the next year, If we sit down a year from now, what are you working on? >> I can tell you that for me, the biggest priority for me is to make sure that the mid-market and the SMB flywheel is effective, the way that we go to market, the way that we target that segment. And it's not that I'm not interested in the enterprise. I'm extremely interested in the enterprise. But we have a lot of people that are working on the enterprise. And Adobe doesn't have deep domain expertise around the mid-market. But with Marketo and Magento, you now do. So for me personally, I wanna make sure that that flywheel is well-run, it's well-oiled, it's set up for success, that operationally, the things that we do to drive market share in that segment run as effectively as the rest of Adobe on the enterprise side. It's a new sales motion for Adobe. But the good news is I think Adobe understands that. We understand that as a company, and I think over the next year, for me, that's where my focus is gonna be. >> So if we keep looking out to the next year, this is your fourth Magento Imagine. >> It is. >> Is there gonna be a Magento Imagine 2020? >> So I will tell you that there will be an Imagine 2020, and I will share details around that Wednesday. I've been asked to help close Imagine out, and when I do, I will be thrilled to announce our plans for Imagine 2020. >> So can folks watch that on the livestream tomorrow, Wednesday, that 15th? >> They can. >> Are you gonna be coming up from the floor, the ceiling? >> I think I'm probably just gonna dance on out. I have been invigorated, I love being here. Imagine is the one opportunity every year where I come out of this thing just feeling really good about the opportunities that we had ahead of us. And by Wednesday, although tired, I'm usually really happy to be going back and getting in the field with my teams and just driving opportunity. And I think we had an amazing one. >> Well, we'll be all watching. Is it imagine.magento.com to watch the livestream ? Or magento.imagine.com. go to to the Magento.com site, Wednesday tomorrow in the afternoon, you're gonna be able to hear more about what's to come next year. Gary, thank you so much for giving us time today. >> Thanks for having me, enjoy it. >> Our pleasure. >> It's great to meet you all. >> Excellent >> Thank you. >> For Jeff Frick, I'm Lisa Martin. Tou're watching theCUBE live from Magento Imagine 2019 from Vegas. Thanks for watching. (upbeat music)

(energetic music) >> Narrator: Live from Las Vegas. It's theCUBE, covering Magento Imagine 2019, brought to you by Adobe. >> Hey, welcome back to theCUBE. Lisa Martin with Jeff Frick in Las Vegas at The Wynn, for Magento Imagine 2019. We're excited to welcome to theCUBE T.J. Gamble. Not only the CEO of Jamersan, but a Magento Master. >> That's the big one right there. >> Right? >> CEO's important, but don't forget that one. >> Well, one of the things I wish our audience could see, is that awesome orange cape that you and the other Masters were wearing this morning. >> If I had had known, I'd have brought the cape, but the cape's going to get framed and put up somewhere, so we tucked that away in the bag. (laughs) >> So you have been a Magento advocate, part of this massive community of over 300 000 that they have accumulated in the years. For a long time now, this is the first Imagine post-Adobe acquisition. What is your take on this year's event? How is this community, in the year since the acquisition was announced? >> You know, the community is a little apprehensive, a little concerned. Change is always a concern for people. You know things are going so well, Magento's growing. Everything is positive forward, and then you have Adobe come in and acquire it. Some people, they're on edge a little bit, but I think you come to conferences like this, and you see the announcement of them rolling Sensei into it, and channels, you know the Amazon channels they rolling in, and you start to see the acceleration of features and innovation that Adobe brings when they bring those level of resources. And so, I think people are starting to really, kinda, get over that nervousness and start to feel the excitement of where the platform is going, and it's just about to explode, and get even bigger. >> It's a whole bunch of resources, right? The new investment, and as you've seen it kinda change hands a couple times: isn't it a pitted company, then going to eBay, then out of eBay, private equity, and now to Adobe, and yet the community has been very , very grounded and stuck with the platform all the way around. Opensource is a huge part of this story, small, medium-sized business is a huge part of this story. There's some really big announcements today, kind of integrating into the Amazon ecommerce system, integrating into the Google shopping systems, and I still can't believe that Adobe didn't have an ecommerce platform, before they brought a Magento. It fits perfectly into this kind of funnel process. >> It could not fit any better if they had built it up from the ground themselves. You know, if you've didn't see at least the promise of it right away, then maybe you weren't paying attention. It fits into what Adobe's doing just incredibly, because Adobe's all about experience, and so Magento being the most flexible e-commerce platform in the world, it does not have the limits that some of the other platforms have. So if you can envision it, if your customers desire it, you can deliver it on the Magento platform, which is what made it just-- I mean, it's like you say, it's just the perfect fit into the Adobe ecosystem. And I don't know why they didn't have an ecommerce platform. I don't know if they've tried and failed. I didn't keep up with the history of Adobe like I have Magento, but I'm glad we're here. I'm glad it worked out that way, because it's gonna be good for everybody. >> What are some of the things that you're hearing from those small and medium businesses, as Jeff was mentioning this morning, the announcement of the Amazon sales channel integration with the free extensions in the marketplace, Google shopping, aimed at squashing the fears of some of those small and medium-sized businesses may have had in the last year of being acquired by a company, Adobe, that has a very strong and oquias presence? >> Yeah, it's not so much those features are-- it's you're starting to see the investments, so that's good, but those features are more about ecommerce is getting more complicated. You're going to have to start selling in multiple channels, you're going to have to start selling on all of the social platforms. Facebook's gonna eventually roll something out. They're already doing it with WhatsApp. Instagram just announced the check-out within their site. So there's a lot of things you've got to manage, and data is difficult, so anytime a platform can out-of-the-box handle a lot of those integrations, you can now manage Amazon, you can now manage your Google products, widen your ecommerce platform, and it becomes the hub for small merchants to run their business, because most small merchants don't have a complex ERP as their hub for their data, so they can-- >> A lot of resources, right? >> Exactly, so if the ecom platform can help you manage that data, so you can focus on properly merchandising, that's great for everybody, because small merchants, the have and the have nots: the gap is widening, and so small merchants are going to have to have tools that they can leverage to keep up, because they're never going to be able to throw the money at it like somebody else can. I mean Amazon is spending eight hundred million dollars next quarter Three months, they're spending eight million hundred dollars to go from two day prime to one day prime. How is anybody supposed to keep up with that? You can't, so you compete on your own turf, but you still need tools so that you can leverage all of the available things out there, all of the available channels and stuff, that you can go out and bring ecommerce to your customers, instead of forwarding customers to your ecommerce. >> It's a great example, bringing it to the customers. I'm curious to get, kind of your take, on the small, medium ecommerce players out there, that's kind of experienced message, right? It's a big piece of the Adobe story. We were at Adobe's summit a couple weeks back, and clearly they've got a ton of resources. When they talk about this ongoing engagement with the client, be with them wherever they are, let them shop wherever they are. Like you say, that's easy if you've got a lot of resources, but I'm curious: are smaller merchants seeing that? Are they changing their way? Do they go to market where it is more of an experience, and the products come along, or a lot of them, that's just too big for them to bite? >> Both. You see both. It depends on the maturity of the merchant, what kind of resources they actually have to dedicate to it. The great thing about experience is, is once you have a platform with limitations, like an Instagram check out, that is an experience. Instagram handles the experience for you, so somebody finds a product, they one-click, and they've ordered that product, and all of the canceling that order, all of the notifications go through that platform, so they've made that very easy for a merchant to have that top-level experience. You know, if you're a small Mom-and pop, and you gain access to Instagram checkout, it's gonna be the exact same experience as the big brands that have access to it. As long as you understand your audience, and you're creating posts to engage with them, and you know how to merchandise your products, you don't have to worry about the technology stack. So I think this is going to be the great equalizer with where merchants are actually interacting with their customers. It's going to be a huge opportunity. >> What about, kind of, the competition with somebody, like an Amazon, where on one hand it's a great distribution channel for me as a small merchant. I got some specialty items-- I used to always joke, "Good news, just got an order from Walmart. Bad news is you just got an order from Walmart", right? So, you've got the scale issues, as you mentioned in Instagram. Suddenly I turn on Instagram, and my cup goes viral. How are small merchants kinda playing both sides of that coin: I wanna play with Amazon. I want to use their distribution technology, I wanna use Instagram with to pay. At the same time, I've got limited resources. Oh my God. One of these things hit and I get 100 000 orders pop up on my system tomorrow, I'm in trouble. How are people managing that? How are you helping them, kind of, strategise? >> You want to find the right tools. You need to understand your customers. You need to understand where to best engage them, and if you have limited resources, you have to be selective. You have to figure out which one is the best, like if I have all my customers on Instagram, then that makes sense, but if all my customers are on Twitter, then why am I putting resources into Instagram? So you figure out which platform is best. When it comes to Amazon, not to quote-- we don't want to quote 90s rap on here, but in the words of the Immortal Too $hort, "You should be getting it while the gettin's good". Take advantage of it while it's there, but sooner or later they're going to own your market. You understand that, you go in with eyes wide open, that sooner or later if you're successful, Amazon is going to take over your market share that you're getting from their platform. But until that happens, you have no choice but to play by their rules. These other platforms, it's a little different, because Amazon's dangerous because they own the channel, the actual medium and the platform by which transactions are happening, but they're also a competitor on that platform, which is what makes them dangerous. When you get in that situation, there just so many gray areas. We've never been in that situation before. The good thing about these other social channels, is that they're the medium but they're not also competing. Like Instagram is not selling on their platform, so it's-- somethings going to happen with Amazon. Every Juggernaut dies at some point. We maybe a 100 years from now before we see that happen, but, you know, something's gonna have to happen to stop Amazon. We can't have one platform, that is also a competitor in the space be 75, 80, 90% of all ecoomerce. We just can't have it, so something's going to happen between now and when we get there. I'm not the guide, I'm not Nostradarmus, I'm not going to prognosticate what that is, but changes are gonna happen over the next five years, because that's just not a market conducive to competition. >> Speaking of changes, there's a lot of change going on with the expectation of consumers, which we are every day, for many products and services, and we wanna have a personalized experience. We also want to be able to do everything from our smartphone, so this rise of, at least it's starting a transactional buying process on mobile is really critical. One of the things also announced today was progressive web apps. Want to get your perspective on that as a game changer in the next gen for shopping, and how might that enable a small to medium business to compete better with its competitors on Amazon itself? >> Yeah, PWA is if you don't know what a progressive web app is, you need to go do research right now. It was-- they definitely mentioned it today. It wasn't necessarily announced. It was announced, I wanna say, a year and a half, two years ago now. They've been working on PWA Studio in Magento for a while. Progressive web apps are a Google initiative, and Google usually gets what it wants. We won't talk too much about Accelerated Mobile Pages, or anything like that, but usually if Google's pushing it, it's a good thing. PWAs are interesting, because they're not a technology. They're a methodology. It's like responsive web design. It is just best practices for how you should deliver a mobile experience. It's a single page application, which means you load your app once, and then elements-- when you're moving through your site, elements that are the same don't refresh. Like if the navigation, the headers the same, when you click, it's still there. It doesn't flicker, it doesn't jump, it lazy loads things in, so it brings things in as it needs it, to save time, so that it loads faster, and to save data, because mobile usually you're on a cell network when you're doing that. It touches on all of the important aspects of ecommerce, which is why it's coming fast. Number one, you're gonna have increased conversions, because if you can browse around the website, and it's snappy, and it's fast, you're much more likely to order something. So you've got increased conversions there, that's number one. Number two, you're gonna get more traffic, because it's a Google initiative, Google rewards fast websites. So if you do it properly, and you've got the SEO right, Google's going to send you more traffic, and so it also leads to more loyalty, because you can have a more pleasant user experience, and your customers like you. Really in ecommerce there's really only three stats that really matter when it comes to how much money you're taking in: how many new customers can you get-- right, that goes back to the conversion rates, and Google sending you stuff-- how much did they order, were they more likely to order more when it's fast, and they go right through and they can browse through 1000 products really quickly, and then how frequently do they order from you? That's it. Every other stat in ecommerce trickles down to those, and PWA touches on all three of those, which is what's going to make it happen and happen really fast. Right now, if you move into PWA, it's a little bit of a risk, a little bit. That risk lowers every day, so if you watching this, two months from now the risk is a lot lower, but the technology is new, the tooling is a little new. It still needs to mature a little bit to be readliy available for the masses and affordable, especially for smaller merchants, but if you do move now, you can have a serious competitive advantage for years. If you're building a website right now, you 100% need to at least look into PWAs. If you're gonna launch it, later this year, you're gonna launch it early next year, you absolutely have to look at it, and if you're going to start the website next year some time, I really-- it's going to be an odd case that launches a website by summer of next year, or after, that is not a progressive web app. It's gonna be that fast. >> T.J. I wanna get your perspective on something else that we're talking about here at the show, and that's AI. You know, talk about AI, and machine learning for a long time, and as we kinda suspected, really the easy application flows are inside somebody else's application. We're seeing Adobe use AI on the back-end or on the marketing side, 'cause the whole idea is to get you what you want, and as somebody once said "If it's done poorly, it's creepy. If it's done well, it's magic". So I wonder if you can kind of reflect on how AI is changing what you can build, amd what you can deliver to the customer, even if you're an SMB, 'cause you're leveraging AI back in systems, way back supporting it. >> Yeah, the AI is a buzz term right now, and buzz terms are always really popular about five years before they're useful, and we're probably a couple of years into AI really being a huge buzz term, so it's starting to creep down market. With something like SenSei being added to Magento, you're going to see it creep even further down market. I'm excited about it. What AI in ecommerce-- where it's really going to play is understanding your customers in real time. Those who understand their customers, can provide a better experience. And how do you understand your customer, the differences between them, what they're looking for in real-time, while they're interacting with your website, that's really difficult to do, and it's impossible to do without something like artificial intelligence, so leveraging it for your product recommendations, for your search, for what content you're going to show to them. It's still going to be a lot of work, unless we figure out how to AI create all that content. Still going to be a lot of work, but just having the ability to understand the subtle nuances and differences between your customers and their desires, and then to be able to actually react to those in real time, is going to be incredible. >> Especially as there is not only so much noise out there, but there's so much competition, pretty much every product and service. T.J. we thank you so much for joining us on theCUBE this afternoon. Next time you gotta come back with your orange-- >> I'll bring the cape. >> Magento Imagine cape. >> If they would have just told me, I'd have brought it, but-- >> Now you have to come back. >> Now I've got an excuse. I'll forget it next time so I have to come back again. >> There you go! (laughs) Allright T.J. thank you so much for joining us. >> Thank you. We appreciate your insights. For Jeff Frick, I'm Lisa Martin. You're watching theCUBE live from Las Vegas, Magento Imagine 2019. Thanks for watching. (energetic music)

>> Announcer: Live from Las Vegas, it's theCUBE covering Magento Imagine 2019, brought to you by Adobe. >> Welcome to the theCUBE, I'm Lisa Martin at The Wynn, in Las Vegas for Magento Imagine 2019. This is a three day event. You can hear a lot of exciting folks networking behind me, talking tech, talking e-commerce innovation and we're pleased to welcome fresh off the keynote stage a couple of guests from HP. We've got Gillian Campbell, the Head of Omni-channel Strategy and Operations. Gillian, thank you for joining us. >> Thank you for asking us. >> Our pleasure and Herriot Stobo, Director of Omni-channel Innovation and Solutions, also from HP. Welcome. >> Thank you very much. >> So Gillian fresh off the keynote stage, enjoyed your presentation this morning. >> Gillian: Thank you. >> Everybody I think in the world knows HP. Those of us consumers going, you know what actually, that reminds me, I need a new printer. >> We can help you. >> Thank you, excellent. Whether I'm shopping online or in a store. So you gave this really interesting keynote this morning talking about what HP is doing, starting at Apache. You really transform this shopping experience. Talk to us a little bit about HP, as I think you've mentioned it as a $50 billion start up and from a digital experience perspective, what you needed to enable. >> Yeah, so as I said, HP have been around for 80 years and in 2015, we became our own entity, HP Inc., and really started looking at how do we enable digital to be pervasive through everything that we do. Our internal processes are reached to customers and identified a great opportunity to really take leading edge and our digital commerce capabilities and we already had some early proof points and APG so we launched a global initiative and we're now on that journey to enable that best in class experience through the digital platforms. >> So Herriot talk to us about, you're based in Singapore. >> Yes. >> What were some of the market dynamics that really made it obvious that this is where we want to start building out this omni-channel strategy starting in Apache? Is it, you know whether, Gillian you mentioned it before. We started retail spaces, some being expensive. Is it more mobile experience and expectations on consumer's part? >> I think we've got a mix of different starting points across Asia. We've got some mega cities like Hong Kong and Singapore rising, Tokyo. And then we've got you know emerging markets across South-East Asia. We don't necessarily have any single market place that controls the entire market as we might see in other regions and so we've had a lot of runway to go and experiment and try new things. We also have an ecosystem of branded retail in Asia. Not in all markets, predominantly in India but also in some markets in South-East Asia that allow us to really blend the experience across both offline and online and to give customers choice at the end of the day. Let them decide how they want to shop and interact with our brand. So we have been running Magento 1 since we first launched our online store businesses in Indonesia and Thailand about six years ago and then we moved into China, replatformed, lexi-platform onto Magento 1 and then that was really the foundation of what we decided to go and build upon to become a global program. so we already had some proof points under our belt with Magento so. >> And what were some of those early wins that really started to make this really obvious that this omni-channel experience, the ability to give customers choice? Whether they want to start the process online, finish it in store, vice verse, or at least have the opportunity to have a choice? What were some of those early wins and business outcomes that you started to see? >> I think even just from because we're all, customers are people. Whether you're a corporate customer, a small business, or a consumer, we're all people and we all know that we shop that way. So essentially the storyline on that back to HP was we have to enable experiences that we would want to experience as well and it was quite a shift for a tech company who were really all about the products to be thinking about, well, how do we really enable that end to end experience? And as Herriot said, the runway was open. We already had some proof points. I was new in the job so I was like all listening to, you know, what the team were telling me. We have a great opportunity here and took that formered as a new concept for the company. We got funding approval and you know the rest is the history and the journey that we're on. So I think it was just taking a different perspective and a different approach and working with a team who already had the, built some of that credibility and others proof points with the earlier deployments and I think we kind of took a risk at the time when we started the engagement with Magento. They weren't in that leadership quadrant and we took a risk to say, let's partner with an energizing company and do something a little bit different and we're still here working towards it so I think that for me was the breakthrough, was just having the tenacity to say, we're gonna drive this path forward. It may not be how we would have done things in the past, but we're a different company now. and we had much more thinner air cover to be able to do that. >> Little bit more agility and flexibility. >> Yeah, absolutely. So you guys, you talked about, Gillian about all the buyers. We are the consumers and we have this expectation, growing expectation that I want to be able to get any and transact anything that I want to buy, whether I'm a procuring person for a company and I'm traveling but I need to approve expenses or I'm a salesperson maybe sitting next to a medium-small business customer. I need to have the option at least to have this store front. What are the things that you guys launched in Apache, leverage be the power of Magento Commerce was click to collect. So tell me a little bit about from maybe an e-commerce cultural perspective, what is it that makes people want to have the ability to start online and actually complete the transaction in a physical location? >> Essentially I was in the Advisory Board yesterday and one of the other customers of Magento said, "Until we can invent a way to touch and feel online, "there's always gonna be a need to have, "outlets where you can go touch and feel." and I think with the click and collect, some of our products are, you know, high-end PCs and gaming devices and printers that is hard to get a good appreciation of what it looks and feels like online. So if you're gonna be spending you know, a significant money you may want to go in and be able to see the colors, feel the finish. You know some of our newer products with the leather portfolios is not something you can truly appreciate without touching it. So I think we have to enable again those customers who do want to experience, feel the weight, you know feel the finish, see the color scheme 'cause its usually important, again not for all customers. Some customers are quite happy to spend thousands of dollars on an online purchase without seeing it and then making sure they have a good facility to be able to, well if they wanted to, to return if they got the normal the product. >> As we look though at like we talked about, this consumerization of everything where we have this expectation and the numbers, I think you even mentioned it maybe in your keynote, Gillian, the numbers of, or somebody did this morning, like upwards of half of all transactions are starting on mobile so we got to start there. What are some of the things that you guys have seen in region in terms of mobile conversions? >> So there's still a massive gap between desktop and mobile conversions, first of all. I mean we're not anywhere near parity between the two. But obviously we're seeing a huge volume of traffic coming in as well and it's shifting that way, so you would expect it to drop as result. I think with Magento what we've seen over the, you know, past few deployments that we've been running and that were over 8% improven. But the desktop conversions are far higher. I mean in terms of improvement and actual conversion so we've still got a long way to go. There and that's a naturative process, that's a journey that probably never ends in terms of ongoing optimization and experimentation. So yeah a lot happening there. I think just on the click and collect topic as well that you were asking about people wanting to start their journey online and then come into bricks and mortar. We're seeing a huge uptake on it just by experimenting, by piloting. Over 26% of our consumer notebooks in India that we've put onto this program were being collected in store and this is in environments which are inherently chaotic on the streets. You don't want to go out there but actually I'm passing that way anyway so it's just easier for me to pick it up on the way home and probably quicker 'cause I can collect in two hours. So it's just giving people customer choice, no additional incentive and it seems to take. So now we're expanding out regionally. >> So you said there's, this morning, Gillian, in your keynote eight markets covered, mostly Apache, but also in Latin America. >> We just started in Latin America, again, the development process is not just as simple as we're switching on. So we've been doing a lot of work for this past six months with Latin America. The team there, they're super excited to get launched. There's some differences there, we've talked about the regional variation around fulfillment models that we have to adapt towards but the intent is to get Latin America deployed, leveraging some of the layer lengths from what we've done in Asia specific and then starting to move around into more the near region and then ultimately back into the US and Canada. >> So as you look forward and of course you've mentioned we're on this journey right, what are some of the key learnings that you're going to apply? You mentioned this morning, something that was very intriguing and that was, respect the integrity of the Magento platform. Talk about that in context of some of the other learnings that you'd recommend for colleagues and similar or other industries to be able to achieve what you have on a global scale. >> I think from the outset, there was this kind of like baggage of deployments of capabilities not just in commerce but deployment of capabilities across HP that we had not respected the integrity of the platform. We had adjusted the code and developed on the code to make it HP specific and with the new HP Inc. company one of the guided principles was no, when we buy the leverage software applications respect it for what it is and adjust business processes and adjust integration rather than adjust the core so that we can get the advantage of the longer term opportunity without creating such like. So it was really just a foundational, you know, let's not go in here with a mindset that we know better than the core. The core is there for a reason and then build around that and ensure the integration and I think you know with Herriot's leadership, we've been able to you know, just keep that firm is why we can be successful and be successful longer term as well. So that all the, and one of the things we talked about yesterday also is the excellent capabilities that are coming with Adobe and the integration that we talked about the recommendation of Adobe Sensei and integrate that with Magento Core. If you don't keep to the respect the integrity, those upgrades and capabilities become really hard to take benefit of so we're really excited about, you know, again, sticking with the core and enabling and growing with the core with Magento and Adobe. >> I would just build on it, I mean I think its never gonna be easy running a global commerce platform. Single instance, multiple countries, you know, 27 markets to get started with. Who knows where we're gonna end. Its always gonna be a challenge so we have to keep it as simple as possible. These upgrades are fast and furious and that's great and we all gets lots of benefit but if we start going down our own path, we've lost it. We've lost the benefit. >> And that's one of the things too that Jason Wolfsteen said this morning was that the word Magento was gonna be enabling businesses to achieve without getting in their way and it kind of sounds Herriot, like you're saying the same thing. That we've gotta be able to respect the technologies that we're building so we don't get in our own way and we keep it simple as we wanna expand globally. Ultimately at the end of the day, you're creating these personalized experiences with consumers and that personalization is so important because it's more and more not only are we transacting or wanting to on mobile but we want our brands like HP to know us. We want you to know our brand value, you know our average order value so that we can become part of the experience but also ideally get rewarded for being loyal. >> Yeah. >> Yeah, I mean, I mean just coming to mobile again but you know, 2.3 delivers the native PWA capabilities which we're super excited to get started with. You know we've got so many used cases for this straight away, right out the box but you know we've got to do it gradually, do it the right way. I think we're also aware that we're not gonna be able to run with PWA in all markets straight away 'cause not all markets are ready for it quite frankly. User behavior- >> Is that a cultural thing? >> It's purely cultural. Maybe technical and just technical ecosystems as well. Places like China in particular, where, you know, customers use app stores but they use app stores from every single phone manufacturer right there. That's where the customer is. We can't just move away from that so we need to keep some of those legacy approaches for a little while and then yeah test in other regions and then take the learnings when we're ready to adopt it. >> Exciting so here we are at, this is the first Magento Imagine since the Adobe acquisition. Gillian, let's wrap things up with you. What are your, you mentioned you were part of the Customer Advisory Board yesterday, just some of your perspectives on this years' event now that Magento is powering the Adobe commerce cloud. >> I actually attended the Adobe Summit a few weeks ago here also in Vegas and started to see the thread of commerce coming into that conference and then seeing the Adobe, the experience, coming into Magento and I just think it's a perfect combination of opportunities especially for a company like HP where we were linked in to connect, you know, marketing and sales and support across the customer journey and the capabilities with Adobe and some of the marketing stack, and then the commerce stack, and there was support bringing that together is a super exciting opportunity for us. You know the partnership that we have with both Adobe and Magento again as one as I really, they were just starting what the next journey was gonna look like. >> We feel that about so many things, we're just starting, but Gillian, Herriot, it's been a pleasure to have you on theCUBE for Magento Imagine 2019. Thank you both for your time. >> Thank you, thank you. >> Our pleasure. I'm Lisa Martin and you're watching theCUBE live from The Wynn Las Vegas at Magento Imagine 2019. Thanks for watching. (light music)

>> Announcer: Live from the Wynn hotel in Las Vegas, it's theCUBE covering Magento Imagine 2018. Brought to you by Magento. (music fades out) >> Hello everyone welcome back we are here, broadcasting here at the Wynn in Las Vegas for the Magento event here, theCUBE with exclusive coverage 2018, Imagine 2018. And I'm here with John Stockton, who is the Vice President of Product Management at Magento. Tell me about the new product news really modernizing the e-commerce tag and enabling digital growth. Great to have you. Thanks for coming on. >> Great! Thanks for being here. >> So, you guys have a digital experience culture here at the company but one of the things that's interesting is the modern stack of e-commerce needs an upgrade. >> John S.: Right >> It's been talked about for years. You guys are doing that, you've got thousands and thousands of customers and partners you've got product news here. >> John S.: Yep. >> Let's dig into the news, what do you guys have, what are you refreshing, what are you bringing to the table? >> Well it's a really exciting time here to be at Magento. We are announcing a number of big initiatives here at the conference. The first is around our superior shopping experience goal, our goal is to continue to support an evolving consumer culture where more and more people are doing things on mobile devices, more and more people are doing things in store. >> We've been working very closely with Google on their progressive web apps initiative, and we'll be announcing here our PWA developers studio is going to be an early adopter program and generally available at the end of the year. That's going to enable Magento merchants, and our partners, and our ecosystem, to be able to create really cool progressive web apps. Progressive web apps are going to revolutionize the way we experience digital commerce on mobile devices, they're much more performant, much faster. They're going to be the way of the future and I don't think any merchant in the world can afford to ignore them. Our PWA dev studio is going to make it easy for merchants to create those apps, and that's really exciting. >> That's the first big news. >> John S.: That's the first big news. >> Let's dig into that, I know you got two more I want to get to but, this is kind of important. We've been hearing about mobile first for years. >> John S.: Right. >> Certainly Google has put the screws on search results, >> John S.: Absolutely. >> response time on mobile. What's the impact to customers on this news, what does it give them? >> Yeah, for a lot of our customers more than 50% of their transactions today are coming from mobile so it's just a trend that they can't ignore at all. What happens when you take a native app in mobile today is, you might be able to do a bit of work with responsive design but the performance expectations the consumers have for a page loading instantaneously, for no delays in scrolling around, for checkout. Increasingly things like Apple Pay and Google Pay, the ability to just do a facial recognition and actually check-out and pay for something on a phone. That's what consumers are going to expect in the future, and PWA is really the only way you're going to be able to meet those expectations. >> That makes them have to take a web response design, >> John S.: Right. >> and make it feel like a native app. >> John S.: Yes. >> Both performance, and experience. >> John S.: (talking over John F.) Very high performance and very high integration with the actual phone itself. >> Alright so the next announcement is what? >> The next big this is on our Omnichannel initiative we want to enable our merchants to be able to sell effectively in any channel. The big news there is we are going to be releasing a Amazon sales channels module for Magento commerce that enables the Magento merchant to push their catalog out to the Amazon marketplace, do things like dynamic competitive pricing, and then track all that transaction data as their products are sold on Amazon. So from directly within Magento they can manage both channels, and see all their results all in one place. >> So this is kind of interesting. Amazon obviously is Amazon, we know what's going on with those guys. So what's the improvement, I mean obviously you can publish-- >> John S.: Right. >> Amazon marketplace. What's the innovation, where's the new updates, you mention pricing, the relationship with Amazon is it the code native, what's going on? >> The innovation is in the data integration of getting you product catalog into Amazon which is going to be easier than ever before. You're going to have visibility into performance within Amazon directly from Magento, and then all that transaction data is going to come back to Magento. So when you're using Magento commerce or our business intelligence tools, you're going to have a single source of truth for how you're performing across both channels. >> John F.: And plus massive sales opportunity for growth >> Right. >> Just on a sales perspective. (laughing) >> Right, right, yeah, yeah. >> Amazon's the big gorilla. >> Yep. >> Okay so third announcement? >> The third announcement is in our business intelligence planning so we have a Magento business intelligence product is now available to all Magento customers who have a commercial license with us, at no extra cost, so. MBI is a full-stack business intelligence data warehouse solution that tracks all your data from all Magento products, commerce, order management, and rolls it up into great dashboards, visualization tools, allows you to integrate it with Google analytics and other data sources, so. We're collecting rich data on consumers behavior across both your physical store, with our order management solution, and your online properties with Magento commerce, and giving you really an unbeatable combination of data points on your consumers that's going to really unlock a lot of potential value. >> So does this bring more wrangling to the table, less complexity, offline-online kind of perspective? >> Yeah a lot less complexity. It is an out of the box PI solution, it's an out of box data warehouse that integrates the core data that you want. We have a pro edition that allows you to integrate your other data, so you could integrate CRM data or other things. It's a great way to get a single source of truth reporting solution for all of your commerce touch points. >> And that's all customers, no charge, part of the platform? >> Yeah the essential edition is now included no charge, and there is a pro edition that is a premium product. >> So product, you run the product management, which you got to-- >> Yep keep your eye on the prize, you got to look at the engineering, and then look at the customers. You've got to kind of make decisions, so as you look at the growth of commerce, just in general, online. >> Yeah. >> There's no denying that we're going to a whole nother level. >> Yep. >> (laughing) How do you guys prioritize? (laughing) Because I mean, there's like so many things you could work on. >> Yeah, it is-- >> What are some of the guiding principles, how do you guys make these decisions, what's the internal DNA like? Share some inside baseball, what goes on? >> Yeah sure. You know our philosophy is the three pillars I mentioned, superior shopping experiences, omnichannel, and business intelligence, those are areas that we know are durable areas of investment that are going to provide value to a merchant. The fourth one is our open ecosystem, and that's really unique to Magento, so we partner with over eleven hundred partners, we have an open source platform that a community contributes to. We're doing a lot to get a lot more leverage out of that, and that allows us to innovate a lot faster. So for example, the day the Amazon patent expired, we had a community partner submit a one-click order feature into the code base, we ran it through a quality assurance product. And I believe we were the first to market with one-click order. So what happens is, even beyond the core organic development that the internal R&D team is doing, we have so much innovation going on, that's customer driven, partner driven. That gives us a very rich opportunity to go into areas that, even where we are following our partners or our community, we're able to incorporate things into the product as the market demands them. >> You know I think that's a unique and compelling thing that's different I think about you guys that I like is, you know the old model was we got to own everything, >> John S.: Right. >> every little feature. And you know you look at startups out there, oh that's really a feature not a startup, that's the old joke of silicon valley but, the reality is, is that, you have partners that have business, >> John S.: Yep. >> So they could build a really hyper focused feature, >> John S.: Yep. >> Bring it to the table, you incorporate it in through your ecosystem, >> John S.: That's right. >> That's what you're referring to, right? >> Yeah absolutely, and you know, I think the business model around closed platforms is kind of fundamentally flawed in that regard, because the vendor can never keep up with the rate of innovation. Especially not a space like e-commerce where things are happening so fast, it would be impossible for any one vendor to stay on top of it all. >> John F.: So your strategy: Stay to your core pillars >> John S.: Yep. >> Let the ecosystem innovate, you've got the open source which is the playground for more innovation-- >> John S.: Yep. creative ideation. And then you have a pipeline in through the product team. >> Yep. >> For QA, quality assurance kind of thing going on there. >> Absolutely, absolutely. >> And then ship it our to all your customers-- >> That's right. >> Through what, marketplace? >> That's right. Well we have a variety of ways to get out. So our partners can get extensions out to the market through our marketplace, which is the best place to get Magento extensions. We're also doing a core bundled extension program, so we will be announcing tomorrow that we're-- we have three new core bundled extension partners. We're partnering with Vertex for tax, (mumbling) for deferred payments, and Amazon Pay as a payment method. So those are integrations that those vendors have done to Magento, that we have certified and blessed as the highest quality. And merchants who deploy Magento 224 which will include those bundled extensions and turn them on with the flip of the switch. So we're doing a lot more innovation to make those solutions available to customers. >> I mean it's innovative because you have some things that might not be in the product, well we've got resources, there's always the contention for resources, but when you've got partners innovating. I just saw folks, I was taking a lunch break walking around, you got a coin crypto solution here, hey we could do, you know, 400 tokens. >> John S.: Yeah. >> Or I don't even know, it's like thousands of tokens but, if someone wants to do say cryptocurrency. >> John S.: Right. >> A partner steps up, >> Yeah. >> And that's enabled, that's an option >> Yes, yep. >> So today I want to take bitcoin, >> Yep. >> You could fit that in. >> John S.: Yes, absolutely. it also gives us great advantage on our global reach as well because we can work with partners who want to localize this and take us into markets where we don't have direct presence today. But the open platform and the fact that we're so partner friendly and ecosystem friendly, makes it possible for other people to build businesses and to take us into places faster than anybody else. >> We were talking before we came on camera about your previous experience, you've been in the industry for a while, you've seen some waves. We know, we're old enough to see some of those. E-commerce, and again, e-commerce is 25 years old, and you know it's always been kind of monolithic, you know, one directional. >> John S.: Right. You push to an endpoint, yeah you got JSON now endpoints but the demand is for rich experience, consumer to consumer potentially, >> John S.: Right. >> Peer to peer action, >> John S.: Right. >> All this stuffs going on, what attracted you to these guys for you job, and what do you look at in terms of big waves, that you guys want to ride on. >> Yeah, you know what attracted me, Magento is my first opportunity to be at an open source platform company. And so the excitement all around here at this event is really validating that this is a fun place to be and this is a great approach to market, I think it's a much more interesting way to build products than the old school ways are. So I'm really excited about that. You know, to your point about evolving needs, both the omnichannel need and then also, we've been doing a lot of b to b scenarios, so we have customers using Magento in very innovative ways that again, are outside the box of what we intended when we first built the product. We have partners here who are doing marketplace solutions right now, where our customers are hosting marketplaces where other consumers are selling products to each other, which is a really cool use case. We have always had customers using us in a b to b context, even though we didn't have native b to b functionality built in. In two dot two which just came out last year, we made a big investment to beef up some b to b capabilities in the product and we'll be making more investments in those in the coming years as well. >> Everything flows from the b to c because, mobiles expected there-- >> John S.: Yeah. >> Now you're seeing mobile first-- >> John S.: Yeah. >> cloud first-- >> John S.: Yeah. >> for b to b-- >> John S.: Yeah. And they're kind of upping their game-- >> John S.: Yep. >> You got to up your game, you know everything's online now. And a lot of, if not all of our b to c customers have some b to b dimension to their business, right? So it makes sense for their digital platform to serve not only their direct consumer up fronts, but all their commerce initiatives. >> What's the big thing that you see out there, for the b to b customers because I see b to b really, moving faster now-- >> John S.: Yeah. >> Than ever before-- >> John S.: Yeah. >> Because they used to have the old websites-- >> John S.: Right. >> Now they're puttin' rich media on there they want to do some, you know, some for some service-- >> John S.: Yeah. >> Everything's moving digital-- >> John S.: Yeah. >> On b to b-- >> John S.: Yep. >> Is it awakening, is it-- >> John S.: Yeah, no I think-- >> like, they're waking up and smelling the coffee, what's going on? >> I think it is, I don't think, you know, people are people, and whether you're shopping for a blender or you're a procurement officer and you need to buy IT equipment, you have expectations that you're going to be digitally served with a high quality. The market is moving that way very fast, there's a lot of potential to create better experiences for your customer that way. There's a lot of opportunity to get more efficiency out of your processes by bringing them to the digital so that they can carry on. >> And then obviously outsourcing the role of the community is super important. Talk about the labs, Magento labs, how does that fit into all this, we saw some folks up there gettin' awards on keynote today. >> John S.: Yeah. What's this labs thing about? >> So we have a program with our Magento masters where we recognize people for contributions to the community and so we gave out awards yesterday morning for the top contributors. We had in the two dot two dot four release, that's coming out tomorrow, we had over 200 community contributions before submitting. Enhancements to the product, fixes, improvements. Security improvements, performance improvements, so the amount of contribution to the community is still, really, from the community is still really really valuable and we really recognize and reward and support that. >> Real competitive advantage. So I got to ask you the data question. >> John S.: Yeah. >> The role of data's so valuable you're seeing data, whether it's IOT devices being potentially in retail outlets i mean, wearables is a IOT device. >> John S.: Yep. >> You know Apple pay could be considered a wearable, to some degree as a device. But data moving around, having data integrate-- >> John S.: Right. >> Is a huge issue-- >> John S.: Yes. >> How is that impacting your business, obviously can imagine pretty significantly impacting both market intelligence, real-time bidding, real-time user experiences-- >> John S.: Yeah. >> Without data you really can't get near real time. >> John S.: That's absolutely right, yeah. >> What's your view on that? >> So data is going to be the next big revolution, I think, as digital commerce spreads across all panels consumers are going to expect you to know who they are when you walk in the store, you, they, you remember the past transactions and interactions you had with them. You're personalizing your outreach and experience for them. Data is key to all that. Right now we're in a foundation building phase where we're getting all that data into Magento business intelligence, we're building a data lake. We recognize, for our customers, that connecting all that data together and rationalizing it all is a challenge. We think we can do a lot to solve that challenge for them through our business intelligence tools and our data. >> John great to have you on theCUBE sharing the insights, final question for you is what's one or two things that someone might not know about Magento that they should know about? The approach, the products, how you guys build technology, happy customers, let's see one-two things that they should know about, that may not know about. >> I would say I mean, I think people know Magento as an opensource platform, an opensource brand. They may not know that we are having a lot of success up market right now, we are increasingly getting pulled into enterprise businesses and running very large-scale businesses for people. They may not know us as a b to b solution provider, they may think of us as a b to c only solution provider, so we're doing a lot in b to b right now. They may not know how much we've invested in the people of Magento. In the Austin office where I work, we've more than doubled in size in the last year. So we are growing like crazy, we're bringin' a lot of talent to the company and it's a great place to be. >> John F.: Yeah, you've got a great ecosystem. And what's the reason why you guys are being successful, speed, performance, flexibility, all of the above, what's the key thing? >> All of the above, I mean, I think we get a lot of pull from the market, the Magento brand is still very solid, there's a lot of people out on opensource who are looking to upgrade and move up and that creates a great pipeline for us. I think the competitive landscape is, got options on the lower end and options on the higher end that are a little bit old-school. I think we have an advantage in the innovation and the things we're bringin' to the market that's going to serve us well in the future. >> The pressure to go digital all the time, 100%, is really on every ones shoulders these days, everything's digital. >> John S.: Yep. >> John Stockton Vice President of Product Management at Magento here at Imagine 2018 in Vegas, theCUBE's exclusive coverage. Be back with more coverage after this short break. (pop music)

(upbeat music) >> Narrator: Live from the Wynn Hotel in Las Vegas, it's theCUBE, covering Magento Imagine 2018. Brought to you by Magento. >> Hey, welcome back to theCUBE. We are at the Wynn, Las Vegas with Magento at their Imagine 2018 Conference 3000 plus people here, really cool day we've been talking about all things commerce and digital commerce innovation. Excited to be joined by Peter Sheldon, the VP of Strategy from Magento, thanks so much for joining us. >> Thanks for having me, yeah. >> So this has been really fun, there's a lot of merchants behind us here in the marketplace, we've been talking to some of your customers who, a direct consumer, we just had Coca-Cola on. But we also see a lot of businesses here. Talk to us about what you guys are doing to help, not just the retailers, you started, right, being building this reputation as Magento, helping retailers to target online shoppers, but there's a lot more opportunity that you guys have been successful in, in the business, B2B space. Talk to us about, the vision, the strategy, on both sides. >> Yeah, so I think what's fascinating about Magento is their diversity of our client base, and I think it's a little bit of a testament to the flexibility and agility of the platform, but you're absolutely right, we started out primarily serving the B2C market, working with retailers, CPG firms, branded manufacturers and so forth, luxury goods. But commerce has really evolved and moved on, and I think what we see today is a lot of opportunity in B2B, and so when I think about B2B, these are typically manufacturers and distributors wholesalers who are looking to digitally transform their businesses, and really make the buying process more efficient. So whether it's a distributor who's buying products from a manufacturer, or an end-buyer might be a contractor, especially in home improvement, or something, who needs to buy tools and materials from either a manufacturer or distributor. Traditionally, it was a very traditional sort of, retail based buying experience. You would go to a branch, a distributor's branch face to face, engagement over sales person, or the sales rep would come visit you, and you would through a paper catalog. >> Relationship based. >> Relationship building. >> Exactly. >> And so forth, and that's a high cost of acquisition channel, and so I think what a lot of B2B firms are realizing is there's significant, first of all, there's demand from the buyers because all buyers have their consumer life as well, e-commerce is so mature and the B2C space with Amazon, that buyers are incredibly frustrated if in their business life they don't get that great ease of e-commerce experience, and instead they're still faxing and picking up the phone or even if it is a digital order entry experience, it's really terrible, and it's not intuitive to use, it's not easy to use. So, there's a real demand to digitize that ordering process, but more importantly, I think for B2B firms, there's some real operational savings and putting margin back into the bottom line by creating a lower cost of doing business and serving customers, and it's e-commerce and so I think we see one of the areas where a lot of firms first start out is in the spare parts business, so we work with a lot of manufacturers. It just makes so much sense to move their spare parts and warranty business online, so it's very easy to re-order spare parts, I don't need to pick up and call my sales rep to do that, I can do it in a digital manner. But I think what's really fascinating us is just the diversity of different B2B clients, their backgrounds, there's not a vertical that's immune to this. We see pharmaceutical companies, we see agriculture, we see traditional heavy manufacturing, light manufacturing, life sciences, you name it. And so the diversity of clients we see wanting to use our platform for digitizing their selling relationship that they have, it's really fascinating. >> We've heard a lot today that commerce is limitless, and it sounds like that's kind of what you're talking about, is that this day and age, every buyer is a consumer at some point, right, or everyday. We have these expectations, Amazon set the bar really high and every company to be successful has to be a technology company. So, from your standpoint as the VP of Strategy, some great exciting things have been announced at this year's Magento Imagine Conference. Share with us some of those, and especially I'm curious what you're seeing in the mobile space. >> Yeah, so mobile's really fascinating and I think it actually continues on to what we were talking about a moment ago in B2B. So, if we think about that B2B buyer, often the B2B buyer is an engineer, a contractor, a field service representative. They don't live in an office, they don't have ready, convenient access to either a laptop or desktop. They are out on a site, they are, if it's agriculture, they're out at a farm. >> In a field, yeah. >> Or in a field, or they're in a construction site, or they're inside a plant, and their primary means, or their only means of digital access is their smartphone. And typically they're having a slightly larger screen, phablet type smartphone, probably in a hard case if it gets dropped and so forth. But the way that they're going to engage with a brand digitally and to make a B2B commerce order, to look up the status of their order etc. It's not, we often talk about mobile first, it's not mobile first, it's mobile only. They don't have easy access anymore to desktop, laptop. If you're not serving them through mobile, they're not able to buy from you and they're going to buy from one of your competitors. And we see this thing across the board. Perhaps less so here in the US, but in some of the merging markets where we operate and where we have great success, markets like India. They again, it's very much a mobile only society now, and certainly in mainland China and other sort of emerging markets. So I think we're rapidly going down a path where if you think even in our day to day consumer lives, as we're thinking about making purchases, we're sitting on the couch, we're multitasking or watching television, but it's our phone that we're interacting with. >> Right. >> And if we think about the challenge today about buying through a phone, traditionally commerce purchase experience, it's really not that great. In fact in some cases it's pretty awful. Typical sort of page load time on a mobile can be five, six seconds, and as you want to navigate around using your thumb and scroll through and do some product research, every time you make an action, every time you touch that screen, the page reloads again, and it's actually frustratingly slow. If you actually get to the point of buying, obviously you've got to enter your shipping address, and that's just- >> Can imagine that conversion rates, and things and attrition. >> Exactly. And so- >> What have you guys done to change the game? >> Right, right exactly. So, those conversion rates on the mobile web today are pretty bad. They're about sort of, 1.7% and on a traditional desktop, it's 3.5% but yeah 70% of all traffic and visitors are coming on mobile devices, it's actually quite a profound sort of issue in the marketplace around us. So what are we doing about it? Well there's a really exciting new, and I call it technology, but it's really just a set of standards around open web technologies, Javascript, CSS, HTML, called PWA, or Progressive Web Apps. Now, Progressive Web Apps is not a proprietary technology, it's just open web technologies, but what's changed and evolved are the browsers themselves, so Chrome and Safari, Firefox, they've evolved and they now support what we call service workers, which is the ability for the browser to do more backbone processing. And the end result of all of this are a lot of brands are now rebuilding their websites away from responsive websites, which is the big investment we've had over the last five years to now building Progressive Web Apps. And a really nice thing about Progressive Web Apps is that they perform like a native app, they're very very fast, the page load times are typically around a second or so, and there's no refresh. Every navigation and action is almost instant gratification, so very fast, very slick to use. It feels like you're using an native app, but you're not, you're actually using a web experience in a browser. And so there's a couple of really important things for merchants around that. One, much, much better conversion rates. So all of the KPIs that a VP of e-commerce is ultimately responsible for, they're measured by there's a conversion rate, average order value, bounce rates. They all see significant improvements. And I never say there's some merchants always sort of facing a little bit of a dilemma, should we build native apps, or what should our native app strategy be? And the problem with native apps is they're incredibly expensive to develop, incredibly, a lot of maintenance with all the updates to iOS and Android. And many merchants really didn't see success because consumers will only download and give you real estate on their phones for an app that you really engage with on a very frequent, on a multiple times a day basis. Most of our customers are retailers that perhaps only have two or three transactions a year with their clients, with their end shoppers, and so a native app strategy just doesn't work. So the real exciting thing I think with merchants are, you can actually almost put the need for an app strategy to bed, they don't need one anymore. They invest there in PWA. So here at the conference we announce Magento's support for Progressive Web Apps. We've launched a new development toolkit we call the PWA Studio, and it's really a native capability for our merchants and our system integrators to be able to build Progressive Web Apps on the Magento platform. So we're super excited about it. >> Yeah, sounds super exciting and also really the consumer, the convenience is that consumers are demanding, and you're really reacting to the mobile only experience there. >> That's right. >> Has a huge potential, upside, for the merchants. How are you seeing that being used or use cases for that in the B2B space? >> Yeah, so if anything, it's almost kind of, more applicable in B2B than it is in B2C, although they're both going to adopt PWAs. So what's interesting about B2B is that there is a much more frequent transaction or interaction with the end buyer. B2B buyers are frequent purchasers, they are buying in bulk and they're making purchases perhaps multiple times a day, perhaps multiple times a week. And so they are power users and they do have a great deal of engagement with the brand, with their distributor, so again, it's starkly, I think the B2B firms have built native apps and have done so on top of Mangento, it's very easy to build a native app and integrate it into our Rest APIs etc. But again it's expensive and often it can be a seven figure front sum to initially develop an app strategy and to continue to maintain it, so there's a real there's a real TCO advantage of actually switching that strategy to do a PWA. The adoption can be higher because you don't need to install the app, and just the cost and support of building and supporting a PWA is significantly lower than a native app, and so again there's a lot of use cases for using PWAs in the B2B commerce space as well. >> Awesome. So besides what you announce with Progressive Web Apps, what are some of the exciting announcements you guys have made at Imagine? >> Yeah, so I think product announcements, we got an exciting new product we're calling Page Builder, it's a content management and page building tool. So what this really does is it allows the marketer merchandiser the real control over building and maintaining the pages on their site, and that's mobile web, mobile desktop and building able to do that, and it really alleviates any dependency on having to a front end developer where there's a true wiz with drag and drop capability, gives them complete creative to build very sophisticated content pages, but to do and have complete control over their publishing schedule, being able to preview that. So we're very excited about that. I think it empowers the marketers and merchandisers to be more creative and to get more done in the day, we're empowering them to be, act independently of needing to work with a front end developer. >> Awesome, and you guys speaking of developers, have a very large community. >> We do, we do. >> Of 300,000+ developers. >> It's quite incredible, I mean here at the conference, it's sort of their main annual get together of what we call the community. I'll come here to Las Vegas every year and to the Wynn and the community is here, and a lot of that community is made up of developers, and those developers, many of them work for our merchants, many of them work for system integrators, many of them work for other technology partners, and some are contractors, self-employed specialists and so forth. But as you say, that community is over 300,000 developers strong, that's 300,000 people who make a livelihood doing development on Magento. So it's really an amazing community, and they're incredibly passionate about Magento, and they contribute back to Magento. We are, have our roots as being an open source platform, one of the great differentiative benefits of that is that our community help us innovate and they help us, they contribute code, they contribute features and capabilities back into the platform that means that we can extend our R&D team to be this much, much greater force where we can develop new capabilities and deliver value to our clients at a far faster pace than any competitors do. So it's a really interesting aspect of our business. >> Well Peter, thanks for stopping by theCUBE and sharing the great announcements that you guys have made today and this week, and the direction you're able to go in and help take best practices and things learned in the consumer space, and apply it to businesses. We wish you the best of luck, and we look forward to being back at the Magento Imagine next year. >> Yeah, great. Love to have you back. Thanks so much for chatting with me today. >> Our pleasure. We wanted to thank you for watching theCUBE again, we are live at the Wynn in Las Vegas with Magento at Imagine 2018. I am Lisa Martin, stick around, we're back with one more guest after a short break. (upbeat music)