>> From the Cube studios in Palo Alto and Boston, bringing you data driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> While the precise direction of VMware's future is unknown, given the plan Broadcom acquisition, one thing is clear. The topic of what Broadcom plans will not be the main focus of the agenda at the upcoming VMware Explore event next week in San Francisco. We believe that despite any uncertainty, VMware will lay out for its customers what it sees as its future. And that future is multi-cloud or cross-cloud services, what we call Supercloud. Hello, and welcome to this week's Wikibon Cube Insights powered by ETR. In this breaking analysis, we drill into the latest survey data on VMware from ETR. And we'll share with you the next iteration of the Supercloud definition based on feedback from dozens of contributors. And we'll give you our take on what to expect next week at VMware Explorer 2022. Well, VMware is maturing. You can see it in the numbers. VMware had a solid quarter just this week, which was announced beating earnings and growing the top line by 6%. But it's clear from its financials and the ETR data that we're showing here that VMware's Halcion glory days are behind it. This chart shows the spending profile from ETR's July survey of nearly 1500 IT buyers and CIOs. The survey included 722 VMware customers with the green bars showing elevated spending momentum, ie: growth, either new or growing at more than 6%. And the red bars show lower spending, either down 6% or worse or defections. The gray bars, that's the flat spending crowd, and it really tells a story. Look, nobody's throwing away their VMware platforms. They're just not investing as rapidly as in previous years. The blue line shows net score or spending momentum and subtracts the reds from the greens. The yellow line shows market penetration or pervasiveness in the survey. So the data is pretty clear. It's steady, but it's not remarkable. Now, the timing of the acquisition, quite rightly, is quite good, I would say. Now, this next chart shows the net score and pervasiveness juxtaposed on an XY graph and breaks down the VMware portfolio in those dimensions, the product portfolio. And you can see the dominance of respondents citing VMware as the platform. They might not know exactly which services they use, but they just respond VMware. That's on the X axis. You can see it way to the right. And the spending momentum or the net score is on the Y axis. That red dotted line at 4%, that indicates elevated levels and only VMware cloud on AWS is above that line. Notably, Tanzu has jumped up significantly from previous quarters, with the rest of the portfolio showing steady, as you would expect from a maturing platform. Only carbon black is hovering in the red zone, kind of ironic given the name. We believe that VMware is going to be a major player in cross cloud services, what we refer to as Supercloud. For months, we've been refining the concept and the definition. At Supercloud '22, we had discussions with more than 30 technology and business experts, and we've gathered input from many more. Based on that feedback, here's the definition we've landed on. It's somewhat refined from our earlier definition that we published a couple weeks ago. Supercloud is an emerging computing architecture that comprises a set of services abstracted from the underlying primitives of hyperscale clouds, e.g. compute, storage, networking, security, and other native resources, to create a global system spanning more than one cloud. Supercloud is three essential properties, three deployment models, and three service models. So what are those essential elements, those properties? We've simplified the picture from our last report. We show them here. I'll review them briefly. We're not going to go super in depth here because we've covered this topic a lot. But supercloud, it runs on more than one cloud. It creates that common or identical experience across clouds. It contains a necessary capability that we call a superPaaS that acts as a cloud interpreter, and it has metadata intelligence to optimize for a specific purpose. We'll publish this definition in detail. So again, we're not going to spend a ton of time here today. Now, we've identified three deployment models for Supercloud. The first is a single instantiation, where a control plane runs on one cloud but supports interactions with multiple other clouds. An example we use is Kubernetes cluster management service that runs on one cloud but can deploy and manage clusters on other clouds. The second model is a multi-cloud, multi-region instantiation where a full stack of services is instantiated on multiple clouds and multiple cloud regions with a common interface across them. We've used cohesity as one example of this. And then a single global instance that spans multiple cloud providers. That's our snowflake example. Again, we'll publish this in detail. So we're not going to spend a ton of time here today. Finally, the service models. The feedback we've had is IaaS, PaaS, and SaaS work fine to describe the service models for Supercloud. NetApp's Cloud Volume is a good example in IaaS. VMware cloud foundation and what we expect at VMware Explore is a good PaaS example. And SAP HANA Cloud is a good example of SaaS running as a Supercloud service. That's the SAP HANA multi-cloud. So what is it that we expect from VMware Explore 2022? Well, along with what will be an exciting and speculation filled gathering of the VMware community at the Moscone Center, we believe VMware will lay out its future architectural direction. And we expect it will fit the Supercloud definition that we just described. We think VMware will show its hand on a set of cross-cloud services and will promise a common experience for users and developers alike. As we talked about at Supercloud '22, VMware kind of wants to have its cake, eat it too, and lose weight. And by that, we mean that it will not only abstract the underlying primitives of each of the individual clouds, but if developers want access to them, they will allow that and actually facilitate that. Now, we don't expect VMware to use the term Supercloud, but it will be a cross-cloud multi-cloud services model that they put forth, we think, at VMworld Explore. With IaaS comprising compute, storage, and networking, a very strong emphasis, we believe, on security, of course, a governance and a comprehensive set of data protection services. Now, very importantly, we believe Tanzu will play a leading role in any announcements this coming week, as a purpose-built PaaS layer, specifically designed to create a common experience for cross clouds for data and application services. This, we believe, will be VMware's most significant offering to date in cross-cloud services. And it will position VMware to be a leader in what we call Supercloud. Now, while it remains to be seen what Broadcom exactly intends to do with VMware, we've speculated, others have speculated. We think this Supercloud is a substantial market opportunity generally and for VMware specifically. Look, if you don't own a public cloud, and very few companies do, in the tech business, we believe you better be supporting the build out of superclouds or building a supercloud yourself on top of hyperscale infrastructure. And we believe that as cloud matures, hyperscalers will increasingly I cross cloud services as an opportunity. We asked David Floyer to take a stab at a market model for super cloud. He's really good at these types of things. What he did is he took the known players in cloud and estimated their IaaS and PaaS cloud services, their total revenue, and then took a percentage. So this is super set of just the public cloud and the hyperscalers. And then what he did is he took a percentage to fit the Supercloud definition, as we just shared above. He then added another 20% on top to cover the long tail of Other. Other over time is most likely going to grow to let's say 30%. That's kind of how these markets work. Okay, so this is obviously an estimate, but it's an informed estimate by an individual who has done this many, many times and is pretty well respected in these types of forecasts, these long term forecasts. Now, by the definition we just shared, Supercloud revenue was estimated at about $3 billion in 2022 worldwide, growing to nearly $80 billion by 2030. Now remember, there's not one Supercloud market. It comprises a bunch of purpose-built superclouds that solve a specific problem. But the common attribute is it's built on top of hyperscale infrastructure. So overall, cloud services, including Supercloud, peak by the end of the decade. But Supercloud continues to grow and will take a higher percentage of the cloud market. The reasoning here is that the market will change and compute, will increasingly become distributed and embedded into edge devices, such as automobiles and robots and factory equipment, et cetera, and not necessarily be a discreet... I mean, it still will be, of course, but it's not going to be as much of a discrete component that is consumed via services like EZ2, that will mature. And this will be a key shift to watch in spending dynamics and really importantly, computing economics, the things we've talked about around arm and edge and AI inferencing and new low cost computing architectures at the edge. We're talking not the near edge, like, Lowes and Home Depot, we're talking far edge and embedded devices. Now, whether this becomes a seamless part of Supercloud remains to be seen. Look, if that's how we see it, the current and the future state of Supercloud, and we're committed to keeping the discussion going with an inclusive model that gathers input from all parts of the industry. Okay, that's it for today. Thanks to Alex Morrison, who's on production, and he also manages the podcast. Ken Schiffman, as well, is on production in our Boston office. Kristin Martin and Cheryl Knight, they help us get the word out on social media and in our newsletters. And Rob Hoffe is our editor in chief over at Silicon Angle and does some helpful editing. Thank you, all. Remember these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis Podcast. I publish each week on wikibon.com and siliconangle.com. You can email me directly at david.vellante@siliconangle.com or DM me @Dvellante or comment on our LinkedIn posts. Please do check out etr.ai. They've got some great enterprise survey research. So please go there and poke around, And if you need any assistance, let them know. This is Dave Vellante for the Cube Insights powered by ETR. Thanks for watching, and we'll see you next time on Breaking Analysis. (lively music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering HPE Discover 2017. Brought you by Hewlett Packard Enterprise. >> Welcome back, everyone. Live here in Las Vegas, this is theCUBE's exclusive coverage for three days at Hewlett Packard Enterprise Discover 2017. I'm John Furrier with my co-host Dave Vellante. Day two winding down, a lot of action happening, a lot of news, a lot of technology announced with a lot of ground-breaking stuff, and our next guest is Navin Mittal, Director, Products and Solutions Marketing at the Data Center Infrastructure Group. Welcome to theCUBE. Good to see you again. >> Good to see you, John. >> Thanks for coming on, I mean a lot of stuff going on under the hood. We heard from Susan about the servers with the security chip and the silicon. You guys got FlexFabric, you got all this capacity. It's really kind of like the new sports cars coming out with Gen 10, under the hood a lot of action happening. What's going on with the relationships? We're hearing a partner-centric message here at Discover this year. Give us the update. >> Yeah, so first of all, absolutely spot on on the whole Gen 10 servers. We are data crunchers. We will get the market right. But let's talk about networking, because that's something that actually combines everything, when you talk about server storage and networking and our customers as you very well know, can't just give it service alone. So, if you may or may not remember, six months back we announced the strategic relationship with Arista Networks where we basically said that they are our preferred network provider going forward. >> John: Yeah, we had them on in London. >> Okay great, yeah, so it's been going great so far. The giant go-to market has not been just go-to market but it's also been reference architecture designs. It's been creation of reference architectures with our server teams especially mission critical servers, SAP HANA talk about it so. >> John: Give us the update. What's new with the partnership? What's the progress in six months? >> Yeah, so in six months, our sales teams are completely trained and stoked to go out and sell there. Our customers are really excited with the partnership. The are asking for not only HPs servers and storage solutions but of course the Arista products also. 'Cause now they have a choice of products. If they are existing FlexFabric customers, they already worked very well with HPE, but now with the bringing in of the Arista switches, you can get the software to fine layer end-to-end. >> And you get the high end covered. A lot of service provider opportunities. What's the big take away in the marketplace from your standpoint? As you look at what's going on here at Discover 2017, and looking at what you're doing with Arista at the networking layer, a lot of interesting things are going on at the network layer, a lot of open source projects, a lot of new software, what's your take on what's going on at the network layer in the Cloud and whatnot? >> Open source has always been an integral part of HP's DNA, as you very well know, right? We have been a great contributor if you talk about Helion or you talk about OpenSwitch which was happening last year. Customers are looking for business outcomes. They don't really care whether it's open source or closed source at one point. We are all about outcomes and business solutions. So, we bring in the best of breed networking along with best of breed servers and storage, combine them to give a solution that we can offer to our customers whether they are in the Cloud-centric journey, they've already made the transition to Cloud or they trying to tackle with legacy (mumbles) >> So what are some examples of some of the solutions? >> Yeah, the SAP HANA solution architecture that we did recently, not many people know about this, but the HANA Cloud actually runs on the Arista switches already. Now think about power that our customers can get if we can bring that flexibility and agility that SAP uses internally in their Cloud into the Enterprise data centers today. So that's the reference architecture which we already have. >> Okay, and then in that example, so the core switch is Arista, and what do you guys bring to the table, everything else around it? >> Storage, yes. And don't forget the Pointnext consulting, right? So that is the switch, ties everything together so that customers can actually utilize not only our products and solutions, but the entire journey. >> And in that solution, for example, the HANA, when you mentioned Pointnext to consulting. What specifically is the service's organization doing? Is it tuned for SAP HANA? Is there some magic sauce that's sprinkled in? How does that all work? >> Yeah, so great point. And so the Pointnext to consulting of course makes a point to understand where you are currently in your journey, right? Depending on where you are, the SAP HANA Cloud solution may not be a perfect fit. In this example that I mentioned about SAP HANA itself we just wanted to highlight the fact that if you are ready to move to the Cloud like agility into your private data center, we have the solution ready with you, and you can apply it in your private data center. So your journey might begin with Pointnext, it might begin with coming to HPE. >> Alright, so here's the hard billion dollar question, not million, billion dollar question. >> It is a billion dollar question. >> Trillion dollar question. Well true private Cloud TAM is 260 billion. So that's not including hybrid. But Meg's up there too. >> Navin: Well it's 250 billion based on one of the reports that Wikibon put in. >> The true private Cloud. Ground-breaking again, another great Wikibon research that no one else is doing. Again, that number is legit, that's basically saying that On-prem isn't going away any time soon. I think this plays beautifully to what you guys are doing. But the question is this, how are you going to simplify as customers are transforming their operating model to Cloud-like, how are you going to simplify it with these relationships? >> Yeah, so for that, to talk about simplicity I need to take a step up, right? Because you saw Meg talk about the hybrid ID strategy, and then we also talked about the Gen 10 Silver announcement where we talk about control and agility and security. That's where the Arista portfolio fits in squarely across the hybrid ID and the Pointnext to consulting because now you're talking about the security solutions being end-to-end from service, storage, and networking, while giving you the agility that you're already accustomed to in some cases from (mumbles) solutions and having the capacity control from our financial services offering. >> So, from a customer standpoint, no real change, it's kind of like, it's enabling them extracted away, I'm just trying to get on the network side, what's your policy? A lot of policies going, a lot of automation opportunities. >> Yes. >> What's going on there? >> Yeah, so I don't know if you know about the product called the Spirit Cloud networking that we offer, where it is really allowing the policies that are defined at the application level and translating that into the underlying infrastructure level. So think about this, in a typical data center you tend to have silos, where you have a server silo, networking silo, and a storage silo, and from the time the application defines the policies and the requirement from an application standpoint to reach the end customer, you would have to go through these silos in order to provision those. With bringing in distributor Cloud networking, and it's integration with other networks, those policies get automatically deployed. And guess what, it's a heterogeneous environment, so you can actually mix and match existing workloads along with existing infrastructure as well. >> And what happens to the IT pros that used to be associated with those different silos? I mean, what are they all doing today? >> Yeah, they get to do much better things, right? Because IT is now transitioning from a cost center to a revenue generator. And it's not about firing people, right? Let me make sure I clarify this, it's about realizing your resources so that they can now become more productive with the time that they have. I don't know about you, if I'm done at 5 pm, you could either go back to your home, and I'm sure you have families, or you could spend time figuring out the next network problem that you're having in the data center. That's where the true agility comes out, that's where the true economic savings come out. >> That's where software programmable infrastructure works. People can get their weekends back. That's really kind of like, I mean, a lot of time is spend on mundane tasks. Either chasing down some sort of automated provisioning, or I mean, manual provisioning, or configuring stuff. What's the big game-changer? Is it machine-learning that we're seeing there, how do you guys see that technology? What's the enabler? >> Yeah, so I think at the end of the day, customers are looking for a stack, end-to-end stack, that one company can bring to them with the flexibility of choosing every layer within the stack. So we at HP of course are very focused on openness, right? So the HPE stack actually has all the way from applications to computers, to servers, to storage, to networking, whether you're talking about Nimble or the SimpliVity acquisition, or the (mumbles) that we have, to the underlying networking layer. And in this case, we are contending that Arista switching is the fabric which brings in best of breed. But you're free to choose the other layers of the stack as well. >> And how do you differentiate in the marketplace? The competition or the customer says, well I should have you guys HP and Arista instead of whatever, vendor X,Y, or Z. What do you tell them? >> Yeah, so the famous thing that I tell is you are either in the legacy mode and stuck with a typical vendor, you know we all know what the name means but I won't mention it here, where they try to keep selling you newer and newer gear with newer operating systems, or you go with a vendor that is open, has a DNA of being open, will hold your hand until you actually deployed in the data center and give you the choice that you need in the data center to be successful. >> Surely making things easier has been key. Nimble, and SimpliVity really kind of put the design at the center, and then brought software in, that changes the game. That's more Cloud-like. That's certainly very DevOps friendly. >> Absolutely, and it doesn't even stop there, right? If you take the conversation up higher up to the virtualization or the container layer, discussion. When you start talking about digitally the containers bring into the world, then it's a completely game-changer. How do you ensure that the network traffic that and application sitting on a container somewhere in one of the Vms or in Silver, can be translated and traced all the way back to the switchboard. And ensuring that nothing goes down. >> And that's the whole ethos of infrastructure as code, is actually make it programmable. So the app guys don't have to get under the hood. >> Yes, that programmable is taking care of the agility side of the house. What I am talking about is visibility and security so that if something does go wrong, we all are human, something can go wrong, even in programming, you need to pinpoint and detect and create and automate and fix issues as fast as possible. And there are some fundamental underlying tenants of the Arista operating system which allows us to do that, and of course the secret sauce that we add on top of that is the combination with the server and storage. >> Navin, thank you for coming into theCUBE and sharing insights. Final question for you. What's your takeaway from this year at Discover? What's the vibe, what's your personal (mumbles) simplifying, IT, hybrid IT, and intelligent edge, outside of the core things, what's your big takeaway? >> Yeah, I think I am super excited after meeting our customers and partners here. We are back in the game. We are here to take the market by storm and we will be doing it. >> Alright, here breaking it down in the networking Arista relationship and all the great stuff in the networking life. Navin, thank you so much. It's theCUBE live coverage from Las Vegas, in HPE 2017. We'll be back with more live coverage after this short break. (futuristic music)

>> Announcer: Live from Silicon Valley. It's theCUBE. Covering Mobile World Congress 2017. Brought to you by Intel. >> Okay welcome back everyone, we are live here in Palo Alto for special two days of wall-to-wall coverage for Mobile World Congress. Here in our new 45 hundred square foot studio in Palo Alto. We have folks on the ground. Analysts, we have reporters in Barcelona, but we're going to be covering all the action here in our studio, where we're going to bring folks from Silicon Valley who did not make the trek to Barcelona here to weigh in with reaction and commentary and opinions and analysis of all the happenings of Mobile World Congress. But first, as the day winds down Monday in Europe, we wanted to make sure we get on the phone and get with folks who are on the ground. And right now on the phone we have Floyd Strimling who's the global vice president of HANA Cloud, I'm sorry, the HANA Cloud Platform which the big news was, they renamed their product from SAP HANA Cloud Platform to SAP Cloud Platform. Floyd Strimling, thanks for taking the time after your dinner. Thanks for coming on. >> Floyd: Yeah, thanks for having me. I'm glad to be there. Happy to help out and give you some insights on what's going on here in beautiful Barcelona. It's actually quite warm here. >> Is it warm? I saw some umbrellas over the weekend but great city, I would love to have been there, but I wanted to anchor the coverage here. One of my favorite cities. But first, tell me what's going on. Obviously over the weekend we were preparing, we were covering all the content for the folks watching, CUBE365.net/MWC17. The news is all there. Every single piece of signal is there. Go to our site. Check it out. Floyd, what's happening? It's been a hand-set show all weekend. Obviously Nokia making a comeback. Blackberry making a comeback. LG, Huawei, Hess Phones, they all want to be Apple, but yet 5G is also dominating as well. So there's a culture clash. What's happening in Barcelona? What's your analysis? >> Floyd: The biggest thing that I was surprised by is exactly what you're talking about. The number of headset announcements and the number of displays that are all based upon new devices and the nostalgia for Blackberry and Nokia continues. People are rooting for them to make a comeback. In the meantime, you've got new devices from Huawei. You've got Samsung doing announcements. You know you're in the show when Sony has a big presence in Europe with their handsets, which I don't see too much in North America and it just seems to be everybody is gunning really for maybe what they foresee as the perceived weakness in Apple just not going for the killer 7 and waiting for the 8 to change the game. And they're all going to try to knock them off the pedestal. There's some very interesting phones that are out there. 5G is definitely everywhere, too. Everyone's talking about it. Everyone's trying to be the first. Trying to show, especially the streaming capabilities. What that'll be able to do and what it'll be able to change. And then, you know what? One of my favorite sections was the drones. We got to see some commercial carbon fiber drones that I never saw up and personal. See what's going on in there. A lot of interesting things going on with those things and more than just delivery, right? Everything that you could possibly do. There's no shortage of IoT and connected this, connected that, but they're adding a flavor of AI now. And I think we still got to get to Step 1 with IoT before we go to Step 2. So, it's been interesting to watch people try to leapfrog each other as they move towards new technologies. [Interviewer] How big is the crowd there? How packed is it? I mean one of the things we were talking about was the identity crisis of the show, Mobile World Congress, you mentioned people going after Apple. But also Samsung. Remember, they're bailing out of the show. They had their own little presser conference last night, they're not active in the show and they have their own problems. I mean the Galaxy 7 blowing up is, everyone's going after Samsung and Apple on the phone side, but you've got Sony, you've got 4K screens, you've got Netflix there, you've got entertainment, it's like a CES wannabe show for those guys, and at the same time it's a serious meat-and-potatoes Telco show with a lot of 5G, IoT, and I haven't heard anything about E-Sports. I saw a little bit with Twitch doing some stuff there, but for the most part, it's a digital show. So is there a huge crowd there and what's the demographics like there for the makeup of the attendees? >> Floyd: You know, I'm seeing big crowds, judging from how long it takes to take a taxi or get the subway. It's a lot of people there. And I'm seeing it's mixed. I'm actually seeing quite a few large enterprises from around the world. They're looking around, just looking at different technology and trying to make sense of what's happening. I do see the big Telcos are here. You know, everything from Telefonica, you of course have Huawei, you have T-Mobile, and Orange and a bunch of those major vendors that are doing it. I'm also seeing HPE and Intel on the same show area that we are on the other side that are generating traffic. I think the mix is pretty good this year and I will tell you, look, I've been to a lot of shows and some shows have trouble drawing people and this medium, some people are saying is not going to survive. I love going to the show and actually feeling the energy. 'Cause there is a ton of people here, there are a ton of large exhibitions with some really interesting stuff. VR, some geek talk, some funny stuff. There's people selling cases, you know, for your phone. I thought that was kind of awesome to see that again. I mean it's all over the place. I think the show is extremely healthy and it's as busy as ever. [Interviewer] One of the things about Mobile World Congress, it's a lot of business development, too. There's some heavy hitters there. It's kind of like Sun Valley meets, you know, the CES show. It really is a mix there. I want to get your take on some of the emerging areas that are really exploding in the mind of the consumer. And these are forward-thinking categorical areas. Autonomous vehicles, Smart Cities, Smart Home and, just in general, this new IoT area. So, what's your take on those areas? I mean, autonomous vehicles, they're huge. But Smart Cities, Smart Home, entertainment, is there a lot of buzz there? You guys have a stadium exhibit. What's the sexy demos? What's the sexy areas? >> Floyd: Yeah, I'll tell you a couple of things on this. You know, on the autonomous vehicles, now it's not just autonomous vehicles, it's going to try to be the first 5K autonomous vehicles. You know, people are looking at just pushing the envelope on it. And I think in Europe where people definitely love to drive, it's big, but I don't know if it's got the same excitement as you do in the traffic-jammed areas of the United States where we're constantly battling this and to put the car into autonomous mode and be able to do something else while stuck on the 405 would be a nice thing to do. I do think that the Smart homes is extremely interesting right now. I mean you have some of the people getting their arms around and I'm starting to see people actually talking about it and you know, a lot of people talking about smart things. This ability through a single gateway to be able to connect to all different types of devices, to be able to hook in with Alexa and Google Home and to be able to actually do more things with it and trying to make it simpler. So that I can do this reliably and easily. That's what everyone wants right now. On the Smart Cities front, I'm seeing a lot of people talk about Smart Cities. I think we're still kind of in that experimentation phase. You know a lot of geo-sensing stories I'm seeing. Some power conservations for lights. The ones that I'm interested in are kind of like traffic management. I'm extremely interested in this. Where we finally can get even smarter traffic lights and systems where you can do things like turn on no left turn or make a lane that's all four lanes. You know, make it one direction if traffic comes up. Very interesting concepts that people are trying out. You know for SAP, the biggest thing that we've got going, it continues to be our Smart Stadium demonstration. Every time that runs it's standing room only. People very interested about. Of course, it's a football, European football, not American football, so we're showing what you can do, and teams experience watching the games and actually how you can change the experience of training. And tremendous amounts of people interested in that. I mean, it's always an amazing crowd of people. Just because it's so intriguing and something we can all relate to. Because we want to have a better experience with this. [Interviewer] You know, Floyd, the Smart Stadiums thing is a really interesting thing. I just shared a link on the CUBE365.net/MWC17, that's our URL for our new CUBE365 all year long site. But one of the articles I shared was from the FC Barcelona Football Club and there was a speech at Mobile World Congress where the president gave a talk to explain the role FC Barcelona in the development of sports through knowledge and innovation to generate value for the club and society. And you think about the stadium aspect of what you were just talking about, is interesting. It's a place where people get together in an analog world, but yet when you weave in a digital services, the role of say an SAP, powering the database and doing all the back office things to power the business, combined with IoT, you now can bring in real people into experiences that are tied to the sports. But also you can go beyond that. You can take that digital interaction and take it to the next level. So there is a data aspect to a society role here. So you're seeing sports teams going beyond marketing their club to having an impact. Can you share any color on that? Do you agree? Do you guys have anything that you're showing? >> Floyd: Well, I agree. I think that much like racing is for the auto industry to bring innovations to the consumer side, or you could even say masses and states that comes into all of our lives. I think that this work is going to push the envelope, even harder than other areas, simply because they know that hundredths of a second is the difference between winning and losing. You know, we've gone with McLaren for years, working with them on tracking their race cars and building dashboards and giving them information. And now to be able to bring that type of technology to the stadium and bend the way that you actually have that interactive experience, it actually makes it that you want to go to the stadiums. Which is, you know, people are, it's a little bit of a hassle. You got the traffic, you got the people, it's like you can sit on your couch and watch it on your 4K television and be happy. I think that people need a way to actually draw the crowds in there. And I think that the interactions, especially with the work that we're doing with Apple and building native applications using our Fiori Technology and our UI Technology, it's starting to really bring together those classical back-end systems with all that rich data and bring it forward so people can actually experience what that data means and use it a different way. So I definitely agree with you. I enjoy working with the sports teams, 'cause they're willing to try anything that gives them a competitive advantage, and it's interesting how to take that technology and then apply it to the consumer and the business world. [Interviewer] Well, you know, we love to be called the ESPN of Tech, so we love sports here. So anytime you have a great sports event you can invite us to, we'd be happy to accept your invitation in advance. Appreciate that. Floyd, of course, great coverage. I'll give you the final word, and next we have a minute or two left. I'll say SAP big announcement with the Apple software development kit, the IOS general availability now. You got native developer support. That's classic bringing cloud native developers into the SAP fold which dominates the enterprise and business base from sports firms to large enterprises. Great marketplace behind that. But you guys are doing a lot more with IoT, AI and machine learning. Share, just take a minute to talk about the key things that SAP is doing for the folks watching. Because losing the name HANA Cloud really emphasizes that SAP is SASifying their entire business, which includes things like microservices, and having kind of IoT as a service and managing workloads dynamically in realtime with a consumer front-end feel to it. Take a minute to describe the key important points of what you guys announced and are impacting. >> Floyd: I would say the biggest thing that we have going really is two-fold. One, it's the elevation of this brand. SAP protects our brand. It's a very, very noticeable and valuable brand. To elevate the platform to a top-tier brand, basically it's signaling to everybody, our customers, our partners, independent software vendors, our competitors, anyone else out there that SAP is serious about building a platform in the cloud that is world-class, enterprise grade and has the capabilities that our customers need to make this digital transformation and we're coming. We're going to innovate at a fast clip and we're not that old SAP that people think about. I think the partnership with Apple further shows that. I mean Apple is very choosy about who they work with. They're at our booth. They're helping us They're showing the demonstrations. They're working on the SDK. And that realization that, hey, to build these world-class native applications, using Swift and this SDK and the capabilities that would bring, are now elevating that game in the mobile space for our customers, which is key. And I think it's a very powerful partnership because we're both such recognizable brands and we both have a really solid enterprise presence and a large ecosystems. On the services, you know, the big thing I would just say, is the IoT services is ready for people to use now in the Beta fashion. It's combining all the access so we can build a device cloud with the Symantec data model that's a little bit different than other people are doing. And combining that with our Leonardo applications which give you a good idea of what's possible on the cloud. And to be able to keep pushing that forward, I think is key. We have the big data services which was the alpha scale announcement, acquisition now being fully integrated into the platform is huge. It basically gives us world-class Spark Services, which we need to be able to compete in this world. You know and I think that the service improvements are there. There's some good service improvements incremental and some things that our enterprises really want from us, like workflow and the ability to put a little infrastructure in there with virtual machines. And our data center build out. You know, friends don't let your friends build data centers, but some companies have to build data centers, so having the ability to have a data center now in Japan and in China, is key to our customers, especially with all this legal wrangling that's going on in clouds. So I think all in all for SAP, it's been a great show. A great place to showcase that we're doing stuff differently and watch out for what we're going to be doing in the future. Because we got a lot more stuff coming, and we're going to be a player in this space. And we're ready. [Interviewer] All right, Floyd Strimling, global vice president with SAP Cloud Platform. Final question, I mean I got to ask you. How's the food? How's the tapas? Are you going to take a nap and then stay out 'til four in the morning then doing it all over again? Barcelona style? >> Floyd: It is Barcelona-style right now. I got to go get some Sangria, some tapas and then we'll hit the places that the tourists don't go to, and have some real good time with the locals. You can't come to Barcelona and go to sleep, that's not allowed. [Interviewer] All right. You're not allowed. Hey, spread the CUBE love for us out there. Really appreciate your taking the time. Thanks, Floyd. We'll talk to you later. Thanks so much. >> Floyd: Thanks. [Interviewer] Okay, Floyd Strimling on the ground in Barcelona here on theCUBE by remote coverage from Palo Alto. We're going to be going wall-to-wall 'til six o'clock tonight, 8 a.m. tomorrow morning, and again, we'll have reaction from folks on the ground in Barcelona. Hopefully we'll get some folks late night and hopefully it might be a little bit lubricated up a little bit, socially lubricated, get to share some good dirt. That's where all the action's happening, up in Barcelona and this is theCUBE. We'll be right back with more coverage, more analyses. We've got Tom Joyce coming in, industry executive to help me break down from his perspectives, the horses on the track. Who's going to win, who's going to lose, and what's going on with NFV? Because NFV certainly now has a bigger opportunity with 5G connecting all these devices together. That's the big story as well as the big devices and the new upgrades. Be back with more after this short break.

(smooth electronic music) >> Hello, everyone, welcome to theCUBE here in Palo Alto covering Mobile World Congress 2017, #MWC17. I'm John Furrier. We are here with Dan Lahl who's the Vice President of Product Marketing at SAP. SAP HANA Cloud now named SAP Cloud. Dan, thanks for coming in and talking about Mobile World Congress. >> You bet and I'm happy to talk about SAP Cloud Platform. That's what we're talking about. >> So the big news is a lot of stuff going on with Mobile World Congress but let's get down from SAP's perspective. You guys have changed the name from SAP HANA Cloud Platform to SAP Cloud Platfrom >> [Dan] Yeah that's right. >> So why that nuance there? What's the specific point there? >> It's way more than just dropping a word from the name of the product. It's really about repositioning where SAP is. So SAP has been an application company for forever. But as companies move to now from mode one, which is kind of application running, to mode two, which is doing more about agility, optimizing their enterprise, digital transformation, we have to have an offer in that second place. That's where the SAP Cloud Platform fits. Things like IoT services, and integration services, and over 40 services we offer on the platform. We're now helping companies become more agile by being very easy and able to personalize any SAP asset, any SAP app. So you have S/4HANA, you want to personalize it, customize it? You use Cloud Platform to do that. You want to integrate success factors in with your on premise apps SAP or otherwise? You use Cloud Platform to do that. >> A lot of change over the past year. At Sapphire last year, we talked about this at theCUBE. In Orlando I interviewed you specifically about the cloud momentum. One of the things that was striking me, and we talked specifically about SAP had this installed based customer set, which you guys have some of the biggest names in business from powering by SAP. Then new sets of developers onboarding and significant was the Apple announcement where you guys were partnering with Apple Computer and Apple doesn't usually go up on stage with many partners. >> That's right. >> It's very rare. They were onstage with you guys. This was really a seminal moment because this kind of brings two worlds together. It brings the existing SAP software world and the Apple world. So a lot's changed there. I know the news that's hitting around Apple's GA, general availability, of the iOS kit. But also it's the growth of the cloud within SAP and the SaaSification that you guys are going through that journey. Give us an update on those two fronts. The iOS news, that general availability, what does that mean? Two, how is the SaaSification of SAP inside the entire, across the business? >> You bet, you bet. So really exciting with the Apple SDK. When we met last year, I sat on the edge of the bed and told you how great it's going to be, okay? We really hadn't defined exactly what was going to be in the SDK. We already had the all the parts, and pieces to be able to take an iPhone device, and pull it back in to access SAP applications. But we really didn't have much native work that we had thought through with Apple on the deliver side on the mobile device. So we've added a number of controls that Apple is actually adding in to their system into the iOS 10. We're actually creating applications, taking advantage of these new controls. As enterprise applications work in a little bit more complex way than let's say playing Candy Crush on your iPhone, right? We've come up with new controls to make it more easy for someone like a project manager to do project management over their day. Or a service technician to do how they look at their appointments, how they're going to look at parts and pieces they need to put into different service appointments. It's been a really great collaboration. Then the other thing we're doing is we're adding SAP Academy or iOS Academy. The iOS Academy will be aimed at training a million SAP developers and 10 million Apple developers on how to use this SDK, how to think about delivering enterprise apps using this native iOS environment. >> What's the impact to the customer? Because Apple essentially, it's their phone, so you're talking about a mobile native app. >> [Dan] Yes, exactly. >> Taking a software cloud model to the phone. Is that kind of the key point? >> Yeah. SAP has been awesome at business processes and really funky at how it's displayed on screens. I mean I know when I started work at SAP, every screen I had to look for where the next key was. Apple is just the opposite. They're awesome at the UI but not known for the greatest business processes. So we're marrying those two things together. >> Bill McDermott has always been high on the Apple. I remember four Sapphires ago he was holding up the iPad saying-- >> That's right. >> "This is going to power our analytics business." >> Which it is. >> He was right on that. >> He's driven us to make that happen. Apple's come along which has been really great. Again, now we're delivering. >> How was the SaaSification going on because workloads as a service is a theme that comes up a lot. You see hybrid cloud certainly driving a lot of that momentum. Hybrid cloud is not as sexy as AI and autonomous vehicles. But certainly it's a lot of brute force action going on. People are really moving to the hybrid cloud. >> That's right. Hybrid cloud is going to be with us for at least 10 years. Everybody thought okay, the cloud is going to be awesome. As an LOB, I'm just going to pick my app whether that's CRM, or HCM, or whatever. I'm going to have this awesome app that I'm just going to be able to run in my business. Then they figure out oh, as a line of business, this is hard to manage. I'm going to give it back to IT. IT says, "Wow, the HCM guys are not "tied in with workforce management." There's nothing between how we're managing our people and how we're managing our workforce. Or how we're doing our pipeline with how we're managing our supply chain. The SaaSification, what we're providing with Cloud Platform is the ability to tie those things together. So native integration services to be able to tie things like success factors or, believe it or not, Salesforce into SAP delivery systems, supply chain systems, bringing ecosystems together using SAP Cloud Platform. So the personalization of the SaaS apps, integration of the SaaS apps into the enterprise, and then actually working with customers to create ecosystem hubs believe it or not. So we've got customers that have actually said, "Hey, I'm a manufacturer but I've got a lot of information "about what's going on in the manufacturing process "and how my customers are using my products. "I'm going to build a hub on the Cloud Platform "and get all my customers and partners "working together on that hub. "Now I'm actually selling information "that'll allow me to sell more of my product." So we see that happening too. >> We're with Dan Lahl, the Vice President of Product Marketing with SAP, breaking down the Mobile World Congress 17 coverage. I'm John Furrier here in theCUBE. Dan, I want you to take a minute to just lay out all the news and the key announcements that's happening this week for SAP at Mobile World Congress. In context of the backdrop of the key things that are happening in terms of the trends at the show. >> Yeah so I'll talk mostly about the Cloud Platform content. So there's some other things happening with SAP. But from a Cloud Platform perspective, it really is the shift to Cloud Platform as a strategic platform for the company in the cloud. So that's really big. Along with that, the iOS SDK, we've already talked about. We're going into beta on our IoT services. So we've now got over 40 protocols that we're supporting. We've got device management, device provisioning, dashboards for monitoring and managing those. The IoT services, which will be the foundation for our portfolio of apps that we deliver, is all going to be on Cloud Platform. We're delivering that service. They're going to announce some things in the Leonardo portfolio, which is our IoT applications. Those work together hand in glove. Some other things, some other bits and bites. We're opening data centers in Japan and China. We're hitting the Asia Pacific market pretty hard allowing customers to take their-- >> Those are SAP data centers? >> SAP data centers. >> Cloud, for SAP Cloud. >> To run SAP cloud in Japan and China with backup and recover, disaster recovery, HA, in between those data centers. Then also we're providing the capability for customers to bring their own applications onto our cloud if they want to run them closed to their cloud applications or SAP Cloud applications. So a VM style of service that we bring. But we're not going to compete against AWS in that. But if you want to bring that next to an SAP app, boom, you can do that very easily. >> I want to ask you about some of the hot trends that we're tracking on (mumbles) on thCUBE and certainly looking at the data. It's pretty obviously that IoT is the hottest, I would call tangible, trend. AI is the hottest hyped trend. >> Coming trend, yeah. >> Well I mean I think AI is legit and I'm a big fan of AI. But I think it gives people a more of a mental model than IoT. IoT's like oh, industrial, internet of things. It's kind of esoteric to the mainstream. AI is robots, flying drones, flying saucers, flying cars. So it gives people a kind of a feel for kind of what machine learning and IoT can point to. So I want you to talk about what you guys got going on there. The other thing that comes up from a customer standpoint, I want to get your thoughts and commentary on, is the number one thing that comes up besides topic on IoT is integration. Integration points is critical. So open cloud is something that you guys have promoted. IoT kind of brings that to the table. How do I bridge IoT into the cloud? How do I integrate either my on parameter clouds? These are the kind of the threads that are being discussed right now. >> You forgot big data. You forgot that one too. So hey, I worked for an AI company in the 90s after AI was dead, okay? AI was hot in the 80s. I worked for an AI company in the 90s. It was dead until today. >> It's back again. >> I'm just shocked that it's back. So the AI piece-- >> By the way, machine learning hasn't really changed much since 10, 20 years ago either. >> Exactly either as well. But we're building all of our AI and machine learning capabilities using SAP Cloud as the base. We're bringing in some open source technology from Google and others. But we're going to be building services on top of Cloud Platform that will allow you to build machine learning AI apps as well as delivering bespoke applications like matching invoices and some other things that makes sense for SAP. >> Well the IoT thing you bring up, in joking about AI, I think the reality is that AI's been around for a long time as you mentioned, as well as machine learning. But I think that the trend that comes up that makes it so peaked for real time right now is cloud horsepower is awesome, almost infinite compute power available, and the tsunami of data. So you combine the fact that, all those new data sources, with horsepower, and now with 5G dropping on main stage with Intel's announcement, you're seeing a confluence of a new fabric being kind of weaved together. That's interesting because now you have the compute, that's not a bottleneck anymore. So overhead whether it's security encryption, and/or security techniques, machine learning, goes away. AI can now do other things. So this is an interesting-- >> It's an interesting area. You kind of named it. You have to have the ability to ingest all this stuff through an IoT type of streaming capability. You got to be able to analyze it in real time, that's our in-memory capability. We talked about the AI, analyze it in real time. The one thing we haven't talked about is you have to have a big data repository to be able to troll through months and years of data. We've actually added the Altiscale company to our portfolio. So now Altiscale is part of SAP. We're renaming that Big Data Services. But it'll be basically Altiscale. So now you've got Hadoop in the cloud. So you've got an IoT, you've got your in-memory capability through HANA in the cloud. You've got your Hadoop in the cloud. All of that is one piece of cloth to us. You can apply IoT against that. You can apply AI against that. You can apply machine learning against that. And guess what? Blockchain against that as well. That's a little bit early for us. But that is-- >> It's on the horizon for sure. >> [Dan] Exactly. >> This is basically talking about where you process the data and now see the IoT edge is something that we keep our own research team. Our team's been actively pursuing. So I want to ask you to explain a little bit about this IoT service you guys announced. What is that about? I mean how would you describe that capability in SAP Cloud? >> Well it's funny. IoT is all about streaming data if you think about. I've been in streaming data since 2008 'cause we were heavy into financial services and understanding the transaction. So we were running algorithmic trading back in 2008 and we bought a couple of companies that did that. You would say, "Streaming data," to people and they would go like this, right? But now with the iPhone, and people understanding that their iPhone is a sensor device, and people now finally get that well data streaming is a big deal. >> Autonomous vehicle's a highlight set big time. >> Exactly. You kind of hit the nail on the head when you said you have to have not only an analysis inside the data center, in the cloud, but you have to push as much as can of that out to the edge. So part of what we're delivering as IoT services is a whole edge set of components that will actually do some of the analytics out at the edge in the hubs. Like what Intel provides, or Huawei, or Dell, or other companies with these gateway hubs. As well as capturing streaming data, doing store and forward of that data. So it's pushing IoT out to the edge for real time decision making, bringing it back into the data center for maybe a little bit more real time deeper analysis, and then connecting it to a big data source so you can actually troll through that over time, and say over the last six months, "Here's the supplier that's doing great. "Here's the supplier that's giving me not so great parts." All of those pieces for customers at the end of the day is really important. Making them more agile in the IoT environment. Making them more connected in the IoT environment and big data environment. Connecting the enterprise to that. So it's all helping customers from our view. >> Congratulations on the news. Well first the name change I think symbolizes a cloud centric philosophy company wide, which is great. SaaSification of SAP, which is huge for your customer base. But also the Apple news I've always been bullish on because that brings an opportunity for developers to work with you and vice versa. The monetization for developers to play in your ecosystem certainly is a great opportunity. Those are the two big news. >> Just think about that Apple piece. They can now take a process, they can build a set of controls, build a new app, and then monetize that in the App center. That will be very cool. Monetizing enterprise applications or extensions to enterprise applications. Pretty cool. >> Well that's one of the reasons why the enterprise is super hot right now. 'Cause the consumer market is (mumbles) you've seen those unicorns you see Airbnb, you see Uber, all the examples we talk about. Netflix, Amazon, enabling all that good stuff, and others. But now the enterprise is sexy one, because there's some real transformation going on from the network to the Apple Air. But there's business to be done, there's actual opportunities for people to have their work of art, the developers if you will, be monetized. >> If you put IoT, and big data, and AI behind all of that, and then make it look beautiful on the device, that's beautiful. >> IoT is a real trend. I mean that-- >> It's real. >> It's definitely happening right now and I think that's where the meat on the bone is in my mind. Okay Dan, final question for you. For the folks watching and our paying attention to Mobile World Congress in general and in the world, what is the key thing that you think they should walk away with about SAP Cloud now? With the new name, with the Apple news, all this good stuff happing at Mobile World Congress. What is the key walk away message that you'd like to send to folks to know the current state of SAP Cloud? What's the key message? >> So I would say the key message is we've talked about it but now we're delivering. SAP is all in on the cloud. We're not only delivering the SAP Cloud Platform but also S/4HANA, cloud as well. Tons of apps being built using SAP Cloud Platform. SAP is all in on the cloud, all in in mode two computing to help our customers. That's the big news. >> Dan Lahl, Vice President of Product Marketing at SAP Cloud. I'm John Furrier. You're watching a special two day coverage of Mobile World Congress 2017 here in the studios of Palo Alto covering it from Silicon Valley. We've got folks on the ground bringing you more action after this short break. (smooth electronic music) (light electronic music)

(upbeat techno music) >> Okay, welcome back to SiliconANGLE's Cube special two-day coverage of Mobile World Congress 2017. The hashtag is #MWC17. My next guess is Emily Mui who is with SAP Cloud, formerly SAP HANA Cloud. Great to see you. Thanks for coming in. >> Good seeing you again, John. It's been a ... Over a year. >> Since Sapphire, since the big news of ... >> That's right. >> The cloud team kind of really showing its stuff. >> Yes. >> That was called the the HANA Cloud. >> Yes. >> Now it's called SAP Cloud. The name changed. Give us a little bit more deeper ... Meaning behind the name, why the name changed, 'cause, you know, everyone knows what HANA is. >> Yes. >> HANA's got a great brand name. >> Right. >> Why drop HANA? What's the deal? >> Well, very good question. I like to talk about ... I've been with this product for over two years now, and I've really seen the evolution of the product. We have so many more capabilities than we did about three years ago, and a lot of it is customer-driven and demand-driven and market-driven. So what we realized is that yes, we have a lot of customers that wanted to do real-time decision, but then we also had a lot of customers that wanted to talk about IOT, use IOT. They want to talk about machine learning, they want to talk about analytics, so it's not just about HANA. So the name change really helps reflect the product and the evolution of this platform as a service that is now known as SAP Cloud Platform. >> So mainly what I hear you saying is that it's gone broader than that. So it's not ... HANA was like a Ferrari, something really good and was great at what it did ... >> [Emily] Yes. >> And that's all great, but the Cloud is more, right? >> Exactly. >> [ John] And what specifically more would you mean? Non-HANA solutions, or ... Greenfield opportunities? >> We have so many customers that do different things, and they're the ones that are helping us understand what is needed to be in the product. So there are many, and what we've learned is that there's a lot of business value that they're seeing from it, and they're the ones telling us that they're trying to be more agile, they're trying to optimize their business processes, and what's interesting is they want to become digital, and I'm not talking about the Ubers of the world, or the Airbnb. I'm talking about those traditional brick-and-mortar companies, manufacturers that are trying to figure out, how do I stay competitive? How do I get one step ahead of the game, and how do I use technology to do that? >> One of the things I love about Mobile World Congress is that it's like CES but in a different way. CES is hardcore early adopters. Yeah, Mobile World Congress is a lot of people who love the device news, yeah, so-and-so's got a new phone, 5G's going to be amazing, it's going to power autonomous vehicles. So, there's some glam and sex appeal inside with some of the tech, but it's almost like a meat and potatoes kind of show in the sense that it's mostly, it's a very business deal-oriented show. A lot of telecos trying to figure out their future, a lot of enterprises trying to figure out how things like network function virtualization works with mobile apps, so you're seeing kind of what I call the early adopter market be more of a CES, and Mobile World Congress be more of a ... Okay, how do you make it real? So this seems to be the topic that we're seeing across the hundreds of events that we go to at theCUBE a year, which is you have the Ubers and Airbnbs, the pioneers, the Facebooks. Then you have the settlers who come in and say, okay, I get it now. I understand what digital transformation means. Now I want to operationalize it. And Amazon Web Services has been so much success with their cloud, in the enterprise, of all places, now. So that's a tell sign that ... Real businesses ... >> [Emily] Yes. >> Not the unicorns, want to use the technology. >> [Emily] Right. >> Do you see the same thing, and can you give some anecdotal or specific examples of how a normal business gets SASSified, and what path does it take? >> So, a really good point and really good question. So one of the customers that is actually going to be at Mobile World Congress is Mapal, and they are a mid-size German precision tool manufacturer. And you think, how are they going to use the cloud and cloud technology to help them improve their business, and it's quite interesting, because they're trying to become digital. They are, you know, and this is ... Their way of doing business is not different from how anyone else is doing. They're trying to connect their suppliers, their customers together, and then be able to track what's happening with the tools that they're manufacturing. The whole life cycle of that tool, from the minute they actually start manufacturing to the point of selling it. But they're using technology to do that, right? And so they're using that SAP Cloud platformm creating the application, and then being able to track what's happening and then providing visibility to their customers, to everyone on the plant floor, to their suppliers, so they're connecting everyone together. >> You know, Emily, I was just talking with Jeff Frick, who runs theCUBE. We had our Silicon Valley Friday show last week, and we were talking about some of the conversations that we hear in cloud from some of the normal businesses out there, and things like microservices ... It's a geeky term, but microservices, containers, a lot of application conversations happening, so you hear that, and also you hear about integration. So these are the two hottest areas that we see, because basically, the SAP has been in the process business. We value chains and manufacturing, customer support, and CRM, ZRP, all that good stuff that goes on, but now, those are being completely shattered and reconfigured with cloud. So integration is top of mind, whether it's an IOT, internet of things or a new application. How does this all get threaded together? Can you share some insight into the SAP Cloud strategy, and what things do you offer to those customers, because that seems to be the critical decision point for most CXOs on the cloud SASSification. >> That's another good point, because we see a lot of customers trying to connect. They're trying to figure out how to get to the cloud, and no one is immediately jumping to it, so they've got different applications that they're trying to build out, but in order to do that, they have to connect their backend, right? And not all of it is cloud application. Most of it is on-premises, and so you've got legacy systems, you've got some SAP applications, you've got some other ... I shouldn't mention venture applications, and then they're trying to figure out how do you extend and create new applications? So how do you bring it all together? So integration is one of the key services that we provide. APIs, integration ... We've also invested in microservices technology. SAP's heavily looking into that and seeing how we can help those companies out there who want to leverage that type of technology. How do they bring all that together? Build small applications, connect everything together, and then build out an application that will help support their business. New opportunities for their customers to make their customer experience better, for their employees, and trying to track talent. So there are a lot of different use cases where ... >> What are the top three use cases that you're seeing there right now from your customer base, as they look at the HANA Cloud ... Well, it's not HANA Cloud. The SAP Cloud. >> Yes. >> New name. When they look at it, what do they gravitate to? What does the ... I mean, it's not all the same, but I mean, some low-hanging fruit. >> Right. >> Most people say, oh, test/dev, but probably in SAP. What is that low-hanging fruit for you guys, and where do you see more of these ... >> Integration. I mean, a lot of times, they start with integration, because they need to bring that together, but integration's kind of a means to an end. So, an example I can think of is we have a customer named Owens-Illinois. They're a glass manufacturer, another real business, right? It doesn't always sound so sexy, but the reality ... >> They're billion ... These are billion-dollar businesses out there ... >> Yes, exactly. >> That aren't called Uber, and no one's ever heard of them, but they're businesses, doing their thing. >> Exactly. And they need to be able to integrate their backend. They had this one specific requirement where they had to quickly meet the requirements of the Peruvian government, because they needed to create e-invoicing, and if they weren't able to bring together their backend systems, build out this application to do e-invoicing, their plant in Peru was going to get shut down. So, really good example ... >> [John] A critical path item. >> Exactly. Integration, and then being able to extend that. So those are really key examples of what our customers are doing, and then of course innovation, just coming up with something completely brand new. You know, there's so many examples of of those types of ... >> You know, you mention some of these traditional businesses, whether they're a glass company or a tooling company or whatever. This is really highlighting the big trend, internet of things, or IOT. AI kind of gets bolted into that 'cause it's got machine learning and using data and things. Is the digitization of business ... It's not just like IT and getting your email and things of that nature. Seeing the industrial, analog side of the business being digitized, so, with sensors ... You can't look any further than some of the more obvious consumer examples, the Tesla car, self-driving cars, drones, all have data. And so that's kind of a mental model for most folks, but it could be plant and machinery, it could be airplanes, flown off data ... This is the industrialization of this new era. >> Right. >> [John] Of data. >> Yep. >> That's connected to the internet. Therefore, it is an internet-connected device that needs to be managed. So this is a new use case that points to some of these businesses that are now digitizing. Is that a big part of the new IOT service, and how do you guys talk to that market, because some of it's not an IT market, they're like a normal business market, that might have SAP accounting software, or manufacturing software... >> Well, I mean, I think, like most companies and most people out there, everyone's a consumer, right? We talk about companies, but within those companies, we're talking about employees, people, and everyone has a phone, a smartphone of some sort, if not an iPhone, an Android device. There's so much data that's being generated. I could give an example of my teenage ... Just turned teenage boy, and I don't want him to carry cash around. He wants to go to Starbucks, so I make sure that he has an account set up. So it's easy. All that ... Just think about the way he's transacting. He walks into Starbucks, and he can pay. I can see how much he's paying, what he's buying, right? So there's so much data, and businesses are transacting in such a way that they've never had to do before. >> [John] Do you track his location? >> That too. I know when he's going in the wrong direction. He's on the wrong bus, right? So, there's so much data, and businesses have to figure out what's the best way to monetize that, to create opportunities from it, right? And to provide that experience for their customers and then come up with new solutions and new products and new services. >> That's a great parent story. I feel the same. My wife and I have the surveillance tracker, and that's part and parcel to us paying for the phone, so. >> [Emily] Right. >> Quid pro quo. If they want to pay for their own phone, they can be anonymous. But that brings us back to the customer. I want to get back to the customer impact, because the challenges are also opportunities, so what are some of the key challenges that your top customers face in the cloud. Because I think right now, it's pretty obvious that Mobile World Congress is kind of proving it's no branch of the cloud. It's really the business model behind it. Okay, I need to have my business model align with the value preposition for what we sell to customers, and how do we execute that operationally? >> [Emily] Right. >> So, take us through how you guys help customers through those challenges and turn them into opportunities. >> Well, first, John, we listen to what those challenges are. We've heard it over and over again. How do I ... How does the company become agile? How can they stay competitive? And you're always trying to stay one step ahead of your competition, and how else do you do it? So agility is really important, and when we talk about agility, we're not just talking about being able to create an opportunity quickly. It's how can you become flexible? How can you integrate your backend quickly? How do you support your new business requirements? If you're IT, how do you support your business partner very quickly? So it's about agility, and we provide the software that will help them do that. The cloud platform allows them to quickly integrate and extend those applications, and then of course, optimizing business processes. Who doesn't want to be efficient? I don't know how many businesses out there who wants to do things this old-fashioned, slow way. They're always trying to do it better and quicker. >> They got to preserve the old, but kind of bring in the new at the same time, it's a ... >> Right. So how do we help them optimize that? So they're asking us that all the time, and we're SAP, right? Our bread and butter, ERP, CRM, applications. We know business processes, so we understand what it takes to help them optimize those business processes. >> I didn't get a chance to ask Dan Lahl, who I interviewed earlier, about ... Who's Vice President of Product Marketing at SAP Cloud, your colleague. I didn't get to ask him this question, but this is important. Customers want to know ... That their partner, in this case, SAP Cloud, has a healthy ecosystem around it. Why is an ecosystem important, a healthy ecosystem important for customers, and then what does SAP Cloud doing to foster more innovation and openness and relevance in that ecosystem? >> Another really good question, because SAP has a history of building out an ecosystem for partners, and with SAP Cloud platform, what's great about it is it's technology that our partners are, today, leveraging and creating applications. So for those integrators, systems integrators who work really closely with our customers or their customers, they understand their businesses. They're very intimate and close with them. So they're developing applications that will help support their needs, and there are actually a lot of these partners. We have over a thousand applications that have been built by partners today. We have 600 partners that are building applications with SAP Cloud platform, and that's quite remarkable, considering the product has been around ... for just three, four years. Four years. So, it's really good news. Our partners are really invested in this technology. >> Can you comment on some of the big news that's happening at Mobile World Congress, specifically around this concept of an integrated solution set? So we see 5G was a big announcement by Intel. You're seeing autonomous vehicles as a showcase. You saw them at CES by the way, too ... It was an auto show there, too, but it allows people to really get a sense that it's not a stovepipe or a silo anymore of software stack solutions in that, you know, you need some bandwidth, you need some glue software, you need some third-party solution. You need to have things componentized or Lego-blocked kind of designed in, so this is kind of this new fabric. Could be IOT from machine manufacturing equipment, to wearable computers, all kind of coming in. That's kind of the new solution set. What's the vision for you guys on that? >> You know, at Mobile World Congress, we actually have a couple really cool demos. I should probably say they're not just demos, but they're actually exhibits. We've got a connected vehicle. We talk about the connected stadium, and when we talk about the connected stadium, we're talking about the whole experience of someone coming to an event and then being able to use their iPhone or their Android device and be able to buy their food, be able to understand what's happening and know what, you know, be able to go to their seats, and things like that. Help them through the whole experience with a connected vehicle. Be able to rent a car, and then be able to create an expense report, all on their phone. All of that needs integration. >> [John] It's a mashup of all kinds of stuff. >> Exactly. >> An accounting system is now part of feature of a stadium. >> [Emily] Right. >> A cool sports venue. >> Think about all those business processes that have to be integrated, and not just on the IT side, but all those business processes. So, like you said. >> The speed is critical. You have to have low latency ... >> Yes. >> And great software to make that work. >> A repository, right? To be able to collect all that data, streaming data, bring all that together, and then be able to analyze and then make decisions and then trigger actions immediately, so. >> All right, so, let's go through some of the cool highlights real quick. I know we have limited time. I want to get to it. In terms of the demos, you mentioned the stadium thing. What else do you have? Explain some of the demos, and kind of give a little bit of a quick synopsis of each demo, and the coolness of it. >> Yeah, so, definitely, like I mentioned, the connected stadium's going to be a cool factor. The connected vehicle. We're going to have a car there, so that's going to be fun to watch, so, the fact that it's all connected. It's all IOT. It's through your phone. It's rental. >> [John] What's going to be in the car demo? >> Lots. (both laugh) Through the iPad, you can see certain things. I don't want to give it all away. >> So go to the demo. If you're in Barcelona, we're here in Palo Alto. >> [Emily] We'll have examples of what exactly the ... >> But what is in the car, because, if you think about it, obviously, over the years, I've seen tons of demos on stage, certainly at Sapphire and the big events. And there's a lot of real-time dashboarding stuff. Is that some of the ... The glam and flair going on at the demos? >> That's some aspect, yep. Yes. So, I can't give anything away yet. We want people to watch when we're there, but yeah. So there's going to be some cool demos there. And then we're actually going to be showcasing ... Intel, who's also a sponsor, for this particular show. This time around. Yeah, so we're going to be showing a prototype of a really simple IOT example, where we're going to connect it with Google Home and Amazon Echo, and we're able to control this little prototype building, send elevators up and down, all through bot technology. >> So SAP as a company's moving from a back office powering 80% of the world's businesses to a much more front-end, agile solution provider with technology ... >> [Emily] Exactly. >> Using the cloud and big data. >> And digital. >> [John] And digital. >> Yeah. And all of that is because our customers are demanding it. They see it, they know that ... They trust that we can help them along the way, on the backend as well as on the integration front, and help them become digital. >> But this is the transformation you guys have been at HANA. The system of record, that's the database and software. System of engagement, that's free-flowing data, and now you have AI ... >> [Emily] Yes. >> Kind of automating a lot of that real-world examples, so that seems to be the same. Nothing changes on the SAP vision on that front. >> No, it's an evolution. So I think all the technology components are in place. So AI, predictive, machine learning, that's been around forever. It seems like it's the holy grail for marketers, for people in risk management, you name it. Everyone wants to be able to use analytics. >> It's all integrated. >> Yeah, and now you've got the database, you've got the in-memory database, you've got the streaming capabilities, you've got ... There's so many different components that are now ready and in place to make it actually a reality. So it's exciting. >> Emily Mui with SAP Cloud Group. Final words, somewhere that you'd like folks to walk away with from a customer standpoint and impact here, Mobile World Congress this week. What's the big story from your perspective? >> Big story is that we've got a great cloud platform solution that people are just learning more about, and they should learn more about it, because we've got all the components, all the services available to help them become a much more agile business, help them optimize all the business processes they have in place today and the ones they're looking to create, and then of course becoming digital. It's become a benefit for them. It's an actual benefit to become digital. >> The IOT really highlights your value proposition as a company in general, and the cloud opportunity is just right ... Right lockstep with that. Congratulations. Thanks for coming out. >> Thank you. >> Emily Mui, here inside theCUBE in Palo Alto breaking down and talking about Mobile World Congress. Special two days of coverage here at Palo Alto. I'm John Furrier, thanks for watching. (upbeat techno music) (bright instrumental music)

>> Voiceover: Live, from Orlando, Florida, it's The Cube, covering Sapphire Now, headlining sponsored by SAP HANA Cloud, the leader in platform as a service, with support from Consolink, the cloud internet company. Now, here are your hosts, John Furrier and Peter Burse. >> Welcome back everyone, we are here live in Orlando, Florida for Sapphire Now, SiliconeANGLE Media's exclusive coverage of Sapphire. I'm John Furrier with Peter Burse. This is our flagship program, we go out to the events, and extract the citizen noise, you're watching The Cube. I want to do a shout-out to our sponsors. Without their help, we would not be here. SAP HANA Cloud Platform, Consolink at CONSOL Cloud, hot start up in Silicone Valley, and also we have Cap Gemini, we have EMC. Thanks so much for your support. Our next guest is Gaby Corin, who's the EVP of the Americas for Panaya, accompanied about a year ago by Infosys, now a part of Infosys. Welcome to the Cube. >> Thank you so much. >> Congratulations on the acquisition over a yeah ago, but you guys are to a part of the big machinery of Infosys, which is tier one systems integrated part of SAP's global channel, as they call it, but essentially, you're out serving customers all over the world. >> Gaby: That is correct, yes. >> At Infosys, what's your role in the Infosys organization, and what does your company do? >> Okay, so, I'll start with the company. Panaya was founded ten years ago. Our quest is to help customers to perform all their changes in their ERP environment. We basically analyze the environment, create that mapping, that baseline that helps them understand exactly what they're dealing with, then we support them in scoping out the changes, and then, we work with them throughout the journey of executing on all the testing cycles associated with all the changes. We serve about two thousand customers, and we are a hundred percent cloud-based solution. My role as EVP for the Americas is to support all customers in the region, and we're working very closely with Infosys into bringing Panaya as part of their offering to accelerate the processes, to bring innovation, and to bring much more efficiency to all the SAP projects and activities that they perform with our customers. >> We had the global partner person on earlier, and that was the big point, innovation's now at the center, not just delivery, which Infosys has been great at, but also other things, innovation, time is very important. >> Exactly. >> Your solution speeds things up, so share with us what it is, is it a SAS space? Is it code analyzers? Is it for QA? Is it for testing? What specifically do you guys solve? What problem do you solve? >> Great question. First of all, we are a SAS-based solution, so we do everything in the cloud. This helps, as you said, perform all the tasks faster and more efficiently. The pain that we're coming to address is the fact that change is constant in the ERP. The ERP is never an island, never an isolated solution. It's always in changes, the core of a lot of the businesses that we meet here, so change is their reality, they need to change all the time. They are highly customized, so every change that come from the vendor or from the business requires a lot of preparation and very fast execution, and this is where Panaya plays. We simulate the change virtually in the cloud, and we tell customers in advance what is going to happen to their environment all the way to the code line level what exactly is going to break, how to fix it, what to test, and we support them, again, throughout all the testing cycles from the unit test or the technical test all the way to user-acceptance test, UATs, that is a big pain to organization because of the collaboration. >> It's faster is the point. So, you guys speed up the process. >> Absolutely, we speed up the process, we reduce costs, we bring customers faster to market by about fifty percent, and we allow them to do their projects at the budget that they establish or lower. >> Give me an example of someone who has the problem, and what their environment looks like. Because everyone's trying to get to the cloud, and your solution is tailor-made perfectly for the cloud because it's very dev-ops-like. It makes things go faster, it's part of that whole agile iteration speed game, which we love, but the people trying to get there that are figuring it out, what's their environment, people who have the problem? What's their environment look like? Paint the picture. >> Virtually any SAP customer needs Panaya. >> John: That's a good plug. It's complicated. >> Yes. Their environment can have one instance, or multiple instances of SAP ECCs. They all have the need for testing because they perform testing all the way. They are trying to bring some of the applications to the cloud, but not necessarily. Most of our customers still are heavily on-premise based, so what we do is that we do all the analysis in the cloud, and this is how we help them do things much faster. >> So I got to ask you the Infosys question, because I'm a big fan of Vishal Sikka. For many years, I've watched his work at SAP, certainly. He was very, very early on and very right on a lot of technical decisions around how things played out. I watched him during the SOA days, going back to the web services days, which is the late 90's, early 2000s, he had the right call and vision on web services, and then service-oriented architectures. >> Yes. >> He brought a lot of great mojo to SAP and has always been very open-source driven. >> Right. >> John: And he's just a cool guy, so what's it like working there? I mean, is he always on top of the employees? Do you talk to him? What's it like inside the company at Infosys, and specifically Vishal, what's he up to? >> First of all, he's such a visionary. You listen to him and his vision. His vision is people and software. And he wants to make a difference when it comes to supporting customers, being an SI, being at a company that creates and makes a difference. He's also very personal, so he's very approachable. He loves ideas as innovation, and he believes that the innovations come from within, so he's a huge supporter of Panaya and bringing Panaya to every single Infosys customer and opportunity, but he has that vision that you don't replace a thing, you don't replace stuff. You take something, and you bring, but you learn to collaborate, and you understand that the environments needs to be flexible, and the only way to bring that flexibility is to take the existing environment and continue to bring innovation, even if it's in small steps, you bring that innovation to the table. And this is what makes it so unique to work for a guy like him. >> The traditional systems integrator relationship, there's always been tension, a lot of tension between customers and systems integrators. >> Gaby: Yes. >> Customers say they want something. Systems integrators have the expertise to do it. Customers want it fast, systems integrators sometimes use their experience to inflate billings, but the customer increasingly is in charge in almost all global markets. The question is are you helping your customers stay more in control of Infosys engagements? And if the answer is yes, how does that improve the value proposition of Infosys? >> Okay, that's a great question. One of the reasons that Panaya remains an independent and contained organization within Infosys is, besides commitment to support that, we sell direct a lot to our customers, and we support, we remain objective, whoever the customer chooses to work with, whether it's to do it in house or to use system integrators. And we have more and more projects that there are three, four, or five system integrators that are involved, and each one does a piece of the solution, and Panaya gives that control because of their analysis, because of the support on the planning stage. We paint the right picture of where you are today, where do you want to go, and in the journey of doing that. This is one of the claims of victory of Panaya is that we bring that control back to the hands of the customers exactly as they want to, because they want to understand what are they dealing with, what are the pricing, and SIs on the other hand, also understand that prices cannot continue to be cut forever and ever. But if you don't bring that innovation, that people plus software, it will be impossible to continue to compete in this market. >> They get more net contract value on the sales as they deliver value. >> Gaby: Exactly, to the customers. >> So if they're helping their customers drive more cash and revenue-- >> Well, I would presume that it actually starts with the contracting process for a lot of these efforts is itself very, very expensive and often leads to not a lot of value, and so I presume that in response to what you just mentioned, John, that you're generating artifacts to make it easy for the customer, the SAP customer, to envision where they need to go, and those artifacts then help the SAP customer manage the integrator and the company doing it, which then dramatically reduces the contracting process. >> Gaby: Exactly. >> Because it's a lot clearer, which means I can focus more on the management of the partner-- >> You release resources, correct. >> As a set of capabilities because because it always changes along the way. >> That is correct. >> As I change, I can envision that using some of the technologies you're bringing to bear. >> That is correct, we create these assets that can be reused time and again, and then we free up resources so they can focus on innovation and additional activities. That is exactly our value proposition, you got it absolutely right. >> So, are you a consultant management system in the SAP world? >> We don't claim to be, no, we bring solutions. We're not in the consulting business at all. >> Peter: No, managing the consulting business. >> Oh, absolutely, we help to manage that process. >> Helping the customer manage those consultants. >> That is correct, that is correct. Yes, you're absolutely right. >> My final question for you, thanks for coming on The Cube, by the way, I know it's short notice. >> Thank you, thank you for having me. >> Great to have the insight. What's the biggest change in the ecosystem are you seeing today? Because you're close to the code, so you're close to all the action at Panaya and certainly Infosys is massive and global. What is the biggest change that's happening in the ecosystem, with SI's and generally across the board? >> That's a great question. One thing that we're seeing is much more competition. The customer is much more educated, exactly as you, Peter, said. The customers are much more educated, they know what they want, and they're coming in with much more control and knowledge, so we're seeing this. Customers are looking for much more long-term activities. This is why HANA is becoming such a strong, we're seeing this also here in this show how everybody's talking HANA, because it's not something that you do for the next year. It's something that is going to be with these customers for a long term. They are looking for long-term type of engagements. >> They don't have to buy a lot of HANA. They can actually put their toe in the water, if you will. The old days it was you buy SAP, and you hired the SI's, project management, delivery over a long period of time. They don't have to do that today. They can still have a long view with HANA, right? I mean, are you seeing that, too? >> Yes, and what we're seeing is, a move on this regard, we're seeing a move from best of suite into best of breed. We want on each area the best solution possible. >> Without ballooning integration and training costs. >> Correct, correct, and we fit perfectly into that story. >> Well, thanks so much. Real quick question for you. You guys have a big end-user event like Sapphire. >> Gaby: Yes. >> Didn't you just have one in San Francisco recently? Or do you have one coming up? What's going on with the events for Infosys? >> We participated in Confluence, which is a very large event of Infosys, just a couple of weeks ago. Very, very well-attended, and we-- >> John: Is that a global conference in San Francisco or is it in other areas? >> It's a global event in which the largest, the biggest customers of Infosys attend, once a year, they get together. It's all about thought leadership and sharing ideas, design thinking, which Vishal is leading very strongly. That was the main theme of the event, so we had the chance to meet a lot of our customers and prospects. Now, of course, Sapphire. >> Thank you so much for coming on, Gaby. Great to have you on The Cube, and welcome to the Cube alumni now that you're on The Cube. We are live here in Orlando for SAP Sapphire Now. I'm John Furrier with Peter Burse with the Cube. You're watching SiliconANGLE' The Cube. (futuristic music)

>> Voiceover: Live from Orlando, Florida, it's theCube, covering Sapphire Now. Headline sponsored by SAP HANA Cloud, the leader in platform-as-a-service, with support from Consul, Inc, the Cloud internet company. Now here are your hosts, John Furrier and Peter Burris. >> Everyone, we are live in Orlando, Florida for a special presentation of theCube at SAP Sapphire Now's theCube SiliconANGLE's flagship program. We go out to the events and extract the signal from noise. I'm John Furrier, with my co-host Peter Burris Want to give a shout out to our sponsors. Without them, we would not be here. SAP HANA Cloud Platform Console Inc, Capgemini and EMC, thanks for your support, really excited to be here. Wall-to-wall coverage, three days. Over forty videos going to be hitting YouTube: SiliconANGLE.com/youtube. Our next guest is Dan Lahl, VP of SAP HANA Cloud Platform Product Marketing, welcome to theCube, thanks for having us. >> Thank you, John. You got all that out without a stumble. That was fantastic. >> I memorize it. >> That's great. >> Without our sponsors, we wouldn't be here, thank you very much. Thanks to you, and it's a been great support from you and your team. Really appreciate it, welcome to theCube. >> Love being here. You guys have something very unique in how you bring a play-by-play but from an analyst's perspective, very, very unique. >> Someone called me Pat Summerall, and Peter, John Madden yesterday, which was a great compliment because our lives are ESPN of tech. >> And I like it because it means I'm the better looking one. >> Exactly. >> NFL Gameday, but the game is on. >> Peter: Who's a guy? >> John: Boom! (laughs) >> Boom the Cloud is here! >> It's the whiteboard. But all seriously, great conversation. One of the things that's emerging out of the whole HANA Cloud Platform Ecosystem play is that it's really buzzing, and it's not like sizzle, but it's steak on the grill as well. So, just a lot of meat on the bone and the thing that we're seeing is that SAP has been putting themselves out there with tech. And not trying to do the land grab, not saying, hey, we're SAP and this is all a marketing program to get more SAP share for our other stuff. There's clear separation between SAP stuff, whether it's, whatever the customers are buying, and then an open way for developers; both SAP developers and, now, mainstream developers, iOS and Apple so, huge shift. And the Ecosystem's super excited, so I got to ask you, how do you guys separate out the market? Explain to the folks out there how this all fits in because the HANA Cloud platform is more open, it's really non-SAP, in a way. And there's other clouds out there, and let's face it, you guys weren't getting the buzz. A little bit late to the party, and you've got the product in good position right now. But you got Amazon out there, as your Microsoft was here, you know, doing relationship with you, your partnering with Apple, IBM was on, Cisco, all the big guys are here working with you. Separate out what it means. >> So let me back up, let me back up and give you all the HANA buzzwords, we've been very confusing to the market on how we brand it to different HANA products. There's the HANA database, data managing platform, we came out with that in 2011; very similar to Oracle from SQL Interface standpoint, very different from a technology standpoint. All in memory, and everybody knows that by now. Then, we have another initiative called S/4HANA. That's taking all of the applications, putting them onto the HANA data management platform. So that's the app stack. So business suite is now S/4HANA. So data management was HANA, S/4HANA, app stack. Then we have something called the HANA Enterprise Cloud, and that's just basically a managed service. You want to take your landscape, give it to our data center, let us manage for you. >> For SAP stuff? >> SAP stuff. Yeah, not any of the red stuff or anybody else's apps but >> But some of the partner extensions? >> But some of the partner extensions, yes. And that has to be certified, but basically it's a managed service. So you want to give your data center over to SAP? Guarantee that it will run, we'll upgrade all of the apps and enhancement packs and that kind of thing. So that's HANA Enterprise Cloud. And then finally, HANA Cloud Platform is something different altogether. It really is our offer, open platform as a service. So, any of the applications that SAP is shipping today, whether that be business suite, S/4HANA, Success Factors, Ariba, Concur, Cloud for Customer, you name it, can be extended or integrated using HANA Cloud Platform. Okay, so HANA data management, HEC, the managed service, S/4HANA, the new app stack, HCP, really the extension platform for that SAP Ecosystem. Okay? Now I say that, it's an open platform. It's Java-based, can you believe it? It's not ABAP-based, it's Java-based. Node.js, all open systems. We announced at the show that we're shipping Cloud Foundry with Node.js runtimes scripting languages like Ruby and Python and PHP and Go. Databases like Mongo and Postgres and Redis, it's open systems, baby, right? >> All the tools that they are offering. >> Exactly, they can do that. Yeah. So, any programmer under 30, we can now approach and have a conversation with. They don't have to learn a German programming language, right? Now, whether it's good or bad, it doesn't make any difference, it's open systems, right? And so that's kind of the framework of what we announced. >> What's that mean to developers? Let's take that forward, okay, open cloud platform, okay, great, under 30, or, just open source is so good now all the Q&A, all the questions are on Stack Overflow and all these Node.js and technology out to be used, so that's what people want. Okay, what's the impact to me? I'm the developer. What does it mean? What's in it for me? Do I have access to all the SAP stuff? I'm used to dealing with all these different tools to put systems together. >> That's the beauty, John, is all of those tools that you use, as an open systems developer, you can now, through HANA Cloud Platform, get to the back end systems that we didn't expose before, expect through an ABAP stack. Right, you don't have to learn BAPIs, you don't have to learn ABAP. You can use your Java capabilities, using Eclipse if you want, if you want to do it on your desktop device, or use a web IDE that's Java-based, right? >> But you're exposing these through API? >> Exactly, exactly, through either APIs or through integration services, through a direct connect back to the back ends. And we not only expose data, but also processes as well, so you can take advantage of a process. One of the things we announced this week was the API Business Hub. So now, we're going to deliver a catalog of APIs, where we'll publish into and an open system developer can say Oh, what's with that management accounting services? That hooks back into S/4HANA, I just need to call the API and take advantage of those management accounting services. Very cool. >> So on the Apple relationship, which is an iOS-based thing, the developer can then go to the Enterprise customer, so this is the Ecosystem now, okay I'm a developer. I have a whitespace, I see some unique thing, a problem that my customer has, that I can solve, or I'm an entrepreneur and say Hey, you know, I have a unique idea, I want to solve that problem. I code it but I might rely on SAP data, say an ERP, I could tap that-- >> You can now tap it. >> John: And integrate it in seamlessly? >> Yes, and show it natively on an iOS device. That's what we're delivering through the ACP software development kit SDK. So you're an Apple developer today. Well, you could develop the next SnapChat or some consumer-to-consumer app. But interesting, the bulk of Apple devices or the bulk of devices in the Enterprise, are Apple devices. They're not Android devices. Apple's done some work on that, upwards of 75% are actually Apple devices. So now, you're a developer, you want to get access to all of those different applications that SAP has, delivered in beautiful 1990s master detail today. >> Let's face it, I mean, we had this comment on theCube which we concur with, the user experience of Enterprise software is dated, and old, and people are bringing their phones to work. >> That's really kind of you to say dated and old, okay? I would have said old and crappy, okay? >> No one wakes up and says, hey I can't wait to download my Enterprise app and use it on the weekend. It's like root canal, don't love it, but you need it. >> Part number 000743xp, okay so now they can get into all of those processes without having to know the back end process. Through the SDK, we're going to expose all of those. >> Share some data on some of the onboard. I know you had a lot of early adopters and now the program's ramping up. We've talked over the past year and you guys are tweaking the product. You want to make sure the product was solid, that was key. Might have been delayed a little bit, but the timing of the Apple announcement, perfect. But I can imagine that the developers are excited because certainly in the Ecosystem out there, in Silicon Valley and beyond, there's a softening, it's kind of a bubble bursting, if you will, on the consumer stuff, so there might not be a couple more unicorns. The few unicorns that come along at every cycle of innovation. But the Enterprise is hot, so the buzz on the street is the Enterprise is hot, that's where you make money. As everyone works for a revenue model, you got to break even, so, there's a big focus on that in the entrepreneurial ecosystem. So, is there an uptake that you can share or any stats on the kinds of new onboarding that you guys are doing. >> Yeah, so just this week, we also announced that IBM is taking all of their MobileFirsts for iOS applications. They're going to participate in the SDK and they're going to move all of their applications onto the HANA cloud platform. They had a beautiful UI that they built for a hundred little mobile apps that were enterprise ready, but not enterprise connected. So now they're going to connect all those hundred little apps like Find&Fix, and Parts Manager and that kind of thing. >> I can see the slogan now. Enterprise: Ready to Connect. >> Exactly. >> Connecting. >> It's pretty decent validation of some of the things we're talking about here. >> Exactly, and the HCP play in it, for SAP is that's the gearbox to get them back to all of the SAP apps. Whether they be On Premise business suite, On Premise S/4HANA, Workforce Management, with Success Factors and Fieldglass. It's the gearbox to get them back to all of those. >> So let me ask the question, you're in a private market so you've got your eye on the prize in the market, you're forward-facing, but also you've got to work with the product teams and deal with that. Do you see a window of opportunity right now? Because the timing of having the product ready with HANA Cloud Platform plus the Apple relationship and the IBM stuff, which is more validation, a window of opportunity, the wind is at your back. This window, you've got a short window to kind of go out and win. Are you worried about that? Are you guys investing heavily now, do you see now a time to throttle it up and pedal to medal, straight and narrow, 90 miles an hour? >> You know, I actually see it as the wave is forming. Okay, I don't think our customer base knows that much about HANA Cloud Platform, it really has its coming out party at TechWave, last October. It's now exposed to the business group. We had the techie outage, now its the business outing. I see the wave starting to form, okay? And we've got to catch the wave and we got to ride the crap out of it. And there's a lot of stuff on the product side we have to deliver. There's a lot more that we have to do for integrating into our existing systems. We have to provide more direct, not direct connections, we've already got that piece, but more integration with the processes. We're not all the way there yet. So we have to push our product, our product management and engineering teams to do that. And that's not always easy at a big company like SAP that has all these different divisions building processes. And then the other hard part is, you got to make sure our sales reps are introducing us into every single customer account as a gearbox, as the agility platform. So that's starting to happen. So I wouldn't even say we're on the wave yet. We're starting to catch the wave. >> So let me build on that. I have two questions. I don't want to say they're quick. But here's the first one, here's what our CIO clients are telling us. One of the advantages of everything you said, platform, a lot of entry points, means that their business can pick their own road map for how they go to S/4HANA, as opposed to having single one-way, and that's the only way in, that'll extend the adoption cycle. Do you see that being a positive thing ultimately for not only SAP, in getting this message, and getting this product out, but also all the partners and the Ecosystem to drive this whole thing forward? >> Let me answer the customer part of that first. The way we have set up S/4 and HCP, is S/4 is the core that you really don't want to touch that much, you don't want to customize that much, you don't want to extend, you do that in HCP. Why would you want to do that? Well, as we deliver new enhancement packs, and we're delivering every couple of quarters, on the S/4 platform. Every time you do a customization inside the app, when you have to upgrade, you have to do regression tests, you got to check to customizations against the new rev. It becomes, in technical terms, a hairball. It becomes a huge hairball. Take that off the plate, just do it on HANA Cloud Platform. And so that's the customer angle to it, the partner angle to it is very simple, and it's a win-win for partners and for us. They can, and for customers as well, they can build a little app on the platform, snap it into S/4, Success Factor, and make it look like an app that's part of our SAS application, okay? The customer doesn't have to provision anything. The customer takes a tile and puts it on their Success Factor application. We win, because they're consuming it on HCP, so we're monetizing that too. So the partner has an easy path, the customer gets something easy, we help monetize on that. >> It's a great story and a lot of folks are looking forward, so for example, some of our clients are telling us, We are looking at the S/4platform, the S/4HANA platform, we came to it through analytics. So here's an interesting question Dan, you've got a lot of background in database. So the old way of thinking about building a database application is you didn't want to write an application required more than 80, 90, 100 disk I/Os. >> Yeah. Now we're talking about in-memory databases, calmative organization, provide any number of different straight-forward, common interfaces from a few standpoints back to the application. We're talkin' about what used to be or the equivalent of tens of thousands, maybe even hundreds of thousands of I/Os. What does that mean to the types of applications that we're going to be able to build in the Ecosystem over the course of the next few years. >> So you're right in that all data's immediately available in-memory ready to go. But here's the cool thing that I think you were getting at. You can build a structure one time, you build a table structure one time. On top of that, you just build views, logical views. And then your queries or your application looks at the logical view. Now logical views aren't somethin' new. It was just horrible to do it on a disk-based databse. >> Yep, very digital. >> You have to do tons of optimizations. In a memory database, it doesn't matter. It's all there. You just look at the logical view. So we're going to see people stacking up more and more and more logical views. Specifically in the analytics case, we see that all the time. From a partner standpoint, they're going to build their table structure, and then mix and match different application types using logical views. And you know, in HANA, we provide calc views and attribute views. So even better ways to do that. >> But the bottom line is the way you get to that ability to take a tile and drop it into a system and add that functionality, is because that underlying platform can support that view in an almost unlimited way. >> Exactly, whether the data is in HANA in the Cloud, or whether the data is still on premise through a direct connection back in the existing HANA system on premise. >> Of course unstructured data complicates the database equation, but also they have to coexist with the schemas and the structured databases out there. Has that thrown a curve ball at you guys at all? Or not a problem at all with HANA? >> So you know we've got an answer for that with Vora. I don't know if you've talked to any of the Vora folks, but you know what Vora brings to the party is it brings in-memory capabilities. It's an in-memory indexer for dup data. So instead of pointing your sequel query or building a MapReduce or using Hive or one of those technologies-- >> Or data lakes-- >> Or whatever, you just point it at Vora, and it's already indexed in memory. So our plan and our hope is that soon Vora will be on the HANA Cloud Platform. So that's just another piece of technology-- >> Peter: Way of generating a view. >> It's another service that we provide for generating a view on top of the dup data. >> Yeah, that's key. So talk about the Ecosystem innovation. Because one of the things I loved in McDermott's opening keynote, and I love the term, business model innovation. 'Cause that just really speaks to a whole new level of innovation. Usually it's tech innovation. >> Yeah. >> You get destructive enablers, platforms. At the end of the day, the application of the tools and platforms, however they're developed, by whomever, impact something. That's the business. That's the revenue. These new processes that are emerging. IoT is a great example. It's kind of an unknown process. It's hard to automate that workflow because it's evolving in real time. What innovations can you point to that you see, and that SAP sees as key mile markers, if you will, that shows that these things are being innovated on the business model side with the Ecosystem? >> Yeah, I'll give you two examples, one that's kind of just a speed up. And then I'll give you one that's a business model. So Hamburg Port Authority is the Port Authority for Hamburg, the second largest port in Europe. For them to keep up with the competition, they're going to have to double and triple in the next 15 years, the amount of goods going through their port. They have nowhere to build out. They cannot make their port bigger. It's surrounded by a city. There's nowhere for them to go. So they're using HANA Cloud Platform to basically create a grid. They're creating a utility or a cell network grid of all the containers that are sensorized, all of the trucks that have telematics information in the trucks. And they're also bringing in traffic information so that when the container comes in, they can bring the exact truck in that needs to get it in the right path into the port. If you think about that, that's a cellular network. And that's what they built using HANA Cloud Platform. So it's a semi-change in business model for the technology-- >> So minutes matter to them. >> Seconds matter to them, literally. The faster they can match up the container with the truck that's going to move that container, the better off they are. >> They got to clear the inventory. Sounds like a business problem. >> Exactly, exactly right? And think about it, they're probably going to sensorize the ships as well. They're going to stage those guys coming in over time. >> John: What's the other example? >> The other example is really interesting. This small company in Germany that builds forklifts, There can be nothing more pedantic than a forklift. It picks up a pallet, it moves the pallet, it puts it down. So here's what this company's done. It's called Still Forklifts. They are using HANA Cloud Platform to match up their order system, which is an SAP with the forklifts that are sensorized on HANA Cloud Platform so that the order system will send the order to get picked by the forklift. And the forklift and the order system have the maps of where everything is in the warehouse. >> The client's order system. >> The client's order system. And they've also now, they haven't done it yet, but they're working on a forklift to forklift integration so that if this guy's over in this part of the warehouse he has to pick something up over here. This forklift is over here. They meet in the middle. Trade some product, get it out to the docking station. >> So the forklift is an IoT device to the order system. And it opens up the possibility of greater automation within the warehouse floor. >> And they've changed their business model. They're no longer selling forklifts. They're selling pounds of goods moved within the warehouse. From in the warehouse to shipped. And they're billing on a monthly basis based on pounds of goods shipped. They're not selling forklifts anymore. That is pretty cool. >> So that's a complete shift. >> That's a business model shift. >> It's an outcome shift. >> Yeah, absolutely. >> They're selling the outcome. >> Exactly, exactly. And they had to think differently about their business. They had to think, we are not a forklift operator. We're a goods mover operator. >> Or to your business model, we were a forklift operator. Now we're a goods mover, an in-warehouse goods mover. >> Exactly, exactly. >> That's a great example and also a huge innovation. Because now, as the keynotes were saying, people are afraid to go out of business. And so the opportunity for the Ecosystem is, put one of those guys at check. They'll get the check. If they don't move, you take their territory. >> Exactly. >> So it's a nice cycle, SAP wins on both sides. >> On both sides, yeah, very cool. >> All right Dan, I got to ask you the question. Plans for this year, you got the Apple. You got the Cloud Platform. You have all this goodness goin' on. What's the plans for the year. Give us a taste of some of the things that you want to achieve this year, out in the market. And what KPIs are you looking at-- >> Yeah, what are we going to be talking about this time next year? >> I think we're going to be talking about what did you guys do in the area of Cloud Foundry. Have you guys really delivered on your Cloud Foundry promise of going opensource and moving toward portability? So next year, if we're fortunate enough to speak again, That's what I want you to ask me. Where are you guys on delivering Cloud Foundry? Pushing opensource, open development for developers even further as we talked at the outset of the interview. And then secondly, where are we on the API business hub? What is SAP doing to expose the thousands of business services that we have to our customers? To be able to use the HANA Cloud Platform with a catalog of business services that we're exposing to help them extend or modify or build that new application. >> And new onboarding numbers, having numbers showing both. >> That's right. Now what that means from a revenue standpoint, it means, you know we got to double or triple our business next year. We're not talkin' a 10%, 15% growth. We're talking an order of magnitude growth for our part of the business. >> And so you'll be investing more in marketing, training, tools. >> All of the above, all of the above. >> Hey, companies want to get into the enterprise, and the existing enterprise suppliers want to stay in the enterprise. >> Exactly, exactly. >> John: So it's a good time to be an arms dealer. >> Exactly, and we'll supply it with the HANA Cloud Platform. >> John: Dan, thanks so much for sharing your insight here on theCube. Really appreciate it, and great to meet your team. >> As well. >> And everyone here has been fantastic. We are live, here in Orlando. The theme is live, here at SAP this year. And of course we got the live coverage from theCube. This is theCube, I'm John Furrier, with Peter Burris. We'll be right back. You're watchin' theCube. (soft electronic music)

>> Voiceover: Live from Orlando, Florida, It's The Cube covering Sapphire Now, headlining sponsored by SAP HANA Cloud, the leader in platform-as-a-service with support from Console Inc., the cloud internet company. Now, here are your hosts, John Furrier and Peter Burris. >> Hey, welcome back, everyone, We are here, live, in Orlando, Florida SAP Sapphire Now. This is SiliconANGLE Media's The Cube. It's our flagship program, we go out to the events and extract the signal from the noise. I'm John Furrier with my co-host, Peter Burris, want to give a shout out to our sponsors, SAP Hana Cloud Platform, Console Inc, Capgemini, EMC, thanks so much for sponsoring us. Our next guest is Pat Bakey who's the president of SAP's Industry Cloud group. It's the core of the cloud, all SAP. Welcome to The Cube. >> Hi, it's great to be in The Cube, first time in The Cube. >> First time on The Cube, congratulations first time Cuber. Great to have you. You have, as holistically viewing across all the different lines of business, Cloud will be a very big part of the future and across all of SAP, that's the core business. Yet, now you have Hana cloud platform, you got all this other stuff going on. Now, you have cloudification of SAP in kind of a real time happening in this show, it's going to have an impact to the deployment model, the consumption model, and the economics. What's the take, what's the internal discussions? How you guys talk about it externally with costumers and how is it received? >> Right, so, you know what, I'll tell you what, this is the industry cloud organization, so, maybe I can start there. What's industry and cloud doing in the same sentence, in the same title? So, when you talk about digitization, what customers are looking for today, it's value and speed, right, speed and agility. So, the industry part of the equation is all about value. How do we communicated the value of our innovations in a message and understanding that gives the customers confidence to invest in a innovation agenda and that's kind of, historically, has always been the strength of SAP, is the language that we speak with our customers, it's well understood, we just make sure that we express that well across all industries and line of business with the digitization agenda. The cloud portion is where speed and agility comes into play. How do you move quickly, how do you move fast? If in yesterday's business the strength was your ownership of assets, the strength today, the attributes in which these companies compete on is speed, innovation, agility, and that's where cloud comes into play. >> And knowledge of the customer. How are you then bringing those two things together for your customerS? >> So, we're helping, actually, customers across all industries get closer to the customer. If there's one strategy that every customer in every industry is pursuing is get close to the customer. This is important, it may seem sort of simplistic, but it's easy to say, it's hard to do. So, we are helping customers understand what their customers and what their customer's customers are doing. It's driving a blurring of industries. You may say that I'm responsible for 26 industries, maybe oversimplifying 'cause we see this massive blurring of industries because as customers in industries are trying to get closer to their customers, they cross boundaries. >> And conversation let's them do that. >> Yeah, it's like we were talking about before, in this world of atoms, very restrictive, very kind of two-dimensional. Digital, it defies gravity, it defies boundaries, and that's why you see this blurring of boundaries in cross industry plays. >> Yeah, we're seeing that, too, you guys talk about it here, I heard it many times, breaking down the silos and the keynotes, but at the same time, you want to have that getting close to your customer mindset which means that the apps, the workloads are domain specific and there's some blurring, so the question is, how can you be vertically integrated at some level for that domain expertise and then be horizontally scalable because the data really becomes the blurring component, too, you have data moving around, so how do you guys look at that and are customers asking for this kind of architecture? >> Yeah, it's exactly, so... It's interesting, in the old world, you either had deep industry expertise in your applications, your technology, or you had sort of a broad, horizontal, and that got you a seat at the table. You had to be best in class in either of those. So, those still get you to the table, if you have those, but it may be a small table like the table that we deal with, with our customers, is an innovation table, it's a growth table, and it involves the whole board, the whole enterprise. If you get to that table, you need to have deep industry expertise and what do I mean by that? First, you speak the language, you understand their industry from a process and the capability area and then you have to express that across their businesses, so whether that business are traditional COM, the customer business around people, HR, or around procurement or even in the industries where you're taking look at supply chain or you're looking at planning, you need to be able to integrate the industry with the horizontal. When you have that conversation and that message, which we have, you're at the big table. >> The big boy table, so what are some of the conversations at the table, is it really more revenue-driving for the customer's customers? Is it cost-saving, both, is it implementation? What are some of the trending conversations that are happening at the big table? So, at the big table, at the top of the house, strategically, around this topic of digitization, the world of digitization, competition is at the business model level, that's what they're talking about which is, I know I'm in this business today, will I be in this business tomorrow and how do I compete tomorrow? It's less about the assets as we said before, what do you have, but it's the insight that you have and that's opening up a lot of new business opportunities, so at the big table, it's around business model innovation, that's what they're talking about. >> Let me see if I can connect a couple of things you said here, so it used to be that when you thought about industry, you thought about the organization of assets, your organization of assets looks like your organization of assets, how do you handle your balance sheets, but now we're talking about customers and in many respects, the new industry is defined by the things that your customers want to do that are common to your competitor's customers. >> Exactly. >> And sometimes they're the same customers. So, as SAP's ecosystem grows, as it expands, as you're able to attract, through new sources of value, to things like this wonderful Apple partnership that we want to give you guys a chance to talk about, do you see SAP's role moving from a provider of software to actually increasing the provider of a way of thinking about doing business, where SAP, in many respects, becomes an element, almost a core element, of the business model that your customers are using to make things happen. >> That is a great statement and I actually can point you in two directions and I want to get to the Apple relation because it actually expresses our strategy on taking advantage of that. So, I would say, historically, when we were just an application company, the source of innovation came from SAP, we understood business process, we understood industry, we built these remarkable applications, and our ecosystem took 'em, implemented, and customers enjoyed the success. We're in the world now of digitization and massive innovation and there's no way that we can be the single source of innovation, this is why you heard Burn, this is why you heard Robyn Bell talking about the Hana cloud platform. So, we still need to be the catalyst when it comes to defining what is remarkable about our technology and capability to solve business problems, but then we have to enable a massive ecosystem to innovate on top of that, to extend it, to innovate, and that's where the Hana cloud platform comes into play. We are setting the agenda, we are setting the expectation of what great looks like and then tapping into the ecosystems that we have. >> What's interesting about what you just said and Peter brought this up yesterday with the global CTO of Capgemini and your premise was, the old days, you knew the processes, but didn't know the technologies, and you automated those processes, now we know the technology and don't know the processes as their developing. So, you look at IOT, it's an unknown future, but you can kind of guess it's going to be a lot of data, it's going to be an edge of the network, so that reinforces this whole ecosystem point that the innovation will come in an unknown innovation way meaning that you can't say, "I'm going to automate that" 'cause it's not known yet, it's evolving. That to me seems to tie what you just said. Can you expand your thoughts on that because this is what everyone's chasing that's the startup mentality, that's the agile, that's the jump on a grenade, win the beachhead, grow a business, that's going to be the startups and the white space for you guys. >> Look, I'm a lousy dart player, all right, but I could win if I'm throwing a thousand darts at a target and the other guy's throwing three, that's the environment we're in with Hana cloud platform, we got massive darts to throw at the target because it changes so fast you need to have a couple things, you need to have that great ecosystem, you need to be able to innovate, and you need to be able to address volatility. Let me give you a practical example of that. If you take a look at digitization and one of the key dimensions which is how work will be done in this new digital world, we have some pretty good ideas how it's going to be done such as it's not going to be done inside of the enterprise, whether that work is a manufacturing environment or that work is knowledge management in a typical office, it's going to be increasingly mobile and these mobile workers will be connected. And the challenge there is one, how do you understand what the processes will be? We have an idea, but they're going to evolve and second, how do you enable them with real time information 'cause the mobile experience isn't just taking the desktop and putting a different form factor on it, so we take a look at the Apple and SAP announcement, what does this mean? When you hear Tim and you hear Bill discuss it, it's a step change in how these two great companies believe work will be done in the digital world. The way that we execute on that is, again, back to what I said before, we will bring the best of a consumer, user experience, with the best of a business insight experience and bring those together and if you take a look then at what is the standard of a mobile platform, it's iOS which, by the way, is severely underutilized. It's chat, it's phone, it's email. If you take a look at your iPhone and how we're using it as consumers, that's massively underutilized in an enterprise setting, same thing with business information, when you leave the office, you're leaving all that behind, SAP will bring all that, the business process, the business insight, you bring it together and you have these new native applications. >> Interesting, too, on the Apple, by the way, congratulations it's a real phenomenal announcement, super happy to see that. The other nuance there, too, is that swift programming languages is very popular among developers right now and there's also another trend in the developer community what they're calling the non-coding developer, the tools are getting so damn good now that you don't have to go to be a computer science major to write code and there's other, Python, other languages that are good on-ramps, so you have an ecosystem that has the glam of Apple and the sexiness of swift. There's all this monetization opportunities. There's a developer saying, "Hey, I have an ecosystem "I can work with, that I can ride on the back of, "to the marketplace," so it's a great avenue for someone or now business to pick a white space and dominate it, whether it's a tool or a feature, they can come in and be a feature and still be a business, you'll be saying, so could I, was, "Oh, that's a feature not a company." That was the old way, now that's the innovation coming from these entrepreneurs, that, to me, is interesting. Are you guys seeing that kind of excitement from developers and do you see the developers as the core of the ecosystem? Well, what's your thoughts on that, overall? >> We're seeing the developer community becoming a more critical part because it's not just about implementing, remember when I said we're the source of innovation and other people implement it, that the skill set of the ecosystem, now when it's innovation, the source of the innovation needs to come from the ecosystem, and that's the developing community. So, if you take a look again at this Apple announcement, the reference applications and what we're building right now because that's what we and Apple think would look great in specific industries, but then it's this SDK and the Hana cloud platform. If you take 2.5 million SAP developers and you take 12 million iOS developers, you bring 'em together, not only just to work together, but to redefine what this new developing environment is, swift, right, the best of how you design enterprise applications or commercial applications and then the third leg of this is the iOS university because these are new classes of developers and my final point is as much as we think we know how work will be done in this mobile work environment, it's going to change, it's going to change. >> IOT's important, but people are going to work together with people over distance over agendas over boundaries, that's going to change the world. Let me ask you a question. We'd asked a couple of times to some of your folks on The Cube, Is it going to possible at some point in time, I'm going to get an Apple developer who decides to enter into an enterprise space by creating a solution, have an Apple phone customer go up, pull something off the app store because it is SAP complaint, is that going to happen? >> I can envision that happening, I can envision it. It's we are the standard for a trusted enterprise partner. >> Well, think about it, so now you got a situation where you your CIO and your IT organization who wants stable, comply in SAP, and then all the folks out in the field that are doing the work, that are identifying new problems and finding software that they can apply to solve the problem and having SAP and Apple bring both of those sides together, so that the CIO can be certain that what was just grabbed works and is compliant, but also, at the same time, that person knows that this innovative thing is not going to create problems in the backend. Very, very powerful vision, loved to see that notion. >> Yeah, and I think that's what you get when you combine those two brands and those two experiences. As quickly we're innovating and moving forward, you still need to have predictability in the business and a strong core, right? It's the business continuity, so you need to be able to innovate very quickly, rapid innovation, quick failure, fast learning, that's at the edge. So, if we can enable that, but give the predictability and the stability in the business relationships, security, you bring that together, this is the new world that we're creating, calls for new developers, calls for new ecosystems, and new leadership, and that's what we and Apple bring to the equation. >> So, Pat, share the roadmap on the Apple thing, just to kind of just to take the final close, square this out in little bits. Ecosystem, I get the ecosystem, I would evision that's a great outcome. >> Yeah, absolutely. >> Certified SAP apps in the Apple, I'm sure that's the plan. On the SAP side, you're going for the low hanging fruit, you mentioned that you're doing a couple of things, what's the roadmap for the sequence and the progression of SAP-Apple relationship? What are you guys bringing to the table from the core software? >> Yeah, so we've identified specific industries where the dynamics play to the favor of the dynamic at work, so they're mobile, they're standardizing already on iOS and they're connected and they need the rich enterprise information and we've identified high-values cases and those where we'll build the applications, but what we want to do-- >> John: That's a low hanging fruit for you guys. >> That's a low hanging fruit. And create that kind of references of what a great mobile experience looks like and then we're going to enable through the SDK, the ecosystem, so that's where the massive innovation is going to come from and then we'll try to figure out where this takes us. This is a series of six month sprints that we're on. >> Business sprints Love that concept. >> You know, this phrase, a couple of years ago, the speed of business, I forget which SAP soft, I remember in 2013, McDermott's phrase was "Running at the speed of business" with the mobile. Final question for you is, on the Industry Cloud, what's your plans, what's your goals, how do you see it evolving, can you share some anecdotal, you don't have to reveal any sensitive information, but the visions for how you see the Industry Cloud group that you're running, evolving over the next 12, 48 months? >> So, I see us, right now, that there's some things your core values and your core competencies shouldn't change, they should sort of leverage the environment that you're in and so, we're caring for our industry in sight, our focus on an end-to-end capability, high-values cases, and integration where it needs to be and that's what we express. So, we're going to take that and we're going to apply it to helping customers digitize on that journey. Here at Sapphire, the focus has been not on what we're announcing because ask any customer here, we have the requisite capabilities, what they want to get is busy on their journey and they want us to help them reduce uncertainty, reduce risk, and realize value. So, all the conversations here on what are we doing, industry, clear road maps, where we going? What capabilities? Second, road map on value, what value? S4, fastest launch in our history, customers, right now, are saying, "How do we double that, how do we triple that? Is by showing the business value associated with it. So that's what we're doing with industry, is showing a clear path of what great looks like, a road map on how to get there, the business values associated with it, and how working our digital business services customers, how we can help them realize that. >> And the road map is key because that clarifies the ecosystem. They understand kind of the rules of engagement. They can see the line. >> Yeah, what their overall is used. You know, it's interesting, Pat, you look around, there's 60,000 people, the amount of activity, the amount of deal making, that's going on here, it's probably the 25th largest economy in the world right here. >> Oh, it is, in Orlando, that's amazing. Yeah, I need to take a knee guys, I was just hearing about that. >> Final question and I'll let you go 'cause we got to go, we know you're tight on time, what's the coolest thing you've seen at Sapphire this week? >> Coolest thing, boy, I've been in so many meetings, I haven't seen cool. >> Peter: Other than this one. >> Oh, yeah, this is definitely a cool meeting. Oh, geez, coolest thing? >> Coolest phrase, sound bite, feedback, hallway conversation. >> What are you going to tell, in your next management meeting, what's the one thing you're going to tell 'em about Sapphire? >> I'd say that there is so much demand for us to help customers. We're not pushing, we're getting pulled. So, it's about prioritization like how do we focus on what's most important for our customers? That's such a lame answer. >> Peter: Well, but the prioritization of-- >> When you're looking for cool, but it's true. >> There's drones somewhere, I saw a beer tap that got IOT on it for-- >> I did see the guy in kind of the transformer outfit, that was pretty cool, but I'll tell you what, as we become more and more of consumer business oriented, my kids start developing a better understanding of what I actually do when I leave home. It's cool, I mean, SAP is cool. Actually, I'll tell you the one thing. The one thing I heard here from customers that either went to original Sapphires and are back after a while or coming for the first time, they can't believe how fast we're moving. They really can believe how fast we're moving. It's that speed, it's not just the pace of this conversation or the pace of the traffic around here, it's the pace of how quickly business is moving and that we're leading it. >> Pat Bakey, president of Industry Cloud, SAP, this is The Cube, I'm John Furrier with Peter Burris. Be right back, this is The Cube, SiliconANGLE's flagship program. This is The Cube, you're watching The Cube, we'll be right back. (fun, upbeat melody) >> Voiceover: There'll be millions of people in the near future that aren't allowed to be involved in their own personal well-being and wellness. Nobody wants to.

>> Voiceover: Live from Orlando, Florida. It's The Cube. Covering Sapphire Now. Headlining sponsored by SAP Hana Cloud, the leader in platform-as-a-service. With support from Console Inc., the Cloud Internet company. Now, here's your host John Furrier. >> Hey, welcome back, everyone. We are here live inside The Cube and we are at Sapphire Now, the SiliconeAngle's flagship program. We go out to the events, instruct (indistinct) Want to give a shout out to our sponsors. SAP Hana Cloud Platform, Console Inc., Virtustream, and EMC and Capgemini. Thanks for your support. We really appreciate it and it allows us to get these great events and provide all this great coverage. Over 35 video interviews already up on Youtube, more coming today. Our next guest is Michael Hoch who's a senior vice president of global system immigration at Virtustream. Now an EMC company sold for 1.2 billion dollars. Originally start out in the SAP ecosystem, created so much value over a billion dollars and then exit to sold to EMC. Welcome to The Cube. >> Thank you very much for having me. I'm glad to be here. >> I really love the Virtustream story because to me, we've been watching the progression of Virtustream from the beginning and it really to me, shows the value of the possibility of what's going on in this ecosystem. You sold for 1.2 billion dollars and that's now come, it's out there, it's established. Cat's floating, whatnot. (Michael laughs) But it really shows that you guys started out with an SAP and then pivoted or navigated out to a business model with the Cloud. Probably a lot of value. This is a lesson for the ecosystem because this is an example where SAP didn't have functionality. What you guys were doing, really was an operating model that was underserved. Very underserved. >> Share the story of how it relates to today's ecosystem. >> Sure. So when Virtustream was founded, Cloud was sort of an anathema for the enterprise. Right? That was the time where AWS was starting to shoot off. Microsoft was just dipping their toes in the water. And what Rodney Rogers and Kevin Reed saw is the opportunity was if you could put SAP and large enterprise mission critical applications on the Cloud, that's something that could have tremendous value in the future. At the time, everybody was skeptical. Security concerns. Availability concerns. Management concerns. >> "It'll never work." >> It'll never work. >> They said that about Amazon web services too. >> A few years earlier, that would never work and now they're what? 10 billion or something. So they focused on that market segment for two reasons. One, there was a huge value if it could work and two, they knew SAP. They came from a joint which they sold eventually to Capgemini. They knew SAP and system integration. White Glove Service was critical for enterprise applications to run in the Cloud. So the company was built with a White Glove Service that we started. As well as our technology, the extreme platform, that was really designed to host IO intensive stateful apps. From there, we grew, we did well, we plowed our way through the VC era. The reason why--- >> Wow, big word. Plow. (laughs) It was a sog. >> Yeah, I had been there for over five years and there were some days but in the end, where we got to over 200 SAP production customers, EMC very interested because of the technology, as well as the White Glove Service. And that's where we, about two years ago, started opening up to SI partners. Now, we were proving that this could work. We were winning customers against them and giving in a small way, the types of hand holding that they do on day to day basis. So we started partnering with some SIs to show that they could run it as well. >> Explain that. Take a minute to explain >> Sure. the relationship that Virtustream, now EMC Virtustream, has with SIs and how they engage with you and the value that you provide. >> Sure. Sure. So, we work with SIs in a couple of different ways. So, SIs are known for high touch, high management application services generally. When it came to where's it going to be hosted? Some SIs are asset light and they say, "Well, here's your respects, go buy data centers, go buy your own servers, whatever. Once you got the hardware provisioned, we'll come in and do the application work." Other SIs built their own data centers. Capgemini runs their own data centers and they had their application management work. So you had asset heavy, asset light. In the Cloud world, we were able to come in easily to those asset light situations and now through our software can help those asset heavy companies to build a full Cloud model to support it. In an asset light model, we would provide up to the IAS, maybe OS management and the SI would handle basis, data baseboard, all of the work that they're very good at. We did what we were really good at. >> Yeah, and this a big trend. We put this up yesterday on The Cube. This asset light and if you can take a minute to describe that is the new normal for operations management on the Cloud. Because you don't want to have heavy assets, you want to be more elastic, more agile if you will. >> Agile and responsive and it ties very well into the current trend of enterprises saying, "How much of my data center do I need to keep?". We're in a hybrid world. We're going to be in a hybrid world for the next several years. So there's going to be a large portion of on premise and a large portion of off premise. How do you build a hybrid environment that's scalable where you can pay for what use in the Cloud while still making use of whatever asset you have? So, the SIs look a lot like IT. >> So if everything's asset light or no asset, say we're using the Uber for example, it backs me out to do self-driving cars. (Michael laughs) As reported today in Pittsburgh. You need a data center somewhere. I mean someone's got to have a data center. So there's no diminishing return, there's no race to zero on this asset light. Someone needs to carry the assets. >> Someone needs to carry the assets and that's where Virtustream stepped in. Five or six years ago, someone's going to need to own this but we're going to need to own it at a higher degree of efficiency and still the scalability and security. >> So, this is the issue, right? >> Yeah. >> If you're going to use data driven, you need to have a data center. But here's where I want to get your thoughts on and this ties to the global channel, A-K-A the big system integrators who are doing a lot of stuff. They're have to be nimble to customer needs so they don't have and tell me if I've got this right? They don't have the luxury to provision up a data center at the scale that need in order to get table stakes and start doing business? And that it's easier to go to say Virtustream and other Clouds possibly to get the critical mass of resource to start doing business and being agile do up in software. Did I get that right? >> Well, if we're talking about the systems integrators in particular, they have some solution already. Most of the large ones, already either have their own data centers or co-location relationships but they're very manage hosting focused. What they're trying to get to is an agile responsive way to deliver what they've already been delivering. And that's where the partnership with Capgemini, for example. Our extreme software and their data centers, they're able to use our IAS as burst capabilities or to reach regions that they can't today. That really gets them into a position of looking like a Cloud provider, even though, they're owning their own data centers. They can use us, our IAS, for regions that they're not in or to extend. But they're able to get to that very responsive manner. What Virtustream was built from from the ground up. What we've been doing for the last six and half years. They're adding to their coasting capabilities. You'll see that >> You're accelerating there with other SIs as well. >> with pre-existing stuff. Giving them the ability to go out and do some of the agile dull. >> Don't lose your current customer, put 'em in a modern world. 'Cause this is another interesting trend. You've got ISVs looking like service providers. All the ISVs want to move to a Cloud enabled something. Maybe not full sass but something and then you've got service providers that need to look more like ISVs, software solution driven. >> So everything's flipping around? So the vector's are reversing on all aspects. >> On all aspects. But either way you look at it, they still want to have a consumption based infrastructure behind it. So whether you're asset heavy where you want to convert your data center to do that or you're asset light and you need to access one like Virtustream, it's really the way that it's already tipping in the industry, it's just going to continue over the next three years. >> What's the biggest challenge for developers out there? And the ecosystem partners that you're working with? I know you mentioned your story about Virtustream, schlogging through the VC and being agile, and that's the ups and downs of entrepreneurship. When we've started companies together. I've done companies. It's the same way, highs and lows. But that culture's moving their world (laughs) It's still turbulent to these guys. It is an up and down for these guys. It's a slog at some level because they got to be agile and that's very startup-like. >> To start up, they have to be agile and what I see, even the global SIs, you're talking about billion dollar companies, multi billion dollar companies. They're getting pressured by their customers to say I want an all in one solution and I want to pay for what I use. And their business models aren't necessarily ready for that so they're having to really rethink of they're delivering, how they're innovating, and what they're bringing to their customers. Because if they don't do it that customer is going to go to somebody who does. >> Yeah, I mean the enterprise has to become more entrepreneurial. That is the only way in my opinion that you're going to see the innovation surge and that's not necessarily be entrepreneur, just be entrepreneurial. >> Right (laughs) >> It's a mindset. >> Mindset. >> And you can learn that. You got to get tough skin. >> Tough skin and taking advantage of changing business conditions, ramping down when it's a good >> Iterating. slow seizing. Iterating. This why everybody comes to Cloud. Agility being number one. They say we want to respond to changing business conditions. You're business also has to respond, it can't just be your IT. >> Alright, the age of Cloud, Michael thanks so much. Give you the final word. What's on your plans for this year? What do you got going on? What's the big highlight for Virtustream? >> Sure. So, we've been doing SAP for six years or so, we're branching out into other enterprise applications. You'll be seeing us expand our catalog. We've always been a heterogeneous Cloud but you'll see a more aggressive move into that. And you'll see the scale. We're going to be opening up new locations globally. Thanks to our parent's company EMC. >> Big, big, deep pockets. >> Big deep pockets. >> I bet to so no one gets--- >> Our customers are global. We need to get our offering out in the global market. >> Well, congratulations on the success and the acquisition and certainly being a private company. Dell Technologies, a combination of EMC and Dell, will give you a lot of room to maneuver under public scrutiny. >> I'll come back in the Fall and talk about that. (light laughter) >> Thanks so much. >> This is The Cube. Live in Orlando for SAP Sapphire. I'm John Furrier. You're watching The Cube.

>> Voiceover: Live from Orlando, Florida, it's TheCUBE covering Sapphire Now. Headline sponsored by SAP HANA Cloud, the leader in platform-as-a-service with support from Console Inc., the cloud Internet company. Now, here are your hosts: John Furrier and Peter Burse. >> Hey, welcome back, everyone. We are here live in Orlando, Florida for Sapphire Now SAP show exclusive coverage from SiliconANGLE Media is TheCUBE, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier with my co-host, Peter Burris, Head of Research at SiliconANGLE Media. I want to give a shout out to our sponsors, SAP HANA Cloud platform, Console Inc., Virtustream, EMC and Capgemini. Thanks for your support, we really appreciate it. Our next guest is Michael Bruchey, who is the SAP Global VP of Partner Solutions, welcome to theCUBE. >> Thank you very much. It's an honor to be here. >> The theme of the ecosystem has been pretty big, but the ecosystem, as we've been learning on theCUBE, is that the channels, the VARs, the VAS, the ISVs, all that stuff going on there, but the global channel, your involvement is the big integrated, it's the much more advanced traditional SAP partners... >> Michael: Sure. >> Back in the old days of Big Six accounting firms that we're doing in the early day of deployments. Now, they're doing the cloud. So what's different now? What are you guys doing? Share with the audience some of the things that you guys are doing today and you're talking about at Sapphire this week? >> You know I think one of the big changes and I, one of the things I'm always curious of is time, and over generations, how the element of time has changed. And in the old days, when you talked about the Big Six or the Big Eight, it was probably more about implementations. It was more about how do I get this software to actually run and do something for me. And while that's still an important element that has to get done, a lot of it today is really about innovation. And it's how does SAP and how do our business partners help our customers innovate their business. So it's not just about implementing a piece of financial software. It's about how do they innovate their business so that they can create a competitive advantage for themselves. So I look at it and say, implementations are important. And we absolutely have to go do that. But if we don't help our customers innovate then they might as well just be standing still because our competition or somebody that doesn't even exist yet is going to come up with an idea or a way to go do something that's going to pass them by. >> It's interesting too that the global challenge is obviously very effective in terms of obviously, delivering value to the market. But it's interesting, you have a customer who has a customer. Your customer, customer, customer. So it's like three levels down, but the partner's closed to the customer. So Peter said something on Monday, I thought it was interesting about the trend we're on. I want to get your thoughts on this and how it relates to the innovation piece. In the old days, it was known processes. You used unknown technologies that were being figured out to automate those processes, deliver those technologies, accounting, ERP. Now you have unknown processes developing with known technology. >> Michael: Sure. >> And technology's obviously getting developed more and more. But the unknown processes, like IoT, these are used cases where it's a complete digital transformation on the workflow. So it's kind of unknown. So this is where the innovation comes in. I want to get your thoughts, what innovation aspects do you see and processes are developing that are getting a clear line of sight for the partners? Obviously, Big Data is one, we see that all the time. But what would you share? What insights? Spend a minute to talk about that. >> Yeah, I, it's a great, I'm glad, it's a great question because I believe that this is one of the big differentiators that SAP is bringing to the market in that, we talked, I talked a little bit about time and the importance of getting information on a real-time basis. It's interesting, I learned from one of my colleagues this morning that the R in our earlier products was for real time. But their perspective on real time was the fact that it wasn't on punch guards. I mean this was at the beginning of our company, and you think about where we are today. For our customers, when they innovate the business, and you look at things like the Internet of Things and you want that connectivity, it's not good enough to connect to the systems they have today because if I can't process that data in real time, then it doesn't, what do I do with it? What service can I provide to my customer? And that's part of the innovation or the enabling of innovation that SAP brings to the table with, as for HANA. It's the fact that, not only can I help you connect those devices, those Internet of Things, but I can help you do something with those devices, do it in real time and provide that feedback directly to you, as an organization, and to your customer immediately. >> And what's interesting too on the ecosystem playing, this is highlighted as well. And I want to get your thoughts on is as the, these discoveries come up, people in the trenches who see customer needs in a vertical or a domain, specific expertise, set, they see an opportunity to innovate then they got to actually program it. So they need a developer approach. >> Michael: Absolutely. >> So the developer approach becomes a pretty big deal so now they see an opportunity of problem to obstruct the way, the complexity and deliver it. So again, time is important. But they have to program it. It makes you break software. >> Peter: Yeah. >> So take a step back and say, "Okay. How long is that going to take?" So what's interesting, the ecosystem you guys are putting together is a time to value equation. What's the perspective on that? I mean cause that becomes now a developer cloud concept, the cloud from the servers and the ecosystem. What are you guys seeing there? And what used cases can you share? >> I'll give you a real live example for me and what we do and how we operate our business with our global business partners. When we decide to go to market with a global systems integrator to address this specific business problem, it's important for us to be able to track and measure whether what we're doing is being effective or not. If we create some sort of a campaign that distributes that message to our customers or our prospects, how many of them come forth or actually interested in it, and do we create business opportunity? And once we've created a business opportunity, we get it closed. Now we really want to track and measure where is it in the implementation? When do they go live? Once they've gone live, let's create a story so we can share that with the rest of the marketplace so that people can see the value that other customers are getting for what we do. We didn't really have a system to be able to track that. I came into this role about two years ago, and for the first year, we took something we had and we sort of got the duct tape out and we wrapped it up and we used it to do the best that we could. But we realized it really wasn't adequate for what we wanted to go do. So we actually contracted with one of our business partners. And we had them develop an application for us utilizing HANA Cloud platform. So it's a HANA Cloud platform-based application. It's fully integrated with our CRM system. And the beauty of it is, in the old world, if you didn't look at the innovative tools that SAP has available today, if you went back to the old way of doing things, it probably would have cost hundreds of thousands of dollars. >> Peter: And you wouldn't have gotten it done? >> We would not, well, and that's part of the reason why we didn't have anything. >> That's right. >> That's because we could never get it done. >> That's right. >> So we contract with one of our business partners who is an expert with HANA Cloud platform, and they developed an application for us in literally weeks. >> John: That's awesome. >> We defined our business requirements. We used, we used our own technology, worked with a third-party company, that's a business partner to go develop an application that solves a business problem. Yeah, now we had to go through the exercise of defining what our business requirements were. But the fact that we could do that, and we were able to do it economically, that's one of those big differences between the way that we used to do things and the way that we can do things today. And that's the important message for our customers is that if you have to take months or years and spend thousands and thousands of dollars to get things done, your competition will pass you by. Somebody you don't know even know exists today will pass you by. We need to enable them, so that they can be innovative, they can be quick. And they can respond to the requirements that are happening in the marketplace so that they can create their own innovations. We did that for ourselves. We used our own technology to get it done. >> But the other thing I'm presuming, I'll bet you, well, let me put it this way, there's been a consistent theme here that the platform approach allows that back end, that traditional SAP, that stable, that secure, that compliant foundation, that it allows innovation to occur in a way that doesn't freak out the IT organization. >> Michael: Exactly. >> And when I say that you probably weren't going to be able to get it done a few years ago is that someone within the IT organization would have come and whacked you with a hammer. But because you're using your own technology, and this is a test, this is the question, to what degree were you no longer, did you no longer have to run that traditional gauntlet of getting it up and running and into production and integrated with the rest of the system? >> Yeah, so we hadn't spoken about this before. >> Peter: Yes. >> And your question's great because I'd indicated that there was a solution that we had. I hesitated using the word solution because it really wasn't designed for what we were trying to go do. It was built on technology from somebody else. It wasn't built on SAP technology. And there were probably two driving factors to move off of that system. Number one, it didn't adequately meet our business requirements. But number two, the IT department said the clock is ticking. >> Yeah. >> We'll only support this for so long. You need to move to HANA, and you need to utilize SAP tools in order to get the support that you're looking for. So in some respects, we were forced to go do it. But we were able to embrace and adopt the new technologies that we have available. And by doing that, we got ourselves back into something that was standard, that our IT operation could support. And get it done much more quickly and get it much, done much more economically, where in the past, we could never get it done. >> So one of the things that's been occurring here at, on TheCUBE over the past couple of days, John, we have a lot of interviews with a lot of people that are part of the overall ecosystem. And SAP has an enormous amount of talent that's devoted to try and drive the productivity and the success and the value of partners and the whole ecosystem for customers. As you look forward, when you think about collaboration, you heard Hasso talk this morning about some of the new tech, in his keynotes, some of the new technologies, some of the ways, that's going to be, that's going to make it easier for smart, high quality, high-success people to work together. Talk a little bit about how you think technology's going to make it easier for you to work with all of the SAP experts and folks who are trying to bring value to the ecosystem for customers. >> Yeah, so today, pretty much all of our global systems integrators are creating innovation centers that will allow them to take advantage of these tools and to quickly develop and deploy assets that will help customers solve specific business problems. And so I believe what we'll be able to have, and I'm envisioning one in particular that happens to be in the same town that I live in, we will be able to work very, very quickly with that organization and integrate that group on a global basis. So it doesn't matter if the business problem is in the United States or if the business problem is in Asia Pacific or in Latin America. We can create those assets in a single location and deploy them anywhere across the globe. And it's interesting when I go around the globe and I meet with business partners, sometimes the challenge that they have is to understand all of the assets that are available within their own organization. And with the way that they're setting up these, and some of them will call them solution centers, some of them will call them innovation centers. But essentially, these centers of excellence, where they had the ability to bring the right resources together, who have the industry knowledge, they have the line of business knowledge. They've got the technical expertise that they can develop these kinds of solutions, that could be deployed in the cloud and can be deployed anywhere across the globe. >> Big buzz this week has been the Apple announcement. >> Sure. >> Obviously, that's going to impact you guys cause it's one great sexy announcement. Everyone loves Apple. They have billions in the cash, 2/3 overseas. But then you guys are global company, Hope we take advantage of that. That's going to bring a lot of attention to the ecosystem and more, and certainly put a spring in the step for developers. That's going to attract a non-SAP set of... >> Michael: Yeah. >> Folks. Yet you guys have an open choice model where you can buy SAP end to end, do all the greatness and goodness of SAP. But for the most part, you might get new customers. How is that impacting the game? Cause that's now, opens to SAP. You have the ecosystem up to a boat load of new opportunities. How are you guys structured for that? What's your thoughts on that? How are you guys organizing and capture that opportunity? Are you going to double down the marketing budgets and go all in? Cause Apple, you've got a window of opportunity. The wind's at your back on this one. >> Michael: Sure. >> So it's great opportunity. How are you organizing it? And how are you taking that to market? >> I think that one of the things certainly, as we work with our business partners especially, it's not about just working with them where they have their SAP expertise. That's not, they're not the only people that communicate either with our customers or with prospects. People who aren't our customers. And so one of the things that we're really trying to do is to ensure that where they have digital practices, and those digital practices aren't necessarily within the SAP practice at all. A matter of fact, they're not. It's really working in collaborating with them and helping them understand how the SAP today has the ability to work with them and to work with customers who haven't necessarily implemented anything of SAP today, whether you're the smallest enterprise or you're the largest global corporation, we have solutions that we can jointly come in together and solve business problems. >> And the consumerization of IT's happening, so that's certainly, is an exclamation point on that. >> Yeah, I thought Hasso's example today was outstanding. Because it took something that he's absolutely got on his app and say you wouldn't be able to do this any other way. >> Peter: That's right. >> And to be able to open SAP up... >> John: It's huge. >> To the user regardless of whether it's somebody just walking down the street or it's somebody within the four walls of the corporation and to be able to use those Apple devices in order to access that information and to make decisions that have an impact on what they do day in and day out, it's pretty significant. >> I mean, I mean it's going to be a competitive advantage for you guys. And I think one of the things that's not being discussed heavily, maybe because it's one of those things people don't like to talk about is money making, huge money making opportunity, exposing the SAP customer base to all those white space developer opportunities could be... >> Sure. >> Fantastic. >> Yeah, well yeah. And it also opens it up to a set of developers who may not have historically even looked at developing on an SAP platform. >> Michael, thanks so much for spending the time on TheCUBE. We really appreciate great conversations, great insights, sharing the data here on TheCUBE. TheCUBE ecosystem's growing at a new CUBE alumni, Michael, welcome to TheCUBE, appreciate it. We're live here at SAP Sapphire. You're watching TheCUBE. (chill-out music)

>> Voiceover: Live from Orlando, Florida, it's TheCube, covering Sapphire now. Headlines sponsored by SAP Hana Cloud, the leader in platform as a service. With support from Console inc., the Cloud internet company. Now, here's your host, Peter Burris. >> Hello! I'm Peter Burris and welcome back to TheCube, reporting live from Orlando, Florida and SAP Sapphire. We've had a couple of great days, this is the third day that we're doing this and we've got another half dozen or so great guests, please stay with us to get the signal from the noise of what's happening here at Sapphire. Today, well right now I'm speaking to Toby Davidson. Toby has a great job, strategy within SAP anywhere, which actually was announced this week here at Sapphire. Toby, tell us a little bit about what SAP anywhere is. >> SAP anywhere is a front office application. So what that means is it's an application for a small business to use to engage with their customers. So whether you're trying to market to them, have them sell, or purchase through digital commerce or a traditional e-store, social selling, or even brick and mortar retail stores. We provide the capability to the small business to bring all of these channels assail together so they can really truly engage with their customers and deliver a great customer experience. >> So we know pretty well from industry data, but also just anecdotal observation that customers are increasingly asking for digital engagement mechanisms. They walk into a retail store in a very traditional, brick and mortar as you said, but they're bringing their iPhones, they're bringing their Android tablets, they are demanding to be able to complement that experience with the ability to access all sources of information anywhere as part of their experience. Is that the kind of thing that you're helping small organizations or small retailers and other types of shops make happen very quickly within their businesses? >> Yes, absolutely. Certainly it's one of the elements that we're mobile first, so the idea being the application is designed to be used on mobile platforms, tablets, phones, etc. So, not just our customer is able to engage on a mobile platform as well as a computer, run their business the way they want to, access it how they want to, but also taking that to the end customers. So, how do you want to buy from a retailer? Do you want to go in in the store, do a traditional physical purchase with cash or NFC technology of Google for Android pay, that type of thing? Or would you prefer to actually buy online and have goods delivered, or buy online and go and pick it up in the store? Track it on your mobile, work with the retailer the way you want to. And I think we see that transacting both the B to C market, the end consumer market, and also the B to B market. So business to business. We want the experience in B to B commerce that we have when we do our personal banking online on the mobile. Or we're buying from one of the sales platforms, like Ebay, etc, when you're sitting on a train. We want to be able to do that in the B to B environment as well. So we're bringing both of those together. Providing the great experience that we like as a B to C customer. The user interface, the way we interact with the banking systems, the sales systems, the e-commerce platforms, as well as the power that you get in the B to B platforms of pricing that's specifically for you and your business. The order to invoice rather than having to pay with a credit card, tracking the account, the shipping, all of that sort of good stuff. We bring it all together so that the small business can offer that functionality to their customers so that they can actually expand the markets that they work in. They're not restricted by their traditional method of selling. >> So, another very important and interesting announcement, at least in the last couple of weeks, was the SAP Apple partnership. >> Correct, yeah. >> You must be frothing at the mouth. >> Absolutely. >> To start translating that into great deliverables for customers. >> Yes. >> Talk about how SAP anywhere is going to be affected by that announcement and how that ecosystem can be engaged to drive a lot of these new capabilities in smaller, medium-sized enterprises. >> So, I think when you look at the likes of Apple, and yeah, we've had some great discussions with them this week already and it's very exciting. But you look at the adoption of Apple technology within the small business. You know, you look at how the SMB is really adopting Apple-based technology. Everybody has an iPhone, everybody uses a tablet of some sort or other. So what we can really do is if we design our software to work on those platforms well. Things like using the capabilities that they provide natively so we're not just building an application that sits on an iPad, or sits on a phone, what we're actually doing is we're building it so it uses the capabilities and the functionalities that those specific devices use so that when you pick up your phone and you go into SAP anywhere, actually, you already know how it works. Because you're used to using the device. You know how to drive around it. So the user adoption is absolutely huge. Very quickly we can get our customers up and running and live. I think we would also very much like to look at the reach that, Apple has within their retail environment to small business, etc. That's very early days and ongoing discussions, but the ability for us to expand our reach into the market by leveraging the key relationships that we're able to drive as SAP. >> I would think that certainly an SAP anywhere customer would be exciting not, as you said, because their customers are using those devices, and they may themselves also be using those devices, but because Apple has shown what a combination of digital and brick and mortar can mean from an experience standpoint. Do you anticipate that this partnership is going to allow a mom and pop shop somewhere to adopt certain elements of that experience in their businesses? >> Yes, absolutely. And I think it's from two elements, you know? You have the devices, you have the physical capabilities, you also have the mechanisms that are allowed. So if we look at our software, you could buy something online, okay? You go into the equivalent of the Apple store, we're talking a mom and pop shop, the small independent trader, actually that order has been sent through to their device. They're working on an iPad as a point to sale. So, they actually see that the order's coming in, they're expecting you, they can have the order read. You can walk in, you can pay, we partner with Paypal, as well, so you could pay using your phone near the Paypal here device with their NFC technology. So actually, your whole transaction, you may have bought the product on the phone, on the train because we're mobile responsive. You've gone to the store, you've paid for it with the phone, you're given the product. What we can then do is, like any Apple store, "Would you like us to email you a receipt?" You don't want a physical paper copy, have it emailed. Provide the feedback, go on social media, share the news of what you bought so that we then know about you to re-market to you, to enable us to try and expand your purchases with us and breed some customer loyalty with, actually, what is a small business. The large enterprise organizations, the big retailers, they have the capability and the resources to drive that social media, drive that repeat business, ensure that you come back to us in the best way possible by providing the offers based on the learning that we've got from you and many other customers about purchase trend and purchase history. If you consider a small business selling on an independent platform, they may have an e-commerce web store that they're paying $9.99 a month for it, enables the selling of products that's not connected to the retail store. That's not connected to the Amazon platform sale. You may actually buy from each of those, but the typical retailer is not going to have that knowledge that is you that's across all of those platforms. So by bringing the elements of big data together, we're able to tie together who you bought from, where you bought, what are your personal buying trends? What do you like doing? So we can help deliver some intelligence back to that small retailer to re-target to you. And it may well be that you only ever buy off your mobile device, you only ever buy off your phone. So let's make sure that the way we target you with a marketing campaign hits your phone and it hits it at the right time in the right format so that we can really try and drive your business back to us as a small retailer. This is capabilities that really only larger enterprises have had the ability to invest in and to be able to leverage for the last, you know, certainly 10 years. >> So let's talk about the role that the ecosystem is going to play in SAP anywhere. We've heard a lot here at SAP Sapphire about the increasing value of the SAP ecosystem, both SAP, but also to customers. But we've also started hearing about how that ecosystem is valued to other partners, and certainly the S and E universe. Do you anticipate, for example, that a small medium enterprise that has a customer base is going to be able to use SAP anywhere, not only to engage their customers but also to engage adjacent businesses? So perhaps they can, in a location, start to weave together new concepts of services that might have been limited to, before, just the inventory that I had in the store? >> Yes, and I think we'll see it on two levels. We're building out an ecosystem of both larger more strategic partners, the likes we've already talked about. The Googles, the UPSs, the Paypals, etc. We can actually enable our customers and our partners, our solution provider partners to have access to those resources. What we're also looking to do is to build out an ecosystem of solution providers plus sort of more vertical specific partners where they can provide functionality and services within our platform. So we may have a sub-vertical, we may have some functionality that SAP anywhere doesn't necessarily deliver out of the box, but the tool kit that we provide as an application enables you as a partner to build out that sub-vertical capability and deliver it on the platform. Now, what that might do is it might mean that you can then extend that reach into those more location based partnerships, for example, where you are then bringing in additional partners, additional teams, additional services and you could leverage SAP anywhere to help control and mange all of that. As well as be an outlet for your products and also as a solution for you to sell your products on. >> So, last question here and let's talk a bit about the role that strategy is playing as you put this together. So, you're a strategist, you have to engage an enormous number of people, both at SAP, but also within this ecosystem. How are you getting and building that consensus to try to drive everybody in a common direction? >> So, it's a lot of hard work. We take a lot of data feeds, a lot of information, and we try and build a picture of what the market is doing now and also what the trends are moving towards. I'll give you an example. Recently I've been looking at our digital marketing capabilities and where should we be in 18 months, two years time? We've spent a lot of time working with Facebook on how their platform's being leveraged and how they're seeing the trend move. 90% of revenue for small businesses that comes through their advertising comes off a mobile device. So should we focus our resources on providing that mobile capability? On the iPhone, for example. Or do we look at the web-based technology as well? So it's pooling all of this data together, pulling all of the trend analysis together, and actually building a picture of where we're going. So really it's leveraging big data for ourselves to work out where we should be going and actually where we hope to drive our customers. Because, again, the SMB don't necessarily have access to these resources themselves, so it's the likes of us who can pull this data together and really drive the market for the SMB so they can move up in the marketplace and achieve that next level where they may move on to some of the products in the rest of the SAP portfolio. >> Excellent. Toby, SAP anywhere, thank you very much. Great announcement this week, congratulations, and there's a lot of small businesses out there that would love to see main street get resurrected. Precisely because of the new capabilities that you're able to bring to retailers and small businesses everywhere. Once again, Peter Burris, TheCube, SAP Sapphire. A lot more coming, stay with us.

>> Voiceover: Live, from Orlando, Florida, it's theCUBE. Covering SapphireNow. Headlines sponsored by SAP Hana Cloud, the leader in platform as a service, with support from Console, Inc., the Cloud internet company. Now, here are your hosts, John Furrier, and Peter Burris. >> Okay, welcome back everyone. We are here live in Orlando, Florida, for SAP Sapphire coverage from SiliconANGLE Media, theCUBE, our flagship program. We go out to the events, and extract the signal for the noise. Want to give a shout out to our sponsors, who allow us to get here, SAP Hana Cloud platform, Console, Inc., EMC, Cap Gemini, thanks for supporting us. We appreciate it. Our next guest is Mitch Kick, Global Vice President, Head of Strategy and Programs for SAP Global Ecosystem. We love strategy guys because, they get the chess board. And they look like they're always playing chess, 3-D chess. Been looking at the landscape, looking at the horse on the track. Welcome to The Cube. >> Thank you very much. Good to be here. >> It's an evolving ecosystem. It's fluid, but yet, active. The Apple announcement, certainly notable news for SAP. Certainly, the Cloud, mobile, social data trend, the confluence of those things, causing massive innovation surge. So you, got a lot going on. >> Absolutely. >> What is the current ecosystem? >> Well, you know, when you think about the way SAP looks at it's ecosystem, I mean certainly we have those traditional types of partners, who resell our product. But, when we talk about our global ecosystem, we're really talking about those partners who are either strategic service partners, technology partners, some emerging partners and names that you mentioned, like Apple, Uber, Facebook, some of these, they're not your grandfathers, SAP partners. And so, we're really moving to partner in new ways. To co-innovate new types of solutions, that take advantage of the trends in the digital landscape. >> John: Like what are you doing with Facebook? >> Well, Facebook is an example, it's something where we said, "Look, there's all this social data," "that's out there. How do we put that together with" "our Hybris, CEC, types of solutions," "our commerce solutions?". To basically allow marketers to do one-to-one marketing, that leverages the power of Facebook data, and your enterprise data, brings it together in a very manageable tool. >> That must've been a very hard deal, because they're very controlled about their data. And also, each person has their profile settings. So, that's awesome. >> Yeah, and it's something that allows for marketers to just do much more targeting, much more insightful targeting. You know, we announced that last year and over the course of the last year had a number of really interesting pilot examples. >> Can developers get involved in that Or is this more of SAP directly, kind of thing? >> Well that, is an example of where we are creating a solution that sort of packages it turnkey. But, you know when you think something like in Apple, the beauty of that one is, not only are we developing these beautiful industry applications, that are going to be in targeted industries, and I don't know if you saw them, they were out on the floor here. >> Yeah, impressive. >> With regard to retail, or with regard to.. >> Well start-ups will come out of the woodwork just in a short time, have hundreds of employees, with this ecosystem. >> Well, exactly. I guess the point I was making with the Apple deal, is not only are we working with to design some really incredible industry apps, but then we're also creating the software developer kit, making that into the Hana Cloud platform, so that if you're developing on Hana Cloud platform, it now becomes another compelling reason you can leverage these beautiful interfaces, and these beautiful tools, that take full advantage of native capabilities on the Apple devices. And so it's a way that our partnership not only delivers, kind of near-term solutions that matter for us, but enables our broader ecosystem of solution partners to capitalize. >> It's fastest to innovation. I mean, you're going to get more R and D, and then real production apps faster that way. >> Absolutely. >> From the developer. So that's Core. David Valente and I always talk about courses for horses, which is, you know, certain things fit certain ways. There seems to be now, with the Cloud platform, an opportunity for developers to come in. So I want you to explain how Hana fits in. 'Cause this, Hana Cloud and then this Hana Cloud platform. What's the difference between the two? Can you just quickly share what that means to the ecosystem? >> Well, Hana as a database, I mean, the thing about the Hana Cloud Platform is that, that creates platform for our solution partners to extend, and integrate, as well as build and develop on it. And you'd say, "Well, as a platform as a service," "are you guys using HCP, to go out there and win" "the past wars?" In the generic sense of the past, that's really not the intention. The intention is, we've got this huge installed base. We've got these service partners, who are working very closely with their customers to innovate on top of, so that once our customers move to that digital core of S4 Hana, they can use HCP as that extension and integration platform, to tie together a number of different things. And a lot of the things that are, you know, when you think about digital transformation, there is so much activity, and discussion around the customer experience, and architecting a beautiful customer experience, with mobile devices, with you know, targeted types of commerce on the front end. But, what people are coming to realize, I think, is the importance of having that end-to-end. Because, you aren't going to be able to deliver the beautiful experience. And so, the example with, you know I was on a panel yesterday with Uber and Tumi. As an example, Tumi, luxury retailer that wants to create, not only a compelling customer experience that embodies the best of its luxury brand, but also is facing the threat of Amazon Prime Same-Day delivery, in metropolitan areas. And the beauty is, by partnering with Uber, and SAP, we are able to incorporate that seamlessly, as an option for Same-Day delivery. They can deliver in 30 minutes, for seven dollars, it's game-changing. That's an example of where we provide, here at this event, an early window into the type of co-innovation that we are doing. It's sort of like, in the past where you'd think, "Well, SAP has a certain solution footprint," "and we're going to partner with other software companies," "who can plug-in to that footprint.". Now you have, in the new world, where there are industry ecosystems like Uber, platforms that you can capitalize on, it's the business network. You can plug-in business networks to, an overall solution to customers, that's really compelling and that delivers opportunities in ways that we couldn't have imagined a few years ago. >> I want to build on that. So, historically, strategy has been three to five years, tied to asset values, mainly fixed asset values, and how are we going to generate a return in those fixed asset, over an extended period of time. You're describing a world where, whereas especially as those assets become more programmable, they can be applied to a broader array of activities, and opportunities, where the horizon starts to shrink pretty dramatically, the strategic horizon. And it becomes more, "What capabilities do we have?", and "How do we improve those capabilities," "and drive them forward?". And that's a crucial way of thinking about partnerships, is partnerships, as capabilities. I think that's where you were going. >> Absolutely. >> Are you thinking now about partnerships in the ecosystem as crucial capabilities, not only for SAP, but for SAP customers? >> They've always been, in many ways, when you think about, customers need a whole solution. In the past, even when the on-prem software world, you didn't get the whole solution by just buying the software package, it required a lot of additional service. With the Cloud model's that are emerging, it's much more easy to consume the software functionality, but there still is a tremendous amount of on-going innovation, differentiation, customization. And that's why when you look at, a lot of where we're going with our solution, you can hear Mike Getlin talking about our success factors product, and the fact that, "Well, how do partners help us?", "Do our service partners help us in the same way" "of just implementing software?". No. There role is really in integrating and extending it, and creating micro-services on top of it, that then say, "This is a really unique capability" "that's essential for delivering value" "to this particular customer or client.". So, you're now finding that because of our ecosystem, that is getting plugged into these new ways of contributing, we can now have a broad array of contribution. People understand how they can plug-in and capitalize on that, and deliver real innovation and benefit to the end customer. >> So you look a lot at industry trends. As you walk the floor here, what trends are starting to emerge, for you, and what is getting you excited, as a strategist? >> From my standpoint, when you think about digital transformation, and honestly, we were joking a lot about this whole term, because when it first game out, it was sort of like, "I'm not familiar with anyone who's actually" "doing analogue transformation.". All IT is digital. We've been doing digital things for years. And transformation, I mean, I was involved in the early '90s and the big re-engineering wave. Right? Where you're re-engineering, using technology and what not, so what is really different here? And I think what we see, is that, through all these trends, there's sort of confluence of them, and people map out a dozen, two dozen different trends that are going to change the world, they speak breathlessly about all these things. But in the end, what difference does it really make? From my standpoint, it's really three. One is you're starting to see all these things change the customer experience, fundamentally. Right? To the real-time, mobile devices, one-to-one. That's being enabled now. You're also seeing the difference in how value is delivered, in terms of IOT, instrumenting the broader landscape, etc. And you're seeing a difference in business models, in terms of how value is captured. You can think about it as, "Well, how is value consumed?", "How is value being delivered?", "How is value being captured?". The real, so what, is that all these different individual technology trends are combining to make those differences happen, that enable completely different ways of making money, of growing of opportunity. >> It changes the analogue, where, the analogue piece used to be the transactional, digital then hands off to analogue, or vice versa. That whole thing, end-to-end you just talked about, is an end-to-end digital. But the analogue role of the person, is augmented differently. So what you said is interesting because, I think people look at it differently and say, "Hey, if it's digital end-to-end," "where does analogue fit in?". Well still, people walking around here at the show, we're face-to-face, so I think it's interesting when you look at the optimization of digital. I'll take sales leads, for instance or marketing automation. You know, get the form, pass the leads to the sales people, they go knock on the door, call, email, that's analogue transaction. That's now digital. >> Mitch: Right. >> But the still, analogue components. What's your thoughts on that? How do you look at it? 'Cause you still got to do business, the people still are going to be involved. >> That really hit home when we were talking about this Uber example, because everybody talks about Tumi, they were talking about, "Well, its a beautiful experience." for somebody to be able to then say, "I got a one-hour delivery.". We can all identify with going to a retail outlet and they say, "Oh, I'm sorry, we don't have any more" "of those in the store, but we've got one" "that's 40 minutes away, if you want to go drive there.". Well, what if now all of the sudden you can get the product in to this store, in the next 30 minutes? Or, deliver it to wherever you happen to be, in 30 minutes? That changes the game. >> John: And that's user experience. >> Yeah. But, the thing is, so that's nifty, that's great, it's really compelling. But, when you start thinking about what it would take to work this, okay? Well now, you're going to have to have an implication for those retail store people. And so, this notion of, "How are we making this" "a beautiful experience for the retail clerk?", who now, instead of just serving the store, is going to get pinged because, "Hey, wait a minute," "we've got some deliveries that you're going to have to" "pick and pack, to get ready for some Uber driver" "to come in." That's a change to them. So, when you talk about implication, that highlights all of the, "change management", all of the, "how does it make a difference" "in individuals work?", and there's always going to be that last mile engagement that is needed. And that's really when you start talking about trends, how do we see things changing, I think about our service partners, I see their role changing to enable the real business change. >> Well that's it, that's it. The impact is clear. Totally agree, 100%. It's the confluence that magnifies that change, and its massive. It's frickin' awesome. Everyone can look at it and say, "Damn, its going to be big!". My final question to you is, given that impact, what advice are you sharing with your ecosystem, in terms of how to prepare for it? How to be ready not to go out of business, or help your customers not go out of business? And enable them to actually compete, digitally, in the transformation. >> Well, when we look at it, part of the challenge is that the ecosystem is so diverse, that you know, often your guidelines are speaking to specific people. The one thing I would say is, everybody is going out and talking a digital message, we need to be on the same song sheet. So when your solution partner, or service partner, and you've got your own offerings, your own reference architecture's, et cetera, let's work together to make sure that we are all singing from the same sheet. Second thing is, it's really imperative that we, basically migrate our installed base, to the digital core. So, S4 Hana, getting enabled around that, making that change happen, that enables all sorts of other benefits. And the third thing would be, the importance of then leveraging Hana Cloud platform. Because, the integrations that were hard coded, from yesterday, are no longer valid. So, if you leverage Hana Cloud platform from integration standpoint, you're really allowing for this much more agile, and fluid, innovation cycle to happen, in a much faster clip. And that's really what our customers are going to need, and it's going to take all of us working together to deliver that promise, of digital transformation. >> Well the Apple deal puts you guys front and center, on the user experience side, consumerization of IT. The chess board, multiple dimensions of chess, going on at the SAP ecosystem. Mitch, thanks for coming on. >> Absolutely. >> Welcome to The Cube Alumni Club. This is The Cube here live at Sapphire, we'll be right back. You're watching, The Cube.

>> Voiceover: Live, from Orlando, Florida, it's theCube, covering SAPPHIRE NOW. Headline sponsored by SAP Hana Cloud, the leader in Platform-as-a-Service. With support from Console Inc. the Cloud internet company. Now, here's your host, John Furrier. >> Hey, welcome back everyone. We are here live at SAPPHIRE NOW, SAP's big user conference. This is theCube, SiliconANGLE's flagship program. We go out to the events and extract the signals from noise. Day three of wall-to-wall coverage, this is day three. We had awesome interviews, go to youtube.com/siliconangle and look for the playlist of SAPPHIRE NOW, it'd be great, great videos out there. We would not be here if it wasn't for our sponsors, so shout out to SAP Hana Cloud Platform, Console Inc., Console Cloud, the Interconnect Companies, for interconnecting the clouds, and, of course, EMC Capgemini, thanks for your support. Our next guest is Uddhav Gupta, who's the Global Vice President for the SAP Platform-as-a-Service. Great to see you, we'll shake hands. >> Good to see you, John. >> So, we have been so excited about Platform-as-a-Service going back, man, almost when the Clouderati started. You know, almost seven years ago, when we started SiliconANGLE. We saw pre-OpenStack, Amazon was already on a trajectory, OpenStack kind of, Rackspace kind of bootstraps that, and then the rest is history, now you have Cloud Foundry, all this stuff is coming together. So, you guys have a big part of that developer ecosystem. >> Yes, we do. >> What do you do for the platforms-of-service for SAP, and what are some of the things you're working on, what should the audience know about that you're working on. >> Absolutely, so, first of all, thank you for having me on the show. We at Hana Cloud Platform, is basically a idea that we came up with to help our customers solve the biggest problem of complicated application development. And when we spoke to the customers, the typical thing that came back to us is, I want to actually integrate applications, right? I have incipient backing systems, I have non-incipient backing systems, how to bring these two systems together? I typically build an application, a mash-up for the audience. The second scenario that we basically solve, is, a lot of customers came back and said, we want to just extend certain business processes that are running on the back end, and you know, build applications that actually sit and extend these processes. So, we started looking at all of that, we said, okay, it's very clear, that we want to simplify the core. But we also wanted to go out and provide a simplified application development stack, so that people actually go out and build these applications. And that's what Hana Cloud Platform is all about. >> So the approach is not so much come from the infrastructure of the service, but come down from the app. Okay, well Larry Ellison, at Oracle, he said as well, well, you come up from the hardware, they got SUN, and then he comes down from the top, and their middleware is Oracle, a similar approach. And that's a great message, because that's his focus, is obviously app, but they got SUN, so they can kind of clean and they can book in the middleware, if you will, or past layer. Um, how do you guys compare vis-a-vis that, because you don't have any hardware. >> Correct. >> You got partners. >> Correct. >> Um, like EMC, then you got the Vblock going back to the day. >> Exactly. >> How do you answer to that? >> So we have always been agnostic in terms of hardware, agnostic in terms of infrastructure. So the angle that we're going with is just like how we did with Hana. We said, we'll build the Hana software, and we'll have it available on multiple different platforms. We are doing the same thing with the Hana Cloud Platform. Today, we offered it off our own SAP data center. The road map is to basically partner with a number of infrastructure providers, like Amazon, like Azio, like other third-party hosting providers-- >> You'd okay the computers? >> Yeah, completely. So if you're actually looking at going ahead and deploying our software on Cloud Form Read, enabling it on OpenStack, so we can actually now take it to all of our infrastructure partners, and use them as suppliers. That way, we can actually concentrate on building a business Platform-as-a-Service layer, concentrate on building the mechanics. Building the intelligence of the Platform-as-a-Service, and leave the infrastructure game to the guys who are really good at that. Which are Amazon, Azio, and a few others. >> So, you guys have Hana, okay, Hana database as well, the platform is Hana Cloud Platform, so, back to the Oracle thing, and I bring up Oracles there, we can relate to that. They claim performance advantage, so Oracle on Oracle, with SUN, has been optimized. It's almost end-to-end stacked. You guys worried about performance at all? Can you share your thoughts on how you answer that? >> Of course, I mean, if you look at the whole team of Sapphire here, that's been about running a business life. You can't run a business life without having performance. So performance is the core of everything that we're doing. Whether it's running a database that's high-speed. Whether it's simplifying the entire application stack, the S/4Hana, running at high-speed. It's also about an innovation cycle around it that needs to also be high-speed. And when we're building the Hana Cloud Platform, we've actually look into those elements continuously, and saying, how can we help application development also run at high-performance? This is around the computer. This is around the database. This is around the tool set that we actually providing our partner ecosystem, as well as the customers, to build custom applications at really high speeds. >> Okay, talk about, um, the Hana Cloud Platform. Expand, and take a minute to explain, because, I think that, you know, seeing on the opening day, you guys aren't getting the kind of credit in the press and in the market, although you're being successful, um, as the cloud. Some people say, oh they have nothin'. Platform-as-a-service, it's just SAP ware. Answer that, explain, take a minute to explain, what you guys have done, in the market, how it's different, and then it does work for non-SAP customers. So, kind of dice that out for us, share that. Take a minute to explain that. >> Absolutely, going to Sapphire, a lot of our customers and a lot of the press, media, also thought that Hana Cloud Platform is just for SAP. Now, after two days of conversations with customers, they quickly realize, that we're not just, like, for SAP, we could actually be the Force.com or the application platform for merging data from SAP and non-SAP, right? So that's the first revelation a lot of the customers have got. I find many of the customers that had this, aha moment, when I was talking to them, and they're like, "Oh, I can actually solve a number of issues with this. "I can actually go out and provide a single "application development layer across "my entire backing system, which is SAP and non-SAP." So we've seen a lot of that reaction. >> So that's an integration game, too. And the thing I would share were the folks at my observation of theCube, and I'd love to get your thoughts on this, is that, it's not trying to win SAP end-to-end. SAP plays well wherever the customer desires it, right? So if they go to ERP, or not ERP. If you want to come and and do, say, HR stuff. And success factors. You're still going to have a little bit of SAP, but this is application layer at the Hana Cloud Platform, is for the rest of the enterprise. It's not to lock in for future SAP, right? >> It's not a lock-in story here, right? I'll give you an example. We are doing some really crazy stuff on Hana Cloud Platform, right. You know the Superbowl that took place in San Francisco. >> Of course, Superbowl 50. >> SAP had a whole fan energy zone set up there, where people were actually playing games. And we are continuously streaming data from those games into the Hana Cloud Platform, right? Now, nothing to do with SAP, nothing to do with anything that even closely SAP's associated with. It's fan data coming to the Hana Cloud Platform. And people seeing analytics on top of it, right? We're having other partners also do similar stuff. I'm talking to partners that are basically going ahead and serving the utility companies, but more on the utility to the consumers piece. With the outlying customers to basically go and create a aggregated view of the consumptions, right? And this is a look at something not what SAP's used to doing. Bringing in the Hana Cloud Platform is allowing them to do such things. >> Alright, so my final question really is around Apple. So, how does the Apple deal affect you guys in particular. Because, you guys can't hide in the shadows anymore. You got to go for- go big or go home with Hana Cloud Platform. So does that change your game in terms if you go to market, is your budget increased? I mean you got, the game is on. The Apple deal puts the pressure on you guys to take that relationship, and use it as a way to get into, obviously means for your development. Swift is a great programming language, got a lot of traction. So tell me, I mean, is it all in now? I mean Apple is Apple that, hey, you got to go for it. Go big or go home. >> Yeah, so, it's definitely go big. The other thing that we have with this whole Apple relationship that we announced, has also made a very beautiful point, if you think about it, right? There're certain applications that can be web applications that you can still render on a mobile device, sure. You can make them extremely responsive, you can do all of that kind of stuff. But the beauty of the IOS and the relationship that we built with Apple, it allows you to start now building native applications that run on the mobile, but consume all the technical services that we have, are made available in the Hana Cloud Platform. >> And the data's critical there, I mean, SAP's got ARP data, systems of record data. And now you're expanding out to other engagement data, non-SAP data by the way. >> Exactly, and all the other technology services that we're basically providing in the Hana Cloud Platform with it's content, with it's data, with it's integration, a whole bunch of stuff, right? >> So is your budget doubled? >> Well the budget is not doubled, definitely right. >> Yeah but you have to, you have to run now so it's pretty clear for you guys, right? I mean, explain, is that the mandate? I mean, because you guys have been kind of like, silent run- I say silent run, not stealth, but I mean you been, chipping away at it, it's been a ground game for SAP Hana Cloud, haven't seen a lot of stuff out there in the market. It seems to me that now, the pressure's on. So go knock it out of the park, right? >> Absolutely, the focus on basically building mobile applications, specific mobile applications, for certain industries, is definitely coming back. So a lot of investment is happening in that space for sure, from SAP, from Apple, also from our partners. So that investment is definitely happening. There's also a lot of traction that we are basically putting on marketing that uh, concept out, so that our partner, the customers also get a true pat forward and a grain in how they should actually invest their resources. >> What's you priorities this year? Education, onboarding new-- >> Our priorities this year is getting a whole bunch of developers to actually start using the Hana Cloud Platform. To that extent, what we've actually done is we've gone ahead and created open SAP courses that allows anybody to access education on Hana Cloud Platform, absolutely free. With the IOS relationship we've gone out and basically created IOS academy. A lot of people understand how to build IOS apps, with the Hana Cloud Platform, thereby bridging the 150,000 developers that are already in the Hana Cloud Platform, the two million developers of the SAP network, and the 30 million developers of the Apple world, all coming together to start building stuff on the Hana Cloud Platform. >> I'm sure you've got some internal debates, like percentage of penetration within that 35 million, I mean, not everyone's going to be interested in enterprise programming but, a good slice will look to build white spaces. >> Absolutely, because, guess what? You can only earn that much money by building consumer apps. The moment you are a developer and you really want to earn serious money, you basically start looking at building enterprise apps. >> Final final question, because I have one more, this is good conversation, uh, where are the white spaces? So the developers that are watching, or people that are interested, in innovating on SAP, where do you guys see the white spaces that are low-hanging fruit right now, that someone can get a position in here and work? >> So, there're a number of those. Uh, the very first one around building industry-specific apps, right? To a large part of the industry, UAX was our SAP gooey. But now, everybody want to actually start digitizing those processes. Nobody actually wants to go into a static screen, or a pre-defined screen. They want it to be very responsive to what they're doing at the moment. It's alive, right? So, building those apps is definitely a white space. The second big white space is around building industry content. What I mean by industry content is, a platform can basically provide you all the platform capabilities that are required. But you need a lot more of the content and the technologies services. This could be matching learning algorithms, this could be actually predictive algorithms, this could be data content that is coming in. Building and providing data as a micro-service within the platform is something that is very interesting for us. >> Thanks so much for coming on theCube, I'll give you the final word Uddhav Gupta, Global Vice President of SAP, Platform-as-a-Service. What's the vibe of the show, you mentioned, what's the hallway conversations that you're hearing. You know, what's going on with the night, certainly at night with all those events going on, last night I went to bed early, watched the Warriors game. Win by 30-something points. Night before I was out til 1:30 doing some networking to Lloyd Bardy, S. Ensher, EY, seeing all the SAP people. Lot of chatter, what are you hearing? What are you hearing in the hallways? >> The vibe is very very positive. People are starting to finally understand how we are bringing all the Cloud acquisitions that we made together. People are starting to understand that they have to move to the Cloud. So the whole thing about the myth, whether we move or do not move to the Cloud, it's now kind of settled down. People are understanding where SAP is with integration, where SAP is with moving to the Cloud. But, the beauty is, last year, same time, the questions I was getting, was is any of this real? The question that we're getting now is, how do I engage into it? How do I start doing it? So that transition's happened really beautifully. Whether you think about S/4Hana, whether you think about Hana Cloud Platform, just in general, what's happening in the past well is helping that quite a lot. >> You guys have done a good job and you've been kind of transitioning, now it's real. You got a straight-and-narrow for developers. I'm looking forward to tracking you guys and seeing the progress. Great hallway conversations, of course the biggest conversation was that Reggie Jackson was on theCube, on day one and he was awesome, also the great executives come on with great conversation. Thanks so much for sharing your insight on theCube, Hana Cloud Platform-as-a-Service. We are live here in Orlando, you're watchin' theCube.

>> Voiceover: The Cube, covering SAPPHIRE NOW. Headlines sponsored by SAP HANA Cloud, the leader in platform as a service. With support from Console, Inc., the cloud internet company. Now, here are your hosts, John Furrier and Peter Burris. >> Okay, welcome back. We are here live in Orlando winding down day two of three days of wall-to-wall coverage, of live coverage of SAPPHIRE NOW. This is The Cube, SiliconANGLE's flagship program. We go out to the events and extract and sift through the noise. I want to give a shout-out to our sponsors who allow us to get here and do all this massive programming, SAP HANA Cloud platform, Console, Inc., Capgemini, and EMC. Thanks to our sponsors, we really appreciate it. Our next guest is Roger Quinlan, Senior Vice-President, global head of the partner-managed cloud at SAP Thanks for joining us, welcome to The Cube. >> Thanks for having me, this is great. >> We love it, so explain what is the partner, partner managed cloud, just to kind of make sure we get the definition out there because you get the partner ecosystem, but this is the managed cloud, the partner managed cloud. >> Right. >> John: Explain what that is. >> So basically it allows, it allows our partners to create cloud offerings, private cloud offerings that they can offer to their clients as software as a service. And obviously SAP technology enables the inside of that, the guts of it. And we typically structure the agreements in, you know, anywhere from two to seven year. Most of them are five year agreements so it's a long-term agreement, good for the partners, helps our clients get into the cloud quickly and easily. >> Explain who those partners are and give an example of how that works because SAP, you had partners, many, many years delivering the apps. But now this platform game with the cloud changes the business models. Who are some of the people that are implementing this? >> Yes, so Capgemini is a great example of one, NTT, Accenture, you know the players that you might think of right there. And there's even some smaller ones, some smaller SIs that are maybe not household names but are doing very good work. >> Specialty boutique kind of, domain expertise. >> Yeah, and even some that are fairly large but are not maybe household names in the US but are big names in Europe, like T-Systems as an example. >> Great, and the vision around this was just to get simplified on the delivery cycle, so with cloud, the goodness of SAP now can be tailored for the end client 'cause these guys are smart, they have data scientists, they have a lot of programming capabilities, they have a cloud knowledge. But they have to deliver a solution to the customers 'cause they are a trusted advisor to your customers. Is that the main reason? What's the push behind all this? >> Yeah, their main reason for us is really to allow us to get into market niches that we don't serve today. So if you think, I'll give you a great example. There was a niche with hospitals, smaller hospitals in southern Africa. And they needed infrastructure to manage the operations of a hospital. They wanted to modernize. They wanted to do the digital transformation, to use the modern buzz-word. And so one of our partners had a very good relationship with a couple of these hospitals and went out and said, hey, you know, if we built a solution, would you use it? And they said sure, so they went out and built it, and you know they started off with one, two, by the time they had it all built they had three. Quickly, they had seven. They're now up to 16 hospitals. It allows us to provide great technology to these hospitals. They can provide better healthcare to their constituents in a market that we otherwise would not be able to serve. So that's one good example of accessing a market that maybe SAP would not have access to. But the integrator, which was T-Systems in this case, that, you know, has great relationships in that community, so it really is leveraging a relationship they already have. >> So I can see the benefits to the customers and the partners 'cause it's clear. Partners can make more money, can have great differentiation to their customers. What's the impact of the SAP sales force? Do they get comped on it? Is there a channel conflict? Because that's going to probably come up. >> It's funny, so you know our market space well enough to know if that's an issue now, right? And it always is, right? So what we've decided to do is, basically the sales organization that has the end customer, they get, basically they get compensated on it. >> So they're incented to play ball. >> Absolutely, there's no disincentive. It's kind of the same if they sold it directly themselves. >> How does the partner managed cloud support the new S/4HANA 'cause that's the big story here. You're talking about ERP, modernized up. It's a big, all the discussions around that, everyone's jazzed up about it. All the hardcore SAP customers are all like, okay, wow. How does that impact this? >> Yeah, so S/4 becomes the technology that most of our partner-managed cloud offerings are utilizing. So what we find a lot is customers out there want, they want to do something new. Maybe they're a Hybris customer today, or they're an Ariba customer today, but now they need to modernize their core. They need to do an ERP. Maybe they didn't have one, or maybe they had an old one and they want to modernize it. S/4 is a perfect way to go deliver that in the cloud to the end client. And so I would say you know maybe a third or 40% of the transactions that we're doin' in the partner-managed cloud space are S/4. >> A lot of your partners, especially some of these big guys, are trying to evolve their business models away from ours-- >> Roger: Yes. >> To IP, so I presume a big part of this is to try to get them to build that IP, proximate to the SAP platform. >> Roger: Yes >> How are you encouraging them to do that? Are you underwriting? Are you financing it in any way? Are you sharing it? How are you getting them, other than just the raw business opportunity, what kind of new business models are you putting in place so the value accretes to your platform from these guys faster? >> Yeah, we're really focusing on verticals and on geographies, so that we don't have overlap. That way it creates a unique differentiator for that particular systems integrator. I talked about the example in southern Africa, but another example would be in Japan in the real estate market. We did a similar thing with a totally different systems integrator, and that allows them to have a unique approach to the real estate market inside of, primarily inside of Tokyo. So what we try and do is try and make sure that we don't have a lot of overlap in geographies and overlap in solution areas, so they get some sort of a competitive advantage and get some runway to run with this for awhile. >> And at what point in time do you find yourself, John asked the question about at least channel conflict with your sales guys but the goal is to have the entire ecosystem work really well together without being encumbered with enormous transaction costs of how these different parts come together. At what point in time does SAP start to have a direct relationship with some of these folks? For example, are you taking responsibility for sending down updates? Are you working to bring new extended or extending the ecosystem into a customer? Or is all that going through the partners that you're working with. >> So I'll answer that in a couple of different ways. So first of all the primary relationship is really between the partner and the end-client. It is their kind of SaaS offering to the client. We provide the technology underneath. So that's one way we do it. The other part of it that kind of keeps this close to SAP is the backend, the maintenance and support. Level one, Level two is still handled by the partner, but we handle level three. So there's still a relationship, when they get stuck and things go wrong or something needs to be fixed, we end up getting involved. But the primary support happens between, with the partner and most of them are very well skilled at being able to handle that level of support. >> But are you also then bringing your ecosystem and your set of partners to them as well? >> Absolutely, yeah, so it's not just the SI world right? So some of these partners really want to be in this game, but they don't have hosting capabilities so we'll do Azure or we'll bring in AWS, and that's a mechanism that's already in a good place for us. >> Well and also, they have a multi-vendor view anyways so they're going to broker the different clouds and intercloud them together. I think, to your point there, I think it's worth double-down on because that was important. Virtustream came out of that concept, so when Virtustream was sold to EMC for billions of dollars, a billion dollars, that ultimately filled the same gap that you guys are doing with this program. They essentially did SAP Cloud and did some tooling up. Now, you're offering, essentially, SAP tech to everybody. Okay, that's cool, so that's just for the folks out there just want to make sure they catch it 'cause that's how big it is in my opinion. >> Can I follow up with one quick point though, John? So let's say the extension, the partner extension programs that you guys have that allow your sales force to sell third-party software from the SAP ecosystem into customers. If a large customer, or if a large partner is a partner of yours and you're standing them up, are they also able to piggyback in those arrangements and start bringing, or do they all have to have separate business arrangements with everybody in the ecosystem, or is there kind of a master agreement that you're bringing to bear so that everybody plays better together because you're kind of overriding the whole thing? >> Yeah, so we like to make this as easy as possible, so we take into the 4,000 items or whatever on our price list, we enable that through this partner managed cloud, that way they don't have to go get individual agreements if they want to, maybe they want to do OpenText or something like that. >> So you're bringing the whole portfolio to their cloud? >> Roger: Yes. >> Tell how the IoT, how this plays in 'cause that's a real sexy market everybody's going after. We heard that's going to be on the second-half of the year. You mentioned some things around that. That's a big focus and a lot of people are using the, I say hype cycle now, which it's legitimate hype, but the apps are coming on a couple of years down the road so the architecture's going on now so people are setting the table for IoT today. Does that fit into this? >> Absolutely, it does, and you heard a little bit about when you talked to Mark right before I came on. He talked a lot about the platform, on a cloud platform that his group is responsible for and really that becomes a leverage point. So on a cloud platform can be a part of this, and oftentimes they want to do the enablement on top of that kind of cloud platform because they want to be able to extend. The great part about S/4 is that it's standard, and it's industry specific, and it's simple to operate. But that also means that some companies have a lot of customizations that need to be part of their solution to their end-clients. And so how do you do that? You do that with HANA cloud platform, and sometimes that becomes an IoT play as well. >> Yeah, that enable them to at least have some headroom. >> Yes. >> (laughs) Future proofing, whatever term they want to use. Okay, tell about the vision of digital transformation because this really becomes an interesting business model question. How does a digital transformation vision that SAP as a company is going down relate specifically to your area, and how does that relate to the business model of the customers? What are you guys doing? Is there any kind of new things? Is it an incentive comp, obviously the sales gets comped but options to the customer? Where's the margins? Is it a discounted sliding scale? All of these are the questions that are popping through my head right now. I'm the partner, what's in it for me? I got to make some cash so-- >> Yeah, so what's in it for the partner is they get a long-term relationship with the end-client, and oftentimes they bring a relationship with that client already, and now they're extending it, and it's a very sticky relationship because when you start on an SAP program, that's not something you switch in and out every couple of years. So that's one of the benefits to the partner. And I will say the part about digital transformation, everyone wants to transform their business. Not everyone is able to, but most companies want to do that. This becomes the digital core, right? You use S/4 as the digital core, and you can get into it quickly. And if it's an industry based solution that this partner is now providing to multiple clients, they can implement it quicker. >> They can standardize on it. >> Yeah, they can standardize on it, and then they can do hospital one, hospital two, all the way to hospital 16 a lot quicker, right? One or two maybe take you some time, but by the time you get to the 16th or 17th, it's going really fast, so it enables a faster time to market for the end-client, and you know that digital is all about speed. >> Yeah, if they're building Lego blocks, and they build their own, they cast it out and they build more of them and just ship them out. >> You mentioned another item. You know there are some customers that have been using SAP Solutions for a long time, and maybe they're not using all of them any more or maybe they've gone off maintenance, that's a topic. We've been able to use this tool as a way to bring the customers back. So maybe they ran ERP way back when it was release four or 4.5 back, you know, back in the 90's. They got away from it for whatever reason, but now they're really excited about S/4 and they want to come back. This is a mechanism to allow us to do it and do it quickly. >> And also they get basically rebooted or reset on the new platform. >> Yep. >> But also you get net new customers out of this. >> Absolutely. >> So it's not like you're recycling the same SAP customers, certainly the churn might be helped a little bit. Now, that's the thing that I'm going to look at is those new customers, and I think they're going to be attracted to things like the Apple announcements. How does that impact you? Are you affected by that? Certainly the glowing afterglow of the announcement will be good. >> It's pretty cool, isn't it? >> John: But does it directly affect your business? >> It will absolutely affect it because the whole concept about that agreement is to develop applications that enhance the user experience and to the extent that we can leverage all of that better user experience, in a faster time to market, get to the cloud quicker, that's all good news for the end client. >> We're finally going to have a remote desktop on the phones that actually works, seamlessly. >> Yeah, real rendering, as opposed to shadow rendering. >> All right, final question, what's your take on SAP this year, thoughts share with the audience who couldn't make it. They might be watching this live or on-demand. What's 2016 SAPPHIRE NOW all about? >> Well 2016 SAPPHIRE NOW, in a lot of the keynotes, was really about kind of exposing a more, you know, a more honest, a more upfront conversation. We saw it in they keynotes. You know, Bill McDermott, our CEO, put his e-mail address out on a keynote with 30,000 people in the crowd and then you know a 100,000 or so watching, right? That's a pretty bold thing to do. And so I think you're trying to see, you're seeing SAP trying to become more human, trying to have more empathy. You know, we're a big company. We do some very cool things. We run a serious business, right? But being able to do that in a very human way is what I'm seeing here on the show floor. >> Final question, final, final question 'cause that was the second final question, what KPIs are you going to look at on the scoreboard to benchmark your success where you say, hey, we hit a grand slam? You know, is it the number of partners? What are the simple metrics that give you an indicator that you're winning, you're achieving your objectives? What are some of the things you look at to kind of get a feel for if it's working or not? >> Yeah, I want to see multi-client agreements that we put together where they have more than one client, where we've established what the multi-client agreement is going to be and we actually are executing against that. That's one. Two, I want to see customers going live and getting productive results out of it. And revenue growth is obviously always something we watch, but that's kind of tertiary to the first two. And if we do the first two, the partners are going to be successful. They'll get sticky with their clients. The clients will be happy because they get a faster time to market and that's how this grows. >> So it's really who stands up what solutions is really going to be the benchmark. >> And focus on, it is all new markets for us I think. >> John: Roger Quinlan, thanks so much for coming on The Cube. Really appreciate the insight. You got a big job, exciting. I think it's going to be a greenfield opportunity with your existing clients in a new way, a new business model innovation, congratulations. >> Great, thanks for having me. >> Okay, we're in The Cube here. You're watching day two coverage of SiliconANGLE Media's The Cube. I'm John Furrie with Peter Burris. Thanks for watching. >> Voiceover: They'll be millions of people in the near future that want to be involved in their own personal well-being and wellness. Nobody wants to age in a way that we're bound to a chair or a bed.

>> Voiceover: It's theCUBE, covering SAPPHIRE NOW. Headline sponsored by SAP HANA Cloud, the leader in platform as a service, with support from Console, Inc, the cloud internet company. Now here are your hosts, John Furrier and Peter Burris. >> Okay, we are live back here at SAPPHIRE NOW. This is SiliconANGLE Media's flagship program, theCUBE, where we go out to the events and extract the signal from the noise, and I want to do a shoutout to our sponsors that helped us get here and present the great content, SAP HANA Cloud Platform, Console, Inc, Capgemini, EMC, thank you very much for the sponsoring. I'm John Furrier with Peter Burris. Our next guest is Rodolpho Cardenuto, who is the President of Global Channels company wide for SAP, as well as the general business, which is the SME as they talk about in the industry. Welcome to theCUBE. >> Thank you, John, thank you, Peter. Good to be here. >> So one, congratulations. We've had a lot of your folks on theCUBE and this area of the floor is buzzing with action, but real meat on the bone, as we say. It's real, it's a sizzle and the steak is here, so they had beer here yesterday, so German company, so we always like to see the Heineken beer out here. >> Peter: (mumbles) back here. (Rodolpho laughing) >> It was good to have Heineken out there, it's good, some good beer. So give us the update. I mean, you guys have had growth. Share with us and the folks watching, just from where you guys have come from, because SAP has always had a strong ecosystem. You go back to the ERP days back in the late '90s, certainly that revolution is 25 years ago when SAP came out of the woodwork and you got Oracle, all these companies were born. They had an ecosystem, they had people deploying and delivering software. It's changed now, so the dynamics are different. Talk about the dynamics and some of the growth that you guys have. >> I think it's better to position the organization, GB, as you've well said, general business, the SME space. Our ecosystem that we built historically was very focused on the enterprise to support the business suite and to support the enterprises to implement, et cetera, and now we are building in the last 10 years, we started to build a very focused, strong ecosystem, ecosystem for the SME space, that's why we're doing it, and I was just sharing with you, we just kicked off SAPPHIRE NOW last Monday with 2,000 of our partners with us, kicking off the SAPPHIRE, 2,000 of GB partners that serve this segment for us. >> So I said yesterday in the close, and I mentioned this to you, you correct me, I want to get this out there and then can clarify the record, I said that you bolt on the partner summit with the end user conference, which is a huge show, 25,000 plus, whatever the number is, massive, why everyone is here is what makes sense, and I was saying that this is being so important that you should break out your own partner event so people feel like a first-class citizen in that partner world, and you had to correct me. So share the correction that you guys do partner events, (mumbles) the big tent event, so why not have everything here for that? But you guys are doing events. Just clarify that. >> Just to give you an idea, I said we came up from the partner summit last Monday with 2,000 of our partners kicking off the SAPPHIRE NOW, but we do have a partner summit here in North America in the US. We have partner summits in Latin America. By the way, the next one is going to be in Punta Cana, (speaking Spanish) we have partner summits in Europe, APJ, Greater China, we do have a series of partner summits-- >> Do you do those partner summits in native tongue, or can theCUBE come there? >> The native tongue, that cannot, if I speak, yes. (John and Peter laughing) >> We have to get a whole new crew for theCUBE. We're looking for some hires down there, if you're watching, since now you brought that up. Okay, so let's get down and dirty. Channels are great. The leverage of channels, the leverage of the cost per order dollar for SAP, from your perspective, it's phenomenal, and that's great business, indirect sales combined with direct sales, phenomenal approach. What's changing, though? Because at the end of the day, people in the channel have an attitude of, "What's in it for me?" They're running a business. They also serve on the front lines with customers. What's changed in the channel today? Is it the same challenges, training, product? Is it different? Do you see different configurations? >> Well, it's changing a couple of things, and I'll try to summarize here, but the fundamentals are changing from on-prem to cloud, because we were, you very well said, historically an on-prem company, the fundamental of the on-prem are changing now to the fundamentals, the economics are changing from on-prem to the cloud, and the second thing is specialization. We were a company that was built on the ERP, and now we are a company as you saw here from Bill McDermott to Rob Enslin, Bernd Leukert, et cetera. We are (mumbles) HCM, Ariba, or supply manufacturer SRM, or CEC, so we have a lot of specialization. So the economics are changing for the channel as much as they are changing for us, and the specialization. You require a lot of specialization. One of the things that we are hear, listening clearly from our customers, is the specialization with integration. You saw, you'll hear from Bill McDermott and Rob Enslin and Bernd Leukert talking today about this integration, and we are doing a lot of our effort, with our channels also, to specialize, but at the same time to integrate them with SAP core. >> So there's something in application development that's been around for probably 40, 50 years called Conway's law, which suggests that the application that gets built is, or the complexity of the application that gets built is a reflection of the complexity of the organization that built it. When we talk about all enterprises of all sizes wanting simpler, faster, more integrated, more convenient, more natural to use, a lot of your partners are at the vanguard of thinking about how to make it simple because they don't have the institutional and organizational complexity to make it complex. >> Rodolpho: Yeah. >> So, is SAP learning from your partners as opposed to just your partners learning from SAP as we move into this digital world that has such a focus and emphasis on simplification? >> Peter, a great insight. I think that now only learning, we have to listen to them and react to that, because if we react in a complex way to serve our partners, they cannot serve our customers, because in the end, they're serving our customers, and as you said, they don't have the infrastructure or they cannot afford complexity, period. They cannot afford. So they need to be simple by nature, and if we are complex to serve them, they're not going to work with us. They're going to pick another one, the application and everything, so we need to build an organization that is fast and agile and is simple enough to work with our channels. I'm not saying we are there. We're not there yet. But we are in our... For instance, our theme is partners first, run light, and win together. Partners first is all about the partners. Everything that I do in my organization, all programs, products, solutions, is with the partner mentality. Is this good for the partner? Is this good with business models, simple enough for them-- >> John: It's a business partnership. >> And is it partner ready? Because if it's not partner ready, it doesn't fit my model. Run light is about the customer, and win together, it's SAP, the partner, and the customer. The customer should be comfortable enough that we are serving them with this partnership. >> Take us through some meetings internally at SAP, because that's a really great point. You got to meet the channel's requirements on how they do business, because they have a business and you have a partnership. So that means you're the favorite guy in town inside the company. Hey, here's my product. Go sell it through the channel. >> Rodolpho: Yes. (Rodolpho laughs) >> I'm oversimplifying, I'm not saying they said it, but that's the knee jerk reaction. >> That's the historical norm. >> That's a historical norm, "Hey, boom, here's the product. "Go just do some training." >> Keep her. >> But now you have to hold the line. You're the safeguard for the customer. So what are some of those conversations? Because you now have to be a forcing function to the product groups, and we've so much transformation, SAP S/4 HANA, HANA Cloud Platform, all these enabling technologies is a gold rush for the partners. So you have to hold the line. Share some internal color. You won't get in trouble. >> No, no, and I have no problem being in trouble, but I'm going to illustrate that with a simple case you just mention, S/4 HANA. S/4 HANA is the flagship of a product for the large enterprise. You saw Nestle up today with Rob Enslin. Nestle, one of the largest corporations in the world, 350,000 employees, $80 billion worth of, pretty large, pretty large by any metric, pretty large, and they use S/4 HANA. My job, and I have an organization, my organization, we package, we price, we enable, and we support the channel to sell and to support the S/4 HANA for the SME market. We are 60% of the S/4 HANAs for SAP. If you get all the S/4 HANAs, 60% goes through the channel that we manage. So, we package-- >> Peter: Is that the number of installations? >> Yeah, yeah, 60% of the S/4 HANAs today that we sold are sold through the channels that we manage in the SME, in the GB space. So that's the job. It's my job to package, to price-- >> John: You're giving money away. You're handing people money. Here, here's some business. >> It's my job to package, to price, to enable the channel, and to support the channel, to actually make S/4 HANA available for the GB space. So that's what we do. So we do that two folds. Of course, I have an organization to do that and I have it also to educate the other organizations. As you said, "Oh, here's my product. "It's perfect for SME. "Go and sell." Okay, let's have a conversation. Let's package, let's price-- >> Is the channel ready? >> Exactly. >> So run light, that means it's got to be turnkey. >> Yeah, we call it the package, price, enable, and support, because you need a different package, it needs to be much more simpler than the enterprise. You cannot go to a Chinese menu for the GBs, so it has to be templates. Price, very specific price for the GB. It needs to enable the channels. Who's going to enable the channel? Technically, pre-sale, sales, et cetera. And we need to support a channel once they sell or during the process. This is my organization, that's why I educate the other organizations. >> So there is not a company on the planet that has mastered the fine art of reaching-- >> Other than us? >> Other than you. Well, you said you got more work to do. (Rodolpho laughs) There's not a company on the planet, you're getting closer, that has mastered the fine art of reaching the general business population of companies. Increasingly also, as we move more into digital business, your biggest customers want to use software in digital interfaces and technologies to reach their small, medium sized business customers. Are they coming to you and saying, "How can we start bringing your platform, "your go-to business, and coupled with our SAP back end "to facilitate the process of helping to reach..." In other words, are you going to be able to catalyze a global change in the approach to reaching small businesses because of the SAP platform? >> Well, I don't know if we can do that, but I think it's a good vision for us to pursue, Peter. We do have an organization that has inside sales, digital sales, social sales, we use social to reach out to our customers. We use digital to reach out to our customer who have feet on the street, direct sales. We have our 12, today, I think 13,000 partners, ecosystems that reach also to our customers, and they are divided by territory, by industry, by solution, so we can map, get the world and map it by territory, by solution, by industry, the partners that we have, and we use a lot of our new methodologies and our social sales, digital sales, a lot of things. So we are building the infrastructure to support any kind of the products from SAP. We are very well serving them support for you, for the market, from SAP, so we have a lot to digest. >> So one of the things, we talked about, a lot of channel partners, SIs down to the ISVs-- >> Resellers. >> DABs, VARs, as you call, and we hear the following from them. I want to get your take on this and how you're addressing this. "We want a partner that's going to be with us "from cradle to grave, through the life cycle "with our partnerships," the things you said. The other thing that was interesting was, "We want to increase our gross profit," and services is 100% gross profit, so me as the partner, I make money on professional services, whether that's quick fix in the old days or architecting clouds, integration, so that's a big part of their revenue. So they want to make money, that's code word for money. So how will you guys shift in the economics to enable the partners to wrap their own unique services. It certainly makes sense in foreign markets, but across the globe, that's a big challenge. How are you rolling out for them, at the same time, bringing the big accounts to them? So how are you enabling me to wrap my services around them? >> And that's (mumbles) going back to your point or to your first question when I said the economics are changing, so we need to follow up the new economics. The channels, as you said, they make a good part of their business is about implementation. Once you go to the cloud, though, this part of the business reduces by one third, because in the cloud, you have less of a share of this service. So the service share is reduced by one third. So what you need to do is to compensate that with what we call an ARR, annual recurrent revenue, from the cloud. So we are building business model, and I launched that last Monday, our cloud business partner new business model, which is give the partners a ARR, annual recurrent revenue, because service is good because it's recurrent revenue. Once you sign a service SLA, a service contract, you don't have anything, but you have a recurrent revenue with that, but this is going to be reducing in a cloud, so we will compensate that, and that's the idea-- >> So you're shifting the dollars into the same consumption model, the cloud, with some sort of subscription-like or recurring revenue model. >> I'm willing to cut a share of my revenue with my partners, from the cloud. >> Well, you might be able to get it back longer term, but it's that up front. >> Yes, yes. >> Peter: So typically you sell up front, you pay for the sales guy up front, and a lot of these partners say, "I can afford to wait for the--" >> Now it's more of a recurrent revenue battle, so I'm willing to get a share of that to split that with my partner for more business. >> So you're financing their business model transition? >> Rodolpho: That's it, yeah. Transition, that's the word. >> Their fear that this transition, because they're on paper, they're getting cut, so they have to have an immediate pop, change, so you're financing that over the long term for the relationship. >> Well we are willing to have this conversation, and the new business models that we are developing, and we introduce it here, they actually address that in a very, very programmatic way. It's not a one-by-one, it's not opportunistic, and by the way, you said the channels, we are getting channels, we have only 15% of our business from the channel. My business, only 15% is opportunistic, that you come with a transaction, 85% is predictable. 85% is loyal, it's about loyalty. >> Great base. >> Exactly, I want to invest in the channels that are here for the long run. >> Peter: So it will support that business model transition? >> Yes, yes. >> So that's a good loyal base, so they probably give you very candid feedback. >> Yes, please. >> What did they say, no they do, if you have a loyal base, they'll tell you the truth, right? What are they saying? What's the feedback on the new business model? What are some of the examples? >> After I presented on stage and we had the conversation, I had, as you can imagine, a dozen conversations with specific partners that are willing to adopt and sign off. It's just for us to start to roll out, of course, to roll out the new business models you need to think about countries, a lot of the other specifics, but we expect in the next six month to have the whole world covered. >> That's great, and you have the events coming. Thanks for clarifying that. Well, we really appreciate (mumbles), coming on theCUBE and sharing your insights. >> Thank you. >> You're very dynamic, and great guest to come on theCUBE, certainly, we'd love to have you again, and if you need us down in the other summits, let us know. >> Rodolpho: It would be my pleasure, thank you. >> We'd be happy to bring theCUBE. Channel is big, the ecosystem is a competitive advantage, and you guys are looking good as they off the T. This is theCUBE here, live in Orlando. I'm John Furrier with Peter Burris. You're watching theCUBE. We'll be right back. 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