 Live from Boston, Massachusetts, extracting the signal from the noise, it's theCUBE, covering Red Hat Summit, 2015. Brought to you by Red Hat. Now your hosts, Dave Vellante and Stu Miniman. Welcome back to Boston, everybody. Dave Vellante and Stu Miniman. This is theCUBE. theCUBE goes out to the events. We extract the signal from the noise. We're here at Red Hat Summit. Steve Lucas is here. He's the president of Platform Solutions. At SAP, stole the show this morning with the keynote. Steve, welcome to theCUBE, great to have you. Yeah, thank you. I mean, I will tell you, everywhere I've been, this is high energy. The keynote this morning was an absolute blast just because SAP Red Hat, from a storied partnership standpoint, we've been working together a long time. I've actually never had the opportunity to come to one of these events. So just to meet the crowd, get the energy and even to be here. I mean, it's been awesome. Well, you had a bit of self-deprecating humor up there. I said, hey, you're probably wondering why I'm not trying to sell you something, why I'm not in a suit and so forth. And so that was kind of clever. But you talked about the relationship with Red Hat, started in the mid 2000s. And it came about because, why? Because the customer said, you damn well better do this. Well, at the end of the day, really, SAP is about making sure that companies can run their businesses 24-7. As it turns out, Red Hat, from a platform perspective, pretty much the same mission and purpose, running your business 24-7. So those align perfectly, number one. And then number two, you've just got, I mean, there's industry upon industry upon industry where Red Hat's not an option. It's the option, right? And so certainly for us, from over a decade ago to today, we've been driving innovation together with Red Hat and it's culminated in some really cool things that we talked about this morning. And you announced as well that you're open sourcing SAP ERP, is that right? Yeah, I think we're holding off on that announcement. I think what SAP is emphasizing is, we actually are actively contributing to over 100 different open source projects. We actually have open source, like, for example, our new user interface, user experience, we call it UI5. That's an open source project. So there's a lot going on at SAP that is open source, but I think for us, it's going to be the best thing for us about Red Hat, SAP, and the open source community. We're going to keep contributing, keep tight alignment and make sure that we support everything. So what do you make of that? Big, successful companies, SAP, IBM, HP, defined success, they're coming back, still throwing off a lot of cash. Oracle, all of a sudden, everybody's talking about open source. How did that transformation occur within SAP? Or has it always been part of the ethos? Well, to a degree, I mean, the open source is, you first have to start, it's a movement. It's something you can't ignore, you just can't. It's kind of like saying, the internet's not there, the cloud's going away, open source isn't there. You can't ignore these things. These are dynamics that are shaping the market. It's the same thing as everybody bringing their own mobile phone to work, right? If you're the CIO that says, yeah, I don't care, everyone has to use a standardized phone, you're not going to be CIO for long. And the reality is from an open source standpoint, what open source delivers to enterprise organizations is simplicity and scale. And that's really where SAP is focused now going forward is delivering agility, simplicity, and scale to customers. So let's press on that. I mean, you were pretty proactive when you were talking about SAP simplicity, that's not the sort of brands that have been put forth over the years. Why is that perception wrong, and how is it changing? Well, it's interesting because we actually win as far, and I know this isn't going to sound terribly interesting, but there's a backstory behind it. We changed our tagline from SAP Run Better to Run Simple. I actually believe that's a message from our CEO, first to us as a company, to SAP, which is we've got to tackle the world's toughest business challenges, but we have to do it in the simplest manner possible. That means leveraging open source technology from companies like Red Hat. That means leveraging the cloud. SAP has completely transformed its landscape. Our cloud solutions go from financials in the cloud to HR with success factors, expense with concur, huge focus on the cloud. So you could argue that our complete remodel of our own platform business, SAP HANA, all the way to how we work with great vendors like Red Hat in the open source community, all the way up to the cloud. All of that is about simplifying the enterprise landscape, which if we don't fight against it, it's just going to get more and more complex. So we've chosen to fight that complexity. And of course, at the back end, it is going to get more and more complex, but your job is to make it simple to the end user. I have to say SAP's always been on the forefront of mobile. I mean, with Jeremy tells a story about when he ordered, I don't know, like a zillion iPads for the organization and jobs column, I was like, what are you doing? That's a great story. He said, well, no, we're going hard after mobile, little side-based acquisition, obviously, leader in mobile. So is that really the sort of face of that transformation? Is everything goes through that mobile UX? You know, I think at the end of the day, we have one clear goal. We want to let any business, big or small, run their entire business in the cloud from their phone. That is the clarity of purpose that we have. That's what we want to do. What Bill has been doing is through acquisitions as well as, you know, our own native effort, like SAP HANA, is driving and forcing, you know, kind of leading SAP to this new watering hole. And I believe that ever, to your point, every important move that Bill has made has driven and forced that cultural acceptance of simplicity. You see it everywhere you go at SAP. Yeah, so Steve, one of the surprising facts we saw was you talked about how, you know, platforms, more than just applications, you're driving a lot of revenue. And if I got it right, you said only half of SAP's revenue comes from the apps now, that a lot of it's coming from the platforms. Did I guess that kept that right in there? That's right. And, you know, we were surprised. And can you give us a little bit of color? Total, if you think about it, that's a total mental shift from where SAP was five short years ago. Five short years ago, we were a 40-year-old enterprise apps company. That's what we did. We made a conscious decision to not just be an enterprise apps company, but to be a company that built platform technology, not just leave it to IBM, Oracle, and Microsoft. And there was a very specific reason that we decided not to just leave that to them. That decision has sent SAP in a completely new direction with our platform business. And yes, today, our platform business is over half of our revenue. Okay, so if I look at some of those other companies, they've made big plays into cloud and what they're doing. You know, Dave talked about your mobility there. Can you give us the update as to, you know, how you guys look at kind of the cloud discussion? Well, I mean, I think we looked at the cloud discussion as we have one singular goal, which is an entire enterprise portfolio of business apps, 100% multi-tenant in the cloud. In fact, we actually have that today. So we recently launched financials in the cloud that's 100% multi-tenant. That's part of the platform, right? Part of the platform, right? There's apps in that half. That's right. It's just not bespoke apps. That's right, but if you think about it, so here's the interesting thing. If I'm an enterprise and I say, well, I could go to salesforce.com and buy CRM and I could go to Workday and buy HR. Okay, SAP today has financials in the cloud, HR in the cloud, CRM in the cloud, Procurement in the cloud, Ariba, Expense Management in the cloud with Concur. Yes, some have come through acquisition, some have been organic, but we are taking to market end to end the broadest, 100% multi-tenant cloud-based enterprise portfolio in the market today. That's what we have. So is it important? Yes, not going to get less important. We are doubling, tripling down. Bill always talks about, we have 40, 50, 60 million users of our technology in the cloud. Most people don't know we have that broad portfolio, but we're there today. So give us the HANA update. You talked about HANA in memory. You don't need to persist the data, I guess. You didn't say it. Yeah, somehow you got to eventually persist it. But tell us, give us the update. Why is HANA taken off? What's unique about it? Bringing analytics and transactions together. Talk more about where you're seeing the uptake there. Well, so the impetus for HANA, the 22nd latitude I'll take on this is, we build business apps. That's what we do for a living. And we noticed this comical, almost absurd complexity that would happen when we would build apps. We would need one database to store what I sold today. Another database to store what I sold yesterday. And yet another database to store what I'm going to sell tomorrow. And then we were spending all of this time, our developers just writing code, just moving the same, it's the same data from one place to another. That's integration, not innovation. And we think that way too much energy from IT in a given enterprise is expended on integrating this way and not innovating this way. So what we did, or the impetus for HANA, was one dense computing platform, one copy of the data for your transactions, what I sold today, your warehousing, what I sold last year, and your forecasting, what I need to sell next year. All in one system, powering this new umbrella or array of business apps. This has transformed how companies are working. They're now looking at their data centers going, why do I need all of these databases and all of this replicated copies of the data? I will tell you right now, this enterprise copy and paste of the data, it is the evil at the heart of the architecture and we've got to change that. Yeah, copy creep is crushing. It's all over the place. Well, especially developer productivity because they're dealing with stale data. If you can provide a developer with fresh data. Integrating, not innovating, that's the challenge. Nothing wrong with integration, but if you can have that more dense integrated system out of the box, then you can focus on, how do I change how my business works, not moving data around. Okay, but you buy CyBase, success factors and other companies, there's got to be an integration play as well. What is that integration play for you guys? Well, the integration play is unequivocally something we call, well, two things. So HANA underneath everything we build. So there's every cloud product that we produce, every on-premise product we produce, HANA underneath. But we've developed a new technology we call the HANA Cloud Platform, it's hcp.sap.com. Here's the goal. It is a single API. So if I'm a Java developer and I want to build an app and I need to talk to Ariba over here and success factors over there and then SAP financials on-premise. One API, one place to go, it's all in the cloud and it's free for a developer. You could go there today. I know it's weird for SAP to say free, but it is in our vernacular. Literally a developer can go there today, sign up for free and start building apps in the cloud that connect to everything we do. So how about, you know, Oliver Boosman used to come on when he was the CIO of SAP and we used to talk about dog food. We love Oliver. We did too, he was a great guest and he used to say, no, it's not dog fooding, it's drinking your own champagne. European flair. Yes, of course. Okay, so are you, is Hannah powering your cloud? Is it, you basically said? Absolutely. So talk about that a little bit. Yeah, so absolutely. And I think, you know, guys like Larry Ellison always like to get up and kind of do the, you know, the, oh, well, there's still a pain is for Oracle. Look, there are companies we acquired, like, you know, Concur, et cetera, that built their apps on Oracle. That's going away. We don't need Oracle. We're moving all of our cloud solutions onto Hannah as the kind of underlying technology. We've already done that in a number of our cloud apps and we're going to continue to do it. Hannah's at the core of Hannah Cloud Platform. The bottom line is this. Hannah is, it is the alpha and omega for us. It's the platform for everything we build. And if something doesn't run on Hannah today, it's just a matter of time. It's just a matter of time. The trick for us is this, is we don't want to make a platform that's just good for SAP customers. We want to make a platform that anybody can use. So what, for me, here's what I believe. I believe that technologies like Hadoop and technologies like Hannah are headed to the core of the data center. They are the heart of the data center for the next 20 or 30 years. It's about massive file system storage and it's about real time in memory storage of data. That's the new core of the data center. The stuff that Oracle's producing today, it'll go the way of the dinosaur. I'm painting a picture of the high volume, transaction stuff, the high activity data, the data warehouse stuff, the analytics that you need real time are in Hannah. Day to day, the day to day run your business in Hannah. Especially two tier from an infrastructure perspective, the fast stuff in Hannah, the bit bucket is Hadoop. That's exactly, I'm going to have to borrow that one because yes, that's exactly right. That is it. It's run your business with Hannah today, everything else in Hadoop and those two things perfectly integrated. I'm sorry, so things are choosing, running real fast in this space. You know, how does the spark change that discussion a little bit? And you say 20 years, we had a discussion this morning with Derek Collison from Afser and he's like, you know, virtualization ran for 10 years, containers probably three years from now will have something to replace in it. So, I'm just, I dig into cycle. Well, the interesting thing about that is the concepts that we still, that still sit at the core of a data center today, how a database is modeled. That actually hasn't changed in 20 plus years. It really hasn't. What we're saying today is technologies like Hannah literally allow organizations to do away with this heavy burden that they have to carry around and how do I architect a database so it's perfectly modeled, so it perfectly performs. The beautiful part about Hannah is it lets you make mistakes and still perform in real time. That's the beautiful part about the architecture is it has that built in. But the bottom line for me is the elements like Spark, right? All of that, it's absolutely going to drive change. Spark has forced us to even look at well, how does Hannah integrate with Hadoop, et cetera. Spark will change the conversation. I think it matures the conversation, but I also think Spark needs a lot more big time in the oven. Well, the other thing that's changed a lot is the user experience completely. So I wonder if you could talk about that, talk about maybe ties it back to mobile, the whole user experience that you guys are investing in. How is that changing the way in which your customers interact with SAP? Well, it's interesting because at one point in time, SAP's mindset was I can run my business from hundreds of screens available on a computer. Customers don't want that. Literally, we are having conversations with CEOs. I'm sitting here, you're the CEO. He's looking me in the eye saying literally, I want to run my business from my phone. How do you do that? You're talking about supply chain, manufacturing, CRM, getting all of that down to a dense point where the CEO, the CFO, the CEO, or COO can know how their business is performing at any moment. So we have two beliefs. One is that everything has to be mobile. We came up with, we have this brilliant engineer at SAP named Sam Yen and his entire team who built a new technology called Fiori. And Fiori is the entire new user experience that goes across everything we have at SAP. It's absolutely beautiful and it was built solely for mobile. Mobile first, mobile all the time, that's number one. The second thing that we're doing is on the back end, we're making our system smarter. And I'll give you one quick example. Anytime I build a report, even though I've been in data and analytics for 20 years, I always use my go-to column chart or bar chart or pie chart. Because those are the three I used in college, right? But the problem is that there's so many different ways to represent data. We've actually built an artificially intelligent feature into our business intelligence tool that will let you look at a set of data, you press a button, it'll tell you the best way to visualize it and you don't need a degree. So that's your visualization engine essentially. So my belief is this. Mobile UI is a big part of the game and AI is a big artificially intelligent systems, is a big part of the game. You have to bring smarter systems and mobile systems together. That's where the world's going. So cognitive, basically. Absolutely. And that's R&D that you guys are investing to build out that as part of your platform? Absolutely, and we're surfacing that example I just gave you. We're surfacing it all over the place and in simple examples like that, you don't need to know anything about it, but the power is there. And we call those HANA insights where you're not necessarily programming the system, it just knows it and does it for you. And that's a service that's available as part of the platform. Absolutely, yeah, that's core to what's available in HANA. It's our job, along with our partners, to make sure that we surface that in simple ways in our apps on your phone. So just like search is kind of everywhere, but it searches a blunt instrument. Talking about visualization, cognitive, artificial intelligence, analytics, all of the machine learning and on and on. So these systems are going to get, they're going to get more beautiful, they're going to get more easy to use. So that's the love side of the business and then they're going to get incredibly smart. The my number one issue right now is why we need a person to click reorder. These systems have to get smarter. Look at the financial services market. Most trading that happens today is not done by a human being, it's done by algorithms. Those decisions have to be made in manufacturing networks and supply chains by machines. They make fundamentally better decisions most of the time and we have to get our systems there. Okay, we're running out of time here. You're building the easy button. That easy button, red, red hat. End with the relationship. Where do you want to see it go? We kind of got, you got the history as to where you guys came from. Where do you want to see the relationship go and maybe talk about the importance of it? Well, I think that the reality is is that what is beautiful about SAP and red hat is red hat covers this unbelievably important part of the enterprise stack and then SAP kind of conveniently comes down to that line. There is next to no gray area between what red hat delivers to an enterprise and then where we pick up and start and go beyond that all the way up to the application tier. I am absolutely firmly convinced that it is just an unbelievably complementary partnership but we've got to start moving not just HANA on RHEL, that's really compelling. All of our new business applications need to be optimized on RHEL as well and I think we need to start talking more and more about concepts like OpenShift and OpenStack and so all those conversations going on, I want to be back here next year talking with you guys telling you about those great innovations that we built together. All right, Steve Lucas of SAP, thanks very much for coming on theCUBE. Congratulations on a great keynote and look forward to having you back. Thank you. All right, keep it right there everybody. This is theCUBE, SiliconANGLE, Wikibon's production of red hat summit. We'll be right back.