 Okay, welcome back, we are live here in San Francisco. Oracle Open World 2013, this is theCUBE, SiliconANGLE's flagship program, we go out to the events district to see them from the noise. I'm joining my co-host Dave Vellante, co-founder of wikibon.org, and we have back returning CUBE alumni, Kevin Chu, who's the global vice president, managed cloud services business and technology alliances. You've been on theCUBE multiple times, you've been on SAP, you've been involved as well as with EMC, EMC Ventures. Congratulations, and we're breaking news today because you just recently would have been promoted from to global vice president of managed cloud, congratulations. Thank you, sir. Always breaking news on theCUBE, SAP, Oracle, you're sneaking under the radar, it lets you come in here, yeah. It's amazing what kind of synergies actually between SAP and Oracle there are, there's obviously competing layers in the stack, but there's a tremendous amount of business that SAP drives on top of Oracle database and Oracle infrastructure. That's not going to change in the near future. Well, before we get to that, before we get down some of the competition, some of the product stuff, I want to get into the new job, I want to get into what you're doing. So we've known you, you're at EMC Ventures, you were part of the early crew, I call the outpost of EMC to get out here and surveyed the landscape of Silicon Valley, you and the team, Mark Lewis, Sean Douglas, really did the heavy lifting, knocked down a lot of deals. The CRO is one of them, a bunch of other deals. And then now, Sean went to service mesh, you went to SAP, great run. You were there early on all the SD, SD, software defined everything, networking, storage, now data center, you saw a lot of stuff. The cloud was right there on your watch, really developing and the big data world. So talk about your new role, what happened in with SAP in the recent promotion. Thanks, so let me just back up for a second. So right around 2008, that was a great time at EMC to be starting EMC Ventures. So the whole idea you nailed it was to get a Silicon Valley listening post out here to really understand some of the major tectonic technical shifts that were happening within cloud, big data. And then back then, I remember sitting in my office and writing a white paper that was, I called it internet scale databases. And it was because the word big data didn't even exist, which was pretty shocking. That's kind of like the information super highway right before the web was born. Yeah, and it was all about machine data, it was all about streaming data, it was all about biometric data. And so that was a major tipping point for the Joe realized that, well, we've got three smart guys, me, Mark, and Sean, Roger, and Silicon Valley, with our ears to the ground listening to what's going on, this could be highly relevant to what's happening back in Hoppington. So that was an important part. It was a great time, and the market was just crashing. I mean, that's classic Joe Tucci contrarian, right? I want to come out of this downturn stronger. And the way I'm going to do that is invest in the hottest place in the world for investing. Absolutely. And as the market was taking a bit of a pause at that time, it was also, but it was also the technology, there was a technology refresh happening. So cloud was just going mainstream, big data was going mainstream, hybrid cloud management, which was one of my pet areas, was just becoming into its own. And it's now becoming mainstream. So fast forward three years, left EMC and EMC ventures, and are now started back at SAP in January of this year, 2013. So I originally dropped in to run technology alliances. So that's looking after all the technology partners which have tremendous relevance to the new SAP stack. So that's, we're talking about Hewlett Packard, Dell, Microsoft, IBM, Oracle, there's a lot of different technology partners have a nice strong play in that new SAP stack. And what I mean by that is say five years ago, before the release of HANA, before SAP acquired Business Objects and CyBase, SAP is a pure applications company, really didn't give two shakes about what was happening at the storage layer, or at the middleware tiers, or at the networking tiers. And now with the importance of those different layers of the database with the release of HANA, with the acquisition of CyBase and Business Objects, now the importance of what's happening at storage, what's happening in networking is the utmost importance to our customers and controlling that entire technology stack. But your philosophy and how you're approaching that is quite a bit different than say, Oracle's, right? I mean, you're doing that with an ecosystem approach versus Oracle trying to, and Bill McDermott's been on theCUBE talking about that, he talked to you, John, about that in the past, saying, hey, we're focused on the application business, we're not trying to own the entire stack. Is that still the case, or do you feel as though there's an opportunity maybe to more vertically integrate? I mean, if you look at what Oracle has made strategic acquisitions both in storage, compute layer, at the networking layer, those are areas which never say never, but those are areas where SAP would probably never go. SAP at its core DNA is an applications company and now a database and middlewares company. So that is core competency, that is home ground for us. And especially when it comes to, you look at the total adjustable market of something like a middleware tier and a database tier, that takes SAP's TAM to the stratosphere. And so from that perspective, it opens up everything wide for the company. Plenty of opportunity. Talk about the virtual stream situation. Obviously, they made a lot of, hey, with big investment recently, devil in capacity, HANA's booming. What's the P&L look like for your role? Obviously you're on a P&L now basis, which is great, means you're managing a business. What's the product, what's the competition look like? And what's the dynamic with virtual stream? Is that in your wheelhouse? Is that part of your deal? Couple different questions. So the virtual stream is very important for our customers to have the portability across hybrid cloud. So whether it's private cloud like a virtual stream, whether it's public cloud like an AWS or our own HANA enterprise cloud. So within my wheelhouse of the business, I'm now global vice president for the managed cloud as a service business. This is working very closely with our private cloud partners. So let me give you some examples. A virtual stream is a great example of companies that have SAP expertise. So over time, companies like virtual stream, ATOS Origin, HCL, HP, they are hosting SAP customers. So for instance, another great one, T systems. T systems in Germany host about 500 SAP customers, full landscape. So T systems, unbeknownst to a lot of folks, T systems hosts one of the largest SAP instances for Shell. And so when you talk about SAP expertise, I think the bellwether is that there's a bit of a blending happening between and a gray area happening between pure hosting partners who we'd have thought would have been pure hosting partners like a telco, like a T systems. Well, they went out and bought systems integration expertise that have thousands of consultants that know how to do not only SAP application management services, but they know how to do, they know how to do custom applications so they can provide and turn. So there is a blending going on right now, big time. Totally, so companies like T systems can provide total end to end infrastructure management, application tuning, performance management, and give it a customer a full experience for a very complicated landscape like an SAP. So those are my partners, those are my. Is CAP, Gemini, part of your partnership alliance? Absolutely, absolutely. And CSC? Yep, so all of those major partners that have SAP practices for hosting. So Hewlett Packard is another great example. So if you look at the HP services organization, we did a major deal which was announced just two weeks ago. So it was a large deal in Australia where they bought, since they already had such expertise in SAP landscapes and they knew SAP customers, then they bought excess capacity and what I mean by that is that they're buying inventory because at the economics of them taking their intellectual property, and wrappering it around RIP and ultimately providing customers turnkey value, HP did that capacity deal in advance of customers actually requesting it, so which is pretty cool. Because now suddenly we've got a ready-made channel. So VMware, as you know, Pat did a very similar deal about four weeks ago. And that was something that, so the HP deal, the VMware deal, those are bellwether deals when it comes to major infrastructure companies that are adopting SAP technology because they know that that's the... This has been a new incremental opportunity for SAP in a way to get more market expansion, right? I mean, they're not incremental, I mean I mean new, but it's more market expansion. It's additional territory they can put on top of their core business, right? It's alternative channels and I think me coming in fresh in the organization, I wasn't wedded necessarily to just the primary channels that made SAP what it is today. I was looking for alternative channels and really from a BD perspective, able to grow that. Yeah, I think about the day, David and I always reminisce about how old we are in the big canaline server days and it was the big six accounting firms, essentially consulting firms that were turned into being the monster integrators for the SAP days in the Oracle. Now it's like big six million integrators out there, potentially developers. Yeah, I think that... I mean, I'm over-stretching that, but I mean there's now literally so many new channels. To that point, I think if you look at SAP, SAP is a 40 year old company and for the past 30 years SAP's been very focused on the traditional model of you license our software, you go out and hire the global SI like an Accenture or Deloitte or Capgemini and they drop in a bunch of consultants on your prem, go out and buy hardware. And so now the evolution of those consulting companies is now into, look at HCL, HCL's a great example of how they have development capacity, they have consulting capacity, but yet they've got very focused expertise in particular areas like automotive, retail. You know, here in North America, we've just did some great retail deals and great automotive deals for our customers because HCL has particular domain expertise to make those customers wildly successful. So that's the evolution from a pure SI to a global outsourcer to a managed cloud as a service partner. So there's a big battle looming, obviously. We're hearing a lot about Oracle 12C in memory. It's short driven, a lot of traffic to your booth here at the show. I wonder if we could talk about that a little bit. You know, these, the decisions that customers make now are going to reverberate for years to come. They're going to have implications on the customers, implications on their suppliers. There's going to be, you know, maintenance agreements that are locked in. So there's a lot of Oracle customers running SAP. We know that. They can sit and watch and wait and try to see what happens around in memory. They can move to 12C and, you know, stay on the Oracle track or they can make a bet on HANA or they can maybe go somewhere else. What are you guys seeing? Talk about the uptake in HANA. How do you see, you know, 12C and Oracle's sort of rhetoric affecting that play, the pricing? You're starting to see some interesting dynamics occur in the marketplace and customers are confused, they're nervous, you know, some of them are dogmatic and loyal. What are you guys seeing? So Dave, we just crossed over our 2000 HANA customer and I think Oracle's announced around 12C in memory and IBM's announcement around blue, which is very similar. It's taking an antiquated database technology which was not designed from the ground up for in-memory processing or the combination of old TP processing and analytics. That's really the power of where HANA is driving. And also SAP, the DNA is application level company and so the knowledge, the brand, the intelligence of the application layer and the control point of the application layer is everything to SAP. That fusion of the application layer and the database layer, as you're going to see, there's going to be, you know, in the past, if you, with the way the customer applications were developed, maybe you had a trigger or a stored procedure sitting in the database container of Oracle, but that was something that a consultant wrote for you that is a derivative product of, off of SAP or Oracle applications. And so that's something that is not supported and not something that is actually running native in the Oracle database. What you're going to see is that as the data, the database and the applications grow closer and closer, the processing and the logic will move into a tighter alignment between the SAP application and the SAP HANA database. That's critical because then now suddenly you're going to have processes that used to be executing at the application tier are now going to be executing closer to the database where that application level can take advantage of the database server. Yeah, and so ultimately what I see it come down to from a customer standpoint is the business value. And that's one of the things I've always loved about SAP. You know, I wasn't able to go to Sapphire this year, I had a conflict, but I've been, you know, several years in a row. And the discussion is at the business value level. That's where it starts, you know, it's great when Hasso gets up there and talks, you know, geeks out a little bit. It's awesome actually, but it's really an event that's unique in that sense. It's really driving business value. So what are the conversations like? You know, you talked about some metrics, some of the uptake, you know, talked about some of the technical advantages. What about the business value aspects that you're seeing? So our customers are wildly evangelical about the business value that SAP drives for them. In many ways, they've shaped their organizations, they've shaped their success, their revenue curves around SAP's success. In fact, when they deploy SAP, they're looking to take that, that their organization or revenue perspective and their organizational success to the next level. And so, in many ways, they attribute the success of the organization to the deployment of SAP. And not just, ERP was a 90s curve. Now we're talking about combining real-time analytics with that ERP. So now, when I was at PeopleSoft back in the late 90s, and we always talked about the dream of having that dial that told me to do something and the gear or the lever that actually did something back in the ERP system. Well, it was very disconnected back then. Yeah, you actually had to have somebody that said, okay, I'm reading that dial, I'm reading that gauge, and I've got to go figure out which lever to pull or which switch to throw. With an SAP, it's automatic because there's certain processes that happen that are happening at machine speed or they're happening beyond the comprehension of one individual. In other words, the system has to take over and has to understand where the business logic is going to be driven and ultimately flip the switch or turn that dial that makes your business hum. And that's a power of the vision, bringing analytic systems and transactional systems together so that decisions can be made in real-time that humans can't make. I'm not saying you can take the humans out of the old humans of the last mile. It's not the Terminator. But nonetheless, you can put humans in a position to make decisions much, much faster. And again, that drives business value. We've been predicting, for the last 12 to 18 months now, you're going to start to see an uptick in IT spending as a result of that because of the business value drivers that you're seeing. Do you buy that thesis? Yeah, at Sapphire, we had the pleasure of having dinner with Jeb York, the owner of the San Francisco 49ers. And he's an amazing guy. I don't know if you ever had a chance to sit down with him, but you should definitely get him on the queue. Oh, John, Jeb York, the owner of the 49ers. Young guy, dynamic, you should get him on the queue because he'd be awesome. Because he's very tech. We broadcasted that live, the press conference he did with Under Armour and at Sapphire. He's very technically savvy. But he cut right down to it and said, you know, Kevin, it's all about, he said, we're building a new stadium. And he said, I can go out there and I can spend 30 million bucks on this super-duper scoreboard that does all this kind of, you know, whiz-bang stuff. But look at the power, look at the smartphone that's sitting in your hand. And look at those 60,000 people in the stadium combined with the power of that smartphone, deliver the real-time analytics that is personalized to that fan's experience and you've got that fan for life. That was brilliant, right? I mean, the second screen, and I'm going to invest in the bandwidth and the second screen experience as opposed to a giant jumbo tron that I have bragging rights on for two years. So we're very close to the 49er organization. One, we met Jeb over there. My friend runs in stadium customer experience and he just hired my other friend who's been in the CTO of that group, John Paul. I don't think it's publicly announced yet, but in fact, I just leaked it a little bit. Don't delete that. Check it from the record. But they're building out the tech there that they're going to take to other teams. So it's not just the stadium stuff that they're doing. They're going to bring this to other franchises. And all powered by HANA, by the way. So that 100% experience, that fan experience is powered by HANA for real-time data and memory analytics. It's going to be a very Star Trek-like video clips to your smartphone and imagining some amazing experiences, not just text messaging. So, you know, it's just a killer opportunity. But let's pivot that into your job, because this is the world you're living in. So you come in cold to SAP from the sense of you have no baggage of SAP religion other than what you've known from the outside. But at EMC Ventures, you had a peek into the future by working with startups. You have a lot of experience. So you pop into SAP, what's the deal? What do you look at? What's jumping out at you? How are you getting your arms around it? And then I'll see you then, we're doing alliances, now you're doing a P&L. Is it, what's your charter? What's your objective? What are you, what's your marching orders? I wake up in the morning and I remind myself to ask why five times. Not why am I waking up, but certainly when I'm in the meetings with a lot of folks that have been at SAP for some time, I find myself asking why five times. In many cases, there is no good reason for doing it the way that things have been done for the past 30 years. And so that sort of disruption, I think was the reason why they like me and the reason why they brought me in is because I think a little bit outside the box, I come from a different perspective, coming from, I started out my career at PeopleSoft as I mentioned to Dave, but so that cut my teeth so I understand about applications. But then a 10 year run at EMC taught me the power of the infrastructure and the power of data, the power of information. That is... The converged infrastructure that HANA is driving to the front door of all the companies with, right? I mean, that's HANA's major software power is on top of the infrastructure. I think what always surprises the heck out of me is like if you look at traditional converged infrastructure, like a VCE or a Flux Pod, it's the simplicity of that. And you're really not doing anything that's totally engineering rocket science here. We're really just putting peanut butter and jelly together. But the simplicity and the power of that is beautiful. And I think we should never forget that. So what's your chart? How many people are working for you? You have some marketing budget, you have marketing objectives. You're actually marketing to specific target customer bases. What's the plan? Interestingly, so 75 plus folks across the world that we're the global team doing technology alliances and the managed cloud as a service business because it's so closely in line with the BD activities that we're doing to tech partners. Like I mentioned, the VMware and the HP deal. So as far as the marketing activities, I've got a marketing team that's just in directly report to me, but they're matrixed over. There's, and oddly enough, when I speak to the marketing organization and the team behind it, I always stress that we're marketing to three different constituents. We're marketing to external partners. So like your HCLs, your Tata's, your WIT pros. We're marketing to SAP customers that you can deploy traditional SAP applications in these private clouds. And oddly enough and ironically enough, we're marketing to SAP itself because you've got 66,000 folks within SAP that are looking for the next wave, the next big thing. And it's about taking traditional licenses that on-prem licenses that our customers have become to know and love over the years and now putting those into cloud economics. It's a great place to be. So you've got a lot of creativity. So it sounds like it's pretty greenfield for you, but you got to manage the landscape. You got to kind of watch the internal politics a little bit, but you have a lot of tools at your advantage, a lot of technology internally, SAP. So it's kind of heard the cats internally, figure out what can work, where you can work, but really the cloud is what you want. I mean, I can see these vendors having private solutions go to market. Your CSE, I mean, they're going to roll their own, right? I mean, kind of thing. Is that one of the main things? So the first point, SAP is a machine. SAP has, like I said, 66,000 folks, about half of those are field-facing. You put a product or the right idea into that channel and SAP will execute against it maniacally, which is great. You bring up organizations like CSE and HCL and Tata and Whitpro. These are also organizations that have a tremendous amount of SAP knowledge and just DNA of the organization. They're looking for the next big thing. It's got to be big though. You can't put not big stuff into those channels, right? I mean. But the good thing about it is that there's a huge win at our back because customers, it's not like, you know, SAP is putting its head in the sand and saying, you know, the cloud doesn't matter or the customers don't want subscription based adoption or pricing. Everybody wants that. Of course everybody wants that. Everybody, the market demands it. And so that sort of win at our back is what's propelling the managed cloud as a service business forward, which is awesome. Okay, Kevin Chu, congratulations on your new role at SAP, GVP, P&L, Technology Alliance is right in your wheelhouse. Exciting time, HANA is exploding. It's funny how HANA just, it's been in the works and just crept up on the big data world and said, okay, we'll take it from here, almost a little bit, you know, mature tech. Now, some will argue the use cases are a little bit different than Hadoop, which they are, but for big businesses, it's working. It's highly disruptive. Congratulations. Great to see you. Thanks for coming by. I know you did a fly by. Took some time out of your busy schedule. Great to see you. Kevin Chu, tech athlete, the CUBE alumni inside the CUBE. This is SiliconANGLE.com's continuous coverage live from San Francisco. Be right back with our day two wrap up after this short break.