 Live from New York, it's theCUBE, covering Inforum 2016, brought to you by Inforum. Now, here are your hosts, Dave Vellante and George Gilbert. Welcome back to the Big Apple, everybody. Jeff Abbott is here as the Senior Vice President of the Inforum Partner Network. We're talking ecosystem with Jeff. Jeff, welcome to theCUBE. Thanks, Dave. So we look around. Great show this year. Attendance looks like it's up from New Orleans. Oh, no doubt. Right? Quite significantly, you know, maybe you've built up a lot of pent-up demand because you go every other year. Of course, New York City helps as well. But at any rate, how's the show going so far? What's happening out there? Lots of excitement on the floor, guys. We're, you know, we actually, to your point, about attendance, we've had greater and greater partner involvement in the show, and this is a record breaker for us in terms of partner involvement. The number of sponsors that are here, they're partners, and they're bringing a tremendous amount of their customers to the show. For the reasons you've probably already mentioned this morning, just the transformation that Infor's taking its customers through, and partners have seen opportunities that they've never seen before from any vendor in this field. So talk about that whole, you know, dynamic a little bit, because Infor's different. You're all cloud, you know, as is your strategy. So there's not a bunch of plumbing that the partners can, you know, pick off. No mods is your sort of mantra. Right. Yes, ah, you think ERP and SAP and all the, you know, recurring revenue from that. So what's an Infor partner like? What are you looking for? What are they looking for and describe that? Yeah, great question. So we have two big communities. We have the systems integrators, which in the last three or four years, we've done a lot of work to bring in relationships like Accenture and Deloitte and Cyber and AVAP. And these are your go-to-market partners that essentially align with our field sales organization, introduce us into accounts that they already have relationships in and we win business together. We create transformation strategies together in the market. And you're right. You know, all cloud has been an intimidating factor for them, especially in the last few years, but they've found a way with us to transform their businesses just like we are, right? And they've found ways to essentially create cloud value, right, for their customers. And going to market together has been great because as we've learned and transformed our business in the cloud, so too we have this ecosystems of services partners going with us and understanding the change that customers are going through and the value they can add. Then on the other end of the market, in the SMB, the small and medium business market, we have over 750 channel partner resellers around the world. Again, same transition guys. They're learning very quickly on how to do the no mods, the turnkey implementations, and so on, and create value by presenting a solution in the cloud. So, you know, 1,500 partners total. All of us learning together with this transition to cloud is all about, but finding the value spots along the way. And now, so that's interesting. You talk about the service partners. At the same time, Charles this morning was talking about to put up some slides on how much you've invested in services. So how do you walk that fine line? What's the message to partners? It is a fine line. We're offering a lot of the latest opportunities in the market, whether it's industries or solutions to the partner community first. So, well, Stefan will meet with our top flight services partners and our alliance partners and suggest, why don't you expand into the Middle East or parts of Southeast Asia or parts of Eastern Europe? Our solutions are growing there. And in a lot of cases they are. They're opening new offices. They're creating new practices on our latest solutions and so on. But we still have to service those customers where we don't have the same strength in the alliance partner community. So I have a giant kind of wall map that shows our coverage model for the alliance partner community by industry and by solution. And where we have those gaps, Darren and his team are filling them in by hiring and training their own people. So we love the whole ecosystem play. You've seen so many companies leverage it. I mean, VMware is a classic example. Todd Nielsen, former president of VMware, used to throw out a stat for every dollar spent on a VMware license. 13 is spent on the ecosystem solutions and that rose to 15 and then 18. And you could see the ecosystem growing. My question, Jeff, is what about innovation that comes from the ecosystem? You guys talked a lot about investments you're making. Can you get, and how do you get a multiplier effect from the ecosystem? Great question. And that's something that we actually pride ourselves as a differentiation in the market. I like to say that your ecosystem is one of the last strategic competitive advantages in enterprise software and we believe that's true. So we have to present those opportunities for them to expand our solutions to innovate and to grow. So things like our development platform, Mongoose. On this platform, we invite our channel partners to go into micro verticals. I'm not talking about just auto but automotive aftermarket parts. Very specific micro vertical industries where they can then add their own intellectual property, their own content to our reporting, pre-populate business intelligence reports and so on and then perhaps even develop their own extensions on our solutions and build out next generation software right there for the customer. Out of the box. Correct. And we're actually going to put a marketplace in place where they can post their extensions so any customer in the world that happens to be in that micro vertical can leverage it. So that's our strategy is to grant kind of a landscape to both alliance partners and channel partners to innovate freely. Are those partners who are building, essentially, I mean if you're thinking about it in consumer phone terms, it's almost like a new skin. Right. Are they also the ones who do the sort of implementation configuration work or when it's a cloud product, they, the activities change. They do. Talk about how a partner's sort of business had to change what we were talking about earlier from when it was purely a non-premises product to a cloud product or a hybrid. Yeah, great point, George. So actually I'll give you a very specific example. We have an excellent partner in North America, Copley, who decided, you know what? We like where your cloud suite product is for a med device, but we think we can do even better with it. So, Copley has built some extensions specifically for medical device, that sub-industry, that extends the reporting and extends the functionality, creates real specific value in that industry, value that speaks directly to those customers. And at the same time, they've retrained their own services organization on what it means to implement in the cloud and what it means to pre-populate those reports and so on. As you said earlier, Dave, out of the box, those customers get the content they want, the reporting they want, and all the while, to your question, George, about what a channel partner does, that partner escorts them through the transformation. So all the demos, all the discovery on what business value they're trying to create through the sales process and the implementation and support. So our channel partners are full service partners. They do all of the selling, implementing, and a lot of them long-term support of the customer. When you say long-term support, like in the older, on-premises era, that would include the patching, maintenance, security, upgrades. But what does that look like now? Yeah, yeah, so that has changed, right? Whereas those same partners were kind of visiting the customer on site all the time, it's been less so, now that they're transitioning to the cloud, it's been more remote, remote implementations, data migrations, the tuning of the solution, but they're still business advisors, right? Sorry, go ahead. Yeah, I want to key off that business advisor comment because it sounds like even though there's a role, there's transition from the on-premise role to the sort of cloud provider role, but it sounds like the skills involved in the partner are very, very different. They are. So whereas the entity, the partner entity can make the transition, not all the people there can. So funny you say that, so this morning I have held about 10 partner meetings so far, a lot more to come, but in each and every one of those discussions, we're having that hard conversation about the transition of your staff and the transition of your business model and your mentality. So between Infor and all of our partners, we created a mutual business plan, right? So that, and that's important so that they understand where our products are going, where our overall strategy's going, but it's equally important so that our customers have a level of confidence that I'm transitioning the best knowledge I have available on what a cloud transformation looks like to my partners. And one of the top challenges they have is bringing in that, call it millennial level talent of folks who don't remember client server and who don't remember the historic side of enterprise software and more so are used to, no, no, no, it should be turnkey. I should be able to just, you know, log in in the cloud, have what I need, where I want it, and if I want to change the configuration, partners have to adopt that mentality. They have to pick up the talent that understands that that's the industry we're now in. Well, a lot of companies, software companies, are looking at the cloud saying, oh, hey, we can claw back some of the channel and cut out the middleman. Ah, cloud's simple. We can, you know, take some of those millennials, put them in the phone, hire some athletes about a, you know, whatever, you know, San Jose State and put them on the phone and go crazy. You're taking a different approach contrast that you're the in for philosophy. Yeah, no, some news just last week, one of our major competitors decided they're going to wipe out a big portion of their partner organization in favor of an inside sales model, which I, you know, good luck to them. It's more than just picking up the phone and making contact with a customer and explaining what the solution does, the value in a channel community, the value in a partner ecosystem overall is extending the knowledge that a vendor provides and extending the capabilities that we provide. So there's, you know, to me, I just can't imagine, you know, a company trusting Irox. Didn't want to say it, but I'd say it for you. Irox, you know what Irox stands for? He knows. Go ahead. Idiot right out of college. Yeah. That's that. You guys can say that. Exactly. You know, somebody who doesn't have any experience in the industry, can't speak the language and then the first question they get kind of goes, hold on a minute, and they're flipping through their script, trying to find the answer, just doesn't work, right? And that's the value, again, that's why I think a competent ecosystem is a differentiator, because you can provide the value, you have the experience, you've been there, done that, and you can give, you know, customers who are putting down a lot of money to transform confidence that they're doing it the right way. Oh, to be in IROC again, this is the best time of your life, by the way. Support for partners. What do you guys do? Pitch me, I'm a potential partner, what's in it for me? Well, first of all, for anyone who's interested, Wednesday, we're kicking off the Partner Summit here in New York, very excited about that, but we constructed the Infor Partner Network program about five years ago, and it's now a four-time five-star channel program, or partner ecosystem program by CRN, channel reseller news, so we're really proud of that, because that means that we are a top flight enablement program for our partner community, and that's the name of the game with the partner community, is enablement, right? Making sure that they're getting the proper training, the proper access, that we've got the right portals in place for them to self-service, gather the product roadmaps to gather all of the online training, and, you know, what I say to a new prospective partner, and we're recruiting new partners all the time, I think we have 1500 now, I think we could easily have 2000 in the next two or three years. What I say to them is, listen, you bring the knowledge, we bring the enablement, we will put people around you to get you started, to help make you successful, and that's what we do, right? So, unlike a lot of our competitors who will take, for example, a market, and they'll pile 15, 20, 50 partners in the same market and say, go at it, we don't do that. We're intimate with our partners, we select very few, but we try to select the highest quality partners, and we make them successful with direct relationships in either channel or alliance management. Enablement liaisons, we do conferences like this every year where we invest a lot of money to make sure they're getting access to the best of info. So there's some degree of exclusivity, I don't want to say exclusive, but there's a quasi-exclusive, a selective process. It's a good way to put it. I would say it's very selective, not exclusive, but very selective. Customers still have choice, right, amongst both our alliances and our channel community, but we do put a lot of investment to make sure that no matter who the partner, they're highly competent, highly trained, and they're proven. So, again, think of it this way. If when you walk in and you're evaluating a new car, a lot of times six guys jump you at the same time, nobody likes that, right? That's not us. What we do is put a knowledgeable person in front of you that knows already the kind of car you might be interested in and has already done their research and their homework to make sure that they're presenting the best possible solution for your need. Have you guys sort of figured out a bracket for the size of the company customer that you can go after with your channel model? And how would that stack up with, I don't know, NetSuite or even SAP or Oracle if they could possibly reach that far? Yeah, our segmentation is very clear and transparent. So essentially, for new prospects or new companies interested in enforced solutions, all customers $75 million in annual revenue and below, that's the market that our channel community serves. Now, companies $75 million to $500 million, we kind of call that a coexist zone and that's where either a direct sales rep or a channel partner can serve the account. Depends on where the relationship is and who's got the experience and so on. But we create that transparent segmentation, George, because number one, customers want to know what's the coverage model. But number two, we're trying to minimize channel conflict. I really don't want to have a direct sales organization presenting at the same time with channel partners. It doesn't make sense, it's not efficient. So that works well for us. Compared to our competition, I think we've actually maintained very steady segmentation model where when I look, our competition's kind of all over the road, like we were saying. Some are now abandoning their partner communities all together in favor of an inside sales model. Some kind of flip-flop those segmentation lines every year, but we've remained very steady. In fact, that segmentation I've talked about has been the same, it's been for at least five or six years now. Worse, very well. You gave an example earlier, Jeff, of a customer actually said, hey, we can improve upon this functionality and develop some additional capabilities. What about the developer world? I haven't heard much about the platform, Infor is a platform that you're going to open up to the world. Is that something that's in the world? How, where do developers play? Yeah, no great question. So, like an ISV community, right? An independent solution vendor community. It's not something we've had in the past. We do have solution partnerships and a lot of them are here and sponsoring and they're great solutions. But we are pressing to do more of what you're describing, Dave. We think that there is, with the advancement of the solutions and kind of us now taking all of them to the cloud, there's an opportunity to create a community of developers who, you know, on their own build extensions and solutions either in the vertical sense or in the solution sense. So, it's something that we're just getting started. Don't really have an announcement about it, but we do have a platform. The Mongoose platform is built for exactly that. Right, and so, you can't take that lightly. So, you've got, the key thing I'm hearing is you've got the tech. And now you need a business infrastructure to support that. Correct. And there's a whole new marketing initiative. And a marketplace. Yeah, right. Exactly, exactly. So, stay tuned. It's on the horizon. All right, what else is on the horizon? What should we be paying attention to in terms of the ecosystem? Things that we should be watching in terms of indicators of success and growth? Yeah, great question. So, I would say, you know, when I'm on stage on Wednesday and presenting to my partner community, I'm going to show them a couple of really, really encouraging graphs. Number one, we have a steep up and to the right graph on cloud adoption in the channel partner community. It's not been an easy transition for them, like we discussed, but they are adopting cloud. And I would say one out of every four or five deals now in the channel community is a cloud deal. And that might not sound like much, but it's accelerating. On the alliance's side, I'd say one or two out of every five opportunities our direct sales force is working on is with a partner. So, in total now, one out of every three deals is a partner's engaged. So, we're seeing, and that's what we want. We want the ecosystem to be very active in the growth of the company. So, for example, channel accounts for 20% of the company's current sales growth or overall sales target. And in the alliance's side, again, one out of every five direct deals sold by a direct rep is included in alliance partner, and that's increasing. So, I think if we met a year from now, those numbers might even, you know, not double, but they'll be up and to the right. It gives you so much leverage, so much coverage, you know, and, you know, talking about overseas opportunities as well. To me, it's critical. Critical part of a company's growth strategy for a $3 billion company that wants to be a $20 billion company. And customers, they want that. They want a healthy ecosystem, especially the multinationals who say, that's great, you've got excellent services here in the United States, but I have locations in Japan and Singapore and Australia, New Zealand. I need kind of a full services package, and that's where the ecosystem's critical. We're up against the clock, but go ahead. Quick question. Dave brought up the topic of how about platform as ecosystem. And I was thinking about GT Nexus, how about network as ecosystem. What is that, I mean, that allows you to think of much broader deals, might be harder to sell, you know, or more of a senior level sell, but it's a very different game. It is, and the GT Nexus team has done a phenomenal job of creating alliance relationships for that exact reason. They've got systems integrator relationships at the highest level across several different industries, including automotive, some in retail, et cetera, whereby those partners are essentially advising their clients, this is the right platform for you to drop in your supply chain and your needs from suppliers all the way through to distributors and end-use customers to create transparency across the entire vertical, as Charles discussed on stage this morning. So those alliance partner communities are seeing the value of the GT Nexus. It's actually, you know, I remember in the late 90s, everybody thought we could create all of these super networks and so on. GT Nexus is one of the only companies I've ever seen that's pulled it off, right, and gotten a tremendous amount of liquidity on that platform, and the big SIs all see it and they're advising their clients to get on it. Excellent. All right, in for investing in its ecosystem, bringing innovation, of course, we're bringing content to our ecosystem with theCUBE, Jeff Abbott, thanks very much for coming on. All right, keep right there. Everybody will be back to the Big Apple right after this word.