 Live from San Francisco. It's theCUBE, covering Oracle Open World 2016. Brought to you by Oracle. Now, here's your host, John Furrier and Peter Burris. Hey, welcome back. We are here live at Oracle Open World of San Francisco. This is SiliconANGLE Media's theCUBE. It's our flagship program where we go out to the events and extract the signal from the noise. I'm John Furrier. I co-host Peter Burris, head of research for SiliconANGLE Media and also general manager with evan.com research. Our next guest is Gretchen Alarcon, who is group vice president of product strategy at Oracle. She has the keys to the kingdom of the product that is the center of the universe at Oracle. HCM, welcome to theCUBE. Thank you. Thanks for having me. I'm excited to have you on because we were just talking about this with the APAC folks about the role of people. And in the middle of things, things. And two years ago I said, you know, as I used to read to my kids, thing one and thing two. Internet of things is not about just machines. It's about people. And that HCM is really morphed and just in the past many, many, few years from being a top-down structured database, schema-driven application. People file performance of reviews. There's a structured process. And then all of a sudden people are very unhappy. Turnover, people were leaving. All kinds of HR issues were kind of stuck there. Now a new breed of software is solving that. So I want to get into it. What is the most compelling thing right now in HCM that is really moving the needle in terms of employee satisfaction and employer productivity relative to retention, onboarding new people, and so on and so forth. Well, you know what we're seeing happening overall. It's kind of interesting is the workers that you have today, and I'm not just talking those who are younger workers, but workers in general have really changed the way they see their engagement with the organization. They're not joining companies and thinking this is my long-term career. They're joining companies and saying, I'm here for this period of time until I learn these skills or until I reach this level. And so as a result, we're seeing a lot more discussion from an HR standpoint around how do I retain these people? How do I engage them? Because if I've spent the time to invest in them and train them, I want them to be a longer, more productive employee. And rewarded personally. Right, exactly. But it changes the discussion, right? So instead of HR being this top-down, manage the system, there's much more of a focus right now on how am I engaging workers, how am I making them more productive? And the other thing that has really changed, and it's funny because I was here when it was first invented, is the whole concept of the technology that your employees are bringing to work now, right? I'm so familiar now with what's on my phone, with if I'm using a tablet, that sort of thing. I expect information to come to me because it doesn't all other areas of my life. So why wouldn't HR information act in that same way? So that's really changing how we think about our systems because we're not thinking as much, we're still thinking process, this process will never go away, we're thinking much more about different ways to get the information to an end user so that they can actually take action and not have to spend time negotiating back and forth with HR saying, can you change this report? This doesn't quite look right. They're really looking for this insight. So what's the big feature that you guys are selling now in the software that enables that kind of success, both on the employer side and the employee side? What are the big features? So there are a couple things. We about two years ago pioneered a new category that we call work-life applications, and it started from this discussion around the internet of things. And if people have all of these things that they're using in their real world versus their work world, how could we start to mesh those together? So we looked at things like my volunteering, find someone who wants to give back and wants community service applications, community service options, how can I do that from within the system? How can the system support me instead of that being separate? Similarly, my reputation. What am I known for? How am I known within the organization? How do I build my reputation? Everybody's got one. But how can the system help you understand what that actually is, not just what's on your resume, but what are you actually known for? Those sorts of things, those work-life applications are about the employee and what we learn about the employee that then lets HR make better decisions or lets managers make better decisions. So when you think about the role that as John was saying, you were agreeing that historically HR management has been, let's establish clearly the relationship between you, the employee and us, the employer. But as we move into a world where information's moving more rapidly, people not only want to get information, they don't want to have to enter in a whole bunch of information at times. How do you see the role of HCM applications, the services that it can provide, not only individuals, but groups, to foster more collaboration, foster higher productivity, to translate into a set of capabilities that are good for employees, good for owners and good for customers? Yeah, so I think one of the things that comes within that, part of it is understanding that your workers are not going to be staying that long. So I'm trying to think about how can I make you more productive while you're here? And in a lot of cases from an HR standpoint, we got to get out of the way. Get you access to the information that you need, but then get out of the way and let you do the rest of your job. So I know everyone's talking about bots right now, but one of the things we're talking about a lot within HCM is so many HR questions are just simple transactions. Did I get paid my bonus? What's my vacation balance? I don't need an HR person to tell me that. That's a quick inquiry that should just be served up to me whenever I think about it, right? Or similarly, if I'm thinking about, I'm at home and so many of us when we're at home, that's when some of these HR questions come up, right? Do I have benefits coverage for Hadancha? I don't know, how am I going to find that out? So those sorts of things from an employee standpoint, how do I help you do a better job? From a manager standpoint, we're looking at two things. One is with all these things your employees are doing, what HR information can we pull from that that would help you make a better decision about that employee? They do a lot of volunteering, but you know what? When they're doing volunteering, they tend to be a project manager. Their job right now has nothing to do with project management. Maybe you need to make a shift in their assignment because they like to do project management, but you wouldn't know that if you just look at their job. So things like that where we can draw insights from their behaviors and serve up to a manager some recommendations. A lot of this new focus, it's not so much on data and hoping for interpretation, but more, here's information, we're mashing up a lot of information together and then giving you two or three different prescriptions so you can decide what might make the most sense for this employee. Do you anticipate that HCM is going to participate in the process of actually identifying where the holes are in terms of, well, we assume process-wise and role-wise and people-wise that we need these many people and actually starting to gather data out of systems and out of activities to determine where we should be targeting people differently and how they should be evolving their roles. We're going back to the notion of project management. It would be nice if we had more of this because our customers are asking for more of that. Right. Well, and I think that's a big shift. It's more about how do you look at what an employee is capable of? Because I think about general management, right? I hire somebody to do a job and my thought initially is their promotion is up, right? They're going to move up in their career, that's what they want. Not everybody wants that. They might be looking for more flexibility, right? I might have a different need and be able to redeploy them differently. The other thing about it is to look, not just at what does their resume say they do, but what do they really like to work with? Is this someone who connects with other people in the organization and I need more people who are good at connecting with others? Or is this someone who really doesn't do that? But they're a guru. When they answer a question, it's the final answer and no one's ever going to question that. I might value those skills differently, which again is not something I would put on a resume, but it has more to do with their behaviors. And the more of that that we can pull out, then we can show a manager that yes, you need a new software developer. But do you need a software developer who's a connector who knows how to communicate with customers? That's a different job or a different skill set than just you want your standard job description might have said. Well, one of the age-old challenges that HCM leaders have faced is to try to align a formal organization with an informal organization. Exactly, yep. What role, we talk about social media as it pertains to employees. What are the rules for how you engage the external world socially? But how is social media, how is it gonna be social and collaborative tools starting to bake their way into HCM so that formal and informal organization is constantly realigning in almost a plastic way so that the organization can reconfigure on the work that needs to be done with the people that it has. Yeah, so actually that's one of the things when we first started looking at our workforce reputations product, we specifically started with what could we listen in terms of how people are participating inside the company on social platforms, whether that's your collaboration platform or discussion groups, those sorts of things. Because that information on its own is very valuable. Now if you want to take that a step further, there are definitely some privacy questions that start to come up about, do you want to listen to someone's LinkedIn or their Facebook or other platforms? We tend to think with those sorts of things that our customers should let that be kind of an employee-led, yes, I'm comfortable giving you that permission because really that's outside the walls of the organization. But again, that's an extra layer that you could start to add in to see more about what this person does. But there's so much you do just within work assignments, right? If you think about the amount of collaboration you have in projects, the amount of work that happens in management, and everything we have within HCM is social-enabled. So we're tracking social collaboration throughout our whole processes as well. Well, one of the things we've been advising CIOs for example for years is not just to track help desk statistics, but to actually look inside some of these HCM systems to see what people are talking about as it pertains to existing systems, new rollouts, what types of things that they want. It seems like it's a very rich source of information. It could be exploited better. Yeah, it is, and you know, it's interesting. There are two ways we are looking at that. One is if I look at a CRM system or someone who works in sales support, I've got a lot of information that I'm collecting about how that person is performing, right? How long does it take them to close a ticket? How often do they have to pass that on? Do they partake in any training? And one of the things we focus a lot in the learning perspective is how can I make that learning more available to the person right at that moment and say, wow, you know, your last three calls on this topic have gone longer than they should. We need to get you some learning right now. Not a formal training class, but here's a quick video. Let's brush up on your skillset. Christian, I'm going to talk about competition. I'll see, Larry always talks about Workday, but I set up my podcast on Friday, our Cube Friday podcast, it's down at cloud.com slash Cubecast. I said Oracle can beat Workday on any given Sunday, so I don't really see, I see them more nipping at your heels, if you will, as a competitor, but you also look like it was like a service now out there, kind of getting into the HR area. So I want you to talk about, and obviously Salesforce is dropping all kinds of stuff on the doors to about AI, Einstein. So it's not always competitive, you guys are always fending off competitors. So I want you to talk about how you guys compare versus the competition first, and then we'll get into how you guys are targeting developers who see cloud native as a really big opportunity. Okay, yeah. I think when you think about, you know, the market in general, one of the things that's really interesting to me, if you just look at HCM, it tends to be a very functionally-oriented market. People are looking for an HR system, or they're looking for a talent management system. They want to buy a performance application. And what we're seeing in the industry itself right now is a real rise in engagement applications. A lot of little companies trying to build one-off engagement cut products, and that's great. It's good to see the innovation. There's been a lot of innovation in HCM in the last 10 years, it's been outstanding. But the other thing we've seen, and we've seen it multiple times now, is the suite wins out in the end. Because someone buys one app and then another app, those companies can't actually survive by offering just one or two products. So they start to build the engagement platform. Or when we saw this in talent management, it was recruiting, and then performance, then it became the talent management platform. So we see ourselves, our focus is, we offer that complete HCM suite across the board in the cloud, and then you add in the benefit of having the same footprint with finance, with CRM, the fact that we can go beyond the walls of HR. That really differentiates us as well. Well, some will argue there's a power law of features. Okay, so let's take the suite wins. That's a winner-take-all mentality, but the developer ecosystem, someone might build a better expense app that is so badass, but it doesn't fit into the suite. So the question is, are you guys using data and opening up to developers, APIs, and using APIs and data and developer opportunities? I might be that little company that may go out of business, a feature, not a company. That's a great opportunity for you to build an ecosystem. Is that on your strategy? That's part of why we have our whole platform as a service platform, is so that people can go build those things. What we see a lot of happening there is companies saying, especially if they're coming from the on-premise world, right, in the on-premise world, they may have built a custom application to do something. I have a lot of people, soft customers, who built very custom apps, and those are not necessarily things that I'm going to build. They're not on my roadmap in the short term, but they still need them. And so there's a great opportunity there for platformers as a service to come in and say, I want to build this specific capability. I'm going to then hook it in to the HCM system, and we offer those to our marketplace. Do you have product clouds, someone to integrate in a non-orable app into the suite, if they choose that stuff that they want? Absolutely, yeah. Well, it's part of the Extents strategy, right? Exactly. You want to provide that core? Mm-hmm. You want to provide APIs so that people can add things to it to make it more relevant to specific classes of customers? Exactly. Or, you know, specific worker types. I mean, we have, you know, case in point, we have a sizable, not huge number of customers, older legacy customers who offer pension. Well, that's not a very common offering now, so it's not something that I really have a lot of market to go build, but for those customers who offer pension, they need it. Great opportunity for someone to build a pension application that then ties into our system. Talk about the ecosystem. Real quick, we have a minute left. Sure. What's going on in the ecosystem around HCM for you guys relative to the product, and you go to market as that translated to value? You know, I think a big change for us is we're really thinking about the transformation of HCM because that process, the way you engage with your workers, really is changing. So when we're thinking about our products, we're thinking about it both in terms of engaging workers, engaging managers, but also thinking about how does HR really support that change, which is different than in the past where we were just like, here's self-service, right? So there needs to be a different sort of an engagement model. So we're spending a lot of time with our customers talking about the process and then how the product supports as opposed to the feature function. Final question, real quick. What's the plans this next couple of months, next year? Any big things happening? I'll see what the world's happening, but you're doing events, you're doing anything digital. Any cool stuff you'd like to share? No, we've actually got some great stuff going on. We have our HCM World Conference that's coming up in April, and we've started, this is I think our fourth year of that, where it is very specifically HR focused. Focused on transformation, focused on processes. My team supports it. Our sales team supports it. Great opportunity for CHROs to come together and really engage. And then you add on top of that, we're starting our conference season. So we're at a lot of other events as well coming up here. So we're really out there spending a lot of time with our customers. And it'd be safe to say that the internet of people is a trend that you support. I love that term, I'm totally going to adopt that. Oh, we're talking about the internet of the Q. Things in people. There you go, that's good too. I'll say the internet of people, copyright the Q. We'll license it to Oracle. No, I'm only kidding. Seriously, we believe the same thing, congratulations. Thank you very much. And thank you for coming on the Q and sharing your insight and the data here. Thank you so much. Great, thank you. We're here in San Francisco on the ground floor, a big booth in the middle of the hallway. You want to come by, if you're here at the show, watching on your mobile phone, come by the show if you're watching. Keep engaged with us at Twitter, handle the Q. You're right to have more live coverage after this short break. Hi, I'm John Furrier.