 Live from the Javits Center in New York City, it's theCUBE, covering Inforum 2017. Brought to you by Infor. Welcome to day two of theCUBE's live coverage of Inforum 2017 here in New York City at the Javits Center. I'm your host, Rebecca Knight, along with my co-host, Dave Vellante, and Jim Kobelius, who is the lead analyst at Wikibon for AI. So we're here in day two, fellas. We just heard the keynote. Any thoughts on what your expectations are for today, Jim, and what you're hoping to uncover, or at least get more insight on what we learned already in day one? I'd like to have Infor unpack a bit more of the Coleman announcement. I wrote a blog last night that I urge our listeners to check out on wikibon.com. There's a number of unanswered issues in terms of their strategy going forward to incorporate Coleman AI and their technology. I suspect that Infor, like most companies, is working out that strategy as they go along, piece by piece. They've got a good framework that... But we've got Duncan and Gov on. Right after this segment, Dave and Nian, you will grill Duncan on that much more. But that in particular, AI is great. AI is everybody's secret sauce now. There's a lot of substance behind what they're doing at Infor that sets them apart from their competitors in the ERP space. I want to go deeper there. So yes, so I'm looking at the blog right now, but what are the particular questions that you have regarding Coleman in terms of how it's going to work? Yeah, well, first of all, I want to know, do they intend to incorporate Coleman AI in their premises-based software offerings? For, I'm sure the vast majority of their customers want to know when, if ever, they're going to get access to Coleman, number one. Number two is, when are they going to complete the process of incorporating Coleman in their cloud suite portfolio, which is vast and detailed. And then really, number three, are they going to do all the R&D themselves? I mean, they've got AWS as a major partner. AWS has significant intellectual property in AI. Will they call on others to work with them on co-developing these capabilities? Those are like the high level things that I want to get out of today. Okay, okay. Well, so a couple of things. So I mean, the keynote today was okay. It wasn't like mind-blowing. We had customer appreciation, which was great. Alexis, who was from Footlocker, CubeLum was up there, and B of A got customer of the year and met those guys last night at one of the customer appreciation dinners. So that was kind of cool. They all got plaques or, you know, that's nice little trophies. Heard a lot about design thinking and they shared some screenshots, essentially, of this new UI. So they're talking about AI is the new UI. It was very reminiscent of the conversation that we had in May at the service now. Knowledge conference, where they're bringing consumer-like experience to the enterprise. It's always been something that service now is focused on, and certainly, Charles Phillips and Hook and Looper have been focused on that. The difference is, quite frankly, that the service now showed an actual demo. Got a lot of claps as a result. Info said this is ready to be tested and downloaded, but they didn't show any demo. So that was sort of like- They didn't show any demo. Is it really baked out? Steve Lucas was up there. He killed it. Very high energy guy, you know, again, another cube alum. He's been in our studio, and he's an awesome dude. And I thought he did a really good job. From Marketo. Talking about the whole engagement economy. You know, we think it's going a little bit beyond engagement to more action, systems of an action, I think is the term you guys use. I think systems of agency or enablement, yeah, but yeah, bringing more of the IoT into it and robotics and so forth. And then DSW was up there. I said yesterday, I love DSW. I tweeted out that, you know, the CIO had a picture, Ashley had a picture of DSW. And I said, okay, when the girls and I go to DSW, I break left, they go middle right. We meet at the checkout to negotiate what actually goes home. So that was good. It was kind of fun. And then a lot of talk about digital transformation. Mark Scavelli was talking about that and IoT and AI and data. So that's sort of, you know, kind of a summary there. As you know, Rebecca, I've been kind of trying to make the math work on the $2 plus billion investment code. And the messaging that Infor is putting forth, there's this desk, this is a source of new capital for us, but I'm, you know, as a private company, they have the right not to divulge everything. And they're not on a 90 day shot clock. Charles Phillips, I think, said yesterday, we're on a 10 year shot clock, so okay. I think what happened is, so I scanned 10 cues and I've been doing so for the last couple of days. There's virtually no information about how much exactly the cash went in and what they're doing with it. And so I suspect, but there are references to Golden Gate Capital and some of the management team taking some money off the table. Cool, that's good. I'm just, it's unclear to me that there's any debt being retired, I think there is none. And it's unclear to me how much cash there is for the business. So the only reference I was able to find, believe it or not, was on Wikipedia and it says citation still needed. Okay, and the number here in the math works is 2.68 billion for 66.6% of the company. And a valuation of 10 billion, which Charles Phillips told us off-camera yesterday, it was 10.5 billion. So you can actually make the math work if you take that 10 billion and subtract off the six billion dollars in debt. Then the numbers work. And they get five out of 11 board seats, so they've got about 45%, they're 49%, I think is the actual number. You know, voting control of the company. So here's the question, is what's next? And now, a couple billion for Coke is nothing. It's like the money in my pocket. It's really, yeah, exactly. And so, and I suspect what happened is, because it always says 2 billion plus. So in squinting through this, my guess is, this is a pure guess, we'll try to confirm this, is that what happened is Coke provided the additional funding to buy Burst recently, that up their share to 66% and maybe that's how Coke is going to operate going forward. When they see opportunities to help invest, they're going to do that. Now one might say, well that's going to further dilute the existing in-force shareholders, but who cares? As long as the valuation goes up, and that's the new model of private equity. The old model of private equity has suck as much cash out of the company as possible and leave the carcass for somebody else to deal with. The new model of private equity is to invest selectively, use, I mean essentially what is a zero interest loan, that $6 billion debt is like free money for in-force, pay down that debt over time with the cash flow of the company, and then raise the valuation of the company. Even at some point have some kind of exit, public market exit, and everybody's happy and makes a ton of dough. So I think that's the new private equity play and I think it's quite brilliant actually, but there's not a lot of information, so a lot of this has to be careful of speculation on my part. What you think is will the Coleman plan initiative raise the valuation of the company in the long term if it's an attrition war in ERP and they've got SAP Oracle, Microsoft, all of whom have deep pockets deeper than them for investing heavily in this stuff. Will Coleman be in that net just table stage? Well, so I think again, there's a couple ways in the tech business as you guys know to make money and one is to invest in R&D and translate that R&D into commercial products. And some companies are really good at that, some companies aren't so good at that. The other way to make money is to do acquisitions and tuck-ins and many, many companies have built value doing that. Certainly Oracle, certainly IBM has EMC back in the day with its VMware acquisition at probably the biggest home run ever and Info has done a very good job of M&A and I think clearly has raised the value of the company. And the other way is to resell technologies and generate cash and keep your costs low. I think a software company has the opportunity, like Info, has the opportunity to innovate, to do tuck-in acquisitions and to drive software marginal economics. So I think on paper that's all good if to answer your question they can differentiate and their differentiation is the way in which they're embedding AI into their deep vertical, last mile approach and that is unique in the software business. The other big question you have is beautiful UIs and it sounds really great and looks really great. Well, when you talk to the customers they say, yeah it's a little tough to implement sometimes. So it's still ERP, ERP is complicated. So it's not like Info is shielded from some of the complexities of Oracle and SAP. It might look prettier, they might be moving a little faster in certain areas, they might, they clearly have some differentiation. At the end of the day it's still complicated enterprise software. Right, exactly. And we heard that over and over again from the people, from Info themselves and also from customers is that it isn't seamless. It's complicated, it involves a lot of change management initiatives, people have to be on board and that's not always easy. Well, and that's why I'm encouraged that to see some of the larger SIs, you see Grant Thorne, Capgemini, I think Accenture's here. We're having Capgemini later on. Deloitte's coming on as well. And so those guys, even though I always joke they love to eat at the trough and do big complex things, but this is maybe not as lucrative as some of the other businesses but it's clearly a company with momentum and some tailwind that in the context of digital transformations and AI, the big SIs and some of the smaller SIs like AVAP that we had on yesterday can do pretty well and actually help companies and customers add value. And with a fellow like Charles Phillips at the helm, I mean he is just an impressive person who as you pointed out multiple times is a real visionary when it comes to this. Except when he's shooting hoops, he's not impressive. No, oh! I tweeted out last night, he's got Obama's physique but not his hoop game. So don't hate me for saying that, Charles. But yes, I think he's, first of all he's a software industry guru. I think he single-handedly changed, I shouldn't say that single-handedly, but he catalyzed the major change in the software business when Oracle went on its acquisition spree and he architected that whole thing. It was interesting to hear his comments yesterday about what he sees. He said, you'll see a lot more tech industry CEOs running non-tech industry companies because they're all becoming SaaS companies. And once they have been so invested in understanding the vertical, they really get it. You can see someone who worked on a retail vertical here going in and being the CEO of Target or Walmart or something. Yeah, so I thought that was pretty interesting comment from somebody who's got some shops in that business. And again, very impressive. I mean the acquisitions that this company has done and continues to do, you and I both like the burst acquisition. It's modern day BI, it's not sort of just Viz. And I don't mean to deposition, click and tableau, they've done a great job. But it's not, it doesn't solve all your enterprise grade, BI sort of problems. And you talk to the Cognos customer base, as great of an acquisition as that was for IBM, that is a big, chewy, heavy lift that IBM is trying to inject Watson and Watson analytics. I mean, you know, you used to work at IBM, Jim. And they're doing a pretty good job of that, improving the UI, but it's still, you know, big, chunky, Cognos, you know, BI, old cubes, wait for results. Yeah. So in many ways, you know, the burst acquisition for Infor and their portfolio is a bit like the thematics that IBM's been putting out on H-Tap, you know, injecting analytics into transactional processing to make them more agile and so forth. What I like about the burst acquisition, vis-a-vis Coleman and where Infor is going is that the burst acquisition gives them a really good team, the people who really know analytics and how to drive it into transactional environments, such as this. They've got, I mean, ostensibly a deep fund of capital to fund the Coleman development going forward. Plus, they've got a really strong plan. I think there's, and with potential strong differentiators for Infor, far more comprehensive in their plan to incorporate AI across their portfolio than SAP or Oracle or Microsoft have put out there in public. So I think we're, we're there in a good position for growth and innovation. Well, we have a lot of great guests coming up today. As you said, Denkoninko was going to be on up next. So I'm Rebecca Knight for Dave Vellante and Jim Kobilius. We will have more from Inforum just after this.