 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. Welcome back, everyone. We are live in San Francisco for Oracle Open World 2016. This is Silicon Angles Cube coverage of Oracle with three days. We're on our third day of wall-to-wall coverage. I'm John Furrier with Silicon Angle and Peter Burris, my co-host, head of research at Silicon Angle as well as general manager of Wikibon.com Research. Our next guest is Mike Webster, senior vice president and general manager of Oracle Retail and Hospitality. Great to see you. Welcome to theCUBE. Thanks, great to be here. So, I love this conversation because it brings kind of a sexy appeal because retail really is the front lines of all edge computing, internet of things, consumer interaction, and hospitality is the schmoozing all these places people go on vacations and the pressure to deliver good consumer experience is at the highest. But yet the data has become more important in these areas than ever before. And sometimes they've always had antiquated systems or siloed applications. So that's just shifting to the cloud clearly. So give us the update on where you see this. Yeah, look, we have a tremendous passion for both industries. You know, the thing we love about retail more than anything is we see changes in consumer desire and behavior that then signals to us potential changes that might follow on in other segments whether they're banking or in the communication segment or in utilities as an example. So we think that these are really at the forefront of where consumer technology meets more traditional business technology. And they're businesses that really lend themselves very comfortably to the use of big data. And look, retail's always been about big data. We've had big data for a long time. What we've had is little insight. So I think the things that we're really excited about and what we're talking about with the hundreds of our guests that are here at Open World this week is how do we help use that data to anticipate what the consumer really wants? How do we bring science into context of better merchandising, better engaging, and then better managing the flow of goods and services to those customers they want to serve. And then we're using the data to try to better inspire staff to serve them. So it's just a really wonderful opportunity with Tech and Cloud coming together in retail. You know, my observation, we've done a lot of CUBE live broadcasts with some of the sports teams in the Bay Area around sports data and interactions. And the three things that pop out of that kind of hit retail and hospitality is how do they manage the team? How do they manage the fan experience and how do they manage the organization? Now, retail's always been kind of a point of purchase kind of thing, with a lot of big data and now very little insight. But now to not only the need for more insight, but more transaction environments. The surface area of digital has expanded. So the sports is a great example. The sports teams would never have the kind of, you know, getting a hot dog in six minutes and a hat and manage your parking all on an app. So the surface area of the touch point becomes larger. It becomes much larger. I think the sports and entertainment venue environment is one of the segments we serve. We have, you know, roughly half of the major league parks and stadiums here in the U.S. and many around the world. And, you know, there's a great case where using technology delivered by our cloud to speed to something simple like getting concessions. Right? I mean, we know as an example that you could drive 50% more concession sales just by reducing the amount of time that you spend waiting in line. And we solve that problem every day for great stadiums. So digital allows us to engage better in seat. Let's us get better personalization around either fans that we have an affinity to. And it allows us to share that in a social environment. So all of those come together via the Oracle Cloud. And agility and business agility becomes a big thing too. We've heard stories and I'd love to hear some use cases from you guys where, you know, if the team loses the prices that jerseys in the store instantly go down, if they win, it goes up. Or if it's a family friendly environment, beer costs more. So they can actually dynamically manage things with the data. And that would make sense almost in all retail and all things being outside in kind of focused. Can you share some examples of where you guys are doing those kinds of things with customers and some of the results? Sure, I mean, I'll take a retail example in this case and maybe come back and give you some hospitality ones. But in retail, what we're able to do is we're actually able to look and see what was all of the browsing behavior for a consumer segment online and looking to see, say, they ship products into a postal code or a zip code of X. We can then take that insight, what were customers looking for and use that to intelligently drive the assortment, what merchandise goes into the physical store. So we start to bridge the digital and the physical divide using data to more intelligently assort offers. We can certainly do the same as we look at the sell-through of items and better adjust inventory. And in a sporting venue, I know I can move around, say hot dog buns are selling hot on this side of the stadium. I can intelligently move goods around. So lots of wonderful applications that are enabled by great data. So the thing that I'd like to have explain is the impact of mobile on retail and hospitality. Can you share some anecdotal data? Does it change some of the dynamics around the business, around the users? Sure. Yeah, I mean, I think mobile obviously is a great neutralizer. It brings transparency to both the retail and hospitality journeys. And for the first time, it starts to engage us as consumers and tailoring it to our own preferences and needs. I mean, there's more devices on the planet than there are people or toothbrushes or toilets. And what it does is it gives us as the guest or consumer visibility to pricing, inventory position, it gives us access to recommendations. So we're enabling all of our applications for mobile, not just for consumers, but for associate use. How do I let you get shoulder to shoulder with associate that can see other things that you've bought, other things that may be in your basket and make recommendations to your experiences, Richard. Same if I go on hospitality. We've taken what is a traditional strength of ours where we provide the check-in service, a property management system to hotels. And now we've extended that all the way out to the guests. So I can from my phone, check in, have my room, select where I want to be, and just flow right past the front desk and save myself some time. So mobile is an absolute game changer for both those communities. So what we've seen happen over the last 10 years is business which used to largely be defined by the industry that they were in, the assets that they had at their disposal, and how they bought them to bear on opportunities. Because of digital, the specificity or the uniqueness of those assets is starting to change, because you can program them differently. So how is Oracle's keeping track, and we kind of talked about this, touched upon it, keeping track of changes in the definition of industry as industries themselves look at their customers and how they can fill up the experiences differently. Sure, I mean we're a bit unique in terms of how we approach our customers and that we have organizations that obviously focus on kind of horizontal platforms like database or core technology or hardware. And then we have industry groups that are very targeted that are made up essentially of domain experts. And it's one of the things that is why we love retail because we think again, understanding how that consumer engages is a good predictor of what could happen elsewhere. So the way that we're trying to change, I think, is again having laser focus on what are the most critical business problems the industries face. And if we see opportunities to leverage and scale those across others, we will. And increasingly we think all of those converge to a point of delivery because the way those assets are now configured is different. If I'll stay in hospitality for a second. If I'm a restaurant, the last thing I want is a server under desk to manage, to secure and update. So what we're helping our customers do is take all the cost and complexity of IT, put it on our shoulders, and then let them really focus on how do they unlock innovation to serve their guests or their consumers. How does Mark Herd look at the retail? I know that he used to be at NCR as well back in the day. Does he see the retail opportunity as a unique thing or part of the overall cloud perspective? Because I think you guys have a unique perspective of Oracle running all the databases, if you will. But now with this whole new cloud push, the model's upside down in a good way. So it's kind of disruptive. Does Mark see that? Do you guys talk about that? Do you guys have conversations around that? We do. And I think what excites Mark and the rest of our teams, of course, is that what cloud allows us to do is to take these incredibly powerful tools that we've offered to the largest global retailers on the planet. The best brands. And bring those down to serve a much, much larger pool of customers. So the aperture of market that we can now address because we've taken that complexity away lets us sell to a lot of new customers. So we have customers that are in hundreds of millions of dollars of revenue that two, three years ago would never have been good candidates for us because the weight and the cost of our offering would have probably been too significant. I think Mark sees that opportunity and that is retail. It is a true pyramid of a select group of very large customers, but a lot of mid-market, which is just more opportunities for us to grow our company. What's the biggest thing that you've seen happen in the retail and hospitality space in general? Just holistic trend-wise. I mean, obviously people are self-serving themselves. You have all kinds of ways. You mentioned the mobility is a great example. You have machine learning and AI, Larry's showing the chat box. I mean, you can almost see the recommendation ends. You can almost connect the dots on machine learning. Is there a new generation of retail mindset as can you point to a trend that's driving a lot of the change at the retail level at the edge? Well, I think you hit them, right? I think the foundational changes that are happening in retail are being driven by this consumer-centric mobile delivery model and that are being delivered by embedding science and analytics into the workflows. I mean, the reality is trying to manage simple things like how do I price across different channels? Exceeds the capacity of the knowledge worker that lives in the retail today. So the buyer, the planner, the allocator, it's too complex. Too many variables, too many data points. So by packaging all of this capability in simple-to-use tools that we then deliver on mobile, that's what's changed the conversation for our community. So how's the industry changing? I mean, I don't want to bring up the whole ageism thing. I don't really mean it that way, but I mean like, I think like mainframes the minis and every transition, you have a generational people that clutch and hold on to the old way, right? Certainly the retail systems have been out there like, I mean, the mainframes and you've worked at NCR have been doing a lot of transaction stuff and IBM's in there. So there's a lot of old thinking and it's hard to rip and replace out these huge systems like that run hotels and global chains and retail. So what's the new philosophy? Is there kind of like a guiding principle? I mean, in Cloud we see DevOps driving a lot of the developer conversation. Is there a business version of that in retail? There is and I believe that we are in that generational shift and we're really in it. I think the retail and hospitality industries, some might describe as being technology laggers and I would respectfully disagree. I think these are companies that may not invest the same percentage of revenue on IT as other industries because their margin profiles are smaller but they get more out of their technology because technology to them isn't about just simple enablement of a business problem. It is about survival. It's quarter their business basically. Quarter their business and increasingly there's a bit of a twist in position in that we are becoming more of the retailer's IT run shop and they are then becoming more about the innovation engine that's going to fuel it. So I think that that delivery model is flipping and that I think Cloud is the front out of that generation shift. I would say that Peter mentioned yesterday on a CUBE interview that IT has always been there in hospitality and retail because it was back office stuff. Certainly critical to the business but now as it flips to the front office I mean it is literally front lines on everything. I think to me that's, do I get, am I getting that right in terms of that flip? I mean it's still critical. Yeah, everything that they're focused on is how do they enable the guest experience, right? So there's not massive transformation going on in back office for new ERP or new HTML things happen but the focus of IT and hospitality is on how do we engage the guest? How do we make his or her journey more efficient and how do we help them drive revenue by better tailoring and personalizing your office? Well one of the most important things that at least in hospitality and retail business is that it's not a push. Guests and shoppers are demanding it because it certainly provides better experience but it also increases their overall power, their ability to get what they want at the price that they want. So this is, you're in two industries where it's a pull problem and IT and business has to respond to customers dragging them into it. That's different from some other industries where folks are kind of doling out new function, new capabilities and hoping that the customer would adopt it. How does that change your relationship with customers, Oracle's customers, relative to some other industries? Yeah, I think it changes our customers in two fundamental ways. One is that I think it puts us squarely in the value chain of how they deliver that, right? Because the availability of our cloud service becomes mission critical, right? Because it's being delivered via our infrastructure, not theirs, right? So I think we take that with obviously great purpose and intent and we know we have to now manage their relationship with their customer. That's one. Two is then you really were able to bring the full breadth of the Oracle portfolio because we don't just have those transactional systems that sell or check in. We can enable those with Oracle BI. We can enable those with Oracle CX technologies that help us attract customers, inspire customers and keep them engaged in the process. So I think the ability for Oracle to become a more strategic partner is just growing every day in these two communities that I'm blessed to serve. On the last minute here, take a minute to share with the audience what your plans are for the year. You guys have any events? If people are watching that, that our customers are wannabe customers, where would they go? Is there an event you guys have? Is there a road show? Is there any priorities you'd like to share with them? Yeah, so I think we have a number of different community activities that we directly manage and promote. Our next large one will be Oracle's Industry Connect, which will be in April in Orlando. But we'll certainly attend a number of other trade shows like the National Retail Federation Show or Shop Doc and Order. So we have a pretty published schedule and everyone can go to o.com to find that. We are as excited as we've ever been about what's coming. We have our absolute latest generation retail platform coming out here in the next few months. It's called version 16. It is a game changer for our customers. Cloud enabled. Cloud enabled really drives simplicity in the business model, inspires their guests and their staff on how better to serve. And it really helps them to better anticipate the changes that are coming. And then we will continue to release a schedule of new hardware to both retail and the hospitality communities, as well as massive investments that we're starting to realize around our property management for hotels and point-and-sale for our restaurant companies. So it's a great time to be in service these communities. There's so much going on. And I think Oracle has a really interesting opportunity here to change the conversation. And what's the main differentiator versus the competition that you tell your customers that Oracle has over the competition? Yeah, I think our business model is different because the way we configure, again, this focus on solving the business problem, I think the level of investment that we make as a company and we spend $5.3 billion in R&D, a lot of that goes to industries. Our delivery model is different and just the breadth of our portfolio. We just have amazing, amazing technologies that help our customers, again, simplify and scale. Mike Webster, Senior Vice President, General Manager of Retail Hospitality. Thanks for spending the time on theCUBE and sharing the insights with us and giving us the update. Thanks, great to be here. Okay, we're live here in San Francisco for Oracle of World, day three of three days of live coverage from theCUBE. I'm John Furrier with Peter Burris. We'll be right back with more after this short break.