 Princider in Barcelona, Spain. It's the Cube at HP Discover Barcelona 2014 brought to you by headline sponsor HP Okay, welcome back everyone we are here live in Barcelona in Europe HP Discover 2014 This is the Q our flagship program. We go out to the events extract the signal noise I'm John for it my co's Dave and latte our next guest is any one burger who is the general manager and vice-president augmented reality and Multi-channel optimization for HP welcome to the queue. Thanks a lot Love the title Augmented reality multi-channel. This is the cloud era right you can do a lot of things now that's possible So explain to the folks what that means also augmented reality. We see wearable all these new things happening a lot of software behind the scenes from business cards or whatever Talk about what is augmented reality and multi-channel from your perspective? Yeah, so you're absolutely right I think especially marketers are really looking for SaaS solutions and that's kind of where we're going in the marketing optimization group under HP software and Two products that I look after are completely SaaS based so augmented reality is you know It sounds like a very geeky sci-fi term. I think it's a really simple with concept actually a Bridging the physical world with the digital world So being able to you know, take your phone and through our app or our technology Plugged into another app actually just hold it over an object an image or a location and get a really Interactive experience so it must be exciting for you and your job because You know you're at the the intersection of big data large-scale compute. We're now in that era We have all this stuff on our software on top of it and it was a lot of cool things So, you know, what are some of the cool things you're working on give some examples of how? You know augmenting reality, which is a virtual space and we're broadcasting here from a physical space into a virtual space And then multi-channel is now long-tail distribution on everything. You could test variety combination So you have a big data challenge and you have you know unlimited essentially compute if you're talking about SaaS So explain some exciting things that you're working on. Yeah, actually Andrew Joyner and I were talking with a customer recently and You know it was a bank and they're really kind of taking from the perspective of their their store and their focus is no longer The presence of the actual bank. It's their website. That's where their customers go That's where they get their information And so what's great about that is that there is as you say a kind of a lot of data and journey back customers are constantly Telling us what they want to see what they're interested in and all we have to do is listen The hard part is taking that data making sense of it And that's what we focus on is grabbing data from all the different places social the actual website call center Taking it making a very relevant targeted experience. It's interesting Dave and I are big students of digital media the transformation That's happening we're part of and and the things that you're working on really speaks to this really big digital Transformation where with big data with cloud with sass you can now have a digital component of all aspects of business You mentioned emerging as customer support to go to market selling stuff So there's a variety of spectrum so everything's now digital so the digital experience with the consumerization is a real trend And it's you know people are now realizing I don't need the siloed product tool So you're seeing a kind of an integration challenge around tooling. Hey, this used to be my listening tool This is my customer service app and I have data and now those are lifting up. It's kind of common unified approach Do you see it that way and what are some of the things that you see? Customers your customers challenge within this digital transformation Yeah, so I think you're having multiple channels is still very very important customers want to be able to interact in many different ways with their Their vendors and their partners But the important thing is making that a seamless experience So, you know, there should be no difference in the information or the experience whether you are calling into the call center Going to the website or interacting on social media Or receiving a statement in the mail and it should all have the exact same information and all be relevant to that person And that's where the big data comes in so being able to leverage all of that data and provide a very consistent experience across all those channels So what is the big data? Autonomies and autonomy solution. What do you guys what's that? What's that? What's make what makes up your? Products that use them so I mean, I think big data in itself. It just exists We leverage it across all of the different software portfolios So we're focused on leveraging big data for marketers and being able to talk to our customers and engage our customers In a way that's meaningful and I think that marketers are kind of the tip of the spear That leading the charge in that way in their respect I just want to post on Forbes this past week called the marketing cloud and really talk about Oracle Obviously their channels there and you got Oracle what a look what you got Salesforce You got LinkedIn now going into this marketing cloud concept. That's what you're talking about is marketing digital cloud What's the landscape like you guys competitive wise you is that Oracle is that other people what are your key competitors? Yeah, I mean, I think every everyone's got to go to the cloud a lot of people are talking now about moving to the cloud The good news is we've been there for a while So I've always managed the SaaS solutions. I've been around for about 10 years. They've always been SaaS based cloud based And so I think you know depending on what their customers looking for it could be Oracle could be Salesforce But I don't think it's like a cloud That's just what everyone has to get to and it's kind of moving at their first kind of no brainer Some people just say they're trying to get sales solutions Sink sales force looking at funneling names into a database their workflow to different digital students You mentioned the multi-channel optimization algorithmically having variations. Is there a lot of different separation points between Digital some of the digital things that you're seeing out there. Is that how I should look at it? I should people look at this. It's kind of confusing like well, am I is it for sales leads or is it for customer Experience I'm saying it's yeah, I mean, I think you know sales is always had you know I think sales force is a great job because it's a very defined way of tracking a lead I think that when you're looking at the the broader life cycle of a customer once they kind of become your customer How do you interact with them? And that's kind of what we focus they obviously can be used for the acquisition phases as well The communications that goes out to gather those customers, but really the whole life cycle So I got to ask you the question about retard retargeting or When I go to a web page, you know get the Hilton site look for a vacation No rooms available, but I go to Facebook and all of a sudden see Hilton ads all over the place But I really want to see that so that that's kind of a big data problem Probably it works well and click-throughs, but actually I'm not interested in that product. So This whole retargeting thing has been kind of interesting conversation Is that good or bad or is there any innovations to make that better? Good or bad. It's all you know Generational mainly that you know what people want to see or what they don't want to see But I think that it comes down to kind of how it's treated and constantly learning So you know that if you do retarget to somebody and they're not clicking on that that they might not appreciate it And I think it's a little big brothery But you know some people really appreciate that because maybe they drop the browser and they lost their place So I think it's just about listening to customers constantly learning and testing to make sure that you're doing the right thing So any let's talk about your products because you run two cool products I do. Erasmus and Optimost. Yes. So let's start with Erasmus Well explain each of those and let's get into them. Okay. So Erasmus is HB's augmented reality platform We have an app as well as an SDK that we You know provide for customers to put in their app and it as I mentioned allows them to do augmented reality So they can take their advertising their catalogs their marketing materials or statements And essentially light those up so that when you hold your phone or tablet over that image It provides a kind of a link to anything digital so you can get take them to an educational video. You can have a quiz You can provide the more information. It's very interactive and engaging experience. So what are you seeing in terms of how having That experience powered by Erasmus. How does that differ from sort of a traditional engagement? Can you share any metrics? I mean are you seeing Presumably you're seeing higher rates of engagement. That's why you would do this right so how high It's actually kind of unbelievable. I've been doing this a while looking at conversion rates and other products The conversion rates that our customers see using Erasmus Astronomical we have for instance office depot uses it in store and on their catalogs and in their advertisements and they got about a hundred and fifty percent increase in version by leveraging Erasmus EMC theaters also kind of lit up every single movie poster so you can watch the trailer when you're waiting in the lobby And then if you wanted to you know either reserve tickets for that film By tickets right there it would use the geo location by the nearest theater to you and you could buy tickets and they had a 75% 75% click-through So you know it's you know a such an engaging and tailored experience that it's getting Well in that in that theater example you're probably not even measuring you're wasn't even a click-through rate before I was just sort of okay Poster advert so you know what the version Versus their website so being able to just people browsing through film Okay, and then optimost is all about multivariate testing a B testing Which of course a B testing was all the rage test fail test again But it's it's hard to sometimes set up a test to do with different iterations Then you get to kind of get exhausted there. I just picked the best one of the end that we did So how does optimost help? We have to spend doing this for about 15 years And I think what we provide besides the kind of core technology and the algorithm that finds the best combination of images and Creative as we have a team of experts have been doing this forever So it's actually a full SAS offering. We'll do all the tests for you We can just kind of take over your website online a code run the test. We can target your website We can test the segments to adaptive targeting And it's it's all done with the idea that we've been doing this for so long We know what the benchmarks are and we can guide people in the right direction of where they might be able to kind of improve the lift So that's interesting. So the business model is it's a service as a service I Okay, so how does that work? So I have my objectives is what I'm going to do I want to optimize my website for X and then you say great. Give us the assets And then we'll play with it the test and run until we get the And I get to look over your shoulder Results So, okay, and it's it's it's you say it's always been a SAS based offering Okay, so these are two of the core pieces of the SAS products that mega always talks about Yeah, on the call. I wanted to ask you so you sell to marketing executives. Obviously, you know this the CMO I was selling to that Role changing Yeah, I mean, I think you know, we're hearing a lot about it and I'm carrying it Everywhere I go every customer I talk to that the marketing budget, you know, I think this year if not an extra rule So past the CIO budget They're really good the drivers now of all the decisions like what tools we need Are we gonna bring in revenue and that's what the marketers And so, you know, it's becoming a very like a very strong supporting Decisions on what the products are especially as we move more in the cloud based so Okay, so that's cool. And then but the challenge that marketers have always had is they get they want to spend on technology They have to spend on technology, but they got to go through the technology department to do that Presumably as a SAS based offering in part anyway helps resolve that So what if we can talk about that dynamic? Yeah, so I mean it's and even on the Erasmus side We just launched our studio store So the way that you can actually access Erasmus you go to the join a studio account Which lets you build your own what we call oras so anyone can go out there and build it We have thousands and thousands of kids doing it every day. So I know it's pretty easy to do And you can actually purchase with a credit card right through the Erasmus store So the marketers can completely bypass any Approvals through IT they can buy what they need for their campaign and run that all through Erasmus And you mentioned you sell Erasmus as either an app or you get an SDK. How are people using the software development kit? So they're using that to embed the technology into their own app And so if you have, you know, like the discover app here, we have the scheduling You have where you know what sessions are and then part of that is augmented reality So you can enter kind of that area of the app and that can be able to link anything with them Do most of your customers sort of move in that direction? Are they just taking off the shelf app? Yeah, I mean some customers that they don't have an app and they don't want to build one We can skin one for them a lot will host their campaign in the Erasmus app because we have a lot of followers anyway So they're getting the benefit of those users that already have it downloaded But I think more and more people are trying to build apps that are meaningful. And so adding ways kind of bridge into the digital world That's not a string URL, but kind of more of an engaging experience I think a lot of people are moving in that direction. So I wonder if you could talk about how you guys compete How the competition how you stack up to the competition and kind of what HP brings that's different So I mean, I think you know Erasmus kind of like first to market for this So you don't have competition Exactly, so we hold a lot of patents Which is always great to have especially in that merging technology So I think we you know have a really good footprint. So I have 80,000 customers now And then we do have the broad case of not only having our own app But being able to provide that SDK so people can embed it in their app. So it's a really broad offering I think that having the HP labs and you know the HP backing has allowed us to kind of keep up with the competition And and is there a developer angle here? I mean, obviously Talk SDK you've got developers. How do you guys approach those developers and do you have a you know You're building out a community and we can talk about that a little bit. Yeah, I mean, I think Developers definitely leverage a vlog by the reality I think any emerging tech developers like to play around with because who knows what it could be And it's a pretty innovative technology. So we work with developers By the next day, I know that the sprout team How about you kind of your to-do list what a customer is asking you To do with the future I mean broadly I mean, I think about augmented reality. It's really moving in the in the direction of kind of replacing search So right now you walk around the world and you see, you know, a billboard or poster or something What more information on they have to open up a search text box type of text they get more text thrown back at you So anyway, we can kind of remove that sense where if you see something you want more information on Put your phone at it or your wearable devices, you know We're wearing glasses or watch point that and then get more information that's highly tailored So it's taking away the need to figure out translate what that is into a text word Type it into a box. Yeah, so this huge retail Opportunities here. I would thank you. Yeah, it's actually brilliant. You're a lot of retail a lot of publishing education Care even but healthcare, I mean, it's kind of anytime you want to link anything physical to the digital world You think of like, you know also part of the market optimization group is extreme Which pretty much manages and prints every statement you've ever gotten at your home And you know, they always put the URL on that statement to forcing you kind of to go to the website Maybe check out a promotion or get some more information Instead now you can just point your phone at that statement and it gives you a media link to everything So, how's the adoption? How's the adoption going in terms of? Market is a classic early adopter How many companies that have 80,000 customers you know, it's a huge number of customers mean I mean, I think you know 11,000 staffs 80,000 pretty I wouldn't say early adopters. Are they really doctors are they more mainstream? I mean, it's I mean, I'm trying to understand because like I love the product already and I want to use it So how do I get started if I was interested? Yeah, no, I think if we're just just past early doctor probably the early doctors were probably publishing a retail and educators I think the educator piece is interesting. It goes to kind of Just the behavior of students They're so device plugged in already that it was a way for them to talk in a meaningful way But I think we're just passing out and it is getting to you know, healthcare manufacturing CPG everyone's kind of looking at this rather than just early adopters So you guys are nailing what I call the preferred user experience in the future of this mobile-like environment people want Engaging experiences and that's cool, right? So who doesn't like that, right? So to take us through where the sectors are for instance publishing Let's just say we want to take the cube and have a web page that was more dynamic more cooler or augmented How would we do it is super super easy as I said, you know, if you just create a studio account Arras, but on studio.com and you can build an aura in less than 30 seconds by uploading What we want to trigger the trigger image putting an overlay on top of that whether it's a video or You know, some people do 3D objects if you have that skill And then click bait you want and then you kind of just hit submit and it's automatically built and stored in our cloud And then it works Immediately and mobile it's all mobile aware mobile-first Environment independent of platform. Yeah, so Android and iOS Who works on the web to browsers That was last decade but all so all pretty much mobile thing and Android and I was And Publishers are adopting this They were kind of the first doctors now. It's pretty much any industry out there. What's the pricing look like so? So it's a subscription based operating It's based on the length of the campaign and the number what we call or is which is essentially cloud storage So you can buy the annual subscription monthly subscription And then how many or is that you're going to build and how interactive they are Are people typically running campaigns for what's the typical length is it Yeah, most people buy any annual subscription because the great news is because it's a web-based platform You can dynamically swap the content out in the back end So they're just building that whereas and they might change it over through their campaigns and in renewal rates I mean if I can yeah, pretty high pretty high With the ROI that people are saying is yeah, I mean so You know different model right traditional software world by a potential license and live off of maintenance the sass world totally different Good news is you know HP doesn't have a huge software business So you don't have to worry about that transition like a lot of companies, but so there's two metrics, right? It's I mean, I'm sure there's many but it's the renewal rate and then sort of the ability to Increase the contract value if you will the subscription value So you are you able to cross sell other products in there? Are you able to see annually average prices? Yeah, I mean, I think if there's also adoption in there I think there's a large population that we can get so You know, but I'm selling for customers. Definitely, you know, just it's doing more with the product We also have a way to target Certain chorus, which I think is you know kind of further down the road But it's still built in already ahead of the game But being able to you know, you'll see something different if you targeted on the East Coast versus myself on the West Coast So giving kind of those different attributes to it. So the market has got to be enormous for these products Can you talk about the TAM at all? Yeah, I mean, it's the report came out pretty recently That said that it's going to be a billion dollars by I think 2018 And just to give some perspective on how fast that's growing last year. They said 108 million So by 110 it's increased in just a year And I even think that's that's pretty low, but just considering what this technology is able to do It's really unlimited by the behavior and I always go back to all of the students that are using it today It's such a poor part of their learning experience and their everyday experience that you know The next generation coming up is going to kind of demand A lot better reality be part of how we're selling to them. Yeah I mean, you know that that stat that I think it's a gardener figure that CIOs are going to spend more than CIOs. Is that on marketing solutions or is that in general? I think it's in running the business. I also think marketing is getting a kind of more responsibility I would say within a company So before it was you know, maybe PR and advertising and now they're considered the owner of the customer and the customer experience So so the number of a billion by 2018 That's what's going to be spent but the the potential is That's the digital spend is actually increasing as a whole roll number So let's talk about engagement one of the things we're always talking about in cuba is the broadcast side We don't really lock the users into any sort of click. It's all free content, right? So but engagements that we see a lot of engagement. That's what everyone's talking about right now It's engagement give me the engagement and you build an engaging So you're in that business. So what's your take on engagement? Where are we in that business model? Is it going to be new technologies coming out? This is one of them What's the myths around engagement? It's like now becoming the holy grail Yeah, I mean I think before you know being a marketer of being a business It was fairly easy to control engagement because they had to come into your shop Or call you and that's you could very much control that one-on-one engagement and measure and measure it and understand it And I think that you know it became really really difficult for the last, you know 10 15 years with the web and social and Now you know people won't reviews from other people that aren't you they want to talk to everyone else But you before they talk to you about your product So they're coming in knowing a lot of things you might not know what they know And everyone's starting from a different touch point and there's so many different places to interact with a brand And then the marketer can't really control it So it all gets back to understanding what those interactions are understanding what's being said so that we can continue the engagement That brings your whole multi-channel Into a home of that dimension really think about it if the customers are talking about you before they talk to you Yeah, that creates a multiple chance within that channel. So you already have multi-channel marketing Things to work on now you have sub channels that you will Every interaction becomes very important because if you you know have a bad review with someone they can tell You know 20 million people like that So you got to get out front on that and and had the technology to do that What's your advice to customers that when I'm a CMO and now I'm being pulled into okay The spend is now going to be increased for social and these new engagement platforms. So I don't know what to do I'm getting pitched from all these different vendors. I got Oracle banging on my door at Salesforce. I got you know, mid to go I got you guys I got a lot of noise coming at me. So how do you clarify that? How would you I mean, I think you know, it comes from not doing kind of inside-out marketing Where you look at kind of where where our channels that we manage or you know, what's our message? But look at kind of how people are interacting with content information and try to catch them there I always kind of say I I started off kind of in the web world People were just building websites and I was selling software to do that And you know, it was trying to convince people to build a website at the time We thought only the biggest biggest companies are really gonna have websites. Oh, that's the quets for kids No, yeah, that's just gonna be your American Airlines or Bank of America But it was you know now, you know, you have a wedding and you build a website for that one event So it's become so let's take that to social so social media is the same This is our our dominance all the time on the queue. The web was laughed at. Oh, there's no ROI on the web Also, I'm doing digital is born Google all the stuff happening search behind it. So web is the pretty much done deal We all see value in that Social is the same kind of critique. It's almost it's almost the echo of the early days of the web like Social media just buzz no real ROI there. So everyone's kind of where's the ROI? So are you seeing similar things and and what would you advise clients as they that believe? Hey, no, social is very important I just can't prove it yet. Holy From a sales transaction. Do you see that a similar trend parallel kind of metaphor? And if so, what advice would you give? Big-time CMOs or small businesses? Yeah, I think you just you have to think of it less as you know We have to maintain our store and our website kind of the company out Communication and go where people are having conversations. So people are you know on Twitter and Facebook all the social medias and you know They are using augment in reality It becomes we have to embrace those because otherwise the consumers leading the way and we're not providing the Information in the places where they're already in and being relevant to Any thanks for coming on the keep really fascinating conversation. I see digital marketing It's just more than selling stuff is creating great user experiences in the moment immersive relevant And it's a big day to cloud opportunity. Thanks for coming on HP as a great solution. We'll be right back We're here inside the Cube live in Barcelona. I'm John Kerry with David Lothi. We'll be right back