 I'm John Furrier. Thanks for watching theCUBE. 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 here live in San Francisco for Oracle Open World 2016. It's the SiliconANGLE Media's theCUBE. It's our flagship program. We'll go out to the events and extract the signal from the noise. I'm John Furrier. Here's our co-host, Peter Burris for three days of wall-to-wall cover. Dan Miller, Senior Vice President of Oracle, ISV at OEM and Java Sales. Back on theCUBE out on Howard Street last year. Inside, we have the big stage in the hall. Welcome back. Thanks, great to be here again. So people are changing their business, obviously transforming their business with the cloud. That's clear message. And there is a cloud quota according to Chuck Hollis mentioned yesterday. We're, you know, heard that term kicked around where customers are looking for, you know, that mandate, how we do with the cloud, so clearly the customers, your customers are moving and your customers, customers are moving to the cloud. What is the status of the ISVs? Because they are on the front lines. Is the uptake strong on the platform from last year? Give us the update. And what's happening this year? So first of all, thanks for having me back again. Hard to believe a year's gone by. I'd say you mentioned that the customer demand and then the partner demand, the customer demand, it's as high as I've seen it ever. You know, the last statistic I saw from one analyst was 84% of CIOs have actually cloud plans going and moving into production now. So, you know, it's not a question of if it's happening on the customer side, it's just when and how they're going to do it. On the partner side, it's converging right with that demand. So I think some of the partners and Oracle were pushing to customers before. Now I think it's kind of a combined push and pull. The demand is off the charts from our partners to say, how do I get my services into production? Is there a distinction between private cloud and public cloud from a customer standpoint? Because now Oracle has the on-prem cloud capability. Juan Loezzi yesterday was very clear. We want our customers to move their Oracle on-prem through the cloud and be seamless, same code base, all the goodness that you guys are announcing. Do the customers distinguish between private cloud and public cloud? Or is it all one thing now? Last year we talked about a little bit about that. I think they do. And I think over time, that distinction will go away. Oracle doesn't distinguish between public and private in the sense that all of our IP and the workloads built around it, both ours and partners, can seamlessly move back and forth between public and private or what we have, which is our customer, our cloud at customer implementation. So that workload is a public cloud instance behind the firewall. It doesn't matter if it's that Oracle cloud machine, a private cloud instance, a public cloud instance, our workloads and Oracle's IP make it seamless to move back and forth. So we don't really differentiate on that perspective. A customer may, but that's a deployment option for them. It doesn't matter what they say. We can do it any way they want. Last year we talked and you had thousands of customers already in kind of like, I won't say pilot mode, but I think it was like trial as a platform as a service kind of getting involved. What's been the learnings that you've seen from that period and what's the status of the ISV today? What's their mindset? Are they thinking, okay, add value with code? Are they looking at it from a customer perspective? But where are they now in that progress journey with the platform as a service and some of the things that they're adding value on? Can you share some examples? I can and the first thing that I think most of our partners are thinking about isn't necessarily cloud. And you may say, why do I say that? Remember a lot of their businesses and the revenue coming from it in some cases, 80, 90, 100% is still an on-premise business. So one of the things that they're telling us is even though they want to get to cloud fuss, they want to cloudify their services, they're saying Oracle, keep taking care of my on-premise business. And we help them do that, whether it's optimizing their on-premise solutions on our Exa platform, whether it's integrating with Oracle applications, we're still committed to do that 100%. A lot of that business like Larry Ellison talked about, it's going to stay that way for five, 10, 15, 20 years. We're not going to abandon that. I think some other partners or companies are saying to people, look, we're just going to support you on the cloud, nothing else. The second part though, as people are building out their migration to cloud, I think they're doing it, our partners, and we're recommending we do it this way in kind of three distinct steps. One is lift and shift their applications into our cloud. I'd say lift and shift in anybody's cloud, but we have the best public cloud to do that, bar none. The second thing is though... Well, Oracle has, they don't have the lift, they just have the shift. That's correct. I mean, that's what you think about it. You're not really lifting, right? I mean, just moving. The lift and shift is completely easy because the workloads that they've built and all the competencies they have in their IP and RIP, it just moves seamlessly into that public cloud instance. And that's probably the easiest part of the process. Easier than a lot of partners think. Second part though, we're really focusing on scaling those applications, especially for our partners that focus on the enterprise, which is most of them, most enterprises are saying, don't just give me a small instance. You've got to show that you have scale in your application. So we do that with things like our extreme database service, our exit data as a service. That helps scale out current workloads and applications. The third part though, is the thing we actually start with in our designs or our conversations with our partners, which is how do we enrich your service to supplement it with things like big data, IoT visualization. And this changes the game for Oracle and our partners. I think the other public cloud providers are saying, yeah, I can lift and shift too. When you get into scale in the enterprise, when you get into enriched performance in the enterprise, that is something that Oracle is uniquely positioned to do. And we bring the full breadth of Oracle developed IP to do that. So it's lift and shift, scale and enrich your applications. And we start on the enriched state and work back into scale and lift and shift. And most of our customers, which you brought up, they want to hear about what's beyond the current on-premise application. And that's great value for the customer, but that's a value proposition for our partners too. They make more money with an enriched application than just a shifted application. So Peter Drucker famously said that the purpose of business is to create sustained customers. I agree. So every ISV that has a customer wants to sustain that customer if they want to stay in business, just as Oracle does. Yes. And given the sum of the numbers that you quoted upfront, that whatever was 84% of most larger IT organizations have a significant cloud component calling back to John's quota statement and are actually putting numbers into their budget that says, this workload, we will invest more in these workloads. You've got to bring your ecosystem to the cloud. It has to happen. And you mentioned that lift and shift and some of the options. But at the end of the day, ISV is still going to be responsible for performing some tasks to make it easy for customers to move. Talk a little bit about what a typical ISV is going to have to do, the kind of commitments that they're going to make with Oracle in front of a customer to say, here's where you are, here's where you want to be, here's how we're going to get you there. Talk us through that roadmap. I'll do that in general and then I'll give a couple of specific examples about how some of our partners are not only retaining their customers but growing their customer base. So in fact, I'll start with there to be very specific. SaaS, one of the most globally well-known brands, one of our most strategic partners has worked across many vertical markets for many years. We have tens of thousands of incidents that are connected to our customers together. They're absolutely committed to keeping those customers but to your point, they want to extend that customer relationship over time. So what they've done is gone to customers like Macy's, big retail brand, and said, hey, everything that we were doing in our analytics platform, we scaled it before by putting it on this Exadata platform from Oracle. So that continued the life cycle for some years. Now they're doing the same thing in Oracle's public cloud and they're gonna enrich that environment even more with visualization, big data analytics. So it's gone from a couple-year experience to a multi-year experience. I think SaaS will stay sticky with Macy's for a long time to come by extending what they're doing. They're not coming back and saying, well, here's a new solution, brand new. The workload doesn't move, doesn't have anything to do. And to the customers, Macy, you've got to start over. What Macy's like is the investment that they made with SaaS years ago has been extended over the past couple of years and will be going forward. Another example is IQMS. Maybe you haven't heard of it, smaller brand, mid-market manufacturing ERP partner here in the United States, just down the road in Paso Robles, California. A little over a thousand customers. So Gary Nimmer is the CEO when he and I first met. The first thing he said is, we have to preserve our customers. But he said, I wanna go beyond that. I wanna add more value to them. Good for his customers, but good for his revenue too. So how is he doing that? He's already gone to every customer that he has and says, as I'm going into the Oracle Public Cloud, which he has now, I have a backup and recovery service for you. And in some cases he'll charge for it, some cases he may just enable it. Immediately his customer base's response is, I wanna do that and I wanna do that as an extension to the core applications that you've already done. He's creating a kind of a longer-term life cycle with his customer base. By the way, that enriched state take visualization. So he's taking the data that comes in from his customers and helping his own customers visualize, analyze that data. The response rate, he got that service going up within the last month. He has immediate response from his customer base about buying it within 30 days. So that should help Gary protect his base, but also grow his revenue base in his current base and get it outside of his base as well. But as Gary and some of the other examples, Macy's is right around the corner here as well, Macy's.com is, but as Gary, who historically has been a provider of applications on top of Oracle technology as a bundle to the customer and then has stepped back, helped with level one, two, three support, helped with integration, helped choose partners. Doing all good things for the customers. But that's different from taking on more responsibility for actually helping them move into a new infrastructure. So how is Gary's business and business model evolving so that they can, so that he and his team can have that conversation about, we will help you move into the cloud? I think in two ways. One is he's been an Oracle based partner for more than 20 years. He has a deep long-term investment in that. He's gonna leverage that as much as possible. He's got other public cloud provider options. He's actually been in another public cloud. He's converting out of that. And the reason why he's doing that, he wants to take advantage of his investment. He's got a lot of smart people, a lot of competency built up. He's gonna leverage that. That's the first thing. And he'll pass that on to his customer base. The second thing though is for his current installed base, he's gonna add services to that. He's still selling his core applications to his base, but he sees a revenue stream of additional services over and above that. Now, to take that on in his company, I think if they are disconnected, disparate, non-leveraged services, that's a big burden on his company. The great thing is his team knows Oracle IP. It's easy for them to connect into additional Oracle IP based services that already easily connect. His team isn't doing the integration. His team isn't doing the additional work to make those services work. They don't have to do it. They don't have to do it. So John, you made a great point in the opening session about how Oracle is showing more of its technical chops to the marketplace. This is one of the reasons to do so is to get more of those technical people out front so partners, ISVs and customers can have greater visibility into the enormous engineering and talent set here to actually ensure that these things happen more easily and more simply. The greatest single value, in my opinion, that Oracle has to our ISV and OEM partners as well as our customers is the wealth of intellectual property all the way up north in the stack up through infrastructure has and the application that they're bringing full bear to our Oracle public cloud. What I would challenge another cloud provider to do, one of the biggest ones who's just working at the infrastructure layers, how will they do that for partners and customers? My personal view is they will add pieces and parts but then come back to the partner, the customer and say you need to stitch that together and that becomes a big cost or a burden to the partner. So in the IQMS example or the SaaS example those companies are taking advantage of the competency that they have an Oracle IP and the Oracle IP is integrated together all the way up the stack. My other opinion is it is much, much harder to develop north up the stack into the past and the application layer and our partners would say yeah, developing their application is harder too than it is to build out the infrastructure layer. I like our hand going forward. That's a great point. You just answered my next final question but I'm going to ask it anyway. I'm clairvoyant. You're so good. But let's put this in terms of the customer. I'm a CIO now and we're just having a one-on-one kind of a coffee. I'm the team vice president of Oracle. I'm a CIO. Yes. My CEO and CFO now understand the importance of the cloud. I need help. How is Oracle and the ISVs going to help me? Together. Together and how do they work together? What's the configuration? What should I expect? How should I organize around it? How should I operationalize it? Okay. I'll make this a very real example. I had coffee with the CIO of one of the biggest energy companies in the world this morning. Not going to say who it is. We had a confidential conversation but it's a very real time discussion. It's come in parts in working with this company. The first one, it's just pure education. Making sure our partners and that customer knows everything we're bringing to bear at all levels. From application to platform to infrastructure to our hardware platform and Java. I'm going to put a plug in for Java there too. So first is education. The second is identifying that enriched state first, not just concentrating on how do we lift and shift current workloads into our public cloud. In fact, his response is that's interesting to me, probably not the most value that I can take back into my CEO or CFO and board. Is that so, your problem or my problem? That's correct. Well, what he would say is that's good for you. Fills out your public cloud. I like that you're going to do that. His view is that's table stakes. He's like Dan, that's not where I want to stop with you. I expect that at a minimum. You better give me great compute storage networking and he's positive we're going to do that for him. So he wants to get to that enriched state, which is how do we add IoT, big data, visualization to the services that are coming from partners that he can then turn into translated increased value services for his company. The third step is we still need to do some show and tell to him. And the best way I can do that is get into proof of concepts with him. And we start with what is that enriched state? And I'm actually proving that out to him. What we'll do for him, take the services that he wants, get them in our public cloud, live in our public cloud, we'll sector out a part of that. And I'm going to prove to him what that service is, both in the integrated part of it, as well as the performance. He said, great, we're signed up to do that. I just asked him for a joint commitment on that. He's given that to us. It's a great stepped way to do it. By the way, there's more work to do there because we have more to offer in our cloud stack. It's far beyond lift and shift. Dan, thanks so much for coming on and sharing the insight. ISV is really important, critical part of the equation of the cloud, certainly delivering and then having the technology and the transparency up and down the stack for enterprises as they move to the cloud. I'll see CEOs, CIOs clearly are recognizing the importance and economic advantage of the cloud. Thanks for sharing the ISV update and Java plug. Good job, we love Java. Jason is one of the ways of pointing out yesterday. Thanks again. This is theCUBE live in San Francisco, here on the show floor, the CUBE stage. I'm John Furrier, Peter Burris. Thanks for watching me right back.