 The open source research company and Mark Milford is the VP of BizDev at SAP, John. You're not going to believe it. We're going to talk about, Mark and I were talking off camera, the OEM business. SAP OEMs at software. I don't know if you knew that. I didn't know it. Yeah, I think, are we going to announce that SiliconANGLE is going to be distributing OEM software? No, this is like a big business for SAP. We're talking about hundreds of millions of order of magnitude. But growing, Bill McDermott said, what, Mark, do you have to grow it? He wants to grow it five times in four years. OK. So they've got the right idea for the job or what? That's pretty interesting. You're new with SAP. I joined SAP four months ago. So after a long career at Hewlett Packard Company and with CA Technologies, in which I managed their indirect channels, including the OEM business, I was asked to come here and take this business over in North America and drive that kind of business. How long were you at HP for? 27 years. It was a long time. I was there from 1988 to 1997. Well, you're really? Yeah. I worked there from 1973 to 2000. I was involved with the computer products organization, which is an indirect channel there, back in the growth years. I was mostly in the enterprise business. Those were the good years when the stock was splitting. Every couple of years. Exactly. Exactly. Tell us about your focus. I mean, I did not know that SAP, sounds like a great strategy. Let me give you three facts about the OEM business at SAP. This is the first time that it's been told, so you get the exclusive on this. Number one, SAP has been in this business for 15 years. So we've been an OEM of our products for 15 years in the business intelligence space. The second thing I tell you is that we have over 800 OEM partners around the world. So it's a sizable ecosystem of OEM partners. And the third thing I tell you is that in the business intelligence space, we are the largest OEM software provider. So Mark, to help us understand the difference between OEMing software and redistributing reselling software. Okay. So in an OEM model, a company, let's pick somebody like Cerner. Cerner is one of the largest healthcare ISVs around the world. So they provide applications to hospitals for clinical intensive care, all the different things, pharmacy that you see in a hospital. So they actually take our software and embed our business object software, which is all around business intelligence and business analytics into their clinical applications. And they provide reporting, dashboarding, analysis, all the things that the business object is all about in their applications. And in the case of Cerner, they make it very clear that it is SAP software. So they actually leverage our brand as they sell into the hospitals. And they use that to enhance their offering to their customers, to their end customer. And then they wrap their requisite value around it. So their value is all the solutions around it? Not just the distribution deal. It is not. So a reseller will actually sell our product as is to an end user and the actual end user then owns that software. In our case, we sell to the OEM and the license is actually owned by the OEM, who then sells it to the end user, in this case a hospital. So the big advantage to the OEM partner is that they don't have to bear the brunt of the R&D. Right? That's you guys. You get to distribute that R&D cost over many, many thousands, hundreds of thousands of customers. Right? Exactly. So time to market. So it's all about how quickly can they enhance their product and take it to market. And it's all about core competency. Their core competency is in his hospital management systems. It's not business intelligence. So they're leveraging our core competency and business intelligence to integrate that into their product and accelerate their product to market. And that makes revenue for them. It's faster revenue for the company, better products, and using their resources in the best way possible. And then you get the advantages of that sales channel now. So obviously that's a very efficient distribution model, but you've also got to do some hand holding presumably, right? Especially if they're doing a lot of wrapping around their value and maybe even customization. So how do you manage that? So we have a dedicated technical team, which we call our OEM enablement team. So they'll go and sit down with the software developers within those companies to teach them and show them how to integrate our software into their software all under the auspices of accelerating time to market. The benefit to SAP is this is a customer typically we would not sell to. So we get our software into a customer which we typically would not sell to. And then our large enterprise or direct sales force can go in there and actually sell on top of that a bigger footprint of business intelligence and business analytics. So it's a small license that's sold by the OEM and our direct sales force can go in there and sell on top of that and sell a bigger footprint. Are those OEM customers, would you characterize them as sort of leading edge ahead of the curve, sort of early adopters? Are they more sort of mid adopters? Are they laggers? Where are they on that adoption curve? You know, it's interesting. When you have 800, it's going to be all over the map, right? I would say for the most part they're early adopters because we've been under the business for 15 years. So by definition, they adopted the technology very, very early and put it in there. If you look at the different markets we operate in, we operate in the ISV market. We're very, very strong there. But we also operate in a couple of other interesting markets like appliance manufacturers. We have an appliance manufacturer based up on the Pacific Northwest called ITRON. They actually make a smart meter which they sell to the energy companies. So the energy companies deploy these meters and then they have our business intelligence software that collects the data from the meters and actually provides back to the energy companies energy consumption information. How can you optimize your energy distribution so they provided more value and more service to their end users by providing this business intelligence software from SAP? So your software resides in the smart meter? It actually sits in, it's actually hosted by them within their cloud and then they actually collect the data from the smart meter. So it actually sits in their site. So it's a little data feeding big data. Exactly. We had John, we had somebody on last week at EMC World. It was at Silver Spring Networks. They had these smart meters, very cool demo. They showed RF, they showed energy from cloud, great data visualization. We talked with George Matthew just recently about the visualization side of the data. Right. Mark, my question is obviously OEM is a great business model. Is there any perspective or information you can share around new OEM models based on the vision we heard today showing this real-time analytics? Because OEM seems to be obviously ISV, the normal usual suspects, right? You can go in there and they have integration opportunities. What we're hearing today with this real-time business intelligence, that seems to me that might open up more doors for new scenarios for OEMs. Are there new scenarios or is it all the usual suspects that you're normally seeing out there? No, there are definitely new scenarios. I talked about the appliance manufacturers, I mean that's a whole new scenario and in fact we have a number of appliance manufacturers besides the one I just mentioned and every one of them has come to us and asked about HANA, so in-memory computing. So that's, to them that's the next generation of being able to collect all this information from these millions of meters and providing even more intelligence to the energy companies. We're also very large, we're very big providers to the SaaS and ASP market. So even separate from the ASP market, our SaaS providers or ASP providers like a Calidus or a Teleo that are in the business of providing service to an end user but off-premise and from the cloud, we also see a whole new business model emerging where in-memory computing would be a tremendous value add. So we've got our OEMs clamoring for that technology. Is it like an Intel model where there's very few customers or can you handle a volume of customers? Question one, question two is for folks out there that may want to OEM, how do they know if they're a prospect? Is it going to be volume funnel? Is it like a handful of suspects? And how do you communicate to do BizDev? Is it like, hey, we got a new tool in the bag or hey, here's a platform? Part of our challenge, in fact, one of the major reasons that I'm here is that people don't know we're in the OEM business and they don't know, hence they can even call SAP and say, I'd like to be an OEM. The fact of the matter is if you look at our target market segments, there are tens of thousands of potential OEMs out there. So one of the investments we've made. Tens of thousands. Absolutely. Can you say you got 800? We have 800. So you got, okay, cool. Well, let's talk about those. There's a big addressable market. What do they look like? What do they look like? What does one of those 10,000 look like? So we can, if they're watching and we can communicate that, help you guys. Like I said, there are what I call horizontal ISVs. These are ISVs across industry like a CA or a BMC. They're industry specific ISVs, healthcare, financial services, energy like a Cerner or an Eitron. They're appliance and hardware manufacturers like Eitron again, but we've also working with one of the larger server manufacturers here in the US to build a VI appliance that they want to sell to the SMB space. So hardware and appliance manufacturers, I've mentioned ASP and SAS providers, and lastly are content providers. We have a very, very large financial services content provider here in the US who provides, who actually services three million customers using our software and providing financial services information to their end users. That's what they look like. So they're in those different market segments and there are many, many, many of them. How about SIs, defense contractors, are they potential OEMs or not necessarily? Is that a different sort of sales channel? Most of the time they're more resellers, so they'll bundle a product with their services and sell it. We do have a systems integrator in the public sector who just signed an OEM agreement and is now selling business intelligence software to DOD primarily. So they are moving, some are moving into the OEM. We talked about this off camera a little bit. What percent actually keep the SAP branding versus their own private label? That's changing. I would say the vast preponderance now, 80% plus are letting the ASP brand stand and want to leverage the brand equity of an SAP. It used to be they wanted to bury it in their application. Now they want to have it front and center as SAP has a very, very strong brand equity. Okay. So that's escalating. Absolutely. This is interesting. A business that is quite large and growing. It's got to be 5X in, would you say, four or five years? Four years. How big is the team that actually goes out and does this? So here in North America, we've got about 55 or 56 people working on the business and globally we're about two-thirds of the business here in North America. So we're the biggest piece of the business. Well, she's a flip from SAP's normal business. Exactly. So there's huge opportunities out there. Exactly. So you can do planes a lot. A lot of planes. Absolutely. A lot of airplanes. We're here with Mark Milford with SAP, Vice President of Business Development, talking about the OEM opportunity, an unknown, apparently unknown, soon to be known business model for SAP and the tens of thousands of prospects. I'm John Furrier from SiliconANGLE.com. And I'm Dave Vellante, wikibon.org, and Mark, it was great to have you on, hear your perspectives, and we'll be watching. This is a new area for us. We weren't aware of this, and please keep in touch. Keep us updated. I appreciate it very much. Thanks for your time. Good to see you. Mark Milford with SAP.