 It's theCUBE, covering Sapphire Now 2017. Brought to you by SAP Cloud Platform and HANA Enterprise Cloud. Hi, welcome to theCUBE. I'm Lisa Martin with my co-host George Gilbert. We are covering SAP Sapphire Now 2017. George, we've just watched the keynote, the very dynamic keynote with quite a few characters. Want to get your take on some of the things that we heard in the keynote today? Bill McDermott kicked it off very lively. One of the first things that was interesting to me, and I'd love to get your opinion, was that the journey to the cloud requires empathy and transparencies. Not often, something that we hear from a CEO, what were your thoughts on his vision as to what SAP is doing around empathy and transparency? I guess I would take it in the soft skills that it might have been intended, which was empathy in that there's gonna be change management, not just because you're moving the operational capabilities from on-prem to the cloud, but because you're exposing new capabilities that will impact how people do their jobs. And transparency, I think, is part of the program of migration where you're gonna break some things as you move them. And this is gonna call out, in the process of migration, what few things you need to change. I think that's what he meant by transparency, because it's not a complete seamless lift and shift. Definitely. I think another thing that kind of jumped in my mind is that not only are these forces changing, they talked about the digital core and the essential elements of that, but also the fact that they're listening to their customers, customers saying, we want transparency. We want to see how things are going like you said. It's not a lift and shift. We need to get more understanding, but I think the undertone of we're listening to our customers was quite strong. When they talked about the new SAP Cloud Trust Center, that seemed to really bring it home in terms of what he was talking about, where not just customers of SAP, whether they're using HANA, can see what's happening, within their cloud infrastructures, but also people that aren't using it yet. So really broadening transparency to foster new customers and acquiring new customers going forward. Yeah, I guess with the transparency, the footprint for enterprise applications is just growing and growing. And he had talked about at one point, we're not just talking to CIO, the CEO has to be involved, the head of sales, had a procurement, had a supply chain. And I think it is related to the idea of the digital core and then what they call the sort of win applications around them, which is the core were the traditional systems of record and the win, they're like the AI and machine learning and internet of things and blockchain. These are strategic new capabilities that enable applications, not just about efficiency, but about opening up new business models, new product and service lines, things like that. And they talked about, you mentioned open, they talked about openness as the game changer with the nucleus of a digital enterprise being that digital core. You talked about machine learning, AI, blockchain. Give us a little bit of an insight as to this expansion of Leonardo. They talked a lot about Leonardo. What were some of the things that really kind of stuck out in your mind as the new capabilities and who's their audience here? Okay, so great question, because the audience is not the typical, their typical buyer was the CFO because it costs so much, so he had to be involved. IT, the CIO because he had to sort of standardize the infrastructure on which it ran. And then between the two of them, they were essentially putting in a platform for business process efficiency and that's what they called the core. And then Leonardo is now the win sort of that surrounds that. And that has, they see that having transformational capabilities and that impacts then not just the departments that were looking for efficiency, but looking for transformation. And so that's why they have to get involved, the head of sales, the head of procurement, supply chain, things like that. It's a different sell. It's sort of just to offer an example, the best description I ever heard for trying to sell enterprise software is like getting a bill through both houses of Congress. And Congress just got a lot bigger. So from a target audience perspective, we know that they work with small, medium-sized businesses, enterprise. We had Google on stage. They're partnering with Apple, with Facebook, et cetera. Looking at Leonardo, from a target audience perspective, are they talking to mostly the large enterprise north of 1,500 employees? Those customers come first because they always have the more sophisticated, greater number of more sophisticated skill sets in place. And as these systems mature from the early adopters, they work the kinks out, they are able to generalize things better, and then it's more easily absorbed into the mainstream. He did say something, McDermott said something interesting, which was you're either an early adopter or an also ran. I think he's trying to motivate people to get started, but the adoption curve doesn't really change just because we're doing more advanced technologies. One of the things that interests me is if you look at a small to medium business, and they mentioned a number of customers, ModPizza, for example, during the intro, and there's a great video about them on their website. But if you look at an SMB or SMBE about as a competitor, they're much smaller, typically, much more agile, much more nimble. That was one of the things I was sort of expecting to hear in some sense in the keynote about the small enterprises really becoming the disruptors because they can react and move faster than a larger legacy incumbent. What were your thoughts there? In tech, we look at the sort of smaller to mid-sized companies as being more nimble, but that's changed in the last few years where the big incumbents, the rich just get richer, partly because they have these data assets that they can keep turning into newer and newer products. That may change in the next few years, but right now, the more data you have, the bigger your advantage and the capital intensity of their businesses is, for the most part, so low that they can use all their profits just to buy the little guys who look promising. That's in tech. Outside tech, I think the answer to your question will be how easy can SAP make it to absorb and install and implement and run their system? In the past, it was so flexible that you really needed extremely sophisticated implementation advice to get it up and running. If they've taken that out and simplified it and made it like just configure these buttons, then that would make a difference. I'm not sure we have seen the answer to that yet. Okay, kind of playing on the incumbency theme, if you will. Google, Diane Green was on stage, and at Google Cloud Next just a couple of months ago in San Francisco, they announced a partnership with SAP to deliver HANA on Google Cloud Platform, and today they talked about kind of the expansion of that. They had a customer, a consulting agency that was kind of their proof in the pudding, and one of the things Bill McDermott did say was they talked about, we are now partnering with Apple, with Facebook, with Google, so they're talking about some of these incumbents looking at Google as an incumbent, but also as a competitor of Microsoft Azure, of AWS, who SAP also works with. What was your take on the conversation that Diane Green had in announcing this expansion and hey, here's a consultancy that's leveraging SAP HANA in the Google Cloud? Well, Diane Green had to talk about both because just running SAP on the Google Cloud Platform without essentially a systems integrator to help a customer who might want to buy it and implement it and then integrate it with their existing systems, they probably can't do that on their own because SAP is still complex enterprise software even if some of the operational capabilities are offloaded to a cloud vendor. So she needed both SAP and an implementation partner to say, hey, we're serious, but I guess I would add that when you're evaluating SAP, there's more than just the core app. The core app is sort of the center of the universe for a customer who's looking to go, looking to take their systems of record into the cloud, but there's an ecosystem on each cloud that surrounds that, that makes it easy to build applications that leverage that, that ecosystems richest on Amazon. It's not far behind on Azure and Google is still booting that up. So what advantage does this SAP partnership with Google give to Google, but also what advantage, if any, does it give to SAP? Okay, great question. So on the, on the advantage to Google, it puts them as a peer, you know, or more closer to a peer to Azure and Amazon. And then to SAP they can say, we're cloud agnostic. In fact, I believe their infrastructure technology is both made up of cloud foundry, which is cross-cloud technology coming from Pivotal, and then OpenStack as a sort of infrastructure technology that's coming from a whole bunch of, of the sort of legacy IT vendors who didn't want to be beholden to Amazon. One of the other things today, if we look at future trends, and that's kind of what I was expecting to hear, and we heard about a lot of them, big data blockchain, we heard about IoT, industrial IoT, IOE, deep learning. They talked a lot about how Leonardo was going to help facilitate machine learning, artificial intelligence, really help deliver automation. But one of the things that I was wondering if we were going to hear about was mobile. And so a few months ago, I look at my notes here, they announced, I believe it was at Mobile World Congress this partnership with Apple. SAP opened their cloud platform to iOS developers with the goal of really establishing a bigger presence in mobile apps to power iPhones, et cetera, with HANA. Curious about, did you expect to hear things about mobile today, or was that not part of the plan? If I had expected to hear more, it would have been from a partner like IBM. Because with Apple, they were essentially creating a toolkit for people to build user interfaces on an iOS phone. And I think they've done Android as well. But in other words, the developer is left to their imagination to fill in the functional capabilities of whatever app. They just have a framework that makes the building an Apple UI accessible. What IBM did with Apple was actually, I think, more significant, which was, hey, we have all these industry solution groups, and we have all these bright ideas, functionality in the cloud, but we don't have an accessible way to deliver it. So what IBM teamed up to do with Apple wasn't just tell Apple, give me an iOS UI development kit. It was, let's collaborate on building some real apps that pilots need, that delivery folks or field service folks needs. So I guess I wasn't blown away by what they did with Apple. Okay, maybe that's a to be continued. One of the other themes that we heard today from Bird and Luker was software needs to become a strategy and that openness in that respect is an absolute game changer, allowing machine learning integration, social data integration for customer profiling and really helping these users of SAP understand customer behaviors. He also said that every company today, regardless of size, needs to drive innovation by connecting all these business processes when software becomes strategy. What was your take on that from a thematic perspective as well as a real world implication perspective for SAP customers from the small enterprises to the large? I would have thought that that would be the whole focus that the famous Mark Andreessen essay from several years ago, software is eating the world. It's now really kind of data is eating software as data programs, the machine learning algorithms that increasingly make up software. But he was a little bit, he talked at a high level about it. The only example I recall was Hybris which is their commerce front end where they're going to link marketing sales, service support, customer experience and that they're going to open this up through microservices so that other developers can easily leverage these capabilities. That to me was end-to-end processes integrated on an SAP platform, but I would have liked to have seen a lot more examples of that. So you talked about Hybris and on the Leonardo front, the expansion of that. They really talked about this expansion of Leonardo giving companies the ability to reinvent. That word has been used a lot by a lot of companies including Dell years ago, reinvent, reimagine. That can be used to mean a lot of things but they talked about that as a facilitator of intelligently connecting lots of things, people, processes, systems, et cetera. What's your take on Leonardo as this accelerator of innovation as they positioned it to be? That was sort of to re-emphasize. They called the digital core, which is their legacy, not in a bad way, that's their asset that they can leverage to move in any direction, their traditional apps. And Leonardo was the win capability, how to leapfrog your competition. And they used this wonderful example of a wind farm where they could then look at a particular instance of a wind mill and find where the stresses were. And in a capability I haven't seen yet, they were actually able to put a virtual sensor on that errant wind mill and see where the stresses were coming from. But that capability isn't completely unique. There's GE and Predicts and there's parametric technology with their ThingWorks and IBM as their genius of things. They're not alone in going after this notion of the digital twin and integrating it within the entire sort of business process life cycle. Their value add should be to make it easy to create that life cycle for the digital twin as designed, as built, as deployed, as serviced, as operated. To make that possible without tons of programming and to link it in with core business processes like field service. But again, it seemed a little bit more like a scenario than a finished app. Okay, maybe you're saying for them to really be differentiated, it needs to be more than at me too. It needs to be much more simpler. Maybe this is the precipice that they're on and just didn't context it that way? It felt like a, hey, this is where we're moving to as opposed to this is where we already are. And I mean, they have a lot of assets to bring to bear to get to that point. It just, they weren't really concrete in saying, okay, here's the functionality we have today. Here's what we're going to add over the next 12 to 18 months. So it felt more like a, you know, this is where we're going. That's a good point that you bring that up that from a roadmap perspective and perhaps that will appear in some of the breakouts which I would anticipate because they talked about that in the transparency and the empathy part of the keynote when Bill McDermott was first on stage about we're listening to our customers. We need to show you these roadmaps. So they did mention in text, I think in press as well, that it's for three particular products that they have these three year roadmaps and obviously they'll be adding more over time. But if you look at SAP, 45 year old company, their roots in on-prem ERP, looking at their evolution and even kind of getting to the topic we were just on, the virtual reality and understanding sensors, is this a natural progression of an ERP company to transition completely to the cloud, help keep their customers there, establish this nucleus of the digital core and then expand upon things to bring in machine learning, advanced analytics, predictive modeling. Is that a natural expansion? You know, it's funny the way you asked that because I think the answer is yes, but it happens in this wave where first it's completely custom and you have, you know, the Accenture's, PWC's and the specialized, the specialized sort of system integrators, the small ones that have boutique capabilities and big data and machine learning. They start building those sorts of apps first for big companies who, or for internet-centered companies who really need to be at the bleeding edge. Then comes like the IBM's of the world where they have these semi-repeatable capabilities and custom development in their industry solutions group and in their global business services. And so there they're composing a bunch of semi-finished piece parts. Then when it gets to SAP, it should be pretty much almost packaged and SAP goes in and configures it for the customer. In other words, they flip a bunch of switches that make choices. So you go from completely custom to configured and almost fully packaged and that's a natural progression over time and every time we encounter newer technology that starts on the back, goes again to the fully custom solution. So I guess I do expect SAP to follow this pattern. Their sweet spot, their business model is the repeatable stuff. When they talked about running core businesses in the cloud to get the benefits of scale elasticity availability, I think this was actually Byrne that was saying that they need to be using intelligent apps to automate as much as possible that hyper-connectivity, as they were talking about, is really going to enable that. And he did predict that 80% of business processes will be running through SAP or 80% of them running will be fully autonomous in the near future. That's a bold number. Yeah, you know, and that's that number behind the anxiety that everyone has about so what happens to my job? Especially when we have conversational bots, we don't need hosts on our shows or, I mean, it's a bit of exaggeration. There are a lot of people who worry that jobs will get completely automated and then there are other people who say, look, it's not every task I do that can be automated, it's some tasks and there'll be a machine that augments me and changes the nature of my work but doesn't replace me. One example is Gary Kasparov, who was beat by IBM's deep blue chess playing computer. I forgot how many years ago, maybe 12 or something like that. The best chess players in the world now are not the computers. They're the ones who pair a grandmaster with a computer playing against another grandmaster with a computer because there's an intuition as to where to look that it's not completely replacing human judgment. It's more like a compliment of judgment and then raw calculating horsepower. Interesting, a compliment. Well, George, thanks so much for sharing your insights on the keynote from SAP Sapphire Now. For George Gilbert, I'm Lisa Martin. 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