 Live from New York, it's theCUBE, covering Inforum 2016, brought to you by Inforum. Now, here are your hosts, Dave Vellante and George Gilbert. Welcome back to New York City, everybody. This is theCUBE. We're here live at the Java Center. David Dorfus here is the Vice President of Product Strategy for Infor Retail, relatively new organization. David, welcome to theCUBE. Thanks for having me. So it's what? Just in the last year, year and a half, you guys have launched this division, right? We started out with one guy and built it up from there. We're up to hundreds now and doing quite well. So tell us the story. How did it get started and why retail? So retail's a great industry, right? So there's a lot of opportunity there because there's so much transformation going on with the web coming out and then mobile and social and now big data and there's so many opportunities. And frankly, that industry is so underserved. Many of the retailers I work with are using 20-year-old systems, right? That were made 20 years ago that can't scale, that are using batch processes to move data all over the place. Integration is brittle. They're not delivering on the customer experience that customers are demanding, right? They don't really set up well for millennial employees. There's all sorts of issues. So Oracle, I'm sorry, Infor looked at the landscape and said, all right, well, this is an industry that we want to be in. This is an industry that needs our help. And that's kind of how it started. Well, so you think of retail. Everybody's got an Amazon war room trying to figure out how to transform, get that mobile experience going. So give us a sort of lay of the land from a customer's perspective. Yeah, so customers will really benefit from the software that we're offering retailers because they're going to get a complete experience in the store, online, on their mobile devices, whatever, it doesn't matter. There's all sorts of connection points that they can have and they'll be known throughout all those connection points. So many times where I've done a lot of shopping online and I show up in the store, they don't know who I am, right? I don't get treated differently. I don't get good promotions. What we're trying to do is make sure that that customer is known throughout all the channels, right? And that's known in the industry as omni-channel, right? You want to make sure that your customers are known, that products are across all your different channels, call centers as well. But the problem is, is that a lot of retailers that have tried to implement omni-channel are now figuring out that it's very expensive. They've got stove type pipe systems that they've integrated together. It's brittle. You upgrade one side, the other side doesn't upgrade. They've got data copied amongst them. And so they're losing a lot of margin. So they might be delivering on some of that customer experience, but it's very expensive to do so. So what we're trying to do with Converge Commerce is have one selling system to work all those channels, right? And you have one centralized hub where you're going to have all the data necessary to serve your customer. All the product information, all the pricing, all the promotions, customer information, inventory positions, make it all very simple for the retailer. And of course, because we're in for it, we want to put it in the cloud, right? So operationally efficient, not going to cost them a whole lot. So glad, George. Well, I'm listening to that and it sounds like a wonderful choice to have the Converge Commerce as a choice. All works together seamlessly. And I'm listening to the prior choice, which is it's still kind of in silos. That sounds like it's the, let's just add a data lake and we'll bring in the data from all the different channels and we'll have a view, even if it's not really real-time, there's just too much of a time gap. But if you want to do the OmniChannel, that sounds like a forklift. I mean, they're trade-offs. There are. How should a customer think about the two approaches? Oh, well, I think customers should always think strategically. So look out long-term. And long-term, I think they do want to get to a single-selling system, right? So along the way, you might take pieces and parts piecemeal and use this hub to connect them together. But it's not only about the data, right? It's also about the experience for both your customers and your employees. And we provide a very consistent experience across all of our touchpoints so that a customer can experience the brand and the brand promise in a consistent manner. And then on the employee side, there's so many retailers that complain to me that they have multiple systems that they're working with and it takes a lot to train people on those and get them up to speed. As you might expect in retail, there's a high turnover rate, right? And you've got a lot of millennials coming in that are used to using an iPad, right? So we've worked with our hook-and-loop subsidiary to really focus on those experiences for both the customer and the employee, make sure that they get that consistent experience. You're not going to necessarily get that with OmniChannel, right? Because you've got all these different pieces and parts. I think our approach is more holistic and more strategic. Well, Apple's a good example of a company. It does pretty well in retail, obviously. Tons of resources, OmniChannel, but not quite there from a consumer standpoint. You know, you can, they're close, you know? But they haven't, you know, to use a cliche that you guys use all the time, gone that last mile, I feel like, as a consumer. And I presume it's because it's hard. What makes it so hard? Oh, it's really hard. There's so much data, so retail is detail. And all this data you've got, you know, you've got such an enormous amount that needs to be processed to make it actionable. And retailers have been great at collecting the data, but not necessarily always processing that data, right? And we have another acquisition that we just announced recently called Predictix. That's all about demand management and taking in all that data and really understanding what it means and predicting the demand that's going to come in your different channels, in your different stores. Then you can assort those stores correctly. You can do your replenishment correctly, all that good stuff. So you're doing that on the back end. The front end experience has to be there, too, right? So I got to have that product in the store and I got to have all the information I need about that product. It's not right to just have, for example, all of your reviews and ratings online. You need to have that in the store, right? You also need to make sure that your employees have that same information. I hear so many complaints about retail employees that have less information than the customers. Have you ever walked into a store and said, you know, I did some research online and I want to know the difference between these two things and the employee goes, uh, what? Right? So the employee should have a tablet right there. Oh, let me pull that same thing up for you. Let me pull up the cart that you just had online. Let me make that comparison. I don't think Apple's quite gotten that far. They're doing a good job and there's someone to emulate, but there's so much more that can be done. Well, you know, and you're bringing up a great point about the asymmetry and information now between the consumer and the brand. Yeah. It used to be the other way around. We talked about digital transformation, you know, Duncan this morning was giving his talk on digital transformation, a big part of digital transformation. I'd love your commentary on this, the brands and the retailers had all the information. The consumer, you know, 20 years ago had no information. Right, right. The catalog, word of mouth. Many people, maybe now the web changed everything, mobile changed everything. Now there's way more data in the hands of the consumers. So there's this, the asymmetry has flipped. And one of the premises we have is that the digital effort in part is to help the retailers and the brands get that information advantage back, use data to their advantage, which again is complex. Yeah. What are your thoughts on that? You know, the landscape has absolutely changed and the consumer is in control, right? They're the ones that determine when they want to shop, how they want to shop, how they want to interact with the brand. And it's really incumbent upon the brands to make that experience the way that their customers want, right? And then when a customer chooses that particular channel or experience, you've got to make sure they've got everything they want out of it, right? So it's really key to be able to do that. And things like big data have changed the landscape as well, right? So there's all this data out there, say social networks, you can go out in social networks and get a beat on what types of products might be trending and go ahead and pre-buy those products and get them into your store faster, right? By getting information from different places. All sorts of opportunities there. This sounds, this sort of transformational value, obviously sounds very compelling. We all know retailers operate at low margins, gross margins, operating margins. And maybe that's why many of them are still on 20 year old systems. How would you pitch this in terms of percent of their operating profits that they would need to spend over x many years to implement this? Or their CapEx budget? Like put it now in terms that the CFO would understand. Well, I'll tell you what, the big change here is the cloud, right? So suddenly a lot of this capability is accessible now to retailers with low margins and low operating budgets. So in the cloud, for example, when we run predictix to analyze a lot of this data, we're using thousands of CPUs in the cloud to run through all this data. That's a number of CPUs that a retailer could never hope to have on premise, right? So we're leveraging the power of the cloud to give them all that, to be able to afford it much more reasonably. And I think CFOs are seeing that now. It doesn't always have to come out of their CapEx. They can get it out of their operational budget. It's so much easier in the cloud in terms of things like upgrades too. So many IT groups can't serve their internal customers well and they're having problems upgrading and they're having problems putting in new promotions and all that. And having it in the cloud makes it so much easier to update and provide that new functionality. So I think CFOs are on board with the cloud. I think retail is kind of late to the game, but I think they're starting to see the advantages. You mentioned predictix before, so you've done some acquisitions. I want to talk about that a little bit. George and I were talking at the open. We all remember CA, you know, bought a bunch of companies, squeezed all the cash from the stone. Dogs breakfast. Right? And it's interesting to see in for, you know, with obviously with its relationship with Golden Gate, making acquisitions, investments, talking about investments. That's the things that customers want to hear. We want to hear, you're investing in us. So you've got the Starman acquisition, the predictix acquisition. Talk about that from a strategy standpoint, where each fits. Paint a picture of that sort of roadmap for us, if you would. Yeah, so with the Starman acquisition specifically, we weren't really looking to acquire, we were going to build. And they weren't looking to be acquired. They weren't for sale. But we had several analysts and customers say, you guys are kind of saying the same thing about converge commerce. Have you guys really talked to each other? When we looked, we saw, you know what? You share the same vision. Your technology is in lockstep with ours. This is a marriage that really could work. And when we make an acquisition, it has to be very strategic. We want to make sure that it really fits well within our strategy. In fact, I was updating, looking to update our strategy deck to reflect Starmount. And I had to make almost no updates whatsoever. Because it just dovetailed right in. A couple of name changes and annotations. Well, and the acquisition for us was all about accelerating the journey to converge commerce. We're already on that journey. What they bring to us is the store systems, mobile point of sale, point of sale, client telling, store inventory management. They've already got all that with some great customers in the tier two and tier one space of retail. So they brought that together, along with the technology and platform that we can continue to build on. And then in the back end, we've got merchandising, which we're building jointly with Whole Foods. And then Predictix for all the analytics and demand management. It starts to become an end to end story now. So now retailers can come to us and they can say, we want to do a complete transformation. And we can put a roadmap in front of them that says, all right, you're going to start here, then you need to move here, then you move here, and you've got everything, right? You can do a complete refresh. It's all in the cloud. So it's much easier to turn things on and off. Integration, much easier to do as well. The fact that it all fits so well, it's such a great synergy. You mentioned consumer reviews before. And it's a huge source of value for a consumer, if the review is populated, if there's more than one or two reviews with five stars, and everybody does the same thing, they go to the negative ones and see what's negative about it. And obviously Amazon has robust reviews, presumably because of the volume, but is that really the secret? Is it volume? Are there other ways in which retailers can get the community interaction going because it's the most valuable part of a shopping experience is understanding what your peers are saying about it. Yeah, absolutely. It's that social experience. And the ratings and reviews, I mean, we don't specifically go after ratings and reviews. There are so many other companies out there that do it, we just pull it in. Sure. But then there's the whole social aspect. So after you've bought it, how can we help our retail customers get their customers to talk about the purchase, right? To push that information out, to let people know what they bought and why they bought it. And that can start kind of a snowball effect, get more and more people involved and interested in that particular brand. So I got an idea there. So what happens is, and Amazon does this a lot, is you buy something and you immediately get a request for it to review it. They'll do it a lot with books. It's in my stack, I haven't read it yet, right? I would love to go back and review a product. Now maybe they don't want me to, but I think that they would. That I've used for a year or two. Now I really know it, right? It would, as a consumer, I don't know how you guys feel about that, but it would entice me to do it. Because now I know it, a lot of times I get it and I'm like, okay, well, it's shiny, you know, it's new. I pulled the cord and it worked. I need a little experience with it. But anyway, just throw an idea at it. No, absolutely. And that follow up is important. I'll also say, hey, you've had this for a week. Are you satisfied? Did it meet your requirements? Did you also want to look at these other recommended items that go with it, right? And as we get permission from customers to be able to collect their data and assimilate it, we've got a great product called Interaction Advisor that in real time can look at the shopping experiences that you've done online and then recommend products for you. Based on what others have done or if you've logged in based on your past purchases, right? That all comes together as part of that experience. And to the point about true omnichannel, it's like true life cycle. When you get a product, you might be, you could comment on the experience of the shipment or the installation or whatever they'll look and feel, but not really, it's longevity, obviously. So there's that, and that's data. Yeah, right? Right, right. So the upside is tremendous, right? I think the upside is tremendous. And like you said, people want to rely on other people's opinions, right? And the more data you can provide, the better. We absolutely want to do that. And how about logistics? How does that all play into it, right? Because you're now seeing, you know, weekend deliveries and shorter time frames. And the like. So we're seeing a lot of buy online pick up in the store or ship from the store. That's also becoming very popular. And we want to support that. In fact, the store mount acquisition doesn't have a GA product yet, but it's almost ready. So that's going to fit in and tuck in very nicely. Because retailers have a lot of investment in physical stores. Use them as warehouses, right? Exactly. Let's get this stuff to the people as fast as possible. I've been sort of waiting for that to happen as a strategic, you know, bulwark against the Amazon effect. Oh yeah. The big box guys have footprints everywhere. And use it. Absolutely. I've been talking to some retailers that want to do curb delivery. So pull up in your car. They have a space for you reserved and they'll bring it out, bring out the products that you ordered. How great would that be, right? That'd be awesome. So it's all about the customer experience. And we want to make sure that the software retailers have can support that. Great. Just to have one quick tactical question on the way to that vision, which is retailers still being on 20 year old systems, you know, and it's sort of like doing a gut remodel of your house. You know, you have to rip out all the walls and everything down to the studs. Right. How about building on those 20 year old systems? You know, let's say you have your financials in place and you have some maybe archaic point of sale system. How can you sort of minimally replace and disrupt and leverage some of the things that still work? Yeah, absolutely. And we want to be able to do that. We understand that most retailers can't handle a forklift where they just throw out everything and just put all in new. So you can definitely, you can decorate things, right? So maybe you want to do mobile point of sale on top of your existing point of sale, right? Then you can get your employees out into the aisles, right? And doing transactions with customers right out in the aisles, check them out right there. Then maybe, you know, after that's working for a while you want to do full client telling on tablets. Then maybe you want to look at store inventory management and keep that POS around for a while, right? You've got to write it off anyway, right? So there's all sorts of ways to do lockstep. And what we like to do is start with where are your pain points and where can we get you the highest return, right? That first project, the return from that first project might fund the subsequent project, right? And each retailer is a little bit different in their pain points and their maturity. So we go in, we say, all right, let's see what the lay of the land is. Now let's pick a roadmap that's right for you to be able to uptake these pieces. Quick hits, evolve. Yes. And then ultimately get to that end point you've never done but of that true omnichannel interaction. Absolutely. And nobody's going to, we're not having retailers that say I want to jump to the cloud 100%. So it's going to be some on-premise, some in the cloud and they'll start to migrate things to the cloud over time and it gets better and better. And what are the headwinds? I mean, it used to be security. I think people are, maybe it's still, I don't know, but is it just... So I believe that, at least for us, the security in the cloud is going to be better for retailers. They don't have to do with PCI and some of the issues with credit cards, right? And PII is very important to be able to secure personal information of your customers. We take care of that for them in the cloud, right? So we're really alleviating them from some of those issues. It definitely helps. Yeah, and maybe it's not a better or worse. It's maybe different. Yeah. It's the headwind. So they got to go through a process of evaluating, okay, different and getting internal sign-offs. Well, and if you think about a retailer and they say, okay, well, let me put in a cloud POS and then on that Black Friday, the network goes down. You're toast. I mean, you're in big trouble, right? So the POS that we have with StormMount actually has resiliency built into it. So if the network goes down, you can still transact within the store. It queues up those transactions and when the network comes back, it shoots them all back up, right? So we have to make sure that you can always sell no matter what. Cool. All right, David, last thoughts on Inforum, some of the customer conversations, some of the things that you're excited about. So I've been hearing a lot of buzz about Converge Commerce, right? So I think the customers are very excited that we've announced this intent to acquire StormMount. Can't wait for that deal to actually close, which should be coming up fairly soon, I think. The momentum that we have with, before that predictix, before that GT Nexus, also fantastic and then the work we're doing with Whole Foods around merchandising, people are saying, you know, you guys are really making your mark on the industry. You know, you're not the same old approach to incrementally changing things. You're radically changing things for the better and I'm just really excited to be part of that. Excellent. David Dorff, thanks very much for coming on theCUBE, talking about Converge Commerce and revision. Bring in content, converging content for our CUBE audience. We'll be right back right after this short break.