 DataWorks Summit Europe 2017, brought to you by Hortonworks. Okay, welcome back everyone. We're here live in Munich, Germany at DataWorks 2017. I do summit formally with the conference name for big change to DataWorks 2017. I'm John Furrier with my co-host, Dave Vellante, our next guest will side-dazz Alan Nancy, fluent justice for the QB interview today, executive vice president with virtual clarity, former star, I call practitioner in the cloud, knows the cloud business, knows the operational aspects of how to use technology. Alan, great to see you. Thanks for coming on the queue. Thank you for having me again. Great to see you. Just in our office, you were in the U.S. recently with a chance to catch up. And one of the motivations that she talked with you today was to talk a little bit about some of the things you're looking at that are transformative. Before we do that, explain a little bit about of your history and what your role is as virtual clarity. Yeah, so as you guys have basically followed that career, I started out in the transformation time with ING Bank and started out basically technology upwards. So looking at converged infrastructure, converged infrastructure into VDI. When you've got that, you start to look at clouds. Then you start to experiment with clouds. And then I moved from ING, from earlier experimentation, into Philips. So Royal Philips, that time had both the healthcare and the lighting group. And then you start to look at consumption-based cloud propositions. And you remember the big thing that we were doing at that time when we identified that 80% of the IT spend was non-differentiating. So the thing was, how do we get away from, almost a 900 million a year spend on legacy? How do we turn that into something that's productive for the enterprise? So we spent a lot of time creating the consumption-based infrastructure operating platform. A lot of things we had to learn, because let's be honest, Amazon was still trying to become the behemoth it is now. IBM still didn't get the transition, HP didn't get. So there was a lot of experimentation on which of these operating models can work. You're the first mover on an operating model with the cloud that has scaled to it. And really differentiated services for your business. But also cost reductions. No, the cost reductions have been phenomenal. I mean, we're talking about halving the budget over a three-year period. We're talking about 500 million a year savings. So those are big, big savings. The thing that I feel we still need to tackle is that when you re-platform your business, it should lead to agile acceleration of your growth path. And I think that's something that we still haven't conquered. So I think we're getting better and better at using platforms to save money, to suppress the expenditure. What we now need to do is to convert that into growth platforms for the business. How about the data component? Because you were sort of CIO of infrastructure at Phillips, but lately you've been really spending a lot of time thinking about the data, how data adds value. So talk about your data journey. Well, so if I look at the data journey, the journey started for me with basically a meeting with Paul Moritz in 2013. And he came with a very, very simple proposition. You guys need to learn how to create and store and reason over data for the benefit of the enterprise. I think, well, that's cool, because up until that point, nobody had really been talking about data. Everybody was talking about the underlying technologies of the cloud, but not really about the data element. And then we had a session with JP Ranswami, who was that a sales force, who basically also said, well, don't just think about data lakes, but think also about data streams and data rivers. Because the other thing that's going to happen here is that data is not going to be stagnant in a company like yours. So we took that, and what happened, I think, in Phillips, which I think you see in a lot of companies, is an explosion across the enterprise. So you've got people in social doing stuff. You've got CDOs appearing, you've got the IoT, you've got the old legacy systems, the systems of record. And so you end up with this enormous fragmentation of data, and with that, you get a wild west of what I would call data stewardship. So you have a CDO who says, well, I'm in charge of data, and you've got a CMO who says, well, I'm in charge of marketing data, or you've got a CISO, so yeah, but I'm the security data guy. And there's no coherence in terms of moving the enterprise forward, because everybody's focused on their own functionality around that data and not connecting it. So where are we now? I think right now we have a huge proliferation of data that's not connected. In many organizations, and I think we're going to hybrid, but I don't think that's a future-proof thing for most organizations. What do you mean by that? Well, if I look at what a lot of those suppliers are saying, they're basically saying, the solution that you need is to have a hybrid solution between the public cloud and your own cloud. All right, but that's not the problem that we need to solve. The problem that we need to solve is, first of all, data gravity. So if I look at all the transformations that are running into trouble, what do they forget? When we go out and do IoT, when we go out and do social media-type analysis, it all has to flow back into those legacy systems. And those legacy systems are all going to be in the old world. And so you get latency issues, you get formatting issues. And so we have to solve the data gravity issue, and we have to also solve this proliferation of stewardship. Somebody has to be in charge of making this work. And it's not going to be just putting in a hybrid solution because that won't change the platform framework. Let me ask you a question, because one of the things you're kind of dancing around, Dave brought up with a data question, something that I see as a problem in the industry that hasn't yet been solved, and I'm just going to throw it out there. The CIO has always been the guy managing IT, and then he would report to the CFO, get the budget, blah, blah, blah. We know that that's kind of played out its course, but there's no operational playbook to take the cloud mobile data at scale that's going to drive the transformative impact. And I think there's some people doing some stuff here in their pockets, and maybe there's some organizations that have a cadence of managers that are doing compliance, security, blah, blah, blah. But you have a vision on this, and some information that you're tracking around an architecture that would bring it to scale. Could you share your thoughts on this operational model of cloud at a management level? Well, part of this is also based on your own analyst, Peter Burris, when he says that the problem with data is that its value is inverse to its half-life. So what the enterprise has to do is has to get to analyzing and making this data valuable much, much faster than it is right now. Chris Sellander of Unify recently said, you know, the problem's not big data, the problem's fast data. So now who is best positioned in the organization to do this? And I believe it's the COO. I do, Chief Operating Officer. Chief Operating Officer. I don't think it's going to be the COO, because I'm trying to figure out who's got the problem, who's got the problem of connecting the dots to improving the operation of the company? Who is in charge of actually creating an operating platform that the business can feed off of? It's the COO. Now, the challenge- Why not the CFO? No, I think the CFO is going to be a diminishing value over time, because a couple of reasons. First of all, we see it in Philips. There's always going to be a fiduciary role for the CFO, but we're out of the world of capex. We're out of the world of balancing assets. Everything is now virtual. So really, the value of a CFO as being sitting on the T, if I use the racquetball, the CFO standing on the T is not going to bring value to the enterprise. And the CIO doesn't have the business juice, is your argument. It depends on the CIO. There are some CIOs out there in general. We're generally not. Because they've come through the ranks of building applications, which now has to be thrown away. They've come through the ranks of technology, which is now less relevant. And they've come through the ranks of having huge projects and huge people to deploy certain projects. All of that's going away. And so what are you left with? Now you're left with somebody who absolutely has to understand how to communicate with the business. And that's what they haven't done for 30 years. And streamline business process. Well, at least getting involved in the conversation. At least getting involved in the conversation. Now, if I talk to business people today, and you probably do too, most of them will still say there is this huge communication gap between what we're trying to achieve and what the technology people are doing with our goals. I mean, I was talking to somebody the other day and there's a lady heads up the sales for a global financial institution sitting on the business side of this. And she's like, the conversation should be about if our company wants to improve our cost income ratio and they ask me as sales to do it, I have to sell 10 times more to make a difference than if IT would save money. So for every euro they save and give me an agile platform is straight to the bottom line. Every time I sell because of our cost income ratio, I just can't sell against that. So, but I can't find on the business, on the IT side, anybody who sort of gets my problem and is trying to help me with it. So, and then you look at her as a ward, you think hybrid solutions going to help you? She's like, I have no idea what you're talking about. Right, so the business person here says, I don't really care where it runs. But to your point, you care about the operational model. Absolutely. And that's really what cloud should be, right? Yeah, I think everybody who's going to achieve anything from an investment in cloud will achieve it in the operating model. They won't just achieve it on the cost saving side or on making costs more transparent or more commoditized. Where it has to happen is in the operating model. In fact, we actually have data of a very large transportation logistics company who moved everything that they had to attempt to be in an Azure cloud. And on the benchmark saved zero. And they saved zero because they weren't changing the operating model. So they were still- So they lifted and shifted but didn't change the operational mindset? Not at all. But there could have been business value there, right? Maybe things went faster. There could have been, but- Maybe simpler, but not game changing. I'm not saying, not game changing, certainly. And not as meaningful. It was a stretch. Give an example of a game changing scenario. Well, for me, and I think this is the next most exciting thing is this idea of platforms. There's been an early adoption of this in telco where we've seen people coming in and saying, if you stop all of this IT as we've known it and you leverage the ideas of cloud computing to have scalable, invisible infrastructure and you put a single platform on top of it to run your business, you can save money. Now, I've seen business cases where people who are about to embark on this program are taking a billion a year out of their cost base. And that was in this company that's one seventh of their total profit. That's a game changer for me. But now who's going to help them do that? Who's going to help them with that program? Yeah, what's that platform look like? I mean, a billion's a lot of money. Let's go blank sheet of paper. So not everybody will even have a billion if I say that. But that gets the attention of certainly the CEO, the COO, CFOs, tell me more. But then you need to build this, you're alluding to it, Dave. You need to build a layered approach to doing that. So you need to fix today's potato stewardship problem. You have to create that invisible infrastructure that enables that platform. And you have to have a platform player who is prepared to disrupt the industry. And for me, I mean, a cloud player. I think it's a born in the cloud player. I think we've talked about it privately. So who are the horses in the track? I mean, you've got Microsoft, you've got AWS, Google, maybe IBM, maybe Oracle. See, I think it's Google. Why? Why do you think it's Google? I think because the platforms that I'm thinking of and if I look in retail, I look in financial services, it's all about data, because that's the battle, right? We all agree it's the battles on data. So it's got to be somebody who understands data at scale, understands search at scale, understands deep learning at scale, and understands technology enough to build that platform and make it available in a consumption model. And for me, Google would be the ideal player if they would make that step. Amazon's going to have a different problem because their strategy's not going down that route. And I think for people like IBM or Oracle, that would require cannibalizing too much of their existing business. So they may dally with it and they may do it in a territory where they have no install base, but they're not going to be disrupting the industry. I just don't think it's going to be possible. I think Google has the enterprise chops to pull that off. I do, I think Google has the platform. I think I would agree with Alan on this, something that I've been very critical on Google. So Dave, it brings us up because he wants me to say it now, but, and I will. Google is well positioned to be the platform. I am in very bullish on Google Cloud with respect to their ability to moonshot or slingshot to the future faster than potentially others or as they say in football, move the goalposts and change the game. That being said, where I've been critical of Google and this is where I'll be critical is their dogma is very academic, very we're the technology leader. Therefore you should use Google G Suite. I think that they have to change their mindset to be more enterprise focused in the sense of understand not the best product will always win that the beach that they have to develop have to think about the enterprise. And that's a lot of white glove service. It's a lot of listening. That's not being too arrogant. I mean, there's a borderline between confidence and arrogance. I think Google crosses a little bit too much, Dave. And I think that's where Google I think recognizes some people in Google recognize that they don't have the enterprise track record for sure on the sales side. You could add a thousand sales reps tomorrow, but do they have experience? So there's a huge translation issue going on between Google's capability potential energy and then the reality of them translating that into an operational footprint. So for them to meet the market folks like you, you can't be speaking Russian and English. You got to speak the same language. So the language barrier, so to speak, the linguistics is different. That's my only point. So I sense in your statements, there's a frustration here, right? Because we know that we know that the key to some really innovative disruptive is with Google. And I think what we'd all like to do, even if I was addressing the camera, I'd love to see Diane, who does understand enterprise, who's built the whole career, servicing enterprises extremely well. I'd like to see a little bit of a glimpse of, you know, we are up for this. And I understand when you're part of the bigger Google, you know, the numbers are a little bit skewed against you to make a big impact and carry the firm with you. But I do believe there's an enormous opportunity in the enterprise space and people are just waiting for this. Diane Green knows the enterprise, right? So she came in, she's got to change the culture and I know she's doing it because I have folks at Google that I know that work there tell me privately that it's happening, maybe not fast enough. So, but here's the thing. If you walked in the front door of Google, Alan Nance, this is my point. And he said, I have experience and I have a plan to build the platform to knock a billion dollars off seven companies that I know personally but I can walk in and win and move a billion dollars to their bottom line with your platform. They might not understand what that means. I don't know. I mean, I was at Google next a few weeks ago last month and I thought they were more, to your point, open to listening, maybe not as arrogant as you might be presenting and somewhat more humble, still, you know, pretty ballsy. But I think Google recognizes that it needs help in the enterprise and here's why. Something that we've talked about in the past is you've got top-down initiatives, you've got bottom-up initiatives and you've got middle-out. What frequently happens, and I'd love for you to describe sort of your experiences, the leaders say, the top CXO say, okay, we're going and they take off and nobody, the organization doesn't follow them. If it's bottoms up, you don't have the top-down, you know, imprimatur. So how do you address that? What are you seeing and how do you address that problem? So I think it's a really, really good observation. I mean, what I've seen in a lot of big transformations that I've been involved in is that speed is of the essence. And I think when CEOs, because usually it's a CEO, CEO comes in and they think they've got more time than they actually have to make the impact in the enterprise. And it doesn't matter if they're coming in from the outside or they've grown up, they always underestimate their ability to do change in time. And now what's changed over the past few years is the average tenure of a CEO is now six years. You know, I'm like, Jack Welch was 20 years at GE, you can do a lot of damage in 20 years. And he did a lot of great things at GE over a 20-year period. You've only got six years now. And what I see in these big transformation programs is they start with a really good vision. I mean, McKinsey, Bain, Boston, they know the essence of what needs to happen. They can sell the dream. They can sell the dream. And the CEO sort of buys into it. And then immediately you get into the first layer of, okay, so we've got to change the organization. And so you bring in a lot of these companies that will run 13 work streams over three years with hundreds of people. And at the end of that time, you're almost halfway through your tenure and all you've got is a new design or a new set of job descriptions or strategies. You haven't actually achieved anything. And then the layer down is going to run into real problems. So I mean, I've seen one of the problems that we had at the company I worked at before was in order to support these platforms, you needed really good master data management. And we suddenly realized that. And so we had to really put in an accelerated program to achieve that with Informatica. We did it, but it cost us a year and a half. At a bank, I know, they can't move forward because they're looking at 700 million of technology debt. They can't get past. So they end up going down a route of, well, maybe one of these big suppliers can buy our old stuff and we can tag on some transformational deal at the back end of that. None of those are working. And then what happens is in my mind, if the CEO from what I see has not achieved escape velocity at the end of year three, so he's showing the growth or she's showing the digital transformation, it's kind of game over. The enterprise has already figured out they've stalled it long enough, not intentionally. And then we go back into an austerity program because you've got to justify the millions that you've spent in the last three years and you've got nothing to show for it. Then you're preparing three envelopes. So you've got to accelerate those layers. You've got to take layers out and you've got to have a really, I would say almost like 90 day iteration plans that show business outcomes. So the technology layer, you could put in an abstraction layer, use APIs and infrastructure as code, all that cool stuff, but you're saying it's the organizational challenges. I think that's the real problem. It is the real problem is the organization. And also because what you're really doing in terms of the enterprise is you're moving from a more traditional supply chain that you own and that you've matriculated with SAP or with Oracle. Now you're talking about creating a digital value chain, a digital value chain that's much more based on a more mobile ecosystem where you would have FinTechs in one area or insurance techs that have to now fit into an agile supply chain. It's all about the operating model. If you don't have people who know how to drive that, the technology is not going to help you. So you've got to have people on the business side and the technology side coming together to make this work. That's just... Al, I have a question for you. What's your prediction? Okay, knowing what you know and kind of obviously have some frustrations in platforms with trying to get the big players to listen. And I think they should listen to you, but this is going to happen. So I would believe that what you're saying with the COO, operational things radically changing differently. I'll say that signs are all there. Data centers are moving to cloud. I mean, this is like radical stuff in a good way, right? So what's your prediction for how this plays out? VisaV, Amazon Web Services, Google Cloud Platform, Azure, IBM, Cloud, it's off-layer. Well, here's my concern a little bit. I mean, I think if Google enters the fray, I think everybody will reconfigure, right? Because if we assume that Google plays to its strengths and goes out there and finds the right partners, it's going to reconfigure the industry. If they don't do that, then what the industry is going to do is what it's done, which means that the platforms are going to be hybrid platforms that are dominated by the traditional players, by the SAPs, by the Oracles, the IBMs. And what I fear is that there may actually be a disillusionment because they will not bring the digital transformation and all the wonderful things that we all know are out there to be gained. So you may get, you know, we've invested all this money, you see a little bit with big data. You know, I've got this huge lake, I've got petabytes, why am I not smarter? Why is my business not going so much better? I've put everything in there. I think we've got to address the operating problem and we have to find a dialogue at the C-suite. Well, to your point, and we talked about this, you know, you look at the core of enterprise apps, the Oracle stuff is not moving in droves to the cloud. Oracle's freezing the market right now, betting that it can get there before the industry gets there. You know, and if it does, it might, but if it does, it's not going to be that radical transformation that you're prescribing. They have too much to lose, let's be honest, right? So Oracle is a victim of its own success, pretty much like SAP. You know, it has to go to the cloud as a defensive play because the last thing either of those want is to be disintermediated by Amazon, which may or may not happen anyway, right? Because a lot of companies will disintermediate if they can because the licensing is such a painful element for most enterprises when they deal with these companies. So they have to believe that the platform is not going to look like that. Yeah, and they're still trying to figure out the pricing models and the margin models and the Amazon's clearly figured out. But you know what's driving the pricing models is not the growth on the consumer side. Absolutely. It's not what's driving it. So I think we need another player. I really think we need another player. If it's not Google, somebody else. But I can't think who would have the scale or the money to pick. Well, the only guys who have the scale are, you know, you got 10 cents, you got a couple of China clouds and maybe a one Japan cloud and that's it. To be honest, she raised a good point. I haven't really looked at the Alibaba's and other people like that who may pick up that mantle. I haven't looked at them. Alibaba's interesting because just like Amazon, they have their own business that runs on platforms and a very diverse business which is growing faster than Amazon and is more profitable than Amazon. So they could be interesting. I'm still hopeful that we should figure this out. Well, Google should figure it out. You're absolutely right. And they're investing. I thought they put forth a pretty good messaging at the Google Next. You covered it remotely, but I think they understand the opportunity. I think they have the stomach for it. No, we had reporters also there as well at the event. We just did the Q&A in our studio. Google is aware, self-aware that they need to work on the enterprise. To me, I think the bigger thing that you're highlighting is the operational model is shifting to a scale point where it's going to change stewardship and COL mainly being, I like that. The other thing I want to get your reaction to is we heard this morning on theCUBE from Sean Connolly which echoes some of the things that we're seeing where you're seeing cloud becoming a more centralized view where IoT is an edge case. So you have now issues around architectural things. Your thoughts and reaction to this balance between edge and cloud? Well, I think this is where you're also going to have your data gravity challenge, right? So Dave McCrory has written a lot about the concept of data gravity. And in my mind, too many people in the enterprise don't understand it. Which is basically that data attracts more data and more data you have attract more. And then you create all these latency issues when you start going out to the edge. Because when we first went out to the edge, I think even at Philips, we didn't realize how much interaction we needed to come back. And that's going to vary from company to company, right? So some companies are going to want to have that data really quickly because they need to react to it immediately. Others may not have that. But what you do have is that you have this balancing act about what do I keep central? And what do I put at the edge? I think edge technology is amazing. And when we first looked at it four years ago, I mean it's come such a long way. And what I am encouraged by is at that data layer. So the layer that Sean talks about, there's a lot of exciting things happening. But again, my problem is what's the enterprise going to do with that? Because it requires a different operating model. I mean, if I take an example of a manufacturing company, I know a manufacturing company right now that does work in China and it takes all the data back to its central mainframes for processing. Well, if you've got the edge, you want to be changing the way you process, which means that the decision makers on the business need to be in situ. They need to be in China. And we need to be bringing systems of record data and combining it with local social data and edge data so we get better decisions so we can drive growth in those areas. If I just enable it with technology, but don't change the business model, the business is not going to grow. So Alan, we always love having you on us, our great practitioner. But now you've kind of gone over to the dark side with work of a company called Virtual Clarity. Tell us about what you're doing there. So what we're vested in, what I am very much vested in with my team at Virtual Clarity is creating this concept of precision-guided transformation where you work with the business on what are the outcomes that we really need to get from this. And then we've combined the, I would say, it's like a data nerve center so we can quickly analyze within a matter of weeks where we are with the company and what routes to value we can create. And then we'll go and do it. So we do it in 90-day increments so the business now starts to believe that something's really going to happen. It's not these big, big insert miracle here after three-year programs, but actually going out and doing it. Second thing I think that we're doing that I'm excited about is bringing in enlightened people who represent the enterprise. So one of my colleagues, former COO of Unilever, we just brought on a very smart lady, Desa Glassa, who was the CDO at JPMorgan Shakes. And the idea is to combine the insights that we have on the demand side, the buy side, with the insights that we have on the technology side to create better operating models. So that combination of creating a new view that is acceptable to the C-suite because these people understand how you talk to them. But at the same time runs on this concept of doing everything quickly. That's what we're about right now. That's awesome. We should get you hooked up with our new analysts. We just hired James Kobelius from IBM who's focusing on exactly that, the intersection of developers, cloud, AI machine learning and data all coming together. And IOT is going to be a key application that we're going to see come out of that. So congratulations. Alan, thanks for spending the time to come in. Thanks for allowing me. So you see us on theCUBE. It's theCUBE bringing you more action here from DataWorks 2017. I'm John Furrier with my co-host Dave Vellante here on theCUBE SiliconANGLE Media's flagship program where we offer you advanced extractive signal noise. Stay with us for more great coverage, day one of two days of coverage at DataWorks 2017. We'll be right back.