 Hi, from Orlando, Florida, it's theCUBE. Covering Sapphire Now. Headlines sponsored by SAP HANA Cloud, the leader in platform as a service. With support from Consolink, the cloud internet company. Now, here are your hosts, John Furrier and Peter Burris. Hey, welcome back everyone. We are here live in Orlando, Florida for SAP Sapphire Now. This is SiliconANGLE Media's theCUBE. It's our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, my co-host. Peter Burris, I want to give a shout out to our sponsors, SAP HANA Cloud Platform, Consolink, Capgemini, EMC. Thanks so much for sponsoring us. Our next guest is Pat Bakies, the president of SAP's industry cloud group. It's the core of the cloud of all SAP. Welcome to theCUBE. Ah, it's great to be in theCUBE. First time in theCUBE. First time on theCUBE, congratulations. First time, Cuba, we're great to have you. You have, as holistically viewing across all the different lines of business, cloud will be a very big part of the future and across all of SAP. That's the core business. Yet now you got HANA Cloud Platform, you got all this other stuff going on. Now you have cloudification of SAP in kind of in real time happening in this show. It's going to have an impact to the deployment model, the consumption model and the economics. What's the take? What's the internal discussions? How are you guys talking about externally with customers and how is it received? All right, so you know what, I'll tell you what. So we, this is the industry cloud organization. So maybe I can start there. Why is it, what's industry and cloud doing in the same sentence in the same title? So when you talk about digitization and what customers are looking for today, it's value and speed, right? Speed and agility. So the industry part of the equation is all about value, right? How do we communicate the value of our innovations in a message and understanding that gives the customers confidence to invest in an innovation agenda? And that's kind of historically has always been the strength of SAP. It's the language that we speak with our customers. It's well understood. We just make sure that we express that well across all industries in line of business with the digitization agenda. The cloud portion is where speed and agility comes into play, right? How do you move quickly, how do you move fast? So if, you know, in yesterday's business, you know, the strength was your ownership of assets, right? The strength today, the attributes in which these companies compete on is speed, innovation, agility, and that's where cloud comes into play. And knowledge of the customer. How are you then bringing those two things together for your customers? Right, so we're helping actually customers across all industries get closer to their customer. If there's one strategy that every customer and every industry is pursuing is get close to the customer, right? This is important. It may seem sort of simplistic, but, you know, it's easy to say it's hard to do. So we are helping our customers understand what their customers and their customer customers are doing. This is why you, you know, this is, it's driving a blurring of industries, right? So, you know, you may say that I'm responsible for 26 industries, right? Maybe oversimplifying because we see this massive blurring of industries because as customers in industries are trying to get closer to their customers, they cross boundaries, right? And how- And how does the station let them do that? Yeah, it's like we were talking about before, in this world of Adams, right? Very restrictive, very kind of two-dimensional. Digital, it defies gravity, it defies boundaries. And that's why you see this blurring of boundaries in cross industry plays. Yeah, and we're seeing that too. You guys talk about it here. I heard it many times, breaking down the silos and the keynotes. But at the same time, you want to have that getting close to your customer mindset, which means that the apps, the workloads are domain specific and there's some blurring. So the question is, how can you be vertically integrated at some level for that domain expertise and then be horizontally scalable because the data really becomes the blurring component too. You have data moving around. So how do you guys look at that and are customers asking for this kind of architecture? Yeah, it's actually so, it's interesting in the old world, you either had deep industry expertise in your applications, your technology, or you had sort of a broad horizontal. And that got you a seat at the table. You had to be best in class in either of those. So those still get you to the table, right? If you have those, but it may be a small table. Like the table that we deal with with our customers is an innovation table. It's a growth table and it involves the whole board, the whole enterprise. And to get to that table, you need to have deep industry expertise. And what do I mean by that? First, you speak their language, you understand their industry from a process and a capability area. And then you have to express that across their businesses. So whether that business are traditional CRM, the customer business around people, HR, or around procurement, or even in the industries when you're taking a look at supply chain or you're looking at planning, you need to be able to integrate the industry with the horizontal. When you have that conversation and that message, which we have, you're at the big table. The big boy's table. So what are some of the conversations at the table? I mean, is it really more revenue driving for their customers' customers? Is it cost savings both? Is it implementation? What are some of the trending conversations that are happening at the big table? So at the big table, at the top of the house, what they're, I mean, strategically around this topic of digitization, the world of digitization competition is at the business model level. That's what they're talking about, which is I know I'm in this business today. Will I be in this business tomorrow? And how do I compete tomorrow? So it's less about the assets, as we said before, what do you have? But it's the insight that you have. And that's opening up a lot of new business opportunities. So at the big table, it's around business model innovation. That's what they're talking about. So let me see if I can connect a couple things you've said here. So it used to be that when you thought about industry, we thought about the organization of assets, your organization of assets looks like, your organization of assets, how do you handle your balance sheets? And, but now we're talking about customers. And in many respects, the new industry is defined by the things that your customers want to do. Yes. And that's what your competitors' customers want to do. Exactly. And sometimes they're the same customers. So as SAP's ecosystem grows, as it expands, as you're able to attract through new sources of value through things like this wonderful Apple partnership that we want to give you guys, give you a chance to talk about. Absolutely. Do you see SAP's role moving from a provider of software to actually increasingly a provider of a way of thinking about doing business? Where SAP, in many respects, becomes an element, almost a core element of the business model that your customers are using to make things happen. That is a great statement. And I actually can point you in two directions. I want to get to the Apple relationship because that actually expresses our strategy on taking advantage of that. So I would say, historically, when we were just an application company, the source of innovation came from SAP. We understood business process, we understood industry, we built these remarkable applications, and our ecosystem took them implemented and customers enjoyed the success. We're in a world now of digitization and massive innovation, and there is no way that we can be the single source of innovation. This is why you heard Byrne, this is why you heard Rob and Bill talking about the Honda Cloud platform. So we still need to be the catalyst when it comes to defining what is remarkable about our technology and capability to solve business problems, but then we have to enable a massive ecosystem to innovate on top of that, to extend it, to innovate. And that's where the Honda Cloud platform comes into play. So yeah, we are setting the agenda, we are setting the expectation of what great looks like, and then we're tapping into the ecosystems that we have. What's interesting about what you just said, and Peter brought this up yesterday with the global CTO of Capgemonite. Capgemonite, right. And your premise was, in the old days, you knew the processes, but didn't know the technologies, and you automated those processes. Now we know the technology and don't know the processes as they're developing. So you look at IoT, it's an unknown future, but you can kind of guess it's going to be a lot of data, it's going to be an edge of the network. So that reinforces its whole ecosystem point that the innovation will come in an unknown innovation way, meaning that you can't say, I'm going to automate that because it's not known yet, it's evolving. That to me seems to tie what you just said. Do you, can you expand your thoughts on that? Because this is what everyone's chasing. That's the startup mentality, that's the agile, that's the jump on a grenade, win the beach head, grow a business, that's going to be the startups and the white space for you guys. Look, I'm a lousy dart player, right? But I could win if I'm throwing 1,000 darts at a target, right? And the other guy's throwing three. That's the environment we're in with HANA Cloud Platform. We've got massive darts to throw at the target because it changes so fast, you need to have a couple things. You have a great ecosystem, you need to be able to innovate and you need to be able to address volatility, right? So let me give you a practical example of that. All right, if you take a look at digitization and one of the key dimensions, which is how work will be done, right? In this new digital world. We have some pretty good ideas how it's going to be done such as it's not going to be done inside of the enterprise. Whether that work is a manufacturing environment, whether that work is knowledge management in a typical office, it's going to be increasingly mobile and these mobile workers will be connected, right? And the challenge there is, one, how do you understand what the processes will be? We have an idea, but they're going to evolve. And second, how do you enable them with real-time information? Because the mobile experience isn't just taking the desktop and putting a different form factor on it. So we take a look at the Apple and the SAP announcement. What does this mean, right? When you hear Tim and you hear Bill discuss it, it's a step change on how these two great companies believe work will be done in the digital world, right? The way that we execute on that is, again, back to what I said before, we will bring the best of a consumer user experience with the best of a business inside experience and bring those together. And if you take a look then at what is the standard of a mobile platform, it's iOS, which, by the way, is severely underutilized. It's chat, it's phone, it's email, right? If you take a look at your iPhone and how we're using it as consumers, that's massively underutilized in an enterprise setting. Same thing with business information. When you leave the office, you're leaving all that behind. SAP will bring all that, the business process, the business insight. You bring it together and you have these new native applications. And the interesting thing too on the Apple, by the way, congratulations, it's a real phenomenal announcement. Super happy to see that. There's a little other nuance there too, is that Swift programming language is very popular among developers right now. And it's also another trend in the developer community where they're calling the non-coding developer. The tools are getting so damn good now that you don't have to go to be a computer science major to write code. And this other Python, other languages out there that are good on-ramps. So you have an ecosystem that has the glam of Apple and this sexiness of Swift with all this monetization opportunities as a developer saying, hey, I have an ecosystem I can work with that I can ride on the back of to the marketplace. So it's a great avenue for someone or now business to pick a white space and dominate it. Whether it's a tool or a feature, they can come in and be a feature and still be a business. You'll be saying Silicon Valley was, oh, that's a feature, not a company. That was the old way. Now that's the innovation coming from these entrepreneurs. That to me is interesting. Are you guys seeing that kind of excitement from developers and do you see that developers as the core of the ecosystem? What's your thoughts on this overall? Yeah, I mean, we're seeing the developer community becoming a more critical part because it's not just about implementing. Remember when I said we're the source of innovation and other people implement it, right? That was the skill set of the ecosystem. Now when it's innovation, the source of the innovation needs to come from the ecosystem and that's a developing community. So if we take a look again at this Apple announcement, the reference applications are what we're building right now because that's what we and Apple think would look great in specific industries. But then it's this SDK and the HANA Cloud platform. If you take 2.5 million SAP developers, and you take 12 million iOS developers and you bring them together, not only just to work together, but to redefine what this new development environment is, like Swift, right? The best of how you design enterprise applications with commercial applications. And then the third leg of this is the iOS university because these are new classes of developers. And my final point is, as much as we think we know how work will be done in this mobile work environment, it's going to change. This is going to change. IoT is important, but it's how people are going to work together with people over distance, over agendas, over boundaries. That's going to change the world. So let me ask you a question. We've asked a couple of times to some of your folks on theCUBE, is it going to be possible at some point in time, I'm going to get an Apple developer who decides to enter into an enterprise space by creating a solution, have an Apple phone customer go up, pull something off the App Store because it is SAP compliant. Is that going to happen? I can envision that happening. I can envision it. We are the standard for a trusted enterprise partner. Well, think about it. So now you've got a situation where you've got your CIO and your IT organization who wants a stable, compliant SAP, and then all the folks out in the field that are doing the work, that are identifying new problems and finding software that they can apply to solve a problem, and having SAP and Apple bring both of those sides together so that the CIO can be certain that what was just grabbed works and is compliant. Also, at the same time, that person knows that this innovative thing is not going to create problems in the back end. Very, very powerful vision. We'd love to see that notion. Yeah, and I think that's what you get when you combine those two brands and those two experiences, and that's what causes it. As quickly as we're innovating and moving forward, you still need to have predictability in the business in a strong core. Right? It's that business continuity. So you need to be able to innovate very quickly, rapid innovation, quick failure, fast learning. That's at the edge. So if we can enable that, but give the predictability and stability in the business relationship, security, you bring that together. This is the new world that we're creating. Calls for new developers, calls for new ecosystems, and new leadership, and that's what we and Apple bring to the equation. So Pat, share the roadmap on the Apple thing, just to kind of, just to take the final, close, square this out a little bit. Ecosystem might get the ecosystem. I would envision that's a great outcome. Yeah, absolutely. If you get certified SAP apps on the iPhone. I'm sure that's the plan. On SAP side, you go for the low hanging fruit. You mentioned that you're doing a couple things. What's the roadmap for the sequence of the progression of SAP, Apple relationship? What do you guys bring into the table from the core software? Yeah, so we've identified specific industries where the dynamics play to the favor of the dynamic work. So they're mobile, they're standardizing already on iOS, and they're connected, right? And they need the rich enterprise information. And we've identified high value use cases, and those are where we'll build the applications. But what we want to do. That's the low hanging fruit for you guys. That's the low hanging fruit, right? And create that kind of a reference of what a great mobile experience looks like. And then we're going to enable through the SDK, the ecosystem. So that's where the mass of innovation is going to come from. And then we'll try to figure out where this takes us. So this is a series of six month sprints, right? That we're on. Awesome. Business sprints. It's a bad concept. Yeah. Child, you know, this phrase a couple of years ago, the speed of business, which was SAP Sapphire, it might have been 2013, McDermott's phrase was running at the speed of business with it was mobile. Final question for you is on the industry cloud, what's your plans? What's your goals? How do you see it evolving? Can you share some anecdotally, reveal any sensitive information? But you know, the vision for how the, how you see the industry cloud group that you're running evolving over the next 12, 48 months. So I see us right now, you know, there are some things, your core values and your core competencies shouldn't change. They should sort of leverage the environment that you're in. And so we're carrying forward our industry insight, our focus on an end to end capability, high values cases, and integration, where it needs to be. And that's what we express. So we're going to take that and we're going to apply it to the helping customers digitize, you know, on that journey. So here at Sapphire, the focus has been not on what we're announcing, because by asking any customer here, we have the requisite capabilities. What they want to get is busy on their journey and they want us to help them reduce uncertainty, reduce risk, and realize value. So all the conversations here on what are we doing? Industry, clear roadmaps, where are we going? Right, what capabilities? Second, roadmap on value, what value? S4, fastest launch in our history, right? Customers are right now are saying, how do we double that? How do we triple it? It's by showing the business value associated with it. So that's what we're doing with industry, is showing the clear path of what great looks like, a roadmap on how to get there, the business value associated with it, and how working with our digital business services customers, how we can help them realize that. And the roadmap is key because you can, that clarifies the ecosystem. They understand kind of the rules of engagement. They can see the line. Yeah, what the overall regime has got. You know it's interesting, Pat. You look around the 60,000 people, the amount of activity, the amount of deal making that's going on here. It's probably the 25th largest economy in the world right here in the world. Oh it is, in Orlando. That's amazing, yeah. I need to take a knee, guys. I'm just hearing about that. Final question, I'll let you go, because we're going to get you tight on time. What's the coolest thing you've seen at Sapphire this week? Coolest thing? Boy, I've been in so many meetings. I haven't seen cool. Look at this one. This is definitely a cool meeting. Oh, geez. Coolest thing. Coolest phrase, sound bite, feedback, hallway conversation. How are you going to tell in your next management meeting what's the one thing you're going to tell them about Sapphire? I tell them. I'd say that there is so much demand for us to help customers. We're not pushing, right? We're getting pulled. So it's about prioritization. Like how do we focus on what's most important for our customers? That's such a lame answer. Well, but prioritization actually. When you're looking for cool, but it's true. There's drones somewhere. I saw a beer chat that got IoT on it. I did see the guy in kind of the transformer outfit. That was pretty cool. I'll tell you what is we can become more and more of a consumer business oriented. My kids start developing a better understanding of what I actually do when I leave home, right? It's cool. I mean, SAP is cool. Actually, I'll tell you the one thing. The one thing I heard here from customers that either went to original Sapphires or back after a while or coming for the first time, they can't believe how fast we're moving. They really can't believe how fast we're moving. It's that speed. It's not just the pace of this conversation or the pace of the traffic around here. It's the pace of how quickly business is moving and that we're leading it. Pat Bakey, president of Industry Cloud at SAP. This is theCUBE. I'm John Furrier with Peter Burris. We'll be right back. This is theCUBE, SiliconANGLE's flagship program. This is theCUBE. You're watching theCUBE. We'll be right back. 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