 Live from Las Vegas, it's theCUBE covering Oracle Modern Customer Experience 2017, brought to you by Oracle. Hey, welcome back everyone, we're here live, day two coverage of Oracle's modern CX, modern customer experience, hashtag, modern CX. Also check out all the great coverage here on theCUBE, but also on the web, a lot of great stories. And one of the people behind all that is Des K. Hills joining Peter Burris and myself. Kicking off day two, Des, great to see you. You're head of customer experience, evangelist, involved in a lot of the formation and really the simplification of the messaging, cross-cloud, so it's really one story. Yeah, absolutely, so John, Peter, great to be here. You know, I think the real story is about our customers and businesses that are going through transformation. So everything that we're doing at Oracle and our CX organizations, helping these organizations make their digital business transformation. And the reason they're going through this transformative process is to meet the demands of their customers. I'd say it's the era of the empowered customer. They were empowered by social, mobile, cloud technologies, and all of us in our daily lives can relate to the fact that over the last five, 10 years, the way that we buy, our journey as we buy products, as we do research, is completely different. Talk about the evolution of what's happening this week because I think this is kind of a mark in time, at least from our observation covering Oracle. This is our eighth year, certainly second year with the modern marketing experience now, modern customer experience, where the feedback in and the floor, and this is noteworthy, is that the quality is great. People at the booth are highly qualified, but it's simple, it's one fabric of messaging, one fabric of product, it feels like a platform. Is that by design, or is that kind of the next step in the evolution of marketing cloud meets real cloud? Yeah, yeah, so absolutely, John, I mean, that is by design, and again, to support our customers and their needs on this digital business transformation journey, it starts obviously with fantastic marketing, we've just got fantastic capabilities within our marketing cloud, but then that extends to sales cloud. If you generate leads in marketing, you're not handing them over to sales effectively, or have a good sales automation engine, and that goes on to commerce, CPQ, social, and service. And all of this, if we bring this back down to, again, this notion of the empowered customer, if you're not providing those customers with connected experiences across marketing sales, service, commerce, you might lose those customers. I mean, we expect connected experiences across our whole journey. If I'm calling my cell phone provider, because I got a problem, and I don't want to call one person, get transferred to another person, then go to the website to chat with someone, have a disconnected experience, I want them to, when I call, I want them to understand my history, my status as a customer, I'm spending $500 a month on them, the problems I've had before, I want them to have context and to know me in that moment, and as Mark Hurd says, it's like a moment of truth with my cell phone provider. Are they going to delight me and turn me into a customer advocate, or am I going to leave and go to another cell phone provider? Well, let's talk just for a second, and I want to get your comments on this and how it relates specifically to what we're seeing here. There are, digital has two enormous impacts. One, as you said, that a customer can take their research activities with them. On their cell phone, they have learned, because of commerce and electronic commerce, they've learned to expect and demand a certain style of engagement, and that's not going to change, so if you're not doing those things. We like to say Amazon is a new benchmark, whether it's B2C or B2B, it doesn't matter. It is a new benchmark, right? At least on the commerce side, so that's one change, is that customers are empowered. The second big change, though, is that increasingly, digital allows people to render products more as services, and that's in many respects what the cloud's all about, how do you take an asset that is a machine, and render it as a service to someone, well now we can actually use digital technologies to render things more as services. The combination of those two things are incredibly powerful, because customers who now have the power to evaluate and change decisions all the time are now constantly making decisions because it's a pay-as-you-go service world now. So how do those two things come together and inform the role that marketing is going to play inside a business? Because increasingly, it seems to us that marketing is going to have to own that continuous, ongoing engagement and deliver that consistent value so customer does not leave, because you have more opportunities to leave now. Well, so I think that's a good observation, Peter. I do think that marketers can play and do play a leading role in being the advocate for the customer within the brand, within the company, and as a marketer myself, I think about not just the marketing function, but I think about, well what is the experience that that lead or that prospect going to have when I hand over to sales? And what is the experience that they're going to have when I hand them over to service? And in my past roles as a CMO, the challenge I always faced was that I couldn't get information out of the sales automation system or out of the service automation system. So as a marketer, I couldn't optimize my marketing mix and I didn't have visibility on which opportunities which leads I passed over, turned into the best opportunities, turned into the best deals, turned into the customers that were most loyal, that got cross-sold and upsold and were the happiest. So I think going back to Oracle's strategy on all of this, it's about having a connected end-to-end suite of cloud applications so that there's a consistent set of data that is enabling these consistent personalized and immediate experiences. I think that's interesting and I want to just validate that because I think that is to me the big sign that I think you guys are on the right track in executing. And by the way, some of the things that you're talking about used to be the Holy Grail, they're actually real now. The dynamic is the silos are a symptom of a digital analog relationship. So when you have all digital, the moment of truth starts here, it's all digital. So in that paradigm, end-to-end wins. And at Mobile World Congress this year, one of the main themes when they talk about 5G and all these things that were going on was, autonomous vehicles, media entertainment, smart cities, a smart home, talk to things, to your point, that's an end-to-end so the entire world wants- Throw IoT in there. Throw IoT, so again, these digital connections are all connected so therefore it is essentially an end-to-end opportunity so whoever can optimize that end-to-end while being open, while having access to the data, will be the winning formula. That is something that we see and you obviously have that. And then the other piece is, how do you actualize that data, right? And I know you've spoke with Jack Berkowitz about adaptive intelligent apps. We're taking approach to artificial intelligence of saying, how can we bring to bear the power of machine learning, dynamic decision science so that all this data that's being collected and enabled by all these digital touch points, these digital signals, how do you take that data and how do you actualize that? Because the reality is, 80% of data that's collected today is dark, it's untouched, it's just collected. Here's a hard question for you, you know I'm going to ask this, I'm going to ask it, here's a hard question. It really comes down to the data and if you don't, connected networks and all that good stuff is great fabric end-to-end. This is certainly the future, it's a new normal, it's coming fast, but at the end of the day, the conversation we've been having here is about the data, what is your position with Oracle on connecting that data? Because that ultimately is what needs to flow. How does that work? Can you just take a minute to address how the data flows? Yeah, I think it starts with our and connected applications that are connected with each other natively and are sharing that same data set. We obviously recognize that customers have mixed environments, so in those cases we can certainly use our technologies to connect to their existing data stores to synchronize with their existing systems. So it all starts with the cleanliness and quality of that baseline customer data. The second piece I'd say is that we've made a lot of investments over the last five years in Oracle Data Cloud and Oracle Data Cloud is a set of anonymized third-party data. We've got five billion consumer IDs. We've got a billion business IDs. We've got a tremendous amount of data sources. We just announced a recent acquisition of a company called Moat last week at our Oracle Data Cloud Summit in New York City. So we've made a tremendous investment in third-party data that can augment, anonymize third-party data that can augment first-party data to allow people to have not just a connected view of the customer, but a more of a comprehensive view and understanding of their customers so that they can better talk to them and give them better experience. That's the key there that we're hearing with this adaptive intelligent app kind of environment, machine learning. The third-party data integrating within the first-party data, that seems to be the key. Is that right, did I get that right? Yeah, well I would say there's a number of points. So I'd say that you can think of the Oracle Data Cloud combining with the BlueKai DMP and being a great ad tech business for us and a great solution for digital markers in and of itself. What we've done with adaptive intelligent apps is that we've combined that third-party data with decision science machine learning AI and we've coupled that with the Oracle Cloud infrastructure and the scale and power of that. So we're able to deliver real-time adaptive learning and dynamic offers and content at a 130 millisecond clip. So this is real-time interaction. So we're getting signals every time someone clicks. It's not a batch mode one-off kind of thing. The third piece is that we have designed these apps to just embed natively to plug into our existing CX applications. So if you're a marketer, you're a service professional, you're a sales professional, you can get value out of this day one. You've got a tremendous data set. You've got real-time adaptive artificial intelligence and it plugs right into your existing apps. It's a win-win. Take your first-party data, take your third-party data, combine it together, put some decision science on there, some high bandwidth, incredible scale infrastructure and you're starting to get to one-to-one marketing. You're freeing your marketing teams from being data analysts and segmenting and trying to get insight and you're letting the machine do that work and you're freeing up your human capital to be thinking about higher-level task about offers and merchandising and creative and campaigns channels. Well, the way we think about it doesn't test you on this is that we think ultimately the machines are going to offer options. So they're going to do triage on a lot of this data and they'll offer options to human decision makers. Some of the discretion, so we see three levels of interaction, automated interaction, which, quite frankly, we're doing a lot of that today in finance systems, but then we get to autonomous vehicles, highly deterministic networks, highly deterministic behaviors, that's what's going to be required in autonomy. No uncertainty. Where we have environmental uncertainty, i.e. that temperature's going to change or isomyothing's going to change, that's where we see the idea of turning the data and actuating it in the context of that environmental uncertainty. We think that this is all going to have an impact on the human side, what we call systems of augmentation, where the system's going to provide options to a human decision maker, the discretion stays with the human decision maker, culpability stays with the human decision maker, but the quality of the options determine the value of the system. So the augmentation is... So let me give you a great example of that with AIA. So take, for example, you're a pro photographer and you got a big shoot the next day and your main camera you bought three months ago, it breaks and you buy all your stuff at Photog.com and you call them up and what could happen today? Hi, what's your account number? Who are you? Wait, let me look you up. Okay, I'm sorry, I'm not authorized to get your return. You know, boom. And the person's like, I'm never going to buy from them again, right? It's that moment of truth. Contrast that with a... Because the person making that decision, if it was the CEO getting that call, the CEO would be like, we're going to get you a camera immediately. But that person that they're talking to is five levels down in a call center, Bismarck, North Dakota. If that person had AI, adaptive intelligent apps, helping them out, then the AI would do the work in the background of analyzing the customer's lifetime value, their social reach, so their indirect lifetime value. It would look at their customer health, how many other service issues that they have. It would look at, are there any warranty issues or known service failure issues on that camera? And then it would look at a list of stores that were within a five mile radius of that customer that had those cameras in stock. And it would authorize an immediate pickup and you're on your way, right? It would just inform that person and enable them to make that decision. Even more than that. And this is a crucially important point that I think people don't get when they talk about a lot of this stuff. These systems have to deliver not only data, but also authority. Exactly. The authority has to flow with the data. That's one of the advantages, by the way. On both sides. Right. And I think that employee wants that empowerment. No one wants to take a call and not make the customer happy. Absolutely. Because that's a challenge of some of the bolt-on approaches to some of these big applications. Exactly. You can deliver a result, but then how is the result integrated into the process that defines and affords authority to actually make a decision? Okay, so where are we on the progress bar then? Because we had a great interview yesterday with the CMO from Time Warner. Yeah. Okay, Kristen O'Hara, she was amazing. But basically, there was no old way of doing data. They were Time Warner, their old school, media. And they set up a project. You guys came in, Oracle came in, and essentially got them up and running. Right. And it's changed their business practice overnight. Right. So, and the other thing we heard yesterday was, a lot of the stuff that was holy grail-like capabilities is actually being delivered. So, give us a slice and dice. What's shipping today that's hot and where's the work area that's roadmap for Oracle? Sure. And where you guys are helping customers. Sure. I'll talk about a couple of examples where we're helping customers. So, Denon and Marantz, high-end audio company. Brand has been around 100 years. The way music is delivered is consumed, has changed radically in the last 20 years, changed radically in the last 10 years, changed even more radically in the last five years. So, they've had to change their business model to keep up with that. They are embedding Oracle IoT Cloud into every product they sell except their headphones. So, all their speakers, all their AV receivers. And they are using IoT data and Oracle Service Cloud to inform not only service issues, like for example, they're detecting failures proactively and they're shipping out new speakers before they fail or they're pushing firmware to fix the problem before it happens. They're not only using it to inform their service, they're using it to inform their R&D and their sales and marketing. Great example, they ship wireless speakers. Heos wireless speakers highly recommend them. I bought it for my kids for Christmas, they're the bomb. But customers were starting to, they were getting a lot of failures on these wireless speakers. They looked up the customer data, then they looked up the IoT data, they found that 80% of the speaker failures, the products were labeled bathroom as location in the configuration in the home network setup. And what they realized is that customers were listening to music in the bathroom, which is a use case they never thought of. And the speakers weren't made to be water humidity proof. So they went to the R&D department 14 months later, they shipped a line of waterproof heo speakers. Second thing is they found people were labeling their speakers patio. They were using them out in the patio. They didn't even have a rechargeable battery on it. So they came out with a line with a rechargeable battery on it. So they are not only using IoT data for a machine maintenance function, they're using IoT data to inform R&D. And they're also doing incredible marketing and sales activities. We had Don Freeman, the CMO, Abdenin on the main stage yesterday talking about this great stuff they're doing. What's the coolest thing this week that you're looking at, you're proud of or excited about? I'm excited about a lot of stuff, John. This week is real, as you alluded to, this week has been really, really fun, really great, a lot of buzz. Obviously a lot of buzz around adaptive intelligent apps and we've talked about that. But I would say also beyond adaptive intelligent apps for CX, we've introduced some great things in our service cloud. The capability to have a video chat. So Pella Windows was also on one of our panels today and they were talking about the ability for to solve a service issue, the ability to show video of what's going on just increases the speed with which something can be diagnosed so much faster. We are integrating on the service cloud, we're integrating with WeChat and we're integrating with Facebook Messenger. Now why would you do that? Well again it comes back to this era of the empowered consumer. It's not enough that a company just has a website or an 800 number that you can go to for support. Consumers are spending more time in social messaging apps than they are in social messaging sites. So if consumer wants to be served in Facebook Messenger because they spend their time in it, the brand has to meet them there. The third thing would be the ability for the marketing cloud and service and sales cloud. We've got chat bots, voice driven, text driven, AI driven, so mobile assistant for the sales professional so you can input data on the road. Hey, open an account, here's the data for the transaction here, what's going on. Incredible, incredible stuff going on all over the stack. I think the thing that excites me is I looked at the videos from last year and the theme was man, you guys have all these awesome acquisitions but you have this opportunity with the data and you guys knew that and you guys tighten that together and double down on the data. And so I thought that was a great job and I like the messaging is clean. I think but more importantly is that in any sea change we joke about this because we're kind of like historians and we've seen a lot of waves. And all these major waves, when the user's expectations shift, that's the opportunity. I think what you guys nailed here is that, and Peter alluded to it as well, is that the users are expecting things differently, completely different. But let me sure start with you. 50% of the companies that were in the Fortune 500 in the year 2000 are either out of business, acquired, gone. 50% and those companies, Blockbuster, Borders, did they stay relevant? Yeah. I think changing business practice based on data is what's happening. It's awesome. Deskale here on theCUBE, more live coverage, day two of Modern CX, Modern Customer Experience. Hashtag Modern CX. This is theCUBE. I'm John Furrier with Peter Burris. We'll be right back.