 Live from Las Vegas, it's theCUBE. Covering Informatica World 2018. brought to you by Informatica. Hey, welcome back everyone. We're here live. This is theCUBE, exclusive coverage of Informatica World 2018, it's our fourth year. Exclusive coverage, I'm John Furrier, co-host of theCUBE with Peter Burris, my co-host, chief analyst at Wikibon and SiliconANGLE in theCUBE. Our next guest is the CEO of Informatica, Chief Executive, Anil Chakravarti, back again for his fifth CUBE appearance. We went back all the way to 2014 at AWS re-invent when Cloud was on the horizon. Now you're running a really high growth company. Congratulations, great to see you. Thank you, it's great to see you, great to be back on theCUBE again, appreciate it. One of the things I want to point out, we're independent, we want to point out all the things that you guys should be working on, but I got to say, you guys have done an amazing job executing on the product front in a market that's growing and changing radically with data and a lot of people got that. Amazon was early on, we saw them executing, they were misunderstood. You guys are not misunderstood anymore. Data is at the center, congratulations. Thank you, thank you. I think one of the things that we learned over the last 25 years, 25 years old this year, and you got that in the sign next behind you, is there are a few things that we're really good at. Data management is what we're really good at. Now it just so happens, data is everywhere in all kinds of platforms and we want to make sure that wherever our customers are, we are there as well to help them with data management. So let's talk about what's going on. So first of all, a lot of interesting things here going on. One, last year we talked about data lakes, data swamps. This year it's about the enterprise catalog, and all the other goodness, MDM, and things that you guys have done, kind of check, check. The catalog brings in the notion of the full visibility. That's right. And then you got the multi-cloud, hybrid cloud adoption, the announcement of Azure. This is bringing in a new era. You called it data 3.0 up on stage. What is data 3.0? Can you take a minute to describe the vision and what does it mean for your customers? Yeah, data 3.0 is the name we are using to talk about the generational market disruption that's going on right now. If you think of what's changing in the data world, there are multiple trends happening at the same time. Volume of data, doubling every year. You have lots of new techs. Six months. Well, for us through the cloud it's six months, but across the industry it's about a year every year. Still faster than computing, in fact, faster than Mozilla. Then you have the variety of data, all kinds of data. You have the velocity of data, all the speed at which data needs to get processed, all the new techniques of processing data, like AI and advanced analytics and so on. And if any single one of these was happening, that would be a big trend in itself. Everything happening at the same time. That's the generational market disruption. And that's what we call, is that look, it's easy if we can give it a name. And that's what we call data 3.0. So you just made a really great point, and I want to highlight it, and suggest, again, looking at the board, where the next generation of innovation is going to come from. It used to be that we relied on Moore's Law. Double performance every 18 months, and in so doing we could put more software into it. But what you just described is doubling the amount of data every year faster than Moore's Law means it's inevitable. We have to move more of the innovation up into software, especially software that manages data. Absolutely right. I think there's, just like you just said, the rate of growth of data being so much faster than even the rate of processing power growth means a couple of things happen. First of all, you're going to move more data into the cloud because in the cloud you can expand horizontally much faster so then you can ever do in your own on-premise. So that's going to happen. The second big thing that's going to happen is as data gets into the cloud and as people are using all of these different types of new data processing techniques, to your point about the catalog, if you don't have a fundamentally, if you don't have a catalog that tells you where your data is, who is using it, what it is for, et cetera, you just lose control. You just cannot keep in control of your data. And so what people are realizing is as they do new business initiatives, they got to have the data catalog, that they've got to put in place the data catalog and then let the catalog expand. A horizontally scalable cloud, that's a really significant point and this has been a customer challenge, right? So we're now in the obvious mode of cloud is there. Azure, you mentioned Microsoft's growing significant. The shift has been made, everyone kind of gets cloud. But the cloud scale is still the pressure. Now you got data coming in into the cloud scale and you got things like GDPR, which is a shot across the bow saying, okay now you got to start thinking about compliance and management and growth. Kind of a lot of things being juggled there. How do you see that unfolding because it's challenging for customers. A lot of things going, a lot of moving parts. So the way I think about it is, think of it this way. Customers have been working with databases for a long time, over 50 years right now. And the first generation of databases, customers used to say, look, I just need a database that runs all the time. I can't have a database that crashes every two hours or so, it just needs reliability was the first thing in a database. The next thing people started thinking about once reliability was a solved problem, was they said, I need scale and performance, the number of records are increasing, et cetera. Once these became design principles, databases started to become more and more robust. The only way to solve the kinds of problems that you mentioned today is every new database that you think of, whether it's for structured data, unstructured, any kind of data. When you think of a database, think not only of reliability, performance, scale, also think of connectivity, governance, security, privacy, all these need to become design principles for whoever is thinking about the database. And that's what we mean by the catalog, is the catalog helps you put the discipline in place. When you start a new database, register it in the catalog. That way you know what you're doing with the database. When you set up a copy of a database, put it in the catalog. That's what we mean by the discipline. That way you can track. Tomorrow if you say, look, I want to know where my European customer data is, just go to the catalog and it will tell you. So I want to build on that. So actually many years ago when I was first going around with databases, one of the things that was explained to me was, bringing a database, the application developer no longer has to know as much about the underlying infrastructure. That's correct. Because the database administrator will take responsibility for how the data got spread on disk and access paths and all that other stuff so the developer could focus on the development. Now when we think about the cloud and all these other technologies and raising things up, the catalog allows the developer to increasingly focus on how they're going to use data as opposed to the process that they're going to build. So we were talking about this earlier with a couple of different guests, Microsoft and when Rohan was here. And the idea that ultimately we're talking about a data first approach to thinking about how we create application value. That's exactly right. And to your point, I think the principles have not changed. What has changed is the way you apply those principles which is you take a data first approach but then that's what the APIs let you do. The APIs expose the data to different applications and different users. They don't need to know how the processing is happening. So today the data might be processed through Spark. Tomorrow you might say I get a new engine that processes it. They don't need to know it at the application level. At the application level it's exposed through APIs and they get to use the APIs. So if you think about it from our perspective, sorry John, when you think about it from our perspective is we've always believed that digital business means something and the difference between business and digital business is digital business is used data as an asset. And a digital business transformation is the degree to which you are transforming, re-institutionalizing your work, reorganizing around data as an asset. That's right. So very, very important concept. Challenging for a lot of CEOs. Exactly. So look, Informatica is a software business which means in many respects it has a whole bunch of data assets associated with it but your engagement model hasn't always been data. Your service model hasn't always been data oriented. As a CEO. Yeah. Informatica, more of a digital business today? Absolutely. And if yes, how would you advise other CEOs to think about this kind of a transformation? Yeah, let me just give you the kind of the intelligent disruption we've gone through because we were a software business, we were a cloud business today. And that's the transformation of the digital business that's happening. Product to a services oriented approach. Product to a service oriented. And even in the product, our business model used to be that we basically said, look, our goal is to try to sell software upfront. Go work with customers, make the business case for software and sell the software upfront. Today we're selling a service which means we not only want to sell the software, we want to know how customers are using the software or they're successful with the software, is it doing what they expected? And that is the motion of land, adopt, expand and then renew. And that's a much better approach because it works for the customer, it works for us, there's less shelf wear in this process. So a lot of people, everybody's happier with it. But in order to make that happen, we got to collect a lot of data on whether customers are being successful. So the business model and the product model has got to be aligned completely. And that's really what you guys have done. That's exactly. And is that where people are making mistakes in your mind when you see people going to the cloud, that they kind of do it with the cloud and then forget to change their. And the corporate, that's exactly what I'm saying. When you think of this digital transformation or digital business, you got to do three things all in sync. There's new customer engagement models like our change from upfront to ongoing. And then there's new production services, which is all the stuff that we've done around the cloud portfolio. And then there's new operating models, new processes. Customer success is a new process that we did not have four years ago, which is we proactively reach out to customers to find out what they're doing with our software and are they successful with it, et cetera. We used to wait for them to call us. Now we do it proactively. That's exactly that. But isn't that also one of the businesses of taking a product or services approach? That's exactly right. It's because you now establish a relationship with a customer that says, it's not just proactively, you're exchanging data on a continuous basis. Exactly. In the form of updates on the one hand, but also utilization, information, et cetera. Building better product, better engagement. Exactly. In fact, you'll see this, one of the packed events here has been what we call the ops insight or operational insights. That's the product we built to do exactly what you said, get the telemetry data, help customers use our products better. And that's the transformation from a product to a service. And we had Toyota on earlier and they were very complimentary, but the big aha for them was, we had this crisis, we weren't connected, but we actually had the data. They just didn't connect at all, right? And huge. So they kind of had it. The answer couldn't get it. And they were using data excellently in each of the different functions. And then they said, well, then we did the transformation. And then they realized, had they gone down a different route, they wouldn't have been prepared for the tsunami of telemetry data coming from the cars. That's exactly it. So now, again, this is not going away. This is going to be the pattern. There's going to be a new set of inbound data coming in. How should customers prepare for that? Is that simply, is there an ingestion mechanism that where you guys do the cataloging? This is kind of the important headroom question. Where's the... Well, there are different points, depending on the style of the organization. I often ask questions, what is the nature, the culture of your organization? Do you guys work top-down better, bottom-up better? How do you work? So somebody who says, look, we actually work bottom-up really well. Top-down dictates don't work really well. Then I say to them, why don't you start and profile the top 100 data elements that really matter for your business? So if you're an insurance company, a policy number, that's one of the top 100 data elements. A claim number, that's one of the top 100 data elements. Just identify the top 100 data elements and then just tell yourself that you have a consistent business definition for the data element. You have a consistent technical definition. You know where the data resides, et cetera, et cetera. Just start bottom-up for some companies that works really well. Other companies are more like, no, no, no, we work more better top-down. Then you start with like, what is your strategy as a business? How are you going to transform yourself? Who is your comparative threats and so on? And then you go through, what are you doing in terms of transformation? New operating models, new customer engagement, et cetera. And then you translate that into a data strategy and that becomes a data architecture. So I think it depends a little bit on the style of the organization. Some of them are trying both and meeting in the middle. But what I tell customers is, based on your culture, based on your style, there's different models that work. Great relationship with Microsoft announced here. Scott Guthrie's on stage. How's that relationship going? I know it just didn't start yesterday because there's deep product integration, shipping, it's not GA, but it's previewed shipping soon. You know, a couple weeks coming or months. No, by September, I think, the estimate is, ballpark. Where'd this come from? How are you guys doing? Can you just give some color to the Informatica, Microsoft, Azure relationship? Absolutely, no, it's been, the relationship with Microsoft itself has been going on for a very long time. We have over 2,000 common customers with Microsoft. So it's something that, especially on premise, has been something that we've been working with SQL Server and other Microsoft products for a very long time. Relationships specifically with Scott and with the Azure team started in 2014. So we went up there to Seattle just to learn about what they were doing with the cloud and so on. We were actually pretty impressed. We said, look, this is clearly the new Microsoft. This is the Microsoft that wants to work with partners, that wants to be a true enterprise player. And we said, you know what, this is the kind of partner that we want to bet on. So we made a few proactive investments initially. We, at that point, which was not clear that Azure would take off like it did, but just like you mentioned with re-invent, we said these guys are really clearly betting on it. So 2014 was when we started making the bets on Azure, SQL Data Warehouse, et cetera, and that was when it started growing. And in the last, we've obviously seen the hockey stick now, we have 200 also enterprise customers. Completely top-down, so we're doing it cloud. Everyone's in line, it's beautiful. The growth has been there. Stock was the, you know, I remember when I was training at 26, like, I think it might have been at that time. Look at it now, exactly. So you're really confident that this is going to be a positive impact for customers. This is a very positive impact. And because with them, you see both the on-premise, we have clear synergy and partnerships with them and in Azure as well, we have the clear partnership and value proposition with them. And let's be honest, there are not a lot of times when betting against Microsoft turned out to be the right thing to do. Maybe with phones, but that's about it. That's right, exactly. This is some things there, but I want to get to the company question. You're the chief executive officer. You're leading now a growing team, growing company. Talk about the culture, because you guys have always had a culture of innovation. That's right. Although private equity took you over, there was a story there, but I really want to get at the key points in the company and talk about the R&D, because you talked about bets. You bet on Amazon, we were there in 2014 with you. We saw you there, and we saw Azure. You guys sniffing out the good tech, you guys are smart, but you got to put the rubber to the road for investment. That's right. Where's your priorities? Tell about the R&D. Yeah, just to set the context, when we went private, we went private with the clear understanding that we would transform the company. We saw the potential for the company, but we also knew that changing from a software company to the cloud company that we just talked about, that was not easy to do as a public company. I mean, basically, obviously, there's a lot of investment required, plus there's some unpredictability. You got learnings. Exactly. So we said, look, we went private with the explicit aim of transforming the company, and the investors, our sponsors, had the same goal as well. Sometimes there's a misperception that all PE is about cost cutting. Almost are. Exactly, that's just not true. It's like you have to look at every PE form and every PE deal, and there are a number of PE deals that are growth oriented, because they know that, hey, with the investments we are making, ultimately, if you can get a company to grow, the valuation is very well, then you can ever get through just cost cutting. They saw that potential in them. Attica, we worked closely with them to define the plan that we've been executing on since 2015. By the way, Microsoft and Salesforce.com came in as strategic investors, so when we went private, there was a good endorsement for us, and so we've been executing on that front, and so we've never stopped investing in R&D. As a public company, we invested about 15, 16% on R&D. This year, we're actually investing 17% on R&D. So we've really done what it takes to continue to be best of breed and integrated. That's the complex. And also, Cloud subscription models there. What are some of the priorities? Can you share some of the priorities for you guys in terms of key areas you're getting out front on being proactive? Yeah, so the biggest priorities for the company are continue to be a clear best of breed product lines in everything we do. That's, we believe that we should never ask any of our customers to sacrifice anything when they buy Informatica. It is best to breed. Second, clear priority for the company is make sure that we have an integrated product suite. That's not easy to do when you're both best of breed and integrated, but that's why we invest as much as we do in R&D. The third clear priority for the company is the transformation journey that we are on. All the key parts of the transformation, product portfolio, go-to-market, business model, customer success, brand, they all have to work in concert. And that's where I mentioned the values and the culture of the company. We really have always been a customer focused company, but we said, look, what really will take us for the next 25 years is what we call the values around we data. I really appreciate your time. I know you're super busy. I have one final question because it's pretty obvious. We were kind of speculating on our intros and our editorial overview is, your ecosystem is, I won't say massive because you're growing, but we predict it's going to be pretty big. Given if this continues, the trend continues, it's going to be a matter of time before you start rolling in developers and all kinds of new partners, just global system integrators, on and on and on. What's the strategy for the ecosystem? Do you guys have clear visibility on how that's going to play out, whether it's global partners or customers? How are people engaging with you guys in the ecosystem? We already have over 500 partners and that's where this focus on being an API-driven, microservices-driven architecture really helps us. That way, when you scale new partners, you don't have to do custom work for each partner and that really helps us scale much faster. In the past, we have 100 plus OEMs and each OEM used to take a little more work because it was all customer interfaces. Now in this new API, microservices-driven world, we can scale to the kind of volume that you're talking about and I'm pretty confident with that. In many respects that is the definition of horizontal scaling. Exactly, exactly. Horizontal scaling is the magic of the cloud, certainly opening up, changing the game, certainly changing the infrastructure with cloud native. You're starting to see a shift to a new infrastructure on the internet, it's all happening with data, cloud and who knows, maybe blockchain and crypto will be in the conversation soon. How do you do the MDM on that? That's a hard one. Okay, we'll get to that later. Anil, thank you for coming on theCUBE. Really appreciate it. Great to see you. Thank you for having me, I really appreciate it. Thank you. All right, John Furrier, Peter Burst here, the CEO of Informatica at Informatica World 2018. We'll be back. Stay with us for more coverage after this short break.