 Live from San Francisco, extracting the signal from the noise, it's the Cube, covering Oracle OpenWorld 2015. Brought to you by Oracle. Now your hosts, John Furrier and Brian Grace Lee. Okay, welcome back everyone. We are here live in San Francisco at Oracle OpenWorld Exclusive Coverage from SiliconANGLE's The Cube, our flagship program where we go out to the events and extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE, John Mike Coase. Brian Grace Lee with wikibon.com, our cloud analyst and our next guest is Steve Dehebe, senior vice president of the past platform as a service and BI, mobile business groups at Oracle. Welcome back to The Cube. Great to see you. Great to be back. Looking sharp as usual here. I'm not rocking the pocket square, but I'm trying. You look fantastic. So how's this Oracle OpenWorld going for you? It's your first real big Oracle OpenWorld. You led the panel at the Oracle Cloud event a few months ago. But now this is the big stage. What have you been up to here at Oracle? It's incredible. This actually adds much bigger than June, though June was exciting when Larry got up there and talked about 24 new services. But this is actually my first OpenWorld. And it's, I mean, it's actually nuts. I mean, the scale of this thing is pretty incredible. You know, for me, like the level of customer investment has just been amazing. I mean, whether you see sort of the notes and all that, the work that they did sort of going into this, but really the amount of investment we have in terms of meeting with them and listening to them and sort of, you know, working together as we sort of transition the cloud. So you've been pretty much with customers most of the time? Most of the time. I've actually been, had the privilege of hosting multiple focus groups that we've been conducting over the last couple of days that will continue to host throughout the week. And these are some of our top customers. And it's just our opportunity to listen. You know, what's their cloud strategy? How do they view the different use cases? What's going to move to cloud first? How do they view things like hybrid, like security, like integration? You know, the feedback has been incredible. So it's just great to actually have a chance to sit and listen. Yeah, four years ago, Larry Ellison kind of had that deer in the headlights look and you can see, and since then at Oracle Open Worlds, you've been a cadence of marching down towards modernizing the database, modernizing the stack. Engineered systems now has come up from behind and really lifted up the performance. So amazing change at Oracle. And now it's moving to the cloud. Yeah, I mean, exactly. Sean Price was saying, we're going to disrupt ourselves. That's what we're doing at Oracle. And so it's super exciting. So with that, with the focus groups, when you say those things to customers, when you have that kind of messaging, they got to be like asking some pretty tough questions. What were some of the conversations that you could share that you've had with customers? What's the common theme that you're hearing? You know, I think it's actually interesting. I think, you know, not tough questions, but I think we're all sort of in this journey together. You know, it's sort of interesting when you look at Oracle's history, you know, we've been doing this for about four decades. I mean, through every single major transition, I mean, you went from mainframe to client server, to the rise of the internet, to mobile, to cloud. And through every single one of these things, we've actually worked with our customers to help transition them. And, you know, cloud and particularly hybrid cloud is just that next transition. And so, you know, we've been listening for quite some time. Our products have been development for quite some time. So you've heard of, you've seen sort of the suite of products we've announced. A 2000 plus past customers has signed up in just the last two quarters. And it's because we're showing up with the right offerings at the right time and we're working together to bridge forward. So you're the hybrid cloud guy, so look at this talk about that. What is the hybrid cloud and how does that fit, or better put, how does the hybrid cloud fit into the overall Oracle strategy? Because it's integrated cloud, and you've got on-premise, and you've got public. I'm not hearing a private cloud or hybrid cloud offering. Yeah, you know, it's just... It's actually foundational to our approach. I think, you know, again, with our experience, we've had an experience of moving customers from one place to another. And we realize that sometimes that's a journey that's going to take some time. So when you think about the movement to cloud, you know, we get on... You talked about sort of on-premises versus cloud, and the answer is it's not an either-or discussion. It's going to be both. So understanding that, what type of workloads are going to move to cloud? What type of applications move to cloud? I might have a 17 million lines of code enterprise application that I'm probably not moving to cloud anytime soon, but there's other things I want to move to cloud. So understanding that these things are going to coexist, I think we took a very unique approach to the market to really help with solutions that span both on-premises with cloud and in really addressing both. There's a lot of vendors out there that are sort of addressing cloud as a one-way street. You know, to me, that's sort of a dead end. At the end of the day, it's more about building a bridge. You know, how do we bridge from where we are today with where we're going moving forward and understanding that that connection needs to be in place for quite some time. We're in the stack and you guys engaging with pass and hybrid cloud. You know, it's interesting. It's actually at every layer of the stack. It's at every layer of the stack. I mean, when you look at architects, they understand that there's data and applications that live on-premise. They understand that there's some that live in mobile, that live in cloud. For database administrators, you know, when you get to that level, it's okay, how can I more rapidly provision and databases, you know, using the cloud for line of business. So just so you guys know, my background, I'm a three-time public company CMO. So I actually take a very interesting line of business view to this. And if you came to me and said, look, I have a solution that can aggregate sales, you know, data with marketing data, with service data, with finance data, give you that full 360 view with a customer and do that across-premise, as well as my cloud applications. That's a story I'm really interested in listening to. So, you know, so even the line of businesses are saying, wow, you know, not only can you supply me all the software products I need, but you have a platform to enrich, extend and integrate those. So that messaging is resonating with them as well. So even these focus groups, I mean, there's line of business, there's IT, there's executives, we're getting a full range of participation across that stack. Yeah, when you're talking to these, your customers about hybrid cloud, like, because there's a lot of definitions in the market, like you said, different companies have different approaches, different CIOs have different approaches. This week is a lot about its Oracle applications. It's the red stack. It's the same in both locations. Is that good enough for them? I mean, do they feel like, if I can get my Oracle applications to be hybrid, the rest of them I won't worry about because they're driving the business, or do they want you to expand into new places? Do people want to migrate a Microsoft application over to an Oracle offering? I think it's both. I mean, so, you know, we've taken a unique approach to say that everything that you have on premise is the same as you have in cloud. It's the same hardware you run. It's the same software you run. It's the same protocols. It's the same security. So you get that leverage, you know, you get that unique merit coexistence where I can move workloads back and forth, but Oracle also understands that we live in a heterogeneous environment. So there's legacy applications that they might want to bridge to cloud, or there might be other cloud apps that they purchase that we might need to help them connect. And so a big part of what we do is integration. So not only across our own stack, our own products, but also third-party products. I mean, if you look at cloud, you know, so I have my Salesforce, my Marketo, my SAP, my Adobe, you know, my work dates, like, wasn't cloud supposed to be easy? I mean, we're sort of like running smack dab into the problems we've had in the past. So for Oracle to be able to come in and uniquely integrate across all those applications with the platform-like paths and also provide our own solutions, I think we can drive unique value for our customers. What about the open message? Platform is a service. Amazon is one with that, but they're also not so open. They have an integrated stack. Integrated stack is what customers want because that's workload-specific. What are you guys doing on that? Because DevOps is a big part of the cloud. It certainly passes like that. It's the battleground we've said on the Cube many times between DevOps and app creation developers. So infrastructure should be completely transparent to app developers. It should. And that's something that you're spot on, especially with respect to app development, which is actually another interesting thing coming out of the focus groups, because every one of them are like, and I know Mark talked about this. You know, we just talked to one major communications company. He's like, I have a sign up in my IT department that says 100% of app dev tests is going to be done in the cloud, which was really interesting. But in order to do that, it can't just be the Oracle apps. How do you address the window apps? How do you address some of the open source apps? In our offering today, as well as our roadmap, you know, Constimplates all that. So, I mean, obviously from a job or perspective, you know, we have a majority of the development going on out there, but we realize there's different languages that people use. There's different types of developers. And so our solution, you know, Constimplates all of that. So I'm getting a lot of DMs and texts and ask them about how they work with other clouds. Microsoft, in particular, SQL Server 2015, SQL Server 2016. Customers have other stuff besides Oracle. Yeah. How do you guys address that? How do you integrate across a multi interoperable, multi-vendor? Yeah, I mean, there's multi-applications we can integrate against. And our solution is also Constimplates integrating across multi-cloud. So again, you know, we realize that customers have multiple clouds. There might have a one-to-vendor cloud strategy. They might have a cloud. I just heard today from a vendor. It says, I kind of signed up on this cloud. I probably want to migrate off. Do you have a solution to help me do that? And so I think it's not only an advantage, you know, advantages for our customers, but it's also good for Oracle to be able to connect to other vendors' clouds. What's your take on OpenStack? I mean, OpenStack has been, seems to be a graveyard these days, but you know, a lot of investment has been built into OpenStack around pass. Because that's been, I think everyone's realized that pass was the part. But now OpenStack's trying to be infrastructure to service. So how do you think about things like OpenStack and things of that nature? Well, I think if you look at Oracle, I mean, they've been very committed to the standards body, you know, contributing, helping develop around OpenStack. So that's just something that's in our DNA and we've been doing. But we also understand how can you innovate, you know, and extend beyond what might be available from like an open source community. And so we continue to, you know, innovate and develop there as well. You talked about the number of pass customers growing. What does a pass customer look like to you? Is it the SIs that are building on top of pass? Is it the end users that are building? What's that profile look like? And what are they asking you for in the past? It's actually, it's across the board, to be honest. I mean, there are some major customers that have, you know, large IT staffs that are doing this in-house. You know, they have application developers and they're looking to move that to cloud or they're using, you know, backup as a service or database as a service or integration for their own use. So it's their own IT staff doing the work. And then I've met with, you know, many customers. There's many customers out there that are working through partners as well to have, you know, managed services. But universally, it's the same thing. It's, I think it's the solutions that we offer. So give me solutions for, you know, for integration, for app development, for backup, for security, for, you know, and all those same things, you know, they're leveraging the same tools at the end of the day. So emerging stuff like Cloud Foundry, competitors use it. Do you guys look at Cloud Foundry at all in terms of integrating with that at all? We do. You know, Cloud Foundry's could come up a lot and that's actually something that we've looked at as well. So, I mean, any of these emerging vendors out there that have a solution that might make sense for us to integrate with, to meet the needs of our customers we're looking at. So you'll do kind of whatever the customer pretty much wants at that point. If it makes sense. If it makes sense. I see you guys at odds with Cloud Foundry, but I think Cloud Foundry is an alternative to what you guys have. Cloud Foundry is playing catch-up, although they claim some significant numbers. What's your take on that? I mean, Cloud Foundry and Oracle don't really play well together, do they? Well, you know, Oracle hasn't been part of the Cloud Foundry Foundation yet. I think, you know, sometimes when you've got a huge installed base, maybe that's not the best play for you, right? It's not where you can get as many customers. You know, but Cloud, but Cloud Foundry is making a big push around Java. I mean, you talked to, you talked to Pivotal, their big pushes around spring. And I think what it says is, you know, we talked about Java yesterday. I mean, Java's still a huge development platform. I think that's maybe the big takeaway from a lot of this. You guys push Java. They're pushing Java quite a bit. That's a big point. I mean, for us, I mean, obviously, you know, serving our installed base is going to be, you know, primary for us. But as we move to Cloud, you know, we continue to attract new customers. I think Mark had a quote that said, 70% of our Cloud customers are actually new on the application side. And so we're attracting new customers. I mean, we'll continue to compete and we'll continue to partner where it might make sense. How about Todd? How do you address? So last night, Larry made a statement. He said, I don't care what anybody else in the Cloud charges. I'm going to meet their price or beat their price. We had Sean come on and say, you know, we've got to be transparent about pricing. You know, Oracle hasn't necessarily been known as the most transparent pricing company, to be honest. We hear this from end users. How do you address that, especially when you're dealing with a world where they might want to be charged by the hour or by the week as opposed to a big ELA where you can hide all kinds of costs? How do you guys address that? What are you doing to be more transparent? Well, I think that's actually part of being in the Cloud business. So we understand that that business is fundamentally different. I mean, you got subscription, you got metered. Those things work a little bit differently. So you have to have, you know, very, you know, fixed price, fixed contract, you know, really well understood transparent pricing. So I think that's part of it. And then from, you know, Larry's comments, I mean, you sort of, you know, when we were together in June, you know, when you announced archival stores at the 10th of Amazon's price, you know, I think that shows a commitment. I mean, Oracle sort of uniquely has a vertically integrated stack. So there's things we can do in terms of cost and economies of scale. We have to pass that on to our customers. But at the end of the day, if we can, you know, help support at the infrastructure layer, we have all the layers of the stack. So, you know, for us being able to sort of monetize across all that or serve our customers across that entire stack is a strategy of ours. So we're not just relying on infrastructure as a service, the weekend, you know. Oracle environment. You guys have a great solution. I mean, if you're Oracle on Oracle, it's a great solution. Now what's interesting about this Oracle open world is this new open mess is why I brought up Cloud Foundry because you start to see Oracle start to lay out the breadcrumbs from the strategy standpoint that says we could win it all. Yeah. We could win the whole game by just focusing on our core base, which by the way, Azure is doing the same thing. Yeah. Microsoft, it's all there. Install base. Focusing on the core first. Yeah. Same with Oracle. But I think you guys are a couple of years ahead of Microsoft at this point. So when customers ask you straight up, hey, how do you guys compare to Microsoft? What do you say? Yeah. Well, I think we absolutely respect Microsoft in terms of what they're doing. I mean, I think Larry talked about that the other day as well. So, yeah, I think at the end of the day, when you sort of look at who might be the chief competitor across all three layers of the stack, we do believe that's going to be Microsoft. I think when you look at things like platform as a service and SaaS applications, you know, not sort of like email and SharePoint, but you know, those ERPs, the HCMs, those core things that you run your business on, I mean, that's something that Oracle has clear leadership on. And I think when you look at the database, when you look at the middleware, when you look at the integration, when you look at the BI or analytics layer, those are things we offer that at just the Microsoft doesn't. Steve, you've been an executive in the industry for a while. You said four decades. I asked you the question, a hard question. Well, I'll put you on the spot. That's not a hard question. But Sean Price point that Oracle's about disrupting itself. And when he joined the company working for Mark, he's like, hey, you know what? I want to be in a company that's going to disrupt itself. And the answer overwhelming with the executive is, yes, Oracle's prepared to disrupt itself. That's clear. So I got to ask you, where do you see that disruption happening? I mean, this whole expression, eat your own before the competitors eat your own. And invent the future. Don't milk the cow until it's dead, right? So like, where are you guys disrupting yourself in your view? Well, in a positive innovation way. Yeah. And I think, well, from an innovation way, I mean, the fact that, you know, every single one of our products are in the cloud are going to be there soon, I think is a testament to our commitment to that. And we understand that as you move to the cloud, there's sort of different pricing models and consumption models that differ from, you know, legacy, you know, traditional license business. So I think we full well understand, you know, that that's a transition. That's going to be a transition that happens over time. You know, Larry Mark and Safra have talked about that. I think multiple times on earnings call, but that's just part of, you know, moving forward and continuing to reinvent ourselves. I think if you sort of look at, you know, history of technology, there's a lot of companies that didn't make that pivot, you know, and Oracle is not going to be one of those. What do you think? We're sitting here next year at this time. I'm sure we'll have you back on because you've been a great guest. What do you think of we're sort of stack ranking SaaS, PAS and IAS from an Oracle cloud protection? Which one's first and second in terms of revenue or in terms of growth rates? Well, I think our growth rates on PAS, you know, we projected to be faster than softwares of service. But I think when you, we look at the overall business, I mean, we continue to exceed in every layer of the stack. I think when I come here next year, I think we're going to talk about some incredible momentum we've made in PAS. I think PAS from a hybrid perspective is, you know, that that's probably a little bit longer of a journey. I think when you look at software as a service, you know, that's clearly, you know, applications in general, that's clearly moving towards a cloud model. And I think when you look at the platform layer and the infrastructure layer, that's going to be a hybrid model. And different customers are going to be different places on that journey at a given time. Steve, my final question, talk to the folks out there watching that aren't here at Oracle Open World. What's your message to them around your role, your team? What are you guys doing? What's the core message? I think for my team, you know, and again, sort of being new to this was, you know, how do we help articulate our value proposition? How do we listen to customers take their voice and really line up our technology and our solutions, you know, in a way that they understand, in a way that they understand meets their, you know, their business needs, as well as some of their technical needs. Our goal is to sort of bridge development with sales and provide, you know, our team and our customers, you know, everything they need to make an educated choice. How are you measuring yourself for this next year? When we talk to you next year at Oracle Open World, we'll say, how'd you do last year? What are the three things you don't knock down? Like Mark talking in the back of my head. On the other hand, it is about, you know, success in the market. So how do we enable our sales teams to be successful? How do we, I think, through these past focus groups, there was a lot of follow-up in terms of how do we educate them on the offering? How do we help put a roadmap together with them to help them transition the cloud? And so I think, you know, having, you know, you know, ultimately success for our customers and helping them transition. So sales and cloud migration, cloud traction. I mean, at the end of the day, that's what we're trying to enable. That's what my team does. Good dodge there. I want to try to push this because it was key metrics. You know. Yeah, yeah. I saw that coming a mile away. I was coming in slow, wasn't it? You're not that late. Well, Mark heard later, never. That's why we're 20, 25, and put Dennis out there. Yeah. A couple of years away. 100% of tests and devs. So congratulations, all your success. Appreciate it. Great messaging. Great opportunity for your team. Yeah, I'm excited to be here. Thanks. Okay, Steve Deheb here inside the Cube on Howard Street. 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