 Live from New York, it's theCUBE, covering Inforum 2016, brought to you by Inforum. Now, here are your hosts, Dave Vellante and George Gilbert. We're back at the Javits Center in New York City. Everybody, Mark Scabelli is here. He is the head of Hook & Loop, Infor's digital company that now is, they're facing two customers, Chief Creative Officer of Infor. Mark, welcome back to theCUBE. Great to see you. Thanks for having me back, David. So we talked two years ago at New Orleans, year and a half ago, and we kind of got the Kool-Aid injection of Hook & Loop, which is this amazing design firm that essentially Charles brought in-house, aimed at all the software. You guys make beautiful software as kind of one of your taglines. And now you've decided to point that externally. So give us the update for the last year and a half, two years, and then we'll talk about the new business. Yeah, thanks. So we systematically wanted to change Infor's software, right? So we had to do that, as you just mentioned, right? We want to make part of Infor's DNA. And I think we did that. I think we did a really good job of sort of franchising out the design, thinking to use the first mentality and getting it to infect all our products. And we've seen that as you look around today and go to each station here at Inforum. The products are totally different than they were when we last met. And they continue to improve every day. So Hook & Loop, basically Core, is still working towards that initiative at Soho XI and the chains we're making there. And then we realized the pivot, we had gone through a transformation as a company, Infor had gone through a transformation. I think we're a different company than we were four years ago, especially. So how do we, we were getting asked a lot from customers about how we did it and can we pivot that for them? Can we start working towards that with them? So it seemed like a good time. Charles and Duncan, our president, wanted us to sort of say, okay, now let's take that same viewpoint and bring it out to our customers. Take that team transformation, take that same transformational model and give it to our customers. So we've done that, we've pivoted with H&L Digital now. I'm running a team similar to how we started with Hook & Loop, just focus on customer engagement. That's pretty rare to see that in the business. I mean, the only example I can even remotely think of is Pivotal Labs, but they're really, they're certainly not an applications company. So it's a big delta between what they sell and what the design guys do. I mean, you're really married to the software and the user experience. Can you discuss the challenges of taking a legacy software platform and bringing in a whole new UX? Because when you do that, you're envisioning new function. There's no doubt about it. And then the development team goes, well, it doesn't do that today. And so how do you square that circle over the last couple of years? Yeah. You know, what we realized was we had to get in deep with our product teams. We had to be part of their roadmaps, we had to be part of their planning of what they were going to release and when they were going to release it. Christina VanHouten who heads up our product development teams, she's been instrumental in getting Hook and Loop embedded inside those teams. What we do is we also broke out into pods and said, we're going to look at industry and then look at what products affect those industries and we're going to have Hook and Loop UX experts then work alongside those product teams. And we're going to make sure that our changes, our business processes are put inside those roadmaps. I think that's where this Pivot really plays a big role. It's really hard to be inside a product roadmap. It takes a longer journey, right? It's taken us a longer time. When we move to more of a publish and subscribe model where the products are actually able to publish information and we can subscribe to it as H&L Digital, we can create all new experiences, all new business processes for our customers in a really deep integrated way that, while Pivot Labs is amazing, they can't do. They just don't have that knowledge or bandwidth or deep expertise in enterprise software. So we've actually built out what we call a connective tissue team that actually connects our products together. So we go from product roadmaps to publishing from those products to now building new experiences with a whole new team. And when you're in that product roadmap phase, it sounds like the design folks are a fundamental part of that connective tissue and maybe sharing DNA and vice versa, becoming more product oriented. So it's a joint sort of, yeah, let's do it this way type of decision. Not a, hey, here's what I would recommend as the UX expert. Is that right? Yeah, that's a great point. That deep embedding with the product was important because otherwise you do kind of get that hands off kind of view from product teams who want it to, you know, have just been doing it that way and want it to be that way or, you know, they've been talking to customers and they hear something different. So instead of, you know, he said, she said we just kind of embedded them all together. And like I said, Christine has done a great job of making sure our, what we're calling kind of product managers, but they really want it. They're more like producers on the hook and loop side. We're making sure that the ethos, the enforced strategy of experience was being really artfully put into all our products and making sure that was happening as a partnership that it wasn't, you know, we were going to customer sites together. We were, you know, exploring changes to the business process together. So there's a joint marriage there. And then last question that George wants to jump in, does that create friction relative to, you know, this notion of agile and, you know, dev ops and, you know, sprints? Does it slow things down? And is that okay, or does it not slow things down? I don't think it slows things down, but it can cause friction, to be honest. I mean, you can have, I mean, anybody coming in and do something differently, transformation. I think it's another great lesson for us. All right, we learned what it was like to be a transformational group inside an organization. I mean, quite frankly, we have been and we continue to be. So when we go in and we talk to our customers and some of them are, they're part of transformational groups, right? They're trying to digitally transform their company. They're looking around going, how do I change hearts and minds? How do I convince these people? What did you guys do? How did you get there? How can you help us? So a lot of our job, as I mentioned on main stage yesterday, is around affecting hearts and minds and getting people to embrace that and be excited about it. That could be the hardest part of our job sometimes. Right, right. So I want to bounce two scenarios off you and see where you fit relative. At Apple, the industrial design and UI design, they're a group, free-standing, and they're assigned to be parts of individual teams. And in fact, they have pretty much veto power. That's how jobs set it up. Then in Facebook, their analytics group has individuals that are assigned to the product groups and they don't have veto power, but their performance is considered not complete until they affect a change. How are you set up relative to that? So Hook and Loop Core was originally set up as having that veto power, right? That we'd be at a certain stage in a road map and to be XI compliant, you had to achieve certain parameters around usability. So in Hook and Loop, we had a team that would actually go and look at the products and do the product testing and do everything else and validate that they were XI compliant. So we had veto power at that point. That doesn't always work, right? Because you need to ship product. So where do you start prioritizing what's a UX company-wide strategy change that's needed? And something that's really the customer wants. It's an enhancement that has to happen. So doing it in a veto way doesn't work. What you have to do is you have to, you can't just be the end part of the process. You can't say, well, we gave you all the tools, go do it and then we're going to come look at it at the end and see if you did it right. We're going to check your work. You can't. You've got to be deeply embedded in that team and be validating and checking it all along this process so to make sure that it's actually happening and you're helping them do it in their timeline, in their space and you're not coming at the ninth hour saying, we know you're about to ship that but it's totally wrong in UX and you can't ship it. That's just a disaster we're going to have. So hook and loop, digital. The world is changing. We all talk about digital transformations. We see these non-linear consumption patterns occurring in the customer base. Mark Benioff said it. He said there are going to be more SaaS companies that come out of non-technology companies than technology companies. Everybody wants to be a software company. So the timing is great but take us through the strategy and where you're at. You said just right there, these non-technology companies becoming software companies. So excited about that. That's the stuff that gets me the most excited about what we're doing at Channel Digital. Looking at these customers that are in commodized markets that are struggling to figure out ways to differentiate themselves. To figure out how digitization can move them from just being an automated system and having automation and a vertical business process be enhanced in the bottom line. How do you actually affect the top line through digitization? How do you change the way customers interact with your business, the way your employees do the operations? And do that in a very big holistic way. And then if you're not a software company what does that really mean to my customers? What data am I providing them? How am I providing it? Who's running it? I'm really, I'm a CIL. I'm really worried about my IT infrastructure. I'm worried about emails staying up. I'm worried about runtime, everything else. I don't really have time to think of IP. I don't have time to strategize it. I don't have time to run into the cloud. Certainly support it. So what can Infor do to help do that? Well, we start with our products set. We look at it. We assemble what products we need. We talk about building out that connected tissue team to make sure that products aren't publishing so that we could subscribe to it, that they will, that they aren't in the roadmap. We'll build workarounds to accommodate that. We'll layer on top of that data science, our new IoT platform that was announced yesterday. And we'll work to figure out what can we do to drive the data that the customer already owns to their end customer to keep them inside that ecosystem and drive value. So you can imagine if you're a animal feed company out somewhere and your only differentiation is that maybe you make really healthy feed or that it's just good for the animals. And I got a website. Yeah, and I got a website and I hope that my farmers believe in it and my brand's strong. How can you start to differentiate? How can you move to being about animal health? And you do that through branding, but you got to do it through technology now. You have to provide technology that drives animal health, right? So you can connect to IoT products that exist on the farm. You can connect the cows so that they, you know when things need to be timed that when they're fed the right feed that you're getting higher yields and performance and all that is data I can give back to the farmer. And as a feed company, I get to keep you in my ecosystem. You want to use my feed company because it's all connected for you. Your milking machine data that's going from another vendor is connected to here and it's connected to how much feed's going to get ordered. And that's a really deep ecosystem. And you know, like I said yesterday, if you've ever downloaded a song from iTunes, you know how hard it is to get an ecosystem. Yeah, well, but this is a big shift for people. This is going to drive a lot of CFOs crazy because the CFO of that company says, oh no, I got to, where am I going to get these resources? How am I going to pay for this? It's way more expensive than a website. But if I don't do this, I'm toast, right? So it's a painful shift for a lot of organizations. What advice are you giving and how are you, you know, talking them down from the tree? I think, you know, it's the same way they were looking at ERP for a long time. You know, they're running big checks for ERP and they're running based on product choices. We want to make those choices based on solutions. That's not a new idea in selling, right? Moving from selling a product to selling a solution. So we wanted to move much faster to that solution selling kind of model. And to do that, you've got to create these ecosystem models that you fundamentally understand that in for product support. So once you have that, I think it's kind of a no-brainer to, if you're going to pay for ERP anyway, you might as well be paying for something that can bundle into a solution that I can get to my own customer and keep them inside my ecosystem. Like that just seems like a no-brainer. It's logical progression. Yeah, logical progression, yeah. And now we're talking to CIO as well. Before it might have been more on the CMO's side, but by having the CIO back at the table, I think that also changes the conversation for the CFO. Mark, it sounds like what you're talking about is actually further along the last mile as far as the customer's thinking in terms of transformational impact relative to the in-force software itself, which is industry specific. But you're talking about turning a fertilizer business into a agricultural sort of services business. One is the sales force up to pushing your level of transformation and it's the rest of the organization up to connecting their software to your vision. Yeah, absolutely. So our head of development has been just hammering the product teams for the last three years, to be honest, to make sure they're publishing to our business vault. That's why we released Sky Vault, I think, two years ago. That publish and subscribe model was important to us. We kind of knew that we needed an API structure for our organization. And that API structure is what allowed us to be able to do this. If we can have that, if we can have the ability to subscribe to our products that we're publishing, we couldn't build here. Can you give us some examples of those APIs that maybe in earlier eras were screens on an ERP system? What would be? I think you see it in GT Nexus, right? You see it when we've not only recreated the UX or GT Nexus, but then you have these in-context apps. These in-context modules that sit alongside GT Nexus is all about supply chain. So not only am I now able to see, when you talk about supply chain, I'm not just able to see GT Nexus data, but I'm subscribing to other products that are in the in-for-product set. And they appear on the side of my screen. And those are basically, we're basically subscribing to those from an API structure. So if it's my orders and my date to ship, that might not be out of the same system that my GT Nexus is in, but they're overlaid because I'm able to pull the API. I can overlay it on top of my GT Nexus data very quickly. Okay, very, that's very interesting. How has your, mentioned the evolution of Mark Zabelli from the standpoint of ad agency person to digital strategist. Because I feel like a lot of the ad agency models are not going to translate into the new world. Many will, but you're making that transition very successfully. I wonder if you could address that. Yeah, sure. You know, I was at ad agencies for a long time, and then I was always in digital in some way or another. I started at the company that founded Priceline in the 90s, late 90s. And it was always a digital bent to what we were doing in advertising. And then a few years ago, I think the industry kind of shifted to a storytelling model in digital. That was, you know, the advent of social and mobile helped us do that. And I think we're seeing the same thing. We could do the same thing in enterprise software. It's a storytelling narrative model. Just how do you deliver it through technology, not just marketing? It's that we don't want to just deliver it through an ad or a message that we have that plays on YouTube. We want to deliver it through the actual technology that's delivered to their customer, to their employee, and then their partners and on the operations. So I mean, I think it's just a storytelling model. It's a shift. For me, it's kind of a no-brainer from how I told stories for a VACA brand to a financial technology brand to something else. It's just a natural shift in storytelling. It's just a different channel. Well, but there is a technology and a platform component. Sure. Which is, maybe it's not brand new, but it's certainly more robust than 10 years ago. And the whole API economy changed that. And that's easy to get wrong. And you talked about before, companies have to service and support this stuff. And there's a new support model that has to take place. So there are some organizational changes and cultural shifts, and it's a real challenge for people. But you guys are, I think, unique, as I observed before, at least in my view, relative to other software companies. Yeah, I certainly think our size helps us to activate around all of those things. We've created a division inside our consulting group that's servicing, supporting, and maintaining these cloud suites that we're putting up, these cloud solutions that we're putting up for the digital engagements. So the customers don't need to worry about that. We've built our structure on an API publishing and subscribe model to help us build it. I don't think any of this would be possible 10 years ago. I think we just would have sold, you have a product problem, you know, a business process problem, here's a product that solves it. Instead, let's bundle those things together and let's affect the top line of an organization. I mean, some of the big SIs, maybe IBM, but I mean, IBM is a huge company, right? And they're services organization. They're making some plays in digital, but for a $3 billion software company to be leading that charge, I think you're in the lead in that regard. Not many companies are thinking the way you are. So congratulations on that vision. I'll give you the last word, thoughts on Inforum 2016? Inforum's been great. It's great to be in New York. I mean, this is, like I said, it's my hometown, right? So I would like to be able to own the New York venue for Inforum going forward would be great. So I hope to see you guys here next year at Next Inforum and be sitting right here in Javits Center. Excellent. All right, thanks again, Mark. Appreciate it. Okay, keep it right there. Everybody will be back with our next guest. Right after this is theCUBE. We're live from New York City.