 Closing the show floor. You can hear that in the background. Bill McDermid just gave a speech. I'm joining with my co-host. I'm Dave Vellante at wikibon.org and John, we heard McDermid. He was on message. He was, as Bill always says, he was well co-offed, looking sharp. You know, a very handsome guy, really, you know, passionate about what he's doing. But it was really, it was staged on the stage. You wouldn't expect anything less in front of 17,000 people. We're going to have Alice Williams come on and we're going to talk about kind of what we heard in the keynote. We were all kind of sat in there and you sat in the house, Alex Williams. Hey, Alex. How are you? Okay. First of all, the opening video was awesome. Yeah, the sound system was amazing. The opening video was amazing. I think it was better than the NAB cube with the cube we had at NAB, which was a great sound system. But this one, I think, blew it away. Yeah, I think so, too. But the video was fantastic. Bill McDermott's intro was kind of like, very lesbian, very actor. He's like, what represents him? Yeah. I'm not like a Shakespearean. You look like Clinton up there, you know, like with the good hair, of course. Yeah, yeah. The commentator would make a lot of hair comments. But it sounded like a cube interview. Yeah, it did. Mobile transformation, consumerization of IT. Yeah. What did you think of the keynote, Alex? I think it was one of the best customer events I've ever been to. I think primarily because of the talk show format and the professionalism that they really took to a new level compared to last year, when they had kind of a funny, kind of an interview style that they tried to do with Bill McDermott. But this year, I mean, we got to see Coinstar, Ace, Hardware, and Burberry talk about how their businesses are really changing, how they're really being affected by data. And I thought their examples were great. Yeah. Interesting. I think it's critical that SAP demonstrates some proof points beyond its core supply chain business. And it's clearly trying to do that. I mean, Ace is sort of the classic, but the examples that they were using were all about, hey, we know everything about the customer and business analytics. I think, though, John, you said it's like a cube interview. I think the difference is that when you had McDermott on, you got him talking about Oracle. He wasn't mentioning the competition out there. I was totally scripted. You can see the different camera angles. They had the crane. And they also had the guy with the camera. You can see the notes. She had all the notes there. I mean, she's a talk show. Yeah. Well produced. She was totally produced. But hopefully, we can get him on the cube and ask him some of the questions that our audience is more interested in. Oh, yeah, for sure. I heard we're going to get McDermott on the cube. So both watching out there. McDermott, Schnabe, certainly going to come on. Oliver Boosman told me in the audience. I'm sorry. I have a quick word with him. He's definitely coming on. Right. But I did see them in the crowd. And they said, yeah, thumbs up. So we'll see. Tomorrow or Wednesday, the CEO's in there. But I felt the presentation was fantastic. I mean, I just love the language that they're using. I love the fact that they recognize that there's so much disruption. Love the fact that it's like one consumer now. That is huge for them. I mean, for any enterprise to say one consumer essentially really is a good message. What are some of the underlying themes, Dave, that you heard out of that keynote? I mean, one of the things I heard was kind of like the transformation of the database in many ways. Where McDermott at one point said, we can help you with your relational database issues, which was really a code for where after you were. To me, Alex, three things stood out. McDermott said he talked about speed, simplicity, and personalization. Now, those are three things that are not normally associated with SAP. And so clearly McDermott and company are trying to transform the messaging, the company. And that's really the emphasis is they got a lot of dough, they got a lot of resources to make it happen. The other thing was 197,000 customers. That's a big number. I hadn't heard that before. He broke things down into little chunks. My first chunk was the things that the key highlights to me, Alex, were consumer revolution. He mentioned that point. Macro forces are converging. We're talking about this society. And the social connectivity were three kind of clumped together. Intimate, right? Intense social connectivity. I like this selection. It was more sophisticated too. It wasn't just about Twitter or Facebook. It was about kind of this new world where it's everywhere. It's part of the business process. We need to think differently. As the Burberry exec said, she said, when I grew up, to succeed, you need to speak English. For this younger generation to succeed, you need to speak social. And I thought that was a good way of putting it, where it is all in this little device. And that's where IT is right now. Yeah, and it's some real actual use cases of social. We used to hear about enterprise social and sort of behind the firewall social. This is really trying to connect social with revenue generation. The other thing today that I thought was cool is that he said that consumers are in charge. That was a direct quote. He really emphasized that. He's totally driving it. We've always said in the queue here that consumers are driving the change in the enterprise. That's coming from the consumer market. That is the social market. That is the mold. And it wasn't the Facebook hype. It was legitimate productivity message. He also mentioned innovation cycles are shrinking. Sustainable competitive advantage. He took the best of the hipster social mobile cloud and turned it into enterprise language. Yeah, very much so. He's not a big joke teller, but he did say tongue in cheek early on, if you're in the 18 to 25 sector, you're more likely to have a smartphone than you are a job. And catching some of the times, he had a lot of questions from the interviewer about the economy. He's obviously bullish on the economy. Let's face it, neither of those individuals were struggling. He also brought up the business model thing, which I thought I'd hit another mark there. He said reinventing business models is a critical board level conversation everywhere it goes. But then he highlighted that with a point by saying thinking from the end consumer in, not in company to the consumer. And that was a really nuance. He was a nuance that was kind of highlights the fact that the business model of the future is about consumer first and engineering it back into the company operations, not the other way around, which was the IT practice. That is the consumerization of IT and the disruptive business model aspect. Again, validates our points over the past two years. And you can see it on the show floor too. I mean, look at the presence that mobile has on the show floor. It's gigantic. I do think, I mean, we go to enterprise shows. We go to EMC world with Citrix Synergy. We're Oracle Open World and numerous others. I think that SAP definitely takes that message, John, that you were talking about just now from the consumer in, not the other way around, more serious than any other company we follow. Do you agree with that? Yeah. I think, well, this year the messaging is a little tighter around, again, the language around business with around this trend data that last year was different. They would put a stake in the ground. Last year to me was stake in the ground, mobile social, the real mobile database feed and mobile message. This year it's going to be about the apps. It's going to be about the productivity. It's going to be about the business model. So I do think that they're leading the way. And I think, you know, like we were talking earlier about Citrix, how there's a huge difference between coming to Citrix and SAP, but yet so similar. Both have active online communities, but SAP is just dwarfs Citrix in terms of relevance. I mean, I felt this year at Synergy as an example that Citrix was just, they had all the elements. It was just kind of like blah. It wasn't popping. It wasn't like, wow. It was that they had virtualization. They had cloud. They had all these things. It was, you know, it was cool. But it wasn't, I didn't fall out of my chair. Here, with McDermott's showmanship, Schnabe's product focus and kind of their execution, it makes you go, wow, I like these guys. They're marching in the right direction. I tweeted. You do like McDermott. He's very personable. You'd buy from him. You'd buy from that guy. Now, last year, as you recall, I mean, it's almost like we had to force big data onto them because we're, you know, you tweeted back, usually ahead of the trends. It's still like an angle. It's true. We were talking about big data all the time. McDermott, I think, mentioned it once last year in his keynote. He probably said it at least 10 times. He showed the dashboard off, and that was pretty much big data. And again, that was a highlight for the folks out there who didn't see the key. And I tried to get a picture, but I couldn't get the resolution with the phone. But he was showing an iPad demo. It was really fantastic. And that is the kind of dashboard I think executives want to run their business. That's a big data application. That is analytics. That's speed of date. That's HANA. That's everything that Alex would have posted if we could talk about that. So that's big data. One thing I think that we need to watch with SAP is there is a little, there is kind of like this hero complex that we're seeing with HANA. And it's important, I think, to look at what's underlying. What are you talking about that? Well, I think it was developed by HASO. And so HASO came in, and he developed this technology. He has his own team. So they have very kind of a separate organization internally. There's the threat that in memory could become commoditized to some extent. But there's also the concern, if you look at, for instance, how they're going to bring HANA to the cloud, and how are they developing their apps in a HANA environment, in a configured environment, versus what they're doing with the ABAP platform as a service and the Java platform as a service. And so I think that the messaging was great. I think that the truth will be told in the details. Well, Jeff Kelly was on earlier, and he was saying that SAP did 160 million euro in last year in HANA revenue, which is about north of 225, maybe 250 million. So that's pretty substantial. He felt like it could double this year or more. So two or three years, you're talking about a billion-dollar company, a billion-dollar component of the company. With SAP's multiple five to $7 billion in market cap right there around HANA, and it could grow substantially higher than that. I think this is where success factors is really going to be interesting in how it can further help with this synergy. Because if Lars can bring together a team, and it looks like he's doing that, it looks like Samir Battelle is working directly under Lars, and Samir is the one I really respect, they're developing this real cloud-up mentality. And that is going to be really important if they are really going to move into really the forefront of technology innovation. They're partnering with Amazon Web Services. So how much do you know about Success Factor? So they pay 3.4 billion. And Success Factor, my understanding is it's relatively narrow around talent management. And SAP's got its own sort of core HR management that's two stovepipes. Now they got a challenge in bringing those things together. We saw how long it took Oracle with its Fusion apps, about six years to bring those apps. Now Oracle is a lot more complicated situation here. But what do you know about that? Do you have any intelligence or sense as to how that's going? Does it need to be integrated? SAP core HR doesn't have self-service, Success Factor does. It seems to me it was a cloud play essentially. Yeah, well let's start with the people first, with Lars in particular, and the impression that Lars has had on SAP internally. He is shaking things up. If you've seen Lars in action, he runs on the stage, he yells and he throws his fists in the air and he says, sales, sales, sales, sales, sales. And that's been a little bit disruptive to SAP with this conservative culture. Sounds like Caso. Yeah, well what that has allowed is to do, what that does, it provides some disruption in the company, but it also gives him kind of a foundation where he can work upon. I think it's interesting if you can look at SAP, if they can build a collaborative platform with social as a kind of a key component and integrate other apps like Streamworks into it. And they're starting to do that. For instance, Streamworks now has collaborative analytics integrated into it. And it'll then have HANA be able to push information into that as well. If you can start building that into the success factors environment, then you might have something pretty powerful. And if they can create that unifying underlayer, that will be helpful. But it's really complicated to understand and decipher what the actual SAP cloud strategy really is. Yeah, so you see that as more strategic. So you compare that to, for instance, what a workday is doing. I mean, they're just selling, right? I mean, it's a cloud app. They've got great mobile apps. The talent management and the mobile apps, it's all there. And they're selling today. Now, I thought the success factors isn't, but it's more narrow. Yeah, and that's where the cultural shift will be really critical because the issue that I'm hearing that SAP has right now is around how they treat developers, right? And the developer factor is critical here because they need to be able to just kind of push out technology so people can develop. And what they've done, in some respects, they started cannibalizing existing mobile technology. They developed that was developed under John Wookie, who left the company to go to SAP. And he had developed actually some really, really beautiful innovative applications. Sorry, John Wookie left to go to? To Salesforce, to Salesforce. And last week, it was just announced that he will be leading all mobile development at Salesforce.com. He did some really interesting stuff here at SAP. He developed kind of these on-demand apps that were looking really, really sharp. But he left, and still there's kind of this question about, okay, well, what is that direction with those mobile apps? How will they treat developers? Are they going to be able to create a platform that developers can work upon at a nominal cost to simplify the licensing? They can start to really get those things in shape. And they're making progress, so then I think you'll see some impact. So what are you looking for in the next couple of days, Alex? Well, tomorrow we'll hear about cloud, and I think we'll hear more how cloud will fit in with success factors. We'll also hear more about mobile, and I think we'll talk about that mobile app developer landscape. I think we'll hear more about how they fit with companies, and how they fit with Amazon Web Services. It was really interesting to hear in one of the sessions today that one of the mobile executives talk about Amazon Web Services, and he was like, rah, rah, rah, Amazon Web Services. And, you know, and you think about it, SAP is in kind of a good situation. You know, they can choose to go with Amazon Web Services. They can go with that, you know, kind of that very kind of lightweight kind of cloud environment, as opposed, you know, they're not a systems company, right? They're purely a software and services company. So I think we'll hear more about, you know, about the kind of advance in thinking. So, for instance, we compare that with sort of Oracle Strategy with the Oracle Public Cloud, on the whole thing. John, you were mentioning earlier Workday. Vishal Sika was sort of trashing Workday, talking about, you know, they're building their own. Well, I mean, he didn't know, and then all of a sudden he went on to elaborate on Object Store. I don't know what they're using. SAP Ventures and its custom database. So we kind of knew that. Yeah, so are you saying, Alex, that SAP Strategy is different? They're not going to try to own that whole cloud infrastructure. I believe that that seems to be the case. It's going to outsource that and focus on the application layer. And that might have some downside to it. So much different than Salesforce and Oracle and Workday and a lot of the other SaaS vendors. Is that right? I think, you know, I make a delineation between Oracle and SAP as an Oracle really is a systems company. They sell the hardware and the software. IBM sells the hardware and the software. Salesforce is they're still pretty much a pure app developer. And that really, I think, gives them some advantage. Now, you could say that actually, you know, they could be boxed out because, you know, companies like Oracle and IBM, they're really focusing on data center consolidation and they can control the enterprise that way. I'm not so sure. Yeah. I think they're trying to bank on innovation. And you know what, you know, and I think a good anecdote example of that is in how they've adopted iPads and mobile devices internally at SAP. I did an interview with Oliver Bruceman about a month or two ago. And they have more iPads being used internally with other mobile devices than any other company in the world except for one telecom company in Korea. Cool. I'm talking about Steve Jobs. What are you doing? Why? We're sports fans, right? What makes a great team? Well, they build internally, right? You have a good team internally. A good farm system. That's an encouragement here from SAP. Good. We're here at Sapphire now, 2012. We're in Orlando. We're here with Alex Williams and John Furrier. This is Dave Vellante of Wikibon.org. You know, now's a good time probably to mention. You got questions. A lot of this terminology might be new to you. Go to Wikibon.org. Go to siliconangle.com. Check out services angle. Check out DevOps angle or new site siliconangle.tv. These are resource. Everything we have on there is made available for free. You got questions. Hopefully we have answers. Tweet us. We have two sites you want to look at. DevOps angle for developers. And also services angle for more of the business. CIO and Alex works and contributes and manages the team to do those sites as well. Jeff Kelly and Wikibon. We're all over those areas. And we're excited to be at SAP Sapphire for the third straight year. Independent coverage and we would not be possible to bring our teams here and our engineers, Markers and Hopkins, Keyin and others. It wasn't for the generous underwriting support of SAP and EMC. Those guys have supported us for three years and allow us to expand our mission and our vision and I want to thank those guys. So Dave, just final comments before we go off. Any things you're looking forward to tomorrow and tomorrow is going to be a packed day, eight hours. This is a sea level show and I love to talk to the customers who come on and hear about what they're doing. They really talk about their business challenges and how they're driving revenue and it's a different mindset. A lot of suits here at this event. Sometimes they're a little button down but it's serious business here and so looking forward to more of that action tomorrow. Alex, anything that you're looking forward to? Oh, I'm just excited to hear the keynote tomorrow. I especially want to hear what Lars has to say. I think that's going to be pretty entertaining. Okay, we'll have a wall-to-wall coverage. You're going to be seeing it on atsiliconangle.tv. This is the Cube, our flagship telecast. Again, we take our team and go into the hallways. We find the stories. If we can't have them here inside the Cube, we'll go out and get the top stories here at SAP Sapphire, Orlando. We'll see you tomorrow.