 sponsored by SAP HANA Cloud, the leader in platform as a service, with support from Console Inc, the cloud internet company. Now, here are your hosts, John Furrier and Peter Burris. Okay, welcome back everyone. We are here live in Orlando, Florida for SAP Sapphire Now. This is theCUBE's SiliconANGLE's flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, my co-host Peter Burris and I want to give a shout out to our sponsors, SAP Cloud Platform, Console Inc, Capgem and I at EMC. Thank you for the support. Our next guest is Mark Giel, who's the SVP at GM of SAP's platform partner ecosystem. Welcome to theCUBE. Thank you for having me. So we are so excited. I mean, the ecosystem, first of all, we love ecosystems because ecosystems mean things are thriving, people making money, having some fun, innovations popping and rocking and rolling. But it's also a more competitive advantage for SAP. And we were talking about that yesterday and today and we've had all the SIs on pretty much everyone here on theCUBE, all pointing to simplicity, run simply, that's the theme. How are you guys doing pulling this off? Because this is a game changer for you guys, not new, you guys have done ecosystems, you've got an ecosystem, but it seems to be transforming. What is the key dynamic for this ecosystem? I think it's timing. I mean, if you take a look at a lot of industry analysts, they're now talking about this two-pace IT, bimodal IT, as Gartner describes it. We have that agility layer. We have that ability to enable customers and partners to innovate very, very quickly and deliver incremental value to customers. So that is very attractive to our partners because they can now start to build new revenue streams. They can do this in a very profitable way and enables them to drive incremental value. So I think this timing of bimodal and the digital transformation that we're seeing in the marketplace provides an opportunity for partners to transform their business models and they're doing that with HANA Cloud Platform. SAP has historically been very focused on calling itself an applications company and try to avoid some of the platform nomenclature. But over the past couple of sat fires, we've started to see that switch. And now SAP is very strongly talking about the platform, a holistic thing where the application set is, I don't want to say being buried, but it's being embedded even deeper into operations. So is your job essentially to kind of catalog and bring that platform perspective, turn it into something that actually can be transferred with partner and get them up and running on the platform orientation and all the stacks associated with it so they can create value at the platform and to the platform? It's a really good observation. I actually think we have three business models. We have a platform business model, we have an application business model and we have a network business model. And those are somewhat different. If we are ostensibly an applications business, then we want the platform to have partners build into white space where we don't have the skills or the expertise or the resource to do it. So platform is really a way of augmenting our own capabilities and taking advantage of the innovation in the ecosystem. So the goal is to say, look, this digital transformation is happening. A lot of that means that you need to extend use cases, you need to rethink and redesign use cases. You want to do that from where all the data is, right? All the data sits within SAP's backend. It sits within 300,000 customers. It sits within two million suppliers on the network. So we provide, we have that access to the content and now the platform makes that content available to other businesses, ecosystem partners that can build incremental value. So it's really, it's something that I think was unexpected in many ways from partners that they can innovate with SAP. Historically, SAP was doing all the innovation. We're now enabling the partners to augment and do additional innovation and that's the real value. But in a disciplined and coherent way that doesn't cut off innovation out where the action actually is. Absolutely, we are an open platform. So if a partner wants to build something that is competitive to one of our applications, they can. They're not going to get much support in the market but they can do it, right? So we are very open in our approach but what we do is we provide insights to partners so they build the right app in the right way, right? We want them to strengthen our overall portfolio. We want them to identify a white space, right? And they will build into that white space. So that enables us to get broader coverage in the market. We can put a stronger solution in the market that drives more value for customers and it means that we can optimize and focus our R&D where it really matters, right? We can be very strategic in our R&D and build out where we have skills and competence and our partners then can augment that. So I got to ask you because the platforms are awesome. I mean, I love platforms. I mean, better to be a platform than a tool but also a tool could have platform like features in it using data, for instance, and thriving an ecosystem. Now standing out in the wild, they can get funded but they can't get critical mass. Certainly in the enterprise it's very difficult these days. It's getting worse now. It was easier seven years ago than it is now to be a startup or an emerging feature or tool in the enterprise, compliance, integration. So being an enabler is critical. So I love that. So I have two questions. What do you see as the disruptive enabler? So there's some disruption that's going to enable some opportunities to create innovation and then two, how are you measuring your business? What are your KPIs to check the scoreboard to see if you're successful? I think the fundamental disruptor is this digital transformation that we're seeing, right? Companies have to change their business models. If they don't, somebody else will. I mean, classic example, I don't know when you flew into Orlando but I've heard stories of people waiting three hours for a cab at Orlando Airport, right? Uber has disrupted not just the taxi industry but also the logistics industry. SAP Sapphire is disrupted. Well, that's true. That's true. Tsunami of people coming in. But that digital transformation is driving that opportunity, yeah? So when we look at how we should be working with our partners, we say, okay, look, where is there change? Where is transformation happening, right? It could be around the internet of things. It could be about the fact that a customer needs to understand their customer behavior better. It could be they want to profile those customers. So I think there's disruption everywhere. I think historically it was very difficult to leverage a platform or a technology to support that. In many ways it hindered, right? So I think many corporates, historically, their IT infrastructure reflected their business five years ago when they invested in it, right? Exactly. Today, it reflects their business needs tomorrow, right? So what's interesting? Cloud, compute, conversion infrastructure, all that stuff points to, under the hood, the engines are better, they're faster. Well, the beauty of Agile is that it allows you to create a deliverable now, but at the same time create options for what you're going to do in the future. Right, and as your business model changes, that can change with us, right? So you're always creating new options when you're doing this right. So there's a big land of opportunity out there out in the valley of innovation, which no doubt we agree, 100%. Now you guys are going to take advantage of all the new point releases, if you will, of new innovations. So the question, second question is, how are you going to measure yourself? What are the things that you want to see lighting up the scoreboard? And be specific, is it more downloads or more SDKs with Apple? Is it more insights? What's, how do you guys measure yourself in terms of, you know, benchmarking? We're doing good, we're doing great. How, what are the things? That's a really good question. That's a really good question. Ultimately, ultimately it's... Well more people are participating in the program, that's one, right? I mean, the ultimate goal is money the partners are making, right? The platform economics are about making, are basically about making money, right? So if our partners can't monetize that investment, that innovation that they're doing, then there's no value. So, you know, there are some high level KPIs that we track, you know, how many partners are building on HANA Cloud Platform? How many apps are out there? How many customers have adopted those apps? So those are the critical ones. Just inability of the partner. Is there any incentives? Are you guys offering any incentives for partners just to be able to, watching, since a lot of entrepreneurs will watch the show. What incentives is there any kind of onboarding? I know the fees are really low, 3,000 euros or roughly around there. Yeah. No, so I think what's interesting is that partners understand that they're going through their own transformation, right? So if I'm a systems integrator, I've historically made money by billing headcounts, yeah? They now want to build a repeatable revenue stream. The best way to do that is build IP, yeah? So what we're seeing is that they need to go down this journey. They're going in one direction to the clouds and then the other to building IP. And you need to do both of those. So what we're also doing is we're trying to educate partners in terms of look, this is the transformation you're going through as a partner and this is how we're going to help you on that journey. We'll help you in terms of building the right products in the right way, right? So we will identify the white space that they can build into. We will then help them launch that product. We will help them potentially even build pipeline for the product that they've built and then hopefully commercially- So basically you're incubating- So we're incubating ideas and we're incubating new business models, yeah. And facilitating resources to the customer. Yep, absolutely. Now one of the big challenges we have is customers don't always associate this agility and this innovation with SAP, right? We've got this rock-solid stable core. Now we're providing this agility layer and it's partners that are providing additional value. So how do we make sure that SAP plus the partner goes to the customer in a coherent and consistent way to demonstrate that business value and remove some of the complexity that we have of going to visit that customer and sell to that customer together? Well the key is going to be partnering with the developer and the partner because they're going to want to have trust because when they go to market they're going to want to have SAP standing next to them or behind them if you will, even if it's abstracted away. Absolutely, and one of the challenges we have, right? And I'm not sure people have always thought this through but we've just spent the last 20 years getting companies to rationalize the number of vendors that they're working with, right? The whole let's build a solution and take that solution to market one throat to check. We're now flipping that business model and saying, look, we've got this platform and we've got hundreds or thousands of partners innovating on the platform. Actually, you need to buy with all of them, right? That's going to take time, I think, for the CIOs and the procurement leads to understand, look, things have changed and I think we need to re-educate the customer. We also need to re-educate our field. The platform without any content is just an empty container, right? But there's good news here. Let me run this by you. There is some good news here and that is that it used to be that the real challenge was getting the process to work on the technology and the companies that the party to the deal between the customer and the seller was the technology company because they knew how the technology really worked and the seller had to protect themselves from a lot of opportunism, very complex contracting, one throat to choke because everything was, the contracting process was so complex. Now we're in a world where we're more focused on the business value that's created, the uncertainty of the processes, cloud platform makes the technology more certain so it leads to a wholly new set of relationships. We're not so much worried about long contracting, we're worried about turning the value on as fast as possible so it makes it possible to carry on more relationships but it's not so much as a procurement as it is a vendor management work. Do you agree with that? Is that kind of the way you're thinking about stuff? I think we're traveling that path, right? I don't think we're there today. I think we, you know, there is, as I mentioned, I think there's an education process because- It's new, how old is this baby? Well, I mean, you know, I mean, we've been driving success in the last one to two years, right, so yeah. So, you know, we need to drive that education. You know, we still get examples, right? Where we're going in, we're showing agile innovation, we're showing product, you know, you could have a product that you build that tries to understand consumer behavior for the Rio Olympics, right? The value of that product is in maybe the four weeks before the Olympics and one or two weeks after. You can't go into a 120-day procurement cycle, right, for something that's going to be of value for eight weeks, right, so that needs to change and I think we need to make sure that we have the right message with our partners to say, look, you know, you're not locking yourself in for 10 years and have to generate a 10-year return on investment. This is something that's driving value maybe for six, eight weeks or it could be for multiple years depending on how your business evolves. So, you know, it's horses for courses in many ways. How are the opportunistic? Yeah, horses for horses, love that. Dave Vellante's favorite line. Mark, final question. What's the plans? I mean, obviously it's going to take some time, you guys are doing a good job. Now we see a big uptick on a cloud platform. Certainly, the developers are attracted. Cloud Foundry is maturing. Things are kind of coming together. Expansionary plans, I know you guys have been taking, you know, crawl, walk, run kind of philosophy. What's going on this year? You guys doing road shows, any kind of promotional stuff? What should people expect to see? Are you guys going to be doing anything online? Any kind of e-learning platform? What's some of the activities you guys are looking at this year? So, I mean, we look at our product portfolio and we run webinars to basically explain to partners the opportunities, right? So it could be around internet of things. So we'll do a push around IoT in the second half. We continue to see good success and adoption around success factors, our cloud HR solution. So we will run some programs around that. And then S4. I mean, S4 now has been a key focus of Sapphire. I mean, it's an area where partners can add a lot of value, right? I mean, if you're rethinking a business process or reimagining a business model, you need that partner insight. So that's an area where we see a huge amount of value in our focusing. Could you take a minute or so just to kind of summarize the S4 impact for the folks who aren't here, aren't seeing it? What is S4 all about this year? What is the core message core? What is the core, what is the main point around S4? What's the hub of all about here for S4? It's the next generation ERP. It's the next generation business solution, right? It basically enables you to run real-time. It's cloud-ified. There are cloud options. I mean, we still have customers that are basically consuming it on-prem or running on-prem. But it's a big deal. It's a big deal because it enables these customers to take advantage of the digital transformation, to take advantage of data and process that data and basically turn that data into actionable insights. I'd say to operate the digital transformation. Maybe. I don't know about operating. I think it's a fundamental part of the digital transformation. Well, I'm not saying it's not, but the notion is as you go off and you do these transformations, it still has to work. Absolutely, and that's the key, right? Which is agility is great, but we're running critical business processes for customers, right? So they need to know that that process is going to work. It's rock solid. U.S.4 provides that rock solid capability and HANA Cloud Platform provides that agility layer to say you can differentiate and innovate, right? So I think, you know. It's a developer cloud. It's a developer cloud, really, right? I mean, I think it's more than that because it comes back to, I think, that the crux of the value of HANA Cloud Platform is its content access, right? We have 75%, 76% of global transactions touch an SAP system. We're making that business data available for new use cases. Yeah, it's going to be a flourishing environment. Really exciting. I think you guys are not getting the kind of credit and the press for this vision. I think it's something that's kind of nuanced, but, you know, when the money starts hitting the table, it becomes very clear, as you said, monetization isn't a great opportunity to reap the rewards of innovation. And certainly, that'll be at the scorecard. That'll give the scoreboard. Mark, thanks so much for sharing the insights here in theCUBE. Rich ecosystem on the horizon, continuing to grow and modernizing your operations. That's SAP's core message. Go fast, go simple. This is theCUBE. We're going fast and hard. Day two, got a full day tomorrow. Got a couple more interviews here today. You're watching theCUBE. We'll be right back. There'll be millions of people in the near future that want to be involved in their own personal well-being and wellness.