 Live from the Wynn Hotel in Las Vegas, it's theCUBE, covering Magento Imagine 2018. Brought to you by Magento. Hey, welcome back to theCUBE. We are at the Wynn Las Vegas with Magento at their Imagine 2018 Conference 3000 plus people here. Really cool day. We've been talking about all things commerce and digital commerce innovation. Excited to be joined by Peter Sheldon, the VP of strategy for Magento. Thanks so much for joining us. Thanks for having me, yeah. So this has been really fun. There's a lot of merchants behind us here in the marketplace. We've been talking to some of your customers who are direct to consumer. We just had Coca-Cola on. We also see a lot of businesses here. Talk to us about what you guys are doing to help not just the retailers. You started building this reputation as Magento, helping retailers to target online shoppers. But there's a lot more opportunity that you guys have been successful in in the business, B2B space. B2B space. Talk to us about kind of the vision, the strategy on both sides. Yeah, so I think what's fascinating about Magento is the diversity of our client base. And I think it's a little bit of a testament to sort of the flexibility and agility of the platform. But you're absolutely right. We started out primarily serving the B2C market, working with retailers, CPG firms, branded manufacturers and so forth, luxury goods. But commerce has really evolved and moved on. And I think what we see today is a lot of opportunity in B2B. And so when we think about B2B, these are typically manufacturers and distributors, wholesalers who are looking to digitally transform their businesses and really make the buying process more efficient. So whether it's a distributor who's buying products from a manufacturer or an end buyer might be a contractor, especially in sort of home improvement or something who needs to buy tools and materials from either a manufacturer or a distributor. Traditionally, it was a very sort of traditional sort of retail-based sort of buying experience. You would go to a branch, a distributor's branch, face-to-face engagement with a salesperson, or the sales rep would come visit you and you would go for a paper catalog, and relationship building, and so forth. And that's a high cost of acquisition channel. And so I think what a lot of B2B firms are realizing is there's, first of all, there's demand from the buyers because all buyers have their consumer life as well. And e-commerce is so mature in the B2C space with Amazon that buyers are incredibly frustrated if in their business life they don't get that great sort of e-commerce experience and instead they're still faxing or picking up the phone or even if it is a digital order entry experience, it's really terrible and it's not intuitive to use, it's not easy to use. So there's a real demand to sort of digitize that ordering process. But more importantly, I think for B2B firms, there's some real operational savings and putting margin back into the bottom line by creating a lower cost of doing business and serving customers and its e-commerce. And so I think we see one of the areas where I think a lot of firms first start out is like in spare parts business. So we work with a lot of manufacturers that just make so much sense to move their spare parts and sort of warranty business online. So it's very easy to reorder spare parts. I don't need to pick up and call my sales rep to do that. I can do it in a digital manner. But I think what really fascinating us is just a diversity of different B2B clients, their backgrounds. There's not a vertical that's immune to this. We see pharmaceutical companies, we see agriculture, we see traditional sort of heavy manufacturing, light manufacturing, life sciences. You name it, and so the diversity of clients that we see wanting to use our platform for digitizing their selling relationship that they have, it's really fascinating. We've heard a lot today that commerce is limitless. And it sounds like that's kind of what you're talking about is that this day and age, every buyer is a consumer at some point, right? Or every day, we have these expectations. Amazon set the bar really high and every company to be successful has to be a technology company. So from your standpoint as the VP of strategy, some great, exciting things have been announced at this year's Magento Imagine conference. Share with us some of those and especially I'm curious what you're seeing in the mobile space. Yeah, so mobile's really fascinating and I think it actually sort of continues on to what we were talking about a moment ago in B2B. So if we think about that B2B buyer, often the B2B buyer is an engineer, a contractor, a field service representative. They don't live in an office. They don't have ready sort of convenient access to either a laptop or desktop. They are out on a site. They're, you know, if it's agriculture, they're out at a farm or in a field or they're on a construction site or they're inside a plant. And their primary means of digital, their only means of digital access is their smartphone. And typically it's they're having a sort of slightly larger screen, a phablet type smartphone, probably in a hard case is kind of very strict, you know, if it gets dropped and so forth. But the way that they're going to engage over brand digitally and to make a B2B commerce order to look up the status of their order, et cetera. It's not, we often talk about mobile first. It's not mobile first, it's mobile only. They don't have easy access anymore to desktop laptop. If you're not serving them through mobile, they're not able to buy from you and they're going to buy from one of your competitors. And we see this, I think, across the board. You know, perhaps less so here in the US, but in some of the emerging markets where, you know, where we operate and we have great success, markets like India, you know, they, again, it's very much a mobile only society now and certainly in mainland China and other sort of emerging markets. So, you know, I think we're rapidly going down a path where if we think even in our sort of day to day, you know, consumer lives as we're thinking about making purchases, we're sitting on the couch, we're, you know, multi-tasking, we're watching television, but it's our phone that we're interacting with. And if we think about the challenge today about buying on a through a phone, and it's a traditionally commerce, you know, purchase experience, it's really not that great. In fact, in some cases, it's pretty awful. You know, the typical sort of page load time on a mobile can be five, six seconds. And as you want to sort of navigate around using your phone and scroll through and do sort of product research, every time you make an action, every time you touch that screen, the page reloads again. And it's actually frustratingly slow. If you actually get to the point of buying, obviously you've got to enter your shipping address. And that's just nasty. Can imagine that conversion rates and things and attrition. And that's just it, exactly. So on... What have you guys done to change the game? Right, exactly. So, you know, those conversion rates on the mobile web today are pretty bad. They're about sort of 1.7% and on a traditional desktop, it's three and a half percent. But yet 70% of all traffic and visitors are coming on mobile devices. There's actually quite a profound sort of issue in the marketplace around us. So what are we doing about it? Well, there's a really exciting new, and I'll call it technology, but it's really just a set of standards around open web technologies, JavaScript, CSS, HTML, called PWA or Progressive Web Apps. Now, Progressive Web Apps is not a proprietary technology. It's just, it's open web technologies. But what's changed and evolved are the browsers themselves. So Chrome and Safari, Firefox, they've evolved and they now support what we call service workers, which is the ability for the browser to do more sort of background processing. And the end result of all of this are, a lot of brands are now rebuilding their websites away from responsive websites, which is sort of the big investment we've had over the last five years, to now building Progressive Web Apps. And the really nice thing about Progressive Web Apps is they perform like a native app. They're very, very fast. The page load times are typically sort of around a second or so. And there's no sort of refresh. Every navigation and action is almost a sort of instant gratification. So very fast, very slick to use. It feels like you're using a native app, but you're not. You're actually using a web experience in a browser. And so there's a couple of really important things for merchants around that. One, much, much better conversion rates. So all of the KPIs that VP of e-commerce is ultimately responsible for, they're measured by, there's their conversion rate, average order value, bounce rates. They all see significant improvements. And then the other side is some merchants are always sort of facing a little bit of a dilemma. Should we build native apps? Or what should our native app strategy be? And the problem with native apps is they're incredibly expensive to develop. Incredibly, a lot of maintenance with all the updates to iOS and Android. And many merchants really didn't see success because consumers will only download and give you real estate on their phone for an app that you really engage with on a very frequent sort of multiple times a day basis. And most of our customers are retailers that perhaps only have two or three transactions a year with their clients, with their end shoppers. And so a native app strategy just doesn't work. So the really exciting thing I think for merchants are you can actually almost put the need for an app strategy to bed. They don't need one anymore. They invest their PWAs. So here at the conference, we announced Magental Support for Progressive Web Apps. We've launched a new development toolkit we called the PWA Studio. And it's really a native capability for our merchants and our system integrators to be able to build Progressive Web Apps on a Magental platform. So we're super excited about it. Yeah, sounds super exciting. And also really the consumer, the conveniences that consumers are demanding and you really react to the mobile only experience there has a huge potential upside for the merchants. How are you seeing that being used or use cases for that in the B2B space? Yeah, so if anything, it's almost kind of more applicable in B2B than it is in B2C, although they're both going to adopt PWAs. So what's interesting about B2B is that there is a much more frequent transaction or interaction with the end buyer. B2B buyers are frequent purchasers. They are buying in bulk and they're making purchases, perhaps multiple times a day and multiple times a week. And so they are power users and they do have a great deal of engagement with the brand with the distributor. So again, historically, I think a lot of B2B firms have built native apps. And I've done so on top of Magental, it's very easy to build a native app and integrated into our REST APIs, et cetera. But again, it's expensive and often it can be a seven-figure sum to initially develop an app strategy and to continue to maintain it. So there's a real TCO advantage of actually switching that strategy to do a PWA. The adoption can be higher because you don't need to install the app. And just the cost and support of building and supporting a PWA is significantly lower than a native app. So again, there's a lot of use cases for using PWA's in the B2B commerce space as well. Awesome. So besides what you announced with Progressive Web Apps, what are some of the other exciting announcements that you guys have made at Imagine? Yeah, so I think product announcements, we've got an exciting new product we call a page builder. This is a content management and page building tool. So what this really does is it allows the marketer and merchandiser the real control over building and maintaining the pages on their site. And whether it's mobile desktop and being able to do that. And it really alleviates any dependency on having to have a front-end developer where there's a true WYSIWYG drag-and-drop capability. It gives them complete creative to build very sophisticated content pages but to have complete control over their publishing schedule and being able to preview that. So we're very excited about that. I think it really empowers the marketers and merchandisers to be more creative and to get more done in the day because we're empowering them to be act independently of needing to work with a front-end developer. Awesome. And you guys, speaking of developers, have a very large community. We do, we do. We have 300,000 plus developers. That's right, it's quite incredible, yeah, yeah. I mean, here at the conference, this is sort of the main sort of annual get-together when what we call the community, I'll come here to Las Vegas every year into the win and the community is here and a lot of that community have made up of developers and those developers, many of them work for our merchants. Many of them work for our system integrators. Many of them work at our technology partners and some are contractors, self-employed specialists and so forth, but as you say, that community is over 300,000 developers strong. So that's 300,000 people who make a livelihood doing development on Magento. So it's an amazing community and they're incredibly passionate about Magento and they contribute back to Magento. We have our roots as being an open-source platform and one of the great differentiated benefits of that is that our community help us innovate and they help us, they contribute code, they contribute features and capabilities back into the platform that means that we can extend our R&D team to be this much, much greater force where we can develop new capabilities and deliver value to our clients at a far faster pace than any of our competitors do. So it's a really interesting aspect of our business. Well, Peter, thanks so much for stopping by theCUBE and sharing the great announcements that you guys have made today and this week and the direction that you're able to go in and help take best practices and things, learn in the consumer space, apply it to business as we wish you the best of luck and we look forward to being back at Magento Imagine next year. Yeah, great, lovely to have you back. Thanks so much for chatting to me today. Our pleasure. Cheers. We want to thank you for watching theCUBE again. We are live with the win in Las Vegas with Magento at Imagine 2018. I'm Lisa Martin. Stick around, be back with one more guest after a short break.