 Live from Munich, Germany. It's theCUBE, covering DataWorks Summit Europe 2017. Brought to you by Hortonworks. Hey, welcome back everyone. We are here live in Munich, Germany for DataWorks 2017, the DataWorks Summit, Fremly Hadoop Summit. I'm John Furrier with SiliconANGLE theCUBE, my co-host Dave Vellante, wrapping up day two of coverage here with Christoph Schuber, who's the Senior Director of SAP Big Data. And it was all the good of Marker for SAP Big Data at SAP Big Data's Twitter handle. You have the great shirt there, go live. And they have a nice, you guys are nice. You guys are a part, welcome to theCUBE. Thank you, I appreciate it. Thanks for joining us on our wrap up. You and I have known each other, we've known each other for a long time. We've been in many sapphires together and we've had many conversations around the role of data, the little architecture, the role of how organizations are transforming at the speed of business, which is SAP is a lot of software that powers business. Under transformation right now, you guys are no stranger to analytics. You have the HANA Cloud Platform now. We know what they're going to do about that. Yeah. You know a little bit about data and legacy as well. You guys power pretty much most of the Fortune 100, if not all of them. Which makes lots on this. Yeah, good point on the topic of some numbers. About 75% of the world GDP runs through SAP systems eventually. So yes, we know a thing or two about transactional and analytical systems, definitely. And you're a partner with Hortonworks. With Hortonworks and other cloud providers, Hadoop providers certainly, absolutely. But in this case, Hortonworks, we have specifically a solution that runs on Hadoop Spark and that allows actually our customers to unify much, much larger data sets with a system of records that we do so many of them around the world for a new and exciting use case. And you were born in Munich. This is your hometown. This is actually a home gig for me, exactly. So yes, unfortunately, I'll also be presenting in English. But yeah, I want to talk German, Bavarian all the time. I wish we could help you, but we don't speak Bavarian, but we do like to drink the beer though. It's the fifth season, but a lot of great stuff here in Germany. Dave, you guys, I want to get your thoughts on something. I wanted to get you guys, because you're like an analyst, Christoph, as well. I know you're at SAP, but you're such great industry expertise. Dave obviously covers this stuff every day. I just think that the data world is so undervalued in my mind. I think the ecosystem of startups that are coming out in the out of the open source ecosystems, which are well defined by the way and getting better. But now you have startups doing things like FinTech. We just had a bank on startups creating value and things like blockchain on the horizon. Other new paradigms are coming on is going to change the landscape of how wealth is created and value is created in charge. So you got a whole new tsunami of change. What's your thoughts on how this expands? And I'll see, certainly Hortonworks has a public company and Cloudera is going public. So you just have to see that level up in valuation. But I still think they're both undervalued. Your thought? It's not just the platform, right? And that's I think where Hadoop also came from. The legacy of Hadoop is that you don't have to really think about how you want to use your data. You have to don't think ahead, what kind of schema you want to apply and how you want to correlate your data. You can create a large data lake, right? That's the term that was created a long time ago that allows customers to just collect all that data and think in the second stage about what to use with it and how to correlate it. And that's exactly now we're also seeing in the third stage to not just create analytics, but also creating applications instead of analytics or on top of analytics correlating with data that also drives the business, the core business from an OLTP perspective or also from an OLAP perspective. I mean, Dave, you were the one who said Amazon's a trillion dollar TAM, a trillion dollar, the first will be the first trillion dollar company. And you would kind of, but you looked at the thousand points of life what cloud enables all these, if you aggregate it all together, what's your thoughts on valuation of this industry because if Hortonworks continues on this pure play and they've got cloud error coming in, they're doing well. You could argue that they're both undervalued companies if you count the ecosystem. Well, we always knew that big data was going to be a heavy lift, right? And I would agree with what Kristoff was saying is that Hadoop was profound and that it was, you know, no schema on right and ship five megabytes of code to a petabyte of data, but it was hard to get that right. And I remember something you said, John, at one of our early SAP sapphires. When the big data meme was just coming through, you said, you know, SAP is not just big data, it's fast data. And you were talking about bringing transaction and analytic data together. Again, something that has only recently been enabled. And you think about, you know, continuous streaming. I think that now that big data sort of entered the young adulthood phase, we're going to start seeing steep part of that S-curve returns. And I think the hype will be realized. I think it is undervalued. Much like the internet was, it was overvalued and nobody wanted to touch it and then it became, actually, if you think back to 1999, the internet was undervalued in terms of what it actually achieved. I think the same or similar thing is going to happen with big data and since we have an SAP guest and I'll say as well, we all remember the early days of ERP. It wasn't clear who was going to emerge as the king. Right, there were a few solutions, you're right. That's right. And as well, something else we said about big data, it was the practitioners of ERP that made the most money, that created the most value and the same thing is happening here, yeah. In fact, on that topic, I believe that 2017 and 2018 will be the big year, big years for big data, so to speak. In fact, because of some statistics, well, we just did a few statistics, right, exactly. Utilizing the value of big data, we're talking about valuation here, right? 75% of CIOs of the top 1000 believe that the next three years are more important to their business than the last 50. And so that tells me that they're willing to invest, not just the financial market, who I believe really run the most sophisticated big data analytics and models today. They had real use cases that real, with real results very quickly. And so they showed many how it's done. They created sort of the new role of a data scientist. They have roles like an AML officer. It's a real job. They do nothing else but anti-money laundering, right? So in that industry, they've shown us how to do that and I think others will follow. Yeah, and I think that when you look at this whole thing about digital transformation, it's all about data. Yeah. I mean, if you're serious about digital transformation, you must become a data-driven company and you have to hop on that curve. Even we're talking to the bank today who got on in 2014, which was relatively late, but the space at which they're advancing is astronomical. Yeah. I don't remember his name, a British mathematician who created about 11 years already that he co-ordined the phrase, data is the new oil. And I think it's very true because crude oil in its original form, you also can't use it. Has to be refined. Right, exactly. It has to be refined to actually use it and use the value of it. Same thing with data. You have to distill it. You have to correlate it. You have to align it. You have to relate it to business transactions so the business really can take advantage of it. And then we're seeing, to your point, we've got, I don't know, the list of big data companies that are now in public is growing. It's still small. Well, I mean, I just think, and this is why I like your reaction. I mean, I just think I'm reading right now some news popping on my dashboard. Google just released some benchmarks on the TPU, the Tensor Processing Unit. Basically a chip dedicated to machine learning. And so you're going to see some abstraction layers develop whether it's a hard and top processor hardware. You guys have certainly done innovation on the analytics side. We've seen that with some of the specialty apps just to make it things go faster. And so more and more action is coming. So I would agree that this S-curve is coming. But the game might shift. I mean, this is not an easy clear path. This bet's being made in big data and this potential for huge money shift of value. See, one of the things I see, and we talked to Hortonworks about this and the new president, betting all on open source. I happen to think a hybrid model is going to win. I think the rich get richer here. SAP, IBM, even Oracle, they can play the open source game and say, hey, we're going to contribute to open source. We're going to participate. We're going to utilize open source. But we're also going to put the imprimatur of our install base, our business model. We're at our trusted brands behind so-called big data. We don't really use that term as much anymore. It's the confluence of not only the technology, but the companies who, would you say, 75% of the world's transactions run through SAP at some point? Yeah, with companies like SAP behind it and others, that's when this thing, I think, really takes off. What I think a lot of people don't realize, and I've been a customer also for a long time before I joined the vendor side, and what is under-realized is the aspect of risk management. Once you have a system and once you have business processes digitized and they run your business, you can't introduce radical changes overnight as quickly anymore as you would like or your business would like. So risk management is really very important to companies. That's why you see innovation within organizations not necessarily come from the core digitization organization within their enterprise. It often happens on the outside within different business units that are closer to the product or to the customer or something like that. Is that something else that's happening too that I wanted to address is this notion of digitization which is all about data, allows companies to jump industries. You're seeing it everywhere. You're seeing Amazon getting into content, Apple getting into financial services. You know, there's this premise out there that Uber isn't about taxicabs, it's about logistics. And so you're seeing these born digital, born in the cloud companies now being able to have massive impacts across different industries, huge disruption creates great opportunities, in my view. I mean I just think that the disruption is going to be brutal and I want to, I'm trying to synthesize what's happening in this show and you know, you squint through all the announcements and the products. Really an upgrade to 2.6, a dupe data platform but here in Europe, the IoT thing just to me is a catalyst point because it's really a proof point to where the value is today and that people can actually look at and say this is going to have an impact on our business to your digitization point and say and I think IoT is pulling the big data industry and cloud together and I think machine learning and things that come over the top on it are only going to make it go faster and so that intersection point is where the AI, augmented intelligence is going to come in. I think that's when you're going to start to see real proof points on value proposition of data. I mean right now it's all kind of an inner circle game. Oh yeah, got to get the insights, we can optimize this process here and there and so this low hanging fruit but the big shifting mind blowing CEO changing strategies will come from bigger moves. To that point actually, two things I want to mention that SAP does in that space specifically. Startups, we have a program actually SAP.io that Bill McDermott also recently introduced again where we invest in startups in this space to help foster innovation faster and help also connecting that with our existing customers. SAP.io, something to look out for and then on the topic of IoT, we made also an announcement at the beginning of the year, project Leonardo, it's a commitment, it's a solution set and then it's also an investment strategy, right? We're committed in this market to invest, to create solutions, we have solutions already in the cloud and also on premise. There are a few companies we also purchased in conjunction with Leonardo, IoT specifically. Some of our customers in the manufacturing space, very strong opportunity for IoT, sensor collection, creating SLAs for robotics on the manufacturing floor for example, we have complete solutions that to make that possible and realize that for our customers and that's exactly a perfect example where these sensor applications in IoT Edge, compute rich environments come together also with the core where then system of references like machine parts for example, matter because if you manage the SLA for a machine for example, you just don't want to not only monitor it, you want to also automatically trigger the replacement of a part for example and that's where you need an SAP component as well. So that's in that space we're heavily investing as well. I think the other thing I want to say about IoT is I see it, I mean cloud and big data have totally disrupted the IT business. You've seen, you know, Dell buying EMC, HPE had to get out of the cloud business, Oracle pivoted to the cloud, SAP obviously going hard after cloud, very, very disruptive those two trends. I see IoT as not necessarily disruptive. I see those who have the install base as adopting IoT and doing very, very well. I think it's maybe disruptive to the economy at large but I think existing companies like GE, like Siemens, like Daimler are going to do very, very well as a result of IoT. I mean to the extent they embrace digitization which they would be crazy not to. All right guys, final thoughts. What's your walk away from the show? Dave, we'll start with you. Well, as I say, Hadoop is definitely not failed in my mind. I think it's been wildly successful. It is entering this new phase that I call sort of young adulthood and I think it's, we know it's gone mainstream into the enterprise. Now it's about, okay, how do I really drive the value of data as we've been discussing and hit that steep part of the S-curve which I agree it's going to be within the next two years you're going to start to see massive returns. And I think this industry is going to be realized, look back as it was undervalued in 2017. Remember how long it took to align on TCP-IP? You're the walk away. I mean, interoperability was key with TCP-IP was one of the things that made things happen. I remember talking about it. Yeah, great two megabits per second. But I mean, bringing back that, what's your walk away? Because is it a unification opportunity? I mean, is it more of an ecosystem? A good friend of mine, also at SAP on the West Coast, Andreas Walter, he shared an observation that he saw in another presentation years ago. It was suits versus hoodies. Different kind of way to run your IT shop, right? Top-down structured waterfall projects. So it's open source, hack it, quickly done, get in, walk away, make a move. Oh, suits with a waterfall, hoodies was the agile. That's correct. Yeah, yeah, okay. Correct. So I think that it's not just the technology that's coming together, it's mindsets that are coming together. And I think organizationally for companies that's the bigger challenge, actually. Because one is very subscribed, change control oriented, risk management aware. The other is very progressive, innovative, fast, adopters, these two camps bringing those together. I think that's the real challenge in organizations, not the technology. And on that topic, we had a lot of very intelligent questions, very good conversations, deep conversations here with the audience at this event here in Munich. Dave, my walk away was interesting because I had some preconceived notions coming in. Obviously we were prepared to talk about them because we saw the S1 filed by Cloudera. You start to see the level of transparency relative to the business model. One's 4.1 billion dollars in private value and then Horton worth pushing only 700 million in a public market, which what I would agree with you is undervalued vis-a-vis what's going on. So obviously you're going to see my observation coming from here is that I think that's going to be a haircut for Cloudera. The question is how much value will be chopped down off Cloudera versus how much value of Horton worth will go up? So the question is how Cloudera does Cloudera plummet or does Cloudera get a little bit of a haircut or stay and Horton work rises? Either way, the equilibrium in the industry will be established. The other option is- I think the former and the numbers are ugly. Let's not sugarcoat it. And so that's got to change in order for this prediction that we're making. Yeah, the haircut's going to happen. I think, but the numbers are really ugly. But the question is how far does it drop and how much is that a venture arbitrage or just how they were capitalized but Horton worth could roll up. But by point is that those numbers have to change and get better in order for our prediction to come true. But in your second thought, sorry to interrupt you. No, I like the debate now. I want to know where that line is. We'll be watching. But the value in, I think you guys are pointing out that I walked away as IOT is bigger here. I've already said that, but I think the S curve the S curve is you're right on. I think you're going to start to see real fast product development around incorporating data whether it's a Horton worth model which seems to be the nice unifying partner oriented one that's going to start seeing specialized hardware that people are going to start building chips for using flash or other things and optimizing hard complexities that you pointed out on the intro yesterday and putting real product value on the table. I think the cards are going to start hitting the table in the ecosystem. And what I'm seeing is that happening now. So I think, I think just an overall healthy ecosystem. Without a doubt. Any final comments? Let's have a beer. Great to see you. Have a beer. We had a pig knuckle last night, too. We had some sourcrap. Have an ox and loggish. Yeah, we had the host and loggish. Dave, we'll have a beer. It's good to be with you again. Thanks to the crew. Thanks for everyone watching. theCUBE signing off from Munich, Germany for DataWorks 2017. Thanks for watching. See you next time.