 Live from the Javits Center in New York City, it's theCUBE, covering Inforum 2017. Brought to you by Inforum. theCUBE's coverage of Inforum here at the Javits Center in New York City, I'm your host, Rebecca Knight, along with my co-host, Dave Vellante. We are also joined by Jim Kobalus, who is the lead analyst for Artificial Intelligence at Wikibon. Thanks so much, it's exciting to be here, day one. Yeah, good to see you again, Rebecca. It's great to be working with you. Really our first time, we really worked a little bit of Red Hat Summit. Exactly, first time on the desk together. It's our very first time. I just met you a little while ago, I'm already your old friend. So here's, there's a third time we've done Inforum. The first time we did it was in New Orleans, and then Infor decided to skip a year, and then last year they decided to have it in the middle of July, which is kind of a strange time to have a show, but there are a lot of people here. I don't know what the number is, but it looks like several thousand, maybe as many as four to five thousand? I don't know. Yeah, no, no, I feel like this is a big show. It's packed for July, for any month actually. Exactly, particularly at a time where we're having a lot of real issues at LaGuardia too, so it's exciting. So the Cube first met Infor at the second Amazon re-invent, and I remember the folks at Amazon told us we really have an exciting SaaS company. It's the largest privately held SaaS company in the world. We were thinking, is that SaaS? And they said, no, no, it's a company called Infor. We said, well, who the heck is Infor? And then we had Pam Murphy on, and that's when we first were introduced to the company, and then of course, we were invited to come to New Orleans. At the time, the questions around Infor, well, who was Infor? What are they all about? And then it became, okay, started to understand the strategy a little bit. For those of you not familiar with Infor, their strategy from early on was to really focus on the micro verticals. We've talked about that a little bit, just a quick bit of history. Charles Phillips, former president of Oracle, orchestrator of the M&A at Oracle, PeopleSoft, Siebel, and many others, left, started Infor, it's a rollup funded by Golden Gate Capital and other private equity, substantial base of loss in software customers, and then many, many other acquisitions. Today, fast forward, you got basically an almost $3 billion company with a ton of debt, about $5 billion in debt, notwithstanding the Koch brothers' investment, which is almost $2.5 billion, which was to retire some of the equity that Golden Gate had, some of the owners, Charles and the three other owners, took some money off the table, but the substantial amount of the investment goes into running the company. Here's what's interesting. Koch got a two-thirds stake in the company, but a 49% voting share, which implies a valuation of about, I want to say, just under $4 billion, let's call it $3.7, $3.8 billion, for a $2 to $3 billion company, that's not a software company with 28% operating margin, that's not a huge valuation. So we'll ask Charles Phillips about that, I mean, some of this wonky stuff in the financials, you know, we want to get through, I'm sure Infor doesn't want to talk too much about that. But it is true, it is one of, it is for a unicorn, for a privately held company, this is one of them, this is up there with Uber and Airbnb, and it's a question that why, why isn't it valued at more? Well, I think my only assumption here is they went to Koch and said, okay, here's the deal, we want $2 billion plus, you only get 49%, only if you get 49% of the company, in terms of voting rights, we'll give you two-thirds in terms of ownership, it's a sweetheart deal, of course it's a lot of dough, you get a board seat, maybe two board seats, I can't remember, and we'll pump this thing up, we'll build up the equity and we'll float it someday in the public markets and we'll all make a bunch of dough and our shareholders will all be happy. That's the only thing I can assume was the sort of conversation that went on, well again, we'll ask Charles Phillips see if he answers that. But James, you sat in yesterday at the analyst event, you got sort of the history of the company and you know, the fire hose of information leading up to what was announced today, Coleman AI, what were your impressions as an analyst? Well first of all, my first impression was a thought, a question, is import with Coleman AI simply playing catch up in a very, I call it like a war of attrition in the ERP space, it's really, it's four companies now, it's SAP, it's Microsoft, it's Oracle, and it's in for duking it out, SAP, Microsoft and Oracle all have fairly strong AI capabilities and strategies and investments and clearly they're infusing, I was at Microsoft build a few months ago, they're infusing those capabilities into all of their offerings. So with Coleman, sounds impressive, though it's just an early announcement, they've only begun to trickle it out to their vast suite. I want to get a sense, and probably later today we'll talk to Mr. Ango, Duncan Ango, I want to get a sense for how does, or does, in for intent to differentiate their suite in this, first the competitive ERP work, how will Coleman enable them to differentiate it? Right now it seems like everything there announcing about Coleman is great in terms of digital assistance, conversational interface, everybody does this too, now with chatbots and so forth in line providing recommendations and kind of, everybody's doing that essentially, everybody wants to go there, how are they going to stand apart with those capabilities, number one? Number two, just the timeline, how this vast suite, we just came from the keynote where Charles and the other execs laid out in my new detail, the micro vertical applications, what is their timeline for rolling out those Coleman capabilities throughout this piece so customers can realize that value? And is there a layered implementation? They talked about augmentation versus automation versus assistance. I'd like to see sort of a layer of capabilities in an architecture with a sense for how they're going to invest in each of those capabilities. For example, they talked about open source like with TensorFlow, which is a new deep learning framework for that Google open source. I just want to get a deep dive into where the investment funds that they're getting from Coke and others, especially from Coke, where that's going in terms of driving innovation going forward in their portfolio. I'm not cynical about it, I think they're doing some really interesting things but I want some more meat on the bones of their strategy. It's interesting because I think they came into, Infor came into the show wanting to message innovation. They're not known as an innovative company but you heard Charles Phillips up there talking about today, he was talking about quantum computing, he was talking about the end of Moore's law, he's obviously talking about AI. You know they named Coleman after Catherine Coleman, Johnson, and so. Here's my speculation. My speculation, they of course they recently completed the acquisition of birth. Brad Peters did a really good discussion of birth. The BI startup that's come along real fast. My sense, and I want to get confirmation is that possibly Burst and Brad Peters and his team, will they drive the Coleman strategy going forward? It seems likely because Burst has some AI assets that Brad Peters brought us up to speed on yesterday. I want to get a sense for how Burst's AI and Coleman AI are going to come together into a conversion. Well wouldn't they say that it's, quote unquote, embedded, embedded in the AI buried within the software suite. We saw, like you said, in gory detail the application portfolio that Infor had. I mean I think one of the challenges the company has, it's like some of my staff meetings. Not everything is relevant to everybody. And so, but very clearly they have a lot of capabilities that most people aren't aware of. So the question is how much can they embed AI across those, and where are the use cases, and what's the value, and it's early days, right? Oh yeah, very much. And you know in some of those applications, probably many of them, the automation capabilities that they describe for Coleman, be just as important as the human augmentation capabilities. You know, in other words, micro-verticalized their AI in diverse ways going forward across the portfolio. You know there's one AI brush, just a broad brush of AI across every application probably won't make sense. The applications are quite different. I want to talk about the use cases here. And the selling points for these things are making the right decision all the time, more quickly. Quantity accelerators for knowledge workers, all that. And one of the other points that was made is that there are fewer arguments because we are all looking at the same data and we trust the data. Where do you see Burst and Coleman? Which, give me an example of where you could see this potentially transforming industry. We all trust data. Actually, we don't all trust data because not all data is created the same. Burst comes into the portfolio not just through really great visualizations and dashboarding and so forth. But they've got a well-built data management back end for data governance and so forth to cleanse the data. Because if you have dirty data, you can't derive high quality decisions from the data. Excellent point. First of all, yeah. So that's really my general take on where it's going. In terms of the Burst, I think the Burst acquisition will become pivotal in terms of them taking their data-driven functionality to the next level of consumability. Because Burst has done a really good job of making their capability consumable for the general knowledge worker audience. Well, a couple things. So Mark, actually let me frame, Charles Phillips I thought did a good job framing the strategy. Sort of his strategy stack, if you will. Starting with, at the bottom of the stack, the micro verticals strategy. And then moving up the next layer was their decision to go all cloud, AWS cloud. The third was the network. They've been formating an acquisition of a company called GT Nexus, which is a commerce platform that has 18 years of commerce data and transaction data there. And then the next layer was analytics, which is Burst. I'll come back to that. And then the top layer is Coleman AI. The Burst piece is interesting because we saw the ascendancy of Tableau. And it's land and expand strategy. And Kristin Chabot, the CEO of Tableau, used to talk about, and they said this yesterday, the slow BI cubes and the cycle of, the life cycle of actually getting an answer. By the time you get the answer, the market has changed. And that's what Tableau went after. And Tableau did very, very well, but it turned out Tableau was largely a desktop tool. Wasn't available in the cloud, it is now. And it had its limitations. It was basically a visualization tool. So what Infor is done with Burst is they're positioning the old Cognos, which is now IBM. And the micro strategies of the world as the old guard, they're depositioning Tableau, and they didn't use that specific name Tableau, but that's what they're talking about, Tableau and Click, as less than functional, sort of spreadsheet plus. And they are now the rich, robust platform that both scales and has visualization and has all the connections into the enterprise software world. So I thought it was interesting positioning. Would love to talk to some customers and see what that really looks like. But that essentially was the strategy stack that Charles Phillips laid out. And I guess the last point I'd make is I come back to the decision to go AWS. You saw the application portfolio. Those are a hardcore enterprise apps, which everybody says don't live in the cloud. Well, 55% of Infor's revenue is from the cloud. So clearly, it's not true. A lot of these apps are becoming cloud enabled. Most of them. Most of them? Most of them, yeah. Most of the AI, most predictive analytics. Most AI, machine learning is going in the cloud. Because Oracle's argument is Oracle will be only one who can put those apps in the cloud. Because the data lives in the cloud. And it's trained on the data. Not all the data lives in the cloud. It's like GT Nexus, that's EDI, that's rich EDI data. As they've indicated, if we're training this new generation of neural networks, machine learning and deep learning models continuously from fresh transaction data, you know that's where GT Nexus and the e-commerce network fits into this overall strategy. It's a massive pile stream of data from mining. But SAP has struggled in the cloud. Success factors, obviously, is their SaaS play. But most of their stuff remains on-prem. Oracle, again, claims they are the only end-to-end hybrid. You see Microsoft finally shipping Azure Stack, or at least claiming to soon be shipping Azure Stack. Okay, they've obviously got a strategy there with their productivity estate. But here you have Infor. Don't forget IBM. They've got a very rich hybrid portfolio. Well, you heard. I don't know if it was Charles. Somebody took a swipe at IBM today saying that the companies have, our competitors have purchased all these companies, these SaaS companies, and they don't have a way to really stitch them together. Well, that's not totally true. Blue Mix is IBM's way. Although, that's been a heavy lift. We saw with Oracle Fusion, it took over a decade, and they're still working on that. So Infor, again, I want to talk to customers and find out, okay, how much of this claim that everything sort of, you know, seamless in the cloud is actually true. I think obviously a large portion of the install base is still that legacy on-prem loss in base that hasn't modernized. And that's always, in my view, been Infor's big challenges. How do you get that base, leverage that install base to move and then attract new customers? By all accounts, they're doing a pretty good job of it. I don't think there's a, I don't think what's going on, I don't think, I don't think a lot of lift and shift is going on. Legacy loss in customers are not moving in droves to the cloud with their data and all that. There's not a massive lift and shift. It's all the new Greenfield applications for these new use cases, you know, in terms of predictive analytics. That's, they're being born and living their entire lives in the cloud. And a lot of HR, a lot of HCM, obviously. You know, competing with Workday and PeopleSoft, that stuff's going in the cloud. So, you know, we're going to be unpacking this all day today and tomorrow, two days a year of coverage. And yeah, excited to be here. It's going to be a great show. Bruno Mars is performing the final day. I know. You know a company's doing good in for when they're getting paid for the likes of a Bruno Mars. It is so true. Who's still having mega hits on the radio. I wish I was staying long enough to catch that one. I know, indeed, indeed. Well, for Dave and Jim, I'm Rebecca Knight. We'll be back with more from Inforum 2017, just after this.