 Live from Las Vegas, it's theCUBE. Covering Adobe Summit 2019, brought to you by Adobe. Hello everyone, welcome to theCUBE, live conversations here. We're covering Adobe Summit 2019 in Las Vegas. I'm John Furrier with Jeff Frick, co-hosting for the next two days, wall-to-wall coverage around Adobe Summit. A company that has transformed from making software to being a full-blown cloud and data provider, changing the user experience. This is our keynote review. Jeff, this morning was the keynote with the CEO. Shanta Ngu Narayan took over in 2007 from Bruce Chisholm Cube alumni. What a transformation. They actually did it. They kind of kept down low, but over those years, absolutely changed the face of Adobe. We're seeing it now with a slew of acquisitions. Now, 17,000 people attending this conference. This is kind of an interesting story. Your thoughts? There's a lot of interesting stuff going on here, John. I think fundamentally, they took the risk. They changed your business from buying new license every year for 800 bucks, 900 bucks, whatever used to be for Creative Cloud, to go to an online model. I think what was interesting about what Shanta Ngu said is when you're collecting money monthly, you have to deliver value monthly. And it completely changed the way that they paced their company, the way they deliver products, the way their product development works. And they moved to, as we talk about all the time, instead of a sample of data that's old and making decisions, now you can make decisions based on real-time data in the way people are actually using the product. And so they've driven that transformation, and then now, by putting their whole suite in with these gargantuan acquisitions of Marketo, now they are helping their customers really make that transition to a real-time, dynamic, digitally-driven, data-driven enterprise to drive this customer experience. It's interesting, Adobe's transformation is real, it's legit, it happened, it's happening. It's interesting, Jeff, you and I both live in Palo Alto, and I was looking through my LinkedIn and my Facebook, there's literally dozens of friends and or colleagues over the years that I've interfaced with that all work at Adobe. Between all the acquisitions, they've built quite a huge company, and they brought a different set of experiences. And this is, to me, the big story that hasn't been told yet at Adobe. And again, this is our first time covering Adobe Summit, and excited to be here and continue to cover this. But here's what's going on, that's really important. They transformed and are continuing to transform, but they did it in a way that was clever, smart, and very predictive in their mind. They took a slow approach to getting it right. And we heard the CEO talk about this. They had an old software model that was too slow. They wanted to attract a next generation of users, and they wanted to reimagine their product and their ecosystem, change their business model, and change their engagement with customers. Very targeted in its approach, very specific to their business model, and the goals were, innovate faster, move to the cloud, move to a subscription-based business model. But that's not it. Here, the story is the data equation with some kind of nuances in the keynote, like we didn't get the data right initially, we got cloud right, but data is super important, and then they got it right, and that's the big story here is the data-driven. And this is the playbook. I mean, you can almost substitute Adobe for your company if someone's looking to do transformation. Pick your spots, execute, don't just talk about it. Right, right. Yeah, they call it the DDOM, the data-driven operating model, and he pulled up the dashboard with some fake data and talked about the management team runs off of this data. And when it's everything from marketing spend and direct campaigns and where people are sampling, there was a large conversation too about the buyer journey, but to me, the most important part is the buying act is not the end of the story, right? You want to continue to engage with that customer wherever and however and whenever they want to. There was an interesting stat that came out during the keynote where, you know, the more platforms your customer engages with you, the much higher the likelihood that they're going to renew, that they're going to retain. So to me, I think, you know, we talk a lot about community and engagement and this experience concept where the product is a piece of the puzzle, but it's not the most important piece. It might be the piece in which the experience is built around, but it's just a simple piece. I think the guy from Best Buy was phenomenal, the story of the transformation of that company, but they want to be your trusted provider of all these services. At $200 a year, they'll come take care of everything in your home. So, you know, they don't just want to ship a box, say goodbye, they want to stay engaged. Well, let's talk about that use case. I think the Best Buy keynote, Best Buy was on the keynote with the CEO, but I think that what I was teasing out of that interview and you just brought it up, I want to expand on that. They actually had massive competition from Amazon, so you think, oh my God, they're going to be out of business. No, they matched the price. They took price off the table, so they don't lose their customers. If you want to buy it on Amazon, you can still come in the store in an experience. They shifted the game to their advantage where they said, we're not going to be a product sales company, we're going to sell whatever the client, customers want and match Amazon's pricing and then provide that level of personalization. That then brought up the CEO's personalization piece, which I'd like to get your thoughts on because you made a stat around their emails. He said, quote, personalization at scale. That's what they're doing. And he talked about, they used to do an email blast and it was an email blast. Now they have 40 million versions of that email that go out, 40 million versions. So it is this kind of personalization at scale and the 360 view of the customer's been thrown around. We could go in the archives, we've been talking about that forever, but it seems that now the technology's finally getting to where it needs to be. The cloud-based architectures allow people to engage in this omnichannel way that they could never do it before. And you're seeing, as you said, the most important thing is the data architecture that can pull from disparate sources. They talked about it in the keynote, they showed as they actually built their customer profile as the person was engaging with the website as they gave more information so that they can customize all this stuff before that person, of course then they always mentioned, but don't be creepy about it, right? Don't go too far. So really delivering this mass personalization at scale. And I think one of the lessons that's coming out, a lot of our interviews on theCUBE is, get the cloud equation right first, then the data one. And I think Adobe validates that here. In my mind, we're going to continue to investigate and report that dynamic. The hard news, Jeff, at the show was, Adobe cloud experience is generally available. And I thought that was pretty interesting. They have multiple clouds, remember they bought Magento and Mercado and a variety of other acquisitions. So they have full on advertising cloud, analytics cloud, marketing cloud and a commerce cloud. And underneath those key cloud elements, they have Adobe Sensei and Adobe Experience Platform. And we have a CUBE alumni coming on to talk about that. And that's making up there kind of the new platform, cloud platforms, experience cloud they're calling in. But the CEO had an interesting quote, I want to get your reaction to that. He said, quote, people buy experiences not products. So that's why they're calling it the experience cloud. I hear you in the office all the time talking about this, Jeff. So it's about the experience, not the product anymore. It is the passion that you can build around a community in that experience. My favorite examples from the old days is Harley Davidson. How many people would give, you know, their left pinky to have their customers tattoo their brand on their body? Right, and the Harley Davidson brand is a very special connotation and the people that associate with that really feel like a part of a community. The other piece of it is the ecosystem. And they talk about ecosystem and developers and open source. If you can get other people building their business on the back of your platform, again, it just deepens the hook of engagements. It opens up your innovation cycle. And I think it's such a winning formula, John, that we see over and over again. Nobody can do it by themselves. Nobody's got all the smartest people in their room. So get an engaged community, get an engaged developer ecosystem, more talk of developers, and really open it up and let the creativity of your whole community drive the engagement and the experience forward. We will be following the personalization at scale, Cube alumni, former Cube alumni who's not at the show I wanted to get his opinion, Satya Krishnaswamy, he's head of personalization at Adobe. I pinged him on LinkedIn. We're going to get him on the Cuban studio. So keep on, we're going to follow that story. I think that's huge. This notion of personalization at scale is key. And that brings us to the next big news. The next big news was from our friend, former CEO of Marketo, Steve Lucas, Cube alumni. They launched a account-based experience initiative with Adobe, Microsoft, and LinkedIn. And I found that very interesting. I was talking with Ron Miller at TechCrunch on Twitter about this. LinkedIn's involved, but they're keeping it in LinkedIn. Again, the problem with data is you have these silos, but you have to figure out how to make it work. So I'm really curious to see how that works. So that brings up that. But I think Steve Lucas was very aggressive on stage, but he brought up a point that I want to get your thoughts on. He said, we're a B2B company, but we're doing B2C metrics. The numbers that they were doing at Marketo were in the B2C range. So is this notion of B2B, B2C kind of blurring? I mean, everyone is a B2C company these days. If everything's direct to consumer, which essentially what cloud is, it's a B2C. Yeah, well, it's interesting. I guess we've talked about the consumerization of IT. Again, check the tapes for years and years and years. And the expectations of our engagement with applications is driven by how we interact with Amazon, how we interact with Facebook, how we interact with these big platforms. And so you're seeing it more and more. The thing that we talked about in studio the other day with Guy is that now too, you have all these connected devices. So no longer is distribution this buffer between the manufacturer and the ultimate consumer of their products. Now they're all connected. Now they phone home. Now the Tesla says, hey, people are breaking in the back window, let's reconfigure the software to have a security system that we didn't have yesterday that wasn't on our roadmap, but people want and now we have it today. So I think Steve's perception is right on. The other thing is that there's so much information out there. So how do you add value when that person finally visits you in their journey? And let's face it, most of the time, a predominant portion of their engagement is going to be electronic, right? They're going to fill out a form. They're going to explore things. How are you collecting that data? How are you managing? How are you moving them along? Not only to the purchase, but again, as I was like to say, it's never the order, it's the reorder and it's ongoing engagement. And that's their journey. They want to have this whole life cycle of customer experience. But the thing that caught me off guard on the keynote, again, this first time I sat in the keynote for an Adobe event was with all these parts coming together with the platform. This is a cloud show. Let's play it in simple. This is cloud technology. It's a data show. We've gone to all the cloud shows, Amazon, Google, Microsoft, you name it, CNCF, Linux Foundation. This is a show about the application of being creative in a variety of use cases. But the underpinnings of the conversations are all cloud. Right, and they had, you know, and to show their commitment to data and the data message, right? They had another CUBE alumni on Juul up. We used to have her on a to-do summit all the time. And she talked about the data architecture. And again, some really interesting facts. Goes right to cloud. She said, you know, most people, if you don't have cloud, spend too much time babysitting your architecture, babysitting your infrastructure. Get out of the way. Let the cloud babysit your infrastructure. And she talked about a modern, big data pipe. And she's been involved in the to-do. She's been involved with Spark. She's been involved in all this progression. And she said, you know, every engagement creates more data. So how are you collecting that data? How are you analyzing that data? And how are you doing it in real time or new real time? So you can actually act on it. So it's very much kind of pulling together many of these themes that we've been covering for years. And the last two parts of the keynote was, you had a CIO discussion between Cynthia Stoddard and... Atticus. Atticus. Both of them. Right. Again, both big Amazon customers, by the way, who have been very successful with the cloud. And then you had Angel Talk and Engineering. That's all there. My takeaway from the CIO one, Jeff, I want to get your thoughts on, because it can be long on the tooth sometimes, the CIO conversation, but they highlighted that the cloud journey is there for the Adobe and into it. But the data has to be integrated. They talk about data variables, the commonality of data. And she mentioned three or four other things. And then they made a point and said, quote, data architectures are valuable for the experience and the workload. This is critical. We're hearing this over and over again. The data's not about which cloud you're using. It's about what the workload is. Right, right. The workloads are determining cloud selection. So if you need one cloud, that's good. You need two clouds. It's all dependent on the workload, not some predetermined risk management, multi-cloud procurement decision. This is a big shift. This is going to change the game in the IT landscape because that changes how people buy. And that is going to be radical. And I think Adobe's right on the right wave here. They're focusing on the user experience, customer experience, building the platform for the needs of the experience. I think it's very clever. I think it's a brilliant architecture. Yeah, and she said that the data strategy lagged. The reporting lag, they were trying to do this DDOM. They didn't have commonality of data. They didn't have really a data architecture. So again, you can't build the house unless you put in the rebar, you build the foundation, you get some cement. But once you get that, that enables you to build something big and something beautiful. And you got to pay attention. But really, we talk about data driven. We talk about real-time data. They're executing it and really forcing themselves by moving into the subscription business model. All right, final question. I want to get one more thought from you before I weigh in on my answer to my question, which is what do you, in your opinion, what was the most important story that came out of the keynote? One or two or one story? Well, again, John, I was in the TV business for years and years before getting into tech. And I know the best buy story and what came before them and what came before them and what came before them. So what really impressed me was the digital transformation story that the CEO shared. First, to basically try to get even with their number one competitor which was Amazon in terms of pricing and delivery and then really rethink who they are as a company around using technology to improve people's lives. They happen to play in laundry, they play in kitchen, they play in home entertainment, they play in computers and education. So they have a broad footprint and to really refocus. And as he said, to be successful, you need to align your corporate strategy and mission with people's strategy and mission. It sounds like they've been very successful in that and they continue to change the company. I agree and I would just kind of level it up and say the top story in my opinion was the fact that Adobe is winning, they're innovating. And if you look at who's on stage like Best Buy and to it, the people around them are actually executing with cloud, with data at a whole nother level that they've gone the next level. I think the big story here is Adobe has transformed and continues to do transformation. And they're just at a whole nother level. And I think the story is Oracle will be eating their dust because I think they're going to, you know, and I think Salesforce should be watching Adobe. This is a big move. I think Oracle is going to be twisting in the wind from Adobe's success. Well, like I said, you know, they tie the whole thing together from the creativity, which is what Creative Cloud is to the delivery to then the monetization and the measuring. So now they've, you know, they've put those pieces together. So it's a pretty complete suite. So now you can tie back. How has my conversion based on what type of creative? How is my conversion based on what type of campaigns? And again, the 40 million email number just blows me away. It's not the same game anymore. You have to do this and you can't do it by yourself. You got to have automation. You got to have good analytics and you got to have a data infrastructure that will support your ability to do that. So just a little report caught on Adobe, old software model that's over. They have the new model and it's growing revenue supporting it. They are attracting new generation of users. You look at the demographics here, Jeff, this is not, you know, a bunch of 40-something pluses here. This is a young generation, new creative model and the products and the customer testimonials standing on the stage represent, in my opinion, a modern architecture, a modern practice, a modern cloud kind of capability. So, you know, Adobe is certainly looking good from this keynote, I'm impressed. So, okay, two days of live cube coverage here in Las Vegas for Adobe Summit. I'm John Furrier with Jeff Frick. Thanks for watching. We'll be back after this short break.