 Live from New York, it's theCUBE. Covering Inforum 2016, brought to you by Inforum. Now, here are your hosts, Dave Vellante and George Gilbert. We're back, Duncan Angovis here. This is Silicon Angles theCUBE. We go out to the events. We extract the signals from the noise. Duncan, welcome back to theCUBE. It's good to see you again. Thank you, you too. So, big show for you guys. You know, every two years you come together, you bring your customers together. It gets bigger and bigger. The story gets stronger. A little over five years ago, what? Five and a half years ago? The band, the Beatles got together and decided to form a new sort of chapter. Take us through where you've come from and where you are today. Yeah, that's right. It's been five and a half years. I'm not sure which Beatles I would be. Yeah. But actually, that's the cool one. Yeah, that's right, the cool one. But it's a very international management team, actually. I mean, Stefan is Swiss Canadian. Pam is Irish. I'm English. So I always say Charles is the token American. Some is Indian. So, but yeah, it's been an amazing transformation. When you look at the journey we've gone over the last five and a half years, and we came to Infor because we had a shared vision around building an industry cloud applications company. And we saw a need and a gap in the marketplace. And to do it with a different set of cultural values in terms of how you build relationships with customers and partner and co-innovate and use the cloud and software and all the strategy we came out with to transform every industry that we go after. And if you look at our growth rate over the last five and a half years, it's been remarkable. So we're very pleased with where we are. So at the time, way back when, people said, all right, the typical private equity deal, just going to squeeze, squeeze, squeeze. You must have had some of that skepticism coming in. What got you over the hump and gave you confidence that your backers were actually going to invest in product and R&D and acquisitions and the like? Yeah, I mean obviously Charles with his background has a deep understanding of the banking and investment world and all of that. And obviously we met with the guys before we joined the company and had real confidence in their support for building the kind of software company that we wanted to. And the investors have been in a long time since 2002. I mean, we joined in 2010, they've already been holding for eight years. They put new money in and they've been fantastic partners of ours and have supported our transformation all the way along. And there are benefits to being private. Every large enterprise software company out there has wrestled with the transition to cloud and it's hard to do in the public markets because of the pressure it puts on revenue and profitability and being private and having the backing and support of our private equity partners has been a huge benefit for us. And you went through several years of a serious, heavy lift. It just feels like talking to the community here, the customers, the partners that you're kind of over that nasty hump and then sort of have a tailwind now. Is it? Well, you know, so we laid out very early on that our belief was that we had to put products and customers at the center of the business model. And we invested got two and a half, $3 billion in R&D over the last five years to build products that had a value proposition that resonated in the marketplace and was differentiated and was modern. You know, it was cloud-based, had a great user experience, was powered by advanced analytics and had the last mile features that the industries were in, you know, needed to run their business. And by putting the product first and investing what we did, you know, and co-innovating with our customers, it was a very potent mix. And, you know, we're five and a half years into that now and obviously, you know, we're with our XI CloudSuite products, our results are showing that the strategy was right. So in your keynote, you talked about Blockbuster, you talked about Kodak, you know, you gave some really good examples of how Instagram and Facebook, you know, have more pictures than those guys ever had with far fewer people. Yeah, sort of interesting times we live in. But now, when we go to these conferences, everybody's talking about the digital transformation. Talk about Infor's role in that digital transformation and maybe some examples of folks that you've helped or are helping avoid being the next Kodak or Blockbuster. Yeah, so five and a half years ago, and let's just dial it back to talk about Hook and Loop, which is our internal design agency. Coming into Infor, that was something that Charles and me had always wanted to do, this idea that we could bring a different breed of individual into enterprise software, right? Guys that were, you know, from more of the creative agencies, digital natives, mobile startups, web, the advertising world and all of that. People that had a better understanding of the design aesthetic and to bring design thinking into a software company. And it's no surprise to anyone that uses enterprise software is the experience has generally sucked, right? It's forms-based, it looks like a representation of the underlying data model because it is. And it's a crappy experience. And human beings don't gravitate to crappy experiences, you know? And that's why you've seen a lot of ERP projects not deliver the ROI they should have because you don't get change management, user adoption, all of that. So we wanted to infect our own gene pool. So we went out, we found Mark Shabeli, our chief creative officer you guys had on earlier, and we said build us a design agency inside the company called Hook and Loop and work with our application teams and our customers to ensure that our applications deliver experiences that people love. And that's the mission that they embarked on and we've invested a ton. It's one of the largest design agencies inside a software company anywhere in the world. And we actually changed the methodology for how we build software. It's not as simple as building a design agency. You've got to change the way, you've got to change the supply chain of how software is developed and move it to end user driven, agile, protesting, design thinking, all of that. And it's a hard thing to do. It took five and a half years and you're seeing it show up in our software now and the results that our customers are getting. So a natural extension of that was our customers coming to us and say, hey look it's great that your software now creates advocates in our user community and they love using the software. Can you help us do the same thing with our end customers? And can you help us navigate digital disruption? And so we step back and we said, hey Mark, I mean we need to go after digital and we need to help our customers' customers. So we created H&L Digital and it's a client facing capability inside Info that works with our customers to help them navigate digital disruption, hack brand new revenue streams and businesses on top of the platform that's their company and it's been amazing. I mean the engagement's completely different. You're engaging not with IT but you're engaging with CEOs and the management team and helping them understand how they transform their business. And we think we have a differentiated spot in the marketplace around what we're doing. Yeah, you're helping them become technology companies, not just companies that purchase and deploy technology, companies that actually sell technology. They're not really software companies but they're all becoming software companies. Duncan, when you talk about business transformation it's clearly way beyond the, when we were growing up the ERP days where they were making G&A line items more efficient. But in addition to the technical or digital transformation consulting, the business technology kind of, or strategic consulting where you do business value engineering, is that necessary? Do you have to have both sides to say here's qualitatively what it looks like and here's the quantitative impact and here's how you prioritize the journey? Yeah, sure. So I think you guys had Riaz on this program before. Obviously he runs value engineering for us and that is a critical component of this because when you go off and you embark on these digital transformation projects, I mean there are different streams of work that can come out of it. I mean some of it is big, big digital transformation. It's a completely new business model, right? It's like if someone had gone to Carrie and said, hey I have this idea for something called Uber, you know, build an on-demand network. I mean that's a completely, there you're disrupting yourself. Some of them are just new revenue streams. We decide to hack a completely different business, business revenue stream on top of it. But some of it just fundamentally is about running better and creating a stickier customer base. And in that latter category, that's where value engineering can play a big role because some of it's about business process transformation about doing things better and at the end of the day, it has to impact the P&L, it has to impact the balance sheet and value engineering can come in there and help us with the kind of as-is process, how we map it to a 2B digital process and how it ultimately impacts the financial statements of the company. So they play a big role in all of that. Probably the biggest differentiation when you're thinking about digital transformations it relates to coming from a software company like us because people have choices. You can go to an SI and they're buying digital agencies, you can just go to a digital agency and you can think you can come up with a digital transformation strategy. The difference with us is is that the customers we're dealing with, they're using our software to automate and run their business, okay? And they're codifying their products, their services and their capabilities in our software. So once you wrap, I mean for simplistic terms, an API layer on top of that that unbundles all of that, right? Then we're allowed, we can come in there and say we understand your business processes, our software's running your business and we can start to use H&L, digital and value engineering to hack new businesses on top of it that leverages everything that you've already put into our software for you. So it's a very powerful proposition. Digital doesn't work if you can't actually fulfill the promise. It's like the early days of e-commerce, late 90s, early 2000, when you'd go online and buy something and then it wouldn't arrive in time. It wouldn't arrive in time for Christmas. You can't fail at the last mile, right? And that's the differentiation. We can close the entire loop. Just to follow up, who was building the API that's on a customer specific basis? And then if I understood it correctly, by having a value engineering and a software toolbox, you can say you can not only lay out the value engineering roadmap, but you can say what software fits in it. But I wasn't sure where the API fits. Yeah, so we have something called the XI platform and part of that is ION, which is our middleware solution. And it has a very rich API management layer. So if you're someone in the automotive manufacturing industry, you're using our cloud suite to basically do design, production, logistics, CRM, all of that on our end to end. We're automating all of those processes. We then take our ION API layer and it sits on top of that and we can start to expose things like inventory, your product file, when something going to arrive, all of that. And using all those discrete services, we can package different business models, different revenue streams, an app for a customer that creates some more stickiness, all of that, right? So you're essentially delivering services instead of what in the earlier era would have been applications and these are programmatic services. Exactly right. And then digital transformation can put a user interface on those. Yeah, the way I like to think about it is is that, and Mark Chevelli talks about this, we have a digital backend, which are the products that you got from us that are running your business, okay? On top of that, we put like an enablement layer, exposing those products and capabilities and processes as a set of services. That's what API does. But then we also have solutions like our cloud suite CX, which is mobile frameworks, e-commerce frameworks, all of that, engagement frameworks. But it's like the canvas on which we can curate completely new business models, new revenue streams, new applications for customers and all of that. And that's what Hook and Loop Digital does, right? They curate brand new businesses and applications on top of that framework. We're up against the clock, but a couple of questions if I may. So another big differentiator for you is the dynamic science labs investment that you made. What's the, give us the status of that and the thinking behind that initiative. Yeah, so we're entering, you can call it the age of intelligence if you want. You know, there's so much data that's being produced out there. You know, there's been a cambering explosion of different devices and sensors that in the IoT world is producing data. 200 billion, you said, by 20s one, yeah. 200 billion, yeah. You know, full cost that came out of Intel, you know, and GE themselves have posted crazy numbers around trillions of dollars being added to GDP just in the industrial sector for IoT. So there's just tons and tons of data. And obviously our cloud suites that all to make companies produce data as well. When you combine all this together and you leverage the cloud as a super, an elastic super computer and provide, you know, throw against that advanced analytics and artificial intelligence or optimization or predictive or prescriptive analytics, machine learning, all of that. You can generate tremendous insights which either help people run the business better, allow us to orchestrate and optimize entire systems of things. So there's a massive amount of opportunity in that and we created dynamic science labs to go out for that opportunity and all the industries that we serve. So how can we build algorithms that make healthcare stronger, right? Delivery of care better, their triple aim, they call it. Same thing in automotive, the same thing in public sector, in retail. And that's the mission that dynamic science have labs are kind of embarked on. You know what else is interesting about that whole IoT discussion? So tons of data, a lot of that data, if not most of that data, today is analog. That's right, yeah, yeah. You think the data exploding now? Just wait. The other is big investment in retail, right? We're hearing a lot about that. You got a new business unit. We've had some discussion on theCUBE around that. We heard it from the keynotes. Why retail, why now? Yeah, I mean, it's arguably one of the fastest growing software business in the history of the industry. From, I can't share the numbers, but from zero to something staggering in a very short amount of time. And it's because the idea and the religion that we proselytized has resonated with people. You know, you have two solutions that you can choose from today to run a retail business. And they're both 25 years old, right? You think about retail 25 years ago. It's a little bit different than it does today. You didn't have online, you didn't have social, you didn't have mobile. You know, the world was a lot simpler from a supply chain perspective. And the technology choices that we had back then were very, very different. So customers don't want to spend hundreds of millions of dollars at basically implementing legacy solutions from 25 years ago that can't run a modern retail business. So we came out and we said we're going to co-innovate with a couple of well-known retailers with great brands and great thinking and build a modern cloud-based solution that was architected for today's retailing environment. We made a couple of strategic acquisitions to basically accelerate that. Again, guys, it brought modern thinking to it and have a compelling vision and a compelling solution that's resonating in the marketplace. All right, we're out of time, Duncan, but I'll give you the last word. Paint a picture of the enforced vision, your vision of the software, you know, the state of the software future. What's it look like? Yeah, I think we're in a tremendous point in time in enterprise software. I think the convergence of sort of next generation analytics, the cloud, IoT and digital overall is transforming the enterprise software industry and it's transforming every industry they go after. You know, there's a phrase that tech leaves the valley, right? And everyone ultimately comes a software company. The thing that we're great at is software and we love to partner with all the companies and industries that we serve to help move them forward in the digital world as well. So it's exciting times ahead and I think we're well-positioned. Duncan, thanks very much for coming back in theCUBE. Congratulations for all the success and wish you the best. Great, thanks guys, thank you. All right, keep it right there, everybody. George and I will be back with our next guest right after this short break.