 Live from Orlando, Florida, it's theCUBE. Covering Sapphire Now. Headlines sponsored by SAP HANA Cloud, the leader in platform as a service. With support from Consolink, the cloud internet company. Now, here are your hosts, John Furrier and Peter Burris. Okay, welcome back everyone. We are here live in Orlando, Florida for SAP Sapphire coverage from SiliconANGLE Media's theCUBE, our flagship program. We go out to the events and extract the signal from the noise. I want to give a shout out to our sponsors who allow us to get here, SAP HANA Cloud Platform, Consolink, EMC, Cap Gemini. Thanks for supporting us, we appreciate it. Our next guest is Mitch Kick, Global Vice President, Head of Strategy and Programs for SAP Global Ecosystem. We love strategy guys because they get the chess board and they're always playing chess, 3D chess. They're looking at the landscape, looking at the horses in the track. Welcome to theCUBE. Thank you very much, good to be here. It's an evolving ecosystem. It's fluid, but yet active. The Apple announcement, certainly notable news for SAP. The, certainly the cloud, mobile, social data trend, the confluence of those things causing massive innovation surge. So you're got a lot going on. Absolutely. Just a high level. What is the current ecosystem? Well, you know, when you think about, think about the way SAP looks at its ecosystem. I mean, certainly we have those traditional types of partners who resell our product. But when we talk about our global ecosystem, we're really talking about those partners who are either strategic service partners, technology partners, some emerging partners and names that you mentioned like Apple, Uber, Facebook, some of these, they are not your grandfather's SAP partners. And so we're really moving to partner in new ways to co-innovate new types of solutions that take advantage of the trends in the digital landscape. What are you guys doing with Facebook? Well, Facebook, as an example, is something where we said, look, there's all this social data that's out there. How do we put that together with our hybris, CEC types of solutions, our commerce solutions, to basically allow marketers to do one-to-one marketing that leverages the power of Facebook data and your enterprise data. It brings it together in a very manageable tool. That must have been a hard deal because they're very controlled about their data and also each person has their profile settings. So that's awesome. Yeah, well, and it's something that allows, it allows for marketers to just do much more, much more targeting, much more insightful targeting. And we announced that last year and over the course of the last year, had a number of really interesting pilot examples. Can developers get involved in that? Is this more of SAP directly kind of thing? Well, that is an example of where we're creating a solution that sort of packages a turnkey. But when you think about something like an Apple, the beauty of that one is not only are we developing these beautiful industry applications that are going to be in targeted industries, I don't know if you saw them, they're out on the floor here, but you know, with regard to retail or with regard to- Well, startups have come out of the woodwork over just in a short time and have hundreds of employees with this ecosystem. Well, exactly. Well, and I guess the point I would make with the Apple deal, not only are we working with them to design some really incredible industry apps, but then you were also creating the software developer kit, making that into the HANA Cloud platform so that if you're developing on HANA Cloud platform, it now becomes another compelling reason that you can leverage these beautiful interfaces and these beautiful tools that take full advantage of native capabilities on the Apple devices. And so it's a way that our partnership not only delivers kind of near-term solutions that matter for us, but enables our broader ecosystem of solution partners to capitalize. It's fast to innovation. I mean, you're going to get more R&D and then real production apps faster that way. Absolutely. From the developer. So that's core. David Vellante and I always talk about courses for horses, which is certain things fit certain ways, but there seems to be now a common with the Cloud platform an opportunity for developers to come in. So I want you to explain how HANA fits in, because there's HANA Cloud and then there's HANA Cloud platform. What's the difference between the two? Can you just quickly share what that means to the ecosystem? Well, HANA as a database, I mean, the thing about HANA Cloud platform is that that creates a platform for our solution partners to extend, integrate, as well as build and develop on it. And you'd say, well, as a platform as a service, are you guys using HCP to go out there and win the past wars? As a generic sense of a pass, that's really not the intention. The intention is we've got this huge install base. We've got these service partners who are working very closely with their customers to innovate on top of. So that once our customers move to that digital core of S4HANA, they can use HCP as that extension and integration platform to tie together a number of different things. And a lot of the things that are, when you think about digital transformation, there's so much activity and discussion around the customer experience and architecting a beautiful customer experience with mold devices, with targeted types of commerce on the front end. But what people are coming to realize, I think, is the importance of having that end to end because you aren't going to be able to deliver the beautiful experience. And so the example with, I was on a panel yesterday with Uber and Toomey as an example, Toomey, luxury retailer that wants to create, not only a compelling customer experience that embodies the best of its luxury brand, but also is facing the threat of Amazon Prime one day delivery, same day delivery in metropolitan areas. And the beauty is that by partnering with Uber and SAP, we're able to kind of incorporate that seamlessly as an option for same day delivery. They can deliver in 30 minutes for $7. It's game changing. So that's an example of where we provide here at this event an early window in the type of co-innovation that we're doing. And it's sort of like in the past where you'd think, well, SAP has a certain solution footprint and we're going to partner with other software companies who can plug in to that footprint. Now you have in the new world where there are industry ecosystems like Uber, platforms that you can capitalize on, it's the business network. You can plug in business networks to an overall solution to customers that's really compelling and that delivers opportunities in ways that we couldn't have imagined a few years ago. I want to build on that. So historically, strategy has been three to five years tied to asset values, mainly fixed asset values. And how are we going to generate a return on those fixed asset values over an extended period of time? You're describing a world where we're focused where especially as those assets become more programmable they can be applied to a broader array of activities and opportunities where the horizon starts to shrink pretty dramatically, the strategic horizon and it becomes more what capabilities do we have and how do we improve those capabilities and drive them forward? And that's a crucial way of thinking about partnerships is partnerships as capabilities. I think that's where you were going. Are you thinking now about partnerships in the ecosystem as crucial capabilities, not only for SAP, but also for SAP customers? They've always been in many ways. When you think about customers need a whole solution and many in the past, even when the on-prem software world you didn't get the whole solution by just buying the software package. It required a lot of additional service. Now with the cloud models that are emerging it's much more easy to consume the software functionality but there still is a tremendous amount of ongoing innovation, differentiation, customization and that's why when you look at a lot of where we're going with our solution you can hear Mike Etling talking about our success factors product and the fact that well, how do partners help us? Do our service partners help us in the same way of just implementing software? No, their role is really in integrating and extending it and creating microservices on top of it that then say well, this is a really unique capability that's essential for delivering value to this particular customer or client. And so you're now finding that because of our ecosystem that is getting plugged into these new ways of contributing, we can now have a broad array of contribution. People understand how they can plug in and capitalize on that and deliver real innovation and benefit to the end customer. So you look a lot at industry trends. As you walk the floor here, what trends are starting to emerge for you and what it's getting you excited as a strategist? Well, from my standpoint, when you think about digital transformation, honestly, we were joking a lot about this whole term because when it first came out, of course, you know, it's sort of like, well, you know, I'm not familiar with anyone who's actually doing analog transformation, you know, you don't talk about, all IT is digital, we've been doing digital things for years. And transformation, I mean, I was involved in the early 90s on the big re-engineering wave, right? Where you're re-engineering using technology, whatnot. So what's really different here? And I think what we see is that through all these trends, there's sort of a confluence of them and people map out a dozen, two dozen different trends that are going to change the world. They speak breathlessly about all these things. But in the end, what difference does it really make? And from my standpoint, it's really three. One is you're starting to see all these things change the customer experience fundamentally, right? To the real time, mobile devices one to one, that's being enabled now. You're also seeing the difference in how value is delivered in terms of, you know, the IoT, instrumenting the broader landscape, et cetera. And you're seeing a difference in, you know, business models in terms of how value is captured. So you can think about it as well. How is value consumed? How is value being delivered? How is value being captured? The real, so what, is that all these different individual technology trends are combining to make those differences happen that enable completely different ways of making money, of growing, of opportunity. It changes the analog. Where the analog piece, it used to be the transactional digital, then hands off to analog or vice versa. That whole thing end to end, you just talked about it as an end to end digital. But the analog role of the person is augmented differently. So what you said is interesting because I think people look at it differently and say, hey, if it's digital end to end, where does analog fit in? Well, it's still people walking around here at the show. We're talking, we're face to face. So I think it's interesting when you look at the optimization of digital. Now it takes sales leads, for instance, or marketing automation. Get the form, pass the leads to the sales people, they go knock on the door, call, email. That's analog transaction. That's now digital. But there's still the analog component. So what's your thoughts on that? How do you look at it? Because you're still going to do business. The people still going to be involved. The humans. That was really hit home when we were talking about this Uber example, because everybody talks about the, to me, they're talking about, well, it's a beautiful experience for somebody to be able to then say, hey, I got a one hour delivery. We've all can identify with going to a retail outlet and they say, oh, I'm sorry, we don't have any more of those in the store, but we've got one that's 40 minutes away. If you want to go drive there. Well, what if now all of a sudden you can get the product into this store in the next 30 minutes? Or deliver it to wherever you happen to be in 30 minutes. That changes the game. And that's user experience. But the thing is, so that's nifty, that's great, it's really compelling. But when you start thinking about what it would take to work this. Okay, well now you're going to have to have an implication for those retail store people. And so this notion of how are we making this a beautiful experience for the retail clerk, who now, instead of just serving the store, is going to get pinged because, hey, wait a minute, we've got some deliveries that you're going to have to pick and pack to get ready for some Uber driver to come in. That's a change to them. You need to make that. So when you talk about implication, that highlights all of the change management, all of the, how does it make a difference in individuals' people's work? And there's always going to be that last mile of engagement that's needed. And that's really, when you start talking about trends, how do we see things changing? I think about our service partners. I see them, their role changing to enable the real business change. Well that's it, that's it. The impact is clear, totally agree 100%. And it's the confidence that magnifies that change. And it's massive, it's freaking awesome. And everyone can look at it and say, damn, it's going to be big. So my final question to you is, okay, given that impact, what advice are you sharing with your ecosystem in terms of how to prepare for it? How to be ready not to go out of business or help your customers not go out of business and enable them to actually compete digitally in the transformation? Well, when we look at it, it's the part of the challenge is that the ecosystem's so diverse that often your guidelines are speaking to specific people. But the one thing I would say is, everybody's going out and talking a digital message. We need to be on the same song sheet. So when you're a solution partner or a service partner and you've got your own offerings, your own reference architectures, et cetera, let's work together to make sure that we're all singing from the same sheet. Second thing is it's really imperative that we basically migrate our installed base to the digital core. So S4HANA, getting enabled around that, making that change happen, that enables all other sorts of benefits. And the third thing would be the importance of then leveraging on a cloud platform because the integrations that were hard coded from yesterday are no longer valid. So if you leverage on a cloud platform from integration standpoint, you're really allowing for this much more agile and fluid innovation cycle to happen in a much faster clip. And that's really what our customers are going to need. And it's going to take all of us working together to deliver that promise of digital transformation. Well, Apple deal puts you guys in front and center on the user experience side, consumerization of IT. The chess board, multiple dimensions of chess going off the SAP ecosystem. Mitch, thanks for coming on. Welcome to theCUBE Alumni Club. This is theCUBE here live at Sapphire. We'll be right back. You're watching theCUBE.