 Live from San Francisco. Extracting the signal from the noise. It's theCUBE. Covering Oracle OpenWorld 2015. Brought to you by Oracle. Now your hosts, John Furrier and Jeff Frick. Okay, welcome back everyone. We are here live in Howard Street at Oracle OpenWorld for Silicon Angles, theCUBE exclusive coverage. It's our flagship program. We go out to the events and extract the signal from noise. I'm John Furrier, the founder of Silicon Angles and Brian Grace Lee, lead analyst on all the cloud and all the infrastructure stuff going on here. Our next guest is Jeffrey Davis, principal Oracle global leader for Deloitte and Touche, legend in the industry. I've also been covering Oracle for a long time. Good to see you. John, Brian, you're a legend in the industry. I had to get that in there, I love that. No, you guys are, the services angle has been something that the services business has been changing radically. Now more than ever with clouds. So I really want to get your take because you are an executive looking at this transformation of cloud for Deloitte across all the Oracle customer base. You're partnering with customers. So you're the front line. So I got to ask you straight up, what is the number one thing customers are looking at right now that you partner with for cloud to figure it out? Is it a migration or all the above? And what do you think about that? So when customers are evaluating the cloud or our clients are looking at the cloud, you're really focused on three things. One is agility. The other one is time and the other one is value. So how quickly can we adopt to the changing environment? How quickly can we leverage technologies like cloud in order to be able to respond to our customers to adapt to the changing needs of our employees to embrace our business strategy in a new and innovative way? So I said legend because we know, we'll go talk about the 80s before we get on camera. But that's an important point I want to bring up and is that the old way, the big growth of client server was around software, middleware, right? ERB, CRN, you name it, that created huge consultancies like Deloitte, you participated in that, created a lot of wealth creation for the customers, created value, right? But the cycles were long and the deals were like, that'll be about 12, 13 years now, but months and almost a year or two through all these big deployments. Now the cloud has accelerated that. Can you compare and contrast the time of then? And now with the cloud, just how much the deployments change the software, the organizations, how you guys operate, new way to do that job? Well, and we're all responding to the market, right? We're all responding to customers' needs. The cloud didn't come about because of technology in and of itself, but we're really all in this ecosystem responding to our customers. What customers are really demanding from us is their demanding agility and speed, as I said before. If you take a look at the way we used to do things, basically you had a large capital investment on the part of the customer. They went, they bought the software, they bought the hardware, they had to hire the expertise, project management, all the meetings. And you're looking at a transformation for them that could take anywhere from 12 to 24 months or longer before they would get time to value. And you know, these projects didn't go as planned. I know that's just wrong. Yeah, I know. The change orders came in though. Exactly. That's where we paid more cash. And so we all got a really bad reputation because of the high cost and the long time to value and even if value was ever realized in some cases. Now we take a look at the environment and what the cloud enables us to do is move in a much faster pace. We used to have what we call a waterfall approach to design and implementation where you went into a big room and you talked about the world and it never ran that way and then you put it into the system and then people never really embraced it because when it came out, it didn't look like anything they thought they were going to get. This is completely different with the cloud. Now you can take an agile approach. Now you can sit and listen to the customer demands and very quickly respond to what they think they need, where they really generate value. And then you can focus on those things and very quickly, they're in a design session with you and at the end of the day, change management is much easier because they've been a part of the process. And also, you're looking at 90-day sprints. You're looking at things that are done in six months, six months time to value. That can give you a competitive advantage. That can help you retain more employees or customers. So it's really a very- What's some timetable? A mid-lavery SVP of the cloud integration group was saying they would do in provisioning in 24 minutes, multiple deployments, like it was nobody's business. What is some of the timetables that you're seeing for some of these time to value horizons? I mean, these hurdles, these milestones. They said days, weeks, months, hours, minutes. I mean, when you go to customer base, what are their expectations and what do you guys deliver? Can you share some insight there? Some of it depends on the environment. So remember, there are still clients we have or Oracle customers that are in a highly regulated industry or have a very complex business process. Those are going to take as long as they're going to take and technology's not necessarily on the critical path. But when you look at those other areas that frankly you don't differentiate yourself very much or speed with a solution can give you a competitive advantage, you know, you're looking at client expectations of anywhere from 90 days to six months, you know, under a year. Not super, but aggressive vis-a-vis the old way. Well, certainly. And the other piece that we're not really talking about is it's not enough for us to put the technology out there. It's also got to be used and adopted. You know, when you had those large transformations it's very hard for an organization to absorb all of that change. Now we're looking at the fine entry point that you can get with cloud with that fine entry point. Now we can sub-select areas with the greatest impact but we're not changing the entire organization. We've, Mark Hurd had the CIO of GE on this morning and one of the comments that he made and I've heard this a number of times just over the last 12, 18 months. He essentially said, I have a ton of undifferentiated applications. Now, there are things that Oracle thinks are fantastic, HCM and CRM and ERP but in essence everybody has those. Every business has those. They're very undifferentiated, but they're complicated. What do you see more? Do you see more people saying, you know what? Take those, help me migrate those into SaaS applications. You know, save costs. Or do you see more saying, you know what? Give me the other 20%. The ones that drive business differentiation. The ones that are new cloud native applications. What do you see in your mix? What's pushing your customers to push you? You know, it depends on the geography and it depends on the industry and some other things. If you want to talk about North America, which tends to be one of the largest markets in the world, if not the largest market in the world, when you're looking in North America, really people have gone through a lot of the major ERPs. Remember the earlier conversation, you know, they've suffered through tens of millions, hundreds of millions of dollars and their boards were not satisfied that they got the results that they expected. Now when you take a look at what's happening, you know, people are now being much more strategic in their investments. Much more prescriptive. They're looking at plans exactly. Because now the boards have different expectations. They've already gone and spent all that money on technology. They can't go back to the board. They can't say we need to redo this. What they do are willing to fund is, you want to get into a new business. If you want to spin something off and you need to stand it up right away. If a customer, you know, provides you a new opportunity and you want to shift to that new opportunity really well, you know, technology is the basis of a lot of this transformation. So cloud provides that opportunity and it's a modest investment with really quick high value return. You bring up a great point. You know, if you look at IT in the past, you know, decades prior to this evolution we're seeing in the cloud, kind of consolidate, consolidate, consolidate, right? I don't want to go to the well again. I just went to the well and it's barely running. You know, whatever the model was there, but now they're under a lot of pressure to drive top line revenue. Absolutely. Top line revenue equation is a completely different mindset. Absolutely. You have to go out and poke at the market. Right. You've got to do some shadow IT or if you're authorized, go out and do legitimate, stand up new platforms, right? That's a great question. Can you give me an example of that? Because we're seeing more of that now. That is a clear mandate for CIOs. Go take a new hill or let's consolidate these apps and let's reposition for this new use case. Which is not, I'd say experiment, but it's certainly a new market opportunity and they got to do the due diligence. So it's almost in parallel. Due diligence. So it kills your waterfall. It does. So that's one. It does. So talk about that dynamic. Where examples can you give? Go take that new top line revenue driver. So, you know, there are customers that are looking at new partnerships in the marketplace and those new partnerships have dynamic new business models. You know, it's not like opening up another hamburger stand. You know, they're not necessarily expanding into a core business. They're really looking at ways to amplify growth. If you're going to take that as a strategic position, then, you know, a customer or client of ours would focus on, you know, let's take this innovation to market. We don't want to invest a lot in it and waste a lot of time and lose the competitive advantage. Let's get to market first. Let's provide a new product or service to the market where we can move very quickly. And then the net result is we can see the benefits right away. And if it isn't, we haven't sunk a lot of, you know, time and money into something that's not necessarily going to yield the same value. We just had Sean Price on. And now I want to ask this because it's such a dilemma that you're in because you're partnering with the customer, right? You're the strategic partner of the customer. So that idea of top line revenue growth could come from a partner, an ISV. How do you work in that? You're cool to work with some ISVs, bring that into the table. You're absolutely. So this market is changing. You know, cloud clearly changes everything and much more so than some of the things we've seen in the past. And so now we need to position ourselves differently. Now, for the Deloitte business model, we were really in a specialized business of focusing highly on value and value creation. We weren't necessarily in other areas and we had different partnerships. Now those partnerships are shifting. Oracle provides us a complete platform. You know, we don't have to really get involved in a lot of the aspects of the platform that frankly weren't our core competency and frankly weren't our clients. What do you, you know, you talked about that customer interaction. What do you have to do to change? What, what do the, you know, we've seen different SIs trying different approaches. We've seen some that are partnering with the cloud provider, but they want to be their own platform. We're acquiring them, yeah. We're acquiring them. What changes in terms of the skills you have to hire the way you expect that interaction to happen between you and customer? Because to a certain extent, you know, like for developers, developers love self-service. They love, you know, they are shadow IT because they're driving. What's changes in your world for that? So this is really kind of an interesting question. Very early on when Oracle made Cloud Product available in HCM, we saw an opportunity. Our clients had the demand because they wanted to create a more sticky environment for their customers. What better way than, you know, providing them better products in the HCM space? We made major investments there. Now we're a leader in HCM. And if I look back over that experience, what did we do differently? First of all, we had to change our mindset. You know, it's not enough just to say the cloud, but you've got to live the cloud because it truly is more agile. It truly is faster. You can't take your old methods and tools and approaches. All the things that worked for you before, a lot of them don't work anymore. There's some, but some really good wins here, especially in the change management side. Also, you know, we'd have clients that had to kind of do-it-yourself brain surgery that have to order their own hardware, that have to provision it themselves. You know, that became a real mess. Now we're looking at something that's a lot different. We're not in that business anymore. You know, we do support on-prem where our clients think it's important and strategic for us. But now we've got a new agile methodology. Now we've trained our workforce. We've got 14,500 professionals around the world. We've had to move that group and Oracle has really helped us do that. They've been very collaborative in sharing IP and sharing methods and tools with us so we can make that adjustment. Not only have we had to change that, but when you think about our other methodologies, all of our other methodologies is to create value, to change management. They were all thoroughly integrated. We've had to rethink those, but it's been a great story because we can go to the client, we can say we can get you there faster because where technology was a barrier, where it was on the critical path, we're now changing that. And by the way, this technology is not your old technology. It's much better. It's much more robust. How do you, you know, obviously we're here at Oracle Open World. It could be called Oracle Cloud World if we really wanted to. I mean, it's, a lot of it is the red stack. A lot of it is one cloud. How do you manage that against customers saying, well, look, there's other options as well. I want to have the ability to leverage this cloud for something, Oracle's cloud for certain things. How do you, you know, do you find your customers want multiple clouds or, you know, one cloud is good enough for them? Well, we're all teaching, right? We're all teaching the world about the cloud because, you know, there's still people that look at it in a variety of different ways. I think it's an excellent question. So let's think about this. Do you want to be your own systems integrator for your smartphone? Do you want to go buy an operating system? Do you want to go buy a separate piece of hardware? Do you want to decide what apps fit and what don't? And do you want to actually try to knit those apps together? I don't think we want to do that anymore. And I try to use that as an example for my clients to tell them, look, let's not be your own systems integrator. You as a IT executive, you could be an officer to help the organization get to their business goals. You know, you're not in and of yourself a business objective, but you can be an agent for change. I try to educate them so they can help their colleagues, explain cloud, take the fear out and then show the art of the possible. What about the security model? I mean, I want to get your take on, so you're a little bit biased because you manage the Oracle Relay. But we want to be a little bit critical or complimentary, that's how you feel about it. But the end-to-end security message is really a game changer in my mind. John Fowler was on. Incredible theory, incredible application, certainly the product's going to be ready soon, if it works. It's like the car, does the key turn over? I mean, it's like, it's all good on paper. Certainly a game changer. Security obviously is the number one thing you're hearing. Get some color to that, because if that plays out, if you believe that end-to-end security on the chip, soft front silicon, plays out the way they say it would, that's going to change the game. For sure it is. So, none of us can go through a week without hearing about a major security breach. When you think about this, you step back and think about the potential here. Our stuff is starting to talk to our stuff. But our stuff, unless it's based on Oracle, isn't all thoroughly integrated. So, somebody can break into our stuff and they can get access to our lives and they can change our lives. That's hugely powerful. So, we are very concerned about security. Deloitte is one of the largest organizations. In fact, we have a cyber practice that looks at both proactive and reactive aspects of security. Here's the big concern we have. As all this stuff starts to get interconnected, the internet of things, security becomes a major issue. We need more breakthroughs in security, and I think Oracle's on the vanguard. Certainly, as we get into what we call a hyper-hybrid cloud on-prem and cloud, some of that's going to be a mixture. State in motion is no perimeter. It's nothing. You're going to protect the data itself. It's the wild, wild west. It's total wild west. And, you know, despite what you believe, boards and people are not reacting fast enough to the security threats, and that's why you're seeing these breaches. And to my knowledge, I don't think anybody's been breached with Oracle security in place. But that said, you have to be constantly vigilant. But still, they probably would get out there. It's not that they're hiding it, but the point is you need an end-to-end system. It's hard to do that in an open-source world, right? So you have a horizontally scalable open-source phenomenon that's growing our market and a vertically integrated product requirement. Because if you believe I want end-to-end security, then you're going to go vertically integrated. You do. Purpose built. But if you want scalability on large scale, aka cloud, you want horizontally scalable. How do you reconcile that with your customers? Well, you know, so again, it's difficult for them because unless you've had a security threat, it's very difficult to really get them to take the initiative. You know, the more that we can build security in, the more that it's covered in the redstone, the more that we get a comprehensive end-to-end product, I think it allows us to help the client realize, you know, the risk and help them to overcome the best. John Fowler said on theCUBE, they had this done in 2005. Yeah. It took a bunch of security breaches to get people's attention. To your point, it's on everyone's agenda. It is. Number one, right? It is. And yet, you know, how much is enough? Well, we find that people are too reactive and not proactive enough. What's the temperature of your customers right now? I mean, you know, Tesla's out there disrupting, Uber's out there, Airbnb, are they sort of defensive and paranoid, you know, that Andy Grove always, or are they trying to be aggressive? Are they saying, no, no, no, I'm not letting these little guys into my market. I'm going to go be aggressive and try and push back. What's the general feel? Because there's a lot of, you know, interesting startup disruption going on. I mean, really changing industries. There is. And, you know, there's so many sort of partnerships and alliances and mergers and new innovations. You know, right now, clients are very uncomfortable. Just the transition from on-prem to cloud is a major change. And our clients, you know, have been the expert for technology for decades for their organization. They are having trouble keeping up with all of it. It can be disruptive. They're looking at what's unique in their industry, you know, what is regulation driving, you know, what is innovation driving in their industry. But, you know, they're always on the learning curve. They're always trying to figure it out. Chef, if you want to get your final thought of wrapping up here, I want to get your take for the folks that are watching here on camera. That couldn't make it here at Oracle Open World. What is this show about? I mean, we haven't been here six years. We've seen that transformation. About four years ago, Larry looked like a deer in the headlights, almost stuck in his tracks, and the smoke coming out of his ears. Like, he felt like a pivotal moment a couple years ago. And then, since then, it's just been, every year, Oracle Open World just gets more and more energy. Just like, dominating, it was at March to the cloud, almost like four years ago. It's like, we're going to win that. What's your vibe? Do you see that same thing here and share some color on what the take is? So, over the years, and we've been doing this a lot in various forms. Over the years, there's been the promise of real innovation. There's been the promise of real change in the industry. And we saw sort of incremental change. We really see exponential change now. And now, the promise is fulfilled. We have real product we're taking to market. We're doing interesting and innovative things. It's real product. It's real product. It is. It's very real. And we have, It doesn't work to be done, but, yeah, real. Case studies and customers. Well, it's an evolution. But this is really sort of an epiphany at the moment. Because we've never had full suites of product in the marketplace, right now, for cloud. I don't know that there are any other large ERP options in the cloud, the way there is for Oracle. And look at the host of services that have been announced over the last year. This particular show for us really is an accelerator. All these products and services in the cloud that are now available, they give us a lot of different options that we never had before. That's a great quote. Put that on a cube, Jim. Thanks for joining us. Thank you very much. We are here live in San Francisco's Howard Street for theCUBE's special exclusive coverage of Oracle Open World. It's a cube we'll be right back with more at this short break. Thanks for watching.