 Live from San Francisco, it's theCUBE. Covering IBM Think 2019, brought to you by IBM. Hey, welcome back everyone. We're here live with theCUBE's coverage in San Francisco, the Moscone Center for IBM Think 2019. I'm John Furrier, my co-host Dave Vellante. Dave, we've been doing theCUBE 10 years. Our second ever CUBE event was SAP Sapphire. So going back into the archives, SAP, we've been watching SAP evolve. We've got two guests from SAP. It's got any global VP of SAP, customer experience, CX, and Marcus Venth, who's a global VP of S for HANA, business and market development, talking about enterprise, intelligence, making data, making it reason. We've been covering you guys, and I got to say, Bill McDermott has always been on the front wave of all the big waves. He was talking about data and iPads right at the beginning, and the things he was talking about in 2012, 2013, is what everyone's doing today. This has been a big part of SAP, not new to you, this transformation. How's the journey going? How's the partnership going with IBM? So the relationship that we have with IBM is, I guess, about 40 years old, and we're not even halfway done yet. We're still working together and successfully delivering great business outcomes for our customers, and I think that's because not only do you have great global reach and scale, but you also understand how data and business processes impact business outcomes, both in the back office and also in the front office too. So you were mentioning Bill McDermott. We have a phrase with inside SAPCX called be bold. It's really taken on the mantra for us. We're making some really bold acquisitions with inside the front office space. So one of the ones that he's done recently that's really focused on data is around Qualtrics, huge acquisition for us about experiential data, and how we bring that back to organizations, and we're really keen to work with IBM on that too. He said that was a game changer on his press conference. I watched that. It was really interesting acquisition because you're bringing in real-time data. You're bringing real telemetry, real analytics, all this stuff together in a kind of new powerful way with an existing system that SAP's been powering business software and all these apps. What does it mean? Does this make this enterprise more intelligent? Is that where it connects? What's some of the key things there? So that's a really good question. So if you can connect the back office to the front office and create trusted relationships, then you're going to deliver a better customer experience, and that has a huge impact on shareholder value. Specifically around Qualtrics, that enables to move that next level on into what we call the experience economy. So I don't know do we understand implicit data and explicit data? Like you were just saying before how many people have just seen that mail, but also how they react to you, but we could also say what do they feel about you? What else would they like you to do? What relationship do they currently have with you and what would they like to see improve? This is interesting. One of the things we talk about all the time on theCUBE is, we're in the information business, we're a media company, information's everywhere. It's knowledge and experience is the new thread. So the outcome used to be the word used to use, but now you're thinking, okay, if experience and presence and knowledge, this is a new kind of user experience, is that what the intelligent enterprise is? I mean, what is the intelligence, right? Give us the definition. So I think I can take that one. So I mean, simplistically, it's about taking data that you've referenced earlier on and applying new technologies to ultimately make business processes or optimize business processes or come up with entirely new business models. You know, we talk about Uber and Airbnb and all these, but the reality is that there are new business models being enacted within certain industries, whether it's direct to consumer type changes or changes moving from a productized or selling products to selling services. And so when we look at intelligent enterprise, it's about taking your business partners, which are the stakeholders that make you as a company successful. That would be your customers, your suppliers, your employees, and connecting them and ultimately leveraging the data that you're collecting as part of those business processes, applying machine learning technology and then looking at how can we make that more efficient or how can we now leverage that data to create new insights that then tie into the customer experience side of things. You know, it's interesting, John, you're talking about McDermott. During the big data craze, Bill McDermott never really used that term, at least not that much. But he did talk about the importance of fast data, being able to respond quickly. Obviously, SAP customers have a lot of data. And so you've got this platform now, this sort of data platform. How are customers making investments to sort of alter or modernize that data platform for this purpose? So the digital platforms, it's really interesting because what we're looking for, if we look at the sort of components of an intelligent enterprise, there's three components. There's the intelligence suite, which includes the digital core. Then there's the platform and then we have the intelligent technologies like machine learning and artificial intelligence wrapped around all of that. The platform is really helping our customers get to a more standardized approach where it's helping them integrate the applications within the suite. It's also a platform with which they can then implement these machine learning scenarios. It's a platform where they can innovate and build new applications. And allowing them to do that means that they can keep that core standard. And that's the key now, as customers are thinking more and more about moving to the cloud. It's all about how do I keep my core clean and standard and allow myself to take advantage of those innovations and then move some of those customer specific innovations to the platform and then layer a UI on top of that that basically means the end user doesn't know which system they're in. They're just leveraging an integrated suite. So abstracting all the complexities and all that intelligence out. What are the obstacles for companies? It sounds easy, but it's not. It's hard. What are the obstacles? What's it take? Culture, we always talk about cultural shift. Yeah, I mean the easy one is the organizational challenges, right? We always see that the executive support, the charter having clearly defined objectives and having the talent in the house that has the courage and the skillset to implement those changes. But I think one of the biggest challenges we see touches on what I was saying before where we have a highly customized environment with lots of disparate applications that really are poorly integrated and then sort of trying to get the customers to then move that to a new platform is very difficult. And so with that, they need the courage in many cases to leave some of that stuff behind, right? Completely, I completely concur. So that's the same challenge that we find in the front office. So we aim to create a phenomenal experience platform for our clients, but unless they've reorganized internally to remove those siloed thinking around what the sales do, what does marketing do, then they're not going to be able to fully utilize the tools and platforms that we deliver. So actually, it's about a mindset change without focusing on the customer. I'd like to get your perspective since you're here, because I talk, we go to a lot of events, go to 120 events last year, go to cloud native computing foundation, eight of us reinvent, we're here at IBM Think. We used to go to SAP Sapphire, that's a different story, but one of the things we hear about is we see new trends like Kubernetes and containers. People are doing it, but they're doing it kind of like in an experimental way or doing it. You guys are actually implementing technology with customers, integrating it in like mission critical kind of integrations. You're not standing up Kubernetes, say, hey, we've got a Kubernetes cluster, look at this, and one or two apps. What's your experience around the integration because putting these piece parts together is hard? What are some of the trends that your customers are doing around really standing up cloud native, intelligent enterprise apps? What are some of the real use cases that our people are doing? I guess, first of all, if we're dealing with the SAP portfolio, we're delivering a lot of those integration points out of the box. So that sort of takes away a lot of the guesswork when we talk about integrating sort of disparate applications. I think one of the key aspects of that is just having the plumbing is not good enough. You really need to have a data strategy around that where our data hub is then able to provide a consistent master record strategy where these systems can then seamlessly talk to each other. Because one of the biggest problems in integrations is not the plumbing, it's actually having these systems being able to talk to each other and rationalize this information. Can we maybe do kind of a before and after example, I mean, take a supply chain example. So what's the before look like? What's the ideal after state look like or the sort of outcome that you're looking for? So let's take an example, right? Let's say you're buying goods from a supplier and you now want to be connected to that supplier so that you can see where those goods are in transit. And then you want to be notified when there's a delay in those goods so that they can then adjust your production plan to make sure you're still accommodating the customer's motorcycle. Now let's say for instance that we start recognizing a pattern or the system starts recognizing a pattern that every February we seem to see a five day delay for whatever reason. Now the system can automatically start applying an additional lead time and accommodating for those changes automatically. So that's when we think of when we talk about an intelligent enterprise, it's about an enterprise that's live and able to adjust and therefore able to build the trust with our customers in order to fulfill their expectations. Really, really important point. Can I answer that from a customer perspective? Yeah, please. Because we're all consumers as well of services and also within our business lives. I think what you want as a customer after you've used our services and our systems is that you want to be treated like a person, right? And you want to feel that your data has been treated with some respect, yeah? And then you want to feel that the promise that customer has, sorry, that business has offered you is being kept. So you want to be treated like a person. I wasn't just a transaction to you. You want to stand what I needed, right? And then you treated my data appropriately. I can trust you with our relationship and I know that you're going to fill in the promise. That's what our platform delivers. Yeah, 100%. I mean, I ordered something, I want to know if it's not here when you said it's going to be here, I want you to either tell me, tell me why or do something about it, not force me to call you and find out. I mean, that's proactive, it's anticipatory, not reactive or no active. You got it, that can only be done if you integrate the front office to the back office. And that's what IBM and SAP are working on right now. That's great. I mean, that's a great segue into my question, which is here in San Francisco, IBM think 2019, move from Vegas, now they're doing some sort of great venue, 30,000 people. What kind of conversations were you guys having here at the show? Take us through kind of the day in the life. What kind of meetings did you have? What were people talking about? What's on the top of minds of your meetings, your customers and your partners at IBM? Well, from my perspective, there's a lot of discussion around how to move towards the cloud and what tools we have available. And so with the collaboration with IBM, they've made a tremendous investment in SAP and SAP technologies. They've built the impact assessment tools to help customers evaluate the value and the cost of making that move. And they've also invested in the impact solution, which is the content and pre-configuration to help accelerate implementations and move towards that standard. So a lot of the discussions I'm having with customers are taking mission critical applications and moving them to the cloud with the support of partners like that. And at a speed, at what kind of speed? It used to be weeks, months, days, now what's the cycle time for moving? If you go to some of the presentations, there's some 12, 16-week implementations out there, right? And when you say moving to the cloud, one could infer, actually moving, but it may not be moving. It may be bringing the cloud model or operating model to the data. Is that fair? Absolutely. So when we're looking at the cloud, it's not necessarily a wholesale shift. It could be a hybrid model where we're bringing subsidiaries up on the cloud and looking at more of a two-tier deployment model where we're looking at an on-prem for the core business and cloud models for subsidiaries. It's funny the apps are driving dictating workloads or dictating what resources and architecture do it. So I had some really exciting conversations here. I was really, really impressed with the conversation I had with the IX teams in IBM, but also with the GBS teams. What's the IX teams? They're, they're organized. Okay, VR, AR, cool stuff. Really, really cool forward-thinking group of design-thinking experts focused on customer experience. So the total addressable market opportunity for CX, commerce, marketing, sales, service is over 30 billion per year. So no one, I don't have to come in and tell anyone what the size of the open market opportunity is. The question is where do we begin because there's so much opportunity ahead of us. All of our market is investing around how do I deliver better customer experience? And that's because it has a really tangible business impact. I mean, I guess 80% of consumers have said that they have changed brands because of poor customer experience. That's a huge financial cost. And organizations that deliver better customer experience have over 200% more shareholder value delivered back. So we've got a great business case and a great platform. Where do we point the gun? You know, they bring up a good point. I want to give you a thought. Dave and I, internally, our research team had looked at all the successful companies that we cover and looked at the successful ones and, you know, not so successful ones and looked at why are they successful? And the winners at the top of the heap have designed thinking in all of their methodologies. We just had a century's innovation kickoff last week. Design thinking is at the core of this. Can you give us your view on why that's the case? I mean, obviously, I think of design is that just customer experience is having more other impacts in terms of other aspects of tech. Why is design thinking such a critical component, design thinking a critical component of these new innovations? Because I think people are, okay, so I think thinking is the operative word there. You've got to think about your customer and what they want from you. And what you've got to think about is how do I deliver a service that is compelling to you rather than a product you may want through a channel you may choose to buy on? So if you look at all of those organizations, they've gone through that process of thinking, how does digital improve my customer relationship? Because ultimately, if you don't own your customer, then you're out of business really soon. Marcus, bring Intelligent Enterprise now in context to that. Does that close the loop on Intelligent Enterprise equals customer relationships and impact on outcome? I mean, how does that- Intelligent Enterprise definitely plays a part in that, right? So I mean, when we're looking at the Intelligent Enterprise, especially the Intelligent Suite, we're really tying all the end-to-end components together whether it's dealing with your employees, your suppliers, or your customers, right? So it's really about the full end-to-end process. And my particular area is around the digital core. So that's order-to-cash, procure-to-pay, order-fulfillment, revenue. These are mission-critical applications, right? So when it comes to making that transformation, this is not just something that you want to take lightly. That's where the partnership with IBM and SAP really counts, because those are sort of partners that you want with that kind of transformation. You know what's interesting, John, I make an observation. You go back to the early days of ERP, it wasn't clear that SAP was going to win. It was hard to squint through. But if you could have bet on the companies, invested in the companies who adopted ERP early, despite its complexity and the time it took, you actually could have made a lot of money because those companies won in the end. And I feel like you guys are on the cusp with the Intelligent Enterprise narrative of the next wave of competitive advantage. If you combine experiential data with operational data, we're going to blow past the competition and create a whole new market category. That's thanks for that observation. I completely agree. And it's back to your front office, back office, and that's why McDermott was all giddy about the acquisition. He was like a kid in a candy store. We're all in. He was spring in his step. He's already cool. Be bold. Be bold. He was still out of handshake. Guys, thanks for coming on theCUBE. Thanks for sharing that insight. Thanks for clarifying the SAP position. Great innovation. Love following you guys. We think highly of the company. We've been following you guys for 10 years and looking forward to continuing to track it. SAP here on theCUBE talking about innovation, design thinking, customer experience, Intelligent Enterprise. theCUBE is bringing all that intelligent data to you live here in Moscone. Stay with us with more coverage after this short break.