 From Orlando, Florida, it's theCUBE. Covering SAP Sapphire Now 2018, brought to you by NetApp. Welcome to theCUBE, I'm Lisa Martin with Keith Townsend. We are in Orlando at SAP Sapphire Now 2018. We're in the NetApp booth, and we are excited to welcome to theCUBE Ray Russ from Fujitsu, the Senior Director of SAP Solutions. Ray, this is your 21st Sapphire. That's correct. This event is enormous. There's upwards of 20,000 people here in Orlando, but what Bill McDermott, their CEO said in his keynote is they're expecting about a million people to engage for a software company that sells an invisible product. That's really incredible. You've been involved, you've been at Fujitsu for a few years but you've been involved with SAP for a long time. Talk to us about your, kind of the history that you've seen with SAP and now what you're doing with them at Fujitsu. Yeah, so I go back 22 years ago as an end user, started with the manufacturing space, company that was implementing SAP for the first time, and then my second end user before I got into consulting. I had seen a lot of change in the companies I worked for and wanted to go and help other companies go through the transition. I really got involved right before Y2K, and if you think about digital transformation, I kind of think of it that way. I mean, digital transformation, everyone talks about it, it's like this new buzzword, but as an SAP expert and as a company, we've been doing digital transformation for years, we just didn't quite call it that, right? To a point where CIOs say stop calling it digital, just tell me how I'm going to fix my business or help become more efficient in my business. So I've seen a change quite a bit. One of the, some of the big things that have changed now is the technology that's allowing companies to actually get outside their four walls and extend that enterprise to supply chains or assets. So that's something that we focus on at Fujitsu. My background has been in manufacturing, and while Fujitsu focused on a lot of different industries, a big part of our business is in the manufacturing space. We're a manufacturer. We run SAP in our own plants, as well as 84% of our customers and globally are in the manufacturing space. So we're very close to companies in this particular space, helping them understand the journey for S4HANA. What does that mean for them? Would it be operational efficiency but also extended beyond their enterprise? Some of the challenges we see with companies right now is that over the years, they've continued to upgrade their SAP systems. When I was, my first implementation was 3.1, I believe, and now it's CCC6 before S4HANA. But they've continued to upgrade and maybe not take advantage of new functionality and the new versions of SAP enhancement packs and that. So they're kind of still got some custom code going on. And now they're asking SAP and partners like us, okay, S4HANA, we really want to see the value not just an IT business case, but what is the business to the companies and organization strategic goals? So part of our job and part of our role is to go in and help these companies understand the business value, whether it be reduction and closing the books or overall equipment effectiveness in their plants, right? To see that those overall outcomes to the business and help them define the business case when the move to S4HANA would come. The other area of expertise for us, industrial IoT, we've been doing this, we've been really one of the global leaders in SAP in what they call digital manufacturing, which is now part of the Leonardo family. We've been doing it Leonardo IoT for years. We just, no one called it that. And that's one of the things we're showcasing here. We work very closely with SAP's Leonardo team. That's in the digital manufacturing space. Some of the solutions customers might know as MII or ME. We're doing co-development with our customers, I'm sorry, with SAP, and as well as our customers as well, innovation projects and seeing what they can get out of industrial IoT for their projects. We were here at the Leonardo event on Monday. Some of the things we're showcasing over at our booth this week and talking to customers about is something we call our smart factory. Many times we've seen IT-led IoT projects, whether it be a shop floor application or something at a plant level. And I said it last year, I spoke in South Florida last year and I said, I hear from CIOs all the time if we're going to fail, fail fast. And I really believe now that why fail at all. And actually talking to Gartner this week as well, they said the same thing, C-level executives don't want to hear that anymore. They want to understand the roadmap. And they're kind of, there was this concept of actually throwing a project to a developer, having them develop something without the business and then taking that down to a plant or something to a user and they were like, this is not exactly what we wanted, we don't see the business outcome. So what we do now in our framework is actually help these companies build their long-term robots. So going in and talking to the C-level executives and the business side and saying, what are your expected outcomes? Let's start with the outcomes, not the technology, right? Whether it be reduction in labor, improved quality, again overall equipment effectiveness, and help them understand what the strategic goals are. And then work with the business units and the users as well to help define what their needs are at the plant level or the corporate level. And part of our methodology and approach is build a maturity model where they sit at that time. And then also using a result chain process to actually build into every initiative or IoT project with the business cases and where's the real value, right? So in making sure there's outcome-based approach to this, build that long-term robot. So yesterday on stage, Bill McDermott talked about the value of augmenting people with technology but the importance of process. So Fujitsu, obviously big manufacturing operations outside of servers and IT equipment, there's always been this battle traditionally between what we call OT, traditional manufacturing operations and IT. Obviously as part of this transformation, organizations need to go through CIOs, plant managers, that traditional line of business have to have this new way of working together. Can you shed light on how that's changed within Fujitsu and then with customers? You hit it right on the head and IT-OT integration has been a challenge for a lot of companies over the years. In fact, I think one of the biggest challenges CIOs have had with shadow IT is at the plant level, right? Because maybe the IoT projects weren't being rolled out fast enough as corporate was trying to focus on the ERP application. I think the plants didn't think of SAP as an OT type of application. Right, and so there were a lot of challenges. Next thing you know, you had major companies with multiple plants having multiple different applications but none of them rolled up so a COO could actually see the operations of all of his plants, right? With some of the acquisitions SAP has done and some of the development they've done and the advances in IoT, now when I talked about some of those problems with the CIOs trying to fail in fast, what we do is go and work with these companies and actually go down to the plant level and work with them. So we talk to them, what are your business processes like? When you've got a developer up at corporate trying to design something for a plant operator or a plant manager who doesn't know the process, you're never going to give them what they need or what they want. You can't automate something a process that doesn't exist. Exactly, exactly. So working with them, we help define what those processes are and then actually build applications that fit their needs. Whether it be condition-based maintenance applications which you need to do before you can do predictive analytics. Some of the innovative things we're doing and we're showing that we've augmented a hollow lens into the process where, for example, even on our own plant down in Richardson, Texas, we make network communication equipment which is a complex assembly. And an operator has to look at a manual sheet and actually look at the numbers and figure out what slot it goes in. With the hollow lens augmented reality, actually it doesn't overlay and he pick up a part and plug it right in, it tells him and we've been able to reduce the cycle time on that assembly by 42%. So that's huge. That is huge. So you mentioned business outcomes a number of times and that you're talking to the C-suite and the CDO who needs to drive digital transformation and cultural change and the CMO who needs technology to drive marketing and line it to sales. Give us an example of one that you think really articulates what Fujitsu and SAP are delivering that's impacting a customer's business, whether it's developing a new product, increasing revenue, increasing profits. So good point and so a good example of the one we've just done recently and I actually spoke on this recently. The four major outcomes as customers looking for in this roadmap was reduction in labor hours, right? Reduction in machine time, right? The big two areas for them was improvement in quality. So by being able to monitor and get real time information on our application to the plant, we're getting information to plant managers real time. It's not the next shift or the next day, right? And we're able to actually improve quality and a lot of our customers plants by between 30 to 40%. And then customer satisfaction is huge as well. You mentioned customer again, one of the things we're doing too now is actually being able to, servitization is kind of a new buzz where it's been around there for a while actually, right? But as companies are looking to, in the manufacturing area, how do we create new routes to market, right? As a customer of ours, we're actually put sensors in some of their high-end assets they sell to their customers as well. We're able to get that information now and actually help them monitor their equipment. We can actually help them then reduce their customer's maintenance costs and so forth. And that's adding value to not only our customer, but our customer's customer. Those are some of the big things we're seeing in manufacturing right now. So talk about the value of partnership, especially with companies like, we're in a NetApp booth, so NetApp will be a great example of when we're talking edge, which is where all IOT data is happening, industrial data happens at the edge. Core, where some of that data needs to be processed and then back to cloud. What, how does Fujitsu partner with SAP NetApp, the customer to bring value from all three of those endpoints? You got it. And you know, it's interesting over the years, somebody asked me there today if I ever worked, never worked for SAP, but I've been in the ecosystem forever. I get accused, if you cut me, I believe Lou. And I found over the years is that, I think every company's realizing they can't do it all, right? You got to do what you do well, right? And so, I mean, SAP realizes that we work, and NetApp's been a strong partner of ours for a long time, right? So, you know, and I talk about our smart factory framework, one of the things we try to do when we go in is actually look at the business outcomes and then the domain areas, line of business we're going to focus on and that. But then we look at the technology. And if it's technology, it's not our core competency, we want to make sure we bring in the right partner, NetApp's one of those partners, SAP's one of those partners. And we have a group of partners that we bring in to make sure we're bringing the best solution to our customer, right? If we can't do it well, then we're going to make sure we work with a partner that has strength in that area. And they expect that choice, that flexibility, right? That word is used, flexibility, agility is, at every, you can't go to a trade show without hearing those at least like 50 times each, but it's really the customers that are driving that and their needs. We've heard a lot of that in the last, you know, day and a half that we've been here. A lot of that value articulated through the customer, as well as the importance, and it sounds like SAP does this well, of listening to the customer. What are you needing that we're not doing? Who should we be partnering with to be able to deliver the solution that you need to your point that's going to drive these business outcomes? Because that's where the conversation this day and age needs to be. Yep, exactly. Yep, yep. Well, Ray, Ray Russ. Thank you so much for joining us and sharing what you're doing with Fujitsu. Fujitsu and SAP, been partners for 40 years. You've got 8,000 plus customers and counting, and I imagine that you're going to carry the momentum forward that you're feeling here at Sapphire into your 22nd Sapphire next year. Absolutely, I appreciate it. Have a great show, guys. Thank you very much. Thank you so much. We want to thank you for watching theCUBE. We are at SAP Sapphire now in the NetApp booth in Orlando. Lisa Martin, Keith Townsend. Thanks for watching.