 Live from the Javits Center in New York City, it's theCUBE, covering Inforum 2017. Brought to you by Inforum. Where am I looking? Welcome back to theCUBE's coverage of Inforum 2017. I'm your host, Rebecca Knight, along with my co-host, Dave Vellante. We're joined by Stefan Scholl. He is the president of Infor. Thanks so much for joining us. My pleasure. For returning to theCUBE. My pleasure, yeah, three years in a row. I think we're four now, yeah. Indeed, indeed. But we skipped a year in between. That's right, three years. Yeah, anyways, good to be here. This has been a hugely successful conference. We're hearing so much about the growth and momentum of Infor. Can you unpack this a little bit for our viewers here? Yeah, I mean, you know, people always forget we only started this aggressive cloud journey literally three years ago, when we announced that in form in New Orleans that we were pivoting the company to Infor industry-based cloud suites. Everybody looked at us and said, that's an interesting pivot and, you know, why are you doing that? Well, as I said yesterday, we really saw a market dynamic that, you know, you see retail just getting crushed by what Amazon was doing. And it was obvious today, but then wasn't so obvious, but that was going to happen everywhere. And so we really got aggressive on believing we can put together a very different approach to tackling enterprise software. Everybody is so fatigued from buying from our competitors, traditional perpetual software, and then you end up modifying the hell out of it, and then you end up spending a gazillion dollars and it takes forever. And then if it does work, you're stuck on old technology already, and you never get to the next round of evolution. So we said, why don't we build cloud suites, take the last mile industry functionality that we have, put it in the cloud, make it easy for our customers to implement it, and then we'll run it for them. And then by the way, when the newest innovation comes up, we'll upgrade them automatically, right? That's what cloud's about. So that's where we saw that transformation happening. So in three years, we went from 2%, as I said, to 55% plus of our revenue. And by the way, we're not a small company, right? Nobody at our size and scale has ever done that in enterprise software. So what an accomplishment. So a lot of large companies, some that used to work for, are really slow. And you know what, a lot of times that's okay because IT tends to be really slow. As you move to the cloud and move to the situation where, okay guys, new release coming, what are your customers saying about that? How are you managing that sort of pace of change, that flywheel of Amazon that you're now innovating on and pushing to your client? Well, they're excited. I mean, and I'll tell you, I mean, I remember standing up in Frankfurt in Germany, 18 months ago for a keynote, and said the cloud is coming. I almost got kicked out of Germany. I mean, I said, it's not going to happen in Germany. We're engineering pedigreed. We're going to be, you know, on-premise. You don't understand the German market. You don't understand our marketplace. And we're really close friends with Andy Jassy at AWS, the CEO. The AWS guys are unbelievable. And innovative. And we said, you know, you guys got to build your next data center in Frankfurt. So they put, you know, hundreds of millions of dollars investment in built data center. What's the fastest growing data center in Europe right now for them? Frankfurt. Frankfurt, right? The German market for us, our pipeline is tenfold increase from what it was a year ago. So, you know, it's working in Germany and it's happening on a global basis. We have, I think yesterday, 75 customers from Saudi, from Dubai, from all the Middle East. I mean, cloud is a great equalizer. And don't underestimate, you know, I'll take luck, you know, to our advantage anytime. The luck part is, there's fatigue out there. They're exhausted. They've spent so much money over the last 20, 30 years and never reached the promise of what they were sold then. And so now with all the digital disruption and think of the business competitive challenges that they have to deal with. I mean, I don't care. You could be in Wichita, Kansas, building up an e-commerce website and compete with a company in Saudi tomorrow, right? The barriers to entry in manufacturing, retail, public, I mean, look at government agencies. I mean, we're doing nine figure transformations in the cloud with public sector agencies. Again, two years ago, they would have said, never going to happen. Yeah, the government to spend that kind of money. That's right. Mike Rogers, CIO was saying, it was like all the technical debt that we've accumulated over the years and it just keeps getting worse and worse and worse. If we don't bite the bullet and move now, it's just going to take that much longer. That's right. That's right. And they're leapfrogging. I mean, I'm so excited. Government agencies, I mean, there's even some edicts in some places where cloud only. I mean, this whole Gold Coast opportunity with 40 plus different applications in Australia, all going into the cloud to handle all the complexities they have around the commonwealth games that they're trying to deal with. So, I mean, just huge transformations on a global basis. Yeah. At this conference, we're hearing about so many different companies and as you said, government agencies, municipalities transforming their business models, transforming their approaches. What is some of your favorite transformation stories? Oh, I mean, my favorite one that we're doing is Travis Perkins. Okay. You know, with John and Carter, maybe even interviewed him last year when he was here, CEO, old-state distribution business and taking a whole new fresh approach, undoing 40 to 50 different applications, taking his entire business, putting it online. He deals with contrast. So, they're the home depot of the UK market. And right now, if you drive up into that carport and you want to order something, it's manual, sticky notes, phones, dumb terminals. I need five windows. I need five roofs. I need five pieces of wood. Everything's just a scurry. He wants to put it on when you drive up next year. You're on an iPad. What would you like? Oh, by the way, you want to make a custom order on that window frame. You want to make green, yellow, red. You want to order different tiles of roof styling. Custom orders is the future. You, as a contractor walking into that organization, want to make a custom order. That today is very complicated for a company like that to handle. So, the future is about undoing all that, embracing the custom order process, giving you a really unique touchless buying process where it's all on an iPad. It's all automated. You know what? Telling you, here's your five new windows. Here's a new frame you want on it. And by the way, you're going to get it in five days and three hours and 21 minutes delivered to your door. Right? And by the way, these guys are huge, right? They're the biggest distribution companies in all of the United Kingdom. And so that's one of my favorite stories. Can we go over some of the metrics that you've been sharing? Oh, it's somewhat repetitive, but I'd like to get it on record. There's 55%, 84, 88, over 1100, 3X, 60%, maybe start with the 60%. I think it's bookings growth, right? That's right, yeah. I was in sales growth last year alone. And you know, I looked at, you know, my CFO always keeps me honest, but I think I can say it anyways, which is I looked at everybody else. I mean, you look at the, I want you to mention any competitor's names, but you look at the top five competitors that we have, we grew faster than they did last year on sales of Cloud Suite. Okay, so that's 60% bookings growth on Cloud. Correct. That's right. Yeah. I mean, when you think of our competitors, I saw 40s, I saw some 30s, I saw maybe 52 at the next one down. So people don't think of us that way. So we were at the enterprise scale, the fastest growing cloud company in the world. Okay, and then 3X, that's 3X, the number of customers who bought multiple products, is that correct? Correct, that's exactly right. So think about that transformation. They used to buy from us one product, feature function rich, great, but now they're buying five products, eight products from us. So 3X increase year over year already happening. Okay, and then it was 1100 plus, is go lives? Go lives? Yeah. So that's, people always ask us, you're selling stuff, are they using it? Is it working? So you got to follow up with delivery. So we're spending a ton of money on certification, training, enablement. Look at the SI community. Look at the Deloitte, Accenture, Capgemini, Grant Thornton. Four of the major SI's in the world that weren't here last year. They're all here now. They're all here this year. Platinum sponsors. So Deloitte on go lives, the SI community is embracing us, helping us. I mean, I can't do $100 million transformations on my own with these customers. I need Accenture, I need Deloitte, look at Coke. Coke's going to be a massive transformation for financials, human capital management. And so I got Accenture and Deloitte helping us taking a hundred plus billion dollar company on those two systems. And then 84, 88 is the number of live customers. Sorry, total customers that we have in the cloud. Cloud customers. Okay, not total customers. Yeah, no, no. We have 90,000 plus customers. And then 84, 8,500 of them are cloud based customers. We've got a ways to go to convert some of those guys. That's our opportunity. That's absolutely right. 55% of revenue came from the cloud, obviously driven by the cloud bookings grill. That's right. Exactly. So I mean, just the acceleration. I mean, as I said, when we started this thing in New Orleans, two, three percent. Now, tipping point, revenue. I mean, it's one thing to sell software, but to actually turn it into revenue. Nobody at enterprise scale has done the 2%, the 55% at our size. Lots of companies in the $100 million range, small companies, but if we were a standalone cloud company, we'd be one of the largest cloud companies in the world. So the narrative from Oracle, I wonder if you can comment on this, is that the core of enterprise apps has not moved to the cloud. And we, Oracle, are the guys to move it there because we are the only ones with that end-to-end cloud on-prem to cloud strategy. And most companies can't put core apps, enterprise apps, in the cloud, especially on Amazon. So what do you say to that? Well, it's because they don't have the applications to do that. You know, Oracle doesn't have the application horsepower. They don't have industry based application suites. If you think of what Fusion is, it's a mishmash of all the applications that they bought, there's no industry capability. So it's horizontal. It's horizontal. You can't, I mean, Oracle's fighting the battle against Amazon. I mean, they declared war against AWS. I'm glad they're doing that. Go ahead. I mean, I don't know how you're going to do that, but they want to fight the infrastructure game. For us, infrastructure is commoditized. We're fighting the business applications layer game. And so when you look at SAP or Oracle or anybody else, they have never done what we've done in our heritage, which is take key critical mission functionality for aerospace and defense or automotive. We have the last mile functionality. I mean, I have companies like Ferrari, one of the most complicated companies. We've talked with those guys for years. No modifications. BAE over in the UK, building the F-35 fighter jets and the Typhoon warplanes. It doesn't get any more complicated than building an F-35 fighter jet. No modifications in their software that they have with us. You can only build cloud based solutions if you don't modify the software. Oracle doesn't have that. Never had it. They're not a manufacturing pedigree organization. SAP is probably more analogous to that. But even for SAP, they only have one complete, big product set covering retail, distribution, finance. It's the same piece of software they send to a bank, that they send to a retail, that they send to a manufacturer. We don't do that, right? That's been our core forever. So your dogma is no custom mods because you're basically saying you can't succeed in the cloud with custom mods. I mean, we have an extensibility platform to do some neat things if you need to do that. But generally speaking, otherwise it's just lipstick on the pig if you're running modified applications. That's called hosting. That's what these guys are largely. A lot of people count hosting as cloud. They all do it. That's the game they're playing. They throw everything in the cloud kitchen sink. That's right. Okay. And as we thought with you before, we spent billions at the, we all are R&Ds at the application layer. We do some work in the integration layer and so on, but most of our money is spent in the last mile, which Oracle and SAP, they don't want to waste it. They're all focused on HANA and infrastructure and system speed and performance and all the stuff that we view as absolutely being commoditized. But that's really attractive to the SIs, the fact that they don't go that last mile. So why is it that the SIs are suddenly sort of coming to infor? Well, you know what? Because they finally see there is a lot of revenue still on the line in terms of change management, business process, re-engineering. You take a company like Travis Perkins, change their entire model of doing business. There isn't just modification revenue or integration revenue. There is huge dollars to be had on change management, taking the company, the CEO, John Carter by the hand, and saying, here's how you're going to transform your entire business process. That more than makes up in many cases, high value dollars then, focused on changing a widget from green to yellow. And it's right in the wheelhouse of these big consultancies. And they're making good money on digital transformation. So what are the digital use cases? So that's where they're, look at Accenture, they did a great job. I think 20 plus percent of their business now is all coming from digital. That didn't exist three, four years ago. Well, you have a lot of historical experience from your Oracle days of working with those large SIs. They were critical, but they were doing different type of work then. And is it your premise that a lot of that's going away and it's shifting toward? Listen, the voice of the customer is everything. And it may take time. You can snow a customer once, right? Which we've already done in this industry of software. We told them, buy generic based software, Oracle or SAP, modify it with an SI, take five years, implement it for a hundred million dollars, get stuck on this platform. And then if you're lucky, maybe upgrade in 10 years. Whoever does that today as a playbook, as a customer? And if an SI can sell that, I'm not buying that. You think any customers I know today are buying that vision? I don't think so. Right there with the outsourcing business. Yeah, that's right. Another thing that's come out of this conference is attention to the Brooklyn Nets deal. Can you talk a little bit about it? It's very cool. I love those guys. We're from Boston. We love the Brooklyn Nets, too. Yeah, we do. And you know I love... We can play us anytime. Every day, every day. Thank you. For those graphics. Bread and those guys. You know what it is, and Sean, the GM, the energy. You know what it is, I use that a lot with my own guys. Brooklyn Grid. And they're willing to look and upturn every aspect of the game to be more competitive. And so we're in there with our technology and looking at every facet. What are they eating? What's the EQ stuff, emotional quotient? How's that team collaboration coming together? And then mapping it to they have the best 3D cameras on the court. So, foot positioning, and how are they aligning to each other? Who's doing the front guard in terms of holding the next person back so they can have enough room to do a three point shot? Where should the three point shot come from? So, taking all the EQ stuff, the IQ stuff, the performance, the teamwork, putting it all into a recipe for success. I mean, these guys are, you know, I'm going to predict it here. These guys are going to, you know, they're going to rock it next couple of years as a team. So. But it's not just what goes on in the court too. It's also about fan engagement too. All that. Well, fair enough. I get all excited about, you know, just making them a much better team. But the whole fan experience, walking into a place, knowing that if I get up now, the washroom line isn't 15 miles long, and that the cash line for a beer isn't going to take me 20 minutes. That on my app, you actually have all the, you know, information and sensors in place to know that, hey, right now is a great time. You know, aisle number four, queue number three is a one minute wait for a beer. Go. Or have runners. You know, everything's on your phone. You know, they don't do enough service. So there's a huge revenue opportunity, along with it, from a business point of view. But I would also say, it's a customer service element. How many times have we sat in a game and go, I'm not getting up there? That's not going to do it. Unless you're sitting in the VIP area. Well, there's revenue to be had all over the place. They're missing out on our beer money. It's ways for stadium services, which are essentially a liquor distribution system. That's right. But to do that, you got to connect point of sale systems. You got to connect a lot of components, sensors in the bathroom. I mean, you got to do a lot of work. So we're going to create, you know, the fan experience of the future with them and preferences. The fact that they know that when you walk in past the door with your app, and if you have the Brooklyn Nets app, that we know who your favorite player is, and you get a little text that says, hey, you know what? 10% discount on the next shirt from your favorite player, right? Things like that, making a personal connection with you about what you like is going to change the game. And that's happening everywhere. In retail, everybody wants to have a one-to-one relationship. You want to order your Nike shoes online with a green lace and a red lace on the right. Nike allows you to do that, right? You want to order a shirt that they'll make for you with a different emblems on it and different, you know, kind of technology to it. Those are things they're doing too, right? So a very one-to-one relationship. Well, it's data, it's more than data, it's insights. And you guys are, everybody's a data company, but you're really becoming a data and an insight-oriented company. Do you kind of stumble into that, or is this part of the grand plan six years ago, or how'd you get here? Listen, this whole, I mean, to do cloud-based solutions by industry is not just to solve for applications, going from infrastructure on-premise to off-premise. What does it allow you to do? Well, if you're in AWS, I can run 10,000 core product. I can run a report in 10 minutes with AWS that would take you a week around sales information, customer information. You know, look at all the Netflix content. You log in on Netflix, suggestions for you. It's actually pretty accurate, isn't it? It's fairly accurate sometimes, yeah. It's pretty smart, what goes into the algorithm that looks at your past. Unfortunately, I'll log into my kids' section and I have my name on it and I get all these wonderful recommendations for kids. But that's the kind of stuff that we're talking about. Customers need that. It's about real time. It's not looking backwards anymore. It's about real time decisioning and analytics and artificial intelligence AI is the future, for sure. So more, more on the future. I mean, this is really fun listening to you talk because you are the president and you have a great view of what's going on. What will we be talking about next year at this time? Well, it won't be quite this time. It'll be September. But what do you think? I think what you're going to see is massive global organizations up on stage, like the ones I mentioned, Travis Perkins, a Safeway, a Gold Coast, a Hertz. Hertz is under attack as a company. The entry point into the rental car business was very, very hard. Who's going to go buy 800,000 cars and get into the rental business? Open 10,000 centers. You don't need to do that anymore today. Software. It's called software, application business. So there are business models under attack. We're feverishly working with their CEO and their executive team and their board on redefining the future of Hertz. So you're going to see here next year the conversation with a company like Hertz rebounding and growing and being successful and the best defense is a good offense. So they're on the offensive. They're going to use their size, their scale. You look at the retailers, and I love the TAL story. I mean, they make one out of every six shirts. Amazon puts the same shirt online that they sell for $39.99. TAL's trying to sell for $8.999. They're saying, enough of that. They built these beautiful analyzers, sensors, where you walk into this little room and they do a sensor about 100 different parts of your body. So they're going to give the perfect shirt for you. So it's an experience center. So you walk into this little center, names escaping me now, but they're going to take all the magic, like a professional Italian tailor would do. You walk in, it's all automatic. You come out of there, they know all the components of your body, which is a good thing and a bad thing sometimes, right? But they'll know it all. And then you go on this beautiful rack and you're going to pick what color do you want. Do you want a different color? So everything is moving to custom. And you'll pay more for that. Wouldn't you pay more for a customized shirt that fits your body perfectly rather than an off the rack kind of shirt at $8.999? That's how you compete with the generic based e-commerce plays that are out there. That use case of TAL is going to happen in every facet. DSW, at this point, these experience centers, the shoeless aisles, you know, that whole experience, but you know, you walking in as a, with, I mean, the most loyal women shoppers are DSW with your application, right? And how many times have you tried to shoe on that doesn't fit properly or it's not the one you want or they don't have your size or you want to make some configurations to it. Actually came by and gave me this. There you go. I love DSW. I mean, look at, I mean, they're what? One of the biggest shoe companies in the world, not standing still, and Ashley is transforming, they went live on financials in like 90 days in the cloud, which for them, that kind of innovation happening that fast is unbelievable. So next year, the whole customer experience side is going to be revolutionary for these kinds of exciting organizations. So they're rather than cowering from this whole digital transformation, they're embracing it. We're going to be the engine of digital transformation for them. So I get so excited, have major corporations completely disrupting themselves to change their market for themselves moving forward. What is the Coke investment meant to you guys? Can you talk about that a little bit? I mean, obviously we hear $2 billion and blah, blah, blah, but can you go a little deeper for us? I mean, forget all the money stuff for a minute. Just the fact that we're part of a company that is, went from 40 million when Charles Coke started taking over from his family and went to 100 plus billion. Think about that innovation. Think about the horsepower, the culture, the aggressiveness, the tenacity, the will to win. We already had that. To combine that with their sheer size and scale is something that is exciting for me. One, two is they view technology as the next big chapter for them. I mean, again, not resting on your laurels. I'm already 100 billion. They want to grow to 150, 200 billion and they see technology as the route to getting there. Automating their plants, connecting all their components of their employees getting the right employees to the right place. So workforce management, all the HR stuff that we're doing on transformation. The financials, getting a global consolidated view across a $100 billion business on our systems. That's transformation. That's big, big business for us. And what a great reference to have. A guy like Steve Feldmayer up yesterday. He'll be up here next year talking about how he's using us to transform their business. There's not many $100 billion companies around, right? So what a great reference point for us to have them as a customer and as a proof point of success. So we'll look forward to that in September and seeing you back here next year too. Look forward to it. Stefan, thanks so much for joining us. Thanks, appreciate it, thank you. I'm Rebecca Knight for Dave Vellante. That is it for us and theCUBE at Inforum 2017. See you next time.