 Live from Las Vegas, Nevada. Extracting the signal from the noise. It's theCUBE covering Informatica World 2015. Brought to you by Informatica World. Now, here's John Furrier and Jeff Frick. Hey, welcome back everyone. We are live in Las Vegas for Informatica World 2015. This is theCUBE's Silicon Angles flagship program. We go out to the events and they extract the signal from the noise. I'm John Furrier. We're my co-host Jeff Frick. Our next guest is Ashkel Karni. SVP and GM of the Informatica Cloud Group. Welcome to theCUBE. Thank you. Thanks for having me. So Cloud's how we, I see big data all day long here in theCUBE, but Cloud is where the action is. People moving to the Cloud from the business unit standpoint and whether it's shadow IT in the Cloud and or native Cloud apps. What's your take on the Cloud? You guys agnostic, do you care where customers run the data software? So we feel that the Cloud is the future, right? So 10 years ago, there was this one company talking about the Cloud, salesforce.com. If you look at the transition that's happened since then, it's not just applications that are being delivered through a SaaS model, but it's entire platforms. So if you look at compute, storage, everything is moving to the Cloud. So platforms as a service, the leading vendors, you have AWS and Microsoft Azure. Now we are talking about billions of dollars in revenue. In Salesforce, they've crossed the $5 billion mark. So this is mainstream. This is absolutely where we expect the future to be. But it's going to be a journey. Nobody is going to take their on-premise application to switch them off and suddenly say, everything is in the Cloud. It's going to take a while to do that, to make that happen. So for us, it's all about enabling that hybrid enterprise and enabling customers to be on that Cloud modernization path. And we are absolutely agnostic to every SaaS application, every past platform. We just want to be the Cloud that connects every Cloud to every other Cloud and to every on-premise application out there. It's interesting. We always talk about shadow IT for years now. In fact, I did an interview with the CTO of Dropbox a couple of years ago. I said, you know what shadow IT is? He didn't know, but he's shadow IT, these young kids. So he didn't really know what shadow IT was. He thought everybody did that one. Shadow IT, no, you're it. But Dropbox is the world. You saw the disruption with storage, right? Put stuff in there, run some Monte Carlo simulations, do some stuff in the Cloud, whatnot, whatever. But that became an R&D opportunity. People say, hey, wow, the consumption economics are changed. So in a way it validates the Cloud as a viable platform. How does a company move to a hybrid on-prem in Cloud without disrupting operations? Because now you have organizational dynamics because the guys doing shadow IT were the ones circumventing IT to get some stuff done. So now they got to operationalize that. What do you guys see there? Because you guys have a neutral consumption model that fits Cloud. So you benefit forward. So how do you guys get people into the Cloud without disrupting their operations? So in the Cloud, we are seeing a few trends and I'll talk about a couple of them. So one is what I describe as micro-specialization. So looking back 10 years, you had sweet vendors and you picked a sweet and you tried to run as much of your front office or your back office on that sweet. So SAP for ERP, you had e-business that included HR and just about everything else. Siebel tried to do every aspect of customer management. And we've gone from that era where you had these massive suites to a time where like for example in Flamatica, we use sales Cloud and service Cloud but we also use exactly for compensation. We use concur for expenses. Like the number of apps that we use that would have been provided by one sweet vendor, it's now just fragmented all over the place. So the challenge becomes, how do you integrate all of these different systems? And more importantly, what's the buying pattern when somebody first picks a sales Cloud? So in the days of Siebel, when it was a 18 month implementation, it was IT that ran the show, right? So they would, there'd be these long requirement gathering sessions and- People made a lot of money. People made a lot of money on every side, yeah. But it took a while. The group that was often the most frustrated by it were obviously the business owners. So what changed along the way with the Cloud is this idea that you get started quickly and it's the functional group that needs that application that's in the driver seat. And so that changed effectively even how integration is viewed. So in the traditional on-premise world, we used to sell to IT in the Cloud world, more often than not, we are selling to Salesforce administrators. We are selling to the sales ops group, the sales operations group. And their focus is just Salesforce. So the way they look at it is, I just want Salesforce to be up and running, connected to everything that Salesforce needs to touch to. Informatica, can you help me do it? And more importantly, their users aren't IT specialists. So they want to have an experience that's not only all web-based, but something that's within the context of Salesforce. You never leave the Salesforce screen. And that's how we've been progressing. The way we have done this is by creating a complete Cloud experience, making the task of where all of this integration runs agnostic, so the IT organization supports it. We use the same underlying Vibe virtual data machine which has been proven. We've been selling this to the top Fortune 5000 across the world. So IT, in enterprise companies, respects and trusts Informatica. And so we've always had the stamp of approval from them. Now in the Cloud, we're enabling line of business users to basically get that simplicity and ease of use and agility that they've never been able to get in traditional data integration. So it's the Salesforce admin's desire to connect that to the corporate IT rather than the corporate IT guy saying, we're using Salesforce and we need to connect that way? Exactly, it's the app owners themselves who come to us and say, like in my Salesforce instance, I don't have the service ticket information. The only way I can service a particular customer better is if I know all the issues that that customer has logged with me. So how do I take this service ticket information that's not in Salesforce and get that into Salesforce? Informatica can make that happen for them. And it's not IT having these discussions. IT comes second. The actual app owners come to us first. Yeah, because they're driving the workloads, drive the infrastructure in the Cloud and that's the DevOps way. Exactly, they have a business need, they need to solve it, that's what they care about. Ash, let's talk about the Cloud business, Informatica Cloud business, you had a great Q1. What was the growth driver for Informatica Cloud business? So there were a couple of growth drivers. Obviously the tailwinds come from the fact that the world is moving to the Cloud, right? We talked about the fact that it's not just SaaS applications, but entire data centers moving to the Cloud. There's the CIO of a massive fortune, I think probably 20 organization that made the statement that she's going to reduce the number of data centers that they have from several dozens down to four. Now, what better proof point of the adoption of Azure and AWS can you possibly have than somebody like that basically saying, I'm going to stop building local data centers, I'm actually going to migrate what I have in my local data centers to the Cloud. That's a big driver. The other thing that's really working in our favor is, I think Cloud has crossed that chasm where in the past it was just about applications and so the integration need was around application to application integration. It was around making sure that accounts were synchronized between say Salesforce and NetSuite. It was about making sure that when something was entered here it showed up there. Now we are entering into the world where we've gone from just optimizing processes by doing them in the Cloud to analyzing processes in the Cloud. So analytics has now moved to the Cloud. Started with AWS Redshift, but now look around us. I mean at this conference at the Cloud Innovation Summit we have Salesforce talking about Salesforce Wave Analytics which is their analytics offering in the Cloud. We have AWS talking about Redshift. We have Azure talking about Azure SQL services and Azure data warehouse. You've got Tableau talking about what they have with Tableau online. The number of analytics capabilities being offered by different vendors in the Cloud means that there's more data than ever before moving to the Cloud. And that's a huge idea for us to differentiate. On the business front, one more question on the, because that's great, product, market, fit, traction, transformation all happening at the same time, it's great stuff. Ecosystem, you have a traditional ecosystem with Informatica, how does the ecosystem shift to the Cloud? Is it more agile? Economics are different. What changes in the ecosystem equation, if anything, in the Cloud business? Vis-a-vis the traditional Informatica business? There are some differences and then some similarities. Probably the biggest differences in the past are largest ecosystem partners were the major app vendors like the SAPs and Oracles of the world and then the system integrators. What's different in the Cloud is the number of ISV partners is several orders of magnitude larger because of this micro-specialization effect that I talked about. It's not just Salesforce and Workday and NetSuite, it's so many more. The number of partners is massive. Net partners, a lot more net distribution. And distributors, and that's where the SI ecosystem has also changed a little bit. It isn't just Accenture, Deloitte, Camp Gemini, like Cogniz and the biggest SI's, but it's also the smaller ones that specialize in just working on Cloud technologies. Blue Wolf, Cloud Sherpas, Aperio, and that's been a pretty significant expanse for us. Well, boutiques come out of the Cloud too. You're going to be a very competitive boutique. Absolutely. Partner. I mean, Blue Wolf started off by only specializing around Salesforce. And now they've gotten a lot bigger and they do a lot more than that. Well, we've got a minute left. I want to ask you, what's the real opportunity for the Cloud? Net it down. Put all the informatics stuff aside for a second. For the folks out there watching, partnering with you guys, whether they have whatever Cloud orientation they might be on, what is their opportunity to make money, do partnering, add value to their customers, what's the real Cloud opportunity with informatics? To me, you need to believe the premise that in another two years, every application that you're building, you will not even think about building it on-prem. Everything new will be done in the Cloud. And so, if you accept that premise, the obvious question is, how do you enable that journey? How do you enable your customers to make that happen? Integration is completely changing. Analytics is changing. Migrating all of that over to the Cloud is changing. The opportunities are going to be in helping customers- They're not changing. Exactly. And frankly, you need to get used to this idea that you no longer have control over those data models. Because it's not within your enterprise. It's all outside. It's a great opportunity. You get fired and you make one mistake. But there's an opportunity to risk. I mean, there's been a lot of challenges. Well, with great risk and opportunity comes the ability to really do something transformative. To redefine, not just your business, but leave a mark. I think that's really the opportunity. If you can help your customers make that migration possible and make it seamless without proposing a rip and replace. Showing a pack to do it through this hybrid landscape, I think there's this tremendous value over. George Gilbert, our new analyst, was just talking about the fact that crisis equals danger plus opportunity. Or was it danger equals crisis? Whatever the Chinese definition is. That's Cloud, basically. A little bit dangerous. You could hurt yourself if you don't do it right. But the benefits are massive. I think big data and Cloud are two areas where there's obvious advantage and opportunity. Big data is still proving itself. Cloud has proven itself. When you see Salesforce talking about them having crossed the $5 billion mark, Microsoft claims that they're going to be $20 billion in the Cloud in another few years. AWS just recently announced that they've crossed the $5 billion mark. These are ridiculously large numbers. At this point, Cloud is here. It is mainstream. It is going to be the de facto. We called it, we called it, we were the only ones who called Amazon being very profitable. Finally released the numbers. When people were down on Amazon, race to zero, what? What's this race to zero? They're like, kick it ass. Ash, thanks so much. The Cloud is hot. We love your business model. Love to follow up after on our briefings. Congratulations, your success. General manager of the Cloud business here at Informatica. We'll be right back with more after this short break.