>> Announcer: Live from the Javits Center
in New York City, it's theCUBE!
Covering Inforum 2017.
Brought to you by Inforum.
>> Welcome to day one of theCUBE's coverage of Inforum
here at the Javits Center in New York City.
I'm your host, Rebecca Knight,
along with my co-host, Dave Vellante.
We are also joined by Jim Kobielus,
who is the lead analyst
for artificial intelligence at Wikibon.
Thanks so much.
It's exciting to be here, day one.
>> Yeah, good to see you again, Rebecca.
Really, our first time,
we really worked a little bit at Red Hat Summit.
>> Exactly, first time on the desk together.
>> It's our very first time.
I first met you a little while ago,
and already you're an old friend.
>> This is the third time we've done Inforum.
The first time we did it was in New Orleans,
and then Infor decided to skip a year.
And then, last year,
they decided to have it in the middle of July,
which is kind of a strange time to have a show,
but there are a lot of people here.
I don't know what the number is,
but it looks like several thousand,
maybe as many as 4000 to 5000.
I don't know what you saw.
>> Rebecca: No, no, I feel like this is a big show.
>> Jim: Heck, for July?
For any month, actually.
>> Exactly, particularly at a time where we're having
a lot of rail issues, issues at LaGuardia too,
so it's exciting.
>> theCUBE first met Infor at the second Amazon re:Invent.
I remember the folks at Amazon told us,
"We really have an exciting SAS company.
"It's the largest privately-held SAS company in the world."
We were thinking, is that SAS?
And they said, "No, no, it's a company called Infor."
We said, "Who the heck is Infor?"
And then we had Pam Murphy on.
That's when we first were introduced to the company,
and then, of course, we were invited to come
to New Orleans.
At the time, the questions around Infor were,
who is Infor?
What are they all about?
And then it became, okay,
we started to understand the strategy a little bit.
For those of you who don't familiar with Infor,
their strategy from early on was to really
focus on the micro-verticals.
We've talked about that a little bit.
Just a quick bit of history.
Charles Phillips, former president of Oracle,
orchestrator of the M&A at Oracle,
PeopleSoft, Siebel and many others, left,
started Infor to roll up,
gold-funded by Golden Gate Capital and other private equity,
substantial base of Lawson Software customers,
and then, many, many other acquisitions.
Today, fast forward, you got a basically
almost $3 billion company
with a ton of debt, about $5 billion in debt,
notwithstanding the Koch brothers' investment,
which is almost $2.5 billion,
which was to retire some of the equity
that Golden Gate had,
some of the owners, Charles and the three other owners
took some money off the table,
but the substantial amount of the investment
goes into running the company.
Here's what's interesting.
Koch got a 2/3 stake in the company, but a 49% voting share,
which implies a valuation of about, I want to say,
just under four billion.
Let's call it 3.7, 3.8 billion.
For a $2 billion to $3 billion company,
that's not a software company with 28% operating margin.
That's not a huge valuation.
So, we'll ask Charles Phillips about that,
I mean, some of this wonky stuff in the financials,
you know, we want to get through.
I'm sure Infor doesn't want to talk too much about that.
>> But it is true.
It is, for a unicorn, for a privately-held company,
this is one of them.
This is up there with Uber and Airbnb,
and it's a question that, why isn't it valued at more?
>> My only assumption here is they went to Koch
and said, "Okay, here's the deal.
"We want $2 billion plus.
"You only get 49%, only.
"If you get 49% of the company in terms of voting rights,
"we'll give you 2/3 in terms of ownership.
"It's a sweetheart deal.
"Of course, it's a lot of dough.
"You get a board seat."
Maybe two board seats, I can't remember.
"And we'll pump this thing up, we'll build up the equity,
"and we'll float it someday in the public markets,
"and we'll all make a bunch of dough
"and our shareholders will all be happy."
That's the only thing I can assume,
was this sort of conversation that went on.
Well, again, we'll ask Charles Phillips,
see if he answers that.
But James, you sat in yesterday at the analyst event,
you got sort of the history of the company,
and the fire hose of information leading up to
what was announced today, Coleman AI.
What were your impressions as an analyst?
>> Well, first of all, my first impression was
a thought, a question.
Is Infor with Coleman AI simply playing catch-up
in a very,
I call it a war of attrition in the ERP space.
Really, it's four companies now.
It's SAP, it's Microsoft, it's Oracle,
and it's Infor duking it out.
SAP, Microsoft and Oracle all have fairly strong
AI capabilities and strategies and investments,
and clearly they're infused,
I was at Microsoft Build a few months ago.
They're infusing those capabilities
into all of their offerings.
With Coleman, sounds impressive,
thought it's just an early announcement,
they've only begun to trickle it out to their vast suite.
I want to get a sense, and probably later today we'll talk to
Mr. Angove, Duncan Angove.
I want to get a sense for how does, or does,
Infor intend to differentiate their suite
in this fiercely competitive ERP world?
How will Coleman enable them to differentiate it?
Right now it seems like everything they're announcing
about Coleman is great in terms of
digital assistance, conversational interface,
everybody does this, too, now,
with chatbots and so forth,
in-line providing recommendations.
Everybody's doing that.
Essentially, everybody wants to go there.
How are they going to stand apart
with those capabilities, number one?
Number two is just the timeline.
They have this vast suite,
and we just came from the keynote,
where Charles and the other execs laid out in minute detail
the micro-vertical applications.
What is their timeline for rolling out
those Coleman capabilities throughout the suite
so customers can realize they have value?
And is there a layered implementation?
They talked about augmentation versus automation,
and versus assistance.
I'd like to see sort of a layer of capabilities
in an architecture
with a sense for how they're going to invest
in each of those capabilities.
For example, they talked about open source,
like with TensorFlow,
which is a new deep learning framework
from Google Open Source.
I just want to get a deep dive into
where the investment funds
that they're getting from Koch and others,
especially from Koch,
where that's going in terms of driving innovation
going forward in their portfolio.
I'm not cynical about it,
I think they're doing some really interesting things.
But I want some more meat on the bones of their strategy.
>> Well, it's interesting,
because I think Infor came into the show
wanting to message innovation.
They're not known as an innovative company.
But you heard Charles Phillips up there talking,
today he was talking about quantum computing,
he was talking about the end of Moore's Law,
he was obviously talking about AI.
They named Coleman after Katherine Coleman Johnson.
>> Here's my speculation.
My speculation, of course, they recently completed
the acquisition of Birst.
Brad Peters did a really good discussion of Birst,
the BI startup that's come along real fast.
My sense, and I want to get confirmation,
is that, possibly, Birst and Brad Peters and his team,
will they drive the Coleman strategy going forward?
It seems likely, 'cause Birst has some AI assets
that Brad Peters brought us up to speed on yesterday.
I want to get a sense for how Birst's AI and Coleman AI
are going to come together into a convergence.
>> But wouldn't they say that it's quote-unquote
embedded, embedded AI?
>> Jim: It'll be invisible, it has to be.
>> You know, buried within the software suite?
We saw, like you said, in gory detail
the application portfolio that Infor had.
I think one of the challenges the company has,
it's like some of my staff meetings.
Not everything is relevant to everybody.
Very clearly, they have a lot of capabilities
that most people aren't aware of.
The question is, how much can they embed AI across those,
and where are the use cases, and what's the value?
And it's early days, right?
>> Oh, yeah, very much.
And you know, in some of those applications,
probably many of them,
the automation capabilities that they described for Coleman
will be just as important
as the human augmentation capabilities.
In other words, micro-verticalize their AI in diverse ways
going forward across their portfolio.
In other words, one AI brush,
broad brush of AI across every application
probably won't make sense.
The applications are quite different.
>> I want to talk about the use cases, here.
The selling points for these things are
making the right decision all the time, more quickly.
>> Jim: Productivity accelerators
for knowledge workers, all that.
>> And one of the other points that was made is that
there are fewer arguments,
because we are all looking at the same data,
and we trust the data.
Where do you see Birst and Coleman?
Give me an example of where you can see this
potentially transforming the industry?
>> "We all trust data."
Actually, we don't all trust data,
because not all data is created the same.
Birst comes into the portfolio not just to,
really great visualizations and dashboarding and so forth,
but they've got a well-built data management backend
for data governance and so forth,
to cleanse the data.
'Cause if you have dirty data,
you can't derive high-quality decisions from the data.
>> Rebecca: Excellent point, right.
>> That's really my general take on where it's going.
In terms of the Birst, I think the Birst acquisition
will become pivotal in terms of them
taking their data-driven functionality
to the next level of consumability,
'cause Birst has done a really good job
of making their capability consumable for the
general knowledge worker audience.
>> Well, a couple things.
Actually, let me frame.
Charles Phillips, I thought,
did a good job framing the strategy.
Sort of his strategy stack, if you will,
starting with, at the bottom of the stack,
the micro-verticals strategy,
and then moving up the next layer
was their decision to go all cloud, AWS Cloud.
The third was the network.
Infor made an acquisition of a company called GT Nexus,
which is a commerce platform that has 18 years
of commerce data and transaction data there.
And the next layer was analytics, which is Birst,
and I'll come back to that.
And then the top layer is Coleman AI.
The Birst piece is interesting,
because we saw the ascendancy of Tableau
and its land-and-expand strategy,
and Christian Chabot, the CEO of Tableau,
used to talk about, and they said this yesterday,
the slow BI, you know, cubes,
and the life cycle of actually getting an answer.
By the time you get the answer, the market has changed.
And that's what Tableau went after,
and Tableau did very, very, well.
But it turned out Tableau was largely a desktop tool.
Wasn't available in the Cloud.
It is now.
And it had its limitations.
It was basically a visualization tool.
What Infor has done with Birst
is they're positioning the old Cognos, which is now IBM,
and the micro strategies of the world as the old guard.
They're depositioning Tableau,
and they didn't use that specific name, Tableau,
but that's what they're talking about, Tableau and Click,
as less than functional.
Sort of spreadsheet plus.
And they are now the rich, robust platform
that both scales and has visualization,
and has all the connections
into the enterprise software world.
So I thought it was interesting positioning.
Would love to talk to some customers
and see what that really looks like.
But that, essentially, was the strategy stack
that Charles Phillips laid out.
I guess the last point I'd make
as I come back to the decision to go AWS,
you saw the application portfolio.
Those are hardcore enterprise apps
which everybody says don't live in the Cloud.
Well, 55% of Infor's revenue is from the Cloud,
so, clearly, it's not true.
A lot of these apps are becoming cloud-enabled.
>> Jim: Yeah, most of them.
>> Most of them?
>> Most of them are, yeah.
BI, mode-predictive analytics, most AI.
Machine learning is going in the Cloud.
>> 'Cause Oracle's argument is,
Oracle will be only one who can put those apps in the Cloud.
>> 'Cause the data lives in the Cloud.
It's trained on the data.
>> Not all the data lives in the Cloud.
>> It's like GT Nexus.
That's EDI, that's rich EDI data,
as they've indicated for training
this new generation of neutral networks,
machine learning and deep learning
models continuously from fresh transaction data.
You know that's where GT Nexus and e-commerce network
fits into this overall strategy.
It's a massive pile stream of data for mining.
>> But, you know, SAP has struggled in the Cloud.
SuccessFactors, obviously, is their SAS play.
Most of their stuff remains on-prem.
Oracle again claims they have the only end-to-end hybrid.
You see Microsoft finally shipping Azure Stack,
or at least claiming to soon be shipping Azure Stack.
They've obviously got a strategy there
with their productivity estate.
But here you have Infor--
>> Don't forget IBM.
They've got a very rich, high-rated portfolio.
>> Well, you heard, I don't know if it was Charles,
somebody took a swipe at IBM today,
saying that the company's competitors
have purchased all these companies, these SAS companies,
and they don't have a way to really stitch them together.
Well, that's not totally true.
Bluemix is IBM's way.
Although, that's been a heavy lift.
We saw with Oracle Fusion,
it took over a decade and they're still working on that.
So, Infor, again, I want to talk to customers
and find out, okay, how much of this claim
that everything's seamless in the Cloud is actually true?
I think, obviously, a large portion of the install base
is still that legacy on-prem Lawson base
that hasn't modernized.
That's always, in my view, enforced big challenges.
How do you get that base,
leverage that install base to move,
and then attract new customers?
By all accounts, they're doing a pretty good job of it.
>> I don't think what's going on,
I don't think a lot of lift-and-shift is going on.
Legacy Lawson customers are not moving in droves
to the Cloud with their data and all that.
There's not a massive lift-and-shift.
It's all the new greenfield applications
for these new use cases, in terms of predictive analytics.
They're being born
and living their entire lives in the Cloud.
>> And a lot of HR, a lot of HCM, obviously,
competing with Workday and Peoplesoft.
That stuff's going into the Cloud.
We're going to be unpacking this all day today, and tomorrow.
Two days here of coverage. >> Indeed, yes indeed.
>> Dave: Excited to be here.
>> It's going to be a great show.
Bruno Mars is performing the final day.
>> Jim: Bruno Mars?
>> I know, very--
>> You know a company's doing good, Infor,
when they can pay for the likes of a Bruno Mars,
who's still having mega hits on the radio.
I wish I was staying long enough to catch that one.
>> I know, indeed, indeed.
Well, for Dave and Jim, I'm Rebecca Knight,
and we'll be back with more from Inforum 2017
just after this.
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