Jon Roskill, Acumatica & Melissa Di Donato, SUSE | IFS World 2019

Jon Roskill, Acumatica & Melissa Di Donato, SUSE | IFS World 2019


>>Live from Boston,
Massachusetts, it’s theCUBE covering IFS World Conference 2019. Brought to you by IFS.>>Welcome back to Boston, everybody. You’re watching theCUBE, the
leader in live tech coverages. Day one of the IFS World Conference. I’m Dave Vellante with
my cohost Paul Gillin. Melissa Di Donato is here. She’s the CEO of SUSE and Jon Roskill is the CEO of Acumatica. Folks, welcome to theCUBE.>>Thank you so much.>>So you guys had the power panel today talking about digital transformation. I got to question for both of you. What’s the difference between a business and a digital business? Melissa, I’ll give you first crack.>>You’re a regular old
business and a digital business. Everyone’s digital
these days, aren’t they? I mean, when we think about, I was interviewing one of
the leaders in Expedia, and I said are you a travel company or are you a digital company,
like where do you lead with? And she said to me no no, we’re a travel company,
but we use digital. So it seems like the more
and more we think about what the future means, how
we service our customers, customers being at the core,
everyone’s a digital business. The way you service,
the way you communicate, the way you support. So whether you’re a business or non, you’re always going to
be a digital business.>>You better be a
digital business, and so–>>You better be a digital business>>I take a slightly different
tack on that, which is, we talk about digital
and analog businesses. Analog businesses are
ones that are data silos, they have a lot of systems so
they think they’re digital, but they’re disconnected. And you know part of a
transformation is connecting all the systems together and
getting them to work like one.>>But I think the other
comments are just data right? Digital business maybe
puts data at the core, and that’s how they get
competitive advantage, but I want to ask you guys about
your respective businesses. So SUSE obviously you compete
with the big whale Red Hat, the big news last year IBM
$34 billion, how did that, or will that in your view
affect your business?>>It’s already affecting our business. We’ve seen a big big
uptick in interest in SUSE, in what we’re doing, you know they say that a big part of the install based
customers that Red Hat and IBM currently have are
unhappy about the decision to be acquired by IBM, whether they’re in conflict
because we’re a very big heavily channeled business, right so a lot of the channel
partners are not quite happy about having one of their
closest competitors now be part of the inner circle if you will, and other customers are just not happy. I mean Red Hat had fast
innovation fast pace and thought leadership
and now all of a sudden they’re going to be buried
inside of a large conglomerate, and they’re not happy about that. So when we look at what’s
been happening for us, particularly since March, we became an independent
company now we’re the world’s largest independent open
source company in the world, since IBM has been
taken over from Red Hat, and big big uptick since
March we became independent, we’ve been getting a lot
of questioning where are we where are we going what are we doing, and “hey I haven’t heard
about SUSE in a while, “what are you doing now,” so it’s been really good news for us. Really really good news.>>I mean we’re huge fans of Red Hat, we do a lot of their events and–>>I’m a huge fan myself.>>But I tell you, I mean we know from first
hand IBM has this nasty habit of buying companies, tripling the price and they
say they’re going to leave Red Hat alone we’ll see.>>Yeah like they said
they’d leave Lotus alone and all the others–>>SPSS you saw that, Ustream you know one of our platforms.>>What’s your view, how do
you think it’s going to go?>>I think it’s a, I don’t think it’s about Cloud, I think it’s about services. And I think that’s the piece
that we don’t really have great visibility on. Can IBM jam OpenShift into
its customers’ businesses without them even really knowing it? And that’s the near term cash flow play that they’re trying to effect.>>Yeah but it’s not working
for them is it though because when you look at the install base, 90% of their business sits within the Linux open source environment, and OpenShift is a tag along. I don’t know if that’s a
real enabler for the future rather than you know an
afterthought from the past.>>Well for 34 billion it better be.>>I want to ask you
about the cost of shifting because historically if you were IBM, you were stuck with IBM forever. What is involved in customers
moving from Red Hat to SUSA? Presumably you’re doing some
of those migrations now.>>We are we’re doing them more and more. In fact we’re even offering
migration services ourself in some applications. It depends on the application layer.>>How simple is that?>>It depends on the application. So we’ve got some Telco
companies is very very complex, 24 by seven, high pays big fat enterprise applications around billing, for example. They’re harder to move.
>>Lot of custom code.>>Lot of custom code, really deep, really rich, they need constant operation
’cause it’s billing, right, big fat transactions. Those are a little more complex than say the other applications are. Nonetheless there is a migration path, and in fact we’re one of the
only open source companies in the world that provides
support for not just SUSA, but actually for Red Hat. So if you’re at Red
Hat for a rail customer that want to get off an
unsupported version of Red Hat, you can come over to SUSA, we’ll not just support
your Red Hat system, but actually come up with a migration plan to get you into a
supported version of SUSA.>>If it’s a package set of
apps and you have to freeze the code it’s actually
not that bad to migrate–>>It’s not that bad, no.>>Right, Jon I got to ask you so, help us understand Acumatica
and IFS and the relationship, you’re like sister companies, you’re both ERP providers, how do you work together or–>>Yeah so we’re both owned
by a private equity firm called EQT and IFS is generally focused on $500 million and above companies, so more enterprise and we’re
focused on core mid-market, so say 20 million to 500 million, and so very complementary in that way. IFS is largely direct selling, we’re 100% through channels, IFS is stronger in Europe, we’re stronger in North America, and so they see these as
very complementary assets, and rather than do perhaps
what’s going on with the IBM Red Hat discussion here, slam these big things
together and screw them up, they’re trying to actually
keep us independent so they put us in a holding company. But we’re trying to leverage as much of each other’s
goodness as we can, and so–>>Is there a migration path? I mean for customers who reach
the top end of your market, can they smoothly get to IFS?>>Yeah it’s not going to be like a smooth turn a switch and go but it
absolutely is a migration option for customers and we do
have a set of customers that are outgrowing us, we have a number of customers
now over a billion dollars running on Acumatica, and for a company we’ve
got one that we’re actually talking to about this right now, operating in 41 countries, global they need 24 by seven support, we’re not the right company to
be running their ERP system.>>On your panel today you
guys were talking a lot about digital transformations,
lessons learned, what are the big mistakes
you see companies making and what’s your roadmap for success?>>I think doing too much too fast. Everyone talks about
the digital innovation digital transformation, it’s really a business transformation
with digital being the underpinning the
push forward that carries the business forward. And I think that we make too many mistakes with regards to doing too much too fast, too soon, that’s one. Doing and adopting technology
for technology’s sake. It’s ML it’s AI and everyone
loves these big buzzwords all the codewords for what technology is, so they tend to bring it
on, but they don’t really know the outcome. Really really important and
SUSA were absolutely obsessed with our customers. And during a digital
transformation if you remain absolutely sycophantic about
your customer at the core of every decision you make
and everything you do, particularly with regards
to digital transformation, you want to make sure
that business outcome is focused on them. Having a clear roadmap with
milestones along the journey is really important, and ensuring it’s really collaborative. We talked this morning
about digital natives. We’re all young aren’t we? (Dave chuckles)
Me in particular, but I think the younger
generation of digital natives think a little bit differently
perhaps than we were originally thinking
when we were their age. I depend on that thinking, I depend on that integration
of that thought leadership infused into companies to
help really reach customers in different ways. Our customers are buying differently, our customers have different expectations, they have different
deliverables they require, and they expect to be
supported a different way. And those digital
natives that young talent can really aid in that delivery of really good thought
leadership for our businesses.>>So Jon we’re seeing
IT spending at the macro slow down a little bit, a lot of different factors going on, it’s not a disaster it’s
not falling off the cliff but definitely pre-2018 levels, and one of the theories is that you had this kind of spray and pray, kind of like Melissa was saying, going too fast, trying everything– And now we’re seeing
more of a narrow focus on things that are going to give a return, do you see that happening out there?>>Yeah definitely some,
people are looking for returns even in what’s been a
really vibrant economy, but yeah I agree with Melissa’s point, there’s a lot of “ready
shoot aim” projects out there and the biggest thing I
see is the ones that fail, the ones that aren’t
lead by the leadership. They’re sort of given
off to some side team, often the IT team and said go
lead digital transformation for the company and
digital transformation, Melissa said this morning
it’s business transformation, you’ve got to bring the
business part of it to the table and you’ve got to think about, it’s got to be lead by the CEO or the entire senior
leadership team has to be on board and if not it’s
not going to be successful.>>So pragmatism would say,
okay get some quick hits, get some wins, then you
got kind of the Bezos Michael Dell mindset go big or go home, so what’s your philosophy
moon shots or quick hits?>>Well I always think starting, you’ve got to understand
your team’s capabilities so starting is something that
you can get a gauge of that, particularly if you’re
new and you’re walking into an organization. Melissa I don’t know how long
you’ve been in your role now?>>65 days.>>Right so there you go so
it’s probably a good person to ask what you’re finding out there. But I think getting a gauge
of what your resources are, one of the things you see around here is there are dozens of partner
firms that can be brought in to supplement the resources
you have in your own team. So being thoughtful in that
is part of the approach. And then having a road map
for what you’re trying to do like we talked this
morning about a customer that Linda had been talking
about had been working on for six or seven years. And you’re saying for an enterprise, a very large enterprise company, taking six or seven years
to turn the battleship maybe isn’t that long.>>Okay so you got the
sister company going on, do you have a commercial
relationship with IFS or are you just here as an outside speaker and thought leader?>>I’m here as an outside
speaker, thought leader, there is talk of perhaps we can
work together in the future, we’re trying to work that out right now.>>Oh, okay.>>I want to ask you about
open source business models. We still see companies
struggling to come up with not profitable, but insanely
profitable business models based on open source software. What do you see coming out of all this? Is there a model that you
think is going to work in the long term?>>I think the future’s
open source for sure, and this is coming from a
person who spent 25 years in proprietary software, having worked for the
larger PC-er vendors. 100% of my life has been
dedicated to proprietary software. So whilst that’s true I came
at SUSA and the open source environment in a very
different way as a customer, running my proprietary
applications on open source Linux based systems. So I get a little bit different
of an approach I would say. The future’s open source for sure, the way that we
collaborate the innovation, the border-less means of which
we deliver thought leadership within our business is much much different than proprietary software. You would think as well that
the wall that we hide behind in open source being able
to access software anywhere in a community and be able
to provide thought leadership masks and hides who the
developers and engineers are, and instead exacerbates
the thought leadership that comes out of them. So it provides for a naturally
inclusive and diverse environment which leads to
really good business results, we all know the importance
of diversity and inclusion. I think there is definitely
a place for open source in the world as a matter of
providing it in such a way that creates business value, that does enable and foster
that growth of the community, because nothing is better
than having two or three or four or five million
developers hacking away at my software to deliver
better business value to my customers. The commercial side is going
to be around the support, the enterprise customers are going to know that when bump goes in the night, I’ve got someone I can
pay to support my systems. And that’s really what SUSA’s about, protecting our install base, ensuring that we get them live
all of the time every day, and keep them running frictionlessly across their IT department.>>Now there’s another model, a so-called open core model
that holds that the future is actually proprietary
on top of an open base. Are you saying that you don’t
think that’s a good model?>>I don’t know, jury’s out. Next time that you come to
our event which is going to be in March in Dublin we’re
doing our SUSA-con conference, leave that question for me and
I’ll have an answer for you. I’m pontificating.
>>You hear that, Dave?>>Well I did–
>>It’s a date. The 12th of March.>>It’s certainly working for Amazon, Amazon’s criticized for
bogarting open source, but RedShift is built on open source, I think Aurora’s built on open source, they’re obviously making a lot of money, you’re open core model
failed for Cloud Air, Hortonworks was pure, Hortonworks had a model
like you guys and Red Hat, and that didn’t work
and now that was kind of profitless prosperity of a dupe and maybe that was sort of an overhang.>>I think the model–
>>But you’re right, the future is open source.>>The future’s open source no question, it’s just what level of
open source within the stack do we keep proprietary or
not as the case may be. Do we allow open source
from the bottom to the top, or do we put some
proprietary components on top to preserve and protect like an umbrella the core of which is open source. I dunno. We’re thinking about that right now, we’re trying to think what
our future looks like, what the model should
look like in the future for the industry, how can we service our customers best. At the end of the day it’s
satisfying customer needs and solving business problems
and that’s going to be pure open source or open
source with a little bit of proprietary to service
the customer best, that’s what we’re all going
to be after aren’t we.>>So there’s no question
that the innovation model is open source I mean I
don’t think that’s a debate, the hard part is okay
how do you make money. What about open source for you guys, I mean are you using
open source technologies, presumably you are, everybody is, but–>>So we’re very open APIs
who joined three years ago, we joined openapi.org and so we’ve been one of
the leading ERP companies in the industry on publishing open APIs, and then we do a lot of customization work with our community and all
of that’s going on in GitHub, and so it’s all open source, it’s all out there for people who want it. Not everybody wants to be messing around in the core of a transaction engine and that’s where you get into the sort of, the core argument of which pieces should be people modifying, do you want people in the Kernel? Maybe maybe not. This is not my area of expertise
so I’ll defer to Melissa.>>I think to your point–>>Having people to be
able to extend things in an open source model, having people be able to find a library of customizations and components
that can extend Acumataca, that’s obviously a good thing.>>I mean I think you hit
on it with developers, that to me is the key lever. If I were a VM where I’d
hire 1000, 2000 open source software developers and say
go build next generation apps and tools and give it
away and then I’d say okay Michael Dell make your hardware
run better on a software, that’s a business model
you’d make a lot of money.>>100% and we’re going
to be very inquisitive right now we’re looking for our future, we’re looking to make a mark right now, and where do we go next? How can we help predict
the outcome and next step in the marketplace when it pertains to the core of applications
and the delivery mechanism in which we want to offer. The ease of being able to get thousands of mainframe customers with
complex enterprise applications let’s say for example to the cloud, and a part of that is going
to be the developer network. It is a really really big
important segment for us and we’re looking at companies, who can we acquire what’s
the business outcome and what do the developer
networks look like?>>So Cloud and Azure got to be two huge opportunities for you, right?>>They are huge.>>Again it’s all about developers, I think that’s the right
strategy at the edge. You see a lot of edge
activity where somebody trying to throw a box at the edge with the top down traditional IT model it’s really the devs up that
I think you’re going to need.>>It is the dev ups you’re
exactly right, exactly right.>>Yeah I mean Edge is fascinating
that’s going to be amazing what happens there in the next
10 years we don’t even know but we ship a construction edition, we’ve got a customer
that we’re working with that’s instrumenting all of
their construction machinery on something like 1000 construction sites and feeding the sensor data into Acumatica and so it’s a way to keep
track of all the machines and what’s going on with them. Obviously shipping logistics, the opportunity to start
putting things like RFID tags on everything and instruments all of that, out at the edge and then
the issue is you get this huge amount of data
and how do you process that and get the intelligence
out of it and make the right decisions.>>Well how do you? Data’s plentiful insights
aren’t, as the sort of–>>I think that’s where the
machine learning breakthroughs are going to happen, we’ve built out a team
in the last three years on machine learning, all the guys we’ve been talking about, Amazon, Microsoft, Google
are all putting out machine learning engines
that companies can pick up and start building models around, and we’re doing ones around
inventory logistics shipping, we just released one on expense reports, so it’s going to be– anyway that really is where the innovation is happening right now.>>Okay so you’re not an inventor of AI you’re going to take those technologies, apply ’em to your business and–>>Yeah we don’t want to
be the engine builder, we want to be the guys that
are building the models and putting the insight
for the industry on top. That’s our job.>>All right Melissa we’ll
give you the final word on IFS World 2019. Is this your first one?>>It’s my first one, yeah.>>What’s the bumper sticker say when your trucks are pulling away–>>Yeah, (laughs) a
bumper sticker would say when you think about the
future of open source think about SUSA. (Dave and Melissa laugh)>>I love it.>>Well I’d say on the event
I mean I’m super impressed I think the group that’s here is great, the customers are really
enthused and I have zero bias so I’m just giving you my perspective.>>Yeah the ecosystem is
robust here I have to say I think they said 400 partners and I was pleasantly surprised when I was walking around last night.>>This is your second one isn’t it?>>It’s theCUBE’s second one, my first.>>Oh your first? Oh right well done. And so what do you think? Coming back?>>Yeah, good energy.
>>I would love to come back. Especially overseas, I know you guys do bunch of stuff overseas.>>There you go, he wants to travel.>>Dublin in March.>>March the 12th.>>Dublin’s a good place
for shows are you doing at the big conference center there?>>Yep the big conference center.>>That is a great venue.>>And not just because the green thing, but it’s actually because–
>>Green and, but no, that’s a really nice venue. It’s modern it’s got I
think three or four floors.>>It does yeah yeah we’re
looking forward to it.>>And then evening events
at the Guinness storehouse.>>There you go.>>Exactly right so we’ll look forward to hosting you there.
>>Good stuff. All right great see you there.>>We’ll come with our
tough questions for you.>>All right thanks you guys.>>All right guys thanks very much.>>All right thank you
for watching be right back right after this short break
you’re watching theCUBE from IFS World in Boston be right back. (upbeat music)

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