This is Bloomberg Business Week with Carol Messer and Tim Stenevic on Bloomberg Radio. So let's talk about the cloud a little bit, because you know, we talk about it so much, Maddie with I feel like, certainly through the earning season, whether it was Microsoft, whether it was Amazon, Gartner's got some statistics out there about worldwide spending on public cloud services reaching nearly six hundred billion dollars in
twenty twenty three, up more than twenty percent year over year. Yeah, and the next guest that we're going to talk with, Julia White, is going to give us some really good insights into overall cloud market dynamics. She is the chief Marketing and solutions Officer and member of the executive board at sapp. Julia also spent more than twenty years at Microsoft building out Microsoft Azure, and she is with us via zoom in Seattle. Julia, thank you so much for
being here. I wonder if you can just start off by giving us a background on your company, including the fact that I need to be calling it SAP instead of which is hilarious because you literally have that in your FAQs on your web. We've had a crazy all of a sudden, We've had like an earning stump, so it's like all of a sudden, we're going through our notes, so we're with us a little bit. But I love I love that you. I was literally just looking at and you have that in your FAQ. So yeah, just
give us, just give us the background here. Absolutely great to be here with you and SAP or SAP as it's formally pronounced. We provide the cloud solutions for business transformation, right, So you talked about Microsoft in my past life or Amazon who have big cloud infrastructures, and SAP provides the business solutions, so for things like finance management, controlling inventory, supply chain, HR processes, procurement, all the business systems that
run companies. Those are the cloud services that we build and provide to our customers. Yeah, what's great about talking to a company like you And we've been talking me awful lot about Mattie and myself about it, spending with a lot of our guests. What are you seeing, especially in a global macro environment where there's so much debate about the outlook FED policy, you know, the big macro stories that are out there. What are you seeing firsthand
in terms of your clients and your customers. Yeah, definitely some interesting trends. I'd say for sure, we've switched into a rigorous process around tech spending. Right, there's no more nice to have tech. It needs to be proven, it needs to be able to demonstrate real business value. And you know, you've even seen in the recent earnings around some of the big cloud infrastructure providers, you know, some of the growth starting to slow a bit because customers
bought a lot during COVID. Right, they've moved a lot of existing business systems to public cloud providers. But that was just basically picking up an existing system running in in a cloud to get some of the efficiencies, which is great, but now they needed some of that business value to come out of it, not just running it in a cloud model. But are You're seeing a lot more decision makers being in the mix as they purchase these things and really saying like, well, how are you
going to help me with inflation? Right? How are you going to help me refactor my Suffly that sounds like CFOs are in the equation or the financial guys are like, great, we want to spend it, but tell us how that helps us with the bottom line? Is that fair. Yeah, way more CFOs in the mix, and really those value cases coming up, right, and I think the three big ones right showing shifting business models, which is a CFO led conversation. I need to go from selling products to subscriptions.
I need full customer life cycle engagement. Right, That's something very hot. Supply chain refactoring. I mean, twenty years of going global supply chain, now we're refactoring all that to be more regional. And then interesting the last one, despite controversy or other things saying otherwise, sustainability still top concerns switching to be more sustainable as companies, we still see
constantly driving purchases. That's really interesting, especially given the change in the supply chain piece that you mentioned right before that, I would think that given some of those headwinds, it would be really hard for these companies to continue to prioritize that. How are you kind of seeing that play out? Yeah? You know, again, there's lots of speculation and rumor that
sustainability is dropping. We're not seeing that in terms of people behavior, and actually it's somewhat a little bit of a silver lining as people need to shift their supply chains right from big global to more regional and more suppliers. In some cases they're investing in more sustainable agriculture as an example, bringing new people into the supply chain that weren't participating before, which enables you to be more sustainable, bring more diversity into supply chains. So in some ways
they're actually very aligned. Or also the case where you're doing more reuse in circular economy actually brings down cost, helps supply chain resiliency and improve sustainability. Your sweet spot for SAP is mid market, which you know, the big You know, large cap companies often get a lot of the headlines, a lot of the attention, but tell us about the MidCap space, which I think, just like small caps,
tells us so much about the economy. Yeah, thank you for asking, because most people think, I say, the only serves the biggest of the world companies, which we do, but the majority of our customers are actually mid market, and you know, the things that we're seeing big companies amplify when we talk to our mid market customers right when they have little fluxes in revenue and it can be devastating impacts on their bottom line, and so working
with them on how they manage inflation, better management, own cash flow, better business planning. And the nice thing about cloud technology is it gives any size customer, but midmarket customers access the same sophisticated business process tools as a big company, right, so it really has a democratizing effect to it. So we're able to really help mid market in the ways we help big customers, but in a
way that's more agile and cost effective for them. What would you say is one of the biggest mistakes that you see some of these Not to put it on them, but some of these midsize companies making when they are struggling and they don't necessarily have access to the tools that you offer yet. Yeah, I think that the biggest mistake is they spend too long running their company on Excel and they you know, they're moving spast they're trying to be efficient, but they don't realize what they're missing
out on. And you know, I was actually just recently working with a kind of mid sized chemical company and it waited a long time to move into automation of business processes, which it just helps a lot of our ound efficiency and decision making. And you know, once they spent the time to implement some more modern enterprise resource management.
They were able to react much more quickly and they saw remediate results, but you know, they had to go through that journey to get there, and then in retrospect they're like, I'm should have done this earlier, but it takes time and focus. It does remind me a little bit, and we don't have to get into this, but it reminds me of FTX using quick books. When we all found that out, we were like, oh my god, how did you have such a huge company and do that.
But then we talked to these startup guys who are like, if you have a big idea, just make it happen and do it. But it sounds like, I'm I'm hearing from you that you do need to focus on the bones and the infrastructure a little bit as well. Yeah, really thinking about all these processes. Yeah, they're getting it done, but at what costs and what are they not getting? And it's oftentimes hard to see the opportunity cost or
the missed cost of what they're doing. But as we work with them, and that part of it too is it used to be i mean big and hard and expensive to deploy, and you know, an ear pear enterprise resource process. Right, it used to be the premises, but now the cloud changes that so fundamentally. But I think a lot of mid market customers are still coming to realize that actually, I can get a really robust enterprise
resource system in place in a couple of months. You know, it's not three years and three hundred million dollars anymore. Julia tell us about just got about a minute or so left here the feedback loops. So in other words, you're talking with your clients and customers, you're saying that these organizations are feeling the impact of a downturn in the economy, so you say about value with you know,
fewer resources. So how do you go back to your creative team or your engineers, when your solutions team and say, hey, here's what we need to be doing because this is what the customer demands. Yeah. I think the things that the big trends we're hearing from our customers are automation, which means, you know, using AI to identify where there's an efficiencies and automating that out and helping the customer
be much more predictive with what's next. Right, Like the world's changing fast and all of our crystal balls are kind of imperfect these days, and so that agility to do different kinds of predictive planning is the generative AI move kind of impacting you guys all of a sudden, because it does seem like it's all of a sudden on everybody's radar. All well, we know it's not brand new, Yeah it has, but it has definitely hugely revolutionary opportunities
with it. So absolutely looking at how we use it in a bunch of our different products, whether it's HR and onboarding to customer engagement. All right, gonna leave it there. Hey, thank you so much, really appreciate it. Julia White, she's chief Marketing and Solutions Officer at SAP, joining us via zoom from Seattle. Some great thoughts. And I think our perspective too more broadly, Maddie, about you know, people clients want to spend, but they've got to do it smartly.
They're thinking about the value proposition when they go to do it spending. So I thought that that was a really key component as we have our big broad macro discussions, if you will, and like you said, we've been talking to all of these is because you make a great show and so does the team. We've been talking to a lot of people who are behind these companies that can really be leading indicators for us about where the economy is going