>>When you think of the offerings and their products for SAS and Cloud Computing Companies, what have you seen to be the most successful offerings to create those successful companies and what do you think those will be a little bit in the future?
>>Sure, I think step you back to both SAS and Cloud and they always take the negative, it's not a religion, it's not the second coming of Christ, there's a whole bunch of times where it just doesn't work. So, like, that's an important thing to start with because someone mentioned the last time, you see a lot of folks trying to rethread their way into the next trend and it's just really embarrassing, it's like watching 40 year olds disco dance, it's just not pretty. So, basically what you got to do for both SAS and Cloud is say to yourself, form follows function. SAS is two things: it's an architecture and computing architecture and secondly it's a business model. Where does that work and where does it not work? It works really well where there's lots of users because is reduces the cost per user to deliver an application versus a desktop app. It works really well if those users are disperse in different places because it reduces the cost to allow them access to essential system. It works really well if you're trying to sell to a smaller to medium business because they don't have as complex a decision making process so try before you buy offering can work really well. And if you think about the deals that have worked like sales force has all or most of those attributes, made sense to having the Cloud sales guys who are everywhere; there's lots of them. For every three people in a county there's 20 people in sales if it's a good company and they need reward access and is just an advantage of having it in the Clouds. So, all those things turn out to be true, right. And if you look at all the successful companies in SAS, we would argue that had one or more of those attributes. And perhaps, a way to make that clearer is to step back and say "Where does it not work?" Zach Nelson is going to talk here next and Zach is the CEO of NetSuite and we've all tracked the company for many years. When it was NetLedger and all it was selling was accounting, I think it was a much tougher sledding for that company because there's not a huge value in having your accounting system in the Cloud if you're a small to medium business, there's two or three customers, there's two or three accountants in your organization, there's probably 40 or 50 sales guys. It was adding the complete suite that made that a much more compelling offer and allowed that company to grow. So, that's an example of something where is wasn't wildly productive to lead with something where the advantages of the Cloud weren't that meaningful. And other examples, Cad Cam software, heavy engineering software, there's no advantage to having that in the Cloud, it's one engineer designing a chip, it's a computer and pencil thing. Why bother putting a lot in the Cloud. So, I think it's true for SAS and I have as an evolved opinion, frankly, on the Cloud side but I think the same would be true. Some things, the architecture and the business model make it sensible to put into Cloud. Those are the deals you should do. Somethings it's not so compelling, it allowed to be a trailing edge adopter or won't happen at all and, you know, I'd love to hear the other guys say "Where has it worked or not worked and what do you guys think about that?"
>>Zach Nelson: Sure, so, I'll jump in because it's always fun to show some contrast and particularly on the NetSuite example where investors is an intact, you know, they very much are small, medium business finance and accounting software, the leading pure play where NetSuite has done a very successful job certainly on the suite side. But what was compelling about what NetSuite showed when they added more application areas and more functionality was the leverage in the model because this really is the heart and lung machine of a business and I would vehemently disagree with the fact that there absolutely are compelling reasons why SAS makes sense even in things that are fairly narrow use case legacy software areas such as finance and accounting which is distributed access, reporting analytics visibility. Those sorts of things that weren't possible before traditional finance and accounting systems now are becoming the standard definition of what a state of the art world class finance and accounting systems should be and that's the advantage if you take some tradition areas and look at the leverage that you can gain through distributed access, Cloud computing, those sort of things, and change the definition of the category, I think there's an absolute advantage to some new entrance coming in. I would also add, though, I completely agree with the second category which is what are things uniquely possible and couldn't have existed before there was this notion of Cloud computing and, you know, where investors linked in an Eloqua phonetic in the marketing automation space and even some like a cornerstone in the intelligent management space which is the notion that you couldn't cost effectively provision your entire organization, all the white collar workers, in a client server architecture before it just wasn't cost effective. Whereas, suddenly now every can access a portal, it's very cost effective, you can deploy to hundreds of thousands of users in an organization which, you know, many of their customers have done is just completely game changing and is something that is uniquely possible through Cloud computing and that to me as an investor is what's exciting. And for the entrepreneurs in the room, I challenge you to think through what are things that you can be doing that change the definition of your category or creating new category because competitively then by definition you're the leader and you can do a lot of interesting things in terms of defining a new space.
==== Transcribed by Automatic Sync Technologies ====
