factory in newark, new jersey. we are proud of that. we thank you for being with us. have a great weekend. good night from new york. >> announcer: from the fox studios in new york city, this is maria bartiromo's "wall street." maria: welcome to the program that analyzes the week that was and positions you for the week ahead. we have two titans of technology. my exclusive interview with the ceo of microsoft, satya nadella. then the ceo of sap, bill mcdermott. but first deirdre bolton is standing by in the fox business newsroom.

with everything from wall street to main street. dierdre: president trump making waves when he broke from a longstanding white house protocol and openly criticized the federal reserve. he qum explained that fed is putting the u.s. economy at a disadvantage by raising interest rates while chain a and the e.u. manipulate their currencies. he threatens tremendous re fly biewtion against the e. -- tremendous retribution against the e.u. that said, markets closed mixed by week's end. microsoft stock surging after a strong earnings report. it hit an all-time high with a strong business in cloud

business. comcast is dropping its bid for 21st century fox. comcast will try to buy sky tv in europe. the e.u. imposing a record $5 billion fine against google. google has 90 days to comply or face another fine. google has said it will appeal. maria, back to you. maria: as the market and investors continue to react to microsoft earnings. the company continues to make the cloud its number one priority. something satya nadella said he would do. microsoft has become a premiere player in cloud. and the stock price has nearly

doubled under nadella. alphabet and apple are sitting on the doorstep. now microsoft is teaming up with walmart to take on amazon. satya nadella calls it a $4.5 trillion opportunity. >> we describe our mission as empowering every person and every organization on the planet to achieve more. our success, whatever we have of it, is dependent on our customers succeeding in an increasingly digital world. that's what you see with walmart and others. they are using digital telling as an ingredient as they transform retail or healthcare or industrial manufacturing. maria: this announcement with

walmart, it's a digital transformation for walmart. but you are calling this a $4.5 trillion opportunity, this transformation to digital. >> when you think about it. for all the success of digital technology companies, on a percentage basis of the worldwide gdp, the tech is about 5%. it's expected to go to 10% in the next 10 years. on a secular basis tech spending will increase. but the real question is what is the opportunity for the other 95% of the gdp? how will they use digital technology whether it's walmart or any health company. 81 across all industries will look to digital technology to bring about the next level of ex

feedent innovation or cost savings. maria: let me ask you about some of the issues of the day. policy as it relates to china. this administration has been fighting back the piracy and trying to get beijing to stop stealing intellectual prompts and transferring the technology from american to chinese companies. someone said there is an expectation that 97% of companies in china use microsoft windows and 95% don't pay for it. you have been dealing with piracy for a long time. >> in chain today our approach is what do their customers and the government there value and how do we in some sense adapt a business model that allow us to succeed there. we are seeing some initial

success with our surface product in china and that helps us understand the customer behavior and how they value things. i think intellectual property needs to be protected. it's in china's own interest now that they are intellectual property creators themselves to insure that intellectual property is protected. we have a good dialogue with the chinese government. i think it voices coming out of washington are good. we want fair trade between countries. the next 20-30 years will be defined by how the united states and china create an equilibrium for themselves and the rest of the world. maria: china won't even admit they are stealing our i.p. how do you change that behavior? from the time you have bent ceo of microsoft have you seen a

change in piracy rates? >> absolutely. as we move to the cloud you are seeing a shift in how people acquire intellectual property and that is helpful. but every country going through a massive transformation economically and solesly. i believe when you get to gdp growth comes with it a responsibility for protecting intellectual property. maria: my thanks to microsoft ceo satya nadella. >> announcer: she is an american running nair america's top tech company. >> we want to make our customers successful. er. do you offer $4.95 online equity trades?

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maria: welcome back. sap is the world leader in business software business in 180 countries. 91% of the forbes 2000 companies are sap customers. during bill mcdermott's tenure they have tripled their market value. mcdermott is seen as an innovator who has adapted to the constantly change technology landscape. we are honored to have him on the program. >> congratulations on your amazing ratings. we want to look at sap as the leader it is and understand what that tells us about the broader economy. >> the growth in the quarter was in the cloud. we beat in the cloud. the cloud was up 40% on a

year-over-year basis. it beat expectations by 5%. but we have a solid core business glowing double digits. the cloud at 40% and the operating income of the company up 12% year on year. what are customers doing? they are working hard to connect their demand chain with their customer who is social, mobile, and they shop in many channels. they want to connect that customer to the ply chain. the supply chain is global, lots of different partners. you have to optimize how to give the customer the way they want it where they are located in real-time. that's what we do. maria: you had a strategy to invest in the cloud to grow the company globally. congratulations.

under your leadership 10 years now, how are you feeling? >> i feel great. maria: tell us what goes object behind the scenes as the ceo of a german company. products sold, revenue and market value. >> it comes down to culture. we have a purpose-led vision in our country. it's all about helping the customer. help them run better so they can improve the world. economy, environment, social condition of the planet. we want to make our customers successful. and what it takes. it takes integration of every human every process in a company around that single most of important objective which is their customer. that's what we focused on year in and year out. and we are getting good at it. maria: let me ask you about the

investment in the cloud and where the earnings slows down. you have been talking to analysts and investors about the need to invest in the cloud. where are you at this point? >> that's a good question. a cloud deal compared to what used to be a capital deal where a customer buys something up front and breaks even at three years. at the 2018 mark as we go into this new year, our cloud business will actually be bigger than our core business. investors want predictability. 66% of the revenues of our company now, well on their way to 75 by 200 will be fully predictable when you go into a new year. when you have a revenue stream with high renewals, you get more

performance margin out of the cloud and that business model is kicking in for us now. maria: where are you in terms of or cal anof -- in terms of orace business there. you are paying one of your competitors. where are you in terms of moving it all away? >> this year all of sap's properties whether we acquired them or build them will run on sap, our own data base technology. this year. that gives us a substantial savings and we are able to do things for the customer we could never have done before utilizing an in-memory data base which replaced the disk. change business models on the fly it's a massive competitive advantage. maria: trade, tariffs, the

international story. the president will be meeting with the head of the e.u. next week. i want to get your take on the european business. you have such significant revenues as well as the world. we are talking international. stay with us. >> announcer: sap is the top player in business software. so what's next for the tech giant? >> we are not look at anything big. >> announcer: more when "wall street" returns. ♪ a hotel can make or break a trip. and at expedia, we don't think you should be rushed into booking one. that's why we created expedia's add-on advantage. now after booking your flight, you unlock discounts on select hotels right until the day you leave. ♪

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of economic recovery and spending from europe. >> the market is good and europe is good. we grow in double digits. in that sense it's not dissimilar to the united states or asia. companies today have to grow their business. a lot of people got caught up on the brexit matter but the u.k. is the fastest growing. when the change in the business model or business process, sap is necessary. now do we work through this and navigate the change. maria: that's a big deal that it's your fastest grower because u.k. is the lager in europe. >> germany has bent most of unbelievable growth market for sap year in and year out. but france is strong and u.k. is strong. when you think about global manufacturing. you think about supply chains, you think about tariffs and

ceos thinking about their tax position. they have to be agile enough to change their business model in real-time. and what we try to do is give the ceo a digital board room. so she can take a good look at the operations, what's going on, and how can i move things around to advance my productivity. my margin performance or shareholder value. '. maria: i was struck to hear you say we are going after sales force. are you still trying to do that? >> of course. the market is the largest safe market nerks rp. so why is it that sap at this time in history can make this bold statement that we'll be the

market leader? because our customers want us to. they want integration. they want an integrated solution. maria: look at the valuations and the deals. broad com -- broadcom ca. what is your thought on the valuations. >> i have to give frank' credit for orchestrating that. some of it is companies going into new categories, and some of it is companies in hardware businesses recognizing it's a dead-end street over time not to be in software. it's the software layer of the technology stack where the value is delivered, where the margin performance is better and where

the customers, the c level customers get involved in i.t. so that's where you have to be. and it's not a surprise. maria: are you still in an inquils tough mode? are there holes you want to fill? >> we are not look at anything big, we have the assets. and we have got a tremendous offering right now. maria: is now the time with valuations where they are? >> it's interesting you ask that question. i have seen desperate buying. if you look at some of these best of breeds, the companies they are buying at a 20x valuation. we don't do 20x deals. we don't do 20x deals because we don't have to. but sometimes when you are so desperate because you don't have the whole solution, you have to do something to get competitive. their growth rates in their core

are starting to slip in a level investors' haven't picked up on. some of these come any valued at over $100 million are only growing at single or mid-double digits. it doesn't justify the 40x multiples on their stock. maria: what do you see on the horizon that will be the catalyst? >> the cloud. we have good partners that are hyper scale cloud providers like microsoft and amazon and google, like ibm and others, and dell. we partner with these companies and they provide important service in their clouds. but our software and reference architecture can run in any of their clouds. so if that's good for our customer, that's where we are running. what our customer wants is the

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and also thing earnings with general motors, facebook, ford, coca-cola all reporting wednesday. housing vacancies for the country. and durable goods. and earnings for amazon, comcast, mcdonald's, starbucks, intel and mastercard. we wrap it up friday with the real gdp numbers. the atlanta federal reserve said we'll see the gdp at 4.5%. plus consumer certain i am down friday. earnings from twitter, exxonmobil, chevron and merck. all next week. jim grant, is my special guest next week. i hope you will joins. and i will see you sunday morning on ""sunday morning

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