Good morning, it is midnight in beijing its 11 00 a. M. On wall street and squawk alley is live. Good friday morning welcome to squawk alley. Im jon fortt with carl quintanilla. Its the end of cloud week on squawk alley. What a week its been. They have brought news on custom chips, Machine Learning and more sales force announced plans to buy slack for nearly 28 billion in the second largest Software Deal ever. Weve had ibm and microsoft weigh in snowflake and others have turned in blah earnings well hear from the ceo this hour what does it mean for investors already sky high investor malic noijoins us now i cant believe we never had you on squawk alley before i hope this is a trend i want to start with sales force slack. I know that you have known stu butterfield for a long time, even before flicker was a hit. You think this very expensive deal makes sense why . So lets remove the price out of the equation. I think what youre looking at right now is in 2020, we have gone from the idea of a company or an organization being physical to completely being digital. Were in need of a system to organize itself. The most important thing for a nervous system, you need to have a communication there, a messaging there. So from that standpoint, it is a great acquisition for sales force. You know, again, like im removing the valuation from the conversation once you do that, it makes a lot of sense the reason im making im separating the two is because a, i will shareholder in slack a little while ago so im a little biassed. More importantly, i do feel that there is sometimes you have to, like you know, back in the day when you go on youtube for a billion dollars, it is a crazy deal and look where it is now it is the future of google similarly on Instagram Beauty is in the eye of the beholder if i may make one more point this is the first horizontal product in the sales force portfolio. It is not going into a single you know, part of the business it is Cross Organization it is the glue which holds companies and organizations together there is a lot more upsell opportunity for sales force in this acquisition i get that. But i got to think salesforce already had chatter which was supposed to do that. If you justify this, dont you have to look at stubutter field and say heres a guy who is a serial founder he is a creator of cultures. Hes a guy who, you know, bennieof had a coceo and moved away from that he needs strong leaders. He has a leader who can grow leaders and has a track record of that but i also want you to step back if you can and tell me this is a bet on the future of this trance formation that weve seen take us this far and that into 2021, 22 and beyond, there is going to continue to be growth. Isnt that what this is a bet on from a company that in sales force is already huge . Yeah. I mean, thats essentially what i was trying to tell you is that in 2020, we have a Company Going to a physical presence you need slack to bring it together now they can be on top of it its not just butterfield. So you think about it. In taylor, you have arguably the best technological mind of a generation he got behind google maps, hes, you know, hes the one who helped put together Facebook News feed. And he is running hes the president and also the technological thinker at salesforce you add a product guy like stewart, now thats a good combination. You cant take stewart just in isolation because you have two really good Young Leaders who can put together a real why i noose future for this compan nice future for this company and he can help this company i want to ask you a baseball question tech leaders are fond of talking about what inning were in with particular Technology Trends its like we never get beyond the third inning theyre never like oh, well, you know, seventh Inning Stretch for this one were going to ride it as far as we can you have seen the transitions many times from business 2. 0 where i also worked. You know, the work youre doing now as an investor what inning is it really so i would start i got into the cloud game like 2005. 2007 we did our first Conference Call structure. And in 2010, i heard a conversation with the ceo and he told me that this thing is going to be a 25year cycle at the very least if you take that and were still maybe second inning, not even third. Oh, come on third inning again still . Thank you great perspective from a guy who has seen a lot of this and continues to watch it and invest in it. Hope to have you back real soon. Thank you, my friend. Carl. Meantime, sharp slowdown on the jobs number last month as we get a print of 245,000 Steve Liesman looking at that and some of the reaction around the street hi, steve. There is concern of worst to come nonfarm payrolls rising. Its an estimate of 440,000. Unemployment failed by 66. 7. That is because many left the workforce. Average Hourly Earnings were up. Thats because the job mix did not include a lot of low paying jobs ticking down again people leaving the workforce rsm writes from here employment gains will become far more difficult and the Unemployment Rate will stall until firms or individuals are certain theyll have access to a safe and effective vaccine. And then at jeffries, he says the rise in permanent layoffs and the decline in Labor Force Participation suggests that not all of the weakness will be reversed easily. Claims were up in home based data on workers showed declines, especially in retail so heres where the jobs were and where they werent transportation warehousing, thats the new retail, folks a big gain in curriers and mess efrpgers goods producing doing well with manufacturing and construction both up. And temporary help, maybe thats a good sign in this report but retail has a very high bar from seasonal adjustmentes it could not get over it and government down 99,000 local workers suffering as well as census workers taking off the pay rolls. Four Million People left the workforce since february they dropped out and there remains 9. 4 million fewer jobs from february and the process of putting them back to work slowed. Looks like we manage to get worst of both worlds a spreading virus and a weakening economy together this is a tough one for Incoming Administration to deal with Steve Liesman, thank you and coming up, the last of the exclusive cloud week interviews just moments away. This one with the earnings mover of the morning pager duty see it up there. The ceo is going to join us this hour as we close out huge cloud week here on squawk alley. Stay with us this is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. The teams been working around the clock. Wire, weve had to rethink our whole approach. Were going to give togetherness. Logistically, its been a nightmare. Im not sure its going to work. Itll work. I didnt know you were listening. The only hope in my view of how the traditional studios can compete with the streamers through using this new theatrical window which is movie place exclusively in a theater for three weeks, could go longer and then moves to your home. And i think if more studios adopt that, think think well see many, many, many more movies playing in a theater for a much shorter period of time i think for the consumer thats a great thing. Instead of going to the multiplex and having avengers playing on eight screens and then two other movies on nine and ten, youll have eight different movies playing every weekend. The only thing is twhoeis they long there will be a new set of a bunch of different movies. But your ability to go to the theater and see things that are not just horror movies or super whore r hero movies, weve seen that drama has really migrated to television and theyre very few dramatic movies released theatrically i think when windows are shorter, well see genres come back and they migrate to streaming. We may see more of those in movie theeters with a shorter window. That is jason blum talking to us yesterday at cnbc evolve summit about the changing theatrical window, the historic innovations in media and nowhere was that more obvious than the warner announcement yesterday. Theyre going to put the 2021 slate on hbo max the same day the films go into theaters heather musneck joins us that amazing evolution in the movie business formerly the head of content partnerships at hulu welcome back hi, thanks so much. Thanks for having me back. The takes on this yesterday is either the window completely collapsed and hollywood changed forever. Others said, look, its u. S. Only its not international and probably is only for a year. Which camp are you in at least right now . I think personally the cats out of the bag so this is a complete paradigm shift when you have the second largest major studio saying that their entire slate for a whole year, beyond what we expect to be sprenlted frprevented from go mo movie theaters, when they said the slate is going to be available on hbo max and the same day available in movie theaters, thats a paradigm shift. I think what is going to be really interesting to see is what, you know, what happens next with what disney does they also have a major horse in the race with disney plus and with hulu in the u. S. And, you know, there is going to be a lot of pressure for them to make a decision very quickly as to how theyre going to what piece theyre going to play against the theatrical distribution of negotiations right you dont think that mulan and soul are already a tell as to what disney is thinking may be i think its a toe in the water. With mulan, they charge 30. You have to be a disney plus subscriber soul, you know, they have gone more in the direction of what hbo max is doing by having it be a same day streaming release and its included in your subscription fwhaut but that is an ip that is unknown. And so i think they have a bigger decision to make. Theyve been pushing off their releases of black widow and others into, you know, who knows when that is going to be released it was supposed to be out this year we have west side story and other Motion Pictures supposed to be released from didz asney pixar or 20th century fox which they recently bought theyre going to be in a position, theyre in the next position to really make a decision about a much bigger move similar to what hbo max has done in order to compete yeah. I mean, without getting too much into the economics of film, there are large questions about what they call the back book, how that gets monetized. Much different in streamingen that than in pay per view. They wonder how the profits are going to be made up. Sure. Im sure they have a lot of people crunching a lot of numbers right now. You know, to figure out exactly what the right move is and the economics are going to be different for disney than theyre going to be for hbo max. So when you look at digital as well, its a very different red share. So box office, youre splitting half of that with the theaters and digital, you get to keep if its your own streaming service, you keep most of the revenues except for distribution fees that youre being charged which are in the tens and 20s. Its not 50. So they have much higher percentage of the revenues and, you know, theyre going to have to make decisions between this and the new homegrown streaming services which is which are also different models from each other. What we saw with troll when they went straight to pvod in march at the beginning of covid19 was that they actually were able to generate 100 million in in digital sales. And that wassomething that was you know, pretty close to what they were doing in box office in the first month. And so it is an as these streaming services get scaled which this kind of an announcement with hbo max is certainly going to super charge their subscriber numbers for next year, theyre going to start to have bigger and bigger budgets to offset the losses i think at this point they really need to make a decision on how seriously theyre betting on the digital feature heather, this broken window this broken theatrical window, two things im hoping that you can address. One, does this essentially spell doom for bad theaters . I mean, if its between going to a old theater with soda stains in the seat or staying home, im going to stay at home. I like the ones with reservations and the leather recliners. Me too. Food yeah. Is this a huge opportunity for Consumer Electronics and over the top names like roku, sonos, amazon, apple, adobe maybe i want to get the surround sound head phones now. Maybe i want a bigger tv maybe i want a buildout. But a really nice experience if the windows broke snn. We broke snn. I bought a projector can you stick on the floor right up against the wall and can you take everything off the wall you dont even need a screen then you have a home theater and it doesnt cost that much money and there is no installation for a couple hundred bucks can you have a projector that streams anything that is the size of a coke can the opportunities for Consumer Electronics to benefit from this home theater experience is absolutely weve already seen with covid19 that people investing heavily in that in improving that experience 40 of households have upgraded their Broadband Connectivity and we already have 100 million households that have connected tvs. So this is a Consumer Base that is ready to stream movies and home and theyre going to continue to invest in making that experience better and better. And that has gotten cheaper anyway for all of us to do the so, you know, this is the time to make that big move especially if youre hbo and you have to get those numbers from 38 million, to you know, 60 or 80 next year to be considered a long term contender. Yeah. As we take a look at those pricing numbers. Good news for the consumer now its up to the companies to figure out how theyre going to do it profitbly. I think its fascinating, heather. Thank you so much for the guidance on this well see you soon. Thanks so much. It has been a good week for apple suppliers with names like micron, intel, all up near double digits and extending those gains today. A lot more squawk alley still ahead. Stay with us this is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. See yourself. Welcome back to the mirror. 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Wall street is taking a backseat again in the latest partnership with stripe. Our kate rooney explains hi, kate hi, carl. Big banks were hoping to win the battle for the next generation of customers the so far, theyre having more success being the back office for more innovative tech platforms. This time its with stripe the 36 billion payments giant is teaming up with Goldman Sachs, citi, barclays and evolve to offer Banking Service to the customers the announcement is the latest a string of the big marriages we had google and citi a few weeks ago and apple and Goldman Sachs with the apple card, this is a big shift for the industry as the banks move behind the scenes in the partnerships, banks are becoming Service Providers and rely on stripe and google for distribution as arc analyst put it, theyre becoming detached from any true customer interaction he says they command less leverage and smaller share of the economics.