>>The cube presents HPE discover 2022 brought to you by HPE. >>Welcome back to the cube. Lisa Martin and Dave ante here covering day one of HPE discover 22 live from Las Vegas. We've been having some great conversations today. So far. We've got three full days coming at you. This is close to the end of day one. We're gonna have an interesting conversation next with a may the executive vice president and chief people officer at HPE. Alan. Welcome to the cube. >>Thanks Lisa. Great to be here. Thanks Dave. >>It's great to be back in person. The keynote this morning, standing room, only people are ready. People are ready to be back to hear what HPE has been doing the last couple of years since the last conference, but I've heard you and Antonio talk about the human side of change. It's challenging humans. Humans are uncomfortable with change, right? Unfortunately we are, but it is a big challenge. How, what are some of the things that you're seeing as organizations are really looking and have to transform digitally? They gotta bring the humans along >>Well. You know, our folks as anybody is just bombarded with data these days bombarded with issues and, and it's really down to share of mind when it comes down to it. If, if you're asking someone to change first, you gotta break through the clutter. There's so many things going on in their world and in their life as individuals. But to me, the foundation is you really have to define what is the mission and purpose of the organization, and then make sure that individual feels safe and comfortable participating at work. I know those sound like soft things, but at the end of the day, you're not gonna have the gumption or the desire to change unless you care about something bigger than yourself and that you feel safe bringing your authentic self to work. >>So you have to be kind of, yeah. Have to be good at sales, I guess, because you have to sell the mission. Well, what do you do if somebody's not comfortable? If they, how do you get them to align? I mean, you, you, it's always a challenge. And that's like, I think what makes the people side of the equation so hard? What's your sort of secret sauce there? >>Well, I wouldn't say it's secret sauce, but you know, we define our mission is improving the way people work and live. Now that sounds so general. But the good thing about that is I think about every one of our 60,000 associates around the world can write theirselves into that mission. Sign >>Up >>For that. Yeah. It's not so specific that you think am I opting in, I am opting out. The other piece is you've gotta give employee voice. You have to give your team members an opportunity, not just to, you know, follow blindly, whatever you're saying, you don't want that. You actually want them to challenge it. You want 'em to say, Hey, what does that really mean, Alan? What does that mean, Antonio? When you say we're improving the way, you know, people work and live, what does it mean when we say commit and go or force for good, these are not just pithy phrases. They're ways to engage dialogue. That's how you get people to think and to create and innovate and to change >>And creating that employee experience and changing that and, and transforming that as obviously the world change, especially the last couple of years, but the employee experience and what they think. And are they, are we part of the vision? Are we, part of the mission is directly relates to the customer experience. Those two things to me are inextricably linked well >>In, in our company, it's all about innovation, but not innovation just for the sake of designing things, but to meet customer needs. So you've actually gotta inculcate in your workforce. A couple of things. One obviously is that freedom to be creative, but the other piece is actually actively listening to our customers and recognizing and understanding what they need and how we can satisfy those needs. When you can bring both of those things together, I tell you, you can do all kinds of things with your workforce. >>So, I mean, I'm hearing you obviously look for common ground, but sometimes there's, there's the dissonance, right? The, you know, creating that great human condition might not necessarily be advantageous for short-term profits. You're a public company. So, so how what's that discussion like, and, and, and I presume there's gotta be a long-term vision, but still how, how do you handle those types of >>Things? Well, that, that's what I call dynamic tension. Good, great organizations, encourage dynamic tension. They don't simply ask people to blindly adhere to whatever they're saying. They actually ask their employees to think and to create and to debate and to argue respectfully, of course, that's how you really get to that virtuous circle of innovation and people moving forward. Now, look, I, I'm not naive. We don't have 60,000 team members totally aligned on every point every day. But I think we've got the vast majority knowing ultimately where we're going. And frankly, some of the fun is figuring out how to get there. And that means that you've gotta have those open discussions to get there. >>Well, you talk about dynamic tension and at the first sort of thought of it, it sounds like it can be a challenging thing, but it also sounds like it can really be an accelerant to the culture and the ability for the company to move forward and obviously meet those customer demands. >>Well, if you're defining what's new in the world, that's the only way you get there because nobody has, you know, basically a lock on innovation or what's the best next thing. When you have the power of bringing a diverse set of individuals together and really create forms for them to explore debate, argue, as I mentioned, that's where you really move forward. >>How do you think about how, how, how has your thinking changed? The company's thinking changed post pandemic with regard to hybrid work, you have something Elon Musk, you gotta come to work at least 40 hours, or you're gone. We, we, we heard someone on wall street have similar things, say similar things and others have said, Hey, we have no headquarters anymore. You know, we're moving to, you know, someplace remote what's H HP's point of view on >>That. Well, thanks for that question in particular. And Dave, what you outlined is we seem to have a world of two extremes out there. Yeah. Where either companies say it's back to the old days pre COVID and you're not working unless I see the sweat on your brow and you're there at eight o'clock on Monday morning, then we have other companies say, Hey, it doesn't matter. Mail it in wherever you are around the world. You know, we're in between that, we think it's important that people do get together face to face. And in fact, we've asked our team members to come back a couple of three days a week in the office, but to do it in a purposeful, thoughtful way, it doesn't mean just coming in, swiping your bad shame that you were there. It means coming in to collaborate, to meet with customers, to celebrate, to innovate, to work with groups. >>So what we're trying to do now is orchestrate those moments that matter for our team members, for a reason, for them to be together. Now, there's no reason for them to come in the office. If they're on zoom or team meetings all day, we know that. But the fact is we believe that our culture thrives when people get together at least a bit during the week. So we're looking for that happy medium. I can't say we've got it all figured out, but I can tell you right now, we're not on those two extremes. We're absolutely center the plate. >>So you encouraged that. That was a great description. If somebody says, Hey, but I, I really want to go move to Bozeman, you know, and hang out there and I'll work remote and I'll, I'll be productive. You, you enable that as well. Or would you discourage that? Yeah. We've >>Hired people all over the world and we actually have people based upon their job classified. If they're so-called hybrid employees, the, the, the situation I mentioned, which is you're not required to come to the office, but we encourage it. In some cases we do have telecomm commuters. If they have the kind of job where they can work from Bozeman or from Bangalore or from any place else, we're open to that as well. Cuz we don't wanna rule out that talent. But the vast majority of our folks, we'd like to be pretty close to one of our centers of excellence to one of our offices, to one of our locations because that fuels our customers, our, our culture, and really it creates community. Now I can't predict the future, but frankly, a lot of the issues that we've seen through a, the, the pandemic around mental health, around isolation, around increased stress, those are not all gonna go away because people are getting back together. But I do think that the pandemic accelerated and exacerbated, some of those conditions, people do want to be together and we're gonna make that happen. >>I, I can't predict the future, but I often try and I, I predict, I think the hybrid model, it will be the dominant model going forward. And I think that that, that smart organizations will put incentives in place to get people together. Not, oh, you won't get promoted. No, but you're gonna, you're gonna actually enjoy getting together periodically with, with your teammates and we're gonna support you, you know, wherever you want to live. >>Yeah. >>What are some of the key skill sets these days that HPE is looking for to attract these folks in an increasingly digital world? What are some of those things you say ABC gotta have it. >>Well, interesting. You ask that. Get asked that question a lot. And people expect me to say, they gotta know C plus plus they've gotta, you know, know all the latest on AI. They gotta be a mathematical wizard to do all kinds of things that we do in algorithms. You know, it's not, it's not those factors. It's the behavioral factors. We're looking for people. First of all, that have intellectual curiosity. They thrive to learn. They thrive to innovate. They don't want to just do a job. They want to come in and they want to create something big. So I think that's first and foremost, the second one is we look for people that have some resiliency have they had in their experience broadly in life ever had to deal with stress with resistance, with, you know, uncomfortable situations. Not because that's our work environment, but because that's the world, the world is an actively changing one. >>And we need people who have got that resilience and that intellectual curiosity to kind of move forward. And then last but not least. And this goes back to our founder DNA. I, I talk about this a lot. Our founders, bill and Dave talked a lot about basic things, respect for one another collaboration, teamwork. That's our culture. Now that's not the culture that a lot of other firms have out there. And in some companies they have maybe a harder edge, but those are the things that really propel our organization. Those are the things our customers appreciate the most. >>What's your point of view on the, the so-called great resignation? Is it a sort of a media created dynamic? Is it something that is maybe a, a somewhat of a knee jerk reaction in the post isolation economy? How do you think about that? >>You know, I, it's real obviously, and, and we've seen some uptick in our, our turnover, although I'm happy to say our turnovers a half to a third of what our competitors are. So we, we seem to have been able to retain our folks pretty well. But I do think that coming out of the pandemic was a, an inflection point. For many people. It was such a searing experience in so many ways. It caused people to really reflect and say, do I want to do something different now? That's great. But I'd like to have them do something different in HPE, if they're one of our employees. So what we're focusing on is gigs. What's your next opportunity to learn something new, do something new, move to a different area. You know, we used to call it career development. Those days are gone of just job ladders and wait for the next job and wait for the next promotion. It's all about how can you give someone a new opportunity and challenge them. And when you're able to do that, I think you can create a real positive dynamic that results in greater retention. But I do think the great resurrection it's real, it's gonna persist one other data point. Well, before COVID supply and demand, I'm an economist, not a psychologist. And at the end of the day, we have fewer and fewer people available to do the kinds of work that we're trying to hire. So those two factors together do create some, some turnover. >>You know, what's interesting is certainly pre pandemic. The prediction was that machines were gonna replace humans, which has always happened, but for the first time ever, it's in cognitive functions. And there's a lot of concern in the press about, you know, the impact on, on jobs and employment seems like the reverses happened, which is often the way, but, but, but longer term, what's your point of view on, on, on that, that piece of, of the equation, people are talking about digital transformation, AI, we see robotic process automation. Initially, a lot of employees are really concerned. Whoa, they're gonna replace my job. We've certainly seen that. And you know, if you were, you see kiosks at the airport, people used to actually put up, you know, billboards and with, with the glue and paper and you know, those jobs are gone, but now other jobs are, are, are at risk. How do you think about that? What, what should companies like HPE and society do to help people get to the point where they can thrive in that environment? >>Yeah. Look, I, it, it's an observation that, that I could say based upon my career, I've seen for many, many years, I can remember back manufacturing when at least from a us perspective, many of those manufacturing firms were shedding jobs because of automation. And there are short term disruptions and those are real. Those are human. And we do have to help people through those. Now I think one obligation an employer has, is let's start with our own folks. Let's make sure we retrain them. Let's make sure we expose them to the latest skills. Let's give them an opportunity to grow and develop. So I think if we do those things, we can help people through those transitions over the long haul. I'm actually very optimistic. I believe that over time, people self-select, these things don't happen overnight. I'll give you one tiny little anecdote before the pandemic. All of this world about autonomous vehicles can eliminate truck drivers. Well, you know, back in the day I actually drove a truck and it's not just driving. You've gotta interact with somebody in a dock door. You've gotta do all kinds of other tasks that can't be automated. And so things will happen over time, but I don't think we're gonna see this massive social disruption people were worried about. There is an incumbent responsibility on firms to train their own people and to keep them up to speed. And that's something we're deeply committed to at HPE >>Is information technology, employment, a parallel. I mean, everybody thought the cloud was gonna destroy the it, you know, worker that didn't happen. They just sort of changed their skillset. They became, you know, cloud experts or cloud architects. Is there a parallel there? >>Yeah, I think there's absolutely a parallel. And while probably the, the rate of change is quicker in, in some tech industries than perhaps others. All we're doing is creating new markets and new opportunities. And ultimately the lack of, of skill that we have, the lack of talent in the external marketplace is gonna mean that it's still very much an opportunity for people to learn, grow, develop, and be employed. >>Do you think that's, it's a matter of, of, of awareness on people not really understanding that whether it's still fear? >>Well, I, I think there may be some of that, but again, I, I, I do think from a, a broader social perspective, there's probably some things that in the public policy we can do to improve education and training, particularly for new entrants and make sure they're learning the skills for tomorrow's jobs and not just today's, but can I'm optimistic. And I actually think most responsible companies get this. And if you talk to their CEOs, the top tier or three issues that they have include access to talent. So why don't we recycle repurpose and reuse to use the sustainability phrase instead of throwing people outta work that have all kinds of intellectual property and capability to be very productive. And that's what we do at HPE. >>And that curiosity, that's something that you can't teach, right? Exactly. Have it, or >>You don't. Exactly. >>So last question, in terms of, of looking at culture corporate culture, as a, as an accelerant, as a catalyst of digital transformation, how do you advise leadership teams? >>Well, I, we've done a fair amount of work in the last five years, defining the culture in very small frankly soundbites. And the way you make that come to life is back what I mentioned before. You have to engage people and ask them to debate it. What does it mean to say, commit and go? What does it mean to say force for good, those kind of conversations, help your culture evolve, help your culture become real and not just a bunch of words on some piece of paper or, or posters someplace. I will say from my experience, and, and particularly with a new entrance to the workforce, if you can't define your culture quickly for this next generation coming in, you're, you're, there's no way you're gonna attract that talent. And so put me on the spot. HPE is here to help people live and grow and work better, and we try to be a force for good. We focus on that and we create work that fits your life. Not the other way around. That's my elevator speech. It sounds pithy, but it's an invitation to have a deeper discussion. >>I love it. And I think this is only day one for us here, but I think that we're, we're seeing, and we're feeling that culture there's 8,000 or so HP folks, executives, partners, customers, ready to come back and innovate with each other. I think that culture is palpable, that you've created. >>Great. It's exciting. And thank you so much for being part of it. >>Thanks, Alan. Pleasure. Thanks, Alan. We appreciate your insights. Okay. For our guests. I'm Dave ante. I Lisa Martin stick around. You're watching the cube, the leader in live tech coverage, and we're gonna be back after your short break.

>> Announcer: From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. (smooth music) >> Hi everybody, this is Dave Vellante, and welcome. As you know, I've been interviewing a number of CEOs throughout the COVID-19 pandemic. I'm really excited to have Alan Trefler here. He's the founder and CEO of Pegasystems. Alan, thanks for being part of the program. >> Oh, thanks for having me, Dave. >> So let's get into it. I mean when you were 27 years old, 37 years ago, 1983, you started Pega. Now you've seen a lot of cycles. Never seen anything like this, I know, but certainly there was the '87 crash. You saw, you know, the banking crisis in the late '80s, early '90s, the dotcom bubble, 2008, 2009, and now this. I want to ask you sort of how have you responded to crises in the past? I mean the hallmark of your company, the book you wrote is being able to manage through change. How did you manage through this one? What was your first move? >> Well, you know, what I'll tell you is from the inception we've always been a scrappy company. You know, we never took any venture capital. We bootstrapped this firm. I went public in the late '90s, and you know, we've now got a firm that will do over a billion in revenue this year and has 5,400 staff. So we've built, I think, a cohesive team around a set of principles that really have matched the way the software and technology have evolved, but has still taken a pretty radically different approach to how it should be used by businesses and business users. >> Well, so talk about some of the big waves that you've been riding over the years. I mean you set out to help business people really communicate better with IT. You laid out in your book some of the challenges there, and as you've pointed out many, many times, it gets more complex, people try to understand the customer better with terminology like customer relationship management. People don't necessarily want a relationship, right? Talk about some of the observations that you've made around customer behavior and channels, and how you've approached things a little bit differently as an entrepreneur. >> So I think organizations, when they think about how they want to engage with their customers, typically make a couple of serious mistakes. One is they say they want to do a good job for their clients, but especially if they're a big company they then devolve into actually doing the work in their channel. I mean they have a mobile group that builds the mobile app, which is different than the group that handles the call center, which is different than the group that handles the website, and all this business logic, it's baked into that. And that just destroys their ability to implement change rapidly, which particularly in this COVID era is so important for the organizations that are going to be successful. Now on the other side sometimes they get overly focused on their backend system. They're worrying about how they're going to put in the perfect ERP system or accounting system, that that will somehow support customer engagement better, but frankly it never does. We think you need to think about your business from the center out. How do I apply AI to what I want to do for and with my client? And then how do I apply workflow and work management capability to ensure that those decisions are done optimally and effectively? That's what Pega worked on from our inception, and now as we've gone into our fifth complete generation of software I think we've really crossed some boundaries that are pretty remarkable. >> So I mean, well what you've built is actually quite amazing. Since you've written your book the stock's exploded. I don't know if that's cause and effect, but nonetheless some of the things that you talk about again in the book, you talk about, you know, people looking at data the wrong way. What's impressed me is you've always taken a systems view. You're not trying to optimize, to your point, on one little either technology or maybe optimizing on cost. If you look at the whole system and think about outcomes, that is going to, you know, yield ultimately better businesses. And so I want to ask you-- >> Well, thinking about an end to end way of understanding how the technology should be applied is exactly what we've always believed, but the key is to be able to do this incrementally, iteratively, not monolithically, because no businesses can afford to rip out things. So you need to be able to do this what we call, say, "One microjourney at a time." One set of things that are good for a customer. In today's era it might send, as we do with many of our clients now under stress, we help them help their customers around things like loan forbearing. How do you give people a payment plan because they just don't have the money to pay their loan today. >> Right. >> And how do you do that while you keep them as customers, as opposed to, well, situations that could be far worse. >> Let's talk a little bit about machine intelligence. When you started Pega it was the same year I started in the industry at IDC, and AI was all the rage, and then, you know, it just never happened. You had the very long AI winter, but now it's, you know, starting to come back. You're seeing, you know, obviously there are certain technical capabilities, the amount of data, the processing power, et cetera, and the cost are much more aligned. You're seeing trends like AI. You're seeing things like RPA, you know, which you've brought in to your platform. Talk a little bit about that sort of incremental change that you're adding in to your platform and how you go about doing that. And I want to ask you about some of your thoughts on those trends. >> Certainly. Well, AI has been, from our point of view, a really big thing for the last decade. There was a set of false starts, and we actually saw that they were false starts, so we didn't get sucked into it, but come around 2010 we made an enormous push to bring machine learning and decisioning into our work management platform, and it's in there beautifully and it's doing amazing things. You know, I just saw one of our customers, Commonwealth Bank in Australia, their CEO in his quarterly earnings announcement led by talking about what the Pegasystem, what our system, which they call a customer engagement engine, is doing for them. During the fires that earlier this year were ravaging Australia, they used that to send personalized, not just messages, but also relief to people whose homes were burned out, so they weren't going to be able to pay their credit card bill. They didn't have to call the contact center. We reached out through the brilliant work that they did using our technology, reached out to preemptively make those customers feel great, and now with the COVID epidemic that organization is doing the same types of things, which really both endears them with their customers but also gets tied into that efficiency layer because you stop doing needless work because you're being smart as a result of using AI to figure out what to do, and to learn from the outcomes that come from that. >> So we've seen, you know, the playbook of you see, you know, startups, they get out, they're well-funded, and they point to the large established companies and they say, "Oh, that's an old stack." They can't respond, innovator's dilemma, et cetera, et cetera, et cetera. One of the things about Pega is you've been able to transform yourselves over the years. You know, build for change, I guess. An example, for instance, going from perpetual to an ARR type of model, which you very successfully have done, and now, you know, as I said, bringing in RPA, but I want to ask you about RPA. A lot of competitors out there, big valuations kind of pointing at you guys as the incumbent. You have RPA, but what do you see within that space specifically? >> I see a lot of delusional behavior. The ability to put robots in to do little pieces of task work can make sense in some situations, particularly if you don't have a good API, a good application programming interface, to get data in and out. A robot in that sort of situation can be a very, very helpful stopgap, but you really need an engine driven by AI and driven by process, process automation, that has to be at the heart. That's the dog to the robotic process automation tail, and a lot of these RPA vendors are running around saying, "You know, all you need's the tail." I'll tell you that in the last week two of the "biggest leaders" have both had massive layoffs. A little google work you can find out exactly who they are, and it's because their stuff isn't working well. >> I want to ask you about entrepreneurship during and coming out of a pandemic. Is it a good time to do a startup? Not that you're thinking about doing a startup, but you know, advice to entrepreneurs. >> Well, I think it's a terrific time to have a startup mentality. You know, part of why I think we've been able to reinvent our technology literally five times over our years is that we're always prepared to look from a new angle and apply that sort of entrepreneurial thinking and scrappiness. However, in terms of starting something right now, it's a very uncertain time. It's uncertain as to when customers will be back in the market. It's uncertain as to exactly how hard certain industry segments would be hit. And so whereas I think that even during recessions it can be a fine time to launch a startup, and in fact that's when I launched Pega was during a time when the economy was not doing that great, I would wait a little bit right now to see exactly when things are going to stabilize. I think that it's just a little too uncertain, but that time will emerge again. >> So I want to ask you, so again, in your book you talked about big data, big problems. I always joke to my friends who have little kids, little kids, little problems, (chuckling) and so little companies, little problems. You're now a billion dollar company, and you're bringing in new talent. You've set your sights on becoming a multibillion dollar company. You've got a great track record. I want you to talk about sort of how you see the future and what your aspirations are. You don't have to give specific numbers, but just frame that for us. >> Well, first of all, just to be clear the numbers in terms of a billion, that's an actual revenue number, as opposed to some of these valuations which we've seen with companies like WeWork might be a little bit tentative. What we see as being central to our growth and value prop are a couple of things. First, we've made our software tremendously easier to use, particularly our last release, which came out about six months ago, really, really straightforward for business people even to take ownership of their projects and work really collaboratively with IT. So that's one aspect of how we grow and want to accelerate the growth. The second aspect is Pega Cloud. Last year Pega Cloud grew enormously. It's now more than half our business, and for people to come on Pega Cloud where we do all of the database work, we do all the heavy lifting for them from a technology point of view, also provides a route to growth, though we also support what we call client cloud, which is where one of our customers wants to run it on their own cloud. And I think the third thing that we're doing that we're hoping is going to allow us to accelerate our growth is to broaden our go-to-market function, make our go-to-market function just larger by continuing to hire, and by the way, this is a great time for a company with a half a billion dollars of cash in the bank to be out looking to hire talent. Looking to hire and broaden and deepen our go-to-market and how we work, especially with those awesome customers, some of whom are suffering but are going to come back, and they're going to increasingly need to change their digital infrastructure. Their digital transformation, we think, is going to benefit from platforms like ours in unique ways. >> Well, Alan, I love the story. As you just pointed out, you just tapped the credit market. You've got a fantastic balance sheet. You've got a lot of tailwinds, you know, despite this pandemic, and as we often say, you've got a founder as the CEO and we've seen how that really culturally makes huge differences at companies. Alan, thanks so much for coming on our CEO series. Really appreciate your time. >> Thank you, Dave. It's been a real pleasure. >> All right. And thank you for watching, everybody. This is Dave Vellante for theCUBE. We'll see you next time. (smooth music)