>> 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)

>> From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR. This is breaking analysis with Dave Vellante. >> Robotic process automation solutions remain one of the most attractive investments for IT buyers. This is despite our overall 2020 IT spending forecast, which remained depressed at minus four to minus 5% for the year. Relative to previous surveys, we do see some softness in traditional RPA strongholds such as large financial services and big insurance and giant public and privates. But RPA relative to other IT investments remains at the top as a sector with the highest spending momentum ahead of machine learning, ahead of AI, ahead of containers, and ahead of cloud computing. Hello, everyone, this is Dave Vellante, and welcome to this week's Wikibon Cube Insights powered by ETR. In this breaking analysis, we want to update you on the latest RPA trends and share fresh ETR data with our community. So let's get right into it with a quick summary. Now, as I said, despite our pretty tepid IT spending outlook for the entire year in 2020, demand for RPA software continues to grow at a 60 to 70% clip. Now remember, RPA mimics human computer interactions, it uses software scripts or robots that execute human tasks in a runtime assembly of discrete steps. The practice first became popular for back office functions mostly, is unattended bots. The pandemic appears to be accelerating front office adoption and this is creating a bit of a schism between front and back office. Digital transformation initiatives in many ways, they're going to create the connective tissue between front and back of the house. Now competitive dynamics are heating up. The two emergent leaders Automation Anywhere and UiPath are separating from the pack. Large incumbent software vendors like Microsoft, IBM and SAP are entering the market and positioning RPA as a feature. Meanwhile, legacy business process automation players continue to focus on taking their install bases on a broader automation journey. However, all three of these constituents are on a collision course in our view, where deeper automation objective is kind of the North Star. Now there are two material changes to our previous scenario. First, we've expanded our thinking on the RPA TAM, and we're extending this toward a broader automation agenda more consistent with buyer goals. In other words, the TAM is much larger than we initially thought, and we'll explain why. Second, we no longer see this as a winner take all or even winner take most market. In this segment, we'll look deeper into the leaders and share some new data. In particular, well, it appeared in our previous analysis that UiPath was running the table in the market, we see a much more textured, competitive dynamic setting up. And the data suggests that other players including Automation Anywhere, and even some of the larger incumbents will challenge UiPath for leadership in this space. Now, as with many developing software markets, the ultimate leader is not crystal clear at this point. Let's talk about the effects of the pandemic. A conventional wisdom really suggests and by the way, we would agree that the automation mandate has accelerated by several years due to Coronavirus. It's three points here. One is that yes, COVID has put digital transformation on the front burner of executives priority lists. Second is automation isn't trivial. So there's a real difference between wanting and achieving. And third, we believe there's another driver for the automation mandate, which will survive a vaccine or herd immunity, and that is the productivity gap. So this chart here underscores that point and was brought to our attention by a friend of ours, Dave Moschella. Specifically, we've seen a noticeable decline in productivity in the US and EU, since remember the personal productivity boom from the personal computer? The PC and the internet brought forth those trends in Moschella's premise and we agree is that in order to solve the grand challenges of the 2020s and beyond automation is going to be necessary. Think about climate change, global competitiveness, aging populations and infrastructure, massive deficits, mass immigration, sustainable food sources, healthcare. These are all going to require huge injections of automation into the system to solve problems associated with these areas. Human labor just isn't the answer. So this in part has influenced our expanded thinking on the total available market. The diagram we're showing here updates our expectations on the TAM for RPA. The first takeaway is that we're envisioning a market for business automation well beyond software bots, which are represented really in the first two layers, that back office and front office divide, if you will. And we see that coming together in the third layer, those two are really going to happen through digital transformation initiatives. But we also envision a massive market for automated decision making, and very deep business integration where systems are communicating to each other, system to system, machine to machine, and also making real time decisions on behalf of humans. Sometimes we call that systems of agency. Now, I won't go deep into this TAM, as it's a bit academic, but suffice it to say this is an enormous market comprising many layers of the tech stack and services stacks. And this represents a serious opportunities for multiple players, both vendors and buyers. Okay, let's get a little bit more tactical and look at the spending data, the latest spending data, from the ETR survey. The chart we're showing here is one of our favorites. And it compares leading RPA vendors on two dimensions. The y-axis is net score or spending momentum. It's a simple metric, that for this last survey asked buyers are you spending more or less in the second half of the year than you had originally planned. Net score is derived by subtracting the lesses from the mores, and is really shown in the upper right of this chart. You can see that in the green highlights. Note that the total N in the survey is around 1200. And you can see that the number of responses for each vendor is shown in the upper right in that gray area. We eliminated any RPA vendor that didn't get at least 25 mentions in responses in the survey. And you can see that Automation Anywhere and UiPath have essentially traded positions on the vertical axis. Indicating that Automation Anywhere customers expect greater spending momentum with the company than UiPath customers for the second half of this year, than they did in the first half. UiPath at 62% net score is still very, very high but this marks the first time since our reporting that AA, has taken the lead ahead of UiPath in net score. And the small arrow show the general direction of their respective momentum over the last couple of surveys, and I'll discuss this later on. Now on this chart, you can also see Blue Prism and Pegasystems and, while they're significantly below Automation Anywhere and UiPath, these are very respectable net scores for more mature players like these. But I don't really consider them RPA specialists, and especially Pega. I mean, they have an automation play well beyond RPA and have built really an awesome business and in many ways are benefiting from the hype being created by the newbies. I have to say I'm in awe of the business that Alan Trefler and his team have built. We're talking about a billion dollar company here. They've got a valuation, over 9 billion, the stock's near an all time high, and they never took a dime of outside capital prior to their IPO, which is just unreal. Oh, yeah, one more thing I want to call your attention to. There's Microsoft with power automate, and kind of crashing the party with a 1.0 product that is making some noise in the marketplace. Now on the y-axis, you can see UiPath has the market share lead, but I want to remind you what this is. Market shares I mentioned of pervasiveness in the data set in the survey and is, calculated by dividing the number of mentions for a vendor in a sector by the total mentions in the survey. So you can see that UiPath has the share of voice lead, but it's still under 10% of the total survey base. So lots of room for this market to grow. But I want to make an important note here because UiPath has historically been a collection of point products, whereas Automation Anywhere their go to market typically involves going to larger accounts and selling this sort of Mongo and digital transformation project to the line of business. As I said earlier, these two and other companies are on a collision course because that is the big prize. UiPath has restructured its product and pricing strategy, done some acquisitions to go after this. But it stands to reason that UiPath has a bigger presence in the ETR data set as measured by market share. So it makes sense that Automation Anywhere, their number one net score position, it makes it even more impressive. Now the other nuance is that ETR tends to be somewhat weighted to the IT side of the house. And although it most certainly picks up line of business spending, there's a bias in the data toward IT. So that means RPA is most likely even stronger in the context of spending initiatives, and it's already number one relative to other sectors. So that's pretty impressive. Now let's look at how net score has changed over time. This chart shows the change in net score or spending momentum for Automation Anywhere, UiPath, Blue Prism and Pegasystems over the last three survey periods. You see last October, this past April, the height of the lockdown in the US and the most recent July survey. And here you see that Automation Anywhere is accelerating and taking the lead over UiPath. And is the only one in the chart growing net score. Again, UiPath remains elevated despite the relative decline from previous surveys. The other two, I have to caution you again, the Pegasystems for example, and they're killing it in the market. The stock is up nearly 40% year to date, it's over 60% in the last 12 months. So because they're not so RPA only focused and they really are not an IT play per se, the survey data has to be digested in that context. But you do see them coming down from elevated levels last October. Now here's a time series view of that net score. This chart really what it does is it just extends the timeframe and shows more granularity of survey data back to January 2018. So we're talking about 11, quarterly survey data points and snapshots here. This really underscores the power of the ETR platform, because you can stretch the data over time. And you'll see Automation Anywhere overtakes UiPath for the first time since we started capturing the segment. UiPath along with the other shows a noticeable decline in net score in this survey, except for Microsoft, who's, you know, they're just showing up, as I said, they're elbowing their way into the marketplace. Now let's take that same sort of time series view but let's flip to market share. And this next chart shows that other favorite metric that we use all the time as market share or pervasiveness in the dataset, over a time series. Now remember, this is really mentions as a percent of the total. It's not an indication of spending amount, but it's a data point and we pay attention to this. And you can see how UiPath broke away from the pack. They did this back in October 2018, and that coincides with their big push on things like, events, and training, they really have done a good job of building a presence and awareness in the market. I've superimposed on the chart the upper left corner for context that shows net scores in the green and shared N in the gray. It's sorted off of that shared N. This refers to the number of mentions in the dataset for each vendor out of the 1192 total responses. So some of these have small Ns. So I'm not going to put too much emphasis on this except, that UiPath escalation is notable and hopefully I've explain that sufficiently. Okay, let's wrap. So we talked about the automation mandate, and the COVID wrecking ball effect. But it's more than that. The productivity pressures on the US and EU in particular make it exceedingly difficult to just throw labor at the world's grand problems. So this has opened up an enormous opportunity for technology companies and practitioners to drive automation. You know, we said this during the initial in the early days of the big data era. In fact, Peter Goldmacher, had this discussion with us on theCUBE really in the early part of last decade, that those companies that can implement automation at the time he was talking about big data are going to be the big big winners. So it's not just the tech players. Now of course, as we've seen, many of the big tech companies are benefiting enormously from the mega automation trend, but the broader set of industries has massive, massive upside. Now what this sets up is a multi-dimensional competitive environment. We have Automation Anywhere and UiPath battling it out to achieve escape velocity. Automation Anywhere just brought in Chris Riley to run go to market. So you know they're serious. He's a player who understands complex enterprise selling. And now you have UiPath, they're hiring engineers as fast as they can. And the other dimension is a classic battle of best of breed specialists like Automation Anywhere and UiPath, up against the bundlers, selling RPA as a feature of their services. Microsoft, IBM, SAP, etc, all see automation is a huge opportunity and everyone's going to hop on the bandwagon because this is worth hundreds of billions of dollars, at least. Okay. Thanks for watching this episode of theCUBE Insights powered by ETR. Remember all these episodes are available as podcasts wherever you listen. Check it out, we've also put up an archive of all the breaking analysis segments on wikibon.com. There's a link on the menu bar right at the top of the homepage that has all 46 episodes that we've done since inception. I write weekly on that wikibon.com platform and I also publish on siliconangle.com where you can find all the relevant news. And don't forget to check out etr.plus for all the survey data and analysis. Go there and sign up for a trial of the software. It's awesome. Okay, this is Dave Vellante, be well, and we'll see you next time. (bright music)

>> Announcer: From around the globe, it's theCUBE, with digital coverage of PegaWorld iNspire, brought to you by Pegasystems. >> Hi everybody, welcome back. This is Dave Vellante, and you're watching theCUBE's coverage of PegaWorld iNspire 2020. Kerim Akgonul is here. He's the senior vice president of product at Pega, Pegasystems. Kerim, great to see you. Thanks for coming on. >> Hi Dave. Thanks for having me. Yeah, I mean I wish we were face-to-face at your big show, but this is going to have to do. A little different this year doing the virtual event. You're used to a big stage, big audience, lots of clapping and buzz. How's it been for you, this virtual pivot? >> It's been different, it's definitely been different, especially since the last few years we had it in Vegas, so it was a big Vegas show. Now we're in my living room. Not the same vibe, but nevertheless we have a lot of new products and new stories to tell, new experiences to share with the clients, so we're focusing on those aspects. >> Yeah, I'm excited to get into that, but I mean your whole raison d'être is you guys build for change, and obviously we've been thrown this curve ball, more than a curve ball, knuckle ball. Maybe talk about what you're seeing your customers do in terms of being able to rapidly adapt to this new abnormal. >> Yeah, so we've seen, obviously, across the globe, right, not just with Pega, not with just our clients, we've seen a tremendous amount of change. We've seen change in how we work, how we communicate, how we collaborate, how we get into meetings, and a lot of our clients, of course, had to quickly adjust to these recent changes as well in these last couple of months, and in many cases they had to make technology choices, and we're pretty excited that basically Pega technology has been on that top shelf of technologies that our clients chose to leverage in this time of crisis. They chose to use the technology to better engage across their organizational work that they do. They use the Pega technology to actually digitize how a lot of the work that gets done in their organization. They use it as a COVID-19 response. They use it to engage directly with the consumers, so it's been on, as I said, the top shelf of technologies that they had to leverage to adjust and transform, so it's been very busy, Dave. >> Obviously a lot of companies have been hit, and some industries have been very hard hit in the shutdown, but I want to pick a couple of examples. Let's start with healthcare. I mean they've been hit like no other, front lines. Do you have some examples that you can share, or any example in healthcare, how they pivoted? I mean have they been able to even spend time on anything that's not emergency? Maybe you could share some of your experiences there. >> Absolutely. Actually a lot of the healthcare organizations that we're working with, the front line workers, obviously, the way that they engage has changed quite a bit, but also the people that work in the corporate, in the back office, in the technology, they have changed as well as they had to really respond to the changes in the scale of their operations, changes in how they engage with their customers, with the other organizations that they work with, and how they operated their processes. We did have one of the customers that I talk about, HCA, one of the Pega customers, they basically implemented a Pega solution just in a couple of days, and rolled it out into production just a couple of days to keep track of their employees, the volunteers that basically work with them, to keep track of people who are impacted by COVID-19, and they have about 200,000 people that they need to manage the availability in the schedules, and they decided to use Pega technology to be able to manage that across the enterprise, which has been a great experience for us working with them. >> So Kerim, how would that work? So they're an existing Pega customer, they spun up a new module, they sort of developed it themselves. You guys helped them. Describe how that sort of became real. >> Sure, so we actually have a couple of different examples of these types of applications that went live in the last couple of months, from the healthcare organizations, we had it from some organizations in the telecommunications industry, we had state governments and different public sector companies. It works differently for each one of them, but it all starts with really having somebody, having a clear idea on exactly what they want to actually do. What do they want to keep track of? What do they want to operate? What do they want to be able to actually get done? And having somebody to have that vision and being able to articulate that in the Pega construct to automate it to define the process, to define what they're going to keep track of, to define the journeys of those things that they're going to keep track of, and a lot of the clients that have centers of excellence in their organizations with Pega experts, some of our clients work with our great set of partners who have come up with ideas and brought them into these organizations, and we also get pulled into a couple of these implementations, and like you said, Dave, we always talk about being built for change, and this is a time of crisis. This is a time of change, and Pega's technology is perfectly structured to be able to get things quickly done and up and running, but what it really needed at all times is somebody to actually have the vision and the ability to make a decision and go execute on it. And we know that the people are there. We know the technology is there, and that's how a lot of the results got done. >> Yeah, very fast decisions had to get made. Another example is we've been tracking the telecom space, and the whole work-from-home pivot has really put stress on distributed networks, the traditional corporate networks. Now everybody's at home. We've all experienced this, whether video calls, et cetera. The kids are at home, at school, sometimes gaming, so the internet, it didn't blow up, luckily, but still major change in the telco industry. >> Absolutely. How lucky we are to actually have access to all this technology, to all this internet capacity, and yeah, it's been a big change. Obviously the demand on their business has increased quite a bit in the telecommunications industry. One of our clients that basically had contact centers in other countries where the agents actually didn't have an opportunity to go into the contact center, and they couldn't actually enter the building. They weren't even allowed to be on the streets, out on the streets, so what they did, and while this is happening, right, while basically the agents are not able to go to work, at the same time the volumes are increasing through the roof, right? There's a tremendous amount of urgency and higher levels of volumes of requests coming in from the end customers, the end consumers coming in, right? It's basically a perfect storm of things happening, so what our clients have done is a couple of things. One, they created new sets of processes, and they created an army of volunteers from within the business to be able to respond to customer requests from home, and two, they really completely ramped up the pace of taking processes and making them self-service available on the mobile apps, on the website, on the IVR, because customers, consumers have a sense of urgency. They need an answer. They need something to get done quickly, and they want to be able to avoid waiting on line for four hours, right? We saw that, we saw a lot of the websites that says, "Hey, if you call our contact center," some companies put up these messages, "it's going to be so many hours." So our clients were able to take the processes that they have defined for their contact center agents and actually pushed them to self-service channels like the mobile channel, like the web self-service channel, as well as chat and chat bot channels, to be able to get the answers that the consumers need quickly and get their work done, respond to them quickly while in this time of amazing change. >> Yeah, so that enables scaling. Self-service is critical. Yeah, I want to ask you about digital transformation. It's a theme of PegaWorld iNspire. There's been a lot of talk the last three, four years about digital transformation. Frankly, a lot of lip service. I think it was Satya Nadella said we've accelerated. We've pulled two years of digital transformation into two months, but again, you guys are all about digital and digitizing processes, so kind of I want to know if you can talk about that theme of the show, kind of what it means to you and your client. >> I think it's been amazing. I think, like you said, there's been a lot of talk about it in several years, and there have been lots of initiatives, but I think it was missing the urgency that it needed to be able to get moving and get things done. We have had so many discussions. So many people have talked about what do we need to do, do we need to do it now, can we basically wait? Long meetings and long delays on making decisions to actually move forward, and this just basically changed all that, right? There's no more the question of do we need to go through a digital transformation? Everybody knows it's a yes. We had to do it, no question about it. There's no more question of can we do it. Yep, we know we can do it. Do we have the technology, do we have the people? Yep, got it. All that is in place. Now really the thing that we're seeing people succeed in is the ability to make a decision to move forward, to move forward aggressively, and having now proven that the people and the technology is there, and that they can get done, and it really basically requires decisiveness and leadership. >> Yeah, I think the word you use, 'urgency,' because there was a lot of complacency leading up to this, but the good news was there was also a lot of experimentation going on. So COVID obviously accelerated that urgency. Anna Gleiss from Siemens is an example of somebody who spoke during your keynote. Big industrial exposed with a huge supply chain, which for years some of that's been really opaque, and digitize that, now you get greater transparency. What were the key learnings from her discussion? >> Right, so Anna and the team have done a spectacular job, and like I say, they didn't need a worldwide pandemic to get going, and they basically approached theirs systematically with a great plan, and what they basically were able to do is really do that, another thing that people have done a lot of lip service in the past is IT and business collaboration. They actually executed brilliantly from that perspective where the IT organization, technology organization sort of delivered, on top of the Pega platform delivered a platform to be able to manage all the technical aspects of business applications that all the processes that seems needed, and in different departments and different divisions were able to leverage those assets and be able to quickly get applications up and running, and being able to dramatically increase the speed of innovation while at the same time dramatically reducing the cost of getting these things done and running them. So basically they built that environment where IT provided the technical aspects as a service to business applications so that they can quickly get things done, automate their processes, and deliver tremendous amount of operational efficiency into the organization. >> Now Kerim, of course, is the head of products. I want to get into some of the product discussion, some of the hard news that you have at PegaWorld. This notion of the Pega Process Fabric, I mean the metaphor is very strong. You think about digital, you think about a fabric. But what do we need to know about the Pega Process Fabric? >> Dave, it's a great solution that I believe corporations, especially enterprises, need to be able to make their staff more effective, streamline their work, getting them to a world where they don't have to personally navigate through dozens of different applications just to achieve an outcome, because whenever you basically have a situation where an employee of an enterprise has to jump through six, 10, 12 different applications just to be able to get something done for the customer, there's a tremendous amount of efficiency that's lost, there's a tremendous amount of training that's required to be able to actually get people to be able to manage all these, working across all these applications, and of course it's very easy to make mistakes. And whenever you have an environment that's built out like that, it inevitably gets exposed to the customers, and they basically, their experiences realize that there's a lot of jumping around. The Process Fabric is around bringing an experience to the users that is basically a single experience, even though work is coming from many different applications in the organization, right? You talk to any enterprise in anywhere in the world, and you basically name any enterprise software company, and they'll tell you, "Yeah, we got that." They have it. >> Yeah. >> They have Microsoft, they have Salesforce, they have ServiceNow, they have Pega, they have it, and users, employees have to juggle through all of these systems to be able to actually get their work done. The job of Process Fabric is to actually bring all these tasks, bring all this work that the workers, and then on behalf of the customers, have to get done, and weave them together into a single experience so that they don't have to jump around. There's much more efficiency. Get work done fast, and the organization then also has control around how the work is prioritized across different systems. How the work is managed through how it gets assigned, how to handle key customers and be able to see all the work that we're doing on behalf of them across all the different systems, and be able to actually bring a home all of these efforts and provide that experience to the user. >> So Kerim, what's the secret sauce there? Is it a combination of using APIs to those applications, and machine intelligence, and machine learning? >> There's a little bit of many things. The key is, one, we basically come with standard connectivity to standard enterprise solutions. We come prepackaged with connectivity to Pega environments within the organizations, as we have many customers that have deployed dozens of different Pega applications. We come with a standard open API approach to be able to provide connectivity, and then we use our decisioning capabilities and process capabilities to manage the prioritization, to be able to manage the routing and the experience for the end users. >> Okay, and the prioritization is something that's determined by business rules, is that correct? Or how does that all work? >> Absolutely. Absolutely, so the idea is to be able to leverage the business rules capabilities of the Pega platform to be able to handle the prioritization and the routing and sort of collating things together that are associated with the same work streams and for the same customers. >> When Alan Trefler started Pega it was right around the time I started in the industry and AI was the hot buzzword, and it took a while to get here, but it feels pretty real right now. How do you look at machine intelligence and the role that it plays? You've used the term real realtime AI. >> Right. >> What do you mean by that, and what's so special about your AI? >> Well, our realtime AI is real, so that's one of the main specialties, but look, there's a lot basically technology out there. There's a lot of great technology out there with great use cases that can look at historical sets of data and be able to actually generate predictive models from them, and those are great. Those are very, very valuable. But we believe that especially when we're directly engaging with customers, that is not enough. That you need actually realtime, real realtime AI. Let me give you an example. If you are basically running some predictive models against a set of customer data, say basically in January and February and using them in March, you will not get the right results that are basically for each individual customer, because things have changed dramatically between February and March. You couldn't make decisions about a customer based on what happened in their activity in January based on what's today. One of our telecom... One of our, I'm sorry, banking clients, for example, used their customer data in the UK, NatWest, used their customer data and identified people that work for the National Health Services and provided realtime programs that are specifically tailored for them, right, so that's basically being able to actually leverage the power of AI and be able to change how you engage with customers. They looked at customer data who might be at financial risk due to the crisis and actually changed programs and payment programs for them, because things have changed dramatically in the timeframe. Our AI leverages predictive models based on historical data, which is great, but actually also adds on top of it the ability to evaluate realtime data based on the real context of the end customer at this point in time, at this point on their experience on the website, on the IVR, on the mobile app, and be able to determine the best way to engage with that customer at that moment in time, and be able to deliver that one-to-one personalized experience. And this has been basically one of the major capabilities of Pega technology. That's how we differentiate in the marketplace in our ability to actually drive the AI capabilities in realtime interactions. >> Wonder if I could ask you about one of the trends in the marketplace, and you're seeing it in the equity markets, these private equity robotic process automation. People, I think, sometimes misunderstand you, and I've said, I've reported a number of times that RPA's just a small part of what you guys do, but at the same time you're seeing a lot of energy in the marketplace, money, billions of dollars, billions, yeah, have poured in. How do you look at RPA? Where does it fit in the Pega platform? >> Yeah, so RPA's absolutely a part of the overall journey. We look at things from an end-to-end automation perspective, essentially we need to do something for a customer, on behalf of a customer, to get an outcome delivered to a customer, and there's a process associated with it. And this process is frequently going to touch through a bunch of different systems. And some of these systems it's going to touch are old. They've been around for a very, very long time. They're a pain point for a lot of organizations. What RPA does really well is it basically lets you put a robotic process, essentially, a process that runs on the desktop and to be able to sort of execute that process inside that old system automatically. And that saves time and saves money, and there's basically a clear ROI associated with it, but it doesn't eliminate that old technology. It just puts, essentially, a veneer in front of it so that the end user doesn't have to key into some old application. It just does it on their behalf. We think that's a part of an end-to-end process automation, and as you go through different steps you might have to execute these robotic process automations, but it's not digital transformation. You're not really transforming it, right? You are basically eliminating that pain point for time being, and it will become a problem maybe for the next person that has to deal with it. We believe that robotic process automation is a great way to automate stuff, but each one of those elements need to go through that transformation as a part of the modernization, digital transformation journey. >> So it's that systems view that you would stress, and obviously you've always taken a systems view. You've got a platform that is an end-to-end platform. That's really what you mean by the end-to-end is that systems view, correct? >> Well, what we mean, really, by end-to-end is a customer comes in and they have a need, and we basically get them what they come in here for, and whatever is in between, whatever processes, and systems, and integrations, and technologies that sit in between, that's sort of the second part of the story. The main important part is work that needs to get done, we get the work done. And we will do anything in between. We'll do integrations, we'll do routing, we will do automation, we'll do business rules, we'll do AI, we'll do robotic process automation, anything that is necessary to basically drive that outcome, drive efficiency, faster response times, and better customer experience. >> Okay, so those are the key metrics. You just answered that other question. Last question, then, is we've got uncertain times. We've talked the gamut of digital transformation, but what advice would you give to customers given this uncertainty? How should they be best prepared? >> I think it's most important, really, to pay attention to the end consumers, and look at it from a perspective of empathy. What is the end consumer worried about right now? What is difficult for them? What is it that they need from your organization given their current circumstances, and make sure the experience that your corporation provides to them is the right experience. This is, I think, a time for a lot of corporations to build some incredible loyalty with their end customers, with the consumers. This is an amazing opportunity to basically have great engagement and to be able to have people realize that yeah, they were there for me. It was a good experience, it was an easy experience, it was a seamless experience, and I would mostly emphasize on that empathy factor. Make sure that we understand what's going through, what's happening in their lives, what they need, and when they engage with the corporation make sure that we provide a seamless experience to them. >> I think that's a great point. We're not going back to the customer experiences of the 2010s. We're entering a new decade, and Kerim, thanks so much for your insights and coming on theCUBE to share them. >> My pleasure, thanks for having me. >> You're welcome, and thank you for watching, everybody. You're watching theCUBE's coverage of PegaWorld iNspire 2020. Be right back right after this short break. (smooth music)