>>Mhm. Hey there. Welcome to the cubes coverage of Splunk dot com. 21. I'm lisa martin. I've got a new guest joining me on the cube for the first time please welcome 20 pierce the senior manager of cybersecurity at the Y 20. Welcome to the program. >>Hi, glad to be here. >>So your linked in profile. I wanted to ask you about this. It states that you are delivering an evidence based approach to cybersecurity. What does that mean? An evidence based approach? And how are you and spunk helping to deliver this approach? >>Yeah. And I'd like to call it like the out case outcome based the price basically you start with what you're trying to accomplish and work with backwards. A lot of people say I've got a problem and then they go try to buy a tool or whatever to go fix the problem. I go in and I'm like all right, I got a problem. Let me figure out what's realistically I can use in the environment. So it's just basically working back so you have, you know, a breach. What if I what are all the different things that I knew to leverage to meet the controls for that breach. Right? And so um think of mitre in a way as a layered way of looking things um and the full defense and depth. So that's kind of my approach, I go when I figure out what the problem is and I answer the question and I used to do that because funk is able to give me a big data to everything. Got a guy so I like to be able to pull in all the different data types that I need to answer our questions, um, to do that. Right. And so whether it's a vulnerability management, patching your networking a good, a good example of this, like most common hacks in the world go after known vulnerabilities, right? And we get kind of caught up in all that. Um, one of the things we like to do here do, why is like we like to combine what's happening in the network. So the threat landscape in which is the network guys, the vulnerability guys who are scanning the data and then actually the patching, who is, who is actually, you know, mitigating the problem putting all those into one screen has really helped people with their risk rating. >>Talk to me a little bit about some of the changes, we've seen massive changes in the threat landscape in cybersecurity in the last year and a half during the pandemic. We've seen massive increase in ransomware. DDoS attacks, ransomware becoming a household word, the executive order that just came down a few months ago. What are some of the things that you've seen? Have you seen the acceleration of organizations coming to help? We know that it's not a matter of if we get attacked. It's when how are you, how are you seeing the last 18 months influence what you're doing. >>Oh man, it's been quite a crazy, right? And so um, by trade, I'm a instant responder, you know, uh high level investigator and possible solutions architect. So I, I get called in a lot for those kind of things. It has been kind of nuts. But you know, one of the things I always tell them when it started understanding what your threat landscaping is, um, and identify your key cyber terrain. Unfortunately most, you know, most companies as they grow, they get really big, they don't really do that. So they don't, they miss the consolidation point, right? I always say, hey, you know, if you're, if you're going to do this, if you say you have a ransomware attack, the first thing you can do is, you know, there's so many different controls that you can do to stop that you really need to know where it is and ejecting and then you can isolate if you need to um, what we're seeing in the companies. They, because they don't all have full coverage, right? And they expect their endpoint protections to actually do its job, you know, and sometimes that's, you know, don't get me wrong, there are some amazing endpoint protections out there, but you really need to be able to log it, you need to know what it looks like and you need to know where it is. So if you need a in case of a ransomware attack as it spreads through the network, you're able to isolate it and rewrite it to like, I like to call it a black hole the land and just reroute it so I can isolate it and then I can go after it. Um instead of trying to try to do every endpoint at a time because you'll get you'll get whacked >>definitely. So talk to me about working and partnering with Splunk and it's full security stuff. How does that, how is that a differentiator for you and your rule? >>Okay. So one of the things that we do here any why is we can find simmons sores one combined offering. Right? So we we try to bring the data in, we operationalize it and then we try to do something with it, right? We we find that. And then if you really think about that in a situation where the spunk products, it's the spunk or funky s and then phantom, right? And so that's the automation play. So we try to combine all those into one combined offering. So that when when bad things happen where we make a decision, we say all right, So, hey, um what we're seeing in the industry is like a lot of times people spend so much time hunting the known to to forget about the unknown. Think about the target. Hack a couple of years ago. Um the oil and gas attack just recently, you know, they miss those core things. So we try to say all right, well let's automate a lot of that known stuff so that the incident responders can focus on the unknown. And so when you combine all three of those products, you get a pretty good security staff >>when you say automating The known, is that at all in any way like helping companies get back to basics. I've been hearing a lot in the last 18 months that some from a data protection perspective and from a ransomware attack perspective. So it's it's when not if but are you saying that companies are are sort of skipping past the basics where security is concerned? Yeah, >>Well, it's I don't say it's skipping past the basics. Right? I think that sometimes people get caught up in the definitions of what it is. Right? So there's there's so many, there's so many fair more shop there. Right? So like I'm a big fan of your trust. Um a lot of instant responded to using minor, I use minor for that as as it retains the instant response. Some people like to use high trust and I think a lot of what happens is they get lost in the confusion of all these different frameworks. Right? I like to go back to basics. I've been doing cyber for Oh, oh my oh my gosh, about 20 plus years. Right. Um I'm an active hacker. I like this is what I do. I like to call a defense in depth. Right? So when you're when you're doing that, if you follow the defense and depth Satur, it doesn't matter what framework you have, you can actually go back and you can Fix that problem. Right? So going back in the automation of unknown to an unknown, we know, and IOC is 100% now, you can say IOC it's like a hash, right? So when a bad thing happens like an exploit, first thing we try to do is we try to grab that hash and then we try to build a roll around it to stop that hash from spreading and going anywhere else. That's a We know 100% of it's bad. Now can exploits change their hash. Absolute. And it happens all the time, but for that Moment in time that hash is 100%. And so we try to say, hey look, you know, we got an endpoint protection but also why don't we use automation to block it at the boundary or why don't we keep it from doing lateral movement? Why don't we why don't we activate it from a defense and depth. So you have your network. Um I like to say, hey look you have your egress ingress and your lateral movement. So if you understand all those three fact factors, you can automate the control so that it doesn't spread, you know, you had mentioned ransomware, it's been really huge, right? And everybody goes, oh well, you know, if we do zero try zero trust, talks about, you know, segmentation a whole lot and then a segmentation is usually important. It won't stop everything but it will do a good job being able to you'll ever swung we actually pull that in and we say hey you know from and why are we take all that network? And we try to put it in a single pane of glass so that we can see everything. And then once we're able to see it, once we get a good robust data set and understand that operations were able to go in and automate it and so if I can go in and say hey look all these hashes are bad. Yeah I'm not going to rely on my end point, I'm going to put another control in place. So at the end point misses it, I have another control that will actually layer it and prevent it from spreading. >>Which is absolutely critical. Talk to me about some of the outcomes that Ey and Splunk are delivering to the end user customers. Everyone's always talking about it's all about outcomes. What are some of those? >>Yeah so we have um we really embraced like the data to everything right? So I I kind of have this opinion of like uh you know everything's data so everything needs to be secured right? Uh the people who missed that tend to get whacked pretty quickly. Um So what I like to do is I'm like all right so you know like IOT is huge out there right now O. T. Is doing it. So some of the things that we've done is like from a health care perspective um We've done we've combined I. O. T. And I. T. Into a commonality solution leveraging like network simple things like pulling in from the wind, pulling in um understanding what those Mac addresses are so that you can actually do like a workplace analytics around um say R. F. I. D. Tagging right? So you know where your people are at? Um Here we also do like a call a sock in a box where we put that put everything together that every like a from a tiered perspective like a tier one tier two analysts. You know what is that they need to do to mitigate mitigate observe something, What is the investigator need? Right? So we try to simplify those conversations so that you know exactly around like a threat hunting as well like threat hunter an investigator, they're totally different roles, right? So they need to be separated. We also like tie in like the um what is it? I really hate uh like power point. I'm not a big power point guy right? So I really like to be able to give the says oh he needs to understand what risk is, right? So we try to automated so we can get to that too. He can pull up his phone and pull up his punk app and he knows at any given time what his risk rating of his company, right? So we try to combine all those in. Like again, you know there is um we do stuff around Blockchain supply chain. You know, it doesn't really matter if it's a data analytics tool. You know a lot of people look at Funk as a sim. I don't just like look at it that way. I look at as a data analytics tool that does sim. It's just one of the functions this does. If you start understanding data and all the different things that data can do, then you need to go in and you can use Funk to basically answer those questions so that you can start putting in a control set. >>What what's the differentiated value that Ey and Splunk bring together to customers. What really sets this partnership and what it delivers apart. >>Well I'm I'm I'm biased on that right? Because I run the North America 17 for you like for consulting. So I would say that those two things is innovation and time to value. Right? So for let's start with innovation for a minute because Funk is so customizable right? Because it pretty much can integrate with just two. Anything we're able to go very fast, take data in and do something with it and operationalize. It doesn't matter who the customer is is they're going to give us a question. We'll break it all the way down and we'll understand what you're going to answer A good example that is like we were doing stuff around P. C. I. Compliance. The checklist. You know the financial sector, they get a huge amount of audits, right? Especially around PC. I. So we took all the Pc. I checklist and we said harry, what can we, what can we answer those questions? And so we built a dashboard that actually sends out a report to internal audit and we call it compliance over time, right? It's looking at data in a different perspective to answer a question. Now the other thing is that we like, we try to do here is, you know, with the, as we do is Funk and funk helps us with this, right? We have a great relationship with them is um, basically, oh I have a, I lost my train of thought there for me. So uh, innovations time to value, right? So from time to value what we do is we used to say, hey look, we have a lot of stuff in our lab. But one of the things I don't like to do is I don't like to um, go to clients and say, hey look, we were going to build this for the first time. I like to say, hey look, here's these questions in the industry. Get ahead of the question and go build in our labs so that when we when we actually get on site, our time to value is not in months. You know, we can begin weeks because we already have a huge repository of um use cases now those every use case is actually tied into an automation play. And so when we say that we say hey look here's everything is flowing, let's do this, let's go answer that question and let's go automate it and you let's make a decision where where we want to automate and where do we want a human interaction. Mhm. >>Talk to me about what's next for the partnership in terms of the future, what what can you tell us where E Y. And Splunk are going together? >>So we've been partying around um I think our next things that we're really looking at is A I um we're really getting kind of into that as well as A R. And D. R. Technology. Right? So um especially around like I'm looking at like the energy companies in the financial banking and one of the things I would love to do is like um go into you know a bank A. T. M. Right? And right now it takes somebody actually has to plug into that and to do a diagnostic on it. I would love to be able to get to a point where you can just take your camera scan the QR code on the on the device and then pull up an A. R. And it runs all the diagnostics on the device as its there. Another one is like the infrastructure um instead of actually going out, plugging into like say a solar panel going out pulling out of the tablet just scanning the solar panels and it tells you if it's good or bad and that's kind of the next step that we're trying to do. We're trying to really take that uh and dated everything and just kind of turn it on its end um like and you've got to remember everything is data nowadays, right? It's not the old days where you know, things are moving around and everything is in the file folders, it's gone right? Everything is data. So everything is security, right? And we know the first thing is we need to know what our threat landscape is. We need to know what that is and we need to apply that. All right. So if we can simplify answering questions, that's so much better. And one of the things I like about flunked is it scales really well, right? And I've looked at some of these fetters and don't get me wrong, I mean everybody has their place. The one thing I like about spunk is it doesn't mean it literally scales really well. So the more data you can get into it, it actually does better. Right? Um and how you do it now, that's just our approach. That's the next steps that we're really looking at from a technology standpoint, >>exciting stuff, Tony thank you for joining me sharing what ey and Splunk are doing together. Some of the unique use cases that you're helping to solve for customers and some of the things that you're excited about. We appreciate your time on your information. >>No, this is fun. You know, like I said, I'm a big fan. I even wore my spunk shirt just for this meeting. >>Fantastic. You're on brand well, Tony. Thank you. Again. We appreciate your time. >>All right. Thank you. You have a wonderful day. >>Thanks you as well for Tony Pierce. I'm Lisa Martin. You're watching the cubes coverage of splunk.com 21. Thanks for watching, >>enjoy. Bye bye mm. Mm hmm.

>>From the Bellagio hotel in Las Vegas, it's the cube covering UI path forward for brought to you by >>Welcome to the cubes coverage of UI path forward for live from Las Vegas. We're here at the Bellagio. Lisa Martin, with Dave a long time, very excited to have in-person events back ish. I'll say we're going to be talking about automation as a boardroom imperative. We have two guests joining us here, James Matras here consulting principal. America's intelligent automation leader at UI and Irv. Dennis retired EA partner, and former CFO of HUD gentlemen. Welcome to the program. Exciting topic automation as a boardroom imperative, James says COO and start with you. How do you discuss the value of automation as being a key component and driver of transformation? >>That's a great question. I think what we've seen in the last couple of years is the evolution of what automation used to be. Two is going nine. And we've seen the shift from what we call generation one, which is very RPA centric type automation to more generation two, which is the combined integration of multiple technologies. It can target an intern process and it's quite important that you understand the pivotal shift because it's not enabling us to move from a task micro top agenda to a macro agenda actually impacts an organization at a strategic level. The ability to be able to look at processes more deeply to automate them in an end to end process collectively and use these different technologies in a synergistic manner truly becomes powerful because it shifts the narrative from a micro process agenda into more systemic area. >>So gen zero is an Emmanuel gen one is RPA point tools that individual maybe getting their personal productivity out. And then now you're saying gen three is across the enterprise. Where are we in terms of, you know, take your experience from your practical experience? Where do you think the world is? It's like probably between zero and one still. Right. But the advanced folks of thinking about gen three, w what's your, >>Yeah, it's a great question. And, um, when you and I, I can do the comparison being private and public sector on this because I was 37 years with E Y then went into retirement and CFL at HUD CFO. Ed was, was a HUD was nowhere. They had to just do all the intelligence digitalization, um, throughout, uh, from scratch. The private sector is probably five or six years ahead of them. But when you think about James talks about the gen one, two and three, the private sector is probably somewhere between two and three. And I know we're talking about the board in this conversation. Um, boards probably have one and two on their radar. Some boards may have three, some may not, but that's where the real strategic focus for boards needs to be is looking forward and, and getting ahead. But I think from a public sector standpoint, lot to go private sector, more to go as well. But, uh, there's a, there's a bit of a gap, but the public sector is probably only about three or four years behind the private sector >>To be okay. Let's look at the numbers, look at, look at the progress for the quarter. And now it's like discussion on cyber discussion on digital discussion on automated issue. It really changed the narrative over the last decade. >>Yeah, I think when you think of boards today, the lots of conversation on cyber that that conversation has been around for a while. A lot of conversation on ESG today, that conversation is getting, getting very popular. But I think when you think of next three, a Jen talks that bear James talks about, um, that's got to start elevating itself if it's not within the boardroom right now, because that will be the future of the company. And the way I think of it from a board's conversation is if a company doesn't think of themselves as a technology company in all aspects, no matter what you do, you are a technology company or you need to be. And if you're not thinking along that way, you're gonna, you're gonna lose market share and you're going to start falling behind your competitors. >>Well, and how much acceleration did the pandemic bring to just that organizations that weren't digital forward last year are probably gone? >>I think it certainly has shifted quite a lot. There's been a drive, the relevance of technology and hard plays for us in the modern workforce in the modern workplace has fundamentally changed the pandemic. We reimagine how we do things. Technology has progressed in itself significantly, and that made a big difference for, for all the environments as a result of that. So certainly is one of the byproducts of the pandemic has been certainly a good thing for everybody. >>Where does automation fit in the board? Virginia? You've got compensation committee. You've probably, I mean, there's somebody in charge of cyber. You got ESG now there's automation part of a broader digital agenda. Where's what's the right word. >>You know, I, I would personally put it in a enterprise risk management from a standpoint that if you're not focused on it, it's going to be a risk to the enterprise. And, um, when you think of automation and intelligent automation and RPA, uh, I think boards have a pretty good sense of how you interface with your customers and your vendors. I think a big push ought to be looking internally at your own infrastructure. You know, what are you, what are you doing in the HR space? What are you doing in a financial statement, close process? What are you doing your procurement process? I suspect there's still a lot of very routine transactions and processing within those, that infrastructure that if you just apply some RPA artificial intelligence, that data extraction techniques, you can probably eliminate a lot of man hours from the routine stuff. And, and the many man hours is probably not the right way to think of it. You could elevate people's work from being pushing numbers around to being data analyzers. And that's where the excitement is for people to see. >>It's not how it's viewed at organizations. We're not eliminating hours. Well focusing folks on much more strategic down at a test. >>Yes. I would say that that's exactly right now in the private sector, you're always going to have the efficiency play and profitability. So there will be an element of that. I know when at HUD we're, we're focused, we were not focused on eliminating hours because we needed people and we focused on creating efficiencies within the space and having people convert from, again, being Trent routine transactions, to being data analyzers and made the jobs, I'm sure. Fund for them as well. I mean, this is a lot of fun stuff. And, and if, uh, uh, companies need to be pushing this down through their entire infrastructure, not just dealing with our customers and the third parties that they deal with >>Catalyst or have been public sector. So you mentioned they may be five or six years behind, but I've seen certain public sector organizations really lean in, they learn from, from the private sector. And then even when you think about some of the military, how advanced they are absolutely. You know, the private could learn from them and if they could open it up. But >>So, yeah, I think that's, that's well said I was in this, you know, the that's the civilian part with, with the housing and urban development. I think the catalyst is, uh, bringing the expertise in, uh, I know when I, when I came, I went to HUD to elevate their financial infrastructure. It was, it was probably the worst of the cabinet agency. The financials were a mess. There was no, there was a, uh, there was not a clean audit opinion for eight years. And I was there to fix that and we fixed it through digitalization and digital transformation, as well as a financial transformation. The catalyst is just creating the education, letting people know what is, what, what technology can do. You don't have to be a programmer, but it's like driving a car. Anybody can drive a car, but we can't mechanic, you know, work as a mechanic on it. >>So I think it's creating education, letting people know what it can do. And at HUD, for example, we did a very simple, I was telling James earlier, we did a very simple RPA project on an, an, a financial statement, close process. It was 2,600 hours, six months. Once we implemented the RPA, brought that down to 70 hours, two weeks, people's eyes exploded with it. And then all of a sudden, I said, I want everyone to go back and come back with, with any manual process, any routine process that can convert to an RPA. And I got a list of a hundred, then it came then became trying to slow everything down. We're not going to do it overnight. Yeah, exactly. >>So, but it was self-funding. It was >>Self-funded. Yes. >>And, and how do you take that message to customers that it could be self-funding how how's that resonating >>Very well. And I think it was important. I always like to say, it's a point of differentiation because you look at, uh, mentioned earlier that organizations are basically technology companies. That's what they are. But now if you look across that we no longer compete at the ERP level without got SAP, Oracle, it's not a point of differentiation. We don't compete the application layer where they've got service. Now, black line, how we use them is helpful. We competed the digital layer and with automation is a major component of that. That's where your differentiation takes place. Now, if you have a point of differentiation, that is self-funding, it fundamentally changes the game. And that's why it's so important for boards to understand this, because that risk management, if you've not doing it, somebody is getting ahead of the game much faster than you are. >>Yeah. Yeah. You mentioned ERP and it, and it triggered something in my mind. Cause I, I said this 10 years ago about data. If in the nineties, you, you couldn't have picked SAP necessarily as the winner of ERP. But if you could have picked the companies that were using ERP could have made a lot of money in the stock market because they outperform their peers. And the same thing was true with data. And I think the same thing is going to be true with automation in the coming decade. >>Couldn't agree more. And I think that's exactly the point that differential acceleration happening this. And it's harder because of the Europeans. Once you knew what it was, you can put the boundaries on it. Digital, the options are infinite. It's just continuous progress as are from there. >>I've got a question for you. You talked about some great stats about how dramatically faster things were took far less time. How does that help from an adoption perspective? I know how much cultural change is very difficult for folks in any organization, but that sort of self-serving how does that help fuel adoption? >>Well, it's interesting. Um, it's, it is a, we're actually going to talk about this tomorrow. It is a framework and it's got to start at the leadership has got to start with governance. It's got to start with a detailed plan. That's executable. And it's got to start with getting buy-in from not only your, the, the organization, but the people you're dealing with outside the organization. Um, it's, it's, uh, I think that's absolutely critical. And when you bring this back to the boardroom, they are the leaders of the companies. And, and I, James, I talked about this as we're getting ready for tomorrow's session. I think the number one thing a board can do today is an own personal self assessment. Do they understand automation? Do they understand what next generation three is? Do they understand what the different components can do? And do they understand how the companies are implementing it? And if I was a board member, uh, on our boards, I say, we need to understand that or else this is nothing's going to happen. We're going to be here at the reliance of the CEO and the CFO strategy, which may or may not include or be thinking about this next three. So leadership at the top is going to drive this. And it's so critical. >>We were talking about catalyst before. And you mentioned education and expertise. I'm always curious as to what drew you to public sector because it's, yeah, I mean, very successful, you know, you're, you're with one of the global SIS directly, you can make a lot more money and that side. So what was it did, was it a desire to it's a great country? Was it >>Take one for the team and I'm going to do a selfish plug here. I just actually wrote a book in this whole thing called transforming a federal agency. What's the name of the book transforming and federal agency. And it's, uh, I spent my time at E Y for 37 years, fully retired. I wanted to give back and do meaningful work. And we lived in Columbus, Ohio, as I was talking about earlier, I was going to go teach and I got a call from the president's personnel office to see if I wanted to come. And these, the CFO at HUD with secretary Carson and change turn the agency around, uh, that took me a little while to say yes, because I wasn't sure I wanted something full time. It was a, it was in DC. So I'd be in a commuting role back and forth. My family's in Columbus. >>Um, but it was, uh, I did it and I loved it. It was, uh, I would pray, I would ask anyone that's has the ability to go into public service at any point in their career to do it. It's it was very rewarding. It was one of my favorite three years of life. And to your point, I didn't have to do it, but, uh, if I wanted to do something and give back and that met the criteria and we were very successful in turning it around with the digital transformation and a lot of stuff that we're talking about today gave me the ability to talk about it because I helped lead it >>For sharing that and did it. So did it start with the CFO's office? Because the first time I ever even heard about our RPO RPA was at a CFO conference and I started talking to him like, oh, this is going to be game changing. Is that where it started? Is that where it lands today? >>From an infrastructure standpoint, the CFO has the wonderful ability to see most processes within a company and its entire lifestyle from beginning to end. So CFO has that visibility to understand where efficiencies can happen in the process. And so the CFO plays a dramatically important role in this. And you think about a CFO's role today versus 20 years ago, it's no longer this, the bean counter rolling up numbers that become a business advisors to the board, to the CEO and to the executive suite. Um, so the CFO, I think has probably the best visibility of all the processes on a global basis. And they can see where the, the efficiencies and the implementation of automation can happen. >>So they can be catalysts and really fueling the actual >>Redesign of work. Yes, they, they, they probably need to be the catalyst. And as a board member, you want to be asking what is the CFO's strategic imperative for the next year? And if it doesn't include this, it's just got to get on the agenda. >>Well, curve ball here is his CFO question and you know, three years or two years ago, you wouldn't have even thought, I mean, let me set it up better. One of the industries that is highly automated is crypto. Yeah. You wouldn't even thought about crypto in your balance sheet a couple of years ago, but I'm not sure it's a widespread board level discussion, but as a CFO, what do you make of the trend to put Bitcoin on balance sheets? >>Yeah, I'm probably not the right person to ask because I'm a conservative guy. >>If somebody supported me and he said, Hey, why don't we put crypto on the balance sheet? >>I would get much more educated. I wouldn't shut it down. I would put it into, let's get more educated. Let's get the experts in here. Let's understand what's really happening with it. Let's understand what the risks are, what the rewards are. And can we absorb any sort of risk or reward with it? And when you say put it on the balance sheet, you can put it on in a small way to test it out. I wouldn't put the whole, I wouldn't make the whole balance sheet for Dell on day one. So that's why I would think about it. Just tell, tell me more, get me educated. How did you think about it? How can it help our business? How can I help our shareholders? How does it grow the bottom line? And then, then you start making decisions. >>Cause CFOs, let me find nature often conservative and most CFOs that I talked to just say no way, not a chance, but you're, maybe you're not as conservative as you think. Well, >>No, but I will never say go away on anything. I mean, cause I want to learn. I want to know. I mean, um, if you like all this stuff, that's new, it's easy to say go away, right? Yeah. But all of a sudden, three years later, the go away, all your competitors are doing it at a competitive advantage. So never say go away, get yourself educated before you jump into it. >>That's good advice. Yeah. In any walk of life question for you, or have you talked about the education aspect there? I'm curious from a risk mitigation perspective, especially given the last 18, 19 months, so tumultuous, so scary for all those organizations that were very digital, they're either gone or they accelerated very quickly. How much of an education do you have to provide certain industries? And are you seeing certain industries? I think healthcare manufacturing, financial services as being leaders in the uptake? >>Well, I think the financial service industries, for sure, they, they, they get this and then they need to, uh, cause they, you know, they're, they're a transaction and based, uh, industry. Uh, so they get it completely. Um, you know, I think maybe some manufacturing distribution, some of the old line businesses are, you know, they may not be thinking of this as progressively as they should. Um, but they'll get there. They're going to have to get there eventually. Um, you know, when you think about the education, my, I thought you were gonna ask a question about the education of the workforce. And I think as a board member, I would be really focused on, uh, how am I educating my workforce of the future? And do I have the workforce of the future today? Do I have to educate them to have to bring in hiring for it? Do I have to bring third-party service providers to get us there? So as a board member really focus on, do I have the right workforce to get us to this next stage? And if not, what do I need to do to get there? Because >>We'll allocate a percentage of their budgets to training and education. And the question is where do they put it >>In? Is it the right training and education, right? >>Where do they focus though? Right now we hear you iPad talking about they're a horizontal play, but James, when you and Lisa, we were asking about industry, when you go to market, are you, are you more focused on verticals? Are you thinking, >>No, it's on two things. So which often find is regardless of the sector with some nuanced variation, the back office functions are regionally the procure to pay process as the same fundamentals, regardless of the sector where the differentiation comes in at a sector of service is when you start going to the middle of the front office, I mean a mining has only one customer. They sold their product to image the retailer has an endless number of them. So when you get to the middle and front office and really start engaging with a customer and external vendors, then a differentiation is very unique and you'd have a lot of sort of customers having sector specific nuances and variations in how you use the platform. And that's where the shift now is happening as well is the back office functions that are largely driven by the CFO. If now getting good, robust value out of it, there's pivot to make it a differentiator in the market, comes in the front and middle office. And that's where we starting to say, sector specific genres solutions, nuances really come to the fall >>Deep industry expertise. Do you think digital at all changes that the reason I ask it because I see Amazon as a retail and then they're in cloud and they're in grocery other in content Apple's in, in financial services and you're seeing these internet giants with a dual agenda, they're disrupting horizontal technology and then there's disruptive industries. And my premise is it's because of data and digital. Do you ever see that industry specialization changing that value chain >>Without a doubt? And I think it's happens initially. It starts off. When people have started looking at the process, they realize there's such key dependencies on the upstream and downstream components of the value chain that they want to control it. So they actually start bridging out of what the core practices or the core business to own a broader agenda. And with digital, you can do it. You can actively interact more systemically that installs triggering, well, maybe I have a different product offering. Maybe I can own this. Could I monetize the information I had at my disposal today in a completely new line. And that really what gets truly innovative and starts creating a revenue increase as opposed as the cost saving. And that's what they're really going after. It's how do I, >>The vertical integration is not new. The plenty of ended up Koch industries, Tyson foods, but now it's digital. So presumably you can do it faster with greater greater scale >>Without a doubt. And you don't have to move your big ERP and things like that. Cause that's the only way it takes five years to move my technology backbone with digital. I can do the interaction tomorrow and we can build up enough to be able to sustain that in the short term. >>Right. And speaking of speed, unfortunately, guys, we are out of time, but thank you. Fantastic conversation automation as a board imperative guys, that's been great James or >>Thank you for your time. Thank you so much >>For Dave a long day. I'm Lisa Martin. You're watching the queue. We are live in Las Vegas at the Bellagio at UI path forward for stick around Dave and I will be right back. Okay.

>>Live from Las Vegas. It's the cube covering UI path forward Americas 2019 brought to you by UI path. Hello. We've already welcome to Las Vegas. This is day two of the year. >>Path forward conference UI path forward three. So what UI Pat does is they named their events one two three last year we were at Miami in the year before was one. Their North American event, which was in New York city. Here is three at the Bellagio hotel in in Las Vegas. 3000 people here for this rocket ship company growing revenues, they've got over $300 million in annual recurring revenue. That's up from 25 million in 2017 so you're talking about greater than 12 X increase in annual recurring revenues over 3000 employees. Now, Daniel Dienes, the CEO just named the industries the tech industry's latest billionaire. He's now dressing like a billionaire last year. He's in a tee shirt this year. He looks more like a more like a CEO. So we're going to be interviewing him later on today, but let's get right into it. The keynotes today comprised God Kirkwood who gave some predictions and that's her. >>I'm going to go, I'm going to talk about his predictions. I'm going to make some comments on those predictions and give you some thoughts of my own. Maybe throw in a few predictions of from Dave Vellante and then Craig LeClaire from Forrester gave a keynote. He was on the QBs today. Very knowledgeable analysts, probably one of the industry's top analysts, and I'll make some comments on some of the things he said. So let me get right into it. You got Kirkwood when you do these predictions, you know I put 'em out there. Of course it is smart. He's going to do these things and make them somewhat self-serving for RPA and UI path. So I'll make some comments on that as first one. One those was, there'll be a global economic downturn. I can't remember if he actually pinned a date, but I think he said it's in paint pending. >>Let's let's say 2020 he said that's good for RPA. Why would that be good for RPA? Because if there's an economic downturn, people are gonna want to get more. For less, and they're going to want to automate. They're gonna want to spend money and get fast ROI. And RPA potentially is a way to do that. It's not necessarily good news for low wage workers. They're doing mundane tasks. But nonetheless, he made the statement that it's good for our RPA. I would say this, I think a lot of this is going to depend on 2020 and the election in the United States as to what happens. I think it's very unclear right now. You saw the democratic debates last night. It's very clear that there's a, there's a swing to the left. Elizabeth Warren is, is kind of appears to be the front runner. So I would, I would make this prediction. >>I actually think Trump was gonna win the election. You know, don't hate me for saying that all you Trump haters, but I think whatever happens, maybe, maybe doesn't win the election. Maybe he wins the election and then, and then the subsequent election goes to the Democrats. But I think there's going to be a major swing back to the left. And I think that what that's gonna do, it's gonna open up the checkbooks and put more pressure on debt and I don't think there's a real issue right now of too fast economic growth of inflation. It's obviously something that economists watch, but if interest rates start rising back to the Clinton era levels, that means big trouble for the economy. But I don't see that necessarily happening in 2020 I think 2020 we'll see some moderation. I definitely think we're seeing less tech spending expected for Q four and I think that'll spill into 2020 based on the ETR and enterprise technology research data that we see. >>But I think it's actually a healthy pullback. I kind of agree with guy on that front. I actually think it is good for RPA. I think RPA is one of those sectors that you see in the ETR surveys that is gaining share relative to other tech spending and I think that will continue in any downturn. So I expect softness. However you define downturn, I don't think it's going to be falling off the cliff or a disaster, but I definitely think spending will be more tepid. Second thing he said is RPA will become the YouTube for automations. Think of YouTube as a container. I am not going to spend a lot of time on this one. A YouTube and RPA. I think no one's a consumer, but his, his analogy was around a container for automations, just like YouTube was a container for for video. I think they have aspirations to scale like YouTube, but if you look at RPA is a right now a back office, B2B business function and I think it'll stay that way for a couple of years. >>I'll make some statements on that. Automations will move from snowflake to snowball. What does he mean by that? Well today automations are all unique. Every company, and he made this statement feels like it's automations are a snowflake there. Everyone is different and what he's predicting is that over time these automations will become, there'd be more commonality in those automations. I think that's true. I do think while there are definite business processes that are unique to companies that there are a lot of similarities. Things like the UI path marketplace will allow people to share automations and I think there will be much more commonality. I think it's critical for scale. Number four, he said students entering the workforce will force employers to use automation. He didn't give a timeframe on this, but I'll tell you one thing. At a 2020 I've got three kids in college with two kids in college, one that's recently, recently graduated, who does something. >>Most kids in college have no clue what robotic process automation is, let alone what the acronym RPA stands for. So this is going to take some time. asked a hundred college kids what RPA is and I bet you maybe one or two have heard of it, even know what it is. So that's not happening today. I think that'll take probably another two cycles of graduate's before that really hits. We heard from the college of William and Mary yesterday where Tom Clancy and the college have partnered to really push in RPA into the curriculum and I think that's great. I'm going to talk, Tom Clancy's, a expert in the area of training and education that's going to take some time to bake out. So I would put that again. Guy didn't give a timeframe, but I would, I would say that's, that's five to eight years away. Number five, we'll continue to be surprised by the intelligence of machines and the stupidity of humans. >>Well, what he meant by that was there are some things that humans do that are repetitive, that are mistakes. They make the same mistakes over and over and over again, and machines won't necessarily do that. I do think this, that the gap or the number of things, if you make a list between the number of things that humans can do versus what robots can do with a physical or software robots, that gap is closing. There's no question about it. It's, you know, short few years ago, robots couldn't even climb stairs and now they can and you're, you're seeing things like chatbots improving. There's still, you know, a lot of them are still crap frankly, but, but you're going to see a lot of money go into chatbots. And so I do think that that gap will, will close. And I think it's, it's gonna, it's gonna come down to education and creativity in terms of the impact on job loss. >>And I'll make some comments about that in a moment. The six prediction, there are seven overall, so bear with me here. Automation will be discussed in the United nations con and the context will be jobs, wages and global economics. That's already happened. It's already happening. People are concerned about the impact on productivity and, and so, you know, that's a lock. The last one was consolidation amongst RPA vendors and automation led services will accelerate. I totally agree with this. He mentioned work fusion and amp works as two companies that are gonna. We're going to where we're going to see consolidation. We've already seen it. SAP got bought Contexto so you see in the big whales come into this market in four talks a lot about RPA. Anytime there's a fast growing software segment like RPA and as a leader like UI path, would you other companies all you know on their tail automation anywhere and blue prism automation anywhere in UI path have a ton of dough. >>You're going to see the big software companies say, wait a minute, I need a piece of that pie. Because software companies generally feel like every dime that's spent on software should go to them. That's the mentality of an SAP or an Oracle or even IBM and so either, unquestionably, you're going to see some consolidation. You mentioned service providers as well. Companies like symphony. I've been making a lot of comparisons this week between what I see in the UI path ecosystem and what I saw way back in the early part of this decade in the service now ecosystem. You had a company with Fritz like cloud sharper, which nobody ever heard of. They were a service management ITSMs expert and Accenture eventually snapped them up and came in. You saw DXC or CSC at the time do the same thing. And so I think you'll see the same thing here in this ecosystem. >>This ecosystem here is happening. It's buzzing, but it's got to grow and, and you're already seeing Deloitte and cognizant and E Y and PWC. The big guys could have jump in here. I often say that SIS love to eat at the trough and they know where the money is and the money appears to be in RPA because really there's so many screwed up processes inside companies. RPA is actually can give them a quick ROI. Now let me turn to some of my thoughts on this. Let me talk about the job impact of automation the vendors would have. You believe that it's all good, that people love this and and when they bring in software robots, it makes their lives better because they're doing less money, less money, less of the mundane tasks, and they're able to focus on new, more strategic things to our customer that we've talked to here in the cube. >>And also privately. This is true, people do love your software. Robots. When we were Jean younger yesterday from security benefit. If you Civ most excited she's ever been, you know, having said that, Craig Le Claire's research shows that over the next 10 years we will see a 16% job loss of jobs will disappear, rolls will disappear, and by the way, foresters at the low end of the spectrum of that forecast. Most forecast say 30 40% of jobs are going to get disrupted. I tend to believe that Craig's number is probably a better one at the lower end of that spectrum, but that's still a huge number. You are going to see unquestionably job impact from automation. Absolutely. No question in my mind. I think you're already seeing it now. Look it. Humans have always been replaced by machines, but for the first time in history we're seeing Keith cognitive functions replacing humans and as going to have a big disruptive impact on the workforce. >>And the other piece of this I would predict we are going to see a productivity boost. I think a significant productivity boost. Let me share you some data with the Bureau of labor statistics, which you know, you may look at that, you know in question some of their methodologies, but over the longterm, I think it's a viable metric from 2007 to 2018 productivity grew at 1.3% that's an anemic rate from from 1947 to 2018 productivity grew at 2.1% so Oh seven to 18 half the longterm productivity gain, 2000 to 2007 2.7% and then from, and then what we saw in Q one of 19 3.4% uptick in productivity. Is that sustainable? I think it is. I think we're now entering a, a new phase of productivity growth and I think it's gonna be driven by things like RPA and other automation. So that is going to have an impact back to the earlier statements on job loss. >>Okay. The other thing is I want to talk about the forecast, the market. Last year at UI path two in Miami, I said that I thought that forecast was low. They had like $4 billion by 2020 and I sort of called out Craig LaClaire on that, you know, and so I said this could be 10 billion by 2020 now he clarified that today up on stage. I was including services in, in my prediction, correct. Declares follows this market much more closely than I do. So I'll defer to him on, on on that. But he put in the services number and he showed the services to license ratio of around, you know, three X or so. But he actually had this very serial number about 10 billion by 2020 so I felt, felt good about that. That kind of bat my back of napkin prediction. I used to do this stuff at IDC for a living. >>So you know, actually got a little knack for that on an analog basis. Then he showed sort of his, his forecast for the market, you know, growing at a very linear rate. Now I'll say this, I think hot markets like RPA, they generally don't grow at a, at a, at a linear steady rate. If you look at some of the emerging forecasts that I, you know, for instance, IDC had in my years there, we would always have these linear like smooth growth forecasts. You know, some of those big markets, you know, think, you know, early days of the PC, the, the, the, the internet flash storage, you know, things of that nature. They tend to, these disruptive technologies tend to grow in an curve or an S curve. So what you see is sort of this momentum building where the market is being seeded. Know Gardner has RPA now in the trough of disillusionment. >>So you're seeing some of this, okay, the little engine that could, and then what you see is this steep part of the S curve growing and then after it explodes and hits escape velocity, it's sort of stretches out into maturity. And I think that's what you're going to see with RPA. But some things have to happen before that happens. And one is specifically the RPA has to move from the back office to the front office. It has to move from only really dealing with pretty simple, mundane tasks to more complicated automations. It's got to be able to deal with unstructured data. It's gotta be able to handle on attended or rather attended bots where you're injecting humans into the equation and you're actually using machine learning and artificial intelligence to to learn and then identify other areas of automation and actually have systems of agency that can act. >>In other words, a bot will call another bot that actually can complete a transaction and so you're going to see a lot of money spent here. This is a big chasm. I think that RPA has to cross. We're going to talk to Daniel DNAs about this. He's a big ticker. He's a go big or go home guy, and so I think those things I would predict those things actually are going to happen because you're going to see so much effort and money and emphasis put into AI and for competitive advantage that I actually think that RPA can lead that and then again come back to the consolidation. I think you will see some consolidation. I think you're seeing UI path. Try to take the lead automation anywhere is kind of pressing the lead if you will. Both companies have raised a couple of billion dollars if you combine them and I think the way this market shakes out is any and you're going to have some of the big whales come in like SAP. >>I think the way this happened is you're going to see one or two specialists emerge. I think UI path is on its way there automation anywhere as well and and the number one player is going to make a lot of money. The number two players going to do two. OK the number three player is going to struggle and everybody else is kinda be either break even or they're going to bundle it in like SAP as part of their overall portfolio and compete on that basis. So I would predict that UI path will maintain its lead. I think its got the culture to do that. I think automation anywhere also could company is going to keep pressing that lead and those should are two companies you know that you need to watch me. Interesting to see. Blue prism, I think they are somewhat under capitalized. They went to the public markets. >>The spending data actually shows all three of these companies as well as some of the legacy companies like Pega systems actually gaining could have more share relative to other initiatives. So I think even some of these legacy companies are going to continue to chug along and actually do pretty well in the business. But, but the real darling, you know, I think it's going to be UI path. All the bankers are hovering around earlier on this week trying to get their business. They know there's an IPO coming at some point. Again, we'll ask Daniel Dienes about that today. You have it. That's my intro. Some of my predictions. Some a guy Kirkwood's predictions. Wall-to-wall coverage on the cube today, day two at UI path forward three from Las Vegas. We'll be right back right after this short break.

(upbeat electronic music) >> Announcer: Live from Las Vegas, it's theCUBE, covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. (crowd chattering) >> Hello everybody and welcome to theCUBE's live coverage of ServiceNow. We are here in Las Vegas, Nevada at The Venetian. I'm your host, Rebecca Knight. Co-hosting with Dave Vellante and Jeff Frick. It's great to be here with you-- >> Hey, Rebecca. >> doing the show. >> Busy week. >> Very busy week and we are only-- >> Busy month. (laughs) >> And it's only day one. So we just heard John Donahoe who is the new CEO, he's been CEO for a year, he was at eBay for a decade. He got up on stage and he said, "When I came "to this job I could barely spell IT." But I want to talk to you first, Dave, and say how's John doing, how's the company doing? What's your take on this? >> Well, the company's doing great. It's the fastest growing software company over a billion dollars. It's got consistent growth. 35-40% growth each quarter, year over year. It's growing sequentially, it's throwing off, it's free cash flow is actually growing faster than it's revenue, which is quite impressive. Company's got a 29 billion dollar market cap. Couple years ago ServiceNow, when Frank Slootman was running the company said, we're going to put the stake in the ground and we're going to be a four billion dollar company, I think this company's going to do four billion dollars in its sleep. I think the next milestone is how they get to 10 billion. And beyond that, how they get to 15 billion, how they take their market value from where it is today in the high 20's, low 30's, up to 100 billion. This company wants to be the next great enterprise software company. Basically automating manual tasks you wouldn't think there's that many manual left, but when you think about whether it's scheduling meetings, or scheduling travel or keeping track of medical leave, and all this other stuff that's manual, they want to automate that process. >> Right, exactly, that's what he talked, the tagline this year and really for the brand identity is making more work work better for people. He said that people are at the heart of this brand. Jeff, does this strike you as a new idea? Is this going to work for ServiceNow? >> It's not really a new idea but their kind of changing their shift. It's interesting when we saw Frank Slootman on he was always, the IT guys are my homies, right? He was very specifically focused on going after IT. And Fred's great kind of early intro was, remember the copier room with all the colored pieces of paper. (Rebecca laughs) Vacation requests, new laptop request, etc. How does he make that automated. And more importantly how does he let the people responsible for that be able to code and build a workflow. So I think the vision is consistent, they're obviously expanding beyond just, the IT are my homies, 'cause it's still ultimately workflow. And I think at the end of the day it's competition for how do you work. What screen or what app is on your screen as you go through your day to day workflow. And they're obviously trying to grab more of those processes so that you're doing them inside of ServiceNow versus one of the many other applications that you might be trying to do. >> Just to follow up on that, when Jeff and I first started covering this show it was 2013, less than 5% of ServiceNow's business was outside of the IT department. Today it's about 35% is outside the IT department. So they have their strategy of, they call it, land and expand. Christian Chabot from Tableau I think was the first I heard use that term. These guys are executing on that. Starting with IT and then moving into HR, moving into maybe facilities, moving into marketing, other parts of the organization, customer service management, security, I don't know if they count that as IT, but cohort businesses. So if you look at their financials their up-selling is phenomenal. Huge percentage of their business comes from existing customers. If you look at the anatomy of a typical ServiceNow customer, they might start with a 50 or 75 thousand dollar deal. That quickly jumps to a multi-hundred thousand dollar deal, then up to a multi-million dollar deal. And then up into the high eight figures. So it's really a tremendous story and the reason is, and Jeff you and I have talked about this a lot, is because when Fred Luddy started the company he developed a platform. He took that platform to the venture capital community and they said well what do you do with this? He said you can do anything with it. They said, yeah, get out. So he said all right I'm going to write an app. He worked at Peregrine so he wrote and IT service management app. And when ServiceNow went public, I remember Gartner Group came out and said, eh, it's a tiny little market, help desk is a dying market, flat, billion dollar TAM. Well this company's TAM, it's almost immeasurable. I mean it's, the TAM is literally in the half a trillion dollars in my view. I mean it's enormous. >> It's workflow, right, so again it's just that competition for the screen. And as everyone goes from their specialty and tries to expand, right? Sales force is trying to expand more into marketing. You've got Zendesk and other kinds of help desk platforms that are trying to get into more workflow. What they were smart is they went into IT 'cause IT controls the applications that are in shop. And so to use that as a basis, and IT touches whether it's an HR process where I need to get the person a new laptop. Or it's facilities where I need to open up a new building or etc., IT touches it all. So a really interesting way to try to grab that screen and application space via the IT systems. >> And that's where John Donahoe comes is. As you said Jeff, Frank Slootman, Data Domain, EMC, you know, IT guy. And now John Donahoe, not an IT guy, came from the consumer world, he's trying to take the ServiceNow brand into the C suite. So we have him on a little later, we're going to talk to him about sort of how he's doing that. But this is a company that's transforming, they're constantly transforming. Really trying to become a brand name, the next great enterprise software company. >> I think another thing that really came out in the keynote and also just on the main stage this morning is this idea of change is not just about the technology. In fact, the technology is the easy part. One of the things he kept saying, and he brought up other people and customers and partners to talk about his too, is that it really is a culture shift. And it really is about a different way of leading. It's a different way of bringing in the right kind of talent who are not just these IT guys, let's be honest. >> Right. >> But they are data scientists, they are creative people, they integrate design thinking into the way they do their jobs, with this over-arching goal of how do I make the employee experience better and how do I make the candidate experience better too. Because that's another part of this. It's not just the people who are already working for you. In the period where there is a war for talent-- >> Jeff: Right, right. >> you also have to be thinking about okay, how do the people that we want to get-- >> Jeff: Right. >> What's their experience like when we're trying to attract them. >> So question for you, Rebecca, 'cause you cover this space-- >> Rebecca: I do, yes. >> a lot, right, and you write for MIT and-- >> Rebecca: HBR. >> HBR and the new way to work and the good, I'm trying to remember-- >> Rebecca: It's called Best Practices, yeah. >> book that you did, that interview. So as it is competition for talent, how did it strike you? 'Cause at the end of the day that's really what it's all about. How do you get and retain the best people when there just aren't enough people for all the jobs that are out there. >> It's interesting because I do feel as though, obviously, you want to be able to enjoy your workday and that's what Andrew Wilson at Accenture was talking about, really it's about having fun. And it's about having it be a great experience. At the same time I do think the human part of work is so essential. As we've talked about before, you don't quit jobs you quit bosses. And it really is about who is your manager and who is the person who is leading this change. >> Jeff: Right. And how are they interacting with employees and with you personally. >> But should it be fun, I mean, they're still paying you to show up. (Rebecca laughs) >> And I think sometimes we get confused. Clearly the mundane still takes-- >> Yes. >> a ridiculously too high percentage-- >> Rebecca: True. >> of time to do the routine, where there's this automation opportunity. But the other piece is the purpose piece and they brought up purpose early on in the keynote, right? >> Rebecca: Yes. >> People want to work for purpose driven organizations and the millennial workers have said they want to be involved in that. It's not just about shareholders and stakeholders and customers. So there is a bigger calling that they need to deliver on to attract and maintain the best people. >> A couple words about the show. So we do a lot of shows. This is a legit 18,000 person show, we're at the Sands Convention Center. It's crowded, the line at the Starbucks coffee the morning-- >> Rebecca: (laughs) Around the block. >> was about 60 to 65 deep, I mean that's a lot of people waiting for coffee. The other thing I want to stress is the ecosystem. When Jeff and I first started this show the ecosystem was very thin, Jeff, as you recall, and that's one of the things we said is watch the ecosystem as an indicator of progress. Well the ecosystem's exploding. You've seen acquisitions where companies like CXC and Accenture have got into the business big time. You see E&Y, Deloitte coming in as big partners now of ServiceNow and as we've often joked, the system integrators like to eat at the trough. So there's a lot of business going on in this ecosystem. >> Right, and that was part of the keynote too. The software's the easy part. It's are you investing in the change management for your people, are you investing in best practices. And if you're not then you're probably wasting some of your money. >> Great. Well it's going to be a great show, this is just segment one, we've got a lot of great guests so I'm excited to get going with both of you. >> Jeff: All right. >> Dave: All-righty. >> I'm Rebecca Knight for Dave Allante and Jeff Frick, we will have more from ServiceNow Knowledge18 coming up just after this. (electronic music)

>> Announcer: Live from Las Vegas, it's theCUBE. Covering ServiceNow Knowledge 2018, brought to you by ServiceNow. >> Welcome back to theCUBE live coverage of ServiceNow. We are here at the Venetian in Las Vegas. I'm your host, Rebecca Knight, along with my cohost, Dave Vellante. We're joined by Dave Schneider. He is the Chief Revenue Officer of ServiceNow. Thanks so much for coming on theCUBE. >> Oh, it's my pleasure. >> You're a CUBE veteran, so- >> It's good to be back. >> Not your first rodeo. No, it's really fun to be with you. >> So, I want to talk with you a little bit about the growth of the company, which has been really astonishing. Why has it grown so stupendously? What makes ServiceNow so special in your mind? >> I think the key to any great company is having really strong focus on the client, and the whole notion that the client's at the center of our universe. We build technology and service the people, and we act as one in service of our customers, because we know that in turn, our customers are serving their employees, their partners, and their ecosystems. So, just having that unified view as our true north is really empowered the growth. Great technology helps. Being in the Cloud really helps, but then also linking it back to who we are as an organization, what our purpose is, and what we're all about as a culture and a team. >> So, John Donahoe said, "Customer success is an important priority for us." So, I wonder, how do you define customer success? What are the metrics that you use to measure? >> There are a couple, and I think there's various phases of this. For one, are customers getting the value that they were hoping to achieve from the project, and more importantly, are they establishing that value clearly and in the front of that project, in the first place? Because some people just want to buy new technology for technology's sake, but that's not good enough. They need to really have a business value in mind, and we should be helping them to think about that, and then measuring that along the journey. Because if we achieve it, then they have more ammunition to go fight the next battle, the new automation to solve another problem. >> So, having said that, every customer's different. I mean, I'm sure there are patterns. So, how do you guys discern what matters to the customer? Do you have a process to do that? What is that process? And how much is the go-to-market team involved in that through the life cycle? >> It starts in the selling motion, it starts in the pre-sales motion, trying to understand the priorities of the executive team and the issues that are facing the customer. As we understand that, we're doing what they call a value assessment, and we share that back and forth with the client to make sure that we're onto the important issues that need to be solved. And then as the deal is structured and happening, and then they are going live, either with our PS people or our partners, which are such an incredible resource to our clients. We're then measuring the outcomes. Now, the measuring the outcomes part is a newer part of our motion, and you can see in our Customer Success Center, which was new as well, a value calculator, so customers are actually able to understand what the potential value is for a product with ServiceNow on different aspects of their business. >> I want to actually talk to you a little bit more about the Customer Success Center. It is new, newly launched. What was the impetus for launching it and then how is it being used? >> One of the things our customers had asked us for over the years is give us best practice. Be more prescriptive. You heard John talk about that on stage today. Tell us what other great customers, how do you recommend that we implement ServiceNow along the following domains? So, what we did is we picked 10 to 15 of the highest kind of gain items and focused on those first, being as prescriptive as possible. What's coming next is these little micro-focused burst ideas, so little things around what's good form design or other ideas great customers have done. But we'll be continuously publishing to that Customer Success Center, and then our community is now answering over 5,000 questions a week on what best practice is. >> They're crowd-sourcing these ideas. >> They are. >> Wow. >> And that's one of the secrets to this event to ServiceNow as a community is that the customers are helping other customers on their journey. >> Dave, organizationally, Customer Success management, professional services, training, and a partner ecosystem are all under sales. Talk about that a little bit. What precipitated that and how is that going? >> So, I actually reverse it. Customer Success is the overarching goal of the company. We happen to put sales, pre-sales, PS, Customer Success team, the technical training advisory piece, all within this group, knowing that it's about the journey. So, we didn't want to just focus on the selling motion. We want it to be inclusive of all aspects of what we think a great customer is going to expect of ServiceNow. So that's how we structure it. >> And how's that going? >> I think it's going pretty well. We're learning some motions on this, but I think the customers who are in that high-touch pilot that we have going on right now are experiencing some really good results from additional resources we're putting on it. They're appreciative of the fact that we have been very prescriptive in certain areas, and then we're organizing ourselves to be more unified to the client. I will say on the training and development front, the investments we're making around curriculum-designed, the mechanisms of getting that material out there, the better and more complete training that we have for our partner community is also yielding really great results. >> Frank Sleuben used to talk about IT are our peeps. >> They are. >> But still, the majority of your business from IT, much, much larger proportion outside of IT, but still a core chunk of the business's IT. You guys talk about digital transformation. My question is who's leading the digital transformation within your customer base? >> It's interesting, a lot of times we do have a group of IT professionals that are leaning in and leading the digital transformation, but they're usually partnered with someone else on the line of business, somebody who's got a goal, a desire to changes something, they're leaning in with that. One of the best examples is the Human Resources element around, they're being asked to change the digital experience for employees, to make the place a better place to work, more inclusive and belonging place to work. And they're using technology to help bridge that gap and get efficiency, so HR's been a real strong suit, and then we're seeing customer service re-imagining how they're going to reach out to customers with a service discipline. So this isn't just inside the company, but it's about how service disciplines can help with customer-partner relationships as well. >> Such a huge part of digital is getting digital right, whatever that means, and a lot of that involves, obviously, strategy at the board level, the C-Suite. When we first started doing this show, you didn't see a Deloy, E&Y, etc, certainly not as prominent as they are now. Those companies get heavily involved in that kind of digital transformation work. Where do you guys fit, how do you guys partner at that strategy level, and then where does ServiceNow come in as a platform? >> It's a great question, and I do think that what's happening here is that our customers, some of the early customers, really were just looking for new technologies to replace legacy technologies. The best of the best were taking that opportunity of transforming processes, either on their own or with partner communities, some of which are now here as larger sponsors and partners of ServiceNow. And now what we're seeing is this next generation of customer and/or our legacy customers, people who've been on the platform for a while, are recognizing that to get true value they've got to think about process. So, the bigger the SI, the ones who have process experience are going in with those customers really thinking about the art of the possible. You've heard Extensor talk about a human centric design, the human first with the heart centric design, making sure they're focused on the people and the process, rather than just the technology, and we're seeing that time and time again. >> I want to talk a little bit about not just the digital transformation, but the cultural transformation, and that has been a real talking point here at the conference so far. I want to hear how you, as the Chief Revenue Officer, are thinking about culture, the culture of ServiceNow, and making sure that culture is really pushed down throughout the organization. How do you do it? What are your best practices as a manager? >> Every day you have an opportunity to lead from the front and model the behaviors that you're expecting others to have, and I think one of the things that we're really proud of at ServiceNow is that we not just say that we're customer-focused, but we have evidence of really spending our time as an executive team, focused on the issues and directly with customers, making sure they're being heard and listened to actively. The other thing, inside the company, we have a tendency to describe ourselves as hungry and humble, that we want to keep achieving and keep pushing ourselves to the art of the possible, but we don't have a big ego about it, and I think when you see companies that are truly listening, the ego is pushed down and they're really focused on the outcome of the customer. And then that makes us feel good, and that's what's driving us forward. There are way too many companies with big egos that forget about the customer, and I think that's the beginning of the end for them. >> The fiefdoms, the egos, the the outdated policies and procedures, how do you kind of get rid of those, not just at ServiceNow, but at your customers that you're working with so closely? This is, again, we're practicing what we call the East-West motion at ServiceNow, between the leadership team, so myself and CJ Desai, or Mike Scarpelli, we have problems we're facing every day as we've grown the business. I've been with the company now almost seven plus years. The processes we had a year ago aren't sufficient to meet the needs of where we need to go tomorrow. So we have constant conversations at our levels about where we can use automation, where we can change process, or where we can use our own technology. As we do that, we're practicing that good East-West motion as executive team, and that's being modeled down beneath us in our people. The other thing I'll say is we often find ourselves listening like we're wrong, and I think that's important as a good leader or a good business person is that if you spend the time to understand the other person's perspective as an active listener, and understand their view, don't be so fixated that you're right all the time, and that allows us to really come together and solve tough problems. >> One of the key measures of success is renewal rates, and you guys are off the charts. I oftentimes get into Twitter debates. We were talking about Twitter and LinkedIn before, trying to help people understand the Mike Scarpelli math of how you count renewal rates, it's a dollar-based renewal rate, which is the only way to count for growing SaaS company, folk. You can't count units, do the math, it doesn't work. Check out the 10K and you can get the exact math, but astoundingly high renewal rates, increasing average contract values, to those numbers, it plays out in the financials. I know that's an outcome of the work that you're doing, but it underscores the success that you're having. >> When you start off and deliver great technology to solve a problem, and then you've got passionate customers, the things we have historically and continued replacing aren't things that change very often inside the enterprise, so it's very important to get it right on the way in, and then as you do that, customers do start to think of you as a 10 to 20-year relationship. And we should trust and treat each other as a 10 to 20-year relationship versus a transactional relationship. I think you're seeing that in our renewal rates, you're seeing that in our growth, you're seeing that in the traction of this event, and then that's really what's driving us forward. But as a sales professional, someone who has to go out there working with customers, the worst thing for a sales person is to have a non-renewal, because it's not just the loss of dollars, it's the loss of reputation. We take that really seriously as an organization. >> Well, Dave, thanks so much for coming on theCUBE. It's always a pleasure to have you here. >> Thank you for having me. It's great to see you guys. >> Great to see you, Dave. >> All right, bye-bye. >> I'm Rebecca Knight for Dave Vellante. We will have more from ServiceNow just after this. (techy music)

>> Voiceover: Live from Orlando Florida it's TheCUBE covering SAPPHIRE NOW. Headlines sponsored by SAP-100 cloud the leader in platform as a service with support from Consulate the cloud internet company. Now here are your hosts John Furrier and Peter Mars. >> Peter: Okay, welcome back everyone. We are here live in Orlando Florida for SAP SAPPHIRE NOW SiliconANGLE Medias flexure program TheCUBE where we go out to events and extract the signal for the noise. I'm John Furrier the host and my co-host Peter Burris head of research in SiliconANGLE Media general manager of Wikibon Research. Want to give a shout-out to our sponsors without them we would not be here SAP100 Cloud platform, Consul Inc, Capgemini, EMC thanks for your support and we got 4 over 40 videos go to siliconANGLE at youtube.com/siliconangle for all the videos. Our next guest is Bronwyn Hastings who is the senior vice-president of Global Strategic Service Partners global channels all the top in integrations. Welcome to TheCUBE. >> Bronwyn: Thank you, thanks for having me here today. >> So it's great to have the boss come on we've had a lot of the folks from your group come in certainly a lot of your partners. We've had Capgemini, we've had Accenture, we've had a bunch of folks come through EY, I think Deloitte and anyway Infosys came on too Deloitte was really the only one and PwC were the only ones I didn't see here. Now we'll get to them later but the message is clear. They have to focus on innovation. >> Bronwyn: Yes. >> Otherwise they are going to get put out of business 'cause right behind them warming up in the sidelines in the ecosystem is their replacement potentially. This is an interesting dynamic you got going on here you growing your future in the ecosystem putting the system integrators I wouldn't say on notice but like hey get busy. Great system model being and they are responding what's your thoughts on some of the feedback you've heard? >> Thank you. This is a really interesting question because I think there are two things happening one is that customers are asking for the innovation and asking us and the partners what's the way forward? They are hearing all this talk about digital they want to know how did this become more relevant to their customers in a quick and more dynamic way. And they are asking both of us that question. The first thing that we do with our partners in this instance is we look at where are the innovation areas one that make them different? How do they get chosen to actually add value to their customers? And these partnerships that you've mentioned actually do it in different ways some of them represent themselves or talk to the customer through business transformations so they talk about what are you trying to achieve? Where is your future? You know the normal business conversation to find out how that innovation can happen and what do they need to be relevant to the customer? The other partners have a look at it and say how do I be part of this world that's changing but then bring quick value to the customer? How do I accelerate that value in quicker chance? And therefore the customer gets what they need in quicker time frames and then others say I'm going to look at this innovation and what's going to really set me apart as a specialist and that's where I'm going to go. So these partners right now are looking at where is their place in this and how do they transform themselves to actually bring value to the customer. And luckily for us we have a lot of those innovation areas that they can make those choices so they can choose >> John: They pick their swim lanes? >> Bronwyn: Swim lanes, focus areas. >> Differentiation. >> Differentiation all of that to be part of the new conversation as well. >> Peter: But what are the duties of the platform strategy that you guys are putting forward? And the ease with which using things like the Apple partnership that you have of creating new great software is you've a lot of this partners buy competition and buying these different alternatives are going to be forced to really focus on the value and their distinction that they need to provide to customers. It's going to be very interesting over the next few years to see these companies that have historically for you know long-term lock-in like relationships have to themselves become real nimble and become really catalyst to thought leaders for renovation of the marketplace because so much of the enabling technology is going to make it more or easier and more likely of bringing success. Do you agree with that? >> I find your comments very interesting actually so where I agree totally is that but I'd a piece. We look at it as though people have competition here actually a number of these companies already have practices or developments or innovations using some of the technology components. We announced Apple, there is a Microsoft announcement all of these areas that you would not normally see all of a sudden we've made these announcements and now that we're with these partners same partners that we've worked with for a long time come to us and say well actually we've got an area that develops an iOS for Apple already because our customers needed us to do that. Then we come to another area and they say but you brought out a new user experience through Fiori so we've got those development tools. And now if you bring out something like your 100 Cloud platform which allows us to build extensibility and these three things together start to actually build even stronger innovation so it's actually had a magnifying effect >> John: Exactly. >> Even for us you know we. >> John: Because you've already had those practices that were not being tapped into so to speak. >> Bronwyn: Not tapped into not brought in and integrated in the same way. But now because we're doing co-development we are doing co-innovation or integration processes actually it strengthens their capability to use the innovation and make it something even more. For me you can hear my passion in this one >> John: I guess. >> For me the excitement in this is that people really now see ways of innovating further and customers see that as valuable because they're getting what they want out of these innovations as well. >> John: Well that you mentioned the co-innovation I want to talk about that. That seems to be an SAP playbook even going back to the seven years that you started covering SAPPHIRE there has always been geeky developer focus which is a good thing we like that. But now simplicity is the theme once you have results but co-development's been a big part of it we were talking with EY for instance and they have a co-development on a lab being put down in I think Atlanta area. They have Accenture's got a zillion data scientists so you start to see this they are romping up they are not just about delivery any more. >> Bronwyn: No. No. >> The old way was delivery back in the contract. >> Yeah. >> Where is the value in your mind for these partners? Is it the co-innovation? Is it the data science? All the above? Is there one thing that pops out at you that you see rising to the top in the terms of trending? >> I would say there are two or three things well to one is we've got a large install base and all of the move that we've got to the newer generations are the S4100 environments. These partners actually have strengths of their own which they have been known for. E&Y has their strength that they're known for in the market with or without us they have got a strength. What these things are allowing them to do is to take some of that shift into the newer technologies and their strength and then build extensible innovation. And what I mean by that is they can say okay I'm strong in finance so I'm going to choose a finance topic on the 100 club platform environment and I'm going to build my differentiation on that. >> John: Their domain expertise map right into it >> Their demand expertise right into it squarely into it really create a compelling thing for them creates the value for the customer and it really establishes this innovation so that would be one point. You come back to the data scientists then you take it a step further you've got your differentiation. Now where else can you excel in? Where else can you bring the things that would make fun ends completely different? Like the digital boardroom that you're seeing that is being created while it's through predictable analytics it's through data scientists type of things so they add in these other services now that still play to some of their core strengths. I'm finding that it's actually creating the next platform for their own differentiation and value and it can incorporate these insights into it. >> John: Yes as you're saying it brings the swim lanes concept the differentiation so I got to thaw up on that and because Peter brought the question earlier today about when you brought up the question around partners working together. >> Peter: Yeah. >> So this comes back down to a lot of (mumbles) >> Peter: By the way for anybody who is wondering thunder and rain opportunity is raining everywhere. >> John: The cloud is raining opportunities the thunder the clouds are moving over us it's an (mumbles) >> Peter: The cloud is here >> (mumbles) Okay so back to this point. I differentiate it here once it has been the greatest has been the greater but also on these bigger projects you might have to work with the other guy. >> Bronwyn: That's correct. >> So how is that playing out 'cause they have to share obviously data might be shared but how is that playing out for them where do you see that trend going obviously probably more of that not less of it. >> Bronwyn: Yeah so what I'm finding is people are also choosing the type of work they want to do and then leveraging the ecosystem for the other types of work they want to do so people rather say you know I choose to do transformational type of things but if I am taking the lead on something I'm going to be able to partner with other partners in this ecosystem that complement me. I actually think it is complementing or if there is a specialist area they can bring someone else in so I actually think the complementary nature of things are getting stronger in some areas. Of course they still stand alone business that they do as well. Second thing I'd say is and I'll add this in because it's not only about the partnerships it's about how do we work with the partnerships and you would have heard some of our announcements around SAP S4 value assurance programs. And what that means is the customers are saying we want skin in the game from SAP too the partners are saying actually this is valuable to us too that you've got your stamp of approval on what's going on so we've created these service offerings that are module arised that partners can include and it's anything from just check my scope is right or the journey that we're going on and our transformation the mapping is correct through to more custom services and then it also including that in their offering as complementary so that customers feel comfortable with where they're going as well so that's all coming together as well. >> Peter: I want to clear out something around here because we are research's very strong sponsors we talk about the three Cs of digital transformation. Context. What are you going to do? >> Bronwyn: Yep. >> Community, who are you going to do it with? >> Bronwyn: With. Yep. >> Capabilities. How are you going to get the capabilities so that you do what you are going to do with who you are going to do it with better than everybody else every time? Does that resonate? >> Bronwyn: Absolutely! Absolutely! For me it's a content context all of those sorts of things. The customers are asking and you would have heard it around here. I want to be here how do I get there what's the time frame and who's capable of doing it actually? The partner community is really well enabled but they also know that this is a journey of new technology areas, shifts in the market. >> Peter: New processes. >> New processes so trying to simplify digital processes to really get the true value of digital so they want people to say we are in. And these are the ways that these things happen and you can solidify it together as well. >> John: And the keywords are that they are enabled. >> Enabled. >> That's there because the platform has to be enabling. >> Enabling. >> Otherwise it doesn't work. And then the tools and the tooling has to kind of got to be there. Is there a process out there and this is what we talked about Peter brought this up yesterday it was a really great observation. In old days look backwards known processes unknown technologies and then they evolve and you automate those processes you have known and now you have unknown processes developing with known technology. >> Yes. >> What are some of those new unknowns is IoT a good example? Or if you ask what other process is there? >> Peter: (mumbles) just unlimited things that we could be doing. >> Things that are like not fully like known that's going to happen but like you can't say that (mumbles) is a clear process for every customer it might be different. >> Bronwyn: I actually think the way that I would answer that and sort of look at that topic is as the transformation to digital is happening I'm almost seeing that all the customers are testing the processes. It's not like everything's a stable process any more they are saying what processes 'cause if you just replicate what was there before you're not getting any gain. You could have the most beautiful fore intent and all these processes remain the same and nothing's actually changed except the user experience. Or you can change all the processes but the user experience doesn't change so these two things are coming together and the process has to be re-looked at. >> Peter: But the customer is becoming part of that process story. >> Process. Absolutely. >> And that's the thing that's most unknown. >> Absolutely. >> And so how customers go about catalyzing those processes through those beautiful user experiences is really what we want to do when we think about engaging customers in a security way. >> Correct. And that's the way really the services piece comes back into play. It's really testing what do you still need or can we make this a much more streamlined simpler process that gives you all the benefits the cost benefits, the user experience which one of those do we want to do? I can say this is where the services that the partners really bring knowledge experience as well into the same equation. >> John: Bronwyn Hastings SVP at Global Services and the third part is final point I'll give you the final word on our wrap up here day three of SAPPHIRE. Take a minute to explain to the folks out there what's going on for SAP with respect to all these system integrators what's your plans, what's the focus, what's the dynamics. >> I think the three areas that we focus on within is digital transformation and the ability for us to bring digital to the customer. Why I take that approach first is this is a transformation time that the market's changing and the customers need that guidance into that process so one is digital transformation. And depending on all of that is that we are asking for the innovation that we've spoken a lot about here is innovating to the future not creating what's gone by not replicating but innovating the new digital world with us and part of that is simplification for the customers. Our work with the system integrators right now is focus on the customer, bring value and it's innovate together that's what we do. >> John: Well, thanks so much for your time and welcome to being a CUBE alumni. >> Thank you. >> Here on SiliconANGLE Media as a CUBE. We are live in Atlanta for day three three days of wall to wall coverage. Thanks for watching that you are watching theCUBE.