[Music] [Music] okay we're back after that nice break here from knowledge we're here in Las Vegas at the Aria hotel this is service now's big customer conference about 4,000 folks here mostly customers most of the content at this event comes from customers its practitioners talking to practitioners which is quite rare actually at these conferences I'm Dave Volante everybody thanks for watching with wiki Bond org I'm here with my co-host Jeff Frick this is Silicon angles the cube we go to these events we extract the signal from the noise we love to bring you tech athletes and Fred ludie is here he is a tech athlete he's the founder of ServiceNow he started this platform around 2003 Fred welcome to the cube thank you very much so we really want to hear the story you know but we've been asked to sort of hold that off because we got another segment with you tomorrow but I just I have to ask you I mean seeing how this conference and ServiceNow as an organization has grown you just must be so thrilled in particular with the customer enthusiasm <Fred>  you know fundamentally I've got a personality flaw and I call it a kindergarten mentality I want to see my art on their refrigerator and the only way you can do that is by making somebody happy and so to see these people here with the excitement the enthusiasm and the smiles on their faces really is satisfying that kindergarten mentality cakes oh good stuff we were talking about that earlier Jeff had not seen the cakes before and was was quite amazed today no I think that's an industry-first actually good well be yeah announcements today you know that's if so you guys had some you're gonna transform an organization you got to have mobile I mean the whole world to go on mobile five billion devices and and growing what you guys announced today <Fred> well we announced the ability to run all of our applications on the iPad and you know I think people's reasonable expectations these days are that they should be able to manage anything anywhere anytime using the device that they currently have now I I like to think of an iPad as something that you use when you're pretending to be attending a meeting or when you're pretending to be watching TV with your family and when you are pretending to do that it'd be nice if very efficiently and very effectively you could manage whatever you needed to manage to get your job done and so today what we've announced is the ability to run everything that ServiceNow has on that iPad  <Dave> yeah I mean it seems to mobile is basically a fundamental delivery model and maybe even the main delivery model going forward wouldn't it be I <Fred> I think it will be a main delivery model and it's a it's a user interface that that requires complete rethinking about how you're going to do things you know for the longest time we we looked at screens with 24 by 80s you know these character screens and then we got big pixel monitors and then we got bigger pixeled monitors and we got very accurate Mouse's and everything got small and got hovers you've got you know this massive amount of data and now the form factor is completely shrunk and you're looking at this as my major input device so how am I going to get you know everything I used to do with a mouse where I'm hovering over things to see what they do or I'm touching you know 16 by 16 pixels which you by the way you can't hit with your fingernail how am I going to get all of that stuff how am I gonna be able to work with all that stuff using only my thumb or thumbs so how are you specifically taking advantage of that smaller form factor and you know the feature sets that you see in things like iPad <Fred> well I think it's a matter of rethinking so we're trying to get the user to be to be able to accomplish their task by doing considerably less work and one of the things that our system is actually very comprehensive it's very big and we create in the browser and our first user interface it was really created in 2005 we treat all the elements of the system equally so now what we've done in the in the mobile which I think is very unique it does MySpace I mean Facebook doesn't have this Lincoln doesn't have this we know exactly what you do as a user and we remember those things that you do edit of Li and so we're able to create shortcuts or we're able to remember the system is able to remember what you do and then very quickly present you back with those tasks which are repetitive so we're trying to simultaneously compress the information and reduce the interactions yeah so that doesn't sound trivial it sounds like there's some secret sauce behind that talk about that a little bit <Fred> well it's not trivial and it's a there there is secret sauce but it does it just requires you to rethink and for me you know if you if you read the jobs biography there were a couple of interesting things in their number one when he met dr. land they had both agreed that everything that had been invented was going to be invented had already been invented right the other thing that they that they pretty much agreed on are what job said and a quote that I've used for years is that great artists copy good artists copy and great artists steal and I've been a thief all my life I just I'm gonna admit it right here it's not on camera live and so what we do is we go ahead and take a look at who's doing this great Amazon is doing it great Zappos is doing it great asan is doing it great you know we and we capture those ideas and then what they meant by great artists steal is that you take them and you reformulate them for the task that you're trying to solve for the problem that you're trying to solve and the rich the artist won't they probably the original artist probably won't even recognize that as their work but yet they're they're deeply inspirational to us an artist so do you fancy yourself as a bit of  <Fred> well I think it's interesting  down down the road and you know to I was watching the Bellagio fountains create something like that if you think about the physics and the art that had to go into that to create that beautiful masterpiece you know it's not just a painting right think about the physics that goes on to shoot something seven its water seven hundred feet in the air and then cut it off instantly and have that all choreographed I mean it's phenomenal amount of engineering but it took also a phenomenal amount of art just to make that interesting so that we were we actually stood there in rapt amazement of you know look how all this is choreographed so yes I do in fact I don't think I take exception to the term engineering software engineering I don't think we haven't progressed to the point where this is an engineering this is this is an art this is a craft you know it's something that people practice and we try to get better at it and better at it and better at it but I don't think it's anywhere near an engineering discipline <Jeff> yeah the other interesting from the jobs book that I never really got until I read the book was like the iPod shuffle because when I first saw the iPod shuffle and you can't do anything you can't manage your playlists on it you all you can do is change songs I don't get it and then in reading the book as you just said you know what is what is it you're trying to accomplish with that form factor right and don't just automatically try to replicate what you can do a one form factor to another form factor but really rethink what's that application and it sounds like you're kind of taking advantage of that opportunity as you take the app to the mobile space into the iPad specifically to rethink what is the best use case for that platform you'll see tomorrow the iPad was really  <Fred> that's right and as as the inspirational first step that we're taking toward a totally mobile app and just like the Apple evolution of building all of this note wonderful new capabilities into iOS and then bringing them back into OS X we're going to be doing the same thing so you'll see tomorrow on stage not only in an iPad app but you will see a native iOS app running and you'll see that it does even more things than the iPad app does and much faster it's a wonderful user experience and those those notions will be also coming back into the browser etc the same way that apples been bringing a lot of the capabilities of iOS back onto OS X <Dave> I was talking to an IT practitioner last month at a large grocer and I asked him what's your what's your biggest challenge what excites you the most and he said the same thing he said both of X what's my biggest challenge is embracing all this pressure from my users for mobile and that's what excites me the most because I have a mobile addict I got in it pulls out all those devices so how do you see this announcement within your user base changing you know the lives of IT  prose.    <Fred> well it'll you know technology since the dawn of time has been used really for two things it's been it's been used to streamline make make tasks more efficient and more streamlined and it's been used to create business differentiators and so our our product really is about process and moving process through an organization and so we want to streamline that as much as possible so if I can we do things like change management change management has multiple levels of approval if I can get it to the point where a manager can pull his phone out of his pocket and do five approvals between meetings he's become significantly more efficient right the changes are going to be done in a more timely fashion and the bottom line improves it's as simple as that <Dave> yeah it's interesting we were those of you watching no we were earlier the today broadcasting from sa P sapphire event and if you go to sapphire are you here to to get huge doses of two things one is Hana of course which is there in memory database but the other is mobile he's all you hear and it's interesting to hear you guys talk about the ERP of IT and your si PE they know the poster child for ERP and all their customers are going to mobile whether it's retail manufacturing you know across the supply chain and so it sounds like you've got sort of similar mentality but more focused obviously with it within IT but of course now you're also reaching beyond IT do you see you're a mobile app a push going beyond the IT community <Fred> yeah absolutely you know our underlying all of our applications we have a platform that say it's a forms based workflow platform that's really purpose-built for something that we would characterize as a service service relationship management so pretty much any request response fulfillment type workflow can be handled by our platform and what our customers have done over the years is create different applications that help them streamline that workflow typically that workflow is handled by by people creating a spreadsheet emailing it to somebody else having a TA back perhaps they built a Lotus Notes app but yes everything that that that or I will say that our platform usage has been expanded by our customers sometimes beyond our wildest dreams and and we love it so you talked about you know some of the greatest artists we stole rights of and so now you guys put up this platform I've said a number of times today it's not trivial to it to actually get a CMDB working in the way that you wanted to get it to work so now you've had this platform out for quite some time your successes started to you know you get a lot of press people are starting to see it do you worry sometimes that people gonna say okay I can do that too I'm gonna I'm gonna you know rip it off what gives you confidence that you can stay ahead of those those thieves out there <Fred> well I have great confidence in that you know we have a very broad base of applications that are very deep in functionality but if that's really something that you want to happen yeah because you want some young people with fresh new ideas to try to unseat you because they will come at the come at this from a completely different perspective and a completely different angle and they will do things that you never thought of and so the race is then on are they going to become more relevant than me or am I going to be inspired by their ideas incorporate them into our platform and stay ahead of them see welcome that all right absolutely welcome back yeah we we wouldn't be where we are today if Edison and Bell weren't weren't the jobs and gates of their time I mean they had just and I think jobs and gates as well right they had this great rivalry that really caused technology to move ahead a lot faster than when it was just I be am selling mainframes and so you need those rivalries you need that you need that competition you know I'm I'm watching these young guys from asana it's a great little platform for for tasking and you know they came out of Facebook they have a very Facebook mentality and they have phenomenal ideas and believe me guys from asana I'm watching you those are just that's where great ideas come from >> <Dave> Wow we always like to say we love sports analogies here in the cube and Jeff your kids are into sports well as our mind you always want to see and play that more competitive you know environment it sounds like Fred you have the same philosophy yes very much so yeah excellent all right Fred well listen we really appreciate you coming by now you come back Fred's gonna be back again tomorrow we're gonna go through the story of service now that's why we really didn't touch up on it and in any kind of detail today but to it but but but Fred actually started the company we give him a little preview Fred so you started the company really not to go solve an IT service management problem right you came up with this sort of idea this platform and and then you you that was really the first application that you developed right up a step in for that oh great you see give us a little tidbit we're gonna back >> every day I wake up that's all I really >><Fred> I've been a programmer now for 40 years want to do why do I program because I want somebody to take a look at the technology that I build and say hey that's pretty helpful I like that I can use they're gonna put that in my fridge fridge so the real strategy behind the company was to build some software that somebody wanted that hopefully they would pay me so I could build more software that was the entire strategy and so you know on one hand I love technology and on the other hand it really irritates me when it makes me feel stupid or it makes other people feel stupid so what I wanted to do was to create an enterprise platform that people could use and they would feel empowered they could walk up and use it like they'd walk up and use an ATM like they'd walk up and buy something from Amazon etc so a completely you know consumer eyes thought process and then that was the thought process really in O 3 and no 4 and then what we do really figured out was that a platform is a very hard sale you know it's tough to convince somebody that they should take this it'd be like selling you an Intel processor and telling you can do anything you want right I want to solve a business problem and so we decided to go after the ITSM space first it was a space that was very underserved very lucrative and and growing significantly <Dave> amazing so so join us tomorrow we're gonna Fred back on and we're going to here this story the founding story of ServiceNow and how we got to where we are today so Fred thanks very much for coming on and sharing the news and I'm gonna change it all by tomorrow good all right so so keep it right there I will be up next we've got Douglas Leone coming on which is a partner at Sequoia Capital and and and one of the better-known DC's out in the valley so so keep it right there will be back with Doug just in a minute this is ServiceNow this is the cube this is knowledge right back

>>from around the globe. It's the Cube presenting Cuban cloud brought >>to you by silicon angle. Okay, we're back. Here. Live Cuban Cloud. And this is Dave. Want with my co host, John Ferrier Were all remote. We're getting into the analyst power half hour. Really pleased to have Maribel Lopez here. She's the principal and founder of Lopez Research and Zias Caraballo, who is the principal and founder of ZK research. Guys, great to see you. Let's get into it. How you doing? >>Great. How you been? Good, >>thanks. Really good. John's hanging in there quarantining and, uh, all healthy, So I hope you guys are too. Hey, Mary, But let's start with you. You know, here we are on 2021 you know, just exited one of the strangest years, if not the strangest year of our lives. But looking back in the past decade of cloud and we're looking forward. How do you see that? Where do we come from? Where we at and where we going >>When we obviously started with the whole let's build a public cloud and everything was about public cloud. Uh, then we went thio the notion of private cloud than we had hybrid cloud and multi cloud. So we've done a lot of different clouds right now. And I think where we are today is that there's a healthy recognition on the cloud computing providers that you need to give it to the customers the way they want it, not the way you've decided to build it. So how do you meet them where they are so that they can have a cloud like experience wherever they want their data to be? >>Yes and yes, you've, you know, observed, This is well, in the early days of cloud, you heard a lot of rhetoric. It was private cloud And and then now we're, you know, hearing a lot of multi cloud and so forth. But initially, a lot of the traditional vendors kind of pooh poohed it. They called us analysts. We said we were all cloud crazy, but they seem to have got their religion. >>Well, everything. Everyone's got a definition of cloud, but I actually think we are right in the midst of another transformation of clouds Miracle talked about. We went from, you know, private clouds, which is really hosting the public cloud to multi cloud hybrid cloud. And if you look at the last post that put on Silicon Angle, which was talking about five acquisition of Volterra, I actually think we're in the midst of the transition to what's called distributed Club, where if you look at modernized cloud apps today, they're actually made up of services from different clouds on also distributed edge locations. And that's gonna have a pretty profound impact on the way we build out, because those distributed edges be a telco edge, cellular vagina. Th whatever the services that lived there are much more ephemeral in nature, right? So the way we secure the way we connect changes quite a bit. But I think that the great thing about Cloud is we've seen several several evolutionary changes. So what the definition is and we're going through that now, which is which is pretty cool to think about, right? It's not a static thing. Um, it's, uh, you know, it's a it's an ongoing transition. But I think, uh, you know, we're moving into this distributed Cloudera, which to me is a lot more complex than what we're dealing with in the Palace. >>I'm actually pretty excited about that because I think that this move toe edge and the distribution that you've talked about, it's like we now have processing everywhere. We've got it on devices, we've got it in, cars were moving, the data centers closer and closer to where the action's happening. And I think that's gonna be a huge trend for 2021. Is that distributed that you were talking about a lot of edge discussion? You >>know what? The >>reason we're doing This, too, is we want. It's not just we're moving the data closer to the user, right? And some. If you think you brought up the autonomous vehicle right in the car being an edge, you think of the data that generates right? There's some things such as the decision to stop or not right that should be done in car. I don't wanna transport that data all the way back to Google him back to decide whether I want to stop. You could also use the same data determine whether drivers driving safely for insurance purposes, right? So the same data give me located at the edge or in a centralized cloud for different purposes, and I think that's what you know, kind of cool about this is we're being able to use our data and much different ways. Now. >>You know, it's interesting is it's so complex. It's mind blowing because this is distributed computing. Everyone kind of agrees this is where it is. But if you think about the complexity and I want to get your guys reaction to this because you know some of the like side fringe trend discussions are data sovereignty, misinformation as a vulnerability. Okay, you get the chips now you got gravitas on with Amazon in front. Apple's got their own chips. Intel is gonna do a whole new direction. So you've got tons of computer. And then you mentioned the ephemeral nature. How do you manage those? What's the observe ability look like? They're what's the trust equation? So all these things kind of play into it. It sounds almost mind blowing, just even thinking about it. But how do you guys, this analyst tryto understand where someone's either blowing bullshit or kind of like has the real deal? Because all those things come into play? I mean, you could have a misinformation campaign targeting the car. Let's say Hey, you know that that data is needs to be. This is this is misinformation who's a >>in a lot of ways, this creates almost unprecedented opportunity now for for starts and for companies to transform right. The fundamental tenet of my research has always been share shifts happen when markets transition and we're in the middle of the big one. If the computer resource is we're using, John and the application resource will be using or ephemeral nature than all the things that surrounded the way we secured the way we connect. Those also have to be equal, equally agile, right, So you can't have, you know, you think of a micro services based application being secured with traditional firewalls, right? Just the amount of, or even virtual the way that the length of time it takes to spend those things up is way too long. So in many ways, this distributed cloud change changes everything in I T. And that that includes all of the services in the the infrastructure that we used to secure and connect. And that's a that is a profound change, and you mentioned the observe ability. You're right. That's another thing that the traditional observe ability tools are based on static maps and things and, you know, traditional up, down and we don't. Things go up and down so quickly now that that that those don't make any sense. So I think we are going to see quite a rise in different types of management tools and the way they look at things to be much more. I suppose you know Angela also So we can measure things that currently aren't measurable. >>So you're talking about the entire stack. Really? Changing is really what you're inferring anyway from your commentary. And that would include the programming model as well, wouldn't it? >>Absolutely. Yeah. You know, the thing that is really interesting about where we have been versus where we're going is we spent a lot of time talking about virtual izing hardware and moving that around. And what does that look like? And that, and creating that is more of a software paradigm. And the thing we're talking about now is what is cloud is an operating model look like? What is the manageability of that? What is the security of that? What? You know, we've talked a lot about containers and moving into a different you know, Dev suck ups and all those different trends that we've been talking about, like now we're doing them. So we've only got into the first crank of that. And I think every technology vendor we talked to now has to address how are they going to do a highly distributed management and security landscape? Like, what are they gonna layer on top of that? Because it's not just about Oh, I've taken Iraq of something server storage, compute and virtualized it. I now have to create a new operating model around it. In a way, we're almost redoing what the OS I stack looks like and what the software and solutions are for that. >>So >>it was really Hold on, hold on, hold on their lengthened. Because that side stack that came up earlier today, Mayor. But we're talking about Yeah, we were riffing on the OSC model, but back in the day and we were comparing the S n a definite the, you know, the proprietary protocol stacks that they were out there and someone >>said Amazon's S N a. Is that recall? E think that's what you said? >>No, no. Someone in the chest. That's a comment like Amazon's proprietary meaning, their scale. And I said, Oh, that means there s n a But if you think about it, that's kind of almost that can hang. Hang together. If the kubernetes is like a new connective tissue, is that the TCP pipe moment? Because I think Os I kind of was standardizing at the lower end of the stack Ethernet token ring. You know, the data link layer physical layer and that when you got to the TCP layer and really magic happened right to me, that's when Cisco's happened and everything started happening then and then. It kind of stopped because the application is kinda maintain their peace there. A little history there, but like that's kind of happening now. If you think about it and then you put me a factor in the edge, it just kind of really explodes it. So who's gonna write that software? E >>think you know, Dave, your your dad doesn't change what you build ups. It's already changed in the consumer world, you look atyou, no uber and Waze and things like that. Those absolute already highly decomposed applications that make a P I calls and DNS calls from dozens of different resource is already right. We just haven't really brought that into the enterprise space. There's a number, you know, what kind of you know knew were born in the cloud companies that have that have done that. But they're they're very few and far between today. And John, your point about the connectivity. We do need to think about connectivity at the network layer. Still, obviously, But now we're creating that standardization that standardized connectivity all the way a player seven. So you look at a lot of the, you know, one of the big things that was a PDP. I calls right, you know, from different cloud services. And so we do need to standardize in every layer and then stitch that together. So that does make It does make things a lot more complicated. Now I'm not saying Don't do it because you can do a whole lot more with absolute than you could ever do before. It's just that we kind of cranked up the level of complexity here, and flowered isn't just a single thing anymore, right? That's that. That's what we're talking about here It's a collection of edges and private clouds and public clouds. They all have to be stitched together at every layer in orderto work. >>So I was I was talking a few CEOs earlier in the day. We had we had them on, I was asking them. Okay, So how do you How do you approach this complexity? Do you build that abstraction layer? Do you rely on someone like Microsoft to build that abstraction layer? Doesn't appear that Amazon's gonna do it, you know? Where does that come from? Or is it or is it dozens of abstraction layers? And one of the CEO said, Look, it's on us. We have to figure out, you know, we get this a p I economy, but But you guys were talking about a mawr complicated environment, uh, moving so so fast. Eso if if my enterprise looks like my my iPhone APs. Yes, maybe it's simpler on an individual at basis, but its app creep and my application portfolio grows. Maybe they talk to each other a little bit better. But that level of complexity is something that that that users are gonna have to deal >>with what you thought. So I think quite what Zs was trying to get it and correct me if I'm wrong. Zia's right. We've got to the part where we've broken down what was a traditional application, right? And now we've gotten into a P. I calls, and we have to think about different things. Like we have to think about how we secure those a p I s right. That becomes a new criteria that we're looking at. How do we manage them? How do they have a life cycle? So what was the life cycle of, say, an application is now the life cycle of components and so that's a That's a pretty complex thing. So it's not so much that you're getting app creep, but you're definitely rethinking how you want to design your applications and services and some of those you're gonna do yourself and a lot of them are going to say it's too complicated. I'm just going to go to some kind of SAS cloud offering for that and let it go. But I think that many of the larger companies I speak to are looking for a larger company to help them build some kind of framework to migrate from what they've used with them to what they need tohave going forward. >>Yeah, I think. Where the complexities. John, You asked who who creates the normalization layer? You know, obviously, if you look to the cloud providers A W s does a great job of stitching together all things AWS and Microsoft does a great job of stitching together all things Microsoft right in saying with Google. >>But >>then they don't. But if if I want to do some Microsoft to Amazon or Google Toe Microsoft, you know, connectivity, they don't help so much of that. And that's where the third party vendors that you know aviatrix on the network side will tear of the security side of companies like that. Even Cisco's been doing a lot of work with those companies, and so what we what we don't really have And we probably won't for a while if somebody is gonna stitch everything together at every >>you >>know, at every layer. So Andi and I do think we do get after it. Maribel, I think if you look at the world of consumer APS, we moved to a lot more kind of purpose built almost throwaway apps. They serve a purpose or to use them for a while. Then you stop using them. And in the enterprise space, we really haven't kind of converted to them modeling on the mobile side. But I think that's coming. Well, >>I think with micro APS, right, that that was kind of the issue with micro APS. It's like, Oh, I'm not gonna build a full scale out that's gonna take too long. I'm just gonna create this little workflow, and we're gonna have, like, 200 work flows on someone's phone. And I think we did that. And not everybody did it, though, to your point. So I do think that some people that are a little late to the game might end up in in that app creep. But, hey, listen, this is a fabulous opportunity that just, you know, throw a lot of stuff out and do it differently. What What? I think what I hear people struggling with ah lot is be to get it to work. It typically is something that is more vertically integrated. So are you buying all into a Microsoft all you're buying all into an Amazon and people are starting to get a little fear about doing the full scale buy into any specific platform yet. In absence of that, they can't get anything to work. >>Yeah, So I think again what? What I'm hearing from from practitioners, I'm gonna put a micro serve. And I think I think, uh, Mirabelle, this is what you're implying. I'm gonna put a micro services layer. Oh, my, my. If I can't get rid of them, If I can't get rid of my oracle, you know, workloads. I'm gonna connect them to my modernize them with a layer, and I'm gonna impart build that. I'm gonna, you know, partner to get that done. But that seems to be a a critical path forward. If I don't take that step, gonna be stuck in the path in the past and not be able to move forward. >>Yeah, absolutely. I mean, you do have to bridge to the past. You you aren't gonna throw everything out right away. That's just you can't. You can't drive the bus and take the wheels off that the same time. Maybe one wheel, but not all four of them at the same time. So I think that this this concept of what are the technologies and services that you use to make sure you can keep operational, but that you're not just putting on Lee new workloads into the cloud or new workloads as decomposed APS that you're really starting to think about. What do I want to keep in whatever I want to get rid of many of the companies you speak Thio. They have thousands of applications. So are they going to do this for thousands of applications? Are they gonna take this as an opportunity to streamline? Yeah, >>well, a lot of legacy never goes away, right? And I was how companies make this transition is gonna be interesting because there's no there's no really the fact away I was I was talking to this one company. This is New York Bank, and they've broken their I t division down into modern I t and legacy I t. And so modern. Everything is cloud first. And so imagine me, the CEO of Legacy i e 02 miracles. But what they're doing, if they're driving the old bus >>and >>then they're building a new bus and parallel and eventually, you know, slowly they take seats out of the old bus and they take, you know, the seat and and they eventually start stripping away things. That old bus, >>But >>that old bus is going to keep running for a long time. And so stitching the those different worlds together is where a lot of especially big organizations that really can't commit to everything in the cloud are gonna struggle. But it is a It is a whole new world. And like I said, I think it creates so much opportunity for people. You know, e >>whole bus thing reminds me that movie speed when they drive around 55 miles an hour, just put it out to the airport and just blew up E >>got But you know, we all we all say that things were going to go away. But to Zia's point, you know, nothing goes away. We're still in 2021 talking about mainframes just as an aside, right? So I think we're going to continue tohave some legacy in the network. But the But the issue is ah, lot will change around that, and they're gonna be some people. They're gonna make a lot of money selling little startups that Just do one specific piece of that. You know, we just automation of X. Oh, >>yeah, that's a great vertical thing. This is the This is the distributed network argument, right? If you have a note in the network and you could put a containerized environment around it with some micro services um, connective tissue glue layer, if you will software abstract away some integration points, it's a note on the network. So if in mainframe or whatever, it's just I mean makes the argument right, it's not core. You're not building a platform around the mainframe, but if it's punching out, I bank jobs from IBM kicks or something, you know, whatever, Right? So >>And if those were those workloads probably aren't gonna move anywhere, right, they're not. Is there a point in putting those in the cloud? You could say Just leave them where they are. Put a connection to the past Bridge. >>Remember that bank when you talk about bank guy we interviewed in the off the record after the Cube interviews like, Yeah, I'm still running the mainframe, so I never get rid of. I love it. Run our kicks job. I would never think about moving that thing. >>There was a large, large non US bank who said I buy. I buy the next IBM mainframe sight unseen. Andi, he's got no choice. They just write the check. >>But milliseconds is like millions of dollars of millisecond for him on his back, >>so those aren't going anywhere. But then, but then, but they're not growing right. It's just static. >>No, no, that markets not growing its's, in fact. But you could make a lot of money and monetizing the legacy, right? So there are vendors that will do that. But I do think if you look at the well, we've already seen a pretty big transition here. If you look at the growth in a company like twilio, right, that it obviates the need for a company to rack and stack your own phone system to be able to do, um, you know, calling from mobile lapse or even messaging. Now you just do a P. I calls. Um, you know, it allows in a lot of ways that this new world we live in democratizes development, and so any you know, two people in the garage can start up a company and have a service up and running another time at all, and that creates competitiveness. You know much more competitiveness than we've ever had before, which is good for the entire industry. And, you know, because that keeps the bigger companies on their toes and they're always looking over their shoulder. You know what, the banks you're looking at? The venues and companies like that Brian figure out a way to monetize. So I think what we're, you know well, that old stuff never going away. The new stuff is where the competitive screen competitiveness screen. >>It's interesting. Um IDs Avery. Earlier today, I was talking about no code in loco development, how it's different from the old four g l days where we didn't actually expand the base of developers. Now we are to your point is really is democratizing and, >>well, everybody's a developer. It could be a developer, right? A lot of these tools were written in a way that line of business people create their own APs to point and click interface is, and so the barrier. It reminds me of when, when I started my career, I was a I. I used to code and HTML build websites and then went to five years. People using drag and drop interface is right, so that that kind of job went away because it became so easy to dio. >>Yeah, >>sorry. A >>data e was going to say, I think we're getting to the part. We're just starting to talk about data, right? So, you know, when you think of twilio, that's like a service. It's connecting you to specific data. When you think of Snowflake, you know, there's been all these kinds of companies that have crept up into the landscape to feel like a very specific void. And so now the Now the question is, if it's really all about the data, they're going to be new companies that get built that are just focusing on different aspects of how that data secured, how that data is transferred, how that data. You know what happens to that data, because and and does that shift the balance of power about it being out of like, Oh, I've created these data centers with large recommend stack ums that are virtualized thio. A whole other set of you know this is a big software play. It's all about software. >>Well, we just heard from Jim Octagon e You guys talking earlier about just distributed system. She basically laid down that look. Our data architectures air flawed there monolithic. And data by its very nature is distributed so that she's putting forth the whole new paradigm around distributed decentralized data models, >>which Howie shoe is just talking about. Who's gonna build the visual studio for data, right? So programmatic. Kind of thinking around data >>I didn't >>gathering. We didn't touch on because >>I do think there's >>an opportunity for that for, you know, data governance and data ownership and data transport. But it's also the analytics of it. Most companies don't have the in house, um, you know, data scientists to build on a I algorithms. Right. So you're gonna start seeing, you know, cos pop up to do very specific types of data. I don't know if you saw this morning, um, you know, uniforms bought this company that does, you know, video emotion detection so they could tell on the video whether somebody's paying attention, Not right. And so that's something that it would be eso hard for a company to build that in house. But I think what you're going to see is a rise in these, you know, these types of companies that help with specific types of analytics. And then you drop you pull those in his resource is into your application. And so it's not only the storage and the governance of the data, but also the analytics and the analytics. Frankly, there were a lot of the, uh, differentiation for companies is gonna come from. I know Maribel has written a lot on a I, as have I, and I think that's one of the more exciting areas to look at this year. >>I actually want to rip off your point because I think it's really important because where we left off in 2020 was yes, there was hybrid cloud, but we just started to see the era of the vertical eyes cloud the cloud for something you know, the cloud for finance, the cloud for health care, the telco and edge cloud, right? So when you start doing that, it becomes much more about what is the specialized stream that we're looking at. So what's a specialized analytic stream? What's a specialized security stack stream? Right? So until now, like everything was just trying to get to what I would call horizontal parody where you took the things you had before you replicated them in a new world with, like, some different software, but it was still kind of the same. And now we're saying, OK, let's try Thio. Let's try to move out of everything, just being a generic sort of cloud set of services and being more total cloud services. >>That is the evolution of everything technology, the first movement. Everything doing technology is we try and make the old thing the new thing look like the old thing, right? First PCs was a mainframe emulator. We took our virtual servers and we made them look like physical service, then eventually figure out, Oh, there's a whole bunch of other stuff that I could do then I couldn't do before. And that's the part we're trying to hop into now. Right? Is like, Oh, now that I've gone cloud native, what can I do that I couldn't do before? Right? So we're just we're sort of hitting that inflection point. That's when you're really going to see the growth takeoff. But for whatever reason, and i t. All we ever do is we're trying to replicate the old until we figure out the old didn't really work, and we should do something new. >>Well, let me throw something old and controversial. Controversial old but old old trope out there. Consumerism ation of I t. I mean, if you think about what year was first year you heard that term, was it 15 years ago? 20 years ago. When did that first >>podcast? Yeah, so that was a long time ago >>way. So if you think about it like, it kind of is happening. And what does it mean, right? Come. What does What does that actually mean in today's world Doesn't exist. >>Well, you heard you heard. Like Fred Luddy, whose founder of service now saying that was his dream to bring consumer like experiences to the enterprise will. Well, it didn't really happen. I mean, service not pretty. Pretty complicated compared toa what? We know what we do here, but so it's It's evolving. >>Yeah, I think there's also the enterprise ation of consumer technology that John the companies, you know, you look a zoom. They came to market with a highly consumer facing product, realized it didn't have the security tools, you know, to really be corporate great. And then they had to go invest a bunch of money in that. So, you know, I think that waken swing the pendulum all the way over to the consumer side, but that that kind of failed us, right? So now we're trying to bring it back to center a little bit where we blend the two together. >>Cloud kind of brings that I never looked at that way. That's interesting and surprising of consumer. Yeah, that's >>alright, guys. Hey, we gotta wrap Zs, Maribel. Always a pleasure having you guys on great great insights from the half hour flies by. Thanks so much. We appreciate it. >>Thank >>you guys. >>Alright, keep it right there. Mortgage rate content coming from the Cuban Cloud Day Volonte with John Ferrier and a whole lineup still to come Keep right there.

>>from the Cube Studios in Palo Alto and Boston connecting with thought leaders all >>around the world. This is a cube conversation, Everyone. Welcome to this week's Cube insights, powered by ET are My name is Dave Volante, and we've been reporting every week really on the code. 19. Impact on Budgets Docker Korakia is back in with me soccer. It's great to see you really >>again for having >>your very welcome. Soccer is, of course, the director of research, that we are our data partner and man. I mean, you guys have just been digging into the data or a court reiterate We're down, you know, roughly around minus 5% for the year. The thing about what we're doing here and where they want to stress in the audience that that's going to change. The key point is we don't just do ah, placeholder and update you in December. Every time we get new information, we're going to convey it to you. So let's get right into it. What we want to do today is you kind of part two from the takeaways that we did last week. So let's start with the macro guys. If you bring up the first chart, take us through kind of the top three takeaways. And just to reiterate where we're at >>Yeah, no problem. And look, as you mentioned, uh, what we're doing right now is we're collecting the pulse of CIOs. And so things change on and we continue to expect them to change, you know, in the next few weeks, in the next few months, as things change with it. So just kind of give a recap of the survey and then kind of going through some of our top macro takeaways. So in March mid March, we launched our Technology Spending Intention Survey. We had 1250 CIOs approximately. Take that survey. They provided their updated 2020 verse 2019 spending intentions, right? So effectively, they first Davis, those 20 21st 19 spending intentions in January. And then they went ahead and up state of those based on what happened with move it and then in tandem with that, we did this kind of over 19 drill down survey where we asked CEOs to estimate the budget impact off overnight in versus what they originally forecast in the year. And so that leads us to our first take away here, where we essentially aggregated the data from all these CIOs in that Logan 19 drill down survey. And we saw a revision of 900 basis points so down to a decline of 5%. And so coming into the year, the consensus was about 4% growth. Ah, and now you can see we're down about 5% for the year. And again, that's subject to change. And we're going again re measure that a Z kind of get into June July and we have a couple of months under our belt with the folks at night. The second big take away here is, you know, the industries that are really indicating those declines and spend retail, consumer airlines, financials, telco I key services in consulting. Those are the verticals, as we mentioned last week, that we're really seeing some of the largest Pullbacks and spend from consumers and businesses. So it makes sense that they are revising their budgets downwards the most. And then finally, the last thing we captured that we spoke about last week as well as a few weeks before that, and I think that's really been playing out the last kind of week in 1/2 earnings is CIOs are continuing to press the pedal on digital transformation. Right? We saw that with Microsoft, with service now last night, right, those companies continued the post good numbers and you see good demand, what we're seeing and where those declines that we just mentioned earlier are coming from. It's it's the legacy that's the on premise that your place there's such a concentration of loss and deceleration within some of those companies. And we'll kind of get into that more a Z go through more slides. But that's really what kind of here, you know, that's really what we need to focus on is the declines are coming from very select vendors. >>Yeah, and of course you know where we were in earning season now, and we're paying close attention to that. A lot of people say I just ignore the earnings here, you know, you got the over 19 Mulligan, but But that's really not right. I mean, obviously you want to look at balance sheets, you want to look at cash flows, but also we're squinting through some of the data your point about I t services and insulting is interesting. I saw another research firm put out that you know, services and consulting was going to be OK. Our data does, you know, different. Uh, and we're watching. For instance, Jim Kavanaugh on IBM's earnings call was very specific about the metrics that they're watching. They're obviously very concerned about pricing and their ability. The book business. There we saw the cloud guys announced Google was up in the strong fifties. The estimate is DCP was even higher up in the 80% range. Azure, you know, we'll talk about this killing it. I mean, you guys have been all over of Microsoft and its presence, you know, high fifties aws solid at around 34% growth from a larger base. But as we've been reporting, you know, downturns. They've been they've been good to cloud. >>That's right. And I think, you know, based on the data that we've captured, um, you know, it's people are really pressing the pedal on cloud and SAS with this much remote work, you need to have you know, that structure in place to maintain productivity. >>Okay, let's bring up the next slide. Now. We've been reporting a lot on this sort of next generation work loads Bob one Dato all about storage and infrastructures of service. Compute. There's an obviously some database, but there's a new analytics workload emerging. Uh, and it's kind of replacing, or at least disinter mediating or disrupting the traditional e d ws. I've said for years. CDW is failed to live up to its expectations of 360 degree insights and real time data, and that's really what we're showing here is some of the traditional CDW guys are getting hit on Some of the emerging guys, um, are looking pretty good. So take us through what we're looking at here. Soccer. >>Yeah, no problem. So we're looking at the database data warehousing sector. What you're looking at here is replacement rates. Um And so, as example, if you see up in with roughly 20% replacement, what that means is one out of five people who took the survey for that particular sector for that vendor indicated that they were replacing, and so you can see here for their data. Cloudera, IBM, Oracle. They have very elevated and accelerating replacement rates. And so when we kind of think about this space. You can really see the bifurcation, right? Look how well positioned the Microsoft AWS is. Google Mongo, Snowflake, low replacements, right low, consistent replacements. And then, of course, on the left hand side of the screen, you're really seeing elevated, accelerating. And so this space is It kind of goes with that theme that we've been talking about that we covered last week by application, right when you think about the declines that you're seeing and spend again, it's very targeted for a lot of these kind of legacy legacy vendors. And we're again. We're seeing a lot of the next gen players that Microsoft AWS in your post very strong data. And so here, looking within database, it's very clear as to which vendors are well positioned for 2020 and which ones look like they're being ripped out and swapped out in the next few months. >>So this to me, is really interesting. So you know, you you've certainly reported on the impact that snowflake is having on Terra data. And in some of IBM's business, the old man, he's a business. You can see that here. You know, it's interesting. During the Hadoop days, Cloudera Horton works when they realize that it didn't really make money on Hadoop. They sort of getting the data management and data database and you're seeing that is under pressure. It's kind of interesting to me. Oracle, you know, is still not what we're seeing with terror data, right, Because they've got a stranglehold on the marketplace That's right, hanging in there. Right? But that snowflake would no replacements is very impressive. Mongo consistent performer. And in Google aws, Microsoft AWS supports with Red Shift. They did a one time license with Park Cell, which was an MPP database. They totally retooled a thing. And now they're sort of interestingly copycatting snowflake separating compute from storage and doing some other moves. And yet they're really strong partners. So interesting >>is going on and even, you know, red shift dynamodb all. They all look good. All these all these AWS products continue screen Very well. Ah, in the data warehousing space, So yeah, to your point, there's a clear divergence of which products CIOs want to use and which ones they no longer want in their stack. >>Yeah, the database market is very much now fragment that it used to be in an Oracle db two sequel server. As you mentioned, you got a lot of choices. The Amazon. I think I counted, you know, 10 data stores, maybe more. Dynamodb Aurora, Red shift on and on and on. So a really interesting space, a lot of activity in that new workload that I'm talking about taking, Ah, analytic databases, bringing data science, pooling into that space and really driving these real time insights that we've been reporting on. So that's that's quite an exciting space. Let's talk about this whole workflow. I t s m a service now. Just just announced, uh, we've been consistently crushing it. The Cube has been following them for many, many years, whether, you know, from the early days of Fred Luddy, Bruce Lukman, the short time John Donahoe. And now Bill McDermott is the CEO, but consistent performance since the AIPO. But what are we actually showing here? Saga? Yeah, You bring up that slot. Thank you. >>So our key take away on kind of the i t m m i t s m i t workflow spaces. Look, it's best in breed, which is service now, or some of the lower cost providers. Right There's really no room for middle of the pack, so >>this is an >>interesting charts. And so what you're looking at here, there's a few directives, so kind of walk you through it and then I'll walk through. The actual results is we're looking within service now accounts. And so we're seeing how these companies are doing within or among customers that are using service. Now, today, where you're looking at on the ex, access is essentially shared market share our shared customers, and then on the Y axis you're seeing essentially the spend velocity off those vendors within service. Now's outs, right? So if the vendor was doing well, you would see them moving up into the right, right? That means they're having more customer overlap with service now, and they're also accelerating Spend, but you can see if you will get zendesk. If you look at BMC, it's a managed right. You can see there either losing market share and spend within service now accounts or they're losing spend right and zendesk is another example Here, Um, and what's actually interesting is, and we've had a lot of anecdotal evidence from CIOs is that look they start with service. Now it's best in breed, but a few of them have said, Look, it's got expensive, Um, and so they would move over Rezendes. And then they would look at it versus a conference that last year, and we had a few CEO say, Look at last quarter of the price of zendesk. Andi moved away from Zendesk and subsequently well, with last year. And so it's just it's interesting that, you know, during these times where you know CIOs are reducing their budgets on that look, it's either best of breed or low cost. There's really no room in the middle, and so it's actually kind of interesting. In this space, it's It's an interesting dynamic and being usually it's best of breed or low cost. Rarely do you kind of see both win, and I think that's what kind of makes the space interesting. >>I've been following service now for a number of years. I just make a few comments there. First of all, you know, workday was the gold standard in enterprise software for the longest time and, you know, company and and and I I always considered service now to be kind of part of that you know Silicon Valley Mafia with Frank's Loop. But what's happened is, you know, Sluman did a masterful job of identifying the total available market and executing with demand, and now you know, his successors have picking it beyond there. You know, service now has a market cap that's not quite double, but I mean, I think workday last I checked was in the mid thirties. Service now is market valuation is up in the 60 billion range. I mean, they announced, um uh, just recently, very interestingly, they be expectations. They lowered their guidance relative to consensus guide, but I think the street hose, first of all, they beat their numbers and they've got that SAS model, that very predictable model. And I think people are saying, Look there, just leaving meat on the bone so they can continue to be because that's been their sort of m o these last several years. So you got to like their positioning and you get to talk to customers. They are pricey. You do hear complaints about that, and they've got a strong lock spec. But generally I got my experiences. If people can identify business value and clear productivity, they work through the lock in, you know, they'll just fight it out in the negotiations with procurement. >>That's right, and two things on that. So with service now and and even Salesforce, right, they are a platform like approach type of vendors right where you build on them. And that's what makes them such break companies, right? Even if they have, you know, little nicks and knacks here and there. When they report people see past that right, they understand their best of breed. You build your companies on the service now's and the sales forces of the world. And to the second point, you're exactly right. Businesses want to maintain consistent productivity on, and I think that, you know, is it kind of resonates with the theme, right, doubling down on Cloud and sas. Um, as as you have all this remote work, as you have kind of, you know, questionable are curating marquee a macro environment organizations want to make sure that their employees continue to execute that they're generating consistent productivity. And using these kind of best of breed tools is the way to go. >>It's interesting you mentioned, uh, salesforce and service now for years I've been saying they're on a collision course we haven't seen yet because they're both platforms. I still, uh I'm waiting for that to happen. Let's bring up the next card and let's get into networking way talk. Um Ah. Couple of weeks ago, about the whole shift from traditional Mpls moving to SD win. And this sort of really lays it out. Take us through the data here, please. >>Yeah, no problem. So we're just looking at a handful of vendors here. Really? We're looking at networking vendors that have the highest adoption rates within cloud accounts. And so what we did was we looked inside of aws azure GCC, right. We essentially isolated just those customers. And then we said which networking vendors are seeing the best spend data and the most adoptions within those cloud accounts. And so you get you can kind of see some, uh, some themes here, right? SD lan. Right. You can see Iraqi their VM. Where nsx. You see some next gen load balance saying are they're on the cdn side right then. And so you're seeing a theme here of more next gen players on You're not really seeing a lot of the mpls vendors here, right? They're the ones that have more flattening, decreasing and replacing data. And so the reason just kind of going on this slide is you know, when you kind of think about the networking space as a whole, this is where adoptions are going. This is this is where spends billing and expanded, arise it. And what we just talked about >>your networking such a fascinating space to me because you got you got the leader and Cisco That has helped 2/3 of the market for the longest time, despite competitors like Arista, Juniper and others trying to get in the Air Force and NSX. And the big Neisseria acquisition, you know, kind of potentially disrupted that. But you can see, you know, Cisco, they don't go down without a fight. And ah, there, let's take a look at the next card on Cdn. You know, this is interesting. Uh, you know, you think with all this activity around work from home and remote offices, there's a hot area, But what are we looking at here? >>Yeah, no problem. And that's right, right? You would think. And so we're looking at Cdn players here you would think with the uptake in traffic, you would see fantastic. That scores right for all the cdn vendor. So what you're looking at here and again there's a few lenses on here, so I kind of walk. You kind of walk the audience through here is first we isolated only those individuals that were accelerating their budgets due to work from home. Right. So we've had this conversation now for a few weeks where support employees working from home. You did see a decent number of organizations. I think it was 20 or 30% of organizations at the per server that indicated they're actually accelerate instead. So we're looking at those individuals. And then what we're doing is we're seeing how are how's Cloudflare and aka my performing within those accounts, right? And so we're looking at those specific customers and you could just see within Cloudflare and we practice and security and networking which by more the Cdn piece, How consistent elevated the date is right? This is spend in density, right? Not overall market share is obviously aka my you know, their brand father CD ends. They have the most market share and if you look at optimized to the right. Now you can see the spend velocity is not very good. It's actually negative across boats sector. So you know it's not. We're not saying that. Look, there's a changing of the guard that's occurring right now. We're still relatively small compared talk my But there's just such a start on trust here and again, it kind of goes to what we're talking about. Our macro themes, right? CIOs are continuing to invest in next gen Technologies, and better technologies on that is having an impact on some of these legacy. And, you know, grandfather providers. >>Well, I mean, I think as we enter this again, I've said a number of times. It's ironic overhead coming into a new decade. And you're seeing this throughout the I T. Stack, where you've got a lot of disruptors and you've got companies with large install bases, lot of on Prem or a lot of historical legacy. Yeah, and it's very hard for them to show growth. They often times squeeze R and D because they gotta serve Wall Street. And this is the kind of dilemma they're in, and the only good news with a comma here is there is less bad security go from negative 20% to a negative 8% net score. Um, but wow, what a what a contrast, but to your point, much, much smaller base, but still very relevant. We've seen this movie before. Let's let's wrap with another area that we've talked about. What is virtualization? Desktop virtualization? Beady eye again. A beneficiary of the work from home pivot. Um, And we're focused here, right on Fortune 500 net scores. But give us the low down on this start. >>Yeah, So this is something that look, I think it's it's pretty obvious to into the market you're seeing an uptake and spend across the board versus three months ago in a year ago and spending, etc. Among your desktop virtualization players, there's FBI, right? So that's gonna be your VPN right now. Obviously, they reported pretty good numbers there, so this is an obvious slide, but we wanted to kind of throw it in there. Just say, look, you know, these organizations are seeing nice upticks incent, you know, within the virtualization sectors, specifically within Fortune 500 again, that's kind of, you know, work from home spend that we're seeing here, >>right? So, I mean, this is really a 100% net score in the Fortune 500 for workspaces is pretty amazing. And I think the shared in on this that the end was actually quite large. It wasn't like single digits, Many dozens. I remember when Workspaces first came out, it maybe wasn't ready for prime time. But clearly there's momentum there, and we're seeing this across the board saga. Thanks so much for coming in this week. Really appreciate it. We're gonna be in touch with with you with the TR. We're gonna continue to report on this, but start Dr stay safe. And thanks again. >>Thanks again. Appreciate it. Looking for to do another one. >>All right. Thank you. Everybody for watching this Cube insights Powered by ET are this is Dave Volante for Dr Sadaaki. Remember, all these episodes are available as podcasts. I published weekly on wiki bond dot com Uh, and also on silicon angle dot com Don't forget tr dot Plus, Check out all the action there. Thanks for watching everybody. We'll see you next time. Yeah, yeah, yeah, yeah, yeah

>> Announcer: From Las Vegas, it's theCUBE. Covering Qualys Security Conference 2019. Brought to you by Qualys. >> Hey, welcome back everybody. Jeff Frick here with theCUBE. We're at the Bellagio Hotel in Las Vegas, at the Qualys Security Conference. This conference has been going on for 19 years. It's our first time to be here. We're excited to be here, but it's amazing that they've just been clipping along through wave after wave after wave. They've got some new announcements today and we're excited to get the full rundown here. Our next guest is Chris Carlson, the VP of Strategy from Qualys. Chris, great to meet you. >> Great, thanks, great to be here. >> Yeah, so you just got out of your session. How did your session go? >> Yeah, it was fantastic. In fact, that's the great thing about a Qualys Security Conference, because we have the ability to not only interact with our customers and partners, but actually showcase what's new, but also what we're working on coming in the future. >> Jeff: Right. >> And that's really important for us at Qualys because we get the feedback from the customers early, and we can work very closely with them to find the right set of solutions and the right products for their use in their environment and programs. >> Now, the security landscape has changed quite a bit over the last two decades, and Phillipe's keynote, I mean he is right on the edge in terms of really appreciating cloud and the benefits of cloud. You guys have a lot of great integration partners. You know, did you have to re-architect this thing, at some point down the road? I mean it's pretty amazing that you've been at it for two decades and still really sitting in a good spot here as kind of the cloud and IOT and 5G and this next big wave of innovation starts to hit. >> Well that's right, and I think that's why it starts with that vision, but it's not just a vision of where the market is going, but the vision of where technology is going. So when Qualys started, they started in the cloud, and they started with the cloud delivered architecture. And that was really, maybe early for a lot of first customers. 20 years ago security was maybe not as much, and put security in the cloud, that's where all the bad guys are. But it's really that architecture vision technology that allowed us to not only innovate quickly on a platform, but as our customers grew, as our customers moved to the cloud, as our customers moved to IOT and OT and mobile computing and those aspects, we're already there. >> Jeff: Right, right. >> We're already there. So and that is what really the advantage for us is, we don't have to re-architect our platform, we can layer on new capabilities and new services, new products leveraging the existing architecture that we've developed in the cloud. >> Yeah, it's really little bit of good fortune, a little bit of luck, a little bit of smarts, right. >> I think it's maybe a lot of experience and smarts from that. >> Well, it's just funny right, 'cause we had John Chambers on not that long ago, and his kind of computing waves, he was using kind of 10 year waves as kind of the starting points. And Phillipe's were a little bit longer, but it's the same kind of story with mainframes and minis and client server and now cloud, but as he said, and as you've reinforced, if you don't architect it to be able to do that at the beginning, you can't necessary repurpose it for this new application. It's really architecture-specific, and without that kind of vision, you're not going to be able to take advantage. >> That's right. >> Of these kind of new waves. >> Exactly, and I think that architecture breaks down into different levels. So one is systems architecture, but there's also the design architecture. So the technologies that we're using on our platform today aren't the same 20 years ago. We've swapped out those technologies. We use new modern technologies. Technically, like Kafka streaming blasts to do real-time event streaming. Cassandra for object data store. Those did not exist five or six years ago. But from our architecture that we're collecting lightweight data from our customers, and analyzing it in our cloud platform. Doesn't matter if we have one million events, a billion events, a hundred billion events, the platform can scale the process of those. >> Right. The other piece clearly that you've mentioned two or three vocabulary words right there is the open source component. You know, the open source has grown dramatically since the early days of Linux, both in terms of market acceptance as well as kind of new opportunities for things like Kafka to be able to grab that type of , integrate it into your product set and really drive a whole bunch of extra value. >> Yeah, that's right. I think we benefit as Qualys is using some of these open source technologies and we do contribute back, because we work with those teams. If there's any defects or performance enhancements, we do that. But while we've benefited from some of the open source technologies, our customers have benefited as well. Now they've benefited from new technology architectures, but in some cases they've benefited from new security problems. So if you get commercial off-the-shelf software, the vendor produces a security patch, they test that patch and they can apply the patch. In many cases with some open source software it's not like that. The customer has to get the software, compile it, make sure it works. Maybe it doesn't fix the vulnerability, and that's why in that case for them open-source technology can improve some of their IT systems and their business initiatives, but it puts a challenge on security to keep up with all the security risks that are happening across the board. >> Right. So one of the big announcements today was the VMDR. >> That's right. >> Tell us all about it. >> Great, so VMDR stands for Vulnerability Management Detection and Response, and that really is a capability that we've actually had in the platform itself, but the feedback from our customers were that internally their own people, their own process and their own tools created these artificial silos that prevented them from actually doing security detection and remediation at scale quickly. We have all these capabilities in the Qualys platform anyway, but with this new VMDR bundle we're bringing it together with new automation, new workflow, new orchestration, new user interfaces that actually reduce the time to remediate down to near zero in some cases. So, we had an example of a live attack that happened two years ago, WannaCry with EternalBlue, and many companies did nothing for two months. So they had the right tools, but maybe the data silos to go from one application to another application, to one team to another team just increased that length of when they could remediate. Our customers that had Qualys already had that data within the Qualys platform. We can tell them what assets they have, what the vulnerabilities were, that WannaCry was a big thing happening. And then with our patch management they can click one button and then just fix those assets easily. >> Jeff: Right, right. >> That was two years ago. Now this summer something called Blue Key. So Blue Key and Deja Blue is another attack that's happening, is going on right now. People don't know about it. Well, maybe not you. (laughing) Maybe if you're a Windows. >> I got nothing, I got nothing. >> Maybe if he has a Windows Operating System he's being attacked right now, I don't know about that. But a lot of our customers here, they're struggling with that every day. Not that Qualys can't tell them where it is, but they have to rely on another team to actually fix it. And that's what's so exciting about VMDR, Vulnerability Management Detection and Response, is the D and the R, the detection and the response allow them to remediate in a full life-cycle very quickly, very effectively, and with a high confidence that it has actually corrected those issues. >> Yeah, it's really interesting. You know, kind of the application versus platform conversation. You guys are integration partners with ServiceNow. Fred Luddy's been on many, many times, and tells a great story. You know, he wanted to build a platform, but you can't go to market with a platform. You got to go to market with an application, hopefully get some traction, and over time he started adding more applications, and it was pretty interesting listening to you guys. >> Well, I was actually going to stop you right there if you don't mind. >> No. >> The marketing people go to market with the platform. The marketing people say, "Hey version one is a platform." >> To their customers? But nobody's got a line-item to buy a new platform today, right. >> Exactly, and that's sort of the disconnect. >> Right. >> Really with normal enterprise sales models and technology. The marketing sales disconnect versus the technical reality that customers depend on for their environment. >> But if you do it right, then you can build that application stack, and I think in their earnings call, your guys last earnings call, you defined seven specific applications that sit on this platform that enabled in you to bundle and have kind of multi-application integration in the new VDMR. >> Yes, that's right, and I think that the difference with Qualys is they knew that the architecture was important. So our vulnerability management was an application on the architecture when it first launched 20 years ago. >> Right. >> And that really helped us going forward. So from the earnings call it's seven product capabilities on our lightweight agent, but the entire Qualys platform has 19 different product capabilities, in the same platform using the same user interface model and the VMDR takes many of those and bring it together in that single bundle on a per asset basis. >> Okay great, thanks for that clarification. Slight shift of focus. Another thing that came up in Philippe's keynote was kind of re-architecting the sales side and the market bundles that you guys are going to go to market with over time. And he broke it down into really only four big buckets of categories. Cloud providers, I think managed security service providers, enterprises, and I can't remember what the the last one was. Oh, OT and IOT vendors. >> Chris: IOT, correct, yes. >> So as you kind of look forward in the way that you're going to develop your products to go to market, how is that impacting your strategy, and are you seeing that start to play out in the marketplace? >> Yes, when we look at security technology and actually part of his keynote, he had this slide that had, you couldn't zoom in, because there's a million logos on this slide, security companies. And you go to some of the security shows, there's 800 vendors in the exhibit hall. >> Jeff: Oh yeah, we go to RSAC. I mean that that's why, it's chaos, right. >> So it's crazy, it's crazy. And there was an analyst that actually said a couple years ago that whenever there's a new threat, there's a new tech. Here's a new threat vector, now there's five new startups. And is that new threat vector super narrow, and it's only a feature, or is it a product, but our view of Qualys was a little bit different in that while the buying centers may be different, while some of the assets may be different, an OT asset versus a cloud asset versus the endpoint asset, the ability to discover it, identify it, categorize it, assess it, prioritize and remediate it is the same. That is the same. So whether it is a PLC on a shop floor from a car manufacturing, or a ecommerce web server that's running in a public cloud, or an end-user machine, the process to identify assess and remediate is exactly the same through us at Qualys with their platform. Different sensors for different asset types, normalized security data and different remediation approaches for different asset types, but all the same platform. >> But it sounds like you're doing some special stuff with Azure. >> Chris: Yes. >> So, tell us a little bit about kind of what's special about that relationship, what's special about that solution. >> Yeah, and that integration was announced two weeks ago at Microsoft Ignite, which is a big Microsoft show, and that really is a close partnership that we have with Microsoft. We actually did an early integration with them four years ago, but this is a lot deeper. And that really is Phillipe's and Qualys vision that security needs to be built in and not bolted on. >> Jeff: Right. >> That if you take, let's take a car for example. When you buy a car, you don't buy the car without a seat belt, an airbag, maybe a radio. You don't buy it without tires, it all comes together. You don't buy a car, then go to the seatbelt shop, and then buy a car and then go to the airbag shop. It all comes together, and that's what we're very excited about this announcement with Microsoft and Azure is that the vulnerability assessment is powered by Qualys already built into Azure. So there may be a whole set of customers that know nothing about Qualys, know nothing about our 20-year history, know nothing about our conference. they go to Microsoft Azure's, the security center, and it goes, "Assess your vulnerabilities," click a button and there's the vulnerability information. So this opens up a new capability for customers that they may not have used, but more importantly bringing security into IT without them knowing that they're doing security. And that is very powerful. >> So is it like a white label, under the covers or? >> So, it's not a white label, it's a joint integration. >> Chris: Okay. >> And it's a Microsoft Azure. >> Chris: So they eventually have, probably is in the bottom of the report. >> Powered by Qualys, powered by Qualys, right, so we got to have that name in there. >> Right, right, right, good. >> And what's exciting about Microsoft Ignite is that we had a lot of Microsoft IT and dev people come up to our Qualys booth and say, hey I don't know much about Qualys, but I get this report of things that I need to fix, tell me more about what you're doing and how can we help that fix faster. >> Chris: Right. >> And it's really about speed. Time to market, time to acquire customers, time to service customers, but more importantly time to produce new technology, time to secure the new technology, and lastly, unfortunately, time to respond to security events that may have happened in your network. >> And I presume they can buy more of the suite through the, and run it on the Azure stack. >> Yes, that's right. In fact, all of our capabilities can go on there from it, and that really is a strong partnership. In fact the group product manager for Azure is speaking at Qualys Security Conference just later today. That really shows a testament of the deep integration of partnership that we have with them. >> All right, Chris, before I let you go, you're the strategy guy. So as you look down the road in your crystal ball, I won't say more than three years, two years, three years, four years. What are some of the things you're keeping an eye on, what are the things you're excited about, what are the things you're a little concerned about? >> Well, I think that the things that we're excited about is a vision that Philippe and of course Ahmet has painted for it, is that the computing environment is accelerating dramatically, it's fragmenting dramatically. 5g might be a complete game-changer across the board. We have some of our large customers that have a project that they call Data Center Zero. 17 data centers, in two years, no data centers at all. I say that in their corporate offices they have laptops and printers, that's it. How do you secure and assess an environment that is ephemeral and that is virtual and that is remote, and that's where the Qualys platform architecture can move along with those customers. Our very largest customers are the ones leading the charge, not only developing new capabilities, but also using them as they come out. So I think that's what we're very excited about. I think that's some areas that we're working deeper with our customers on, is at the end of the day, it's people, process, and tools. And we're working on the technology capability and stack that can also influence and make the process better, but ultimately the people have to come in and understand that security has to be built in, we have to shift left, integrate it into the dev cycle to really reduce that attack surface and have a stronger, more secure enterprise. >> All right Chris, well, think you're going to be busy for the next couple years. >> It's a exciting time, it's an exciting time for Qualys. >> All right, well again, congrats on the event. >> Thanks very much. >> Thanks for having us. Can't believe it's been here for 19 years and we haven't been here yet. So again, thanks for having us and congrats on all your success. >> Great, fantastic Jeff. >> All right, he's Chris, I'm Jeff. You're watching theCUBE. We're at the Qualys Security Conference in Las Vegas. Thanks for watching. We'll see you next time. (upbeat music)

>>Live from Las Vegas. It's the cube covering UI path forward Americas 2019 brought to you by UI path. >>Welcome back to Las Vegas. Everybody. You're watching the cube, the leader in live tech coverage. This is day two of UI path forward UI pass, third North America event and we're excited to be here. This is our second year here. Daniel DNAs is here. He's the CEO of the rocket ship known as UI path. Welcome back to the cube. Great to see you again. >>Thank you. Thank you for inviting me here. >>Oh, so it's our, it's our pleasure and it's been great to be able to document this and we've been saying all week that we see the ecosystem developing the customer base, that UI path very reminiscent of some of the very successful companies that we've seen. But we've never seen a company sort of growing this fast. I have to start with you. Our big idea person kind of go big or go home mentality. But did you really see it getting here so fast? >>Well we, we kind of see it a year ago going here. I can not say that. I've seen it five years, five years ago, I couldn't see, I couldn't see me even in front of a hundred people speaking not to talk about 3000 like can close today, yesterday. >>Well, it's gotta make you very happy. You set it up on stages. When you see your saw the software that you developed, your, you're a developer, you're a coder affecting people's lives. The way some of the examples that you gave, it was a little tear in your eye maybe out of saying, but how to tug at your heart a little bit. That's got to be as a developer and of course now CEO, that's gotta be very gratifying to see your technology have an impact on people's lives. >>Okay, well I can tell you it is a really gratifying, in the end it's, um, we, we, we've built technology, you know, to, first of all, we are proud as engineers to build the best technology that we can, but it's, uh, it makes us a lot more, it's a lot more touching seeing that you can help humans to become better, to become healthier, to even save lives, to help refugees. It's a, it's an amazing feeling. It's when >>I talk to people about robotic process automation, most people don't, don't really are connected and they'll say things to me like, really is there that much room for automation? We've been in the computer industry for 50 years, we've been automating everything back office, front office. How much more room is there? And you put forth the premise last night in your keynote essentially said technology is actually created inefficiencies that >>despite all the automation that we've had now we have all these processes that can be improved. So necessarily the first time I had heard that put forward. I guess my question is, so technology got us into this problem, can technology get us out? >> Yeah. Um, first of all, I'm a software engineer, so I didn't believe there are so many inefficiencies in within the business world. I fought the law. Gender prizes should have been automated completely. Everything should run as move, as ineffectually. But in reality, the alert is far away from this. And as I said yesterday, email and a pro plus activity tools, especially spreadsheets and line of business application has changed completely. How we perform or in front office and back office. But uh, it's, it's a lot of skit work because it's, it's work created when people build business processes, they work with different systems and they always touch the system by looking at the user interface of the, by looking at human readable interfaces of these systems and uh, and when you go and automate them it's kind of difficult to translate into a BIS. >>So where are the at the on the field. So our approach is just through replicates Q months using the same tools, the same thing. Knowledge is that thought for media to business people building and the it's the only way that can work at scale. Of course you can take one particular process, build an it project flow developers with them be successful but you cannot do it. The large scale that an enterprise has, it's the only technology that can work at the large scale. Like I believe in the transportation industry, self-loving cars are the only solution to the industry or not. It's not feasible to say I will build much larger freeways. No, you put self driving cars or self driving trucks driving in the night on the freeway and this is how you will free daily, you know, everything else for the norm of agriculture. Same sort of concept. >>Like there's nothing, I can't make more land. Right? But as you grow your company, um, you guys growing so fast, are you able to use automations to support that growth? I'm sure there are some inefficiencies in it because there's a pace of growth. Helped me understand that this is, this is our story. So way we've built initial finance processes, finance, HR, procurement processes in the very manual slides using people and then scaling up when each a point where we've become a big consumers of all our own technology. It's not, it's not about what we use the most modern systems in the world. It's not a vote that they are not integrated. It's about all the, all the words build by this business people, all the reports that we are creating or all this stuff required a lot of work. We have automated more than a hundred thousand manual hours within you iPod today. >>A mother company built on the best technology stick, all that. Do you feel, feel like that's part of the reason why you've been able to grow so fast? Maybe faster than other historical examples of software companies? Systems are one thing way we weren't able to grow as fast by couple of reasons. First of all, we went global from day one. We were not the typical Silicon Valley company that says I will win in North America and then I will replicate this model across the world because they lose about three to five years in Muslim America just Lang to perfect the machine at least at least then we just went when globally they want an hour. It helps because we can make a business case easy so we can, we can go into a lot of gentle price, show them how it works and it does not require such a huge investment. >>That list to get started and second is it's evolved our culture. We put the big emphasize in keeping our culture customer focus and we put humility as the core. Then that evolved culture and I, I know it might sounds a bit pretentious to see, we put humility, but it's a humility that gives you a, a great, great framework of how you operate. You can, it makes you listen to people, it makes you able to change your mind. It makes you actually accelerate because people that change their mind or they look to find foster better solution that people that are stuck and they need a lot of data until they make, because they are afraid of losing face in making decision. So it's something that works. So it's uh, it's this, those two things combined gave us this cake. It's very interesting you say that because there's a lot of ways to skin a cat. >>Um, many companies have succeeded with extremely dogmatic approach. I mean, I would argue Microsoft, much of its success was it was built around personal productivity, you know, or bust. Um, yet your philosophy is be more open minded. You're humble. Listen to the customers change fast if necessary. Kind of a different philosophy maybe than some others have used in the past. I believe that our philosophy is, is helping us, I don't know, maybe a Microsoft has change. Yeah, exactly that. Satya. So, so it's uh, it's not, so I think this is, this is built in the fabric of how humans operate. We talk to other humans, we learned their needs and then we address their needs. I think it's arrogance to say, I know your boss, I will do this is what you have to do. Like many more traditional software companies are doing, we were very fortunate to build these products by listening to customers. >>That's, that's luck. You don't have to find product market fit. Listen to customers. Market is big. Bring what they want. Well the funny thing is, you know, we talking about the analysts meeting and I do remember you, you're there the other day. You said that you made a bunch of mistakes early on that you got ahead a build it and they will come a mentality. You've kind of built it and then you had to go out, listen to people and figure out how to apply it. Right. Actually I've been using a lot of parallels to service now. It's kind of right. Fred Luddy did, he built, he built a platform and then the VC said, well what do we use it for? He goes, anything good? He had to go and talk to people into the route. Okay, how do I apply it? But you said, well kind of made some mistakes early on, but you recovered from those mistakes by listening. >>It sounds like the definitely in the bill. Coming from a software engineer background, I, uh, I have, uh, at least I had the tendency to don't give enough credit to sales, to marketing even to the customers it was, we clearly understand the customers in the, so we build technology for the sake of technology. So we were really fortunate to have some MALDI customers. We didn't understand how because I fought that custom was, should all to themselves to test and find the best technology out there and just go there. I was really kind of, I had a lot of blind sports, so on how this world operates, but after I've stopped it to visit customers and understand their pain points and their requests actually realize they are smarter than us in using our own technology because they use it in the real world. So then message that that completely transformed my thinking. So I went back to my engineering team, sunlight, unlike the one guys on this day, I don't want to ever hear, we don't fix bugs and we do features and we do this. When the customers say, you do this, you say, thank you, thank you for showing me the light. I will do this. That's, that makes me create a better broad your feet >>back as a gift. The feedback is a gift. So I want to ask you about the statement you made yesterday in your keynote about we are cloud first and you announced a SAS capability today. I said I signed up, took me seconds, and now I've got to do some work to invite some other people and start doing some automations. But when you were in your apartment in Bucharest or wherever you started the company, why not cloud then? >>Most of our customers are still on prem. So way we have to be where customers are with the clouds first four years ago we wouldn't be here today. Oh. So we started close to the customers way and learn a lot from really large customers that thought a bit more reluctant to go into cloud and now as I think all in all in life is about timing. I think it's the right time timing to benefit the other segments of the market and allow for automation on demand was the infrastructure. Bryce, that people that are still on prem pay are huge. Compare some in some companies only to provision a server would be like 200 K period one time on. Then you have people to maintain them. Offering a many surveys by us in our own cloud looking at the best, you know, we create the best infrastructure, most efficient. We have the best people understanding our technology. We're seeing it. I think it's a great business proposition, but now we were ready to do it. >>Well, plus it sets up potentially new pricing models, you know, consumption based pricing models. You hear a lot of, a lot of row, a lot of bots, uh, are, are sitting idle as a customer. Help just charge me when I'm using violet, thinking of, you know, the serverless and functions. But this is possible only with economy of scale. So the cloud is, you're going to your cloud, you're not going to build it on Azure or AWS or you guys may use, we'll use Bob Lee Clow shows, which is infrastructure. You just have this look Chelios. Yeah. Okay. Um, I'm going ask you about, uh, IPO. Um, what, can you share with us your thoughts? You know, the window seems to be closing a little bit different, right? You know, Uber's and now Slack, you know, not such a successful. And what are your thoughts on IPO? Well, I think that the enterprise software >>companies were actually pretty successful in IPO and this year. And they have one of the, you know, a lot of just multiples that we have. We're seeing. So you cannot compare marketplace companies like who you are or Lyft to enterprise software. So I think for a good enterprise software company, they will always be a place to land a good IPO regardless of timing. Timing is, doesn't work for us. We are still, we are still a young company in many ways. We are 40 years old company. So it will be one of the yellow most earliest IPO. Very, very, very early. We need the bit, we need more at least one year. Like we want do an IPO in 2020, but we've been here the 2021 would be a good year for that. Depends on the climate, but we have met on the client, you have them, you're very well capitalized. Right? It's not like you need to do upsell Kevin the motivation and we still have five would bribe private Gabby. The markets are very frothy so you can still raise a lot of money and very good volume. >>Right. So the motivation for IPO is, is what awareness maybe for the employee. >>Yeah. Exited for the employees. And, uh, you'll just get to a size where you cannot be prideful. And most of our customers are public and they are much more comfortable dealing with the public. >>Yeah, for sure. It's part of your transparency edict, but I mean, well a lot of companies that have raised a ton of dough at the Cloudera for example, waited and waited and waited and then, you know, they go public. It's like, then the public doesn't get to participate in the upside. So I'm sure you're having those conversations thinking about it though. You know, the little guy wants to invest too and you're like, yeah, why not, right? Yeah. So let's go this. It's very exciting times and as you say, it depends on the time and we'll see what happens with the 2020 election who can, who can predict those things. But, so I want to ask you about the Capitol because software is a very capital efficient marketplace, but, but we see companies, you know, you included raising hundreds of millions, sometimes a billion plus dollars. Why such large raises? Where do you see that going? You mentioned engineering, you'd have plenty of money to do engineering. Is it really promotion? We tried to get to escape philosophy. We >>build a big market and we have invested in a mode in order to, if you go fast, well let's take cold car. Okay, the fosters or car go, the more guess it consumes. Right, so you need, if you want to comprise the time, it's costly, but that helps you extend much faster when when large markets and build a large bill, really a large company. In the short time, we could have been much more efficient if we, instead of four years, we would have built this company in 10 years. Many companies, if they would reach our size in 10 years, I will still be happy, but we've done it in four instead of 10 and then it was if you have unit capital to grow fast, >>I think it's the right approach because I do think there's going to be consolidation in this market and I think the company that achieves escape velocity and you are the favorite to do that now, we'll do very, very well. I think the market's much larger than the market forecast suggests. I think the Tam is way, way, way under, and again, we call this on service now as well. We saw this early on at the core. People tell how the core is really not that big, but, but the, but the adjacencies and the potential market is, it's, it's, it's way more than 16 billion or whatever that number is you showed. I think it's, it's, it's, it's 30 40 you know, perhaps even even bigger. >>I think as people realize that this is the really, the only way you can achieve automation on this, a smaller type of processes, but large volume, I think they will. They will go more and more. >>Well then, I know you're super busy and you've got to go. Thanks so much for coming again. Thank you guys for watching. Keep it right there. We'll be right back. Right after this short break. You're watching the cube from UI path forward three right back.

>> From Times Square, in the heart of New York City, it's theCUBE. Covering Imagine 2018. Brought to you by, Automation Anywhere. >> Welcome back everybody, Jeff Frick here with theCUBE. We're in Manhattan, New York City, at Automation Anywhere's Imagine Conference 2018. About 1,100 professionals really talking about the future of work bots, and really how automation is gonna help people do the mundane a little bit easier, and hopefully free us all up to do stuff that's a little bit more important, a little higher value. We're excited to have our next guest, he's Craig Le Clair, the VP and Principal Analyst from Forrester, and he's been covering this space for a long time. Craig, great to see ya. >> Yeah, nice to see you, thanks for having me on. >> So, first off, just kind of general impressions of the event? Have you been to this before? It's our first time. >> Yes, I did a talk here last year, so it was a little bit smaller then. There's obviously more people here today, but it's pretty much, I think it was in Brooklyn last year. >> It was in Brooklyn, okay. >> So, this is an upgrade. >> So, RP Robotic Process Automation, more affectionately, probably termed as bots. >> Yeah. >> They're growing, we're seeing more and more time and our own interactions with companies, kind of on the customer service side. How are they changing the face of work? How are they evolving as really a way for companies to get more leverage? >> Yeah, so I'll make one clarification of your sentence, and that's, you know, bots do things on behalf of people. What we're talking to in a call center environment is a chat bot. So, they have the ability to communicate or really, I would say, attempt to communicate with people. They're not doing a very good job of it in my view. But, bots work more in the background, and they'll do things for you, right? So, you know, they're having a tremendous effect. I mean, one of the statistics I was looking at the other day, per one billion dollars of revenue, the average company had about 150 employees in finance and accounting ten years ago. Now, instead of having 120 or 130, it's already down to 70 or 80, and that's because the bots that we're talking about here can mimic that human activity for posting to a general ledger, for switching between applications, and really, move those folks on to different occupations, shall we say. >> Right, right. >> Yeah. >> Well it's funny, Jeff Immelt just gave his little keynote address, and he said, "This is the easiest money you'll find in digital transformation is implementing these types of technology." >> Yeah, it's a good point, and it was a great talk, by the way, by Jeff. But, you know, companies have been under a lot of pressure to digitally transform. >> Right. >> You know, due to really the mobile, you know, mobile peaked around 2012, and that pushed everyone into this gap that companies couldn't really deal with the consumer technology that was out there, right? So then you had the Ubers of the world and digital transformation. So, there's been a tremendous focus on digital transformation, but very little progress. >> Right. >> When we do surveys, only 11% are showing any progress at all. So, along comes this technology, Robotic Process Automation that allows you to build bots without changing any of the back end systems. There's no data integration. You know, there's no APIs involved. There's no big transformation consultants flying in. There's not even a Requirements Document because you're gonna start with recording the actual human activity at a work station. >> Right. >> So, it's been an elixir, you know, frankly for CIOs to go into their boss and say, "You know what, we're doing great, you know, I've just made this invoice process exist in a lot better way." You know, we're on our path to digital transformation. >> And it's really a different strategy, because, like you said, it's not kind of rip and replace the old infrastructure, you're not rewriting a lot of applications, you're really overlaying it, right? >> Which is one of the potential downfalls is that, you know, sometimes you need to move to that new cloud platform. You don't want, to some extent, the technology institutionalizes what could be a very bad process, one that needs to be modernized, one that needs to be blown up. You know, we're still using the airline reservation systems from 1950s, and layers, and layers, and layers and layers built upon them. At some point, you're gonna have to design a new experience with new technology, so there's some dangers with the seduction of building bots against core systems. >> Right, so the other thing that's happening is the ongoing, I love Moore's Law, it's much more about an attitude then the physics of a microprocessor, but you know, compute, and store, and networking, 5Gs just around the corner, cloud-based systems now really make that available in a much different way, and as you said, mobile experience delivers it to us. So as those continue to march on and asymptomatically approach zero and infinite scale, we're not there yet, but we're everyday getting a little bit closer. Now we're seeing AI, we're seeing machine-learning, >> Yes. >> We're seeing a new kind of class of horsepower, if you will, that just wasn't available before at the scale it's at today. So, now you throw that into the mix, these guys have been around 14 years, how does AI start to really impact things? >> It's a fascinating subject and question. I mean, we're, at Forrester, talking about the forces of automation. And, by the way, RPA is just a subset of a whole set of technologies: AI, you mentioned, and AI is a subset of automation, and there's Deep Learning, is a subset of AI and you go on and on, there are 30, 40 different automation technologies. And these will have tremendous force, both on jobs in the future, and on shifting control really to machines. So, right now, you can look at this little bubble we had of consumer technology and mobile, shifting a lot of power to the consumer, and that's been great for our convenience, but now with algorithms being developed that are gonna make more and more decisions, you could argue that the power is going to shift back to those who own the machines, and those who own the algorithms. So, there's a power shift, a control shift that we're really concerned about. There's a convergence of the physical and digital world, which is IOT and so forth, and that's going to drive new scale in companies, which are gonna further dehumanize some of our life, right? So that affects, it squeezes humans out of the process. Blockchain gets rid of intermediaries that are there to really transfer ideas and money and so forth. So, all of these forces of automation, which we think is gonna be the next big conversation in the industry, are gonna have tremendous effect societally and in business. >> Right. Well, there's certainly, you know, there's the case where you just you can't necessarily rescale a whole class of an occupation, right? The one that we're all watching for, obviously, is truck drivers, right? Employs a ton of people, autonomous vehicles are right around the corner. >> Right. >> On the other hand, there's going to be new jobs that we don't even know what they're gonna be yet, to quote all the graduating seniors, it's graduation season, most of them are going to work in jobs that don't even exist 10 years from now. >> Correct, correct, very true. >> And the other thing is every company we talk to has got tons of open reqs, and they can't get enough people to fulfill what they need, and then Mihir, I think touched on an interesting point in the keynote, where, ya know, now we're starting to see literal population growth slow down in developed countries, >> Yes. >> Like in Japan is at the leading edge, and you mentioned Europe, and I'm not sure where the US is, so it's kind of this interesting dichotomy: On one side, machines are going to take more and more of our jobs, or more and more portions of our job. On the other hand, we don't have people to do those jobs necessarily anyway, not necessarily today, but down the road, and you know, will we get to more of this nirvana-state where people are being used to do higher-value types of activities, and we can push off some of this, the crap and mundane that still, unfortunately, takes such a huge portion of our day to day world? >> Yeah, yeah. So, one thought that some of us believe at Forrester, I being one of them, is that we're at a, kind of, neutral right point now where a lot of the AI, which is really the most disruptive element we're talking about here, our PA is no autonomous learning capability, there's no AI component to our PA. But, when AI kicks in, and we've seen evidence of it as we always do first in the consumer world where it's a light version of AI in Netflix. There's no unlimited spreadsheets sitting there figuring out which one to watch, right? They're taking in data about your behavior, putting you in clusters, mapping them to correlating them, and so forth. We think that business hasn't really gotten going with AI yet, so in other words, this period that you just described, where there seems to be 200,000 people hired every month in the ADP reports, you know, and there's actually 50,000 truck driver jobs open right now. And you see help-wanted signs everywhere. >> Right, right. >> We think that's really just because business hasn't really figured out what to do with technology yet. If you project three or four years, our projections are that there will be a significant number of, particular in the cubicles that our PA attacks, a significant number of dislocation of current employment. And that's going to create this job transformation, we think, is going to be more the issue then replacement. And if you go back in history, automations have always led to transformation. >> Right. >> And I won't go through the examples because we don't have time, but there are many. And we think that's going to be the case here in that automation dividends, we call them, are going to be, are being way underestimated, that they're going to be new opportunities, and so forth. The skills mis-match is the issue that, you know, you have what RPA attacks are the 60 million that are in cubicles today in the US. And the average education there is high school. So, they're not gonna be thrown out of the cubicles and become data scientists overnight, right? So, there's going to be a massive growth in the gig economy, and there's an informal and a formal segment of that, that's going to result in people having to patch together their lives in ways they they hadn't had before, so there's gonna be some pain there. But there are also going to be some strong dividends that will result from this level of productivity that we're gonna see, again, in a few years, cause I think we're at a neutral point right now. >> Well, Amara's Law doesn't get enough credit, right? We overestimate in the short-term, and then underestimate the long-term needs affect. >> Absolutely. >> And one of the big things on AI is really moving from this, in real time, right? And all these fast databases and fast analytics, is we move from a world where we are looking in the rear view mirror and making decisions on what happened in the past to you know, getting more predictive, and then even more prescriptive. >> Yes. >> So, you know, the value unlock there is very very real, I'm never fascinated to be amazed by how much inefficiency there still is every time we go to these conferences. (Craig laughs) You know we thought we solved it all at SAP and ERP, that was clearly-- >> Clearly not the case. Funny work to do. >> But, it's even interesting, even from last year, you mentioned that there the significant delta just from year to year is pretty amazing. >> Yes, I've been amazed at the level of innovation in the core digital worker platforms, the RPA platforms, in the last year has been pretty amazing work. What we were talking about a year ago when I spoke at this conference, and what we're talking about now, the areas are different. You know, we're not talking about basic control of the applications of the desktop. We're talking about integration with text analytics. We're talking about comp combining process mining information with desktop analytics to create new visions of the process. You know, we weren't talking about any of that a year ago. We're talking about bot stores. They're out there, and downloadable robots. Again, not talking about last year at all. So, just a lot of good progress, good solid progress, and I'm very happy to be a part of it. >> And really this kind of the front end scene of so much of the development is manifested on the front end, where we used to always talk about citizen developers back in the day. You know, Fred Luddy, who was just highlighted Service Now, most innovative company. That was his, you know, vision of Citizen Developer. And then we've talked about citizen integrators, which is really an interesting concept, and now we're talking about really citizens, or analysts, having the ability via these tools to do integrations and to deliver new kind of work flows that really weren't possible before unless you were a hardcore programmer. >> Yeah, although I think that conversation is a little bit premature in this space, right? I think that most of the bot development requires programming skills today, and they're going to get more complicated in that most of the bot activities today are doing, you know, three decisions or less. Or they're looking at four or five apps that are involved, or they're doing a series of four or five hundred clicks that they're emulating. And the progression is to get the digital workers to get smarter and incorporating various AI components, so you're going to have to build, be able to deal statistically with algorithm developments, and data, and learning, and all of that. So, it's not.... The core of this, the part of it that's going to be more disruptive to business is going to be done by pretty skilled developers, and programmers, and data scientists, and statistical, you know, folks that are going through. But, having said that, you're going to have a digital workforce that's got to be managed, and you know, has to be viewed as an employee at some level to get the proper governance. So you have to know when that digital worker was born, when they were hired, who do they report to, when were they terminated, and what their performance review is. You gotta be doing performance reviews on the digital workers with the kind of dashboard analytics that we have. And that's the only way to really govern, because the distinction in this category is that you're giving these bots human credentials, and you're letting them access the most trusted application boundaries, areas, in a company. So, you better treat them like employees if you want proper governance. >> Which becomes tricky as Mihir said when you go from one bot to ten bots to ten thousand. Then the management of this becomes not insignificant. >> Right. >> So Craig, I want to give you the last word. You said, you know, big changes since last year. If we sit down a year from now, 2019, _ Oh. >> Lord knows where we'll be. What are we gonna talk about? What do you see as kind of the next, you know, 12-month progression? >> You know, I hope we don't go to Jersey after Brooklyn, New York, and-- >> Keep moving. >> I see Jersey over there, but it's where it belongs, you know, across the river. I'm from Jersey, so I can say that. You know, I think next year we're gonna see more integration of AI modules into the digital worker. I think with a lot of these explosive markets, like RPA is, there's always a bit of cooling off period, and I think you're going to see some tapering off of the growth of some of the platform companies, AA, but also their peers and compatriots. That's natural. I think that the area has been a little bit, you know, analysis and tech-industry loves change. If there's no change, there's nothing for us to write about. So, we usually over-project. Now, in this case, the 2.8 billion-dollar market project five years out that I did is being exceeded, which is rare. But I expect some tapering off in a year where there's not a ceiling hit, but that, you know, you end up with going through these more simple applications that can be robotized easily. And now you're looking at slightly more complicated scenarios that take a little more, you know, AI and analytics embedded-ness, and require a little more care, they have a little more opaque, and a little more thought, and that'll slow things down a bit. But, I still think we're on our way to a supermarket and a lot of productivity here. >> So just a little less low-hanging fruit, and you gotta step up the game a little bit. >> I guess you could, you said it much simpler then I did. >> I'm a simple guy, Craig. >> But that's why you're the expert on this panelist. >> Alright, Craig, well thanks for sharing your insight, >> Alright. >> Really appreciate it, and do look forward to talking to you next year, and we'll see if that comes true. >> Alright, appreciate it, take care now. >> He's Craig Le Clair and I'm Jeff Frick. You're watching theCUBE from Automation Anywhere Imagine 2018.

>> Narrator: Live from Las Vegas, it's the CUBE covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome back everyone, we are wrapping up three big days of the CUBE's live coverage of ServiceNow Knowledge 18. I'm your host Rebecca Knight along with my cohost Dave Vellante and Jeffrick. It has been such fun co-hosting with you both. It's always a ghast to be with you so three days, what have we learned? We've learned we're making the world of work work better for people. Beyond that what do you think? >> New branding you know there which I think underscores ServiceNow's desire to get into the C-Suite. Become a strategic partner. Some of the things we heard this week, platform of platforms. The next great enterprise software company is what they aspire to, just from a financial standpoint. This company literally wants to be a hundred billion dollar valuation company. I think they got a reasonable shot at doing that. They're well on their way to four billion dollars in revenue. It's hard to be a software company and hit a billion. You know the number of companies who get there ar very limited and they are the latest. We're also seeing many products, one platform and platforms in this day and age beat products. Cloud has been a huge tailwind for ServiceNow. We've seen the SaaSification of industries and now we're seeing significant execution on the original vision at penetration into deeply into these accounts. And I got to say when you come to events like this and talk to customers. There's amazing enthusiasm as much of if not more than any show that we do. I mean I really got, what's your take? >> We go to so many shows and it's not hard to figure out the health of a show. Right you walk around the floor, what's the energy, how many people are there? What's the ecosystem I mean, even now as I look around we're at the very end of the third day and there is action at most of the booths still. So it's a super healthy ecosystem. I think it grew another 4,000 people from this year of the year of year growth. So it's clearly on the rise. SaaS is a big thing, I think it's really interesting play and the kind of simple workflow. Not as much conversation really about the no code and the low code that we've heard in the past. Maybe they're past that but certainly a lot of conversation about the vertical stack applications that they're building and I think at the end of the day. We talked about this before, it's competition for your screen. You know what is it that you work in everyday. Right if you use, I don't care what application. SalesForce or any SaaS application which we all have a lot of on our desktop today. If you use it as a reporting tool it's a pain. It's double entry, it's not good. But what is the tool that you execute your business on everyday? And that's really a smart strategy for them to go after that. The other thing that I just think is ripe and we talked about a little bit. I don't know if they're down playing it because they're not where they want to be at or they're just downplaying it but the opportunity for machine learning and artificial intelligence to more efficiently impact workflows with the data from the workflow is a huge opportunity. So what was a bunch of workflows and approvals and this and that should all get, most of it should just get knocked out via AI over a short period of time. So I think they're in a good spot and then the other thing which we hear over and over. You know Frank Slootman IT our homies I still love that line. But as has been repeated IT is everywhere so what a great way to get into HR. To get into legal, to get into facilities management, to get into these other things. Where like hey this is a really cool efficient little tool can I build a nice app for my business? So seemed to be executing on that strategy. >> Yeah CJ just said IT will always be at our core. Rebecca the keynote was interesting. It got mixed reviews and I think part of that is they're struggling we heard tat from some of our guests. There's a hybrid audience now. You got the IT homies, you got the DevOps crowd and then you got the business leaders and so the keynote on day one was really reaching an audience. Largely outside of the core audience. You know I think day two and day three were much more geared toward that direct hit. Now I guess that's not a bad thing. >> No and I think that I mean as you noted it's a hybrid audience so you're trying to reach and touch and inspire and motivate a lot of different partners, customers, analysts. People who are looking at your business in a critical way. The first day John Donahoe it struck me as very sort of aspirational. Really talking about what is our purpose, what do we do as an organization. What are our values, what problems are we trying to solve here and I think that that laying out there in the way that he did was effective because it really did bring it back to, here's what we're about. >> Yeah the other thing I learned is succession has been very successful. Frank Slootman stepped down last year as CEO. He's maintained his chairman title, he's now stepped down as chairman. Fred kind of you know went away for a little while. Fred's back now as chairman. John Donahoe came in. People don't really put much emphasis on this but Fred Luddy was the chief product officer. Dan McGee was the COO, CJ Desai took over for both of them. He said on the CUBE. You know you texted me, you got big shoes to fill. He said I kept that just to remind me and he seems to have just picked up right where those guys left off. You know Pat Casey I think is understated and vital to the culture of this company. You know Jeff you see that, he's like a mini Fred you know and I think that's critical to maintain that cultural foundation. >> But as we said you know going the way that Pat talked about kind of just bifurcation in the keynote and the audiences in the building and out of the building. Which I've never heard before kind of an interesting way to cut it. The people that are here are their very passionate community and they're all here and they're adding 4,000 every single year. The people that are outside of the building maybe don't know as much about it and really maybe that aspirational kind of messaging touched them a little bit more cause they're not into the nitty gritty. It's really interesting too just cause this week is such a busy week in technology. The competition for attention, eyeballs and time. I was struck this morning going through some of our older stuff where Fred would always say. You know I'm so thankful that people will take the time to spend it with us this week. And when people had choices to go to Google IO, Microsoft build, of course we're at Nutanix next, Red Hat Summit I'm sure I'm missing a bunch of other ones. >> Busy week. >> The fact that people are here for three days of conference again they're still here is a pretty good statement in terms of the commitment of their community. >> Now the other thing I want to mention is four years ago Jeff was I think might have been five years ago. We said on the CUBE this company's on a collision course with SalesForce and you can really start to see it take shape. Of the customer service management piece. We know that SalesForce really isn't designed for CSM. Customer Service Management. But he talked about it so they are on a collision course there. They've hired a bunch of people from SalesForce. SalesForce is not going to rollover you know they're going to fight hard for that hard, Oracle's going to fight hard for that. So software companies believe that they should get their fair share of the spend. As long as that spend is a 100%. That's the mentality of a software company. Especially those run by Marc Benioff and Larry Ellis and so it's going to be really interesting to see how these guys evolve. They're going to start bumping into people. This guy's got pretty sharp elbows though. >> Yeah and I think the customer relation is very different. We were at PagerDuty Summit last right talked to Nick Meta who just got nominated for entrepreneur of the year I think for Ink from GainSight and he really talked about what does a customer management verses opportunity management. Once you have the customer and you've managed that sale and you've made that sale. That's really were SalesForce has strived in and that's we use it for in our own company but once you're in the customer. Like say you're in IBM or you're in Boeing. How do you actually manage your relationship in Boeing cause it's not Boeing and your sales person. There's many many many relationships, there's many many many activities, there's somewhere you're winning, somewhere you're losing. Somewhere you're new, somewhere you're old and so the opportunity there is way beyond simply managing you know a lead to an opportunity to a closed sale. That' just the very beginning of a process and actually having a relationship with the customer. >> The other thing is so you can, one of the measurements of progress in 2013 this company 95% of its business was in IT. Their core ITSM, change management, help desk etc. Today that number's down to about two thirds so a third of the business is outside of IT. We're talking about multi-hundreds of millions of dollars. So ITOM, HR, the security practice. They're taking these applications and they're becoming multi-hundred million dollar businesses. You know some of them aren't there yet but they're you know north of 50, 75 we're taking about hundreds of customers. Higher average price, average contract values. You know they don't broadcast that here but you know you look at peel back the numbers and you can see just tremendous financial story. The renewal rates are really really high. You know in the mid 90s, high 90s which is unheard of and so I think this company is going to be the next great enterprise software company and their focus on the user experience I think is important because if you think about the great enterprise software companies. SalesForce, Oracle, SAP, maybe put IBM in there because they sort of acquired their way to it. But those three, they're not the greatest user experiences in the world. They're working on the UI but they're, you know Oracle, we use Oracle. It's clunky, it's powerful. >> They're solving such different problems. Right when those companies came up they were solving a very different problem. Oracle on their relational database side. Very different problem. You know ARP was so revolutionary when SAP came out and I still just think it's so funny that we get these massive gains of efficiency. We had it in the ARP days and now we're getting it again. So they're coming at it from a very different angle. That they're fortunate that there are more modern architecture, there are more modern UI. You know unfortunately if you're legacy you're kind of stuck in your historical. >> In your old ways right? >> Paradigm. >> So the go to market gets more complicated as they start selling to all these other divisions. You're seeing overlay, sales forces you know it's going to be interesting. IBM just consolidated it's big six shows into one. You wonder what's going to happen with this. Are they going to have to create you know mini Knowledges for all these different lines of business. We'll see how that evolves. You think with the one platform maybe they keep it all together. I hope they don't lose that core. You think of VM world, rigt there's still a core technical audience and I think that brings a lot of the energy and credibility to a show like this. >> They still do have some little regional shows and there's a couple different kind of series that they're getting out because as we know. Once you get, well just different right. AWS reinvents over $40,000 last year. Oracle runs it I don't even know what Oracle runs. A 65,000, 75,000. SalesForce hundred thousand but they kind of cheat. They give away lot of tickets but it is hard to keep that community together. You know we've had a number of people come up to us while we're off air to say hi, that we've had on before. The company's growing, things are changing, new leadership so to maintain that culture I think that's why Pat is so important and the key is that connection to the past and that connection to Fred. That kind of carried forward. >> The other thing we have to mention is the ecosystem when we first started covering ServiceNow Knowledge it was you know fruition partners, cloud Sherpas I mean it. Who are these guys and now you see the acquisitions, it's EY is here, Deloitte is here, Accenture is here. >> Got Fruition. >> PWC you see Unisys is here. I mean big name companies, Capgemini, KPMG with big install bases. Strong relationships it's why you see the sales guys at ServiceNow bellying up to these companies because they know it's going to drive more business for them. So pretty impressive story I mean it's hard to be critical of these guys, your price is too high. Okay I mean alright. But the value's there so people are lining up so. >> Yeah I mean it's a smoking hot company as you said. What do they needed to do next? What do you need to see from them next? >> Well I mean the thing is they laid out the roadmap. You know they announced twice a year at different cities wit each a letter of the alphabet. They got to execute on that. I mean this is one of those companies that's theirs to lose. It really is, they got the energy. They got to retain the talent, attract new talent, the street's certainly buying their story. Their free cash flow is growing faster than their revenue which is really impressive. They're extremely well run company. Their CFO is a rockstar stud behind the scenes. I mean they got studs in development, they got a great CEO they got a great CFO. Really strong chief product officer, really strong general managers who've got incredible depth in expertise. I mean it's theirs to lose, I mean they really just have to keep executing on that roadmap keeping their customer focus and you know hoping that there's not some external factor that blows everything up. >> Yeah good point, good point. What about the messaging? We've heard as you said, it's new branding so it's making the world of work work better, there's this focus on the user experience. The idea that the CIO is no longer just so myopic in his or her portfolio. Really has to think much more broadly about the business. A real business leader, I mean is this. Are you hearing this at other conferences too? Is it jiving with the other? >> You know everyone talks about the new way to work, the new to work, the new way to work and the consumers they sort of IT and you know all the millennials that want to operate everything on their phone. That's all fine and dandy. Again at the end of the day, where do people work? Because again you're competing everyone has, excuse me many many applications unfortunately that we have to run to get our day job done and so if you can be the one that people use as the primary way that they get work done. That's the goal... >> Rebecca: That's where the money is. >> That's the end game right. >> Well I owe that so the messaging to me is interesting because IT practitioners as a community are some of the most under appreciated. You know overworked and they're only here from the business when things go bad. For decades we've seen this the thing that struck me at ServiceNow Knowledge 13 when we first came here was wow. These IT people ar pumped. You know you walk around a show the IT like this, they're kind of dragging their feet, heads down and the ServiceNow customers are excited. They're leading innovation in their companies. They're developing new applications on these platforms. It's a persona that I think is being reborn and it sound exciting to see. >> It's funny you bring up the old chest because before it was a lot about just letting IT excuse me, do their work with a little bit more creativity. Better tools, build their own store, build an IT services Amazon likened store. We're not hearing any of that anymore. >> Do more with less, squeeze, squeeze. >> If we're part of delivering value as we've talked about with the banking application and link from MoonsStar you know now these people are intimately involved with the forward facing edge of the company. So it's not talking about we'll have a cool service store. I remember like 2014 that was like a big theme. We're not hearing that anymore, we've moved way beyond that in terms of being a strategic partner in the business. Which we here over and over but these are you know people that header now the strategic partner for the business. >> Okay customers have to make bets and they're making bets on ServiceNow. They've obviously made a bunch of bets on Oracle. Increasingly they're making bets on Amazon. You know we're seeing that a lot. They've made big bets on VM ware, obviously big bets on SAP so CIOs they go to shows like this to make sure that they made the right bet and they're not missing some blind spots. To talk to their peers but you can see that their laying the chips on the table. I guess pun intended, I mean they're paying off. >> That's great, that's a great note to end on I think. So again a pleasure co-hosting with both of you. It's been a lot of fun, it's been a lot of hard work but a lot of fun too. >> Thank you Rebecca and so the CUBE season Jeff. I got to shout out to you and the team. I mean you guys, it's like so busy right now. >> I thought you were going to ask if we were going next. I was going to say oh my god. >> Next week I know I'm in Chicago at VMON. >> Right we have VMON, DON, we've got a couple of on the grounds. SAP Sapphire is coming up. >> Dave: Pure Accelerate. >> Pure Accelerate, OpenStack, we're going back to Vancouver. Haven't been there for a while. Informatica World, back down here in Las Vegas Pure Storage, San Francisco... >> We got the MIT's CTO conference coming up. We got Google Next. >> Women Transforming Technology. Just keep an eye on the website upcoming. We can't give it all straight but... >> The CUBE.net, SiliconAngle.com, WikiBon.com, bunch of free content.- you heard it here first. >> There you go. >> For Rebecca Knight and Jeffrick and Dave Vellante this has been the CUBE's coverage of ServiceNow Knowledge 18. We will see you next time. >> Thanks everybody, bye bye.

>> Announcer: Live from Las Vegas, it's the Cube. Covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome to day three of Knowledge18. You're watching the Cube, the leader in live tech coverage. Day three is when ServiceNow brings together its audience and talks about its platform, the creators, the developers, the doers get together in the room. Jeff Frick and I, my co-host, we've seen this show now, Jeff, for many, many years. I joked on Twitter today, it's not often you see a full room and this room was packed on day three. Unless Larry Ellison is speaking. Well, Larry Ellison is not here, but Pat Casey is. He's the Senior Vice President of DevOps at ServiceNow and a Cube alum, Pat, great to see you again. >> Absolutely, just glad to be back. >> So, my head is exploding. With all the innovation that's comin' out. I feel like I'm at a AWS re:Invent with Andy Jassy up on stage with all these features that are coming out. But wow, you guys are on it. And part of that is because of the platform. You're able to put out new features, but how's the week going? >> So far it's been great. But you're sort of right, we are super proud of this year. I think there's more new stuff that's valuable for our customers coming out this year than probably the three years prior to this. I mean you got the chat bot designer, and you got some great application innovation, you got Flow Designer, you've got the entire integration suite coming online, and then in addition to that you've got a whole new mobile experience coming out. Just all stuff that our customers can touch. You can go downstairs and see all that and they can get their hands on it. Super exciting. >> So consistent too with the messaging. We've been coming here, I this is our sixth year, with kind of the low-code and no-code vision that Fred had way at the beginning. To let lots of people build great workflows and then to start taking some of these crazy new applications like chat bots and integration platform, pretty innovative. >> Yeah, I think it's a mindset when you get down to it. I mean we, the weird failure mode of technology is technology tends to get built by by technologists. And I do this for a living. There's a failure mode where you design the tool you want to use. And those tend to be programmer tools 'cause they tend to get designed by programmers. It does take an extra mental shift to say no, my user is not me. My user is a different person. I want to build the tool that they want to use. And that sort of user empathy, you know Fred had that in spades. That was his huge, huge, huge strength. Among other things. One of his huge strengths. It's something that we're really trying to keep foreground in the company. And you see that in some of the new products we released as well. It's really aimed at our customers not at our developers. >> The other thing I think that's been consistent in all the interviews we've done, and John talked on the day one keynote one of his kind of three keys to success was try to stay with out of the box as much as you can as a rule, and we've had all the GMs of the various application stacks that you guys have, they've all talked consistently we really try to drive, even as a group our specific requests back into development on the platform level so we can all leverage it. So even though then the vertical applications you guys are building, it's still this drive towards leverage the common platform. >> Yeah, absolutely. And there is, what's the word I'm looking for? There's a lot of value in using the product the way it was shipped. For easiest thing is when it advances or when we ship you new features you can just turn 'em on, and it doesn't conflict with anything else you got going in there. There's always an element of, you know, this is enterprise software. Every customer's a little bit different. GE does not work the same way as Bank of America. So you probably never get away entirely from configuring, but doing the minimum that you can get away with, the minimum that'll let you put your business-specific needs in there, and being really sure of it, you need to do it, it's the right approach to take. The failure mode of technologists, the other one, is we like writing technology. So give me a platform and I'm going to just write stuff. Applying that only when it makes sense to the business is where you really need to be. Especially in this day and age. >> Well I wanted to ask you about that 'cause you guys talk about many applications one platform. But you used to be one platform one app. >> Pat: Yep. >> So as you have more, and more, and more apps, how are you finding it regarding prioritization of features, and capabilities? I imagine the GMs like any company are saying, hey, this is a priority. >> Sure. >> And because you have a platform there's I'm sure a lot more overlap than if you're a stovepipe development organization. But nonetheless you still got to prioritize. Maybe talk about that a little bit. >> Sure, you end up with two different levels of it though. At one level, you tend to want to pick businesses to go into, which you're aligned with the technology stack you have. I don't think we're going to go into video streaming business. It's a good business, but it's not our business. >> Too bad, we could use some of that actually. >> Well, maybe next year. (laughs) But when you get down to it we mostly write enterprise business apps. So HR is an enterprise business app, CSM, SecOps, ITSM, they're all kind of the same general application area. So we don't tend to have something which is totally out to lunch. But you're right in the sense that A, what's important to CSM might be less important to ITSM. And so we do prioritize. And we prioritize partly based on what the perceived benefit across the product line is. If something that a particular BU wants that five other BUs are going to benefit from that's pretty valuable. If only them, not so much. And part of it too is based on how big the BUs are. You know if you're an emerging product line you probably get few less features than like Feryl Huff. Like she has a very big product line. Or Pabla, he has a very big product line. But there's also an over-investment in the emerging stuff. Because you have to invest to build the product lines out. >> The other thing I think is you guys have been such a great opportunity is I just go back to those early Fred interviews with the copy room and the color paper 'cause nobody knows what that is anymore. >> Pat: Yep. >> But workflow just by its very nature lends itself so much to leveraging, AI, and ML, so you've already kind of approached it while trying to make work easier with these great workflow tools, but what an opportunity now to apply AI and machine learning to those things over time. So I don't even have to write the rules and even a big chunk of that workflow that I built will eventually go away for me actually having to interact with it. >> Yeah, there's a second layer to it too, which I'll call out. The workflows between businesses are different. But we have the advantage that we have the data for each of the businesses. So we can train AI on this is the way this particular workflow works at General Electric and use that bot at GE and train a different bot at maybe at Siemens. You know it's still a big industrial firm. It's a different way of doing it. That gives us a really big advantage over people who commingle the data together. Because of our architecture, we can treat every customer uniquely and we can train the automation for the unique workflows for that particular customer. It gives a much more accurate result. >> So thinking about, staying on the theme of machine intelligence for a moment, you're not a household name in the world of AI, so you've done some acquisitions and-- >> Pat: Yep. >> But it's really becoming a fundamental part of your next wave of innovation. As a technologist, and you look out at the landscape, you obviously you see Google, Apple, Facebook, IBM, with Watson, et cetera, et cetera, as sort of the perceived leaders, do you guys aspire to be at that level? Do you need to be? What's the philosophy and strategy with regard to implementing AI in the road map? >> Well if you cast your eyes forward to where we think the future's going to be, I do think there are going to be certain core AI services that they're going to call their volume plays. You need a lot of engineers, a lot of resources, a lot of time to execute them. Really good voice-to-text is an example. And that's getting pretty good. It's almost solved at this point. A general case conversational agent, not solved yet. Even the stuff you see at Google I/O, it's very specialized. It does one thing really well and it's a great demo, but ask it about Russian history, no idea what to talk about. Whereas, maybe you don't know a lot about Russian history, you as a human would at least have something interesting to say. We expect that we will be leveraging other people's core AI services for a lot of stuff out there. Voice-to-text is a good example. There may well be some language parsing that we can do out there. There may be other things we never even thought of. Maybe stuff that'll read text for you and give you back summaries. Those are the kinds of things that we probably won't implement internally. Where you never know, but that's my guess, where you look at where we think we need to write our own code or own our own IP, it's where the domain is specific to our customers. So when I talked about General Electric having a specific workflow, I need to be able to train something specific for that. And if you look at some other things like language processing, there's a grammar problem. Which is a fancy way of saying that the words that you use describing a Cube show are different than the words that I would use describing a trade show. So if I teach a bot to talk about the Cube, it can't talk about trade shows. If you're Amazon, you train your bot to talk in generic language. When you want to actually speak in domain-specific language, it gets a lot harder. It's not good at talking about your show. We think we're going to have value to provide domain-specific language for our customers' individualized domains. I think that's a big investment. >> But you don't have to do it all as well. We saw two actually interesting use cases talking to some of your customers this week. One was the hospital in Australia, I don't know if you're familiar with this, where they're using Alexa as the interface, and everything goes into the ServiceNow platform for the nurses. >> Yep. >> And so that's not really your AI, it's kind of Amazon's AI, that's fine. And the other was Siemens taking some of your data and then doing some stuff in Azure and Watson, although the Watson piece was, my take away was it was kind of a fail, so there's some work to be done there, but customers are going to use different technologies. >> Pat: Oh, they will. >> You have to pick your spots. >> You know we're, as a vendor, we're pretty customer-centric. We love it when you use our technology and we think it's awesome, otherwise we wouldn't sell it. But fundamentally we don't expect to be the only person in the universe. And we're also not, like you've seen us with our chat bot, our chat bot, you can use somebody else's chat client. You can use Slack, you can use Teams, you can use our client, we can use Jabber. It's great. If you were a customer and want to use it, use it. Same thing on the AI front. Even if you look at our chat bot right now, there's the ability to plug in third-party AIs for certain things even today. You can plug it in for language processing. I think out of box is configured for Google, but you can use Amazon, you can use Microsoft if you want to. And it'll parse your language for you at certain steps in there. We're pretty open to partnering on that stuff. >> But you're also adding value on top of those platforms, and that's the key point, right? >> The operating model we have is we want it to be transparent to our customers as to what's going on in the back end. We will make their life easy. And if we're going to make their life easy by behind the scenes, integrating somebody else's technology in there, that's what we're going to do. And for things like language processing, our customers never need to know about that. We know. And the customers might care if they asked because we're not hiding it. But we're not going to make them do that integration. We're going to do it for them, and just they click to turn it on. >> Pat, I want to shift gears a little bit in terms of the human factors point of all this. I laugh, I have an Alexa at home, I have a Google at home, and they send me emails suggesting ways that I should interact with these things that I've never thought of. So as you see kind of an increase in chat bots and you see it increase in things like voice-to-text and these kind of automated systems in the background, how are you finding people's adoption of it? Do they get it? Do the younger folks just get it automatically? Are you able to bury it such where it's just served up without much thought in their proc, 'cause it's really the behavior thing I think's probably a bigger challenge than the technology. >> It is and frankly it's varied by domain. If you look at something like Voice that's getting pretty ubiquitous in the home, it's not that common in a business world. And partly there frankly is just you've got a background noise problem. Engineering-wise, crowded office, someone's going to say Alexa and like nobody even knows what they're talking about. >> Jeff: And then 50 of 'em all-- >> Exactly. There's ways to solve that, but this is actual challenge. >> Right. >> If you look at how people like to interact with technologies, I would argue we've already gone through a paradigm shift that's generational. My generation by default is I get out a laptop. If you're a millennial your default is you get out your phone. You will go to a laptop and the same says I will go to a phone, but that's your default. You see the same thing with how you want to interact. Chat is a very natural thing on the phone. It's something you might do on a full screen, but it's a less common. So you're definitely seeing people shifting over to chat as their preferred interaction paradigm especially as they move onto the phones. Nobody wants to fill out a form on a phone. It's miserable. >> Jeff: Right. >> I wonder if we could, so when Jeff and I have Fred on, we always ask him to break out his telescope. So as the resident technologist, we're going to ask you. And I'm going to ask a bunch of open-ended questions and you can pick whatever ones you want to answer, so the questions are, how far can we take machine intelligence and how far should we take machine intelligence? What are the things that machines can do that humans really can't and vice versa? How will humans and machines come together in the future? >> That's a broad question. I'll say right now that AI is probably a little over-marketed. In that you can build really awesome demos that make it seem like it's thinking. But we're a lot further away from an actual thinking machine, which is aware of itself than I think it would seem from the demos. My kids think Alexa's alive, but my son's nine, right? There's no actual Alexa at the end of it. I doubt that one's going to get solved in my lifetime. I think what we're going to get is a lot better at faking it. So there's the classical the Turing test. The Turing test doesn't require that you be self-aware. The Turing test says that my AI passes the Turing test if you can't tell the difference. And you can do that by faking it really well. So I do think there's going to be a big push there. First level you're seeing it is really in the voice-to-text and the voice assistance. And you're seeing it move from the Alexas into the call centers into the customer service into a lot of those rote interactions. When it's positive it's usually replacing one of those horrible telephone mazes that everybody hates. It gets replaced by a voice assist, and as a customer you're like that is better. My life is better. When it's negative, it might replace a human with a not-so-good chat. The good news on that front is our society seems to have a pretty good immune system on that. When companies have tried to roll out less good experiences that are based on less good AI, we tend to rebel, and go no, no, we don't want that. And so I haven't seen that been all that successful. You could imagine a model where people were like, I'm going to roll out something that's worse but cheaper. And I haven't seen that happening. Usually when the AI rolls out it's doing it to be better at something for the consumer perspective. >> That's great. I mean we were talking earlier, it's very hard to predict. >> Pat: Of course. >> I mean who would have predicted that Alexa would have emerged as a leader in NLP or that, and we said this yesterday, that the images of cats on the internet would lead to facial recognition. >> I think Alexa is one example though. The thing I think's even more amazing is the Comcast Voice Remote. Because I used to be in that business. I'm like, how could you ever have a voice remote while you're watching a TV and watching a movie with the sound interaction? And the fact that now they've got the integration as a real nice consumer experience with YouTube and Netflix, if I want to watch a show, and I don't know where it is, HBO, Netflix, Comcast, YouTube, I just tell that Comcast remote find me Chris Rock the Tamborine man was his latest one, and boom there it comes. >> There's a school of thought out there, which is actually pretty widespread that feels like the voice technologies have actually been a bit of a fail from a pure technologies standpoint. In that for all the energy that we've spent on them, they're sort of stuck as a niche application. There's like Alexa, my kids talk to Alexa at home, you can talk to Siri, but when these technologies were coming online, I think we thought that they would replace hard keyboard interactions to a greater degree than they have. I think there's actually a bit of a learning in there that people are not as, we don't mandatorily, I'm not sure if that's a real word, but we don't need to go oral. There's actually a need for non-oral interfaces. And I do think that's a big learning for a lot of the technology is that there's a variety of interface paradigms that actual humans want to use, and forcing people into any one of them is just not the right approach. You have to, right now I want to talk, tomorrow I want to text, I might want to make hand gestures another time. You're mostly a visual media, obviously there's talking too, but it's not radio, right? >> You're absolutely right. That's a great point because when you're on a plane, you don't want to be interacting in a voice. And other times that there's background noise that will screw up the voice reactions, but clearly there's been a lot of work in Silicon Valley and other places on a different interface and it needs to be there. I don't know if neural will happen in our lifetime. I wanted to give you some props on the DevOps announcement that you sort of pre-announced. >> We did. >> It's, you know CJ looked like he was a little upset there. Was that supposed to be his announcement? >> In my version of the script, I announced it and he commented on my announcement. >> It's your baby, come on. So I love the way you kind of laid out the DevOps and kind of DevOps 101 for the audience. Bringing together the plan, dev, test, deploy, and operate. And explaining the DevOps problem. You really didn't go into the dev versus the ops, throwing it over the wall, but people I think generally understand that. But you announced solving a different problem. 500 DevOps tools out there and it gets confusing. We've talked to a bunch of customers about that. They're super excited to get that capability. >> Well, we're super, it's one of those cases where you have an epiphany, 'cause we solved it internally. >> Dave: Right. >> And we just ran it for like three years, and we kept hearing customers say, hey, what are you guys going to do about DevOps? And we're never like quite sure what they mean, 'cause you're like, well what do you mean? Do you want like a planning tool? And then probably about a year ago we sort of had this epiphany of, oh, our customers have exactly the same problem we do. Duh. And so from that it kind of led us to go down the product road of how can we build this kind of management layer? But if you look across our customer base and the industry, DevOps is almost a rebellion. It's a rebellion against the waterfall development model which has dominated things. It's a rebellion against that centralized control. And in a sense it's good because there's a lot of silliness that comes out of those formal development methodologies. Slow everybody down, stupid bureaucracy in there. But when you apply it in an enterprise, okay some of the stuff in there, you actually did need that. And you kind of throw the baby out with the bathwater. So adding that kind of enterprise DevOps layer back in, you still do get that speed. Your developers get to iterate, you get the automated tests, you get the operating model, but you still don't lose those kind of key things you need at the top enterprise levels. >> And most of the customers we've talked to this week have straight up said, look, we do waterfall for certain things, and we're not going to stop doing waterfall, but some of the new cool stuff, you know. (laughs) >> Well if you look at us, it's at the, if you take the microscope far enough away from ServiceNow, we're waterfall in that every six months we release. >> Dave: Yeah, right. >> But if you're an engineer, we're iterating in 24-hour cycles for you. 24-hour cycles, two-week sprints. It's a very different model when you're in the trenches than from the customer perspective. >> And then I think that's the more important part of the DevOps story. Again, there's the technology and the execution detail which you outlined, but it's really more the attitudinal way that you approach problems. We don't try to solve the big problems. We try to keep moving down the road, moving down the road. We have a vision of where we want to get, but let's just keep moving down the road, moving down the road. So it's a very, like you said, cumbersome MRD and PRD and all those kind of classic things that were just too slow for 2018. >> Nobody goes into technology to do paperwork. You go into technology to build things to create, it's a creative outlet. So the more time you can spend doing that, and the less time you're spending on overhead, the happier you're going to be. And if you fundamentally like doing administration, you should move into management. That's great. That's the right job for you. But if you're a hands on the keyboard engineer, you probably want to have your hands on the keyboard, engineering. That's what you do. >> Let's leave on a last thought around the platform. I mentioned Andy Jassy before and AWS. He talks about the flywheel effect. Clearly we're seeing the power of the platform and it feels like there's the developer analog to operating leverage. And that flywheel effect going from your perspective. What can we expect going forward? >> Well, I mean for us there's two parallel big investment vectors. One is clearly we want to make the platform better for our apps. And you asked earlier about how do we prioritize from our various BUs, and that is driving platform enhancements. But the second layer is, this is the platform our customers are using to automate their entire workflow across their whole organization. So there's a series of stuff we're doing there to make that easier for them. In a lot of cases, less about new capabilities. You look at a lot of our investments, it's more about taking something that previously was hard, but possible, and making it easier and still possible. And in doing that, that's been my experience, is Fred Luddy's experience, the easier you can make something, the more successful people will be with it. And Fred had an insight that you could almost over-simplify it sometimes. You could take something which had 10 features and was hard to use, and replace with something that had seven features and was easy to use, everyone would be super happy. At some level, that's the iPhone story, right? I could do more on my Blackberry, it just took me an hour of reading the documentation to figure out how. >> Both: Right, right. >> But I still miss the little side wheel. (laughs) >> Love that side wheel. All right, Pat, listen thanks very much for coming. We are humbled by your humility. You are like a rock star in this community, and congratulations on all this success and really thanks for coming back on the Cube. >> Thank you very much. It's been a pleasure meeting you guys again. >> All right, great. Okay, keep it right there, everybody. We'll be back with our next guest. You're watching the Cube live from ServiceNow Knowledge K18, #know18. We'll be right back. (upbeat music)

>> Narrator: Live from Las Vegas, it's the CUBE. Covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome back everyone, day two of the CUBE's live coverage of ServiceNow Knowledge 18. Here at the Venetian in Las Vegas Nevada, I'm your host Rebecca Knight along with my cohost Dave Vellante. >> Dave: Still have my voice. >> You still have it yes okay well we'll see how you do tomorrow but you're still going strong. But I'm really excited about this panel we have Pharrel Howe she is a GM in IT service management, asset management, business management. Have I forgotten one? >> Nope. >> Rebecca: I got it all at ServiceNow. >> Dave: This week. >> Exactly, at ServiceNow. You run the biggest business for ServiceNow. >> Yes. >> Thanks for joining us Pharrel. >> Thank you so much for having me. I'm happy to be here. >> So I want to talk about employee experience which is really. It's just the cornerstone of this conference but really ServiceNow's purpose. Why has it become so increasingly important in IT today? >> Okay well in IT really you saw it today in CJ's keynote. The era of great experience is here and in IT we've been really really great at managing productivity and managing cost and making sure we were running efficiently and that we still do that and do it really well. But now we have to also make sure not just our customers have a great experience but our employees do too. And companies that do that well have the competitive advantage. It's absolutely required that we're able to do that now and so you know ServiceNow's paving the way for great experiences on our platform. For customers and employees and we're excited to be leading the next era of great experience. >> So I don't want to minimize the accomplishments that ServiceNow has made because they're phenomenal. >> Pharrel: Alright I'm happy for you not to minimize them. >> But I want to say this, you have thrived. I mean when Fred Luddy developed the platform. You thrived in the sea of mediocrity and you drove a ship through that sea and just mopped up a lot of business. Awesome, congratulations and in this world we live in it's like now it's becoming table stakes. If you guys have pointed out our home lives we live with these consumer interfaces we expect that now so as a leader of ServiceNow's a largest business. How do you continue to push the innovation levier? We expect now so much more, how do you continue to differentiate. Because your competition has woken up, the world was waking up. How do you stay ahead? >> Well you saw, you know earlier today CJ talking again and we're going to, you'll continue to see this theme from us. It is all about the platform. We are a platform company and when we build and innovate, acquire and then innovate. It is all within the platform and that I our competitive advantage. So then every application that was in existence today or that we build in the future can take advantage of that innovation natively. It's all integrated and seamless and there's nobody else out there who is able to do that and deliver those experiences. And so that is going to continue to be our strategy moving forward. >> So let's double click on that a little bit. Maybe get some examples. So clearly there's a big emphasis on UX and design. I think you guys have made some investments in design firms. >> Pharrel: Significant. >> There's machine intelligence I'll call it, AI. You're infusing AI throughout the platform and those are just two examples. >> Yeah. >> Maybe talk about those and give us some others if there are them. >> Sure well you know in the IT keynote that I'm going to have this afternoon. It's all about the era of great experiences and taking the roles that are in IT. It will be about the fulfiller, the requester, the planner and the operator in IT and how we've taken to the road and gone and done user research out with our customers and we're building great experiences in the platform for those roles. You no longer is it going to stand for you to just use your best judgment and go and build product and hope everybody will come. You've got to get out there side by side with your customers. Truly understand the work that they're doing and then build that back into the product and iterate again and again and again. And so that's the direction we're going from a design standpoint to build those experiences. >> So let's unpack this era of great experiences something that's simple, easy, intuitive but what are we really talking abut here. How do you define a great experience? >> Yeah well let's take it from something that we can relate to, we're all requesters of services one way or another right? And me as an employee I need services from IT in order to do my job. The thing is the channels that we have today are not enough. Phone and email aren't going to cut it and a lot of times if I'm in the carpool line waiting to pick up my daughter and her friends from school. I and you know I'm trying to check in on the ticket status for a laptop that I need immediately and I happen to think of it right then. I'm not going to call IT, I'm not in front of the laptop. I need more channels on more devices anytime anywhere at my convenience not someone else's. And so that's the kind of stuff that were talking about. We can't, it can't just be good enough anymore it has to be prolific. >> I'm interested in how you're using and applying machine intelligence. It seems like you're trying to anticipate my needs, put things in front of me that I might. You know I might shorten my search time or might be relevant that I hadn't even though of. Is that the right way to be thinking about how you're using machine intelligence and second part of the question is. What ar you finding that machines can do better than humans and how do they compliment each other? Srt of a long question. >> Sure I love this question. That's okay love it. Okay so our initial approach to agent and to machine intelligence, artificial intelligence. All of that is to you heard CJ say it today. You'll here micro-moments are moments that matter and we're looking to inject intelligence right there. Right there, those are very very practical use cases. They're not a panacea. They are not the answer but they are an answer in a moment that critically matters and so a perfect example of how that would play out would be my example previously of checking in on my laptop. The virtual agent that we're bringing to the market in our London release is all conversation based. And so I can very quickly see what topics that agent can handle and I can you know immediately engage on what that looks like and get the confidence that I need back and forth engaging with the virtual agent in m convenience wherever I am. Whether I'm at work or I'm at home and so you know that is a moment that matters for me because it's not, it eliminates the mental overhead for me to keep track of the administration of just trying to do my job everyday. Now take the flip side of that. The person who's on the other side of that virtual agent or would have been had that virtual agent not be there. They are not having to answer those kind of questions. Is my laptop coming please just assure me. They're not answering questions and so you know maybe that's not necessarily deflecting it an incident. It could be, but it's also reducing the administrivia that's happening when, and so it's cutting down the time it takes to resolve incidents and it's reducing friction and frustration. Between fulfillers and requesters of service ad so that's how we're looking at it. In those moments that matter and then as technology evolves and gets stronger. There may be bigger and larger use cases. >> And the machine verses human thing. I hate to say it that way but things the machines are doing. You're seeing categorization obviously is one at scale. Other things, I mean how do you see that evolving. What are the things that increasingly machine are going to do that humans can't do as well. >> Well I would say a use case besides maybe the virtual agent and those conversation based topics which really are just guided flows for conversation. Another thing might be being able to you know if there's just so much data that would take me a while. Or I would need a business analyst to maybe go and look for insights. That's something that machines can do and that's not replacing humans that's scaling our ability to act. And so that I think is the next foray to really move into and we'll start poking in different areas of insights as well and the moments that matter for work getting done in the enterprise as well. >> Because that is really what we're trying to do is help people get their work done. >> Pharrel: Yes. >> Quicker. >> Pharrel: And more easily. And when we talk about employee experience it's simply that. Please just let me get my work done and let me have some choice. I'm going to have a personal tool chain. Don't force me to use you know ServiceNow, please don't force me to use your messaging client. Our connect chat if I want to Microsoft Teams or Slack let me do that and let me keep that UI. So we're really when we talk about employee experiences it's a very broad arena there and its a great partnership between IT and all the other lines of business to deliver what employee experience is going to look like. >> And you know Rebecca, we talked about this yesterday. John Donahoe took on the machine replacing humans and was very transparent. The example I would use is search. When IDC we had a big library. We had like three or four librarians. They're not there anymore but nobody is saying oh wow. Search I mean search is a machine. It made our lives better, it created new opportunities. I think that's a good example, a small one but one where. I'm an optimist even though things are getting complex. >> Pharrel: Me too, absolutely an optimist on that and so for example with our virtual agent. Go do a search on LinkedIn and you will find for conversation designer. There are new jobs being created to be able to support this kind of technology. You know, jobs are evolving not going away. >> So speaking of jobs. You have been a very successful leader in a high growth organization. >> Thanks. >> I think on your Twitter it says I'm on a rocket ship ride of a lifetime. >> Pharrel: I am, I'm here to tell you. >> I'd love to hear what your advice is for other leaders who are trying to affect transformational change in their IT organizations. >> Alright I think whether it's personal change for yourself, you're trying to evolve or you need to evolve your organization. The first thing you need to do is check your assumptions. You know the older we get and the more we're barraged by noise we think we know. Make sure that you're really clear on and have some self reflection but also go and check that with people around you and get some clarity around alright is this really the reality. What's our reality that we're trying to transform? And when you're talking about transformation it doesn't necessarily happen overnight. It can happen overnight and that's called disruption but transformation that you are initiating. Give yourself a little bit of breathing room. You got to know that this is a marathon and you cannot be doing it at a sprint pace. You will burn out so keep your eye on the horizon and what you're trying to accomplish and just get started. Don't sit there and wait and try to have the perfect plan. You're going to attack your way through it, it's going to change anyway. Just get started. >> The rapid iteration we were hearing about that's so important. >> Yeah absolutely DevOps and you know personal digital transformation. You got it. >> I also want to talk to you about women. There is a dearth of women leaders in technology. You are one of them, what are you doing personally to promote diversity and inclusion at ServiceNow and then what is the company doing and finally what should the tech industry be doing to face this challenge head on? >> Yeah you know my take on it is, it's all about belonging and I got that word from Pat Waters. So diversity, inclusion and belonging. That's something that she's championing and we are so fortunate to have her as our chief talent officer. Prior to having that word I was just really focused on connection. You know really engaging just with people and trying to understand where they're coming from and really making sure that you're practicing active listening. That has been like the key for my success I will say throughout my career. Is just being able to constantly reflect back what I'm hearing. One to make sure I didn't put any filters on it obviously and then two people want to feel heard and so you know whenever I get into the conversation around women in tech. Yes there are some very real facts, fact based, data based challenges ahead of us but where I choose to put my focus is a much broader conversation that includes you know everyone. And really just focusing a lot more on connection and belonging over all makes a huge difference. >> What you're saying is really resonating because I mean that's what we keep hearing is happening but perpetuates the old boys club is that oh I know this guy because we went to college together. Or some other kind of biases that you hold that it's just oh he's like me. I want to promote him and bring him along and there are fewer women in positions of power who they can bring up the people that they see are like them. So I think that's another problem too is that you have to... >> Yeah that goes back to a really great HR practice which is you cannot just reach deep into your network every time you get in trouble. Rely on a great HR standard practice that says no you know we need to go out there and there's great talent out there that you just didn't even think of. So you know when you're going back to, we talked about transformation earlier in this conversation. Check your self awareness, be clear about wait a minute. Do I really know right now what I need. I'm not sure let me broaden my perspective here and HR's been a great partner to be able to do that. >> So that's a great point because gender and race and sexual preference are part of that diversity and certainly other factors. But like a financial advisor when the portfolio gets over balanced in one area he or she has to rebalance that portfolio. And again it sounds formulaic but I think Pharrel your point is what you're looking for is to open up that network to a wider audience. >> Absolutely. >> And not just the good old boys network. >> I have a little bit of a bias here, you know my background. I'm an English major and I'm running the large business for ServiceNow. >> We need to open the diversity to English, it's a liberal arts background. >> I don't want kids these days to think that if they pick one path they're stuck in that path and their locked into certain jobs. It's not true, you can you just need, it's the way that you think, it's having critical thinking skills. Now listen, you're not going to go put me on the platform although I probably could. Go in and start coding, you're not going to rely on me to do that right away. I can learn it but allowing us, allowing yourself to start to believe. That hey wait a minute, you know the labels that I've grown up with and put on people. Maybe I can remove a couple and I love it when I'm surprised and are able to bring an employee on my time that I'm like ah it doesn't necessarily make sense on the paper but look at you. You're amazing. >> Well one of the things that supports that is digital. For years if you were in the financial services business or the manufacturing business or the automotive business. You were there for life but if you have digital skills you can traverse now much more easily. >> Yes absolutely. >> Kids today just have phenomenal opportunities. >> I know, I know it's great. I think it's so cool and I love making. I love opening tech a bit more to make it more accessible. More appealing, that there are so many different roads to come in and it's important that we get people who think differently, creative you know people who are good strong communicators. Who can bring clarity to a situation. We need all of that and that to me is the first step for diversity. >> And because that's the stuff that robots aren't very good at. Is the empathy, the creativity, that kind of broad thinking. >> That's right. >> Awesome way to bring it home. >> Found full circle. Pharrel thanks so much for coming on the program. What a fun and enlightening conversation. >> Oh my gosh, super fun. I really appreciate it. >> And you're speaking today at 1:30, good luck with that. >> And by the way we have a diversity and inclusion belonging lunch with Pat Waters and CJ Desai which will be at I think 12:30 as well so. >> Great plug, excellent. Thank you so much again. I'm Rebecca Knight for Dave Vellante we will have more from ServiceNow Knowledge 18 hashtag know 18 just after this.

(techy music) >> Announcer: Live from Las Vegas, it's theCUBE, covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome back, everyone, to theCUBE's live coverage of ServiceNow Knowledge 18 here in Las Vegas, Nevada. I'm your host, Rebecca Knight, along with my cohost, Dave Vellante. We're joined by CJ Desai. He is the Chief Product Officer for ServiceNow. Thanks so much for coming on theCUBE again, CJ. >> Thank you, it's great to be here. First time I came was last Knowledge, which was my first Knowledge, so I'm a lot more educated and equipped this time as compared to firing round of questions from Dave last time. >> We will pick your brain, exactly. So you were up on the stage this morning, a great keynote, and you said, "Welcome to the era of great experiences." Unpack that a little bit. What do you mean by that? >> First of all, thank you for remembering that. That was supposed to be the idea. But on a serious note, we feel, if you think about even our company name is ServiceNow, so you provide service, and when you provide service, that's not a technology you provide, you provide an experience, whether it's IT service, customer service, employee, whatever the case might be. And, if you are not delivering experiences, then you are not that relevant. So we are trying to truly, and we are in the beginning of this journey, truly internalize that, that if people are using us, they call themselves service desk, insider organization, IT service desk, customer service desk, whatever the terms you want to use, there is about experiences. Rather than focusing on bits and bytes, we want to focus on experiences, deliver those experiences via our platform. It's not software as a service, it's software as an experience. It's software as an experience, that's the idea, correct. Thank you for-- >> You also talked about the eras. You know, we went back to the industrial era and then went through the ages of computing. Yeah, I was not sure if that was going to work or not, but the point I was trying to make, Dave, was just around the quality of work and how work has evolved. That's it, that was the idea. >> But I think my takeaway was even more than that, because we are entering, in my view, anyway, a new era, and I'd love to get your comments. We're moving from what is real tailwind for you, which is the Cloud era, and obviously, Cloud is an important part of the new era where you have a remote set of services to one where you have this ubiquitous set of digital services that do things like sense, hear, read, act, respond. That's a different world, and it's all about the experience, and I don't know how to define that yet. Digital, I guess, is how we define it. But what are your thoughts? >> The one thing, even simple things, and these are not simple things to understand. When I look at things like even genomic sequencing, that's so different. They are using technology to figure out how to sequence the human genome so that it can help you with your health, live longer, even things like knowing that somebody rings a doorbell at my home and I can see on my phone. Everything is connected, humans are connected, when mobile came and computer came and internet came. But things being connected is pretty exciting for me. That just transforms our lives and how we work, and I really like that it is all about us, and other than us being focusing on the technology itself. So that's the point. It's that we're humans, and let's focus on humans and experience, rather than worry about, oh, this runs two times faster than the other thing, or this thing is smaller than other thing. That's interesting, but not that interesting. >> At this conference, this is really the message that you're getting across. It's the new tag line, we are making the world of work work better for people. How does the Now platform really deliver on that promise? How does it make the employees life easier? I would say we have a bunch of use cases, but as you know, we started out early on with IT service management, and the whole idea was can we provide, as long as computers are there, as long as software is there, password reset is going to be there for a very, very long time. So, my point is that that's when it started. Okay, I need to do password reset, I want to upgrade my laptop. Every year there is a new laptop, every year there is a new phone, and that cycle will continue, and as long as we are using technology for our knowledge workers, IT help desk will be there, right? And where we are evolving is enterprise service management, because you don't, as an employee, you may deal with IT, you may deal with HR, you may have a contractual issue with legal, you may need something related to your payroll from finance. People think payroll is HR, but payroll is finance. And as you try to go across in a day in a life of an employee, you need to make it as easy as possible. So that's what we are focused on, deliver better experiences. You know, artificial intelligence that listen today, I believe, is more about optimization, rather than intelligence. Yeah, we want to use your data to be able to predict, like if you see in Gmail, I don't know if you use Gmail, but if you have Gmail, you get an email, it'll suggest auto-responses. Those auto-responses are almost positive. Have you noticed that? They are never negative. >> Yeah. >> Oh, of course. >> They're like, no, I don't want to come to your meeting. (laughing) It's kind of like trying to predict most likely what you would want to say, and I think if we can use intelligence to make people more productive, that's what we want. >> I mean, I use that function. I actually like it. >> CJ: Yeah, exactly. >> You know, it gives you three choices, and one of 'em is pretty close to what I would normally, and if I'm busy, I'm done. >> Yeah, right, exactly. >> I like that. This is the other thing we've talked about. We've talked about this with Farrel this morning. Try to anticipate my needs, right? So that means you've got to infuse AI into the application and identify specific use cases. You guys have done some M&A there, you talked to the financial analysts meeting, obviously, not disclosing anything, but watch for us to do some more M&A. You got to believe that that machine intelligence space is really ripe for innovation. >> And what we believe is if I look at the big Cloud providers, like Google, are investing a lot in deep learning and many, many other technologies, so whenever they expose it, and some of them do a really good job, we will just leverage their libraries. But there are things specific to enterprise, because there are things specific to enterprise, like if you use the word network at a hardware company, that's always in context of compute network and storage. If you use the word network at a healthcare company, that's a network of physicians, networks of hospitals, networks of whatever. And if you use the word network at a Telco company, that is a whole different network. My point is we want to understand those pieces, and if we can make it easier based on your data, so if all your cases, which are, Oh, part of your network is down. Ah, that's what you mean from the context end point, so we want to use wherever folks like Google are investing, we will leverage that, but if we need to leverage, we'll do that too. >> It's interesting, we were talking to a customer today, it might have been Worldpay, and they took the CMDV language and transformed it into the language of the business. What a rare and powerful concept for somebody from IT to do that, because if the lingua franca is business, then the adoption's going to go through the roof. >> So does that make sense? >> Yeah, it makes a lot of sense. Well, I appreciate you talking about the value and the customer experience versus the technology. Certainly, it speeds and feeds you right. Boring. But the platform is important. Many products, one platform, that's unique for an enterprise software company, and you guys aspire to be the next great enterprise software company. Talk about how the platform enables you to get there. >> So I will tell you simple. You know our founder, Fred Luddy, started with the platform in 2004, so that was 14 years ago now, and his idea was you should be able to route work through the enterprise using our platform, and then we started with the IT service management and use case. The biggest advantage we have is that we are a very customer-driven organization. Many companies say that, but you see it here. Dave, you have been coming to Knowledge for a long time, I don't know about you. >> This is my first rodeo, but it's cool. >> It's the first thing you see. >> These are 80-plus person sessions, are customer sessions. They're not our sessions, where they are sharing best practices with them. So we get all these requests, CJ, we have built emergency response system using ServiceNow, CJ, we have built financial close using ServiceNow. Can you productize it? And we say, okay, thank you for the idea, which is great, thank you for the idea. How do I prioritize all of that? And, Dave, where platform comes in, because all the services I talked about today, service intelligence, service experience, user experience, they're all built in the platform, and I'm trying to be cautious, but if I want to create a brand new product on our platform, a brand new product on our platform, 40-use case, a 1.0 product where I feel comfortable the customers can use it, I would say 12 to 18 engineers. That's it. >> Rebecca: Wow. >> If I want to create one product, it's 12 to 18 engineers. So the R&D leverage, and that's the point I was trying to get across, that whether it's my own team creating product or whether our customer building apps on our product, because on platform, because we provide all the common services integration, the incremental cost to create something, now sales marketing, with my close friend, Dave Schneider, is much harder, because he has to scale it, build specialty in it and all that, but to create the product is not an issue for us on the platform. >> But this is where Cloud economics are so important, because at volume, your marginal costs go to practically zero. >> CJ: That's exactly right. >> But people may say, oh, 12 to 18, that sounds like a lot, but we're talking about an enterprise class software product here, and Fred Luddy, in the 2004 time frame, I mean, the state of enterprise software then, frankly, and now, was terrible. The guys at 37signals, I don't know if you know Jason, they made valid attempts, but it wasn't enterprise class software, it wasn't a platform. I've said, a number of times this week, the reference model for enterprise software is painfully mediocre, so you guys have done a great job, and now you've really got to take the next step and stay ahead on innovation. >> Correct on innovation card, that's what I said, innovation should be my top priority. You heard me at the Financial Analysts Day. Customer Service Management, brand new product, we actually launched it at Knowledge 16. Okay, that's when we launched it. It was engineers and teens who created that product, so many teens, the 1.0, now we have evolved quite a bit, 500 customers two weeks ago, 500 enterprise customers. You guys know that we don't go to the small line of the business. 500 in two years, eight quarters. >> And I found out last night, I think it was 75, or it might even be higher, reference customers. >> CJ: Yeah, already, using CSM. >> That's the difference. I do, we do, a lot of these shows. >> That's the platform impact. >> And you're talking about the customer focus. You do a lot of these shows. The customers talk about the impact on their business. They don't talk about how they installed some box, or like you say, runs faster. It's the business impact that really makes a difference, and that's why we're excited to be here. >> You saw today when I talked about Flow Designer and Integration Hub. IT wants to provide software so that business analysts can model business processes in a Cloud way with whoever you need to integrate with, so we are really keeping that as the north star for our customers, and how can we make their life easier, whatever they want to automate, some manual processes, all of manual processes. I remember speaking to Fred when I joined initially, and I said, "Fred, how did you think about TAM?" He said, "What do you mean, TAM?" You know, he's a funny guy, and he was serious. His point was there are so many manual workflows, how do you put a TAM around it? Every business is unique, their processes are complex, so don't box yourself and say, Oh, this is a $4 billion TAM and I'm going to get 20% of it. Every enterprise, as long as they exist, they will have manual workflows, you go and give it our platform so they can automate however they want. >> Well, I'm going to make you laugh about TAM. I'm a former industry analyst, so when you guys did the IPO way back when, well before your time-- >> CJ: 2012. >> when Frank was here, there was a research company saying this is small market, maybe it's a billion dollars and it's shrinking, so I, with some of my colleagues, developed a TAM analysis, and it was more than 30 billion. I published 30 billion, you can go on our old Wiki and see that, and the guy said to me, "Dave, you can't publish more than 30 billion. You'll look like a fool." The TAM is much, much bigger than 30 billion. You can't even quantify it, it's so large when you start looking at it. >> And now, because people are recognizing that we automate all the manual workflows in a enterprise on a Cloud platform, last week somebody published a report and I just saw the headlines, I didn't go through the details, 126 billion. So from in 2012 to that small number, and we don't know what the number is. >> Could it be bigger? >> I would have no idea. I would be completely disingenuous if I told you I know what my TAM is, but I don't think that way. I say what customer problems can I solve? >> Well, that's what I wanted to ask you. So you're here with so many different customers. Just on the show, we've had ones in payments, in insurance, in health care. What are you hearing from customers, and what are sort of your favorite applications of what you're doing? What makes you the proudest? >> Yeah, so I would say the proudest moments for me are when I'm like, wow, you do that with ServiceNow? I would have never thought that. So when I didn't expect, when I expect something, Oh, I had this routine email, text collaboration, and I switched it to ServiceNow, get it, like not a big aha moment. I had this one customer who said he has a big distribution network, all these partners, and those guys have ServiceNow, he has ServiceNow, and when they have problem with the product, their product, my customer's product, they all communicate via ServiceNow to each other. So they have created a whole ServiceNow network, truly a B2B kind of exchange, kind of, using ServiceNow. One of our median and entertainment customers who owns a bunch of parks, they refill the popcorn machine using ServiceNow. When the popcorn levels dip, they have those people who carry around the cart, Oh! The popcorn level dip, it marks the sensor, it routines the workflow, goes to the corporate, Ah, we need to fill up popcorn on by this particular ride. For me-- >> And even at my house, I love it. >> Yeah, so that's exciting to me. >> We talked to Siemens today. >> Yes, great customer. >> Awesome, and I want to run a line by you. We talk about AI a lot, machine intelligence. I wrote down during, you know, data is the fuel for AI. Well, you know we love data here at theCUBE, and he was describing that, he said, you know, even though CJ was not prescribing taking the data out, we could leave it in so it learns, right now, we take some of the data out. Well, you described that. Well, we put it to SAP HANA, we throw a little Watson in there, we do some Azure, machine learning, we use Tableau for visualization, he's probably got some Hadoop and Kafka in there, a very complicated, big data pipeline. And I said to him, Okay, in two years, do you want to do that inside of ServiceNow? He goes, "Absolutely. That would be my dream come true." So, I guess I'm laying down the gauntlet. Do you see that as a reality? >> So, we are talk to Siemens, great customer, they keep us honest, so I love that and I did actually meet the team who was in charge of their BI and reporting and they did share the same story a few months ago when I met them. And we are trying to figure out, Dave, if I knew the answer, I would have told you, but you know my style. I don't know the answer. We are seriously trying to figure out, Do we become an analytics hub? We are really good with ServiceNow data, we can build connectors with other data, but do I want to be in the BI and reporting market? Absolutely not. Do I want to help customers as their processes span across and provide them more visual credit tools than others, text-based searches, whatever they need, the answer is yes. Performance analytics, as you know, we have been moving along really at a good pace, and now we have what every single product, but this is something that Eric Miller, who runs that business, we talk about it all the time, because currently our analytics is building the platform, and now you know that data has a Cloud issue, so if you have data here, you have data there, you have data there, we are in our own Cloud. Can we build a connector, potentially, to OnPrem? Don't know the answer, but this is something, it's a fair gauntlet having to solve. >> Humbly, I'd like to give you my input, if I may. >> Yes. >> We see innovation, as I said before, it's data, applying machine learning to that data, and then leveraging Cloud economics. The project with big data projects, as you well know, is the complexity has killed them. Now you see the Cloud guys, whether it's Amazon or Microsoft, and that's where the data pipelines are being simplified and built. Now, I don't know if it's the right business decision for you guys, but wow, wouldn't that be powerful if you guys could do that, certainly, for your customers. >> And, truly, that is, as you heard me on Financial Analysts Day, I'm a huge fan of Geoffrey Moore's work, and he defines system of record, ERP CRM, system of action where we fall in, and then he has System of Intelligence, which is all the things around data and how do you harness the power of data. And that's something that I really, in our product teams, we talk about all the time, if I can solve Siemens problem with everything in ServiceNow, that'd be awesome, but is that something I want to prioritize right now, or is there something, we should give them the flexibility. I don't know. >> Well, you're one of the top product guys in our industry. It's why they found you. No, seriously, I put you up there with the greats. >> You're kind, thank you. >> It's true. You've got an incredible future ahead of you. But as a lead product person, you have to make those decisions, and you have to be very circumspect about where you put your resources. You can't just run to every customer requirement, right? >> And I tell, coincidentally, my wife asks me What's your job, by the way? I said, that's a good question. >> I'm married to a product officer, too, I feel the same way. What do you do all day? You do a lot of meetings. >> Yeah, exactly. So I said that I do a lot of meetings, and she said why do you do a lot of meetings? And I said I'm making a some decision or help my team make a decision because they already analyze a bunch of things. And I said, my hope is, as long as I can make more good decisions than bad decisions, specifically about product strategy, because you never know unless you make the chess pieces move and think of two or three steps ahead, and some things could be right and some things could be wrong. I have a simple framework on my whiteboard for every meeting. No jokes, right? So, my framework is very simple. Question number one, What customer problems we are trying to solve. If you cannot articulate that, for any new product idea you have, I don't go past that question, What customer problem we are trying to solve? Second is Why now? Why do we need to solve this problem now? Like you said, there are many problems, which one are you prioritize? And then, third, Why us? Why should we solve that problem? So, if you can articulate the problem, which always is a challenge because you kind of know what problems you have, but unless you really, really understand the customer pain point, you cannot articulate it. Then you say, why now? Like why is the time right now for us to invest in this, say, analytics, as a service? Why right now? And, third, why you, as in why us? Why is ServiceNow should solve it? That, at least, gives me a guiding compass to say because I have many products, as you know, I am very protective of our platform, and all these use cases come in, every product line wants to go deeper, rightfully so, because they are trying to solve for customers, and the new products want to be built on this platform. Sometimes I say maybe a partner should build it, so we made a decision, facilities product, Should our ISB partner build it? And that's the right place because we feel they are more suited, they have the skill set, all of that. But that's it, what problem, why now, why you? >> Rebecca: Really, I love it. >> Well, the Why you? it's a great framework. The why you is unclear for the Siemens problem, and I can understand that. You take the DemOps announcement that Pat stole from you today-- >> I know, that's not cool, man. >> But that's a problem that you guys solved internally, clear problem. >> He did a nice job of articulating it, very nice job. >> Yeah, definitely. >> But we feel that there always is a process when you need a workflow across, because in planning there are a bunch of companies, as the patch, or in build there are a bunch of companies in develop there are a bunch of companies. That's fine. They could be the system of records for those chevrons and we are the workflow that cuts across. So we feel loved. We showed our value to our customers by doing that. >> Rebecca: That's great. >> I know we've got to go, but lastly, it's roadmap. Last year, you talked about how you guys do releases by alphabet, twice a year. You were really transparent today, laid out the room and talked a lot about Madrid, you laid out well into the future what you guys are doing so, as an analyst, I love that. I'm sure you're customers love it, so-- >> A lot of people to picture, so that's nice. And Twitter, a lot of people posted on social media as well, so clearly there was a customer pain point, as we call it, that they needed a roadmap. In speaking to customers last one year, number one thing, if you tell us what you're building, then we don't have to build it. If you tell us when you're shipping, then we can plan around it, and then we will set aside resources to do testing. Any Cloud software company, whether it's us, CRM software or HR software, people still test, because you cannot mess up your employee experience or customer experience, and they just said give us a predictable schedule, please, so that we know. We did say two times a year, but we were not prescriptive which quarter. It could be four months and eight months, it could be six and six, it could be seven and five. I'm currently going with the quarterly-level fidelity, and eventually, I want to get to a month-level fidelity, where I say March and September, once our internal processes are organized. >> So the other subtlety there, and I know we got to go, is the ecosystem, because you're giving visibility, they have to make bets. They're making a bet on service, but then where's the white space? They're betting on white space. If you're exposing that to them, they can say, Oh, not going to solve that problem. ServiceNow's going to solve it in two quarters. >> I agree. >> Huge difference for them. >> You guys are wonderful. Thank you so much for inviting me. >> Rebecca: Thank you for coming on the show. We appreciate it. >> No, that's awesome, thank you, thank you. >> Dave: Great to have you. >> Rebecca: Great to have you. I'm Rebecca Knight, for Dave Vellante. We'll have more from ServiceNow Knowledge 18 just after this. (techy music)

>> Narrator: Live from Las Vegas, it's theCUBE covering ServiceNow Knowledge 2018, brought to you by ServiceNow. >> Welcome back everyone to theCUBE's live coverage of ServiceNow Knowledge 18. We are theCUBE, we are the leader in live tech coverage. I'm your host Rebecca Knight along with my cohost Dave Vellante. We're joined by Jason Wojahn. He is the managing director global ServiceNow practice lead at Accenture. Thanks so much for your, your returning guest. You're a CUBE veteran. >> Yeah, many times. >> Many time CUBE alum. >> Yes, >> Thanks for noticing. >> Back in the early days. >> But for those who have not had the pleasure of watching your CUBE clips, can you explain what your role is and what you do at Accenture? >> Sure, I'm the global ServiceNow practice lead at Accenture, I'm responsible for our global capabilities in ServiceNow for the company of Accenture. So you know, everything to do with ServiceNow from our consulting capability to our training capability. At Accenture we also have, kind of, what we call three estates of ServiceNow. We have the CIO estate, I know you had Andrew Wilson on theCUBE yesterday, and of course we are a fully deployed ServiceNow customer in our CIO's office. One of the top 10 customers of ServiceNow. We also utilize ServiceNow in our AO, IO, and PBO lines of business. Now in that case that's a go to market relationship where we're selling things like HR outsourcing that is platformed and delivered on ServiceNow and of course last but not least our consulting capabilities. Just over 3000 skilled ServiceNow resources across the world What makes us the largest practice for ServiceNow in the world as well. And those are our three estates of ServiceNow in Accenture. >> So don't hate me for saying this but when we first started following ServiceNow I remember Frank Slootman said to me Dave, this thing is a rocketship. We're going to blow through a billion dollars. We're going to be the next great software company. And one of the things Jeff and I said was well, the ecosystem has to grow. There were companies like Cloud Sherpas which nobody ever heard of which were specialists in the space. Now you fast forward five, six, seven years, Accenture gets into the game, other big SI's have gotten into the game and it is the real deal. It feels like the next ERP of the modern era. >> In my view there are three main big surges going on in the ServiceNow ecosystem and you can kind of tie them back to the CEO's. So you had the early day with Fred Luddy of course, kind of the zero to 150 million stage of ServiceNow. of course when Frank Slootman came in in the 2011 time frame you know you have the next big surge, see them getting IPO ready, you see them really ruggedizing their commercial selling capabilities, their delivery methodology capabilities, etc., and then we move all the way to today and with John Donahoe you see the third surge. And here you see every GSI on the planet wanting to do something with ServiceNow for a lot of the reasons that I just discussed. I mean ServiceNow has been a terribly strategic tool in Accenture across multiple aspects. Of course our go to market aspects, our consulting aspects and of course our internal use of the platform as well. >> It's not easy for software companies to reach escape velocity, certainly many of them can become unicorns and have a billion dollar valuation. It's really hard for them to get to a billion dollars of revenue. ServiceNow has blown through that. They'll probably do three billion or close to it this year. So they really are, in many ways, the next great software company, but you know, VMWare got there, Red Hat obviously doing really well. What are your perspectives on the software ecosystem? I mean, personally I think it's great that we see more competition but there seems to be always this pressure to consolidate. What's your sense of what's happening now? >> Well you see a lot of consolidation that ServiceNow is doing to round out their capabilities as a platform and I think that's terribly important. That's how people want to consume technology right now so we spend a ton of time at this event and you've heard ServiceNow as well, talking about experience management, service management, you know trying to get things away from, you know how do I do this and going to why would I do this versus how. And of course you utilize platforms to really set that tenancy. When you got platform like ServiceNow that has the ability to turn on intelligent automation machine learning capabilities across your platform, the ability to turn on chatbox across your platform, analytics across your platform, knowledge across your platform and of course manage your workflow the way they do with portals, etc. I mean there's no reason to go somewhere else but more importantly, the strategy underneath it you know ServiceNow is an outcome of something that's very important. You can't use AI, you can't use Chatbox, you can't automate if you don't have what we call a lake of data, a data lake. You've got to have that kind of single source of information so that you can do those compounded workflows and get that automation benefit and then when you start laying things like AI, machine learning, intelligent automation, chatbox in there, actually you have to have the data in there to make the suggestions, right, to do the modeling and the analyses to find those opportunities. So I think what you're going to see and what you're actually seeing right now is consolidations on platforms. And those platforms are kind of being used as a ubiquitous glue code for everything else behind the infrastructure and really looking at you know, this is the employee first experience. This is where the last yard of the field is being delivered to the individual. >> The red zone. >> Yeah. >> So the timing of the Accenture acquistion was actually fortuitous because it coincided with ServiceNow's push into the rest of the enterprise. Accenture obviously deep into lines of business, board levels, C-Suite, etc. Talk about how that's changed the whole relationship motion with your customers, how you've gone deeper and describe, sort of, that dynamic. >> Yeah, so, obviously within Accenture our diamond clients are paramount to the way we run our business and who we are as a business and what's great is we're seeing more and more of those clients where they have comprehensive relationships with Accenture, bringing ServiceNow to bear in that conversation and actually, again, using it as an overarching capability to help get things done better. You know it can be very austere to sit at a Cebol console or an Oracle console or those types of things. We're actually using ServiceNow to kind of keep that from having to happen but you're doing the same transaction on the back end. And again, like I said, you know, once you get some of those data points in there it tends to kind of start to gain some momentum because you get a little bit of automation here or a little bit of automation there and then suddenly that connects you to other aspects of the enterprise and other consolidation points. >> What makes Accenture different, you got all the SI's are now in, elbowing their way in. We want a piece of the action. Why Accenture? >> Well the ego in me says it's because we're number one. We have the largest single certified pool of resources across the globe. There's nobody bigger than us. There's nobody that does more influence revenue than ServiceNow, than us and there's no one with higher customer satisfaction than us We actually got that award two days ago from ServiceNow. So if you value those things, that's why you should work with Accenture. But more importantly than that we've really spent a lot of time making sure that we're doubling down on our methodologies, we're doubling down on our thought leadership, we're leveraging our capabilities that we're you know, trialing and piloting in our CIO's office across the 450,000 person company called Accenture. We're obviously leveraging the things we learn in our AO, IO, BPO practices where we have embedded ServiceNow into those go to market services. But we're bringing that all back to our consulting practice and it's a creed of to not only the way we handle CIO, AO, IO, BPO, but a way we handle our customers from a consulting perspective as well. >> It's the customercentric approach. >> Jason: It is, it is. >> Well Jason thanks so much for coming on the program. It's always fun to have you on theCUBE. >> Thanks a lot. >> Dave: Great to see you. >> Thanks. >> I'm Rebecca Knight for Dave Vellante. We will have more from theCUBE's live coverage of ServiceNow Knowledge 18 in just a little bit.

(soft techno music) >> Live from Las Vegas It's The Cube covering Service Now, Knowledge 2018. Brought to you by Service Now. (soft techno music) >> Welcome back to The Cube's live coverage of Service Now, Knowledge '18. I'm your host Rebecca Knight along with my co-host Dave Vellante. We are The Cube, we are the leader in live tech coverage. We are joined now by Alan Marks, he is the Chief Communications Cfficer of Service Now. So thanks so much for coming on the show. >> Thank you, great to be here. >> So the new brand identity of Service Now is we make the world of work, work better for people. >> That's right >> That's your baby, you came up with it so tell us a little bit about your creative process and coming up with that idea and why it works for Service Now. >> Well, it's been a team effort and we think of that identity as our purpose as a company. And as John talked about in his keynote today, purpose is really the center of who you are as a company and what you believe in and what you aspire to do, and I think it's so important in your own life to have a sense of purpose and meaning and I think that's true for companies as well, companies are just collections of people, right? And so as we thought about the next phase of growth for Service Now and how do we build the company awareness and build the brand, we started with, who are we, and why do we exist? And so we did a process where we met with a leadership team we did employee focus groups around the world we met with about a dozen customers to just talk about how do you think about Service Now, what does Service Now mean to you, and that's what lead to our purpose statement of "we make the world of work, work better for people" and really emphasizing people, cause that's something we believe deeply in, that technology should enable people. And what we do is really trying to help people have more meaningful work. Take some of the routine task out of your job so you can focus on things that matter more to you and create more meaningful work for you and create more productivity for your company and your enterprise. >> Dave: I'm always, oh go ahead please. >> Well so, we started with our purpose and then that lead to the brand identity we have a new tagline; Works For You. So, Service Now Works For You, is kind of our version of a Just Do It kind of tagline. >> Dave: (laughs) >> And so we've got our purpose statement we've got a new brand identity, what you see here at Knowledge and we've got a new tagline called, Works For You and you'll see us rolling that out now more. This was the launch of it. We spent the first quarter rolling it out to our employees we did a global tour in eight locations around the world rolling out our purpose to our employees and now this is the first public launch of the new brand. >> I was fascinated by that process. I love that you guys start with wide, big fan of Simon Sinek Google him if you don't know him, his Ted Talk is fantastic and we heard John Donahoe this morning talking about he started with why, so okay, so you do all this research but somehow you have to put that into a creative package the idea of putting the person in the center of the logo and whether it's color scheme or, you know little snippets. How do you come up with that, is that just in your DNA is that really by committee, I mean how does that all work? >> Well we put together a creative team, this is the fun part once you've landed the purpose, this is take out the crayons and let's start decorating something, right? And so when we landed our purpose, and we said well if we're really focused on technology enabling people the former logo of the company was the power button so that was more purely about technology and so we started playing, we had a creative team we put together, we had our in-house creative team we also were using some outside creative support and we started playing with well, how can you change the power button to more reflect people and that's what morphed into the logo today of really using the yellow in the word Now to symbolize people, to symbolize the "you" in "Works For You" instead of the power button as a symbol for the company. >> So you, the last Knowledge, Knowledge '17 you had just started. >> Just started, first week. >> First week on the job, trial by fire here. So tell us a little bit about your first year, reflect on some of the things that might have surprised you during the year, some of your challenges, what would you say? >> Oh it's been wonderful. I say to Pat Waters our Chief Human Resources Officer, every new employee should start the week of Knowledge. It was just such a wonderful way to start, I literally did sign the papers and got on a plane and came to Knowledge '17. And so, to come into the company being able to experience this, and meet our customers and really understand the culture of the company was an extraordinary way to get grounded in the company and understand the, you know, Service Now has just a deep commitment to customers, and listening to our customers, and then responding to their needs. So, given the brand work I've done over the past year that I couldn't think of a better way to start. And then after Knowledge '17, a week or two after that I went down to San Diego and spent an afternoon with Fred Luddy, our founder. And I just said "Fred, tell me your story.", and two hours later Fred was still talking, such a wonderful person, and what struck me in that conversation with Fred is we were spending, really two hours talking about the history of the company and why he founded it, and I realized he was talking mostly about people he wasn't talking about technology and Fred's a product guy. And so it just started to hit me from day one just how focused we are on helping people and helping companies succeed and our customers succeed and that's really what lead to where we are today, and the branding, and so it's an amazing company, amazing culture, and what we're trying to do with this brand the product is well known, we've got deep customer loyalty but the company is not that well known and so as we think about growing the company and reaching other state coders, as we think about expanding our business with existing customers and engaging new customers at the C-suite level, we felt we needed to really elevate the company and that's what this is about. How do we continue to have a strong product brand but elevate the company brand both to drive greater awareness of the company but then also the talent brand piece is important as well and how do we use our brand identity and our purpose to engage the right talent worldwide as we continue to grow and recruit from around the world. >> And that's a big part of why John Donahoe was brought in. I remember I was talking to Frank Slootman, I'm like Frank is so young, he goes look, we found the right guy to take this to the new level. He's been kind of working at it for a while so the timing was perfect. As you do all this research as you talk to customers about their future of work. I mean they're telling you what they need maybe what some of their challenges are, but you guys still have to figure out how to get there. It's almost like Steve Jobs inventing this smart phone, nobody told him no customer told him, this is what we need. >> Alan: Right. >> So you're minds have to put that together, I know it's only a year in, but what are you seeing in terms of your ability to shape the future of work? >> Well I think it starts with the Service Now platform and to me that's the secret sauce. A lot of people have focus, cause people know the ITSM product suite and how the company, the flagship product of the company and a lot of people think of the company in that way but its really the platform itself that can cut across the enterprise and connect different work flows and different work streams particularly work streams are cross-functional areas and the ability to understand that and leverage that with our product suite that really is unlocking the potential of how we can partner with a customer and really drive transformation in the way enterprises operate and drive transformation in how work gets done in a company. >> So with your consumer background, did you like, when you first heard about Service Now say, "really, IT service management?", or did you say "hey, why should the consumer guys have all the fun I want to bring this to the enterprise". >> Exactly, well part of it, this is my first job in the B2B world my background is in consumer, but as John has talked about we really do see the things that we've enjoyed as consumers coming into the workplace. So I really do see a lot of B2C type creative thinking and ideas coming into the workplace to drive this transformation and that's so exciting to take the best of traditional B2B marketing and branding and bring in B2C to help reflect this new wave of technology and how it's changing the way we work and the way we think about work. >> As you're now embarking on this strategy to get Service Now to have wider recognition in the market and you're background in consumer, particularly at Nike, what do you think makes a great brand and what really makes it sort of take hold of customer's imagination. >> That's a great question and I would go back to purpose. I can't say enough about purpose, a company that is clear about who it is and why it exists and what it aspires to achieve in the world, and the impact it aspires to achieve in the world, that's what connects people emotionally, right? You can connect people intellectually but really connect heart and mind, that's the secret sauce. And you said consumer brands, obviously that's what they do right, that's what you have to do. In the B2B world, you see a broader spectrum but that ability to say, how do we take this technology and the more intellectual aspects of our business and really connect it to how you help people and how you enable people and connect it more emotionally. I think that's the (inaudible) NOC, and today, you look at millennial employees today they really do care about what is the purpose, what's the higher value of working for this company vs. that company, and what kind of impact are we going to try to have in the world, and it really does matter. I see it today where you're talking to potential employees and they're asking that question. About if I'm going to join this company, what are the values tell me about the culture of the company. And I think at the end of the day, culture and talent really is what differentiates a company. And strategy is obviously important, but companies that have strong purpose, strong brand, strong identity and that get expressed through strong culture that gets expressed through the kind of people they attract to the company, the kind of talent they have in the company. I think that's what creates great, enduring companies over time. >> So thinking about transparency, I go back to Fred. The self deprecating humor, always, if there's a wart in the software, he talks about it, he's not shy about that. Frank continued that tradition certainly with Wall Street and I'm sure employees, and Mike Scarpelli, very much transparent, John is continuing that tradition. It's obviously worked for Wall Street, you've built trust with investors. How do you take that brand and build trust beyond the investor community, it's a challenge. What are you trying to accomplish there? >> You'll see us marketing more and that's part of what you see here, expressing the brand in a bigger way, you'll start to see us do more marketing at the company level in addition to what we already do at the product level. You'll see us do more marketing directed to talent and being a great place to work. You'll see us expressing this in a variety of ways the kind of culture we create, what we do in the community, the broader impact we have in the world and so I think it's all of those things together and communicating but ultimately you've got to walk the talk, right, it's not just the marketing, you've got to be authentic in what you're doing and have people experience you in an authentic way to really create that sense of trust and engagement over time. And you see we've got that today in our customers. The loyalty we have with our customers the renewal rate the company has with our customers and now we're just trying to continue to build on that and engage other stakeholders as we grow as a company. >> So making work better, okay that's good. The new sort of focus, expanded focus, but what do you want people to say about you, how do you want them to describe you, what are the adjectives you'd like them to use? >> Human, we're "work for people" right, "make work better for people". I think we're a human company, we're an authentic company we're a company that cares, we're a company that really understands technology should help you, it shouldn't be technology for technology's sake, that the end result should be making your life better and we're trying to do that in a work context and I hope that people look at our brand and our identity and how we show up in the world and think that's a copmany I want to be associated with as an employee, as a customer, as an investor, as a partner, as a stakeholder because that's a company that really cares about people and really understand how to apply technology and innovative technology to help people have better lives and in this context, have a better life at work. >> We've been talking a little bit about how you're company is working to attract the best talent, and it's really at a time when the skill sets are changing and we were talking about Fred not being an IT guy, he's a product guy, but you really need the sort of confluence of the two together, you need people who are thinking about the technology but also about the human idea. How hard is it to find the right people or do you just say "we can train them", what's your approach? >> It's always hard to find great talent all over the world it's very competitive, and particularly in technology but I think it gets back again to purpose and culture really being clear about who you are so a potential employee can say "is that a place that I want to work at, when I see the purpose of Service Now, does the resonate for me?". If I'm an engineer, do I want to create product that really is focused on helping people have better work lives and again it really, purpose is the essence of it and I think that really is the center of everything and if you can connect people with your purpose then you will attract the right talent and it'll build on itself through word of mouth and reputation that that's company that I feel attached to and that I want to a part of, and I want to work at.

(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 Washington D. C., it's the CUBE. Covering .conf2017. Brought to you by Splunk. (electronic music) >> Welcome back to the nation's capitol everybody. This is the CUBE, the leader in live tech coverage. And we're here at day two covering Splunk's .conf user conference #splunkconf17, and my name is Dave Vellante, I'm here with with co-host, George Gilbert. As I say, this is day two. We just came off the keynotes. I'm over product orientation today. George, what I'd like to do is summarize the day and the quarter that we've had so far, and then bring you into the conversation and get your opinion on what you heard. You were at the analyst event yesterday. I've been sitting in keynotes. We've been interviewing folks all day long. So let me start, Splunk is all about machine data. They ingest machine data, they analyze machine data for a number of purposes. The two primary use cases that we've heard this week are really IT, what I would call operations management. Understanding the behavior of your systems. What's potentially going wrong, what needs to be remediated. to avoid an outage or remediate an outage. And of course the second major use case that we've heard here is security. Some of the Wall Street guys, I've read some of the work this morning. Particularly Barclays came out with a research note. They had concerns about that, and I really don't know what the concerns are. We're going to talk about it. I presume it's that they're looking for a TAM expansion strategy to support a ten billion dollar valuation, and potentially a much higher valuation. It's worth noting the conference this year is 7,000 attendees, up from 5,000 last year. That's a 40% increase, growing at, or above actually, the pace of revenue growth at Splunk. Pricing remains a concern for some of the users that I've talked to. And I want to talk to you about that. And then of course, there's a lot of product updates that I want to get into. Splunk Enterprise 7.0 which is really Splunk's core analytics platform ITSI which is what I would, their 3.0, which I would call their ITOM platform. UBA which is user behavior analytics 4.0. Updates to Splunk Cloud, which is a service for machine data in the cloud. We've heard about machine learning across the portfolio, really to address alert fatigue. And a new metrics engine called Mstats. And of course we heard today, enterprise content security updates and many several security-oriented solutions throughout the week on fraud detection, ransomware, they've got a deal with Booz Allen Hamilton on Cyber4Sight which is security as a service that involves human intelligence. And a lot of ecosystem partnerships. AWS, DellEMC was on yesterday, Atlassian, Gigamon, et cetera, growing out the ecosystem. That's a quick rundown, George. I want to start with the pricing. I was talking to some users last night before the party. You know, "What do you like about Splunk? "What don't you like about Splunk? "Are you a customer?" I talked to one prospective customer said, "Wow, I've been trying to do "this stuff on my own for years. "I can't wait to get my hands on this." Existing customers, though, only one complaint that I heard was your price is to high, essentially is what they were telling Splunk. Now my feeling on that, and Raymo from Barclays mentioned that in his research note this morning. Raymo Lencho, top securities analyst following software industry. And my feeling George is that historically, "Your price is too high," has never been a headwind for software companies. You look at Oracle, you look at ServiceNow, sometimes customers complain about pricing too high. Splunk, and those companies tend to do very well. What's your take on pricing as a headwind or tailwind indicator? >> Well the way, you always set up these questions in a way that makes answering them easy. Because it's a tailwind in the sense that the deal sizes feed an enterprise sales force. And you need an enterprise sales force ultimately to be pervasive in an organization. 'Cause you can't just throw up like an Amazon-style console and say, "Pick your poison and put it all together." There has to be an advisory, consultative approach to working with a customer to tell them how best to fit their portfolio. >> Right. >> And their architecture. So yes, the price helps you feed that what some people in the last era of enterprise software used to call the most expensive migratory workforce in the world., which is the sales, enterprise sales organization. >> Sure, right. >> But what's happened in the different, in the change from the last major enterprise applications, ERPCRM, and what we're getting into now, is that then the data was all generated and captured by humans. It was keyboard entry. And so there was no, the volumes of data just weren't that great. It was human, essentially business transactions. Now we're capturing data streaming off everything. And you could say Splunk was sort of like the first one out of the gate doing that. And so if you take the new types of data, customer interactions, there are about ten to a hundred customer interactions for every business transaction. Then the information coming out of the IT applications and infrastructure. It's about ten to a hundred times what the customer interactions were. >> Yeah. >> So you can't price the, Your pricing model, if it stays the same will choke you. >> So you're talking about multiple orders of magnitude >> Yes. >> Of more data. >> Yeah. >> And if you're pricing by the terabyte, >> Right. >> Then that's going to cross your customers. >> Right. But here's what I would argue though George. I mean, and you mentioned AWS. AWS is another one where complaints of high pricing. But if, to me, if the company is adding value, the clients will pay for it. And when you get to the point where it becomes a potential headwind, the company, Oracle is a classic at this, will always adjust its pricing to accommodate both its needs as a public organization and a company that has to make money and fund R & D, and the customers needs, and find that balance where the competition can't get in. And so it seems to me, and we heard this from Doug Merritt yesterday, that his challenge is staying ahead of the game. Staying, moving faster than the cloud guys. >> Yeah. >> In what they do well. And to the extent that they do that, I feel like their customers will reward them with their loyalty. And so I feel as though they can adjust their pricing mechanisms. Yeah, everybody's worried about 606, and of course the conversions to subscriptions. I feel as though a high growth, and adjustments to your pricing strategy, I think can address that. What do you think about that? >> It's... It sounds like one of those sayings where, the friends say, "Well it works in practice, "but does it work in theory?" >> No, no. But it has worked in practice in the industry hasn't it? So what's different now? >> Okay. So take Oracle, at list price for Oracle 12C, flagship database. The price per processor core, with all the features thrown in, is something like three hundred thousand, three hundred fifty thousand per core. So you take an average Intel high end server chip, that might have 24 cores, and then you have two sockets, so essentially one node server is 48 times 350. And then of course, Oracle will say, "But for a large customer, we'll knock 90% off that," or something like that. >> Yeah, well exactly. >> Which is exactly what the Splunk guys told me yesterday. But it's-- >> But that's what I'm saying. They'll do what they have to do to maintain the footprint in the customer, do right by the customer, and keep the competition out. >> But if it's multiple orders of magnitude different. If you take the open source guys where essentially the software's free and you're just paying for maintenance. >> (laughs) Yeah and humans. >> Yeah, yeah. >> Okay, that's the other advantage of Splunk, as you pointed out yesterday, they've got a much more integrated set of offerings and services that dramatically lower. I mean, we all know the biggest cost of IT is people. It's not the hardware and software but, all right, I don't want to rat hole on pricing, but that was a good discussion. What did you learn yesterday? You've sat through the analyst meeting. Give us the rundown on George Gilbert's analysis of .conf generally and Splunk as a company specifically. >> Okay, so for me it was a bit of an eye opener because I got to understand sort of, I've always had this feeling about where Splunk fits relative to the open source big data ecosystem. But now I got a sense for what their ambitions are, and what their tactical plan is. I've said for awhile, Splunk's the anti-Hadoop. You know, Hadoop is multiple, sort of dozens of animals with three zookeepers. And I mean literally. >> Yeah. >> And the upside of that is, those individual projects are advancing with a pace of innovation that's just unheard of. The problem is the customer bears the burden of putting it all together. Splunk takes a very different approach which is, they aspire apparently to be just like Hadoop in terms of platform for modern operational analytic applications, but they start much narrower. And it gets to what Ramie's point was in that Wall Street review, where if you take at face value what they're saying, or you've listened just to the keynote, it's like, "Geez, they're in this IT operations ghetto, "in security and that's a La Brea tar pit, "and how are they ever going to climb out of that, "to something really broad?" But what they're doing is, they're not claiming loudly that they're trying to topple the giants and take on the world. They're trying to grow in their corner where they have a defensible moat. And basically the-- >> Let me interrupt you. >> Yeah. >> But to get to five billion >> Yeah. >> Or beyond, they have to have an aggressive TAM expansion strategy, kind of beyond ITOM and security, don't they? >> Right. And so that's where they start generalizing their platform. The data store they had on the platform, the original one, is kind of like a data lake in the sense that it really was sort of the same searchable type index that you would put under a sort of a primitive search engine. They added a new data store this time that handles numbers really well and really fast. That's to support the metrics so they can have richer analytics on the dashboard. Then they'll have other data stores that they add over time. And for each one, you're able to now build with their integrated tool set, more and more advanced apps. >> So you can't use a general purpose data store. You've got to use the Splunk within data. It's kind of like Work Day. >> Yeah, well except that they're adding more over time, and then they're putting their development tools over these to shield them. Now how seamlessly they can shield them remains to be seen. >> Well, but so this is where it gets interesting. >> Yeah. >> Splunk as a platform, as an application development platform on which you can build big data apps, >> Yeah. >> It's certainly, conceptually, you can see how you could use Splunk to do that right? >> And so their approaches out of the box will help you with enterprise security, user, they call it user behavior analytics, because it's a term another research firm put on it, but it's really any abnormal behavior of an entity on the network. So they can go in and not sell this fuzzy concept of a big data platform. They said, they go in and sell, to security operations center, "We make your life much, much easier. "And we make your organization safer." And they call these curated experiences. And the reason this is important is, when Hadoop sells, typically they go in, and they say, "Well, we have this data lake. "which is so much cheaper and a better way "to collect all your data than a data warehouse." These guys go in and then they'll add what more and more of these curated experiences, which is what everyone else would call applications. And then the research Wikibon's done, depth first, or rather breadth first versus depth first. Breadth first gives you the end to end visibility across on prem, across multiple clouds, down to the edge. But then, when they put security apps on it, when they put dev ops or, some future big data analytics apps as their machine learning gets richer and richer, then all of a sudden, they're not selling the platform, because that's a much more time-intensive sale, and lots more of objectives, I'm sorry, objections. >> It's not only the solutions, those depth solutions. >> Yes, and then all of a sudden, the customer wakes up and he's got a dozen of these things, and all of a sudden this is a platform. >> Well, ServiceNow is similar in that it's a platform. And when Fred Luddy first came out with it, it's like, "Here." And everybody said, "Well, what do I do with it?" So he went back and wrote a IT service management app. And they said, "Oh okay, we get it." Splunk in a similar way has these depth apps, and as you say, they're not selling the platform, because they say, "Hey, you want to buy a platform?" people don't want to buy a platform, they want to buy a solution. >> Right. >> Having said that, that platform is intrinsic to their solutions when they deliver it. It's there for them to leverage. So the question is, do they have an application developer kit strategy, if you will. >> Yeah. >> Whether it's low code or even high code. >> Yeah. >> Where, and where they're cultivating a developer community. Is there anything like that going on here at .conf? >> Yeah, they're not making a big deal about the development tools, 'cause that makes it sound more like a platform. >> (laughs) But they could! >> But they could. And the tools, you know, so that you can build a user interface, you can build dashboards, you can build machine learning models. The reason those tools are simpler and more accessible to developers, is because they were designed to fit the pieces underneath, the foundation. Whereas if you look at some of the open source big data ecosystem, they've got these notebooks and other tools where you address one back end this way, another back end that way. It's sort of, you know, you can see how Frankenstein was stitched together, you know? >> Yeah so, I mean to your point, we saw fraud detection, we saw ransomware, we see this partnership with Booz Allen Hamilton on Cyber4Sight. We heard today about project Waytono, which is unified monitoring and troubleshooting. And so they have very specific solutions that they're delivering, that presumably many of them are for pay. And so, and bringing ML across the platform, which now open up a whole ton of opportunities. So the question is, are these incremental, defend the base and then grow the core solutions, or are they radical innovations in your view? >> I think they're trying to stay away from the notion of radical innovation, 'cause then that will create more pushback from organizations. So they started out with a google-search-like product for log analytics. And you can see that as their aspirations grow for a broader set of applications, they add in a richer foundation. There's more machine learning algorithms now. They added that new data store. And when we talked about this with the CEO, Doug Merritt yesterday at the analyst day, he's like, "Yes, you look out three to five years, "and the platform gets more and more broad. "and at some point customers wake up "and they realize they have a new strategic platform." >> Yeah, and platforms do beat products, and even though it's hard sell, if you have a platform like Splunk does, you're in a much better strategic position. All right, we got to wrap. George thanks for joining me for the intro. I know you're headed to New York City for Big Data NYC down there, which is the other coverage that we have this week. So thank you again for coming on. >> Okay. >> All right, keep it right there. We'll be back with our next guest, we're live. This is the CUBE from Splunk .conf2017 in the nation's capitol, be right back. (electronic music)