live from las vegas it's the cube covering knowledge 60 brought to you by service now here your host dave vellante and Jeff Frick we're back Jeff Frick and I are pleased to be wrapping up day one for us for the cube at knowledge 16s a plastic piece no service house big events been a long day okay farriers texted me from SA and looks like they had a good event down there as well but but we're here at knowledge 16 great day financial analyst meeting yesterday set up the cube had a great kick off today at the the keynotes with Frank's luqman and and company laying out their vision she said robert gates on as a rock star right i saw him at the cio event so service now has a separate cio event within the event and they bring in a lot of speakers and they share you know it's behind closed doors CIOs talking to other CIOs pretty impressive was great walking over with him ten minutes he came on now remember he replaced rumsfeld all right george w bush brought him in asking him to replace rumsfeld it was like it would be like Belichick replacing Parcells right Rumsfeld effusive outgoing controversial hey and then and then and then of course belcheck you know very straight narrow and and that's kind of way Gates is right i mean he was very measured and in yet opinionated met serving eight presidents all of all of which had great sense of humor except to he said right jimmy carter and and richard nixon yeah dark days then take take what you will from that he's head so pretty interesting but so what's your take on day one at knowledge you know kind of following up on some of the stuff that dr. gates talked about it the themes are actually really simple you know and he listed the traits of leadership you know these are not things that you never heard before carrying it with the trust humor and I think the themes here at as service now are very similar Dave and that it's it's about work it's not about records it's you know for time and time again about it's about effective response not necessarily you know building the biggest mode in the security in the security aspect and you know it's the action platformer we get work done so it just seems like this kind of methodical just boom boom boom stick another knitting moving down the road moving down the field as we like to say and continuing just to execute and as they see everything as a service that now that opens up this huge opportunity to go well beyond itsm which is you know consistent with the vision and I don't keep talking about that 2013 interview with rebels our first meeting with him you know to execute on that vision of a platform and now going into shared services which we've heard a lot about you know a little bit into HR a little bit into legal and continuing to move down that path where you know this seems like a good opportunity for a head but they're just executing just keep executing well and I Tom now is the big opportunity facing them and I think it's going to provide a Mick shift to to a new set of products for service now IT operations management they've made some acquisitions they are a service management is now it's got its tentacles everywhere and I mean essentially helping orchestrate chef and puppet if you want they could do the orchestration for you so cloud management is a new area for these guys than this whole notion of inter clouding and managing multiple disparate clouds is something that service now can help attack I mean it's pick a problem that involves a service workflow and service now is going to knock it down how many things in business involve a service workflow it's like everything everything we do everything we touch has a service workflow aspect to it so every project every new initiative every acquisition it's just you know the market opportunities enormous and what service now has done a really good job of doing is taking this little notion of a like the Big Bang IT Service Management he'll help desk changed man and problem management change management etc and exploded that in all different directions into new vectors you mentioned a little bit in hrs I think it's increasingly getting traction in HR legal logistics you're now seeing service now lay out a vision of touching and helping to essentially orchestrate request service requests around the ERP systems around the CRM systems which are systems of record and relatively rigid systems of record right and service now can help orchestrate all the activities around that it's an enormous opportunity so the TAM I pegged the tam in 2014 I wrote an article that John furrier II published on Forbes I pegged the tam at 30 billion at that time and remember when I went through the analysis David floor you help me at ease you know it just feels like it could even be higher and I remember discussing that with David said yeah but 30 billion so huge already and they get this tiny little company and you're on thin ice we better be conservative here and now it's up to 60 billion i think the 60 billion is is understated Jeff well Darryl from from H&R Block in Canada you know they do this annual thing I left I called it a merger acquisition at a divestiture to build the infrastructure to execute the annual tax process for Canada 84,000 tasks everything from painting the building to signage to computers to paper to hiring people firing people i mean how does a lot of different tasks that they now manage with service now I thought that was pretty a fascinating story you were not when we had Lawrence on from from from ey not understand young anymore ey and talked about now they can provide a level of detail in the IT FM the financial management is like what's the cost of an application that no one ever knew before because they never added in the data center cost you know this is just software and maintenance and now people can start making interesting informed decisions about end-of-life enough which has come up in a number of our conversation so that people are turning off other applications and and service now is taking that workload the other thing I wanted to talk about we talked about this at the open but when you and I walked the floor at 22 the ServiceNow 2013 it was struck us that one of the challenges they had is to evolve this ecosystem and in that but by the way they they still have that challenge but they've done a really good job and you've seen one of the things we said is where the real big guys KPMG was here but you know the the Accenture of the world the youngs at the time now they are going all-in so accenture acquires cloud sherpas CSC acquires fruition so those guys like to focus on big opportunities so the only area now the other thing we talked about when we were at the Aria was the down market opportunity you know we said boy wouldn't it be nice if they had a solution for small companies take a put in a page out of the the Salesforce playbook and they've announced offerings there you're not hearing anything about them you know because and I think the reason is at least in part there's so much opportunity in the global 2000 they're really laser focused on that piece we got to do some more digging and find out what's going on there I know initially there was some concerns about sort of the the growth path and but we haven't heard a peep unless I missed it about the down market product the entry-level product guys the guys like us right you know he'd use it I don't know if I have 84,000 tasks to put the cube production together but i could not the few that i was not to have an automated in this system absolutely yeah so and then the other thing Dave which which you know we ettore on talking about the design and and the the watch and the fact that he sits in a room he had a surf shop in the Maldives before he came to work for service now for a couple years and he sits with Fred and so again just this unique culture of having kind of the mad scientist you know elder coder with the the fellow surf shop design guy and to come together and to try things and to come up with the watch and told the story the watch and I had to build credibility over years to try new things to get to the point where you could say hey let's let's talk about the what let's do a watch and is a form factor of the wash and what are the types of notifications and work behavior that we can better represent represent in this form factor and I think it's just you just cannot underestimate the strength of having you know a driven visionary leader that pulls people to him and inspires people which he so clearly does well and he's young at heart I mean a sec i would say i think he was coding in the keynotes today i got we gotta ask him but he comes on you know but they you know you look at this company and there's some folks at this company that been around for a while you know it's not a bunch of kids you know co diem there are right but a lot of the senior leadership team and the technical team the development team have been around the block right this is not their first rodeo and yet they're able to focus on simplicity you know Fred used to talk about the Amazon experience lat you know last year I think it was the uber experience I think I know we're gonna see some more stuff on on Wednesday though the watch still as we scratching my head a little bit but look low when did the Apple watch come out right i mean window if you look at apple's kind of the people at stamp you know this is now kind of a valid new technical assed year right austrian they're already kind of thinking of new ways to use this fourth basket right well so one of the guests said today you know things change so quickly now you know we it's true we used to go to these conferences and you'd be talking about the same cloud narrative two years straight hey right now it's like every six months it's something new every three months it's something new you know whether it's you know the way i OT just exploded on the scene you know hadoop which was so hot now the dupes like passe you know everybody's talking about you know spark and you know other new real-time methods and streaming and and it's just amazing to see the pace of innovation and so servers now seems to be a company that can keep up with that the other thing is i'd look at my notes on is back to your comment about the system integrators you know we had center and see you see both talking about them getting out of the plumbing business and really moving more of their efforts with their clients to the high-value stuff and you think wow that's kind of counterproductive they've made a lot of money on I'm doing heavy lifting infrastructure implementations and integration and all that big nasty stuff even they see the writing on the wall it's better to get behind this transformation the cult of the rotation to the new and to build their practice around helping their customers execute in a cloud enable the world versus necessarily continuing to stitch together infrastructure well I mean I think that's it's important I mean the hallmark of a great company is one that can can navigate through transitions we we've covered EMC for years we've seen their their Executive Joe Tucci talk about the waves I I always believed in the DMC strategy for example was was the right one but it could not navigate those waves all right it's been a lot of great companies the digital is the primes the way thanks you know and so we'll see if well I mean guys like the service companies tend to be able to make those transitions all right because they they do you know eat from the trough so to speak right right hey they wait until there's a lot of food and then they go in and and pig out and I do a really good job of it and they're doing it now so that tells you there's food so that's a huge sign a confirmation about this ecosystem so all right anyway a big another big day tomorrow start off with the keynotes at eight a.m. pacific time and and then we start up i think at nine thirty again right correct we start at nine thirty and again we've got a great selection of service now executives of course but more importantly what we look forward to really is the customers and and again as we've said a number of times one of the reasons why this is one of our favorite shows is because we get to talk to practitioners we get to talk to people that are executing that are in the trenches that are transforming their own companies in this competitive world and they happen to be using service now as part of that strategy and there's a lot of them here so we will be extracting the signal from the noise as we do with the cube thanks for watching everybody this is a wrap day one we're here at servicenow knowledge 2016 at the mandalay bay we'll see you tomorrow service management

>> Announcer: Live from Las Vegas. It's the Cube. Covering Knowledge 16. Brought to you by ServiceNow. Here's your host, Dave Vellante. >> Welcome back to Knowledge 16 everybody. This is Dave Vellante. It's our pleasure to have Dr. Robert Gates here, American statesman, scholar, author, and the 22nd U.S. Secretary of Defense, Dr. Gates thanks very much for coming on the Cube. >> My pleasure. >> So we just came over. We had a nice walk over from the CIO event here at Knowledge, you were speaking on leadership. Your book, A Passion for Leadership, which I can not get on Amazon so I have to carry it around with me. It's nice, it comes in handy when we're on the Cube. First question. Are leaders born or are they made? >> I think that they are not necessarily born, but there are certain aspects of leaders, of leadership that I think cannot be taught. If your empathy with other people, character and honor. Courage. Sincerity. A liking for people. A vision. I think these are things that are very personal, you're not necessarily born with them, they develop during the course of your life. But I also believe that they can't be taught in a university. >> Now we were talking on the way over, I mentioned that there's no co-author on this book, you told me you write all the books yourself, do all the research yourself. And you said one of the things you're proud of, I'll let you explain it, there's been no factual, claims of factual error and you do all your own research, is that right? >> Well it's one of the benefits of the IT revolution is access to a lot of databases and things that even a non-technical person like me can use. >> So how much time does it take you to write a book like Passion for Leadership or...? >> I would say that that book probably took about 18 months. Two years. The previous book, Duty, the memoir of my time as Secretary of Defense under Presidents Bush and Obama took longer, but it's got a lot more factual information and a lot more synthesis of information. And this really was more all out of my head in terms of my experiences over 50 years in public service. >> So you've served eight presidents, six of whom had a great sense of humor. Why is it important for leaders to have a sense of humor? >> Well I think a sense of humor reflects balance. It reflects a perspective on the world that is healthy. And people who don't have, well to be specific, as I often joke, I mean the two presidents that as far as I was concerned had no discernible sense of humor were Richard Nixon and Jimmy Carter and I leave people to draw their own conclusions in terms of the outcome for those presidents. >> Now in thinking about some of the concepts that you put forth in your work on leadership, one of the things that struck me is when you came in as the head of the CIA, that was obviously a tumultuous time, the Soviet Union was splitting apart. You're an expert in that field. You had to have intense focus, and the same thing when President W. Bush asked you to come back as Secretary of Defense. The focus was on Iraq so you had intense focus on the Soviet Union in the first example, and Iraq in the second yet you had so many other tasks that you had to do. Help us understand how you balance that need for focus which many of us in the start-up community have to have with all the other tasks that you have to do, how'd you adjudicate? >> Well I said as I write in the book, you have to, sometimes you're faced with a situation where you need to make immediate changes and take immediate steps to deal with a crisis situation that's in front of you. But sometimes, simultaneously, you have to be making decisions about the long-term future. So for example, when I became CIA director in 1991, we were literally five weeks from the collapse of the Soviet Union. So it was not only how do I provide intelligence support for the president in terms of what's going to happen when the Soviet Union collapses, what happens to 40,000 nuclear weapons, will there be famine, will there be riots, et cetera, et cetera. But also the longer term task was how do I reorient the entire American intelligence community away from this singular focus on the Soviet Union that we'd had for 45 years to deal with a world where there many more and different kinds of challenges. So I was dealing with both a short-term crisis and the longer term issue. When I became Secretary of Defense, we were, for all practical purposes, losing two wars. In Iraq and Afghanistan. So my focus entirely as Secretary of Defense was on how do we turn those wars around. The president had made what I thought was a very courageous decision to surge troops into Iraq, so how do I get them there. The decision is one thing. Getting 30,000 troops there with their equipment and getting them into the fight and providing them the support was quite another. And then we also had the war in Afghanistan, so there was a singular focus there and as I write in the book, it was only when President Obama asked me stay on that I then broadened the aperture dramatically in terms of how do we change the way the Department of Defense gets managed and how we manage big weapon systems. How do we ring overhead out of our costs and take the longer term view of repositioning the defense department. >> So when you think back to 1991, you had to make a lot of predictions, you and your colleagues. About what would happen with the Soviet Union. And while I'm sure there was a lot of data, we talk a lot on the Cube about big data and big data analytics. How has data changed the decision making process in government at that level? Or has it? >> I think when it comes to intelligence, data provides you more information about capability. But big data and technology still cannot help you when it comes to intentions. I always liked to say that in the intelligence world, all the information we want to know can be divided into two categories. Secrets and mysteries. And unfortunately the mysteries are the big things. Will the Soviets invade Czechoslovakia? Will they invade Afghanistan? Is China prepared to go to war over the South China Sea? And there is no data that can help you answer those questions. You can, the data can help you identify the capabilities they can bring to the problem. Or to the issue. But in essence, when it comes to figuring out what other leaders will do, sometimes figuring out what our own leaders will do, there is no data that can help you solve that problem. >> I want to change the subject, ask you about term limits. And specifically my question is, do you think corporations should have term limits on their executives? >> I think these kinds of broad rules are a mistake. I think that there may be certain companies where that has value, but on the other hand, you've got leaders, and I write about 'em in the book, who've been leading institutions, whether it's a university or a company for 20 years. And they are still the most restless, the most innovative, the most entrepreneurial people in the company. Even at 75 or 80 years old. So to have some kind of a general rule that says everybody has to leave, I think is a serious mistake. I first joined corporate boards when I was 50 years old. After I retired as CIA director. I thought age limits on boards then were crazy. And I was the youngest person on virtually every board I was on. But I would see somebody forced to rotate off at 70, who at 70 was making a bigger contribution than a lot of members of the board at 50 or 55. So I think these general rules are a mistake. I think it has to be very company-specific and personality-specific. >> Well in the technology industry obviously you have some big names like Dell still around and the other Gates who did quite a good job and so forth. What about at lower levels within the organization. Still senior but what's your philosophy in terms of mixing things up, putting executives in different roles? Giving them a flavor for whatever, running finance or information technology or logistics, et cetera? >> Well let me frame it a different way. I would tell rising military officers that they were not, as Secretary of Defense in my view, they were not competitive for senior command if artillery was all they'd every done. Or if flying helicopters was all they had done. Or supervising people who flew helicopters. I wanted people who had a breadth of experience, who knew different aspects of the defense establishment. So they had a broader perspective of the various challenges that we faced. So I think for someone who is going to aspire to the most senior positions, having some exposure to the other parts of the organization is valuable. By the same token, it seems to me, it doesn't make any sense to take somebody who is a CFO and who has a particular skill and then put them in charge of the production line or something, I don't know, I've never run a private company but it seems to me you have to be pretty careful about that. Of taking somebody who is in a technical specialty and then trying to get them to do something else. But once you rise to a certain level in an organization, if you want to have the big job, it seems to me you have to have a variety of experiences that give you a broader perspective. >> I feel I want to talk a little bit about cybersecurity, you mentioned in the CIO event that you were just at the threat of cyber, I feel like in our industry it's trivial compared to some of the cyber threats that you've had to deal with. But nonetheless, there seems to be the recognition within the executive community that it's not about just keeping people out anymore, it's about recognizing that you have been hacked, you will continue to be hacked, it's about the response. What should be on board of directors' check list, if you will, with regard to cybersecurity? >> Well I think cyber and the risks associated with cyber and IT need to be a regular part of every board's agenda. I think that there is value in having it an integral part of risk management. And so whether you focus specific attention, in the audit committee for example, and then have briefings for the broader board. Probably is up to each company but, there's no question in my mind that when it comes to risk, for most companies today, cyber is right up there with natural disasters and business continuity and so on and needs to be a responsibility in terms of oversight for a board. >> With regard to the board's use it on, do you feel like there's an honest and frank conversation about cyber and has that changed? >> Well I do, I do, I think it's very different, I mean I think people really take it seriously. >> Yeah sometimes I get concerned that this fail equals fire mentality has led a lot of organizations to sandbag the risks, is that a fair criticism? >> Oh, what do you mean by that? >> By essentially say, I've got it covered. The risk of us getting hacked is low, we have it under control. Verus an open and frank conversation of no, we're getting infiltrated, we have to think about the response versus we can't keep the bad guys out, we can try, but... >> Anytime anybody in an organization tells me he's got everything under control, I am automatically skeptical. >> Okay fair enough. I got to ask you, I know we're tight on time, you've been gracious with your time, but I have to ask you about the current tone of the campaigns. Your reaction to that. It's kind of comedic. There's not a lot of comedy. Comedy in the narrative. What's your take as now an independent observer? >> Well I don't think it's funny at all, I think it's very serious, I worry about the fact that there's no real discussion of specific, of the many challenges that we face expect in the broadest possible terms. Foreign policies being discussed in almost primitive terms. And not very intelligently in my view. So in terms of the challenges that the country faces, which are quite extraordinary, it seems to me, the campaigns at this point, across the board politically, seem to me to be pretty superficial. >> So I want to end with coming back to the Passion for Leadership. You know I have to say the brilliant part of this book, don't hate me for this, but you basically laid out a lot of common sense ideas but the brilliance of the book was the way in which you weaved it together and gave examples. If I may, it was listen, respect, reward people, delegate, empower, have fun. Care from your heart. Check your ego at the door. Hire smart people, honesty, integrity. These are very common sense things, but you brought them all together in a way that had meaning, I felt like some of the classics, Dale Carnegie's How to Win Friends and Influence People, I feel like there's a lot of timeless things in here. Was that your objective or did you just write from your heart? >> Well both. It seems to me that as I looked back and realized that I had let these three very large institutions, the American intelligence community, the fifth largest university in the country, and the Department of Defense, that I actually had been able to change a lot. And in environments where people said that was impossible. And so it seemed to me worth sharing here's how I got it done. It can be done, I guess one of the most important messages I wanted to convey was that institutions can be reformed. They can be transformed. And made more efficient and more cost-effective and more user-friendly. And better serve both customers and citizens. At a time when most people just throw up their hands and say this is all impossible. The theme of the book is it's not impossible, it can be done, it has been done, it can be done in the future. >> Dr. Gates, thanks so much for coming on the Cube, taking your time and really appreciate you at this event and really welcome the feedback. >> Thank you very much. Really appreciate it. >> Alright, keep it right there everybody, we'll be back with our wrap right after this. Thanks for watching. >> Service management is helping GE connect...