live from Las Vegas it's the cube covering service now knowledge 2018 brought to you by service now welcome back to the cubes live coverage of service now knowledge 18 we are here in Las Vegas Nevada I'm your host Rebecca Knight along with my co-host Dave allanté we are joined by John Donahoe who is the president and CEO of ServiceNow thanks so much for coming on the cube it's great to be here Rebecca so I want to talk with you a little bit about what you said on the main stage this morning you said this is your first year your anniversary of joining ServiceNow you said when you got here you could barely spell IT but when you reflect back on this year what has been sort of the biggest surprise challenges and surprises about about leading this company well I would say a couple things one I've sort of fallen in love with our customers and the challenges and opportunities they have and what I spoke about this morning this digital transformation thing even a year ago is a bit of a buzzword it's a reality for CEOs for companies and therefore for CIOs and then the second thing that is as I talked about it something very exciting is the role of the CIO the role of IT is transforming before our very eyes out of necessity because technology is here to stay technology's driving strategic change at every company can call it a digital transformation called a tech transformation and CEOs need the most technically savvy leader in the c-suite to help with that and that's often the CIO and so I think that's an enormous ly exciting opportunity for the people that are our traditional customer base and then the last thing I just I'm thrilled about is how many companies are saying that ServiceNow is a strategic platform of choice going forward far beyond just IT and so that's something to roll build upon I was struck yesterday in the Financial Analysts session you shared with us your meeting with the board yeah and you said to them look if you want to clean this thing up flip it whatever that don't hire me I'm here to build a sustainable company during company I think is what you said and the attributes of an enduring companies that are Purpose Driven they both innovate and execute they invest in talent and they have a will to win they got a fight in them a lot of good sports analogies there yeah so okay so you've set that framework where do you see this thing going in the next near term mid term and long term well we've said I think it's really important to set the aspiration of what it is you're shooting toward I've been surprised how many customers have responded well to the statement that we aspire to create a built to last company it starts with the purpose I defined our purpose and that purpose is a long term investment and our employees are already deeply resonating with the purpose and then comes the hard work the hard work of how you bring the purpose to life and our purpose and our product and the work we do with our customers all fit together you talked about automation and in many executives that we talked to kind of run away from that we don't want to talk about automation because it implies we're gonna replace humans you said hey we're at the center of automation we have to take that issue head-on what's the conversation like with the executives and customers that you talk to well the first thing is I have to think yet to look at the data which is what I've spent time doing and two things jump out one if you look at where automation is really gonna have the biggest impact it's not in any given job it's actually the third of all of our jobs that are repetitive administrative redundant right that's so we need to automate the low value-added parts of all of our jobs and then that will free our time up to be due to leverage our more creative capabilities to add more value and so if you look at it both at a micro and macro standpoint where automation is going to impact jobs it's not a given category it's more of a horizontal cut of all jobs and then secondly looking at aggregate job creation I've done a fair amount of work with James mineka the McKinsey Institute is to blow up a suit who's got to think the best objective macro study about job creation and there going to be some jobs they'll be fewer of and other jobs they'll be more of and how do we migrate the skills migration so that people have the skills for the jobs of the future one of which by the ways things like being a ServiceNow administrator you do not have to be a computer science major or an engineer to be a ServiceNow administrator you have to like technology you have to embrace technology but you can do it as a mere mortal and so we're looking at ways of how do we help retrain people to have the skills to create one of the jobs that we're creating through ServiceNow administrators John you talk to a lot of people I think five or six hundred customers know and they'll have since I met you a year ago it ServiceNow headquarters we obviously talked to a lot of people on the cube and no question every CEO the ax talked it was trying to get digital right yep they understand it but there's somewhat of a dissonance and I wonder if you sense it in and I wonder if you could talk about how ServiceNow can help wear this the c-suite gets it and they're driving for that but when you go below the line there's a lot of sometimes complacency not in our industry not in my lifetime I'll be retired by then do you hear a lot of that and how can ServiceNow help increase the urgency well I'd say I take a couple things Dave one is the c-suite gets it by not every c-suites role-modeling what's necessary without the cross-functional leadership the partnership of ITN HR and the business units then what happens by tama goes to three levels down people have functional identities and so people role model are behaving the way they see their leadership team role modeling and so if that if that c suite is embracing technology and understanding technology demands cross-functional engagement to deliver great customer experiences and employee experiences then it makes it a lot easier two three steps down the second thing I think c-suite people need to do is be able to say we take if off the table we said I talked about top-down goals most people are scared of a top-down goal the problem is if there's a not a top-down goal then people can debate if we need to make this change and how but if the CEO the c-suite says we are going to improve the employee experience and I'm setting this goal then it's when you go a level two levels down it's not if no no they said if now our job is how and so I think leadership has to do its role and I think I think the c-suite and leadership's learning how you lead and a technology enabled environment so leadership is the key and and the CEO is really leading a little suite I think the whole the whole C suite set of leaders and partnering and reaching out to one another so we I mean as you said on the main stage in many ways the technology is the easy part but what you're talking about is the hard stuff because this is the real change management and and it's human lead so what are you hearing what are you seeing and do you have any ideas for best practices I mean as you said that the the C suite needs to embrace it yes and then push that down but how do you do it what are some what are some of the things you've seen that work well here's some of the things that we're trying to do to contribute toward that because obviously we're a software platform but one is to do what I did this morning which is be more articulate about what best practice looks like what is best in class so that anyone in any organization can can go to their boss and say oh this is best practice this is best-in-class we need to emulate this and here are the returns we can get if we emulate it so one is just hold out the successes successful examples and illustrate what's required that's why I kept saying over and over this morning employee experience is not just an HR issue employee experience is not just an IT issue you need a powerful team of CIO C HR o other functional leaders and then the second thing I think is getting people on i.t to see themselves a little bit differently we have a CIO track going on upstairs with a hundred top CIOs and the whole day is around driving culture change and CIO is leader and I think good leaders they don't just allow a label to be attached to them they invest in themselves they build their skills they build change management skills communication skills and I think whether it's a CIO or IT if they're going to have the kind of transformative impact they can across the company they need to build their technical expertise along with other skill sets you heard Andrew Wilson talk about that and they need to learn to speak business and not just IT John I want to push on something that I'm discerning from you guys and get your reaction so obviously cloud you guys are born in the cloud cloud is a tailwind for you we've seen this Asif occation of business but we seem to be entering a new era moving from a cloud of remote services to one of us fabric Ubiquiti is fabric of digital services so my question is around innovation you talked about that as one of the key attributes of an enduring company what's the innovation equation going forward yeah it's not Moore's law anymore it's not cloud mobile social Big Data at least it doesn't feel that way anymore is it machine intelligence combined with cloud what do you see I think it gets down actually to what I talked about this morning user experience I think machine learning I think AI is going to be a commodity functionality we're gonna get it from AWS or Azure or Google the cloud infrastructure providers whether it's natural language processing whether it's the kind of machine learning capabilities that's that's gonna be sort of available widely then it's our job as a software platform to build that into our platform so we built machine learning capability into our platform we built chat bot functionality into our platform we built leading-edge mobile capability into our platform and again I'll call that I don't know it's the easy part but that's our job in this equation the hard job then is how you apply that to real-world use cases whether you're applying using real-world datasets specific customer data sets and real-world workflows and use cases so let me give you a small example we bought a machine learning company a year ago called DX continuum great machine learning team great machine learning technology we rebuilt it inside the ServiceNow platform okay and I don't believe a AI is a horizontal platform is I don't you know we didn't call it a name it after a a dead scientist that's out what we're gonna do and I'm not casting judgment on it but it's not a solution looking for a problem we built machine learning into our platform and then so we want to be the first user we want to use it on a specific challenge so the case we used it on our own inbound customer support we have about 800 customer support agents that serve our customers about 11 percent of their time is spent on something we call incident categorization and incident routing sounds kind of grunty terms but when summer calls with a problem we have to be able to identify what that problem is and then route it to the right person to fix the problem so 11% of our peoples time was doing that that's not a fun task so we turned on machine learning and within two weeks the machine was categorizing the issue and routing it more accurately than a human can so now what happens is our customers problems are getting solve faster and the 11% of those resources those customer support resources who are engineers in our case are focused on solving customer problems not doing what felt like an administrative task to them and so I think the actual application of machine learning the actual application in many of these these technologies it's the application that's going to matter not the invention so a lot of what you said makes it makes sense to me because you're saying that your customers are gonna be buying essentially that machine learning capability in relative and applying it in very narrow use cases to solve their business problems rather than trying to build it right and you do see some companies trying to maybe get over out over their skis and over-rotate to try to build some of that stuff that's gonna come from the technology suppliers what yours if we're doing our job the infrastructure providers the software platforms like us we're doing our job we're making it easy another small example will be mobile I talked this morning about companies everywhere need to build mobile experiences and so there one do I need to build a mobile design team a mobile coding team if you're up if you're a bank or utility or an oil and gas company or a retailer or well platforms like ours make building mobile experiences really easy for them so we're trying to build that mobile capability that design capability that Design Thinking the mobile capability into the platform so they can just get out-of-the-box functionality and they don't have to have their own mobile designers they don't have their own mobile engineers they can just be saying how do I want to use mobile inside my company and then there they're taking our mobile platform if you will and and creating mobile applications and mobile experiences that are relevant for them so your brand identity is now making work work better for people yes when you are doing your blue sky thinking about the pain points that employees feel and that job candidates feel because that's their another important part of of companies trying to keep their people happy yes what what are what do you see I mean as you said the next three to five years are going to be this the revolution is going to be in the workplace yes what do you see as sort of the biggest challenges that you want to help solve well let me just take a simple use case that that comes to mind as you mention that let's take from the time you start being recruited for a company through that let's say you get hired and get started so the recruiting process you're sending a resume and you don't know if I got in didn't get in if anyone someone may or may not contact you you may get an interview you got to find out where you're going if you're going did you get called back maybe you get an offer letter it comes you get it all set all kind of I would call an unstructured workflow let's say you get hired then the onboarding process onboarding is a classic unstructured workflow you got to go to this security to get your badge you got to go to facilities to get your desk you got to go to it2 get your laptop or mobile phone you got to get to another part of IT to get your email credentials put on you've got to enter your information into the payroll system you got to reenter your same information and pick a health care provider you got a range of the same information and and and get a in the tini system you got to do all this compliance training painting an accurate ownerís picture this is your first impression of the company you're joining now there is no reason they took my mobile phone away from me so I'm twitching there's no reason why there shouldn't be an app that says a recruit says I want to interview if the company they download the app they submit their resume based on the app we give a response in the app they say oh might my resume was accepted and I they want me to do an interview and they want me to be in Santa Clara next once at 8:00 and here's who I'm going to be meeting with and here's their background in the app then they do the interview let's say they get invited back who they're interviewing with we're inside the app okay let's say then they get an offer well then the app has more permission in the offer comes through the app you can print it or you can read it then onboarding starts onboarding can be a seamless experience it still can connect but you enter your data in once it pre fills all those systems and then in one mobile experience you're picking what's your laptop what's your healthcare system what's the bank you want your payroll in teeny to go into and all the complexity is hidden underneath it that's what we have in the consumer world our lives at home when you buy something on eBay all the complexities hidden when you pay with PayPal all the complexities hidden there's no reason why all the complexity can't be hidden in the recruiting and onboarding process and and so the technology's there to do it but it's managing all the workflows managing all the processes underneath so you can pull that together into a seamless experience and that's the kind of experience it's funny I have four grown kids my daughter she started working I won't say where but a major technology company and she's like dad what's up with this onboarding process why isn't it in a mobile app and the Millennials will start demanding this and so I I just think there's so much opportunity to make our lives at work feel more like our lives at home and you just described the capability that allow you to reach your aspirations of the next great enterprise software company when we think of great enterprise software companies we think of Oracle and si P you're nothing like Oracle and si P in my opinion and then of course you think of Salesforce different you know you're not a an SMB how should we be thinking about the next great enterprise software company so this I think this is a really important question Dave and I'd look at it through the eyes that what I heard from the 500 customers and here's what I heard they're embracing digital transformation they're embracing cloud they're embracing cloud at the infrastructure level figuring out their data center strategy and how much they embrace public cloud and then at the software platform level they're saying we want to have four to six strategic platforms and often it's the born in the cloud platforms often its sales force and workday and service now and maybe office 365 or Google for email or communications maybe if they have a supply chain ASAP and they're saying I want those platforms to work well together so no one platform should be claiming they can do everything each of us needs to figure out what's our role and how do we work with one another and our role ServiceNow I'm proud to say is one of those strategic platforms as I said earlier people see our capabilities as being connective tissues helping to pull those platforms together you know in the onboarding example we pull all the data sets and platforms together by the way we don't slap our brand on top because actually employees want to see their own brands they want to see their own company's brand they don't want to know what the enterprise software brand underneath it is they just wanna have a great experience and so I I don't view it I think the winning enterprise software I see a chance for Salesforce and workday and ServiceNow and Microsoft to all be winners and delivering this future for companies where you are the platform of platforms though correct but that's not and I'm being very careful the way I say it I'm not saying we're the top dog sure I'm saying what we're good at is cross-functional workflow actually it's probably the grunt 'ya stuff all those things and you're the best at it and we're the best at you are and our brand we're not we're not forcing our brand everywhere that we're doing it in service to our customers and so I just want to always be listening to what our customers want that's gonna be our North Star they're gonna guide us it always has been I know you know Fred Letty started that from the beginning and that's what we're gonna continue to do well John it's always a pleasure having you on the cube so thanks so much for coming on our show thank you very much Becky thank you Dave great to be happy John I'm Rebecca night for Dave Allante we will have more from ServiceNow knowledge 18 in just a little bit [Music]

>> Voiceover: Live from Orlando, Florida, it's theCUBE, covering ServiceNow Knowledge17. Brought to you by ServiceNow. (upbeat electronic music) >> Welcome back to sunny Orlando, everybody. This is ServiceNow Knowledge17 #Know17. I'm Dave Vellante with Jeff Frick. John Donahoe is here as the newly-minted CEO and President of ServiceNow, fresh off the keynote, fresh off 49 days in. John, welcome to theCUBE, thanks for coming on. >> Thank you very much, it's great to be here. >> John: So how'd you feel up there? You had the theater in the round, you were working the audience, I loved how you walked on the stage and really got into it. How's it feel? >> Well, what I love about ServiceNow, is it's a community-based business and a community-based company. And so, we had 15,000 members of our community out there, and that community feeling is, I think, one of the real powers of the movement that's called ServiceNow and of the ethos of this company. So, I loved that, I fed off that energy. >> So, at the risk of some repetition, a little bit of background about yourself, a former Bain, former eBay CEO, you shared that with the audience. What is relevant about your background to the ServiceNow experience that you expect to have? >> Well, you know it's funny Dave, I spent the first 20 years of my career at Bain doing business transformation. And a lot of what I talked about today was digital transformation, that is, every company is trying to transform. And I spent the first 20 years of my career focused on that. And then we talked a lot about great customer experiences. Well, the consumer world and consumer-based applications like eBay, or PayPal, or many other consumer applications, are defining the new standards of what kind of easy, simple, intuitive experiences are possible. And employees are consumers at home and they're increasingly expecting the same kind of great experiences they have at home at work, and as customers of enterprises. And so I think you're going to see the world of consumer and enterprise converging. And so that's why I'm very excited about being a part of ServiceNow. >> So, you talked to the audience, as I say, about your background. You're a family man, you've got Four children. >> John: Yeah >> Jeff: Pictures on stage; which I love. You know, it really kind of goes with the folksy, you know, history of this company and the community base. Not too many people put their family photo up on the keynote. I thought it was great. >> John: Yeah, well, they're my bosses, so... (all laughing) >> Dave: Well, like you said, they make you humble >> John: Yeah. >> Dave: and you learn a lot from them, so... So I appreciated you starting that. I've got Four kids, Jeff's got kids, and so... >> John: That's great. >> Dave: And you're hosting a women in tech breakfast tomorrow, a real passion of ours, so, maybe talk about that a little bit. >> Well, I just think it's really, really important. And, people ask me: "Why do you think that way?" I think it's good business, right? At the end of the day, the ultimate thing we do to succeed in business is we need to attract, develop, and retain the very best people, >> Dave: Right. >> John: and by definition, 50% of the workforce is female. And so, to not be aggressively trying to cultivate that part of our team is to miss an opportunity. And doing it well is hard, but if you do it well, it could be a source of competitive advantage. So, I care deeply about it professionally, and then also personally as a father of a daughter, the question I ask men that have daughters and say: "Do you want your daughter to grow up and be part of a work environment that's even better than the one they would have been if they'd come at your time?" And almost all of us say, "Yes!" >> Jeff: Of course >> John: So, it's a responsibility we all share. >> So, I want to ask about your management philosophy. You know, I've heard the term, of course you have too, "benevolent dictator". You use the term, >> "servant leadership". >> "servant leadership". >> John: Yeah. >> Dave: Which starts at the customer on top. Explain your philosophy there. >> Well, it's a way I learned to lead early in my career; which is: that it's the opposite of a classic pyramid. Right, where the CEO's on top and everything's underneath. No, this is an upside-down triangle, where the reason we're here is to serve our customers, to serve our employees as they serve our customers, to serve the purpose and to the extent you can, to serve the communities in which we are part of. And my experience is that: building that deeply into the culture of a company breeds a level of commitment and a level of long-term orientation that's really important. And ServiceNow's had that from the beginning. Think about Fred Luddy embodied that. He was a brilliant technologist, and he said, "You know what, I'm going to recruit a CEO" "before the company goes public who has those skills." So, he recruited Frank, right? And Fred stayed involved. Frank embodied servant leadership. Frank could've stayed forever. Frank said I was the right CEO to serve this purpose from 75 million to a Billion Four. And then he started to looking for someone that's the right person to serve for the next generation; which is me. So this notion of stewardship, we're all here to serve our customers and try to make our purpose come alive over a long period of time. And I think it's the most enduring motivation and inspiration we can have. And it keeps the customer front and center. >> Well, so one of the first things you did in your first 100 days, you said you wanted to see 100 customers, you actually accomplished that in 45 days. So, first of all congratulations, first of all how'd you do that? (all laughing) >> Well, I went at a roadshow to 10 cities across the U.S. and just packed my days full of meetings with customers. And they were individual meetings, and we had some group meetings, some lunches and dinners. And those are some of the best because you get a conversation going. I had Four or Five, Six customers around a breakfast table or dinner table and we start talking about their issues. And, the dynamic in every situation was they would start sharing with each other. They would say, "Well, how are you addressing this?" And they'd starting saying they have similar issues, similar challenges, similar ideas of how they're going to address it. So, the power, that community power, I was seeing firsthand in smaller settings. And for me, it was just so energizing because our limitation of how quickly we can get better is well we understand our customer's needs, and also understand their feedback about where we can get better. >> Well it's interesting, you said you were a customer when you ran eBay... >> John: Yes. >> Jeff: of ServiceNow, so that's kind of some of your background knowledge of the company. When you went out on your tour, what were some of the things that surprised you that you didn't know even though you had been kind of a ServiceNow customer in the past? >> Well, I think what I hadn't fully understood was the power of the ServiceNow platform, and how it's getting pulled into new areas across the company. So, it's getting pulled to customer-facing applications, customer-facing processes like Ashley at GE is talking about. >> Jeff: Right. >> John: And it makes sense, right? I know at eBay and PayPal, we really worried a lot about how do we handle inbound contacts from our users. And password reset was the #1 inbound contact. (dave laughing) Well, password reset is a perfect process that can be handled in an automated in a self-help way; which is ultimately what the customer wants. >> Jeff: Right. >> John: And ServiceNow can help enable that. And so, as I was sort of surprised and delighted by how this platform is getting pulled into new use cases, that in many ways are back to what Fred Luddy imagined when he founded the company. The interesting thing is, Fred founded the company as a platform to serve all services, businesses, business processes across the enterprise. And then, but platforms don't generate revenue, They don't sell. So, he found an application: ITSM; which was the first application, and it took off. And so ServiceNow began to be known as the IT company. But that was never what Fred envisioned. It was a company that enabled and empowered IT to simplify and automate and transform the entire company. >> It's interesting, password reset. Because it seems like such a simple process. And it doesn't necessarily seem like a high-value process. But in fact, it's hugely high-value for the customer. It's hugely cumbersome in terms of the time it takes. So, to automate something that seems so simple as password reset, has huge implications in terms of efficiency inside and customer satisfaction on the outside. What a great example. >> Well, and here's what's so interesting about that example: Is, it touches multiple parts of the company. Because, people actually, your password is your security. And you could automate changing it in a way that was insecure. But, you've got to do it in a way that it's the convenience that we want to reset our passwords, but we want to know we're safe. And so, that password reset flow has to touch security, it has to touch engineering, it has to touch operations and customer support, it has to touch the customer's record, and so it's a classic multi-function, multi-discipline flow, but you want to make that easy and simple for a user, and yet also have them feel safe. Simple and safe is hard to do. >> John, you mentioned Ashley from GE, I want to talk about digital transformation. It's one of those terms you hear a lot at these conferences, sometimes it's amorphous, it's kind of like A.I. We'll talk about that if we have time. But Jeff, I love your quote. We follow GE quite closely, and Jeffrey Immelt said: "I went to bed an industrial giant," "and I woke up a software company one day." >> John: Yep. >> Dave: And you see this everywhere. So what is digital transformation to you and the customer's that you've been talking to? >> Well, here's, technology and software in particular on one hand is disrupting every company in every industry. I view that as a motivation. I view that as a wake-up call for all of us, including a software company. And, software is an opportunity. An opportunity to make changes and advancements at a pace and a magnitude that's been unparallelled in business history. So every company needs to define how they're going to use technology, how they're going to use software, how they're going to use digital capability to their advantage. To their advantage with their own consumers, their own customers, either industrial customer or a consumer in a consumer business, and how to use it to change the employee's experience and improve it. So, employees are spending time not on manual tasks; which now can be done by technology, but on higher value-added activities, and then how you can operate a global enterprise in an effective and efficient manner. And so, technology is an offensive weapon if you will, an offensive tool, is something that's on the mind of every CEO, and every company. And that's where they're looking for how do they have a few trusted partners. A few trusted technology partners that help them navigate their way through that, help them drive their way through, and that's ultimately what ServiceNow is. >> So these are big ideas, and they involve a lot of different constituencies within your customer base. Obviously, your IT peeps, as we like to say, but the CIO, who's role is changing, and also the line of business folks. So these are big, heavy lifts that you can't do alone. You've got to have an ecosystem to do that. When we did our first Knowledge in 2013, the SIs were a lot of companies frankly that we never even heard of. And now, you're seeing all the big SIs. I don't even want to name them because I'll forget some. But, your partner strategy is critical to achieving that vision that you just laid out, isn't it? >> Absolutely, Absolutely. Because it takes both of us. It takes our software and then their capabilities to help our shared customers, shared clients, implement the software, and do it increasingly in a way that is as configurable as possible; which means as minimum customization as possible, and also as quickly as possible. And our partner ecosystem's an essential partner in doing that. And there's the big SIs, and then also some of the smaller ones. I spent some time with customers in some smaller cities where they're saying having local capabilities, local teams, that were trained and certified on ServiceNow was really important to them. Often they end up being acquired by or joining the bigger SIs over time, but that sort of grass roots opportunity. Because that's also job creation. That's job creation in communities. I got to see how talented, computer-literate, software-literate people in different cities around the world are seeing an opportunity to create a livelihood by helping customers integrate ServiceNow in the most effective way. >> So two years ago, Frank Slootman in his keynote said that the CIO's role is changing and they're becoming business people. >> John: Yes. >> Dave: And kind of challenged CIOs, if you don't speak wallet you better start learning that language, the "lingua franca" of the business. So, you obviously agree with that. But, how is the CIO role changing, and how does it support other roles within the organization, that you're trying to apply ServiceNow to? >> Well, I have a really, Jeff, a really outside-in... Or, Dave, really outside-in...sorry about that. >> Dave: It's alright. >> John: I've had a lot of names this morning. >> Jeff: I'm sure you have. >> Dave: That's pretty good. >> John: Outside-In view of this. Which is through the eyes of the customer, alright? The CEO is thinking about: "Alright, I've got to serve our customers better," "I've got to retain our customers" "and serve our customers better." "And then I've got to tract and retain employees" as we've been talking about. "And I need the digital capability," "I need technology to help us do that." Their going to turn to the most technically-literate person in the C-suite to help do that. That's the CIO, right? And so the CIO by very definition has to play a broader role of partnering with the business unit leaders, with the functional leaders, to drive that end-to-end business transformation or digital transformation. And the CIOs that I met are ready to take on that challenge. They couldn't have done that before the cloud technologies that give them the ability to play offense. But these cloud technologies now cut across, they don't just sit in IT, they cut across all of the enterprise. >> Jeff: Right, right. >> John: And so, I would say there's almost this gigantic sucking sound, if you will, to use an old Ross Perot-ism, that IT and the CIO are being asked to play this role, be change agents, strategic change agents, across the enterprise. And they're ready to do that, but they do need to speak business in business terms, and business value, and business value means: Are we serving our customers better? What's our customer NPS? What's our customer response time? What's our customer retention? They need to speak employee value terms: What's our ability to retain our best employees? What's their satisfaction? And then of course they have to speak the business terms of efficiency, right? Are we being more productive and more efficient as we're serving our customers and as we're serving our employees? And so, the CIOs I met and the IT professionals I met, are asking for help to translate what they do into that business language. And the very best ones are doing it. And I think you'll see that trend continue more and more. >> And they've got to have automation, and they've got to have efficiency because their budgets aren't going up commiserately with their increased responsibility to drive this digital transformation. So they've got to wring that extra value out of the tools and processes and people that they have, and that's where you really help them quite a bit. I think I saw a quote the other day that someone went from 60 days to Two days in a business process, amazing. >> Well, and it's interesting because companies are investing more in technology than they ever have. If you take the broad technology spend, they're investing more in technology. But, they expect to get productivity and efficiency, not just out of IT, but across the entire enterprise. >> Jeff: Across the board. >> John: And that's the opportunity: More investment, greater productivity, greater value for customers and employees. >> You talked yesterday to the financial analyst about the sort of execution machine that you inherited. Personally, I think you have a great CFO, one of the best if not the best in the business. So I presume you're not going to be spending a lot of your time trying to restructure reporting and counting beans, no pejorative intended there. So, what do you bring to the organization? Where are you going to spend your time? And what are your main goals over the next mid-term and long-term? >> Well, as you said, I'm blessed. Mike Scarpelli, I think, is a world-class CFO and the best in the industry and I'm honored and thrilled to work with him. Same with Dave Schneider and Kevin Haverty who run our sales force. And now CJ Desai, our Chief Product Officer, Dan Rogers, we've got a really strong team. My focus is to have us continue our current momentum, continue the current execution that we're focusing on. But then, to begin to sort of chart a course for 2018, 2019, 2020, and beyond as we go from being a billion-dollar company, to a four, to five-billion dollar company, to beyond to a 10-billion dollar company. And the nice news is that it's building on top of this very solid foundation. As we evolve from being what has been an IT-focused platform company to be more of a digital transformation platform and company. And helping our clients, helping our customers, achieve their aims and their goals, and being one of the few trusted technology partners. Every company has a few trusted technology partners and we want ServiceNow to be one of those. And, to do that, you've got to be viewed as mission-critical and adding real value, both of which I think we are. >> Dave: So you could joke, you know, don't mess it up. >> John: Yes. >> Dave: Okay, and take it to another level; which really is kind of what seems to be your expertise. Bringing it into the line of business is talking to the CEO and other C-level executives. And actually, marrying the expertise of the CIO has cross-organizational purview, leveraging that capability and super-powering that. >> Exactly. Exactly. You know, it's interesting. If I were to look back on the last 15 years, the C-suite role that has changed the most in the last 15 years has been that of the CFO. 15 years ago CFOs were being counters. >> Dave: Yeah. >> John: Right? Today, as you said, as Mike Scarpelli and Bob Swan, my previous CFO at eBay and the best CFOs, they drive value across the enterprise. Right? They're almost COOs in their mindset. They work with business units, and they add enormous value. So that job has become significantly more important and powerful. I see the same thing happening with the CIO over the next Five to 10 years where the CIOs role with grow, and expand, and broaden. And that's exciting. >> Well, you know, one of the things, actually, you know, we come to these conferences, and there's obviously a lot of messaging, but we try to understand how that messaging actually fits with what customers are doing. One of the things that you guys are messaging this year is light speed. And so, when you talk about the CFO and the changing role, it brings up, to my mind anyway, light speed requires a new set of metrics, and listening to, like Scarpelli, talk yesterday, he's all over the metrics. And these aren't, you know, your typical, you know, EBITDA metrics, they are just a new set. Do you see that happening within, not only ServiceNow, but within your customer base, where the so-called, I'll call them, "light speed" metrics are emerging? >> Absolutely. I mean, you saw the example of Dave Wright going through the machine learning, and how the machine learning capability, when applied to the ServiceNow platform, applied to specific problems, helps you fix problems before they happen in an automated fashion. Imagine that, right? That's light speed. Dave said it so well on stage. (all laughing) That's even faster than light speed. And so, you begin to see, alright, how do you measure, in delivering a great customer experience, how do you measure the reductions of problems? How do you measure the prevention of problems that provides greater availability, greater reliability, greater consistency, of a customer's experience? Now, ultimately that measure will be in customer NPS or some other customer metrics. But, some of the subordinate metrics I think you will see a growing number of what I would call L2, L3 metrics, that is, a dashboard of how to run a great company around customers, employees, and financials. >> Alright John, I know you're super busy, we've got to leave it there. Thank you so much for coming on theCUBE and congratulations on the role, great keynote, and best of luck. We'll be watching. >> John: Thanks very much Dave, thanks >> You're welcome, alright. >> From me, congratulations. Keep it right there, buddy, we'll be right back with our next guest. This is theCUBE, we're live from ServiceNow, Knowledge17. Be right back. (upbeat electronic music)

>> From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE in ETR. This is breaking analysis with Dave Vellante. >> ServiceNow is a company that investors love to love, but there's caution in the investor community right now is confusion about transitory inflation and higher interest rates looms. ServiceNow also suffers from a perfection syndrome of sorts. The company has seen that the slightest misstep can cause many freak outs from the investor community. So what it's done is it's architected a financial and communications model that allows it to beat expectations and raise its outlook on a consistent basis. Regardless, ServiceNow appears to be on track to vie for what its CEO Bill McDermott refers to as the next great enterprise software company. Wait, I thought Marc Benioff had his hands on that steering wheel. Hello everyone, and welcome to this week's Wikibon CUBE insights powered by ETR. In this breaking analysis, we'll dig into one of the companies we began following almost 10 years ago and provide some thoughts on ServiceNow's March to 15 billion by 2026, which we think is a highly probable achievement. In 2020, despite the contraction in IT spending, SeviceNow outperformed both the S&P 500 and the NASDAQ, but here's a view of 2021. And you can see while the stock has done well since it saw a softness in May and again in early June, and it bounced off that double bottom, it's performance is well below those other benchmarks. This is not a big surprise given the fact that this is a high growth stock and we all know that those names with high multiples get hurt in an inflationary environment, but still the gaps are notable. This is especially true given the performance of the company. It's not often that you see a company with four to $5 billion in revenue growing at a 30% clip, throwing off billions of dollars in free cash flow and increasing operating margins at 100 basis points a year and promising to do that over the next several years. In fact, I don't think we've ever seen that before. I remember years ago, when the trade press was criticizing SeviceNow for its lofty valuation, despite the fact that it was losing money, then CEO, Frank Slootman said to me, "Dave, we can be highly profitable tomorrow if we want it to be, but this is a marathon and we're planning to go big." So essentially Slootman was telling me that this company was going to be an ATM machine that prints money. And that seems to be how it's shaping up. I happened to be at SeviceNow headquarters in 2017, literally the first day on the job for John Donahoe, the CEO replaced Slootman, and I remember while I was there thinking Donahoe was certainly capable, but why the heck I said, would the board let Frank Slootman get away? You know what? It turned great for Slootman, he's at snowflake. Donahoe, I always felt was a consumer guy anyway, and not long for SeviceNow. And now you have this guy, new CEO, Bill McDermott at the helm. He's not a more qualified CEO for the company in my view. About two months ago, McDermott led a virtual investor day. We've had McDermott on theCUBE a couple of times back when he was CEO of SAP and this individual is very compelling. He's got JFK like looks and charisma, but more than that, he's passionate and convincing. And he obviously knows enterprise software. And with conviction, he laid the groundwork for how SeviceNow will get to $10 billion in revenue by 2024 on its way to 15 billion two years thereafter. And one of the big things McDermott's stressed was they're going to get there without any big M&A moves. And that's important because previously the door was left open for that possibility. And now the company is assuring investors that it can get there organically, even with slower growth. So this chart implies no big M&A, and you can see Slootman handed over the reigns at that year one tick on the horizontal axis. This was not a turnaround story. It was a rocket ship at the time. And look at the logos on this chart. This is a revenue view and SeviceNow is aiming to be the fastest to get to 10 billion in software industry history. SeviceNow is valuation just to sort of shift gears here for a minute blew by workdays years ago. Its sites are now set on SAP which is currently valued at 170 billion. And then there's Oracle and Salesforce. They're at around 250 billion and 225 billion in valuation respectively. And these lines back to revenue show the trajectory that these companies took to get to 10 billion. And you can see how SeviceNow plans to get there with those dotted lines. And this is why I call this a collision course with Salesforce, because I think Marc Benioff might say, "Hey, we are ready." Are the next great enterprise software company. We have no plans to give up that post, that mantle anytime soon. I want to share a clip from four years ago. something we've been saying for a long, long time. Roll the clip. >> As they say their goal now is to be four billion by 2020. It feels like, you know, when we first covered SeviceNow knowledge, we said, wow, this company reminds us a lot of the early days of Salesforce. They've got this platform you can develop on this platform, you know, call it paths or, you know, whatever you want to call it, but we at the time said, they're on a collision course with Salesforce. Now there's plenty of room for both of those companies in the marketplace. Salesforce obviously focused predominantly on Salesforce automation, SeviceNow really on workflow automation, but you can see those sort of two markets coming together. >> Now you may be thinking isn't Salesforce's revenue like 5X that of SeviceNow? And yes it is. But I would say a couple of things. One is that Salesforce has gotten to where it is with a lot of M&A, more than 60 acquisitions. At some high profile wants to like slack and Tableau as well as MuleSoft and Heroku back in the day and many others. So we'll see how far McDermott can get before he reverts to his inquisitive self that we saw at SAP. But the second thing I'll say is serviceNow positions itself as the platform of platforms. And the thing is it runs its own cloud. And when it does acquisitions, it replatforms the acquiree into the now platform so that it can drive integrations more seamlessly. That's fundamentally part of its value proposition, a big part of its value proposition. And that means it's somewhat limited on the acquisitions it can make, it has to be pretty selective. Otherwise it's got to do a heavy lift to get it the now platform. It's the power of the models, especially if customers can get to a single CMDB, that configuration database management system, which by the way, a lot of customers never get to that kind of skirt that, but remember SeviceNow is like the ERP for IT. So the more you can get to a single data model, the more effective you're going to be, especially in this data era where you got to put data at the core of your organization, something we've talked about a lot. And the third thing I'll mention the SeviceNow wants to use this platform to attack what it sees as a very large TAM as shown here. Now, a couple of things I want to point out. One is when SeviceNow IPO in 2012, a lot of the analysts said that they were way overvalued because they were in a market. It was help desk and writing tickets was a $2 billion business that was in decline and BMC remedy. Wasn't really that big of a base to attack. In 2013, the Wikibon team took a stab at sizing the TAM. I dug back into the old Wiki. We had well over 30 billion at the time and we expected the company to move deeper into IT and then beyond IT into lines of business and line of business management. Yeah, we felt we were being conservative. We thought the number could be as big as 100 billion, but we felt like putting that number out there, was too aggressive but, you know, it turns out from SeviceNow standpoint, it sees these new software opportunities coming together. And SeviceNow in a way they can double dip both in and beyond their current markets. What I mean by that is it can partner with, for instance, HCM vendors and then at the same time offer employee workflows. They can partner or even purchase RPA tools from specialists like UI path or automation anywhere. And it can go acquire a company which it did like Intel a bot and integrate what I would consider lighter-weight RPA into its platform. So it can manage workflows for best of breed and pick off functionality throughout the software stack. Now what's interesting in this chart is first, the size of the TAM that SeviceNow sees 175 billion, but also how it's now reorganizing its business around workflows, which you see in the left-hand side. This was done of course, to simplify the many, many, many things that you can buy from SeviceNow. But there's also speculation that SeviceNow is leveraging its orchestration and service catalog capabilities, which are meaningful from a revenue standpoint and using them to power these workflows because the way it was organized was both confusing and not as effective as it could be. Now, it's well known that SeviceNow has ITSM this comprises the biggest piece of its revenue pie, probably a couple billion. And it's adding to that with ITSM pro and ITSM enterprise going deeper, deeper into the ITSM space. And it's ITAM business is also doing well against the likes of Datadog and Elastic and Splunk and others and its acquisition of LightStep. It's going to push it further into this space, which is both crowded is morphing into observability as we've been reporting. What's unclear though is how well, for instance, HR and the CSM businesses are doing as sort of standalone businesses, you might remember they used to be standalone businesses with standalone GMs. They've sort of changed that up a little bit. So this is potentially not only a way to simplify, but also shuffle the deck chairs a bit and maybe prop up the non IT workflows, which then allows SeviceNow to show this chart, which essentially says to the street, see, we have this huge TAM and our TAM expansion strategy is working as the overall business is growing nicely yet the mix is shifting toward customer, employee and creator workflows. See how awesome our business is and see how smart we are. So this is possibly a way to hide some of the warts and accentuate the growth. Look, there's not a lot to criticize SeviceNow about, but they've been pretty good at featuring what some perceive as weaknesses. Like for instance, the way it marketed it's a multi-instance and turned that into an advantage as a better model. Even though the whole cloud world was going multitenant and within a ServiceNow you got to really plan new releases, which they drop every six months, although CJ decide. So he's SeviceNows head of products. He did say at the investor meeting, that event that they held last May, that they do certain releases now bi-monthly and even some bi-weekly. So, yeah, maybe a little bit of nitpicking here, but I always liked to question when such changes are made to the reporting structures to the street. And if workflows are the new black, so to speak, I wonder will SeviceNow start pricing by workflows versus what really has been a legacy of, you know, what's your ticket volume and how many agents need access to the model and we'll charge you accordingly? Now, I'm not a service pricing expert and they don't make it easy to figure out that pricing. So let's dig a little bit more on that and keep an eye on it. Now I want to turn to the customers survey data from ETR on ServiceNow. First, here's the latest update on IT spending from ETR, something that we've been tracking for quite some time. We've been consistently saying to expect this year a seven to 8% growth for 2021 IT spend off of last year's contraction. And the latest ETR survey data puts it right at 8%. So we really liked that number. You know, could even be higher push 10% this year. Now, let's look at the spending profile within the ETR dataset. Of the 1100 plus respondents to this quarter, there were 377 SeviceNow customers, and this chart shows the breakdown of net score or spending velocity among those respondents. Remember, net score is a measure of that spending momentum. What it does is it takes the lime green bar, which is adopting new, that says 11% of that 377 customers are adopting ServiceNow for the first time. It takes that lime green and it adds the forest green bar that's growth in spending of 6% or more this half relative to the first half. That's 43% of the customers that have been surveyed here. And then it subtracts out the reds, which is that pinkish is spending less, that's 3%, small number of spending less. And then the bright red is we're leaving the platform. That's a minuscule 1% of the respondents. And you can see the rest in that gray area is flat spending, which is ignored. And so what this does is it calculates out, you'd take the greens minus the reds. It calculates out to a net score 50% for SeviceNow, which is well above that magic 40% elevated mark that we'd like to see. It's rare for a company of this size, except for the hyperscalers. You see AWS and Microsoft and Google are up that high and oh, there's another great enterprise software company at the 45% net score level. Guess who that is, salesforce.com. But anyway, it's rare to see that large of a company have that much spending momentum in the ETR surveys. Now let's take a look at the time series data for ServiceNow. This chart shows the net score granularity over time. So you see the bars, that time series, the blue line is net score. And you can see that it was dragged down during last year's lockdown. As, even though SeviceNow did pretty well last year and it's now spiking back to pre-COVID levels, which is a very positive sign for the company. That red call-out that ETR makes it shows market share. That's an indicator of pervasiveness in the dataset. I'm not overlyconcern there that downturn. I don't think it's a meaningful indicator because ServiceNow revenue is skewed towards a big spender accounts and this is an account unit indicator, if you will not spending level metric. And okay, and here's another reason and why I'm not concerned about SeviceNow is a so-called market share number in the ETR dataset as ETR defines it. This is an X, Y Z view chart that we'd like to show here. We've got net score on the vertical axis and market share in the horizontal plane. This is focusing on enterprise software. So remember that 40% red line is the magic level, anything above that is really indicative of momentum. Oh look, there's Salesforce and ServiceNow on that little collision course that I talked about. Now, CEO McDermott, I would say as by the way, would his predecessors, look, we're a platform of platforms and we partner with other companies, we'll meet at the customer level and sure we'll integrate functions where we think it can add value to customers. But we also understand we have to work with the vendors that our customers are using. So it's all good, plenty of room for growth for all of us, which by the way is true. But I would say this, anyone who's ever been in the enterprise software industry knows that enterprise software execs and their salespeople believe that every dollar spent on software should go to them. And if it's a good market with momentum and growth, they believe they can either organically write software to deliver customer function and value, or they can acquire to fill gaps. So, well, what McDermott would say is true. The likes of Oracle, Microsoft, SAP, Salesforce, Infor, et cetera, they all want as big of a budget piece as possible in the enterprise software space. That's just the way it is. Now, we're going to close with some anecdotal comments from ETR insights, formerly called VENN, which is a round table discussion with CXOs. You can read the summaries when we post on Wikibon and SiliconANGLE but let me summarize. This first comment comes from an assistant VP in retail who says SeviceNow is a key part of their digital transformation. They moved off of BMC remedy two years ago for the global ticketing system. And this person is saying that while the platform is extremely powerful, you got to buy into specific modules to just get one feature that you want. You may not need a lot of the other features, so it starts to get expensive. The other thing this individual is saying is initially, it's a very services heavy project. And so I'll tell you, when you look at the SeviceNow ecosystem the big SIs, the big names, they have big appetites. They love to eat at the trough as I sometimes say, and they want big clients with big budgets. So if you're not one of those top 500 or 700 customers, the big name SIs, you know, they might not be for you. They're not going to pay attention to you. They're going after the big prizes. So what I would suggest is you call up someone like Jason Wojahn of third era, he's the CEO over there and he's got a lot of experience in this space or some more specialized SeviceNow consultancy like them because you're going to get better value for the money. And you're going to get short-term ROI faster with a long-term sustainable ROI as a measurable objective. And I think this last comment sums it up nice, let me to skip over the second one and go just jump to the third one. This basically says the platform is integrated. It's like a mesh. It's not a bunch of stovepipes and cul-de-sacs. Yes it's expensive, but people love it. And like the iPhone, it just works. And their feature pace is accelerating. So pretty strong testimonials, but I want to keep an eye on price transparency any possible backlash there and how the ecosystem evolves. It's something that we called out early on. It's an indicator and SeviceNow needs to continue to invest in that partner network is especially as it builds out its vertical industry practices and expands internationally. Okay, we'll leave it there for now. Remember I publish each week on wikibon.com and siliconangle.com. These episodes they're all available as podcasts. All you got to do is search for breaking analysis podcast. You can always connect with me on Twitter @DVellante or email me @david.vellantesiliconangle.com. Appreciate the comments on LinkedIn. And don't forget to check out etr.plus for all the survey data. This is Dave Vellante for theCUBE insights powered by ETR. Be well, and we'll see you next time. (upbeat music)

>>from around the globe. It's the Cube with digital coverage of VM World 2020 brought to you by VM Ware and its ecosystem partners. Hello and welcome back to the cubes. Virtual coverage of VM World 2020 Virtual I'm John for your host of the Cube, our 11th year covering V emeralds. Not in person. It's virtual. I'm with my coast, Dave. A lot, of course. Ah, guest has been on every year since the cubes existed. Sanjay Putin, who is now the chief operating officer for VM Ware Sanjay, Great to see you. It's our 11th years. Virtual. We're not in person. Usually high five are going around. But hey, virtual fist pump, >>virtual pissed bump to you, John and Dave, always a pleasure to talk to you. I give you more than a virtual pistol. Here's a virtual hug. >>Well, so >>great. Back at great. >>Great to have you on. First of all, a lot more people attending the emerald this year because it's virtual again, it doesn't have the face to face. It is a community and technical events, so people do value that face to face. Um, but it is virtually a ton of content, great guests. You guys have a great program here, Very customer centric. Kind of. The theme is, you know, unpredictable future eyes is really what it's all about. We've talked about covert you've been on before. What's going on in your perspective? What's the theme of your main talks? >>Ah, yeah. Thank you, John. It's always a pleasure to talk to you folks. We we felt as we thought, about how we could make this content dynamic. We always want to make it fresh. You know, a virtual show of this kind and program of this kind. We all are becoming experts at many Ted talks or ESPN. Whatever your favorite program is 60 minutes on becoming digital producers of content. So it has to be crisp, and everybody I think was doing this has found ways by which you reduce the content. You know, Pat and I would have normally given 90 minute keynotes on day one and then 90 minutes again on day two. So 180 minutes worth of content were reduced that now into something that is that entire 180 minutes in something that is but 60 minutes. You you get a chance to use as you've seen from the keynote an incredible, incredible, you know, packed array of both announcements from Pat myself. So we really thought about how we could organize this in a way where the content was clear, crisp and compelling. Thekla's piece of it needed also be concise, but then supplemented with hundreds of sessions that were as often as possible, made it a goal that if you're gonna do a break out session that has to be incorporate or lead with the customer, so you'll see not just that we have some incredible sea level speakers from customers that have featured in in our pattern, Mikey notes like John Donahoe, CEO of Nike or Lorry beer C I, a global sea of JPMorgan Chase partner Baba, who is CEO of Zuma Jensen Wang, who is CEO of video. Incredible people. Then we also had some luminaries. We're gonna be talking in our vision track people like in the annuity. I mean, one of the most powerful women the world many years ranked by Fortune magazine, chairman, CEO Pepsi or Bryan Stevenson, the person who start in just mercy. If you watch that movie, he's a really key fighter for social justice and criminal. You know, reform and jails and the incarceration systems. And Malala made an appearance. Do I asked her personally, I got to know her and her dad's and she spoke two years ago. I asked her toe making appearance with us. So it's a really, really exciting until we get to do some creative stuff in terms of digital content this year. >>So on the product side and the momentum side, you have great decisions you guys have made in the past. We covered that with Pat Gelsinger, but the business performance has been very strong with VM. Where, uh, props to you guys, Where does this all tie together for in your mind? Because you have the transformation going on in a highly accelerated rate. You know, cov were not in person, but Cove in 19 has proven, uh, customers that they have to move faster. It's a highly accelerated world, a lot. Lots changing. Multi cloud has been on the radar. You got security. All the things you guys are doing, you got the AI announcements that have been pumping. Thean video thing was pretty solid. That project Monterey. What does the customer walk away from this year and and with VM where? What is the main theme? What what's their call to action? What's what do they need to be doing? >>I think there's sort of three things we would encourage customers to really think about. Number one is, as they think about everything in infrastructure, serves APS as they think about their APS. We want them to really push the frontier of how they modernize their athletic applications. And we think that whole initiative off how you modernized applications driven by containers. You know, 20 years ago when I was a developer coming out of college C, C plus, plus Java and then emerge, these companies have worked on J two ee frameworks. Web Logic, Be Aware logic and IBM Web Street. It made the development off. Whatever is e commerce applications of portals? Whatever was in the late nineties, early two thousands much, much easier. That entire world has gotten even easier and much more Micro service based now with containers. We've been talking about kubernetes for a while, but now we've become the leading enterprise, contain a platform making some incredible investments, but we want to not just broaden this platform. We simplified. It is You've heard everything in the end. What works in threes, right? It's sort of like almost t shirt sizing small, medium, large. So we now have tens Ooh, in the standard. The advanced the enterprise editions with lots of packaging behind that. That makes it a very broad and deep platform. We also have a basic version of it. So in some sense it's sort of like an extra small. In addition to the small medium large so tends to and everything around at modernization, I think would be message number one number two alongside modernization. You're also thinking about migration of your workloads and the breadth and depth of, um, er Cloud Foundation now of being able to really solve, not just use cases, you are traditionally done, but also new ai use cases. Was the reason Jensen and us kind of partner that, and I mean what a great company and video has become. You know, the king maker of these ai driven applications? Why not run those AI applications on the best infrastructure on the planet? Remember, that's a coming together of both of our platforms to help customers. You know automotive banking fraud detection is a number of AI use cases that now get our best and we want it. And the same thing then applies to Project Monterey, which takes the B c f e m A Cloud Foundation proposition to smart Knicks on Dell, HP Lenovo are embracing the in video Intel's and Pen Sandoz in that smart make architectural, however, that so that entire world of multi cloud being operative Phobia Macleod Foundation on Prem and all of its extended use cases like AI or Smart Knicks or Edge, but then also into the AWS Azure, Google Multi Cloud world. We obviously had a preferred relationship with Amazon that's going incredibly well, but you also saw some announcements last week from, uh, Microsoft Azure about azure BMR solutions at their conference ignite. So we feel very good about the migration opportunity alongside of modernization on the third priority, gentlemen would be security. It's obviously a topic that I most recently taken uninterested in my day job is CEO of the company running the front office customer facing revenue functions by night job by Joe Coffin has been driving. The security strategy for the company has been incredibly enlightening to talk, to see SOS and drive this intrinsic security or zero trust from the network to end point and workload and cloud security. And we made some exciting announcements there around bringing together MAWR capabilities with NSX and Z scaler and a problem black and workload security. And of course, Lassiter wouldn't cover all of this. But I would say if I was a attendee of the conference those the three things I want them to take away what BMR is doing in the future of APS what you're doing, the future of a multi cloud world and how we're making security relevant for distributed workforce. >>I know David >>so much to talk about here, Sanjay. So, uh, talk about modern APS? That's one of the five franchise platforms VM Ware has a history of going from, you know, Challenger toe dominant player. You saw that with end user computing, and there's many, many other examples, so you are clearly one of the top, you know. Let's call it five or six platforms out there. We know what those are, uh, and but critical to that modern APS. Focus is developers, and I think it's fair to say that that's not your wheelhouse today, but you're making moves there. You agree that that is, that is a critical part of modern APS, and you update us on what you're doing for that community to really take a leadership position there. >>Yeah, no, I think it's a very good point, David. We way seek to constantly say humble and hungry. There's never any assumption from us that VM Ware is completely earned anyplace off rightful leadership until we get thousands, tens of thousands. You know, we have a half a million customers running on our virtualization sets of products that have made us successful for 20 years 70 million virtual machines. But we have toe earn that right and containers, and I think there will be probably 10 times as many containers is their virtual machines. So if it took us 20 years to not just become the leader in in virtual machines but have 70 million virtual machines, I don't think it will be 20 years before there's a billion containers and we seek to be the leader in that platform. Now, why, Why VM Where and why do you think we can win in their long term. What are we doing with developers Number one? We do think there is a container capability independent of virtual machine. And that's what you know, this entire world of what hefty on pivotal brought to us on. You know, many of the hundreds of customers that are using what was formerly pivotal and FDR now what's called Tan Xue have I mean the the case. Studies of what those customers are doing are absolutely incredible. When I listen to them, you take Dick's sporting goods. I mean, they are building curbside, pick up a lot of the world. Now the pandemic is doing e commerce and curbside pick up people are going to the store, That's all based on Tan Xue. We've had companies within this sort of world of pandemic working on contact, tracing app. Some of the diagnostic tools built without they were the lab services and on the 10 zoo platform banks. Large banks are increasingly standardizing on a lot of their consumer facing or wealth management type of applications, anything that they're building rapidly on this container platform. So it's incredible the use cases I'm hearing public sector. The U. S. Air Force was talking about how they've done this. Many of them are not public about how they're modernizing dams, and I tend to learn the best from these vertical use case studies. I mean, I spend a significant part of my life is you know, it s a P and increasingly I want to help the company become a lot more vertical. Use case in banking, public sector, telco manufacturing, CPG retail top four or five where we're seeing a lot of recurrence of these. The Tan Xue portfolio actually brings us closest to almost that s a P type of dialogue because we're having an apse dialogue in the in the speak of an industry as opposed to bits and bytes Notice I haven't talked at all about kubernetes or containers. I'm talking about the business problem being solved in a retailer or a bank or public sector or whatever have you now from a developer audience, which was the second part of your question? Dave, you know, we talked about this, I think a year or two ago. We have five million developers today that we've been able to, you know, as bringing these acquisitions earn some audience with about two or three million from from the spring community and two or three million from the economic community. So think of those five million people who don't know us because of two acquisitions we don't. Obviously spring was inside Vienna where went out of pivotal and then came back. So we really have spent a lot of time with that community. A few weeks ago, we had spring one. You guys are aware of that? That conference record number of attendees okay, Registered, I think of all 40 or 50,000, which is, you know, much bigger than the physical event. And then a substantial number of them attended live physical. So we saw a great momentum out of spring one, and we're really going to take care of that, That that community base of developers as they care about Java Manami also doing really, really well. But then I think the rial audience it now has to come from us becoming part of the conversation. That coupon at AWS re invent at ignite not just the world, I mean via world is not gonna be the only place where infrastructure and developers come to. We're gonna have to be at other events which are very prominent and then have a developer marketplace. So it's gonna be a multiyear effort. We're okay with that. To grow that group of about five million developers that we today Kate or two on then I think there will be three or four other companies that also play very prominently to developers AWS, Microsoft and Google. And if we're one among those three or four companies and remembers including that list, we feel very good about our ability to be in a place where this is a shared community, takes a village to approach and an appeal to those developers. I think there will be one of those four companies that's doing this for many years to >>come. Santa, I got to get your take on. I love your reference to the Web days and how the development environment change and how the simplicity came along very relevant to how we're seeing this digital transformation. But I want to get your thoughts on how you guys were doing pre and now during and Post Cove it. You already had a complicated thing coming on. You had multi cloud. You guys were expanding your into end you had acquisitions, you mentioned a few of them. And then cove it hit. Okay, so now you have Everything is changing you got. He's got more complex city. You have more solutions, and then the customer psychology is change. You got to spectrums of customers, people trying to save their business because it's changed, their customer behavior has changed. And you have other customers that are doubling down because they have a tailwind from Cove it, whether it's a modern app, you know, coming like Zoom and others are doing well because of the environment. So you got your customers air in this in this in this, in this storm, you know, they're trying to save down, modernized or or or go faster. How are you guys changing? Because it's impacted how you sell. People are selling differently, how you implement and how you support customers, because you already had kind of the whole multi cloud going on with the modern APS. I get that, but Cove, it has changed things. How are you guys adopting and changing to meet the customer needs who are just trying to save their business on re factor or double down and continue >>John. Great question. I think I also talked about some of this in one of your previous digital events that you and I talked about. I mean, you go back to the last week of February 1st week of March, actually back up, even in January, my last trip on a plane. Ah, major trip outside this country was the World Economic Forum in Davos. And, you know, there were thousands of us packed into the small digits in Switzerland. I was sitting having dinner with Andy Jassy in a restaurant one night that day. Little did we know. A month later, everything would change on DWhite. We began to do in late February. Early March was first. Take care of employees. You always wanna have the pulse, check employees and be in touch with them. Because the health and safety of employees is much more important than the profits of, um, where you know. So we took care of that. Make sure that folks were taking care of older parents were in good place. We fortunately not lost anyone to death. Covert. We had some covert cases, but they've recovered on. This is an incredible pandemic that connects all of us in the human fabric. It has no separation off skin color or ethnicity or gender, a little bit of difference in people who are older, who might be more affected or prone to it. But we just have to, and it's taught me to be a significantly more empathetic. I began to do certain things that I didn't do before, but I felt was the right thing to do. For example, I've begun to do 25 30 minute calls with every one of my key countries. You know, as I know you, I run customer operations, all of the go to market field teams reporting to me on. I felt it was important for me to be showing up, not just in the big company meetings. We do that and big town halls where you know, some fractions. 30,000 people of VM ware attend, but, you know, go on, do a town hall for everybody in a virtual zoom session in Japan. But in their time zone. So 10 o'clock my time in the night, uh, then do one in China and Australia kind of almost travel around the world virtually, and it's not long calls 25 30 minutes, where 1st 10 or 15 minutes I'm sharing with them what I'm seeing across other countries, the world encouraging them to focus on a few priorities, which I'll talk about in a second and then listening to them for 10 15 minutes and be, uh and then the call on time or maybe even a little earlier, because every one of us is going to resume button going from call to call the call. We're tired of T. There's also mental, you know, fatigue that we've gotta worry about. Mental well, being long term. So that's one that I personally began to change. I began to also get energy because in the past, you know, I would travel to Europe or Asia. You know, 40 50%. My life has travel. It takes a day out of your life on either end, your jet lag. And then even when you get to a Tokyo or Beijing or to Bangalore or the London, getting between sites of these customers is like a 45 minute, sometimes in our commute. Now I'm able to do many of these 25 30 minute call, so I set myself a goal to talk to 1000 chief security officers. I know a lot of CEOs and CFOs from my times at S A P and VM ware, but I didn't know many security officers who often either work for a CEO or report directly to the legal counsel on accountable to the audit committee of the board. And I got a list of these 1,002,000 people we called email them. Man, I gotta tell you, people willing to talk to me just coming, you know, into this I'm about 500 into that. And it was role modeling to my teams that the top of the company is willing to spend as much time as possible. And I have probably gotten a lot more productive in customer conversations now than ever before. And then the final piece of your question, which is what do we tell the customer in terms about portfolio? So these were just more the practices that I was able to adapt during this time that have given me energy on dial, kind of get scared of two things from the portfolio perspective. I think we began to don't notice two things. One is Theo entire move of migration and modernization around the cloud. I describe that as you know, for example, moving to Amazon is a migration opportunity to azure modernization. Is that whole Tan Xue Eminem? Migration of modernization is highly relevant right now. In fact, taking more speed data center spending might be on hold on freeze as people kind of holding till depend, emmick or the GDP recovers. But migration of modernization is accelerating, so we wanna accelerate that part of our portfolio. One of the products we have a cloud on Amazon or Cloud Health or Tan Xue and maybe the other offerings for the other public dog. The second part about portfolio that we're seeing acceleration around is distributed workforce security work from home work from anywhere. And that's that combination off workspace, one for both endpoint management, virtual desktops, common black envelope loud and the announcements we've now made with Z scaler for, uh, distributed work for security or what the analysts called secure access. So message. That's beautiful because everyone working from home, even if they come back to the office, needs a very different model of security and were now becoming a leader in that area. of security. So these two parts of the portfolio you take the five franchise pillars and put them into these two buckets. We began to see momentum. And the final thing, I would say, Guys, just on a soft note. You know, I've had to just think about ways in which I balance work and family. It's just really easy. You know what, 67 months into this pandemic to burn out? Ah, now I've encouraged my team. We've got to think about this as a marathon, not a sprint. Do the personal things that you wanna do that will make your life better through this pandemic. That in practice is that you keep after it. I'll give you one example. I began biking with my kids and during the summer months were able to bike later. Even now in the fall, we're able to do that often, and I hope that's a practice I'm able to do much more often, even after the pandemic. So develop some activities with your family or with the people that you love the most that are seeing you a lot more and hopefully enjoying that time with them that you will keep even after this pandemic ends. >>So, Sanjay, I love that you're spending all this time with CSOs. I mean, I have a Well, maybe not not 1000 but dozens. And they're such smart people. They're really, you know, in the thick of things you mentioned, you know, your partnership with the scale ahead. Scott Stricklin on who is the C. C so of Wyndham? He was talking about the security club. But since the pandemic, there's really three waves. There's the cloud security, the identity, access management and endpoint security. And one of the things that CSOs will tell you is the lack of talent is their biggest challenge. And they're drowning in all these products. And so how should we think about your approach to security and potentially simplifying their lives? >>Yeah. You know, Dave, we talked about this, I think last year, maybe the year before, and what we were trying to do in security was really simplified because the security industry is like 5000 vendors, and it's like, you know, going to a doctor and she tells you to stay healthy. You gotta have 5000 tablets. You just cannot eat that many tablets you take you days, weeks, maybe a month to eat that many tablets. So ah, grand simplification has to happen where that health becomes part of your diet. You eat your proteins and vegetables, you drink your water, do your exercise. And the analogy and security is we cannot deploy dozens of agents and hundreds of alerts and many, many consoles. Uh, infrastructure players like us that have control points. We have 70 million virtual machines. We have 75 million virtual switches. We have, you know, tens of million's off workspace, one of carbon black endpoints that we manage and secure its incumbent enough to take security and making a lot more part of the infrastructure. Reduce the need for dozens and dozens of point tools. And with that comes a grand simplification of both the labor involved in learning all these tools. Andi, eventually also the cost of ownership off those particular tool. So that's one other thing we're seeking to do is increasingly be apart off that education off security professionals were both investing in ah, lot of off, you know, kind of threat protection research on many of our folks you know who are in a threat. Behavioral analytics, you know, kind of thread research. And people have come out of deep hacking experience with the government and others give back to the community and teaching classes. Um, in universities, there are a couple of non profits that are really investing in security, transfer education off CSOs and their teams were contributing to that from the standpoint off the ways in which we can give back both in time talent and also a treasure. So I think is we think about this. You're going to see us making this a long term play. We have a billion dollar security business today. There's not many companies that have, you know, a billion dollar plus of security is probably just two or three, and some of them have hit a wall in terms of their progress sport. We want to be one of the leaders in cybersecurity, and we think we need to do this both in building great product satisfying customers. But then also investing in the learning, the training enable remember, one of the things of B M worlds bright is thes hands on labs and all the training enable that happened at this event. So we will use both our platform. We in world in a variety of about the virtual environments to ensure that we get the best education of security to professional. >>So >>that's gonna be exciting, Because if you look at some of the evaluations of some of the pure plays I mean, you're a cloud security business growing a triple digits and, you know, you see some of these guys with, you know, $30 billion valuations, But I wanted to ask you about the market, E v m. Where used to be so simple Right now, you guys have expanded your tam dramatically. How are you thinking about, you know, the market opportunity? You've got your five franchise platforms. I know you're very disciplined about identifying markets, and then, you know, saying, Okay, now we're gonna go compete. But how do you look at the market and the market data? Give us the update there. >>Yeah, I think. Dave, listen, you know, I like davinci statement. You know, simplicity is the greatest form of sophistication, and I think you've touched on something that which is cos we get bigger. You know, I've had the great privilege of working for two great companies. s a P and B M where the bulk of my last 15 plus years And if something I've learned, you know, it's very easy. Both companies was to throw these TLS three letter acronyms, okay? And I use an acronym and describing the three letter acronyms like er or s ex. I mean, they're all acronyms and a new employee who comes to this company. You know, Carol Property, for example. We just hired her from Google. Is our CMO her first comments like, My goodness, there is a lot of off acronyms here. I've gotta you need a glossary? I had the same reaction when I joined B. M or seven years ago and had the same reaction when I joined the S A. P 15 years ago. Now, of course, two or three years into it, you learn everything and it becomes part of your speed. We have toe constantly. It's like an accordion like you expanded by making it mawr of luminous and deep. But as you do that it gets complex, you then have to simplify it. And that's the job of all of us leaders and I this year, just exemplifying that I don't have it perfect. One of the gifts I do have this communication being able to simplify things. I recorded a five minute video off our five franchise pill. It's just so that the casual person didn't know VM where it could understand on. Then, when I'm on your shore and when on with Jim Cramer and CNBC, I try to simplify, simplify, simplify, simplify because the more you can talk and analogies and pictures, the more the casual user. I mean, of course, and some other audiences. I'm talking to investors. Get it on. Then, Of course, as you go deeper, it should be like progressive layers or feeling of an onion. You can get deeper. It's not like the entire discussion with Sanjay Putin on my team is like, you know, empty suit. It's a superficial discussion. We could go deeper, but you don't have to begin the discussion in the bowels off that, and that's really what we don't do. And then the other part of your question was, how do we think about new markets? You know, we always start with Listen, you sort of core in contact our borough come sort of Jeffrey Moore, Andi in the Jeffrey more context. You think about things that you do really well and then ask yourself outside of that what the Jason sees that are closest to you, that your customers are asking you to advance into on that, either organically to partnerships or through acquisitions. I think John and I talked about in the previous dialogue about the framework of build partner and by, and we always think about it in that order. Where do we advance and any of the moves we've made six years ago, seven years ago and I joined the I felt VM are needed to make a move into mobile to really cement opposition in end user computing. And it took me some time to convince my peers and then the board that we should by Air One, which at that time was the biggest acquisition we've ever done. Okay. Similarly, I'm sure prior to me about Joe Tucci, Pat Nelson. We're thinking about nice here, and I'm moving to networking. Those were too big, inorganic moves. +78 years of Raghu was very involved in that. The decisions we moved to the make the move in the public cloud myself. Rgu pack very involved in the decision. Their toe partner with Amazon, the change and divest be cloud air and then invested in organic effort around what's become the Claudia. That's an organic effort that was an acquisition fast forward to last year. It took me a while to really Are you internally convinced people and then make the move off the second biggest acquisition we made in carbon black and endpoint security cement the security story that we're talking about? Rgu did a similar piece of good work around ad monetization to justify that pivotal needed to come back in. So but you could see all these pieces being adjacent to the core, right? And then you ask yourself, Is that context meaning we could leave it to a partner like you don't see us get into the hardware game we're partnering with. Obviously, the players like Dell and HP, Lenovo and the smart Knick players like Intel in video. In Pensando, you see that as part of the Project Monterey announcement. But the adjacent seas, for example, last year into app modernization up the stack and into security, which I'd say Maura's adjacent horizontal to us. We're now made a lot more logical. And as we then convince ourselves that we could do it, convince our board, make the move, We then have to go and tell our customers. Right? And this entire effort of talking to CSOs What am I doing is doing the same thing that I did to my board last year, simplified to 15 minutes and get thousands of them to understand it. Received feedback, improve it, invest further. And actually, some of the moves were now making this year around our partnership in distributed Workforce Security and Cloud Security and Z scaler. What we're announcing an XDR and Security Analytics. All of the big announcements of security of this conference came from what we heard last year between the last 12 months of my last year. Well, you know, keynote around security, and now, and I predict next year it'll be even further. That's how you advance the puck every year. >>Sanjay, I want to get your thoughts. So now we have a couple minutes left. But we did pull the audience and the community to get some questions for you, since it's virtually wanted to get some representation there. So I got three questions for you. First question, what comes after Cloud and number two is VM Ware security company. And three. What company had you wish you had acquired? >>Oh, my goodness. Okay, the third one eyes gonna be the turkey is one, I think. Listen, because I'm gonna give you my personal opinion, and some of it was probably predates me, so I could probably safely So do that. And maybe put the blame on Joe Tucci or somebody else is no longer here. But let me kind of give you the first two. What comes after cloud? I think clouds gonna be with us for a long time. First off this multi cloud world, you just look at the moment, um, that AWS and azure and the other clouds all have. It's incredible on I think this that multi cloud from phenomenon. But if there's an adapt ation of it, it's gonna be three forms of cloud. People are really only focus today in private public cloud. You have to remember the edge and Telco Cloud and this pendulum off the right balance of workloads between the data center called it a private cloud. The public cloud on one end and the telco edge on the other end. I think we're in a really good position for workloads to really swing between all three of those locations. Three other part that I think comes as a sequel to Cloud is cloud native. All of the capabilities a serverless functions but also containers that you know. Obviously the one could think of that a sister topics to cloud but the entire world of containers. The other seat, uh, then cloud a cloud native will also be topics, but these were all fairly connected. That's how I'd answer the first question. A security company? Absolutely. We you know, we aspire to be one of the leading companies in cyber security. I don't think they will be only one. We have to show this by the wealth on breath of our customers. The revenue momentum we have Gartner ranking us or the analysts ranking us in top rights of magic quadrants being viewed as an innovator simplifying the stack. But listen, we weren't even on the radar. We weren't speaking of the security conferences years ago. Now we are. We have a billion dollar security business, 20,000 plus customers, really strong presences and network endpoint and workload and Cloud Security. The three Coppola's a lot more coming in Security analytics, Cloud Security distributed workforce Security. So we're here to stay. And if anything, BMR persist through this, we're planning for multi your five or 10 year timeframe. And in that course I mean, the competition is smaller. Companies that don't have the breadth and depth of the n words are Andy muscle and are going market. We just have to keep building great products and serving customer on the third man. There's so many. But I mean, I think Listen, when I was looking back, I always wondered this is before I joined so I could say the summit speculatively on. Don't you know, make this This is BMR. Sorry. This is Sanjay one's opinion. Not VM. I gotta make very, very clear. Well, listen, I would have if I was at BMO in 2012 or 2013. I would love to about service now then service. It was a great company. I don't even know maybe the company's talk, but then talk about a very successful company at that time now. Maybe their priorities were different. I wasn't at the company at the time, but I can speculate if that had happened, that would have been an interesting Now I think that was during the time of Paul Maritz here and and so on. So for them, maybe there were other priorities the company need to get done. But at that time, of course, today s so it's not as big of a even slightly bigger market cap than us. So that's not happening. But that's a great example of a good company that I think would have at that time fit very well with VM Ware. And then there's probably we don't look back and regret we move forward. I mean, I think about the acquisitions we have made the big ones. Okay, Nice era air watch pop in black. Pivotal. The big moves we've made in terms of partnership. Amazon. What? We're announcing this This, you know, this week within video and Z scaler. So you never look back and regret. You always look for >>follow up on that To follow up on that from a developer, entrepreneurial or partner Perspective. Can you share where the white spaces for people to innovate around vm Where where where can people partner and play. Whether I'm an entrepreneur in a garage or venture back, funded or say a partner pivoting and or resetting with Govind, where's the white spaces with them? >>I think that, you know, there's gonna be a number off places where the Tan Xue platform develops, as it kind of makes it relevant to developers. I mean, there's, I think the first way we think about this is to make ourselves relevant toe all of that ecosystem around the C I. C. D type apply platform. They're really good partners of ours. They're like, get lab, You know, all of the ways in which open source communities, you know will play alongside that Hash E Corp. Jay frog there number of these companies that are partnering with us and we're excited about all of their relevancy to tend to, and it's our job to go and make that marketplace better and better. You're going to hear more about that coming up from us on. Then there's the set of data companies, you know, con fluent. You know, of course, you've seen a big I p o of a snowflake. All of those data companies, we'll need a very natural synergy. If you think about the old days of middleware, middleware is always sort of separate from the database. I think that's starting to kind of coalesce. And Data and analytics placed on top of the modern day middleware, which is containers I think it's gonna be now does VM or play physically is a data company. We don't know today we're gonna partner very heavily. But picking the right set of partners been fluent is a good example of one on. There's many of the next generation database companies that you're going to see us partner with that will become part of that marketplace influence. And I think, as you see us certainly produce out the VM Ware marketplace for developers. I think this is gonna be a game changing opportunity for us to really take those five million developers and work with the leading companies. You know, I use the example of get Lab is an example get help there. Others that appeal to developers tie them into our developer framework. The one thing you learn about developers, you can't have a mindset. With that, you all come to just us. It's a very mingled village off multiple ecosystems and Venn diagrams that are coalescing. If you try to take over the world, the developer community just basically shuns you. You have to have a very vibrant way in which you are mingling, which is why I described. It's like, Listen, we want our developers to come to our conferences and reinvent and ignite and get the best experience of all those provide tools that coincide with everybody. You have to take a holistic view of this on if you do that over many years, just like the security topic. This is a multi year pursuit for us to be relevant. Developers. We feel good about the future being bright. >>David got five minutes e. >>I thought you were gonna say Zoom, Sanjay, that was That was my wildcard. >>Well, listen, you know, I think it was more recently and very fast catapult Thio success, and I don't know that that's clearly in the complete, you know, sweet spot of the anywhere. I mean, you know, unified collaboration would have probably put us in much more competition with teams and, well, back someone you always have to think about what's in the in the bailiwick of what's closest to us, but zooms a great partner. Uh, I mean, obviously you love to acquire anybody that's hot, but Eric's doing really well. I mean, Erica, I'm sure he had many people try to come to buy him. I'm just so proud of him as a friend of all that he was named to Time magazine Top 100. But what he's done is phenomenon. I think he could build a company that's just his important, his Facebook. So, you know, I encourage him. Don't sell, keep building the company and you'll build a company that's going to be, you know, the enterprise version of Facebook. And I think that's a tremendous opportunity to do this better than anybody else is doing. And you know, I'm as an immigrant. He's, you know, China. Born now American, I'm Indian born, American, assim immigrants. We both have a similar story. I learned a lot from him. I learned a lot from him, from on speed on speed and how to move fast, he tells me he learns a thing to do for me on scale. We teach each other. It's a beautiful friendship. >>We'll make sure you put in a good word for the Kiwi. One more zoom integration >>for a final word or the zoom that is the future Facebook of the enterprise. Whatever, Sanjay, Thank >>you for connecting with us. Virtually. It is a digital foundation. It is an unpredictable world. Um, it's gonna change. It could be software to find the operating models or changing you guys. We're changing how you serve customers with new chief up commercial customer officer you have in place, which is a new hire. Congratulations. And you guys were flexing with the market and you got a tailwind. So congratulations, >>John and Dave. Always a pleasure. We couldn't do this without the partnership. Also with you. Congratulations of Successful Cube. And in its new digital format, Thank you for being with us With VM world here on. Do you know all that you're doing to get the story out? The guests that you have on the show, they look forward, including the nonviable people like, Hey, can I get on the Cuban like, Absolutely. Because they look at your platform is away. I'm telling this story. Thanks for all you're doing. I wish you health and safety. >>I'm gonna bring more community. And Dave is, you know, and Sanjay, and it's easier without the travel. Get more interviews, tell more stories and tell the most important stories. And thank you for telling your story and VM World story here of the emerald 2020. Sanjay Poon in the chief operating officer here on the Cube I'm John for a day Volonte. Thanks for watching Cube Virtual. Thanks for watching.

>> Narrator: From around the globe, it's theCUBE with digital coverage VMworld 2020. Brought to you by the VMware and its ecosystem partners. >> Everyone, welcome to "theCUBE's" virtual coverage of VMworld 2020. I'm John furrier with my cohosts, Stuart Miniman and Dave Vellante. 10 years covering VM it's our 11th Vmworld, 2010 was our first. Guys, this is an unusual event. It's not in person. Analyzing the keynotes and essentially the main announcements in the general sessions. Let's analyze VMworld 2020. I know it's hard, we're not in person. A lot of the hallway conversations we're grabbing on Twitter. Obviously we've got our Cube interviews on "theCube".net. There's a link on the front page of the VMworld site. Check it out and go check out all the dozens of interviews we're doing here with our community. But, the event is "Digital Foundation "For An Unpredictable World," that's the theme. Most of the announcements are around future architecture, but the blocking and tackling is around AI With NVIDIA. You got security and you got some really key announcements around networking Stuart. So guys, what's your take on all this? Because, VMware has to set the table. They've made good moves under Gelsinger, last few years, you're seeing another Q2 successful quarter, Dave, you're starting to see VMware's investments pay off Raghu and the brain child who are behind VMware making these calls Stuart. Guys, this is the VMware's moment to go to the next level. What's your thoughts, Dave, we'll start with you. >> Well, I mean, as always you saw VMware have on stage some really high profile guests. So John Donahoe from Nike, who knows a little bit about the enterprise, right? He left ServiceNow after a couple of years, stint. Ironically ServiceNow is pushing a hundred billion dollar valuation. Nike's at 150. But he's more comfortable in the consumer world. CEO of Nvidia. I think that's a key move, Nvidia the arm acquisition. That's going to be critical at the edge. You're seeing VMware just throw its blanket around telco Edge cloud with VMware cloud and AWS, which is doing very well. We're going to talk about that in our cube segment. You're, seeing them really go after hybrid. And so they're really about expanding their marketplace and they've done a great job of that. For translating engineering into customer value and getting paid for it. >> I want to come back to you Dave, on this edge because some of the key trends that I think we've been on now that the whole world is kind of realizing that they're kind of going mainstream. One's been the edge and you mentioned ARM, and we got analysis on that. Stuart, cloud native, we've been banging on the cloud native drone. We've been riding that wave, now with the Snowflake IPO just happened earlier, you starting to see cloud native, everything is coming true. It's kind of evolving in front of us right now and the whole world is now on board with this new mega trend enterprise computing companies, the largest IPO, since we enrolled, actually if you look at Snowflake, so you start to see cloud native and Enterprise Technology as the next wave, this is huge. And VMware is a big part of it. Your thoughts from how they did the show. >> Yeah, so John, one of the questions we always ask is, how fast are customers moving? Are the vendors moving along with them? Our friend and often co-hosts in "theCube" Keith Townsend said, and it was kind of faint praise. "VMware has moved at the speed of the CIO." Dave, I've heard you so many times this year say that the impact of the pandemic, that the financial ramifications has been an accelerator for many of the transformational journeys that we've been talking about. Move to cloud much faster adopting cloud native faster. Companies that have gone through their digital transformation, are able to react much faster. And to be honest, I'm not sure that VMware's moving fast enough. We've seen them do a number of big acquisitions over the last few years. Some of them are doing great. Carbon Black, great to see them go deeper into the security space. We've talked a lot about that before. Some of the others, Pivotal came out of VMware and got pulled back in. Datrium was a recent acquisition. What we hear inside is, some of those groups and product lines have been trimmed back. So as companies are looking to move faster, they're looking to AWS is that bar. And while AWS is a big partner for VMware and very important, how many people will get to VMware on AWS and say, well, maybe I can scale back what my VMware state is, or maybe those some environments. So, we've said for the longest time, cloud is a double edged sword for many players you need to partner as closely as you can to keep that momentum going forward. But VMware is also getting cut by some of those deals. Boy, John, there was a big news a couple of weeks before the show here about how the VMware cloud on AWS, it's doing great. And if it's a big deal, the channel often gets cut out of it and Amazon's taking it. So there definitely are some things that put up a little bit warning lights for me as to who is winning, when it comes to the partnership. >> That's a great point, the ecosystem in VMware, out of 10 years we've been covering here, this is our 11th year with ""theCube"," we've always had that ecosystems evolving. And I think cloud native to me really sees how that's driving them with cloud. We saw that, serverless, you starting to see cloud native. And what cloud proved Dave was that developers really shouldn't care about the infrastructure being abstracted away. But now you look at multiple clouds, with VMware's now moving into having a multicloud kind of backbone, connected to these environments as a key strategy. But then you look at the edge. The edge is about purpose built devices, run with software and data. So whether it's at an office on a person or in space, you have these devices that is really not about the hardware, it's about the software running on them. They have to run into multiple environments. They are purpose built. They do have to run like cloud native. The edge is the next opportunity for VMware with multicloud. What's your thoughts and reaction to that? >> Well, I think there's no question. And again, the relevance of Nvidia on stage, we think that ARM and Nvidia are going to dominate AI inferencing at the edge real time, and you're going to need much more efficient processing at the edge than you're going to get with traditional x86 architectures. So today what we're seeing is a lot of companies, Dell, HPE included a throwing over x86 boxes to the edge. I think they clearly realized that ARM is going to be a player there and now with the Nvidia move. And I think, multicloud is really something that is starting to become real. I've often said multi-cloud has been more of a symptom of multi-vendor than an actual strategy. Well, that's changing. I think people don't want lock-in. I think they realize that they've got the right horse for the right course, and you're seeing Red Hat and VMware emerge as real leaders there. You're seeing it in the data, you're seeing VMware cloud on AWS. Okay, that's in AWS, but you're also seeing VMware Cloud Foundation and it's other VMware cloud capabilities emerging as in demand, a lot of spending velocity, a lot of interest gaining share. And so these are becoming real and they're becoming fundamental strategies as to your points Stuart, CIO's are catching up. And it's, actually becoming not just slideware, but real aware. >> Well, I'll debate that whole idea that CIO's are catching up, but I'd say CSOs already caught up. CIO's are catching up to the CSO, but this brings up the question Stuart, of what a modern app is. And this is one of the highlights of the show, modern applications, and feels a lot like kind of window dressing to the cloud native conversation because Tanzu is built into it but cloud native really is. This is where the modern apps are being built. And it's about security, it's about multiple clouds. So the question for you is, are we going to have a cloudless architecture? Because we've got serverless. Because if you think about modern apps, should you really care about which cloud it runs on? I'm sure Andy Jassy would be saying he does care. And you see Google almost shying away from having that conversation. But, Tanzu kind of speaks to a cloudless strategy. Is that something you see? >> John you're absolutely right. The goal we want is... Developers don't even want to think about the infrastructure at all. So cloudless serverless, storageless, it would all be wonderful if they didn't have to do that. Now, of course, data is the lifeblood of my business. We need to make sure that things are secure all the time. Serverless is wonderful and there's even some early connections that VMware and others in the traditional infrastructure space are tying to serverless environment. But if I look at VMware, John, this still isn't, where the app dev team people come, this is an infrastructure show and it needs to be an enabler for what they're doing. If you look at how Kubernetes integrates into VMware, it's, take your virtual estate and let's put containers in it and it can be managed in that environment. Or we've got some new tools we're developing and do some of that multicloud world, as opposed to the companies that are born in the cloud, or have a heavy leaning towards the cloud. This might not be attractive for them, but in many ways, it's extending what VMware has done for a long time. They've, got strong position here. And that's why John, as you've said, all the other clouds want to partner with VMware ' 'cause they've got just so many customers there that they will be... it's hybrid today it will be hybrid in the future. The public cloud is a pool, but the edge is also a pool. So that those new architectures like are starting to be put forward with project Monterey, give people a roadmap as to where they can go. And VMware absolutely is a key player in that discussion. >> Yeah, well, I want to bring this up real quick on project Monterey and then I want to get Dave's reaction too what the buyers are thinking about. 'Cause you know, we can debate the speed of the CIO and I'd love to have that debate in a separate segment. I think,COVID and the security threats are forcing the businesses to really be focused because if you not thinking about having an environment where people are working remotely and that's with COVID, and I'll see with the security vectors, if you don't have an architecture Stuart, then you're going to be screwed. So I think project Monterey feels to me as that VMware answer like, look, and you can have an end to end architecture. I think there's marketechure there's architecture, that's one thought. So let's react to that Stuart. How much of that do you see as, look at, if you want to move faster CIO, because they have to now move fast. COVID showed that and the ones that aren't are failing and it doesn't change the buyer behavior, Dave. Stuart we'll start with you Monterey. >> John I don't think we know yet. It is more marketecture I'd say you got to get into the whisper suites, have those discussions. There was not as much, pre-briefing on this. We talked for awhile, VMware on AWS, those solutions, they take two or three years to bake out. So I think Monterey is a good vision. They have some of the architectural underpinnings, but I'm not ready to say, "hey, you want to deploy that gear in 2020? "That's the blueprint that you want to use going forward," but it gets VMware a seat at the table. >> I'm a big fan of the project I think it's about time someone put a stake in the ground. So this is what a modern architecture looks like and love to debate that further, we'll do that another time, Dave buyers. Were they buying the VMware? What's your data tell you in terms of where the customers are right now in 2020, you've been doing a ton of breaking analysis on COVID fire behavior, spending patterns. How does VMware potentially its ecosystem stack up with all these focused cloud native, multicloud modern app and security and networking? >> Well, let's start with some data and I'll bring up this slide, which is this kind of wheel slide. And it's ETR data that talks to what we call net score. And essentially what it's doing is it's taking the green in this wheel, which is spending more and it's subtracting the red, which is spending less or leaving. And then you see that in the middle is 53% are flat. So they've got a net score at 29. What does that mean? That means this is a mature company, which is amazing to me that VMware continues to really outperform from a financial standpoint. Yeah, so you could see that, we subtract the red from the green. This is again a sign of a mature company, but the key is they've got to continue to invest. Now they make a lot of inorganic acquisitions and some organic acquisitions, but Dell, as we know, is using VMware's cashflow to restructure its balance sheet to go public, et cetera. So if you could bring up the next slide, if you would guys. This is a slide I like to share. And it shows in the vertical axis, spending momentum, which is net score and the horizontal axis, which is presence in the survey. It's a 1200 person survey or a respondent survey, IT buyers. Look where VMware cloud on AWS is. So while VMware has a 29%, net score, look at VMware cloud on AWS, look at VMware cloud, which is cloud foundation. And you can see Red Hat is in there with OpenShift, even OpenStack, believe it or not and telcos. And then just see the hyperscalers in the upper right. Everybody wants to be AWS or Azure, and you sort of see Google there. But the point of this is the momentum in hybrid cloud and multicloud, and VMware really is clearly in a very, very strong position there. So, back to your point about project Monterey, they're basically using this hybrid cloud notion to go everywhere. It's that TAM expansion that I love to talk about. And it's the innovation. The big question is if Dell's going to be squeezing VMware R&D, will it be able to continue to execute on that translation of engineering into product and customer value? That's going to be a challenge. We saw it decades ago, where IBM got squeezed doing stock buybacks and dividends R&D is the lifeblood of innovation. And so that's something that we have to watch very closely, I think. >> Just to one quick followup, Dave, we're talking about the financial pieces here we are in 2020, there's been the discussions and I know you've dug into it a bunch. By the time we get to VMworld 2021 will the ownership of VMware and the role that Michael Dell has, change? And will that impact that investment capability that you talked about? The cashflow just, I know you've done a lot of research on this and could it help educate our audience? >> Well, it's going to change the income statement of Dell because they won't have VMware in there anymore. It won't change VMware's cashflow. It will affect VMware and Dell's balance sheet. And so two companies, one chairman and the chairman is going to say, okay, let's rebalance the balance sheets and create an equilibrium. So Dell has less debt, VMware has more debt and we'll try to thread the needle so they're both investment grade, which will lower the interest costs on that debt. But fundamentally, I don't think it's going to change anything in terms of strategy, go to market, the close relationship was between Dell and VMware. the thing to watch is VMware's, Dell's piggyback. And so I would rather see a lot of that go... once this equilibrium is reached, I want to see that go more in R&D. You know, again, remember IBM has spent $6 billion in R&D for the past two decades IBM was right there. They could have invested in cloud the same way Amazon did. And in the same way that Microsoft did, they were kind of equal 20 years ago. And look what happened. You don't want that to happen to VMware. They must continue to spend on R&D and innovate. >> Oh, well let's get to the innovation strategy in a second, but I want to ask the ecosystem question, because if you go back in history guys, and remember when Pat Gelsinger had that year, where he was basically given the presentation of his life, and he was in the hot seat and there's a lot of rumors spinning around. Since then it's just been nothing but exceptional performance on as a company executing, all new bets have been played it's almost like he'd cleaned house, put the ship in the right direction they've been smooth sailing since strategically making all the right moves. Okay now that VMware is back on their footings and Dave they have a solid foundation, what happens to the ecosystem because now that their houses in order, what do they do with the ecosystem? How do you see it evolving? >> Well look, I mean the ecosystem is looking for alternatives. I mean they have to participate in VMware. It's part of their go to market. You remember Todd Neilson used to say, "For every dollar spend on a VMware license, "15 or 20 or $18 is spent in the ecosystem," you don't hear that type of ratio anymore. Maybe it still exists I'm sure it does because it's a very vibrant and robust ecosystem but look, let's face it. Jeff Clark and Michael Dell are very clear. We are going to do a much closer integration than EMC ever did. And look at HPE we're looking for alternatives, driving to the edge. That's a huge opportunity for people. VMware becomes the ecosystems cash cow, but they need new growth and new strategic opportunities. And so they got to play nice, but there's more green fields out there. >> Stuart multicloud and cloud native with Tansu I think this is a really big opportunity to reset the ecosystem with services, because it used to be vendors, you bolt on some data backup and recovery, and you have a bunch of people doing storage around VMware, and these big white spaces, they're kind of huge white spaces. But now, when you start getting into cloud native, is a whole new landscape developing. Your thoughts because we're seeing some activity, certainly companies that are building on top of clouds that are building on top of clouds. So you've got Snowflake builds on Amazon now, other clouds and you have companies building on Snowflake. So you're starting to see this kind of new interconnected cloud native landscape, your thoughts. >> Yeah, well John there's definitely a huge tug of war in the ecosystem. One of the things that's been really nice if you were a VMware partner, let's take data protection. Huge ecosystem companies like Veeam, that were created in that environment. Hot companies like Rubrik and Cohesity grew very much working in VMware. All of them now play natively with the cloud environments, but they also get pulled along when you do a VMware Cloud on AWS, on Azure, on Google, on Oracle. So VMware will pull some of the ecosystem with them, but that tug of war is well, if the customer decides to just go fully cloud native, that software needs to work there and you would think that the vendor actually makes more money if it's just natively there, there's not that middleman extra piece. So VMware has a slice the pie and like Microsoft or Oracle behind them, can they justify that value for the license that you're paying when I go to some of these environments. So VMware does not have the pull in the ecosystem Dave talked a bit about it. HPE, Cisco, IBM, all companies that were early, early big huge proponent of VMware now very much are investing heavily in alternative. So VMware major player but no longer the gravity that everyone orbits around. >> Dave, what do you think? >> I want to bring up another data point if I could I want to share something with you. This is a slide that talks about... It asks customers. Why would you not work with VMware? Why would you replace them? What are the reasons? And three things stand out to me, it's not around cloud on the very left alignment with Cloud they've taken care of that with the AWS deal and even now Oracle. And you look at the right hand side, you see technology lead or lag that's innovation. Look at how that gray a couple surveys ago, has gone down to the yellow. So that's off the table, not a problem with innovation, look at total cost of ownership that's gone down, in terms of concerns. The one concern is price and that stays up there. If that's your biggest challenge, that your price is too high, that says to me that VMware's ticking all the boxes of value. So they're in a really, really good position if they can continue to innovate and that's why I've been harping so much on innovation and R&D and key acquisitions they're are great acquire of companies. So, I see this as this data is very, very positive for VMware. If your price is too high and that's your big objection, all you need as good salespeople. >> Or also you'd lower the price and you shift the value to say new features, say cloud native or security. I'll see the movement they've been making with NSX Gelsinger famous quotes are things like, "Kubernetes the dial tone of the internet, "and NSX is the crown jewel security is a do over." So NSX Dave and Stuart, this been a big part of their theme every year. That's a core feature for their security play. That's where they're going to put a lot of value in there. You guys, what's your thoughts on that because you've got Cisco in going that " mh we're frenemies" that's what Sanjay Poonen says, but are they really frenemies? >> But culturally VMware is an engineering driven company they a great engineering team and they don't have dogma about these new... they don't get defensive about some new trends. They embraced Kubernetes, they finally figured out Cloud, they were sort of defensive originally, but they realized hey, and they got religion. So that's the smart thing to do, go on to the next way maybe take a little bit of heat if you've got to go through a transition, but they've done a phenomenal job of making those transitions and staying relevant >> What's the big wave guys? What's the big wave that VMware's riding? The 10 years out we're in we've seen the movie, we've been through a decade with VM world coverage Stuart Dave next 10 years, what's the big wave or waves plural? >> Well, cloud is the first one that they addressed no doubt and then they are in my mind, the leader, or certainly a leader in multicloud. Edge I think there's a big question Mark there, AI is going to be everywhere. I think security is the really interesting opportunity for VMware and it's going to be... the big battle and security is, do you go after these point products like Okta and CrowdStrike and Zscaler and SailPoint who are really doing very well right now in the market or do you want an integrated stack that can be, you good enough VMware will say it's best to breed. We'll see that is a huge opportunity for them because security just keeps getting more and more critical. We've seen that with COVID. >> Let's do final word on your thoughts on the next 10 years for VMware looking back and learn and looking forward. >> Yeah well Dave just building off what you were just saying there, we said that the mission for Pat Gelsinger was, could he do for VMware, what Indel had done for the longest time, which has expanded Tam, expand what markets to go into, but not completely tick off the ecosystem and have them run away. So you saw here at the show, I mean Dave, Zscaler is a partner there. Security absolutely is a monster opportunity and John networking, networking, right. But it should be multibillion dollar business for VMware and they can eat some of that multicloud environment. we talk specifically about SD-WAN, now that cloud's doing well. So VMware that's software across environments, hybrid cloud multicloud, they're well positioned today, they just need to move a little bit faster and make sure they don't bleed talent and continue to support their customers because Dave, you're right how many times have people said, "Microsoft too expensive. "Oracle's too expensive." Here we are in 2020, they still have pretty strong positions VMware still has a very strong position. >> Well, I'll just add, I think it just shows what happens when you have a technical visionary, like Gelsinger in the lead and you have an industry visionary of not just technical, not just financial, but industry luminary like Michael Dell. These are very powerful... VMware and Dell have extremely capable management teams and you're seeing it in action >> And you've got Sanjay Poonen who's a great executer as well, he knows how to execute, he knows technology. Guys it's been a great run. I got to say for me personally, I'm so excited that, for 10 years that we've had "theCube" and the team covering the enterprise tech space, you can't be more excited. At least I'm so excited at the number one IPO in the history of wall street is an enterprise tech company. You can't see any more proof points that enterprise technology is now with the whole end to end architecture with the edge. We're talking about space, we're talking about cybersecurity. We're having now conversations with "theCube" that is now ranging... It reminds me David of the B to C world it's almost like consumerized. Now the enterprise technology is now so important that is now taking over the appeal on wall street entrepreneurs, and to me, VMware can tap into that on this next wave and this will be huge. Your thoughts on- >> I think the Snowflake IPO tells us several things. One, I totally agree, it says the technology is the now trend, no question about it. It also really underscores the cloud and it underscores the demand for issues other than the big Apple, Amazon, Google, et cetera. But it's really interesting to see as well the street continues to reward growth. I mean, Snowflake has as a valuation higher than Workday comparable to VMware. In fact it exceeded VMware on its first day. So that says that the street is rewarding growth. It's rewarding technology, it's rewarding cloud. And so that's that to me says great opportunities for companies like VMware who have both growth, great cash flow, they're profitable and they have a huge, huge customer base. So right now things look good for tech >> Dave enterprise tech is hot, it's sexy. Don't you think? Enterprise tech these days? >> Used to be storage is sexy. Now Enterprise tech sexy. >> You guys great run great analysis again, VMworld's virtual, we didn't have the face to face. We didn't have the hang space, but we have the virtual cube. Virtualization has come to "theCube". We have multiple tracks on our site, check out the content. Thanks for the analysis guys. Great keynote announcement coverage of the Vmworld 2020. This is "theCube". Thanks for watching. (digital music)

>> Narrator: From around the globe, it's The Cube, with digital coverage of VMworld 2020, brought to you by VMware and its ecosystem partners. >> Okay, welcome back everyone to The Cube's coverage of VMworld 2020 virtual. I'm John Furrier with Dave Vellante, and Stu Miniman, who's covering VMworld virtually from our Cube virtual studios, where we've been doing The Cube coverage for the past six months virtually. Guys, let's wrap up VMworld virtual this year, different, not in person, still packed with content. Again, they tried to replicate and they did a good job of bringing that site together. They didn't overdrive the platform. They have content, but still a big gap in not having it in person. A lot of action on Twitter. Certainly, we've been commenting on cube.net site, and getting all these videos out. But guys, let's wrap up VMworld this year. Great show. Again, content's virtual. So a lot of asynchronous content. The cloud city, lot of solution demos of obviously, Cube commentary on our side. But Dave, what's your reaction to the past few days? >> Well I thought, you know, as always, VMware has some highlight folks show up to their keynotes. John Donahoe, who knows a little bit about the enterprise 'cause he did a couple of years stinted service now, then he jumped to back to his consumer roots, went to Nike. Interestingly, the service now, the company left is, they're approaching $100 billion evaluation now. They're zoning in on Nike. Of course, and then, you had the Nvidia CEO. Everybody does business with Nvidia. And so, that's kind of a check box, but they actually get the CEO to come to your event. I think it's a big deal. So as always, people want to do business with VMware 'cause they got half a million customers, and I thought that was a pretty impressive gets. >> And the CEO from Nvidia, Jensen Huang. I mean, you couldn't ask for a timely guest because of the news with them buying Arm. >> Huge. >> Nvidia just is a key player in the chip game right now. >> Yeah, and I think too, you know, some of the announcements VMware made around Edge and even Telco, Nvidia is going to be huge there in Arm. You know, we think that that is going to be a really new and interesting AI inferencing at the edge. There were some AI announcements, so very strategic. Again, you know, VMware does a great job of identifying those waves and driving engineering to drive customer value. >> Stu, I want to get your take on the announcements, and Dave, you can chime in too 'cause as we saw the Snowflake IPO, to me, this is, this basically rings the bell for the worldwide global computer industry around cloud native. This, to me, puts the full stake in the ground, cloud native. VMware made some bets, Stu. We go back and look at Gelsinger's moves, and Sanjay's move, and the team's moves. Your thoughts on the announcement there, networking, a lot of multicloud, but it's all about operational cloud native, your thoughts. >> Yeah, well John, cloud's so important, you know? Let me make an analogy here. We all talked about, if this pandemic had happened, enter 15 years ago and we were stuck at home without our Netflix, without our Zoom, without our connectivity, where would we be? John, when we started coming to the VMworld show in 2010, it was a huge amount of gear sitting in Moscone and the amount of trucks that needed to deliver all of that. Of course today, it's all built in the cloud, doing those labs are so much easier, and learning and enabling these technologies can be done so much easier. So I think that that really puts a highlight on where we are with the technology and you know, that was one of the key things that we saw in that announcement. So we're VM, we're fit with the big HyperCloud players, how they're hoping to extend, what they have in a hybrid environment from a management standpoint, starting to push out to Edge Solutions, VMware has strong strength with service providers. So there's a lot of things there to dig into, and that we wouldn't have had if we were talking about this five years ago. >> I just love the glam of the Nvidia 'cause the AI angle there is super important, but I'm, you know, I love the Project Monterey, Stu because it kind of digs out VMware trying to set the agenda on Architecture. This is the end-to-end, you know, whether it's the edge of the network from a work perspective person. Even in space, a purpose-built devices at the edge still need to be updated by software. This is a huge architectural shift. Do you think VMware's got the right moves here? >> Well John, VMware's got some great strength in the service provider environment, and of course, you know, great strength in data center. They've been growing their cloud capabilities. So Edge is still a little bit of a jump ball, as we'd like to say. Absolutely like some of the things that they're doing, strong partnerships. We talked about Nvidia, absolutely one of the companies you want to be closely working to to be successful at the edge. So I like what I'm seeing, but as with anything with VMware, until they have thousands of customer doing it, it's still a little bit early for me to have any final say. >> Stu, 30 seconds left. >> Yeah- >> Tanzu portfolio and partnerships. >> Yeah, so the critique I'd have, John, is VMware have been trying for years to go deeper with developers and they've made some progress, but they haven't done enough. They have moved doing more with open source, they've made a number of acquisitions in the space, but it's all about developers, it's about building those apps. If you talk about a hybrid message, you know, Microsoft, nothing about bit but building new apps. VMware is starting to get there, but they still have work to do. >> Guys, great job, 2020 is in the books. The Cube is via virtually. And again, 10 years ago, John Troyer, Eric Nielsen, Robin Matlock was our partners. Now, we're going with the next generation with VMware the next 10 years. Unpredictable, we'll see how it goes. Thanks for joining us today, appreciate it. Okay, thanks everyone for watching. Cube coverage of VMworld 2020. I'm John Furrier, with Stu Miniman, and Dave Vellante. Thanks for watching.

>>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

>> live from San Francisco, celebrating 10 years of high tech coverage. It's the Cube covering Veum World 2019. Brought to you by VM Wear and its ecosystem partners. >> Welcome back, everyone. Day three Q coverage here in San Francisco for V emerald. 2019. I'm just for a student, Um, in here with David Lan. Take days free kick off. We have two sets wall to wall coverage. Guys, this is the time where we get to take a deep breath two days under our belts look and reflect on all the news we've covered in a dark to last analysis sessions but also kind of riff on. We got two nights in hallway conversations we learned a lot of the party means do. I learned a lot last night. Dave. I know you. You learned a lots, do you, Thomas? When things that the chatter Certainly twittersphere hashtag the emerald. A lot of action on there, but it's the hallway conversations. It's the party that people have a few cocktails in them day that you start to hear the truth. The real deal comes out, >> No doubt. And and again Jon Stewart, there's real concern over from the from the practitioners we talked to about this acquisition spree. Are they going to be integrated? Are they going to just throw all this stuff at us and keep jamming products and service is down our throats? Or is this going to be a coherent set of solutions that solves our problem? We also had a little little interesting side conversation about, you know, Snowflake, Frank's lumens new company and how basically Frank is bringing back the Pirates from Data Domain and from service. Now Mike Scarpelli is over there. He's a rock star. CFO Beth White is eventually is back over there. And Frank's Lupin. He's the guy who takes companies from, you know, 100 million to a billion, so that's gonna be >> very serious money making him going on there. >> We have been following his career for a number of years now. We watched him take data domain. We watched him pull that that rabbit out of his hat with the sale with net app, and then the emcee swooped in. And then we saw what he did service. Now we've documented this is an individual to watch, you know, >> he's a world class management team member I mean, he's executes. >> Oh, yeah, no doubt. And >> he has >> a formula that's been proven and in time and time again. And to me, the biggest testament salute Min is the success of the continued success of Data Domain. After he left Hey, he really helped clean up the emcees data protection mess. Um, and then the second thing is, look at service now is performance after he left, I haven't missed a beat. And, yeah, John Donahoe, great executive and all, but it's because Frank's Lubin had everything in place and that was a really well run >> dry. And they got a nice little oracle like business model. >> Yeah. No, you're right. They kind of, you know, the big complaint now as well. Your price is too high that Oracle. >> What have you learned? What you hear in the hallways? I mean, a lot of chatter. >> Yes, John, we We've been reflecting back a lot. It's 10 years in 10th year of the Cube here and back here in San Francisco. The new Mosconi, our third show that I've been at this year in Mosconi and we always track year to year. But since it's been what 45 years since we were here for VM World. When I talked to the average vendor. When I talk to you know, the analysts here were like, Oh, thank goodness we're not in Vegas. When I talked to the average attendee, they're like, Oh my God, what happened to San Francisco since last time we were here? It is too expensive. And the experience walking around San Francisco has really not nearly as nice as it might have been five or 10 years ago. And many of them we were talking to, Ah, woman that runs an event that has been Vegas in San Francisco. And she said, Oh, we did in San Francisco and got tremendous feedback. Don't do it there again. Brings back to Vegas both for costs and the enjoyment of being around the environment. >> Where was a shit show here in San Francisco is horrible right now, I got to say to your right eye was walking this morning from my hotel. Literally. A homeless person passed out the middle of the sidewalk. Um, your smells like urine. It's P, and it's It's just I mean, it's really bad this tense now. I mean City of San Francisco is gonna do some. Mosconi, by the way, has been rebuilt. Awesome. So, you know, in terms of the new Mosconi stew, that's a serious upgrade. Hotel rooms are scarce and just the homeless problem. It's just ridiculous. I don't know what they're >> doing. So one of the other big things when I was reflecting coming into here two years ago when VM wear really started down right before the war on AWS announcement, they made a big announcement. IBM because they had sold off the cloud air toe Oh, VH And for two years Oh, VH was a big partner, Talked about that transition, said we handed off this great asset over h isn't here at the show. I was like, Oh, my gosh, you know, that was, you know, such a big story and other companies like New >> 12. That's good. One lets someone who's not at the show and why. Yeah, oh, VH wired to hear >> They aren't here because, well, they've got customers. More of them are in Europe That was supposed to be a big entry into the United States. Obviously, it wasn't as valuable for them to be here, even though I'm sure they're still part of that service provider ecosystem. They have other big one for us, and we've had on the Cube Nutanix. You know, we've had Dheeraj Pandey. First time we had him on was that this show is still the majority of Nutanix. Customers are VM where customers I've talked to lots of Nutanix customers at the event, even part of the analyst event. Some of the customers I talked to were like, Oh, yeah, my hardware stacks Nutanix and amusing NSX. And I'm using other things there. But they are not here. They're not allowed to be at the show. And I >> mean, they were blatantly told they can't come. >> They can't come here. They can't come to the regional things. They can't do the partner things. So that that that relationship is definitely >> from red hat. What kind of presence have you seen from Red s? >> So their number companies like red Hat that they're kept at a lower level of sponsorship. So they're here. They participate, you know. Open shift, of course, is you know, big enemy for cloud native. Lots of open shift runs on V sphere. So many of those companies that are part of the ecosystem, but not the ones that they want to celebrate and put front and forward. So it's always interesting kind of walk around on those. Even Microsoft is an interesting relationship for, you know, decades with the M wear. You know, of course, azure they partner with. But hyper V was long a competitors. So, you know, we understand those competitive relationships >> could be interesting. Stew and Dave on the ecosystem Jerry Chan Day when we just doing my interview yesterday on the other set mentioned that the ecosystem reinvents itself the community. The question now is with Delhi emceeing Del Technologies obviously heard Michael Dell essentially laying out his plan, which is he's got. He's trying to keep people distracted, but the bottom line is going to top people putting together the cloud right well service provider model. So you know, that's what he's gonna be a big impact. VM wear the crown jewel of Del Technologies certainly is looking more and more like It's >> well and yesterday remember the first VM world we did in 2010? It was It was del I mean course and see only the time Who's Del? It was H p Yes, the emcee was there, but it was net app. I mean, everybody could've had equal standing yesterday at the keynotes. It was Project Dimension of V M, where cloud on Delhi emcee and long keynotes >> data protection into the VM were >> also it's It's all very heavily, you know, Jeff Clarke has his his thumb on, you know, the the deli emcee folks pushing that through Veum where Michael is orchestrating the whole thing. Pat obviously is allowing it. I was sitting in the audience Next next, Some folks from Netapp they're like, you know, this kind of a bummer. Calvin Sito from h p e tweeted Wow how to stick it in the face of your ecosystem partners. He then later went on Facebook saying, Hey, I love this ecosystem, so sort of balancing it out because, you know, he wants to be a good, good citizen, but clearly the ecosystem partners who basically brought VM where you know, to the the position where it's in through distribution, our little ruffled. Right now you can't blame him, But at the same time, the mandate is clear. Michael Dell is driving his products and his solutions through VM were period the end. And, you know, if you don't like it, leave >> right. They had such great success with V San and VX rail in that joint product development and go to market. If they can replicate that with a number of other solutions, they get that the synergies. If >> you don't like it, don't leave. That leave is worse than that. They say you don't like it, you know, invited you. But >> how about what Pat said yesterday in the Cube about when they announced on Gwen heavily leaned into V san. He said publicly that Joe Tucci was pissed and I hate her. They were going at it so that so that shows you the change, right? I mean, so so so e m. C. When it owned VM where was very cautious about allowing Veum wears a software company to drive value somewhere Now is just acting like a software company. >> Well, I think I mean, I learned last night's do, um and you can appreciate this. I learned that the top executives of'em where are looking heavily and working hard at understanding and drive them kubernetes cloud native thing because this is not a throwaway deal. This is not a you know, far anything that they are investing. They get their top brass tech execs on kubernetes fto. Two big players job. Ada, Craig McCaw calumnies. We know interviews since day one, but I think the cloud native thing is going to be interesting. And I think it's gonna be evolution. I think there's gonna be a very dynamic road thing's gonna be a series, of course, corrections, but directionally they're all in on. They're going for it, they're not. >> And actually, I had a, you know, good discussion with Chad Attack. It's a good friend of the program now working at GM, where for the first time, but came from AMC worked at Pivotal. He said, culturally, such a gap between VM wear don't have to touch your app, you know, move everything along lifted shift is nice and easy versus pivotal, you know must go completely You know, dual programming, you know, agile everything there, so bridging those because there's multiple paths and the rail pharaoh announcement is that would be cloud native stuff that won't necessarily go to the EMS. We're going to retool V EMS to now be a platform for kubernetes so that they have a few passed to bridge or to build towards the future. Here's the >> answer strategy. Discussion That and Rayo Farrell was now running Cloud native. Think this is just really >> ties in the interesting discussion that I had with some folks was that you've essentially got well, Jerry Chen brought this up last time we had him on it and reinventing because >> we have >> a conversation all the time about this Amazon have to go up the stack. And Jerry Chen made a really he said, Look, it they're not They're not gonna become an e r peace offer company. What they're gonna do is give tools to the builders so that they can disrupt Europea. They can disrupt service. Now they can disrupt Oracle. That's their strategy, at least for now. Okay, so what does that say? I think the strategy discussion inside of'em were and and l is about by whatever clouds gonna be 35 to 50% of the market. Fine. And the cloud native abs. Great. But you got this mission critical. E r p is an example. Database saps that are on Prem. What we have to do is keep them there. So we're going to sell to the incumbents and we're going to give them cloud native tools, toe modernize. Those APS have build new acts on Prem, and that's the that is the collision course that's coming. So the big question is, can the cloud native guys and AWS disrupt that >> huge? I've always said I'm is on and like the way they're coming in, a tsunami is coming in. And who's gonna build that sea wall to stop it right? And that's essentially only hope that these guys have. You look at all the competitive strategy. Was Oracle. Whoever just gotta stop it? You can't like >> the sea >> wall. That's a great building. A sea wall I was, I would say, is Is that you know, they're only hope at this point is to, you know, get in the game because see Amazon is the stack. They're not really moving up the stack. You hear that from Cisco and Dale and other people? That's where it's a game of musical chairs. Right now, the music's you know, there's still a lot of shares left, but soon chairs getting pulled away and Cisco Deli emcee VM, where they're all fighting for these big chairs. And one >> thing >> we talked about yesterday is that VM wears very directional, product driven. Otherwise they pick a direction, is a statement of direction and don't really have a lot of meat on the bone. In the product side, Sister is actually in market with service providers there in market with NETWORKINGS to this no vapor there that's installed basis and incumbent business. You have developers Esso Baton talks about suffered to find data center, suffer defined networking. I mean, come on, Really. I mean, they're getting there, but it didn't have the complete solution. Cisco >> Coming into this week, I expected here a bit more about the progress and all the customers of'em wear on AWS and feel like Vienna actually downplayed the AWS. We know what a strong partnership it is at every Amazon show we go to, and we got a lot of them Now there's a big presence there, and I can talk to customers that are starting to roll out and move there, but it felt like it was David's. You pointed out there are some messaging differences when you talk about multi cloud and how they're positioning it. So, you know, put those >> here Amazon. If your Amazon you're not happy with Microsoft Dell Technologies World The big announcement that was positioned a cloud foundation Although it wasn't a joint engineering, But the press picked it up as though the Amazon deal has been replicated with Microsoft and Google. I mean, you gotta be gotta be hurt if your Amazon >> So I've I've just been taking notes this this event, there's I've noted at least five major points of difference between a W s what they're saying and their philosophy and the anywhere so eight of us. We know they they don't talk multi cloud. They've told their partners, If you're doing joint marketing with us, you cannot say multi cloud aws that reinforce John. We saw this. Steven Schmidt said that this narrative that security is broken doesn't help the industry. Security's not broken, you know, we're doing great. The state of the nation is wonderful. Aws Matt. Not really. I agree. By the way. Uh, that's not the case. I agree with Pat saying Security's broken. It's a do over VM where wants to be the best infrastructure and developer software company. Who's the best infrastructure and software development platform. Eight of us. The M one wants to be the security cloud. Who's the security cloud? Eight of us. And then, uh, they talked about 10,000 cloud data Listeners are those really cloud data centers at Vienna. And the last one was this was a little nuanced Veum was talking about We know about migrating, modernize, lifted ship shift and then modernize The empire's not talking about modernize and then migrate. If you want to. I totally in conflict >> as a collision course. That's got Look, look, look at the data center was Look, it looks like we're going. We're going away, right to the data center. Staying. That's music to Michael Dell's VM. Where's years they live in the Data City? Do you pointed out yesterday? Data Senate goes away. So does begin. Where's business? >> One of things. I'm surprised. I'm wondering you both have talked to some of the service fighter telco pieces of'em, where they're doing that project dimension, which is the VM where stack on del that looks just like outposts on. And I know they had deployments on this for months. If I was them, you know, it's everybody's hearing about Outpost to talk about it, being more like we're already doing it in. This has you in that Amazon ecosystem. It might be a little strong for the Amazon story, but have you been hearing any about that this week? >> I think they keep a lot of cards close to the chest, but it's clear from the announces that they're doing certainly del the VM, where on Delhi Emcee Cloud or whatever it's called, it's not a cloud but their their infrastructure that is essentially a managed service. That's gonna be really strong for I t. People, because I think that the value proposition of going toe i t and saying we have this, you don't need to do anything. It's very strong, I mean, because I didn't want him >> and justified because this the project to mention it is that single, that thinner stack like what we saw on Outpost in the Amazon video, as opposed to Veum, where cloud on AWS, which is the full C i r h d. I stack. >> I haven't heard anything still on >> well, but the conversation I had from from Vienna, where standpoint, they could make money on that manage service. That's why it's the preferred partnership, right? And so that's their part of their cloud play. If you don't have a public cloud, I said this yesterday, you have to redefine Cloud and you have to get into cloud service. And that's what's happening. And that's exactly what's happening. And what I like about what V M where is doing is they are transitioning their model to a sass based model. Now it's only 12 and 1/2 percent of the revenues today. But both pivotal and carbon black are gonna add, you know, ah, $1,000,000,000 next year to that subscription based $3 billion in year two. Um, and so you know, Pat said the other day, I think we could get to 50 50. I don't necessarily think in the near term we're gonna go beyond that. It's not the Adobe >> way could be critical. Critical of'em were in some areas, but I gotta tell you their core strength that they went to a software operators on the data center friend of prices. That's been a great strategy. Focusing on their core building from there is Jerry 10 point out adding other products so their software company, So I think they're really got a good solution. And you? The data shows that people are increasing their spending, John. Just one based on >> that. Because I had a couple of really good conversation with customers, customers that would deploy VCF So they've got the full stack on there. So using H C I, but not necessarily on Dell hardware, could be Cisco Hardware. Could be HB hardware in the like or they're buying NSX. But the virtual ization team owns it, and they get kind of put in. A box storage team says That's not the array I'm used to buy. Well, maybe I'll put a pure storage box and put it in between. The networking team says I'm refreshing my Cisco hardware. You know, we're like, but we have NSX, and it's great. Well, you can use NSX over there. We're going to use a C I over here. So the term I heard from a number of customers is organizations still have hardware to find roles, and they're trying to figure out how to move to that software world. Which hurts me, cause I spent years trying to get beyond silos and helping people you know, move through those environments. And still, in 2019 it's a big challenge. That organizational shift is we know how tough that is. >> So just couple points in the data, because you're right. There are some countervailing trends, though. So, yes, people are spending Maurin VM where in the second half. But at the same time, the data shows that cloud is hurting VM wear spend. So this that's kind of gets interesting. Our containers gonna kill VM where? No, there's no evidence that container's air hurting VM where spend. But there's clearly risks there, you know, as we've talked about who's best position of multi cloud. Well, it turns out three guys with the public cloud are best positioned in multi Google and Microsoft on, and so and then the pivotal thing is interesting, and ties ties all this in so that the data is actually really interesting. It's like you're seeing tugs at both sides, and I think your your notion about the seawall is dead on. That's exactly what they're doing. >> You see that with Oracle's trying to stop jet. I just want they can't win this one to stop Amazon just on the tracks gave great data. Great reporting, Stoop. Good observations. Get all the day that night and parties we're gonna certainly keep doing that. Day three of wall to wall coverage here. You bringing to the insights and interviews here live from the Emerald Twin 19. Stay with us for more after this short break.

>> 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 theCUBE covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome back to Las Vegas, everybody. This is theCUBE, the leader in live tech coverage. We go out to the events, and we extract the signal from the noise. We're here at Knowledge18, ServiceNow's big customer event. 18,000 ServiceNow practitioners and partners and constituents here. As I say, this is day three. This is our sixth year at Knowledge. Jeff Frick and I are co-hosting. When we started in 2013 early on, we saw this ecosystem grow, and one of the first CIOs we had on from the ServiceNow customer base was Link Alander, who is here. He's the Vice Chancellor of College Services at Lone Star College. Link, always a pleasure. Great to see you again. Thanks for coming back on. >> It's always great to get back and talk with you, see what's happening in the industry, and follow you. But, once again, great conference. >> It really is, I mean, wow. Last year was huge. The growth keeps coming. We said that Dan Rogers, the CMO, K18, 18,000. How ironic. >> Yeah, wow, let's see, your first was six years ago, right? >> Dave: Yep, it was 2013. So my first would have been New Orleans, which had been I think 2012, 2011. >> Right, right, the year before we met 'em. >> Three to four thousand in this conference. Actually, that might be the high count. >> Yeah, I mean, it's quite amazing. And the ecosystem has exploded. What's your take on how, not only ServiceNow and the ecosystem have grown, but how it's affected your business? >> Let's start with the, yeah, yeah, yeah. Let's start with the ecosystem part because, really, you've got so many more partners out there now. You've got so many more integration points. What was really exciting as we saw this morning with Pat, and some of the enhancements they're doing on the DevOps side, but also what we're going to see with the ability to integrate our cloud linkage, which is really the challenge for everybody as a practitioner today. How do you bring all these cloud services? I've got quite a few of them in my environment. How do I actually integrate those in with my ServiceNow, with my ERP, with all of the other instances? So, seeing what they're doing in that space is great. From the business standpoint, when we came onto ServiceNow, we came on like everybody else, a journey for IT service management. Can we improve our services? Can we help our customers out? In our case, that'd be our faculty and staff. What we didn't realize was the opportunity that came to us with the platform. And one of the first things we did when we brought the platform back to us was we built an app for students. We built a way to help students out with their student financial aid. Now I've got, I think we're roughly at about nine of our areas that are using Enterprise Service Management. I just came back from giving a presentation about legal, and what we've done in the legal space to where that's helped the organization to move forward faster. So that's really cool in what it does, but it also elevates the position of IT in the organization. It really does bring us forward. >> Yeah so, let's talk a little about Lone Star College, 'cause I love your model, you know, and we can both relate. Kids in college, and, you know, the cost of education, the ROI, which I think is a big focus of what you guys provide for your students, so how's that going? How's the model working? >> Well the model's working great. And you know, you hear the pressures out there, 'cause one of the first thing is, how do you help a student complete. So, we're really very focused on student completion, but then now, you've got another focus that, well, it's been there, but it's really getting stronger, on gainful employment. So not only that, how do you get a student in college, how do they complete on time, but then how do they come out and have a livable wage, an earnable wage? And so I'll give a plug on that always because that's what we're focused on. Whether you're just coming to us to transfer to another institution or whether you're coming in the workforce. And we have a very strong workforce development, and one of the things I got out of this conference that I've been working on for quite awhile was for us to become a ServiceNow train, to get that integrated into our curriculum. And I was really excited. We've talked to them before about this, and it's been a discussion, but now what we're looking at is a program that they put in France where they have a six week program that if people are going out of there, coming in, six weeks later, job retrained, 100% placement. A year later, they have 98% retention, and those 2% just went to another company. So I can't think of a better opportunity for us from our standpoints in our workforce development. And I'm really excited we're going to be starting to move that forward now. >> It's interesting to hear John Donahoe on Tuesday talk about their measurement of customer success. And we were asking him on theCUBE, well, your customers measure success in a lot of different ways, so how do you take that input? Your measurement of success is student success, as you just have indicated. >> Absolutely, absolutely. You know, my focus has always been is IT is just a support operation. We're not the mission of the college. And that's important. Because as long as we have that mindset, we realize that it's us helping the faculty to less stress on their life, or the staff, then we've improved their experience, which will improve the student experience. The same goes for the administrative systems. We want administrative systems to have a user interface that's intuitive to today's student. It wasn't designed by a person that was intuitive to today's student. So we have that challenge, and that's what I liked about the change this year and the user interface in ServiceNow and where they're going with UI and UX, and how much of an enhancement that makes for our customers. But it's also, that's the changes that are happening in industry right now. Coach K was at the CIO Decisions, and he was talking about he's headed to go through all this process, and 50 forward years of difference, and he's recruiting 18-year-olds, and he's sending emojis to them, his recruits. But like, yeah, because you have to relate to it. So, we started a process, and this is where coming to a conference like this helps me a lot, because it's like, yeah, I went down the right path. But my team came to me, and I've got a phenomenal team. They came to me and said, you know what, we really need to look at UI, UX, and design thinking. And I'm like, okay. Now let's discuss what we really want to do with this. One group was wanting design thinking to think about analytics. What does the customer need? How do they want to see this data come to them? And how can they make data-informed decisions? Well, we have then rolled that same design thinking into, how do we roll out the fluid technologies in our ERP? How do we become more of a user interface that today's student wants, to what we're trying to do next in mobile? >> That's a really interesting take, because we talk often about millennials entering the workforce, right? And consumerization of IT and expectations. But they're usually a pretty small and growing percentage of the workforce at a particular company. For you, it's like 90% of your customer base, right? And they're on the bleeding edge. They're coming in there 18, 17 years old. So you got to be way out front on this customer experience. So have you really taken that opportunity to redesign that UI, UX, and interface to the applications? That must be a giant priority. >> We've done a lot of incremental items, but really it's been a huge priority for us for the last, we have two really cool items coming down the path. One is the UI UX experience. How do we transform the student experience? The next is a process that our academic success side, the student services side have gone down, with guided pathways. Okay, you and I went to college. What did we do? We saw an advisor every single time we registered. Then we up to the thing, and we filled in a bubble sheet, right? >> Right, right. >> Well right now, the students are registering on a mobile phone while they're sitting down at a Starbucks. They're not seeing an advisor. We want them to see an advisor. So we push them those directions, but this guided pathway says, you know what, I want to do this degree. Then we just line out, here's the classes you're going to take, and whether we use program enrollment, whatever methodology, we can help guide them in their pathway to success and completion, which is a big difference. And that's what needs to happen today. >> Right, well it's interesting, I always like to talk about banking, right? 'Cause banking, you used to go see the banker, go into the teller, and, you know, deposit your check and get your cash. And now most people's experience with their bank is via electronic, whether it's online, on their phone, or their app. You have kind of the dichotomy, 'cause they still have their interaction with the teachers. So there's still a very people element, but I would imagine more and more and more of that administrative execution, as you just described, is now moving to the mobile platform. That's the way they interact with the administration of the school. >> Well, that's their expectation. So, that's what we have to deliver, and it's a challenge because we have resources, we have limitations in resources or capabilities, but it's really keeping that focus going to where you look at it. So as we're doing this UI UX right now, one of our major goals is going to be to bring students in the engagement as we go through the design process, and get their feedback. Not computer science people, not IT people. We want the normal student that's going to go register for a class. And since what you have is such a large transient population, you know, two years, they're in, they're done. 100,000 per semester. 160,000 unique each year. You've got to create that rich experience, but the engagement, the bonding to the institution. And I like the bank for an example because not too long ago I switched banks because I didn't like their app. >> Dave: Absolutely. >> And it's easy to do, it's real easy to do. >> Airlines, you appreciate the good apps. >> Link: Yeah, yeah, absolutely. >> How does ServiceNow contribute to that user experience, that, your customer experience? >> Well right now from the student side, they don't see much of ServiceNow. They can submit requests, and we can handle their incidents, and those types of items. They have certain things. We have the student financial aid. But it really is about the Enterprise Service Management philosophy. I think if you go back to one of theCUBEs, maybe two or three years ago, I said, "Who would have ever thought they would come to IT to talk about service delivery?" Okay? Now, everybody at Enterprise is like, okay, how do you do this? How do you not let things fall through the crack? So that the legal app was a great one, because that was a challenge that our general council or our COO had when he came in. Everything was falling through the crack. So they worked through their workflows. They built a process. And then they built, we built an app for them in ServiceNow that handles everything. Now when I'm in a cabinet meeting, I get to hear about how legal's doing so great. I'm like, what about me? I think we're still doing a good job. (laughing) >> Well, Link, I'm curious too on, kind of the big theme has always been at this show kind of low code, no code developing, right? Enable people that aren't native coders to build apps, to build workflows. How has that evolved over time within your organization? >> Well, we still want to make sure when we're putting out code. What it's enabled for us is, of course, our developers, it makes it easier to get to time to completion of a project. But we still want to make sure that whatever's built is production ready. You know, so we're not opening up the tool case to everybody. (laughing) But, sad to say, I actually still go in, and I'll build my dashboards, and I'll build my interaction, and I use my performance analytics, which does enable people. And we're seeing that in some of our heavier Enterprise Service Management side, but as far as letting them dive into the no code environment, I still have to put some protection on us. And like any organization, we always have to think of IT security. That's the other piece of it. What are they putting out there? What could be a violation of privacy? How do we handle that? >> Jeff: Right. >> So, we stay completely engaged, but the speed to deliver is what the change is. Our legal app was a three month development project. Three months to go from a, they had a separate system. And to go through the process, redesign it, build it, and put it in production. Three months. >> Three months? >> How many people, roughly? How many people did it take to get there? >> Well, we use a development partner that used three, and then I had two at the time on my own. I still have only three individuals that actually handle our, that are primary to ServiceNow in my organization, as large as our installation base is. >> Really? And that includes the permeation of ServiceNow into the rest of the organization, or? >> Link: Yes. >> Dave: Really? >> 'Cause I added, and before that, if it has been last year, it was one and a half. >> Dave: Wow. >> That's what I had then. And technically, I probably have only two and a half because one person has another job, which is running our call center. >> So what are you using now? You got obviously ITSM, what else is in there? >> ITSM, ITBM, we got a great presentation we gave earlier on project portfolio management, and what we've done with that. And where we're going next. Business operations. We're actually launching this summer, if everything goes right. This is more of an internal, us doing it, but what I've been doing is I've been taking our contract management piece, utilization, incidents request change, and project. Now I'm going to roll it in and then do analytics against it to come back with what is the total cost per service per month per individual. On every license contract I hold. >> It's funny, the contract management software licensing management piece is a huge untapped area that we hear over and over and over again. >> So, two years ago we talked a lot about security. I think ServiceNow just at that point had announced its intentions to get into that business. What do you make of their whole SecOps modules, and is it something you've looked at? State of security, any comments? >> Well this is one of those situations I think we're just a little bit too far ahead of them again. 'Cause we actually had built a modular ourself that handled what we needed. In my environment, I've got an ISO, but I also have the partners that support us. My SOC is operated by a third party. So they feed in the alerts. We ingest the alerts into the security module, and then we take action from there. So basically, they were about, a little bit behind us. And we had just looked at the model saying we need a better way to manage that event. >> So you got that covered. Yeah, I want to ask you, you know, a couple years ago we, when the big data meme was hitting, we were, of course, asking you all these data questions. Now the big theme is AI, and in some regards it's like, same wine, new bottle. But it's different. What's your thoughts on machine intelligence? Obviously ServiceNow talking about it a lot. How applicable is it to you? >> Okay, so. (laughing) >> You know why, that's good. I had to ask. >> Augmented intelligence. Let's just not make it artificial, okay? 'Cause I, when Fred had that conversation during the fireside and he said, you know, a computer takes 10,000 images to know what a cat is. And of course, the computer's a mundane object that can look at 10,000 images to determine that's a cat. You showed me the other ones earlier today, I about rolled over laughing. >> It's allowed on the blueberry, check it out. >> You know, augmented intelligence is going to be a driver. There's no question about it. What we saw on the interface about it abled to, as the machine learning goes through the process, it's picking up the information, and it's helping the agent to get to the resolution faster, that's great. Knowledge bases that are integrated in with that. Can you think about how much quicker it would be for somebody like myself who's going to go to a chatbot, and I'm going to run through a chatbot in automated intelligence and do that type of work. So that's going to make a significant difference. One of the areas we think they will be dramatic, for especially this generation, the millennials coming into the school, will be to put that augmented intelligence in, in that process. Because, trying to explain to a student, you know, yeah, you go to the registrar's office to take care of this, and you go to the bursar's office to take, they have no clue what those mean. Well, if we can take it to their language, but then also add in augmented intelligence to guide them through those navigation points. So augmented intelligence over the next years, it's taking that big data now, it's actually put into use, all that machine learning, and making something happen out of it. >> You know, digital is one of those things where I actually think the customers led the vendor community. So often in the IT business, and the technology business in general, a lot of vendor hype, whether it's hyper converged or software to fund, they kind of jam it down our throats, and then sort of get it adopted. I almost feel like, you've been doing digital for awhile now because your student force has sent you in that direction. And I feel like the vendor community is now catching up, but is that a right perception? I mean that, the digital is certainly real, and then you guys are leaning in in a big way. >> I think between the three of us we could probably come up with all the different hype words that have been used, and probably fill this room with every one of those words, right? But the reality is, as practitioners, you're looking at what is your customer base, what do you need to be able to deal with. So, we've been into digital transformation, absolutely. Is it a good definition? Was cloud a good definition? I mean, what am I really? It's either I'm going to use software as a surface, a platform as a sur, I have a gigantic private cloud. Okay, that's great. We're talking about high availability and scalability. But when you put all those in, we've been in a digital transformation everywhere. Your banks did it, that's why you have a bank app. Airplanes did it because, you know, what was that ticketing system they used to use? >> Dave: Yeah, Sabre. >> Sabre, that's what it was, oh yeah. It's probably still out there somewhere. But the reality is, is that, if you're not transforming digitally, you're going to get left behind. And even some big IT companies, and I'm sure we got a list of those bit IT companies also, that have fallen off the face of the earth, or are struggling to stay on because they didn't go through that digital transformation. They tried to do the same thing the same way and move forward. You can't do that. >> You know, you just reminded me. I just got a, hey, it's been awhile since I goofed on Nick Carr, but you remember, as a CIO, Does IT Matter? Right, in the early 2000s, that book. I mean, IT matters more than ever, right? I mean, Nick Carr obviously very accomplished, but missed it by a mile. >> Well, it's funny 'cause then IT was a support organization. Now that IT is an integrated piece in the way that everything just happens, right? It's not keeping the lights on and support so much anymore. >> I can't remember who brought that up in the keynote. Talking about the fact that, basically, we permeate the organization, okay? 'Cause there's not a function that they're doing that doesn't have some type of IT. And the question is are you sewing it together correctly. Because in the end, what are they going to want? Well, you want a seamless student experience. You want a seamless employee experience. Nobody's perfect, everything needs improvement. I'll always say that. But then at the same time is, you want that data to be all tied together so you can take advantage of big data. You can take advantage of machine learning. And then you can come back and report on it. You know, what we've done, so I guess three years ago is when I took over. I was put in charge of our analytics team. And our focus was unlocking the data so that people could have access and make decisions that are informed. You know, it's not data driven. We need to see the data, look at it, and come forward from there. So things like what ServiceNow did in performance analytics. Our general council highlighted the performance analytics as soon as we, we missed it, as he said. We put it in the first app, we didn't do it. We needed to add it. So we added it in. And he's like, wow, what I always thought was one thing. But now that I'm seeing the data, and I'm seeing the patterns, it's totally different. Because we have assumptions just 'cause we think we're busy. Performance analytics is letting him see exactly what's happening in his organization. >> Let me ask you a question. If somebody on your staff, let's say somebody that you mentored, came up to you and said, "Listen, Link, I really want to be a CIO. I mean, it's my aspiration. What advice would you give me?" >> Well, it's kind of hard when you ask this one, because I've mentored and then partnered, I wouldn't even call it mentored anymore, a great friend of mine, and he's now a CIO at Spellman in Georgia, yeah. In fact I was just chatting with him earlier because I saw something, I was like, hey, you need to check this out. It'll solve your problem. You know, it's a simple key fact. If you want to be in IT, you've got to be agile. You really have to be agile. You can't be rigid. You can't close those doors and keep your focus, and you have to constantly learn. If you don't just constantly learn, then you fall off. And that's something, when we talk about digital transformation and these companies that haven't made the transformation, that aren't here anymore, they stopped learning. They thought they had it. It's the companies that have actually continued to learn, or the CIOs or people coming up the ranks that look at it. And they look at things differently. It really is. The digital transformation is about keeping the CIO transformed, and every one of the staff. Had a discussion not too long ago with one CIO about how does he energize his staff. He's trying to do a transformation, but his staff is entrenched in the old way we did things. And, you know, sometimes you just have to shake things and get 'em excited about this piece of it. And a lot of times, if you're especially in a college, I have the luck of bringing a student in. What was your experience with that application? What did you think about it? They think it's the greatest thing they've ever created. But when you get it in front of a student, it can be something totally different. So, the biggest one right there, you got to have agility, you got to constantly learn, and you really, you know I might have a laser focus about things, I have a very agile planning model I use, but at the same time is I try to keep the door open to any possibilities. >> Well, Link, you're a great leader, and a friend of theCUBE. Can't thank you enough for making some time out of your busy schedule to come back on. Great to see you again. >> Jeff: Good seeing ya. >> It was great seeing you again, as always. As always. >> Alright, keep it right here, everybody. We'll be back with our next guest. We're live from Las Vegas, ServiceNow Knowledge18. You're watching theCUBE. (upbeat 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 Knowledge18 live from Las Vegas. I'm your host Rebecca Knight. We're joined by Raja Renganathan, he is the Vice President of Cloud Services at Cognizant Technology Solutions. I should say welcome back, it's not just welcome, it's welcome back to theCUBE. >> Thank you Rebecca. >> So tell our viewers a little bit about Cognizant Technology. What does your company do and what do you do there? >> I head the cloud services for Cognizant in the capacity of a vice president. Cognizant is a world-leading professional services company. Our objective is to help our clients to navigate the shift to digital. We have three pillars: go to market, we have Cognizant Digital Business which focuses on the user experience, data related, and we have the Cognizant Digital Operations which is predominantly a middle-office, back-end processing in an enterprise, and the third pillar is Cognizant Digital Systems and Technology which is basically modernizing the platform systems that is required to create the digital foundation. >> And you're also just this week been called a Certified Global Partner of ServiceNow so explain how that works. >> Our relationship with ServiceNow goes back six years. Today I think the ServiceNow line of business, which is under the cloud services, is one of the fastest-growing business unit for us. The key thing in any platform such as ServiceNow is the human intellectual capital. That is where we give a lot of importance. While technology is created by ServiceNow, someone has to go execute and implement the technology. So that's where we spent time and started hiring people, re-skilling the people, and then getting certified across different facets of what ServiceNow recommends as a part of their education system. So today we have about 850 plus certified people across the globe and we also do the delivery across our global operation centers, we also call it as RDCs, Regional Delivery Centers, we have one in Budapest, one in Phoenix, and one in Buenos Aires. So all these three centers caters to different service areas of ServiceNow. As a part of this RDC we're also adding, creating an experience zone, a ServiceNow experience zone, so when client walks in they not only see our associates working on projects, but they also get the panoramic view or the panoramic experience of how ServiceNow orchestration happens, how automation happens, how HR module works, and things like that. Because of the people we have, in terms of re-skilling and certification, we are being measured as the best overall global partner award yesterday in Knowledge18. >> Well congratulations. When you were searching for these people, as you said you had to so a lot of hiring, what were the kind of skills you were looking for when you were trying to find the top talent? >> If you look at Cognizant as a 265,000 plus organization we know the art of hiring people. >> And it is an art, it absolutely is an art. >> So our approach is, one we go to the campus, hire the fresh grads in all of the campus. If you look at of late the kids that are coming out of the campus, they are pretty smart in the sense of they come with the latest digital technologies, artificial intelligence, machine learning, natural language processing understanding, and things like that. So we take them and then we, within 30 days, we completely format them for ServiceNow. This is one approach. The second approach is we go to the lateral market and we hire and we bring them up to speed on the ServiceNow-related technologies. The third option is, with 265,000 people we have, the raw material is inside Cognizant, so we take people from other business units, other domain and then try to format them and to do that. But of late what we have started, especially within the U.S. footprint, is we go to all the community colleges and also we go to all the veteran's associations, those type of organizations and we hire them. So if you look at our Phoenix RDC, I'm proud to say that it is a woman-powered delivery center, when it comes to ServiceNow, with a pretty good mix of veterans. So these are the different approaches we use to hire people towards the ServiceNow practice. >> And they've been successful. >> They have been successful and if you look at how long can they continue in ServiceNow 'til they retire? No, so we do job rotation, every three years we give them opportunity. I have a unique advantage since I run the cloud services. I always rotate my people from ServiceNow to go to Amazon or to Microsoft as you're in different technologies every 24 to 36 months we do the job rotation. In that way I think I'm managing my retention well. >> So we know that the role of IT is really changing in so many organizations around the world. What are you hearing from customers, what are their pain points? What are the challenges that you're trying to solve? >> I think that's a great question now, Rebecca. We are in a very interesting time. The customers have a tremendous problem in their hand because they need to stay relevant in their business because business models are changing and if you look at for a retailer, the competition is not from the same industry. Similar for a pharmaceutical company, the competition is not from the same pharma industry. Everybody wanted to know, a pharma company wanted to know why Google is hiring 100 physicians. So the disruption is going to happen not in your industry, outside your industry. So that is the biggest challenge. The second thing is they need to continue to reinvent their business model. They cannot operate. We are hearing many stories like a lot of regional stores are closing because they didn't stay relevant to the business, to the customers. The third thing if you look at, let's take healthcare industry. Typically patients expect, historically, they were asked to maintain their prescription and medical records, but today in the new age patients are expecting the hospitals to manage everything because keep the data and intelligently apply the data because data is the new fuel or new oxygen, whatever you want to call it. >> Fuel, oxygen, one of those analogies. >> Data is going to play a critical role for any business. So every business is looking for how do I take the data and apply it intelligently? In the process how do I elevate experience? When I say experience it's both customer experience and also employee experience. So that's why if we look at, going back to the purpose of ServiceNow when John Donahoe was presenting in the keynote, he said, "We are in the world to make people's work better." The work is basically the experience. So we know about all the digital, every client is adopting the digital because of the advent of the cloud and the technologies around the AI, machine learning, et cetera, everybody is having a clear chatter of the digital transformation chatter as a part of their enterprises. So that is where we, companies like Cognizant, we go to them and then help them in truly being digital, how do you get there. That is where technologies like ServiceNow plays a critical role. >> And so it is the mission of ServiceNow, and it sounds like also the mission of Cognizant, to make the world of work work better for people. So give me some examples of ways that you are creatively solving employee headaches. How are you making the world of work better? >> I'll give a couple of examples. To start with, for a leading manufacturing company there are a lot of equipment dispersed across the field so we use IOT technology, sensors, and we collect the data, and the data gets analyzed and then we give a dashboard to our customers. When I say customers, the chief customer support officer, he or she can look at the dashboard and send the technician for evaluate it Imagine if the cloud was not there and moreover we use ServiceNow as a platform to do all the orchestration. If the cloud was not there, if products like ServiceNow was not there, this could have been a humongous task, but we are helping the problem for the customer. Today, with one click, the chief customer support officer can know which machine is giving which problem, accordingly dispatch a technician. This is one example. The second example is we are helping some agricultural companies where, in fact this came out during our hackathon, which I'll talk about you a little bit later, all this agricultural farms, the lands are there. When you wanted to grow something, you also need to know everyday what is the moisture of the soil, what is the temperature, et cetera. So we apply IOT technology and then collect the data and use ServiceNow dashboard to give it back to the customer. These are all real-time problems the customers are facing. There are so many examples, but if you look at most of the solutions and the outcomes what we give to the customer, it's all triggered by our innovation. So we are the only company, I can proudly say, conducted three hackathons with ServiceNow. When I say hackathon, all the people are put under one room and ideas were given and end of the day you'll get 100 plus ideas. Recently we did, about a month back, we did a global hackathon. First time we wanted to try India, three continents, seven cities, India, Budapest, Phoenix, 20 hours of continuous time. We generated about 115 ideas. Out of the 115 ideas, I think we are going to come with certain ideas and then put that back into ServiceNow app store. We have close to six plus apps already running on the ServiceNow store, now our plan for the next six months is to add another about 10 plus apps onto the ServiceNow store. >> That is the other questions that that begs. Are hackathons the best way in your mind to spark energy and innovation and creativity? >> Especially with the millennials. The millennials, yes definitely because they don't want to very mundane, routine work. They want a challenge, they are asking for challenge. So this hackathon is one of the ways to keep them happy. Because the future of workforce is changing with millennials coming in. And the jobs, they're also expecting, even in my team people wanted a change every 12 months. While we need to address our customers, we also need to take care of their expectations also. >> Let's think about the future a little bit now. What do you see your customers' future demands and where do you see Cognizant and ServiceNow being able to provide solutions to the problems they don't even know they're having. >> Right, right. So digital is the heartbeat. When I say digital is the heartbeat, the outcome is all about experience because if someone asks me, digital is not technology. Digital is all about experience so in order to give that experience, customers wanted multiple technologies, they wanted to reinvent, rewire, rethink their business models. So that is where we wanted to go as a Cognizant. For example, if you take ServiceNow, if you're taking that platform to them, how can I digitize your enterprise process, digitize your entire workflow and create automation, et cetera and then bring a collaborative work environment within your ecosystem. So this is what they are expecting. Nobody wants non-value add, mundane task, everything they want to get operated in an automation manner. That is where we are helping, basically anything that changes the experience, or pave a new way to the experience, that is where we at Cognizant we are constantly reinvesting on people, process, technology, and then taking that back to our customers. >> That's a great note to end on. Raja, we'll look forward to seeing you again at Knowledge19 next year. >> Thank you, definitely. >> I'm Rebecca Knight, we will have more of theCUBE's live coverage of ServiceNow Knowledge18 in just a little bit.

>> 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. I'm your hose, Rebecca Knight, along with my cohost, Dave Vellante. We're joined by Josh Kahn. He is the General Manager of Platforms, ServiceNow. Thanks so much for coming on theCUBE again. >> Yeah, really excited to be here. Thanks for being here and thanks for being part of our event. >> Thank you. >> You're welcome. >> It's been a lot of fun. >> Newly minted. >> Yeah that's right. (laughing) >> Yes, congrats on the recent promotion. So tell us about your new role. >> Yeah, so I run the Platform Business Unit. We use the word platform a lot of different ways at ServiceNow and I think we're trying to get a little bit more clear about that. On the one hand, our platform is the core foundation that all of our applications and all of our customers' applications are built on. It's also a way that independent software vendors and our customers can build their own applications. So what my group is trying to do is really be more thoughtful and structured about how we go about gathering those requirements from our customers and our independent software vendor partners and make sure we're bringing the products to market that meet their needs, and that we're doing all of the things across the board as a company we need to do to make them successful because there's a lot that goes into long-term customer success from the sales teams to the solutions consultants to professional services and the Customer Success Management Team. We're bringing all those things to make sure that, as our customers are building applications, we're helping them be successful. >> I remember we had Erik Brynjolfsson and Andy McAfee on and they were making a point. This was years ago when they wrote their, I think, most recent book. They were saying platforms beat products, I'm like, okay, what do you mean? Look, you can make a great living doing products, but we are entering a platform era. It reminds me of the old Scott McNealy, car dealers versus car makers. If you want to be a car maker in this day and age, unfortunately Sun Microsystems never became that car maker, but you've got to have a platform. What's your perspective on all that? >> I totally agree. I think that every customer I talk to is looking for fewer, more strategic vendors and partners, and they're really saying, hey, be a strategic partner to me. Digital transformation is everywhere. Disruption is everywhere, and they're saying, hey, we need a few people we can really count on to help us build a strategy and execute on that strategy to get to the next place. Isolated, independent pieces of software tend to have a hard time becoming one of those strategic vendors, and I think the more you can be thought of as a platform, the more different kinds of workloads run on the same common shared infrastructure that provide shared data services, that can provide simple ways to get work across each other, the more value that you can bring and the more you can be thought of in that strategic partner realm. >> So you guys are a platform of platforms, we use that terminology a lot, and I think there's no question that for a lot of the C-level executives, particularly the CIOs that I talk to, you are becoming, ServiceNow is becoming a strategic platform provider. Who else is in there? Let's throw some... IBM, because of its huge services in certain industries, for sure, SAP because of its massive ERP estate. I mean, I don't know, Oracle, maybe, but it feels different, but maybe in some cases. Who do you see as your peers? >> The category of players that are in this space are really people that are investing big in the Cloud and investing big in intelligence and automation. And, I think, a lot of times automation can have kind of a negative connotation to it, but we really believe that automation can be used to serve people in the workplace and to make the world work better for people, not just make the world of work work without people. So when you look around at the people that are moving into that strategic realm, it's Cloud players, people who are providing either Cloud infrastructure or Cloud functions, a wide set of microservices capabilities, and people providing applications software as a service that start to cover a broader and broader portfolio. Clearly, Workday is thought of oftentimes as a strategic partner to their customers, because they provide a human capital management capability that's broader than just being a data repository. Salesforce is clearly a strategic partner to the sales and marketing organizations. The reality, though, is a lot of work that happens in the Enterprise cuts across these things, and so there's an opportunity for us to work with the Saleforces and the Workdays and the Googles and the Amazon Web Services of the world to help bring all of those things together. I think that what customers want is not only strategic technology providers, but strategic technology providers that will work with each other to solve customers' problems. >> John Donahoe on, I guess it was Tuesday, was saying we're very comfortable being that horizontal layer. We don't have to be the top layer, although I would observe that the more applications you develop, the more interesting the whole landscape becomes. >> Yeah, well, I think that's absolutely true. We're in the early stages of this, right? If you look at the amount of money that's spent in IT in the enterprise sector and then you start adding up all of these areas that I just mentioned, Cloud and SAS, it's still a very small amount of that overall spent. So clearly, big legacy technology vendors are incredibly relevant still today, but the challenge they'll have is making sure they stay relevant as this tide shifts to more Cloud, more intelligence, more automation in the workplace. >> I wonder if you could walk us through the process that you go through when you are working closely with customers, collaborating, trying to figure out what their problems are and solve them and then also solve the problems they don't even know they have, that you can provide solutions for. >> Actually, it's amazing, because in a lot of cases, the innovation, and this has been a phenomenal week, because I've gotten to meet with so many customers and see what they're doing. And what tends to happen with ServiceNow is the IT organization, oftentimes, it starts there. The IT organization brings it in for IT service management, and people start using that to request things that they need from IT, and they very quickly say, man, I have a process that would really benefit from exactly what you just did. Can you build my application on that? And so there starts to become this tidal wave of people asking the IT organization if they can start hosting applications on the platform. I'll give you one example from a company called Cox Automotive. Donna Woodruff, who's an innovation leader there and leads the ServiceNow platform team, found a process where they had a set of safety checks they do at all these remote sites as part of a car auctions, and it was a very spreadsheet-driven process that involved a lot of people doing manual checks, but it also had regulatory implications, insurance implications, and workplace happiness implications. And they were able to take this, put it on ServiceNow, and automate a lot of that process, make it faster, I should say digitize it, 'cause you still need the people going through and doing the checks, but were able to digitize it and make that person's job that much better. These applications are all over the place. They're in shared email inboxes, they're in Excel spreadsheets, they're in legacy applications. We don't actually have to go drive the innovation and the ideas. They end up coming to the ServiceNow platform owners and our customers. >> I'd like you to comment on some of the advantages of the platform and maybe some of the challenges that you face. When I think about enterprise software, I would generally characterize enterprise software as not a great user experience, oftentimes enterprise software products don't play well with other software products. They're highly complex. Oftentimes there's lots of customerization required, which means it's really hard to go from one state to another. Those are things that you generally don't suffer from. Are there others that give you advantages? And what are maybe some of the challenges that you face? >> I think it's true. Enterprise software, you used to have to train yourself to it. It's like, hey, we're going to roll out the new system. How are we going to train all the users? But you don't do that with the software we use in the consumer world. You download it from the app store and you start using it. If you can't figure it out, it's not going to go. >> You aint going to use it. >> Josh: Exactly right. So we put a lot of that thought process from the consumer world into our technology, but not just the technology we provide. We're trying to make it easier for our customers to then provide that onto their internal and external customers as well. Things like the Mobile Application Builder that we showed earlier today, that's coming in Madrid, it's an incredibly simple way to build a beautiful mobile application for almost anything in the workplace. And, again, as I was saying before, a lot of the ideas for applications come from people in the workplace. We've got to make it easy enough for them to not only to identify what the application potential is, but then build something that's amazing. What we're trying to do is put a lot of those design concepts, not just into the end products we sell, but into tools and technology that are part of the platform and the Platform Business Unit so that our customers can build something just like it in terms of experience, usability, simplicity, and power without having to have as many developers as we do. >> You and I have known each other for a number of years now, and just as we observed the other day, off camera, that you've been forced into a lot of challenges. I say forced, but welcomed a lot of challenges. >> I love it, I love it. >> All right, I mean, it's like, hey, I'll take that. No problem. You've had a variety of experiences at large companies. Things you've learned, opportunities ahead, maybe advice you'd give for others, like the hard stuff. >> I think one of the biggest things I've learned here, particularly at ServiceNow, is just the importance of staying focused on customers rather than competitors. I think a lot of times when you're in the business roles or strategy roles, you can really think a lot about who am I competing against, and you can forget that you really just need to solve the customer's problem as well as you possibly can. Be there for them when they need it. Have something that's compelling that addresses their needs, and stay laser-focused on what works for them, and at the end of the day you're got be successful. So that's a strategy we've really tried to take to heart at ServiceNow, is put the customers at the center of everything we do. We don't worry that much about competitors. They're out there and we know they're there and we study them, but it's really the customer that gets us up every morning. >> You know, it's interesting, I've had this, as well as John Furrier has, had this conversation with Andy Jassy a lot, and they're insanely focused on the customer where he says, even though he'll say, we get into a competitive situation, we'll take on anybody, but his point was both methods can work. Your former company, I would put into the very competitive, Oracle, I think, is the same way. Microsoft maybe used to me, maybe that's changing, but to a great extent would rip your face off if you were a competitor. My question is this: Is the efficacy of the head-to-head, competitive drive as effective as it used to be, and are we seeing a change toward a customer-centric success model? >> I think there's two things going on. I think one is once a market really kind of reaches maturity, the competitive dynamic really heats up. >> Dave: 'Cause you got to gain share. >> Yeah, you got to gain share. And today, in the Cloud world, in the intelligence world, there's just so much opportunity that you could just keep going for a long time before you even bump into people. I think in mature markets it's different, so I think a lot of times, partly at EMC, that was one of the dynamics we had is a very, very mature market on on-premise storage, and so you had to go head-to-head every time. But I think there's also the changing tenor of the world. People have a lot less, they don't care for that kind of dialogue as much anymore. They don't like it when you come in and talk bad about anybody else. So I think there's both dynamics at one, and the markets we're in, they're so new, they're growing so fast that it's not as important, but also, people don't care for it. I don't think it helps, if anything, sometimes it makes people wonder if they ought to be, oh, I didn't think about talking to them, maybe we should go call the competitor you just mentioned. (laughing) so, all that said, when you get into a fight, you got to fight hard and you got to come with the best stuff, so I think that's the reality. >> Dave: Great answer. >> That's a good note to end on. Thanks so much, Josh, for coming on theCUBE again. It's been a real pleasure having you here. >> All right. Thank you, I really appreciate it. >> I'm Rebecca Knight for Dave Vellante. We will have more from ServiceNow Knowledge 18 just after this. (techy 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.

>> 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.