>> Announcer: Live from Las Vegas, it's theCUBE! Covering Splunk .conf19. Brought to you by Splunk. >> Okay, welcome back, everyone. It's theCUBE's live coverage here in Las Vegas for Splunk's .conf 2019. It's the 10th year of .conf and we have two great guests, Rick Fitz, senior vice president, general manager of groups at Splunk, and Karthik Rau, vice president, area GM of SignalFx. The big story is SignalFx acquired by Splunk. Rick, you sponsored that. Guys, welcome to theCUBE, great to see you guys again. >> Yeah, great to be here, Jeff. >> Great to be here. >> They just broke a world record for the bike on intro there. >> Rick: They did. >> Pretty exciting what's going on here, a lot of records being broken. Splunk just continues to move the needle on capabilities, product, platform, brand messaging. SignalFx coming, we've been reporting on it since their founding, really in your wheelhouse, you guys bought them for a good number, a big number? >> Rick: Yup. >> Why? What's going on? Why the interest in SignalFx? >> You know, for a long time, we've been watching, I would say, perhaps, patiently, watching the market and the trends, and we were really waiting for a time where the new application architecture was really going to kind of start to take hold, where this cloud native trend that we've been seeing where people are building applications, where people are actually delivering applications to market in quite a different way, would finally get some escape velocity, and we've been watching patiently for that to occur. And as we saw that last year start to accelerate, really, we went out and surveyed the entire market and, of course, at the end of that survey, resulted in the acquisition of SignalFX, and also of Omnition. And so we bought those two companies, and have combined them to deliver on our vision of what we've trying to do for DevOps. >> Rick, you and I had a conversation in 2015 here in theCUBE at the .Conf at that time, you were on the IoT, you saw this wave, again, you've been patient. What about IT operations that's happening now that makes this so critical for Splunk? 'Cause IT operations, we know what automation's doing, machine learning toolkit, getting a lot of rave reviews. People love to automate things, but more apps are coming. What's the motivation now? What was the critical linchpin for you to make this happen? >> Yeah, exactly. What we're seeing is, in traditional IT operations is this world where developers build these monolithic applications, hand 'em off to operations, and they operate it. And then in the same conversation, you'll get handed over to somebody running, if you will, developer engineering or cloud engineering or they have various different levels for it but you're really dealing with an engineering organization and they're being tasked with digitization of their enterprise and very strategic investments are being made there, but they're also being asked to build things at high availability, high scalability, and highly reliable with lots of change. So it's kind of the competitive advantage of the enterprise. And as I was seeing that occur more and more I just saw the distance between IT operations and development, kind of, separate, and I said, wow, that's interesting 'cause it's being driven by this new application architecture, or cloud native architecture. And I didn't want to be left behind. I wanted to actually be able to build a bridge for IT operations into this future. And I think this future trend is something that's going to be lasting for the next 10, 15 to 20 years. So I think this is very strategic to Splunk and very important for us to get right for the long-term, but I also see my role as part of Splunk, is to make sure that we take IT operations into this new world, because these new worlds, and if you will, the existing worlds, those operating models are quite different. >> John: Yeah. >> They operate differently. They think differently. They, in one they own their code, they're on call. In another one they're waiting for something to fix so then they try to, you know, we're waiting for something to break and then they fix it. So we're trying to actually help enterprises across that entire gambit with some pattern. >> And certainly with security the theme here, at this event, this is a security event too, on top of everything right? So, this is what it's turned into. >> Rick: That's right. >> Data is driving a lot of security polemetry and data's important for security, so. >> Yeah. >> I mean, that's operations. >> That's right. And your apps have to be secured, in both worlds. >> Yeah. >> So, I think Splunk has a role to play in helping in this transformation for all of IT as it becomes much more developer centric. And, of course, as I said, that is really one of the strategic reasons why we led the acquisition Citadel FX in Omni. >> Well, we're looking forward to seeing how you handle the acquisition, of course, we were fans of the deal. Karthik, I got to ask you, every single company in observability space is going public. So, why, you could have gone public, why Splunk? Why sell to these guys? What made it a fit for you? >> Well, ultimately, we look at a number of things, or we looked at a number of things in making the decision and we wouldn't have done this with anyone other than Splunk. Just a strategic fit was just so great on so many levels. You know, when we started the company our goal was to solve the modern dream observability challenges for anyone building a cloud native application, and we knew that was going to be a long road. They're going to be a lot of things we needed to invest in and develop. And so we started on the metric side. We layered on distributive tracing and we took a philosophy that we wanted to build an enterprise great, scalable, robust, feature-rich set of technologies. We weren't in the market to build, you know, SMB, kind of very simple, limited type of a product. We're really focused on the larger, more sophisticated customers. And so, as we looked at continuing to extend our portfolio, one of the things that we needed to invest in was in the logging space because, when you think about the trifecta of monitoring data types that you need, you know, logging is a big part of it. And we knew that we wouldn't be able to go and build a logging system from the ground up that would be robust enough to support enterprise use cases, and so we started a partnership conversation with Rick and team, and it just became very clear through that process that there was a tremendous amount of product fit, vision fit, culture fit, values fit. Just everything was so aligned that we realized that we could do so much more together as one company. So, we rounded out the solution portfolio, or the technology portfolio quite substantially over night by becoming a part of Splunk and then the other part of it too is, you know, we saw as we were dealing with customers, we were dealing mostly with native cloud native, cloud first customers. But a lot of the customers that we were, that were prospects, that we were talking too were more traditional enterprises who were not 100% of the way there yet. Some of them weren't even 10% of the way there yet. And it was difficult for us to really engage in conversations early with them, to help them understand what does it mean to shift from traditional IT ops to DevOps because we didn't have a relationship with them on the IT ops side of things, and so, the other thing that we were really excited about being a part of Splunk is we can be a part of that conversation from the very beginning when the customer, you know, maybe they're just beginning to think about it and they don't have the urgency of doing it today but we can be there with them from the very beginning and help them get there on their timelines. >> This is an interesting discussion point because what you're highlighting and we've had conversations about your company about being a platform, not just a tool. So, you're getting at is that as you guys started getting more market share, you're platform needs, you needed logging. And meet the market leader, right here right? >> Yeah. >> That's right. >> So, you guys need them, so, partnering's hard when you're trying to build a platform. Now, you can have a platform that enables partners to build on top of it, but components of a full baked platform, it's hard to partner. Rick, what's your thoughts and reaction to that, because that's my statement, but do you agree with it? It's hard to partner in the platform, it's core competency. Look it, he struggled with logging 'cause he'd have to build out a boat load of new investment and you guys are already, just to catch up. >> Yeah, that's right. And I think the thing that needs to be stated here is in your large scale enterprises, they are truly looking for the best to breed, highly scalable environments, right, that we're talking about here. And, they want, they encouraged us to take a step in this direction. It was an obvious choice and I think that has been the reaction that we've kind of heard universally. Like, this is a great idea. This is a really strategic thing that you've Splunk folks have actually done. And so that's really encouraging and so I would agree with you. Partnering, and we were talking through it, but as we were talking, it's like, this is better not to partner in this case. >> John: Better together. >> One of the things that's really important is that logs, you know, that's what were all about. We've actually spent a lot of time in trying to invest into this streaming world of dealing with things in stream. And these guys have perfected it for Metrix, which is, that's the strategic aspect of this. And then combining what they had already done with Tracing, with Omnition, it just doubles down on this future of this application architecture that I mentioned. >> Some MMAs have a couple flavors to them. You buy a company, you throw them under a general manager, an executive, they kind of live there. Founders lead, you get the core tech, some team. The other scenario is full team comes in, hits the ground running. They're building out. They're going to own the build-out. It's seems to me based upon the Omnition acquisition, you're giving Karthik and team, kind of some reign here. >> Rick: Yeah. >> To go build this out. Is that how you guys see it? >> Yeah, that's exactly right. And so, both Speros and Karthik report to me. I'm their onboarding czar, as it were. But were really what we're going to focus on is customer success and achieving our business case. And really capitalizing on the opportunity. These guys were running a hundred miles an hour and we got to get them to got a thousand miles and we're only going to make adjustments to the business case in order to achieve that. And that's what we're here to do is to shepherd this organization in its entirety to the greatness that I think we all see out there. We're going to do that in a very careful, cautious way. >> Karthik, Omnition is a acquisition stealth company. Kind of a commitment saying hey, here's some more horsepower. Talk about how that happened and what's the purpose behind that acquisition. >> Well, I can let Rick talk to how it happened. And I'll talk about the other plans, so. >> When we surveyed the market we actually found that people have certain strengths. These guys that actually started their journey into tracing. I guess their first release was last December and so they've made some strides. And we kind of found Omnition through this discussion and we went like, oh my gosh. And we were in the process of doing the acquisition, doing due diligence. And we set everything on their roadmap is what these guys have done and vice versa. This is another combination that we can't pass up. This is, and what I told him the day we closed, I said, if you had the capital you would have done this, and he's like, yeah I would've. (chuckles) >> One of the things that Rick had asked me during our process was, what are the top three things that you would invest in if you had Slunk resources behind you. And I said Microservices APM, Microservices APM, Microservices APM, and so. >> And I got a big grin 'cause I obviously couldn't disclose what we doing but.. >> You know, the Omnition team, they're still in stealth so there's not a whole lot out there on the web about them. It's a phenomenal team. They've got people who are committers on some major open source projects, deeply technical, very, very shared philosophy to what we had a SignalFx in terms of open instrumentation, not having any proprietary lock in how you collect an instrument data. Very similar philosophies around leveraging the power of analytics and monitoring. And we just actually focused on different parts of the problem because we're both relatively early in this effort. So, we effectively doubled up the teams capacity over night and accelerated our roadmap by several quarters, so, I'm really excited about what we can do together with them. >> Well, are they the Bay area or they from.. >> They are Bay area base, yes. >> Okay cool. Well, I want to get your guys' thoughts on the keynote today. Feedback was authentic, kind of very cool keynote. As you guys bring this together, Rick, Karthik team, the optics, the messaging, what's the core positioning? What's, as you guys look at wholistic view now that you've invested in and are building out for customers, what's the posture? Take us through the keynote positioning. What's the marketplace, customer message around the future here? >> Yeah, I think it's really clear that what we're trying to do for IT organizations and application development organizations is build solutions that are modern and helpful to their core mission. And, by the way as I mentioned, in the world of new development, it's different, it's a different solution set. It's a different approach, a different operating model than it is in current IT operations. And so, one of the key messages we wanted to resonate is that we have the right solutions in both these worlds for you and that we're trying to develop an operating model of reactive response, a quick response, or engaging the right person in the problem, through our use of VictorOps for example, and using that as a way to be very intelligent about how we educate the people that are engaging in resolution process. So, we are trying to create a bridge to both worlds so that they can both be successful. And then under pit that, of course, with automation that can be leveraged in both worlds as well. So, that's what we're trying to convey. We know it's early days, by the way, these guys have been with the company for three weeks, so, it's kind of like, wow. >> Culture shock. >> Culture shock. >> Throw into deep water. Yeah, let's throw you out on stage in front of 11,000 people and see if you can swim and they did phenomenal, by the way. But that was kind of the key message and we're so excited because we just, we feel like were just in the first inning of perhaps a 19 or 20 inning game, 'cause I think it's going to be a lot of fun. >> Karthik: Yeah it is. >> And it's going to be close out here but we're really excited to be able to bring this to market. >> I mean, it's amazing coming in now three weeks in to see the breath of technology that's available and that's going platform. And, you know, what struck me today watching the keynote was just, you know it's such a feature rich and such a broad platform from everything in the, with the core, indexing capabilities that everyone's known about a long time. All of the ML, the additional capabilities we're going to bring in on the metric side. >> Yeah. >> And then the use cases just across every persona, there's just so much that we can do. >> What do you think of the culture? Are they run hard? They a playful company? They like to work hard, play hard? >> Yup. >> But they also are focused on real customer value. They got great engaged communities. What's your take of the culture so far? >> Yeah, absolutely. I mean culture fit was a really important part for us if we're going to be acquired by a company and be a part of a larger organization. Their kindred spirits I feel to the way we ran SignalFx. It's a very customer focused organization, great technology and engineering culture. And it's hard to find both, right? It feels like every organization is very important and very well respected. It's not like heavily skewed to it's just all about engineers, it's all about sales, it's very balanced culture and it's very customer focused. >> Guys, congratulations. Big deal. They don't see these kind of mega deals, they come along once in a while. It's a big bet. Good luck with everything, Rick. Thanks for coming on. Final question for both of you, what's the big take-a-way to take back to the office as you leave .Conf this week? What's going to resinate the most with you guys that you're going to take back as feedback? >> For me its, you know, I get my energies from customer conversations. We all do here at Splunk. If you're having a bad day, go talk to a customer and then they walk you and stop you in the hall and say, you know we really thank you again doing what you do. And so it just, I take back from this always that what we do matters and is important and just keep chugging along at it because we're doing some really good work out there that's really helping lives. And that's really important. >> John: That's good therapy. >> Yeah. >> When a bad day, talk to a customer. >> Go talk to a customer. >> I love you guys. (laughs) What's your take-a-way? >> I'm just, I'm thrilled at the number of customers who are coming up to me and saying how excited they are about the acquisition and working with us. You know, that's really re-affirming for me and it's just super exciting to see what we have ahead of us. >> You guys have a great tech following. A lot of tech leaders who knew you guys, knew you had good stuff so congratulations. Great Validation. >> Yup. Thank you. >> John: Good job >> Thank you John. >> Thanks you guys for coming on theCUBE. Great insight. Thanks for sharing all that data. (laughs) Data to everywhere here on theCUBE. I'm John Furrier, more coverage after this short break. (upbeat music)

>> live from London, England. It's the queue covering a ws summat. London twenty nineteen Brought to you by Amazon Web services >> Welcome back to London Summit Everybody, this is David Lamont and you watching the Cube, the leader in live tech coverage. We loved to go out to the events. We extract the signal from the noise. This is our one day coverage of a WS summit London, and it's packed house twelve thousand people here. The twenty six thousand people registered, which is just outstanding. Chris Bunches. Here's the general manager of a MIA for cloud reach, and he's joined by Mark Randy, whose CEO of signal FX. Gentlemen, welcome to the Cube. >> Thank you. >> Okay, let's start with signal effects. What's going on at the show? What's the buzz like? >> Very busy. Dozens deep. A lot of demonstrations feature in our massively scalable metrics platform and distributed tracing platform. So we've had a very good show. Good showing in London. >> Good. We're going to get into some of that. Chris, tell us about cloud reach. What you guys do? >> Sure. So Cloud Reach was founded in two thousand and nine. So quite a long time ago in the history of cloud confusing, at least >> was right after the Cloud City with >> quite a pure vision around helping complex organizations to adults public cloud computing technologies to doom or faster and better. That's all we've ever done. It's all we ever intend to do way work these days with enterprise organizations across the cloud lifecycle starting with adoption, helping them to understand White Cloud. How am I going to do this? How am I going to move my data center's into the cloud? How am I gonna build new services moving on through the life cycle? We help them with that. At that migration, we helped them to shut down their data centers on rebuild them in a WS. We helped build New Cloud native Services. Using the latest offerings from from Amazon and other cloud providers, we worked with him on Data analytics, helping them to generate insights from their data. Data flows in an ever faster pace from across the across the world into their organization. On all of that is wraps with an MSP manage service twenty four hours a day, seven days a week. >> So, Mark, I gotta ask you so back back in the day, the narrative was that the public law was going to kill every man, his service provider out there. It's been nothing but a tailwind for your business. Business is booming. What's what actually happened to give you that? Left >> on the signal effects side I look, the big trends are the move to the cloud number one. The second piece is just a change in the architecture's you know, the move to communities, the introduction for elastic burst e type use cases of things like Lambda and and that even more importantly, just the process of developing software movement from, you know, waterfall, Dad, agile and the Whole Dev ops movement in introduction of micro services. So that's it's It's just a lot of a lot of these ways been going on for quite some time, but they're really starting to hit the shore to shore right now, and I think it's been a great great opportunity for companies like Cloud Reach Tio to take advantage of were very excited by the partnership. >> Well, it has. It has ripple effects on the rest of the business, doesn't it? I was saying earlier in a segment that it used to be the business of No, we can't do that because and now you look around this audience, it's all doers and builders, and, you know, it's it's actually great marketing because it works, doesn't it? So clouded has been a fundamental component of >> Yeah, I mean, our whole businesses around making t v enabler helping businesses to innovate. Once upon a time, the message was all around. Cost saving is the reason to move to the cloud, and there's still an element of that. Nobody wants to pay Mohr, but actually, increasingly, what we're seeing is organizations moving to Amazon because they want the agility, they want to move faster. And they don't want to be the the culture of no and have a process that takes six months to deliver a new service to the business. They want to be out of deliver things in hours or minutes in the some cases, and they want to do so quickly on they want to innovate, a pace that they've never been able to before, partly from a competitive threat perspective and partly from a market opportunity. There's so much, but we can deliver to customers if we put our minds to it and use the primitives, the Amazon providers, as building blocks to enable new >> services. You know where you live in the Bay Area. I spent a lot of time out there, were based in Palo Alto and use a vortex that unique that sometimes I think way think that that's where all the action is. You come to London and you see all these startups. Every business is becoming a software company. And you know, we don't in Silicon Valley in America have a monopoly on innovation anymore, >> not even close. So there's a lot of great innovation all over Europe. Uh, here in the U K. All the way to Northern Europe, Doc, uh, Paris Way we see it across the board. So >> So what are people doing? They building new cloud native APS in the public loud. Are they doing a lifted shift and trying to get more agility out of those traditional APs? What's the landscape? Looks like? >> It's ah, combination of the two. The startup organizations, of course, is starting with no legacy. There's nothing to my great and they are building cloud native and they're doing so far, >> we have no I d >> no. Yeah, technically, before nine years, four hundred on eBay test migrations. But that's the only hardware for the museum. Exactly the larger organizations. They have huge volumes of legacy infrastructure, some of it dating back to the seventies. In the case of financial institutions or public sector, then all of that is an opportunity to modernize, and not just for the agility and innovation but in some cases just to reduce risk. There is huge business risk in these old, untouched, dusty, cobweb ridden servers that nobody understands anymore. And there's a really opportunity to move that to the public cloud, reduce and remove that risk. And while you're there, take advantage of the new technologies and innovative deliver a better service to you or in consumer whoever that may be >> so prik uber, Netease and micro services, even though containers have been around for a while. But the modern doctors ascendancy. You know why? To K was the year of the decade of modernization. It was like four or five years leading up to y two K at some I T shop said, Okay, we're going to modernize, but but none of these micro services existed, so it really was. It was about dates, maybe some application portfolio rationalization. What's different today that I could take those apse that were written in the seventies with a lot of custom code? How am I able to modernize, though >> I think it's the maturity of the services. You look at something a platform like Amazon. There's one hundred twenty hundred thirty, or Mohr. It grows almost every week. Building blocks primitives, the Amazon are providing, and its a rating on it. At an incredible rate on DH, there's almost a service for everything. And when you think they've run out of services to introduce, a new services is created. And, you know, we talked about micro services. They introduced Lambda back in two thousand fourteen, which was there. Serve Elice environment driving event based micro services architectures, and it's ahead of the game. It's ahead of the curve. It's causing people to think very differently about what's even possible from a night perspective. And there's no way. In most organizations, you, Khun, build that kind of infrastructure on that kind of platform that is build and costs you on a Microsoft microsecond basis. I mean, it's it's >> incredible. It was amazing. I remember the first virtual machine. It would be anywhere that I saw spun up like, Wow, this is going to change the world. And then the cloud comes along like a while. This is going to change the world. And now survivalists. I don't even have to deploy servers anymore. It's side by Amazon >> way. See this? Even even in some of the more traditional organizations we we worked with in the UK and in Germany and France and elsewhere, you don't even need to be looking at service. Just the ability toe programmatically spin up a virtual machine without a human touching anything. That's incredible to some organizations, right? They're used to it, taking six months to provision of infrastructure to deploy an application. Now they can click a button, and by the time they've made a cup of coffee, it's it's up and running, and it's It changes the way people >> think So much Talk about Cloud Region signal effects. What's the partnership like between you two and what's your partnership like with eight of us? >> Um, on the cloud reach side, we went through an extensive evaluation by cloud reach, and over several months they evaluated all the alternatives on the market and ended up selecting us to be their standard for their many service provider business. It's We're super excited about that. On the go for it, we're rolling that out with them there. Current customer based on DH. We were hoping that, uh, using signal effects, that cloud reach that will help them be the point of spear on all cloud native. You know, in their marketplaces, they go pursue other customers, so it's pretty excited about. >> So it's not a pressure release deal, not a Barney deal. Like we like to say that >> they're up there, They're a paying customer. And, you know, I made a big bet on signal effects going forward. >> So why the choice to go with manage service provider? You have You could have built it yourself and take us through that. >> Yeah. I mean, the nature of the business we're in is very much predicated on the fact that you don't build it yourself. You know, you look at the market and if somebody is already doing it well and provides excellent service as a commodity, you use it. We've been in the MSP space since round about twenty ten very soon after the the company was was founded, and we know it pretty well. We have a large customer base. We are one of the top tier MSP for along the major cloud vendors in the world, lots of large organizations. However, as we look to refresh our tooling with a view on Maura, an application centric approach, which is what all of our customers want and expect a CZ we look to micro services and the very latest platforms and technologies he's being released by the hyper scale cloud vendors. We recognize the need for a newer, more modern tooling on DH. After a thorough evaluation, a CZ mark says signal effects came out on top. Why is that? Partly it's the cloud native element. You know, some of that sounds a little bit like a marketing buzzword, but in reality, what it means is the company was founded relatively recently and as a result, was geared towards modern technology. So out of the box they support doctor, they support containers, they understand, and they're orchestrated around micro services. It deals with scale on volume, and we we want to low test things in a big way. We only serve large scale and surprise customers. And they are going to throw tens of thousands of containers on micro services at their tooling, and it has to be able to track tto handle that massive volume of transactions. >> It's a complicated picture, actually. You know, sometimes micro services aren't so micro. Yes, and you've got to secure all these containers. Got spinning up of'Em is easy. >> Well, >> you see multiples. So how do you guys deal with that? I mean, you're obviously experts at it, but But give us the sales pitch >> on. Yeah. So I think you kind of you covered it earlier with, You know, all these great new technology with introduction of micro services. I mean, developers in our writing it the running it, they're pushing code directly into production environment. You know, you went from releasing code once or twice a year, a few years back now toe several releases and you know your people lifting shift. They're starting with a few micro services. Someone we're getting up into the hundreds, even thousands in our most advanced deployments. It it it ends up being worth a situation Where Alright, all this innovation is great, but it also introduces a ton of complexity. And based on the way we've architect of our system, really time streaming like within seconds, you're going to need to see it, to react to it, whatever the use cases. And that's what differentiates signal FX is this massively scalable streaming architect we built for from a Metrix platform standpoint and then from an Eastern West standpoint for your from your custom code are Micro Services, a PM solution on top of that to go help measure what those transactions air how they're performing across the entire complex environment. So we feel like we're just purpose built for today to help in the lift and shift crowd and or for the more advanced customers, they're intothe point dozens, if not hundreds of micro services. >> Tell me more about this metrics platform you mentioned a couple times. What is that all about? >> Well, we start with essentially, you know, the three big pillars are logs, metrics and eight p. M. And you know, our company was found it. We have deep roots. Back in the two thousand seven ranges, our founders were you know, they built the monitoring stack at Facebook and so had several years, you know, kind of earning and learning that secret. You know, in the early days, they didn't call it Dev Ops. Back then they called it move fast, break things, didn't call >> it. They didn't call it >> a micro services. I mean, and then twenty, twenty, thirteen, early, two thousand fourteen. That's when the founders got together and started. The company is also the same time frame. Doctor came out. Were just purpose built for this for this environment. >> Final thoughts. Yeah. Thie event where you guys were headed. Maybe little road map, if you could. >> The event has been incredible. Every year it gets a little bit bigger. It gets a little bit more exciting. There's, ah, bigger range of organizations, different industries. And it changes a little bit over time. This year, financial services has been particularly of interest for us, but this event is a lot of large large banks, investment houses, those kind of companies here on DH. That's been really exciting for us. I think trend I'm most excited about is really around machine learning. Amazon talked about it in the keynote this morning and democratization of very, very complex technology bring it to the masses is a as a manage service that can be provisioned in minutes and seconds. And to me that something that's that's really exciting and using the signal FX platform, we're now in a position to provide manage service wrappers around the machine learning based solutions that we build for our >> customers. Yeah, the financial services. Interesting. Back in two thousand nine when you started, a lot of the banks in New York thought they could scale and compete essentially with KWS >> world. The world changes very quickly. Absolutely >> final thoughts for you. >> Yeah, I think they think we're moving past that point. You know, even the later adopters. I think we're moving past that point and look at that name there getting pressure from the startup community, whether it's intact or or any industry's gonna have that type of pressure. You talked about that y two k moment. I think in any vertical out there, it's that you know those cloud native type companies the companies are becoming software companies were going toe transform yourself or you're going to have some pressure from the start up going forward. We're >> guys. I'm thrilled that you could make time to come in the queue. Thank you. Thank you. Thanks for having us. All right. Keep it right there. But it is. Dave Alonso will be back with our next guests right after this short break. You watching the Cube from London? Eight of US Summit right back.

>> Live from Las Vegas. It's the cute covering knowledge sixteen Brought to you by service. Now here your host, Dave, Alon and Jeffrey. >> Welcome back to knowledge. Sixteen. Everybody, This is the Cube, Cuba Silicon Angles Flagship program. We go out to the events and we extract the signal from the noise We're here. This is Day two for us. Will be going wall to wall for three days. That knowledge sixteen hashtag No. Sixteen. Chris Beatty is Here's the CEO. Relatively new CEO. It's service now. Chris, Thanks for coming on the Cube. It's going to be here. So you are hosting the CEO Decisions event Yesterday >> I was an event. We had a lot of CEOs, a lot of energy in the room, you know, one of the main main themes. Wass. You know, technology change happens all the time, but really one of the leadership challenge is right and what courage is required of leaders to really break through the status quo and get to that next level. We talked a lot about the importance of getting the right culture right within it, and that's a and what it really means to have a service mindset right throughout the enterprise. And as our vocabulary becomes the same inside it and across all the departments, right, as a leader, how do you enact that change so really a lot about the human element, as opposed to, you know, the technology part of it? >> Yes. So a lot of discussions over the past several service now knowledge comes in one year, Frank said. He sort of threw down the gauntlet and CEOs. They have to be business leaders. No longer Is that just a technology roll? Others have come on. The Cuban said. Well, you know, CEOs role. They gotta choose. They're gonna choose a technical path or a business path or data path. Even Chief Date officer. What do you thoughts on the >> I mean, >> there's a >> lot of press about the role. The CEO, right? And if you go back years and anything from Seo's dead, it is a relevant right. It's going the way of the dodo bird. Teo CEOs Morse strategic than ever, disrupting and creating new business models. I think the answer is somewhere in between, and it's probably changes, you know, depending on the day of the week. Right. So CEOs have a base job which is running, you know, the technology infrastructure of any company running the applications. But I do agree with Frank in terms of CEOs up, leveling their responsibilities and taking on the responsibility for more. I could tell you what I take responsibility for, right And yes, it's I t. But the overall velocity of our business. How fast can we run with everything Hiring employees, closing our books. Every single process in the company is powered by an IT platform, right? And so high tea is really in a unique position, and it has a bird's eye view of the organization to really help. Dr Velocity and Velocity is everything. How can you outflank your competition? The other thing I see think CEOs need to take responsibility for is maximizing the productivity of every single employee in the company. Right now, if you take that on, you start to look at things a little bit differently. It's not about projects, it's really about outcomes. And you know what measurable things are we delivering? And last and certainly not least, I think, the responsibility for customer experiences again. Customer experiences are powered by platform CEOs have the ability that influence every single one of those experiences and make it great and more and more as we look towards the future with things like automated bots and augmented reality customer. Your actions are going to become human to platform, and that's going to increase its relevance in that >> so and thinking about CIA imperatives of, you know, the bromide of eighty percent of the dollars we spend is on keeping the lights on twenty percent of innovation of That's a real number, No, but nobody seems to argue with it. Yeah, you >> hear that number a lot, but I think the good organizations actually do measure that number so they actually they will know what their number is and that service. Now we've done a lot of work, so our ratio is actually sixty percent run the business forty percent on innovation, and we're driving that down. So it's uneven. Fifty fifty split. I think that where you don't want to go is spending too little time on what I call the utility computing because that's the fabric that gets work done right. It's everything from networking and email and all those basic services you still need to have. Those aren't going anywhere collaboration services. >> I'd like to split it up into a little finer grain. I wonder if you could comment run the business grow the business transformed the business. Now maybe you're maybe you're always transforming your business, I don't know. But in >> terms of have to be >> in terms of but specific spending on initiatives to transform the business is that a reasonable, reasonable way to look at your portfolio was >> absolutely right. And I think if you're not doing things that transform your business, you're you're not acting with enough urgency. So my view on it is identify the big rocks right that we need to knock down, make sure we make room for those, even if it's at the cost of the grow or run part of the budget. Because if you're not getting those things done again, back to that getting left behind things were moving too quick. You got to keep pace. So make room for the transformation somehow, and that means squeezing every bit of automation that you can. How did the run part of the business, which is something I've used service now for in my past. I used to be a customer. I bought the platform twice over before I joined the company, and we did it a lot, and I'm doing it now, now that I'm at service now, >> that's one of Frank's requirements to become a CEO. I think. How >> do you >> measure that? That split. You said you're sixty today. Like to be a fifty, a lot of CEOs going. I have no idea how to measure that. I look at my projects are, but guess how do you do it? >> And it's tough we actually use. Not surprisingly, are Ownit Financial Management module to do that. And so technology's technology would we take all of our G L data and we map it to a taxonomy of business services in certain business services we know are not transformative, but they're a run part of the business, and we do that mapping once than every month. We can look at actuals against it. We can look at our unit costs, but the other begin put his projects right, which is again also in our platform, so able to look at those two things together and data driven segmentation of our spend too many times I see ninety organizations. They do it as one time exercise as part of annual planning. Then they don't look at it again until the next year. Annual planning. But there's a lot of runway in between and decisions we're making every day, which you should be making based upon data. But instead you're doing on perhaps nine months ago information. >> So you essentially categorize the business process, the business services as run or Growler training farm and on an ongoing basis. >> Absolutely. And you do the math and the most dynamic part of it, his projects. So every one of our projects, when we look at our portfolio, we look at our project portfolio by business areas, the sales marketing HR finance so on. But then we also do categorize our portfolio by Is this just sort of keep the lights on activity? But it's a project we still need to dio, or is it growing the business in somewhere? Is it truly helping us transform the way we operate >> on reasonable people? Khun, sit down and agree on sort of what those look like and >> short, and we also adjust accordingly. Also, do a top down allocation of what percentage do we want to go into each bucket, and that's not the same for each area because different parts of our business are different maturity cars, different pressures on them. I wouldn't want to be very transfer meitiv with RGL, right? That's not an area I want to innovate on. But with our sales and marketing organization, absolutely. We want to be in high innovation. Hi, experimentation, whatever we can do to help dry. >> So that's a top down bottom up exercise with the executive team says Okay, >> sideways inputs from everywhere. You know, one of the things I think CEOs it is a coming to fund CEOs to dio is manage spend. But more importantly, where people spending their time right, that's inarguably a fixed costs. We have a set of people where they spending their time and are they spending their time on the right things? And if you get that right, the rest could get a lot easier. >> So Secretary Gates last night speaking Teo, you know, maybe roughly one hundred CEOs and your your CEO decisions Conference gave the thumbs down on consensus management, and I sense just a little bit of discomfort in the room because CEOs is a hard job. But you serve a lot of different masters if you will, and as well you've got heads of application development you got, you know, architects, you got the business to serve, and so there's a lot of consensus building. And so he got questions on How do you do it? What was your reaction to that? Your colleagues, You know, which >> one was your science? They asked him a question. And because he said Consensus building doesn't work into an outside person looking in, it would seem like by nature. Everything in the government is consensus oriented. He had a lot of examples actually, where he did things against his own team's conviction, but he felt like that change was necessary. So it's two things I think Dr Gates has dealt with monumental organizations, right? Texas A and M is the smallest organization of those the CIA and the D. O D. Department of Defense has three million people, so the scale is unlike what most enterprise CEOs are leaders have seen. So when when he talked about not being consensus oriented, he viewed it as a requirement, and I actually agree with him. If you're trying to disrupt the status quo, you can't be consensus oriented. I don't think you'LL move fast enough, and most of time you won't get very far. So I think it's incumbent upon leaders to be the ones that break the status quo and say, We've got to change. And But what? What Dr Gates did describe is that if people are informed about why, from their leader enough, even if they disagree, they can get on board. And he brought up numerous examples of where he had conversations with Congress and people within the d. O d about change. He wanted to drive, and even though they were very opposed to it, they got on board because they intellectually could understand why. And over time, he won over hearts and minds >> about your priorities. So you come in relatively new tow service now. So first of all first impressions, any any surprises, pleasant or unpleasant? And what your priorities. >> So coming in no surprises. I had had a lot of admiration for the company as a customer, and now that I'm here, I love the culture. The culture is very execution oriented, get stepped on, very customer focused. You know, when we when we talk about our go to market, we really talk a lot about what's going to be most important for our customers. What pressures are customers under what problems can be solved for him? It's really not a discussion around squeezing. You know, the maximum margin out of each customer, which I think is fantastic way drive pretty hard. But but we're also very team oriented culture, so that's been great. My priorities at service. Now, when I think about my six strategic themes that I'm focused on growth eyes hugely important that service now. Right now, it's a lot of time I spend, fails and marketing effectiveness and innovation. And what can we do to drive, help, drive growth from a night perspective? Working with our partner organization, helping our partners? I do business with us easier things like partner portals and things like that. Ah, velocity. I mentioned earlier driving velocity through every department at the Enterprise at service now and really maniacally going after business process automation. And the great thing is, we have a platform that makes it easy, right and Ivax full access to that platform. So self service catalogs and knowledge base, but really going department by department saying, How do we do that? Analytics. Obviously we want to continue to measure and improve our business. But we're starting to do a lot more with Predictive Analytics, right? And how can we use data to really predict next best actions in a variety of arenas? Uh, security is the gift that keeps on giving for every CEO never ending. It's >> just one of those things that'll Teo you got, you >> got, you got to accept it and then really focus on team, right? I think talent and team and culture hugely important. You could have the best plans, you know, on paper. But if you don't have the right talent and culture within your team to get it done, I don't think you're getting very far operational. Rigor is a big one for me and a Metrix based approach to managing our business and driving outcomes. So when I look at projects that I execute for the organization on time and on budget, that's fine. That's table stakes. Really. What I'm after is on benefit, right? Are we delivering the benefits that we said we were going to get? And last, but certainly not least a part of my job is now on now. What? What we mean by now? On now is me being our best in first customer. And that's a very strategic level, working with product management to help them, you know, with roadmap features and things like that that I think all of our CEO's would need also upgrading early. So hopefully we can iron out the bugs before all of our customers and then consuming our own your products and implement it internally, learning the lessons within our four walls that we can inform our fields they could help our customers. >> How about on benefit? What percentage of projects are on benefit? That's another one of these things. Seventy percent of the projects fail. It was a number one on the market research, even >> that even that's a problem that fail is identified as not being on time or on. But right now, I view that is interesting but not compelling. Are you delivering the outcome? And so we're early. I've only been at service now six months, but I know in the past, through rigor and even making it a metric that's important have gotten to an eighty five percent hit rate on benefit. Certainly you could do better, but some of the benefits we have realised, with our platform eighty three percent increase in productivity. Leveraging R R R R application, but examples outside of Ice D, where we've eliminated forty five hundred hours of work from our financial close by putting email and manual checklist on your platform. Eighty five percent reduction in time that we spent hours spent on on boarding new employees. I mean, the list goes on and on, but it's a requirement in my organisation. When you're doing a project, you gotta have an outcome and set an aspirational outcome. Because if you talk about ten percent improvement and anything, that's sort of easy to get it. If you tell yourself I need to get a seventy percent improvement, it forces you to really rethink things and think differently. And I think that's our job. Is leaders to set those set the bar really high and then sharp teams have the resources to go after it. >> So even if you're late and over budget, if you get that, I didn't say that I later over, but I was asked, so that's got three. So that's a that's a prerequisite to be on time and on budget, >> and we're not perfect, but our target is to be ninety five percent on time, ninety five percent on budget, knowing you're gonna have five percent, you know, wiggle room and ninety five percent on benefit. >> What is on. So when you talk to the board, switch topics about security, what should be on the CEO's checklist for communicating to the board about security? So So >> I think it's really about risk, right? And what risks do we think we have? What's the likelihood of those risks? And what's the plan to mitigate those risk? I don't think security should be talked about in a This is Donner. That's done because you're never really done right. It's risk management, and the bad guys continue to innovate faster than the good guys. So what's your current security posture? What's the state of your risks and how are you mitigating them and in what time frame you know the stuff about? You know, we have a deal. P. We have ideas. We have I ps. I mean, the list of acronyms is interesting at a more tactical level, but at a board level, I think it's really risk management. >> So I promise I wanted before Ortiz talk about mitigating risk. But is there a place for a narrative that says you'd only mitigate so much? You're going to get penetrated. It's how you respond absolutely is critical. And I can I, as the CEO can lead that response or whomever is the >> appropriate person? I think you you have to do everything you possibly can Teo secure your perimeter. But it's known that you are going to get breach. Just a fact. So then it really becomes How quickly can you identify the fact that you have anomalous activity happening on your network of data? How quickly can you mitigate it? And in the past, when I was at various sign JD issue, a lot of that was manual right You have. You know, you have a piece of bad malware on the Enterprise. You may even know what assets. Um, it's on where you think you know. Usually I think you know, and then you really find out later where it's gone. But tying those assets to risk meaning what? Business services, it is it my CFO's laptop? Or is it? You know, the the you know, the person in AP. So you treated a little bit differently. And is it the infrastructure that supports our badge reader? Or is it our ear piece system? Right, So that's the missing piece. And I do thank our security organization and our our business unit, Shawn, because they've actually built a solution. Help solve that where you can go from security incident. Piece of Alberto Asset to Business service to employ within minutes, which that used to be half a day, at least half a day is a long time in a security incident. >> Yeah, so there's that magic number of whatever it is two hundred five days to detect a penetration? Yes, very. Do you feel like your organization can compress that? Is that a viable metric to be focused on? >> It's certainly a viable metric to focus on in terms of knowledge, off again anomalous activity. I don't think we're near two hundred five days, but absolutely we are focused on it because we need to secure not only our data but the data that our customers in trust without trust, >> meaning you feel as though you could detect much in a much shorter time frame, and they have some interesting. You haven't depending >> on the wrist right? Without getting into a lot of the details. >> Yeah, So we'll see you. But implicit in that is that you have a sense of the value of your data, your assets your I p what you're saying you've got a pretty good visibility on. >> Is that right? Yeah, we d'Oh. We spent a lot of time making sure our security posture is solid again customers and trust us with their data. We take that responsibility very seriously. >> Not speaking for service now, but just general knowledge of your colleagues Do you feel as though the lack of ability to value data assets negatively affect people's ability? T appropriately spend resources >> on security? It's tough because one of the first things you need to do in security say, what do I need to secure first? And then you say, OK, well, that's my core. I pee. Where's my core I pee stored? I would argue that a lot of companies don't even know because it's scattered on different file shares and different servers, and then you don't know whether people are putting it on box or drop box or one of the many storied sites out there so keep key. First step, I think for a lot of organizations is really just getting a handle on where their I P is. >> Right? All right, Count Chris, Thank you very much. Appreciate you coming on last. Give the last word. Uh, knowledge sixteen for you. What's the kind of bumper sticker? Is the truck's pulling away from its been awesome. I mean, >> just talking with customers and fellow CEOs. You know, we're all in this journey together towards this service enabled enterprise, but it is about leadership and just courage to bust through this current status quo that were in within the enterprise to get to that next level of efficiency. >> Thanks a lot of fun. Well, congratulations on the new role on DH hosting at a hostel conference just caught the tail end of it. But it looked like great energy >> because a lot of >> had some really good discussions with some of your colleagues. So really great coming on. Thank you. Alright. Keep right there, buddy. That's the Cuba bit back from knowledge. Sixteen, Las Vegas. Right after this >> every once in a while.