>>from the bellagio Hotel >>in Las Vegas. >>It's the >>cube covering >>Ui Path forward. >>Four brought to >>you by Ui Path. >>Welcome back to Las Vegas. The cube is here. We've been here for two days covering Ui Path Forward for lisa martin here with David Monty. We've talked about automation and many industries. Now this segment is going to focus on automation and healthcare. We've got two guests joining us Jim Petrosea Cto of Blue Cross, Blue Shield and Gadget. Dhaliwal. The global C. I. O. Industry lead at you. I pass guys welcome to the program. Thank you. So let's start unpacking from the CTO level and the ceo level the agenda for automation. Jim let's start with you. What does that look like >>for us. It's actually pretty strategic and part of as we think about digital and what digital transformation means, it actually plays a pretty key role. Um There are a lot of processes that can be very manual within a big organization like Blue cross and Blue shield and to be able to streamline that and take away kind of what I would call the mundane work. Right? The the you know, going through a spreadsheet and then typing it into the screen, there are a lot of processes like that that are legacy. But what if you could take that away um and actually create a better work experience for the people that work there right? And and focus on higher value type uh type things and it's really key. And it really It goes down to our our business folks right? There are a lot of things we can drive with automation. We started a program um in 2019. Um that's been quite successful. We now have 250 box, we measure what we call annualized efficiency gains. So how much efficiency are we getting by these bots? So the bots are doing um this repetitive work that people would do. Um And what we're finding is, you know, we've got about $11 million in any wise efficiency gain through the process and we're just getting started. Um But we're all we're not stopping there too though, we're enabling citizen developers. So we're saying, hey business, if you want to automate, you know, parts of your job, we're gonna help you do that. So we've got about 60 people that were training. Um We run bad Ethan's where they come together and they actually create bots uh And it's really really creating some some impact and buzz in our business >>anywhere from your lens, where does automation fit within the C. I. O. S. Agenda? And how do you work together in unison with the C. T. O. To help roll this out across the enterprise? >>Yeah, no, definitely. And in fact as a part of introduction, I can actually share that. How I'm wearing a Ceo had within your path since I'm just joining join path and I'm actually now helping a client ceos in their automation strategy but I was a deputy ceo in my prior role at L. A. County where actually I ran the automation strategy. So if we look at from our organization perspective B complex as L. A County which is such a Federated organization. From a Ceo perspective, the way we look at the strategy is it's always driven by the business goals of the city or a county and we typically drive into three different areas. One is how we can transform our operational processes so that we can save the tax dollars. It's all about doing more with the less dollars. And then second is about how we can transform our residents experience because end of the day it is all about how we can improve the quality of life for our residents. So we've got 10 million people for L. A. County, the largest populous county in us. So it was an uphill task to serve that such a diverse population need and that the third area is about how to transform the new business models because as we are moving away from a government centric approach to the residents centric approach, you really need to come up with a new digital solutions. And Ceo is in the center of all these three elements when you look at it. So it's a very appear to us to keep keep improving your efficiency and then at a time keep adding the new digital solutions and that's where automation strategy is kind of a horizontal strategy which enables all these components. So what I hear from >>that is alignment with the business. Yeah. Right. Change management. Absolutely. That's like really fundamental and then see IOS this this agent of transformation uh you can see or she has a horizontal purview across the organization now now jim the cto role is the automation at blue cross blue shield lead by you or you there to make sure the technology plugs into your enterprise architecture. What's your shoulder? >>You know? Uh my my role is really to drive uh what I'll call technology enabled business change. Right. So I actually uh started our our automation journey uh at hc sc and I did that by partnering with our business. Um There was actually a lot of buzz around automation and there were actually some small pockets of it, none of it was enterprise scale. Um Right. And we really wanted to go big in this and and working with the business sponsors, they saw value in it. Um and we've you know, we've generated um a lot of uh efficiency, better quality of work because of it but but I very closely had a partner with our business, we have a committee that is lead of business folks that I facilitate. So I view my role as an enabler, um we have to communicate the change management pieces is huge. Uh the education just having a common vernacular on what is automation mean, Right, because everybody interpreted it differently um and then being able to do it at an enterprise scale is quite challenging. Um You know, I I really enjoyed um one of the key notes, I don't know if you had a chance to see shankar by Duncan from the hidden brain, right? But he talked a lot about the brain aspect and how do you get people to change? And and that's a large part of it. There's a lot about technology, but there's really a lot about being a change agent um and and really working very closely with your business, >>how does one measure? I'm hearing a lot time saved. Our saved. How does one measure that and quantify the dollar impact, which by the way, I'm on record as saying the soft dollars are way bigger. And but when you're talking to the, you know, the bottom line CFO and it's all about, you know, the cash flow, whatever is, how do you measure that? >>I can take it. So we, what we do is as we define these use cases right? We we go through an actual structure product process where we we gather them. Um we then rate them and we actually prioritize them based on those that are going to have the greatest impact. Um and we can tell based on, you know, what is the manual effort today. So we understand there are X number of people that do this X number of days and we think this body can take that some load off of them. Right? Um So we we go in with the business case. Um And then the Ui Path platform actually allows us to measure well, how much is that pot running? Right. So we can actually sit there and say, well we wanted that thing to run 10 hours a day and it did and it's generated this kind of efficiency because otherwise the human would have had to do that work. >>So the business case is kind of redeploying >>human. It really is is really maximizing human capital and make and and you know really using because the bots do repetitive stuff really well. They don't do higher level thinking and and we don't view it as replacing people, we view it as augmenting and actually making them more efficient and more effective at what, how do you get the dollars out of that? Well, a couple of ways. Right. And so one of the things we've we've done is we we create and measure the efficiency our business users and financed by the way is one of our bigger ones. And the CFO is one of the sponsors of the program, um can decide how to reinvest it in a lot of cases it is actually cost avoidance as we grow, literally being able to grow without adding staff. I mean that's very measurable. Um in some cases it is actually taking, you know cost out um in in certain cases, but a lot of times that's just through attrition, right? You don't back fill positions, you let it happen naturally. Um and and then there's just things that happen to your business that you have to respond to give you a great example, state of texas, um passes what's the equivalent of the no surprise attack. But they did it there before the federal government did it. Um but it requires a lot of processes to be put in place, because now you have providers and payers having to deal with disputes, right? It actually generates a boatload of work. And we thought there might be, you know, 5000 of these in the first year, where there were 21,000 in the first year. And so far this year we're doubling that amount, right. We were able to use automation to respond to that without having to add a bunch of stuff. If we had to add staff for that, it would have literally been, you know, maybe hundreds of people, right? And but now, you know, there's, you can clearly put a value on it and it's millions of dollars a year, that we would have otherwise had to expect. >>The reason I'm harping on this lease is because I've been through a lot of cycles, as you know, and after the dot com boom, the the cost avoidance meant not writing the check to the software company, right? And that's what nick Carr wrote this, i. T matter. And then, and then, you know, post the financial crisis, we've entered uh a decade plus of awareness on the impact of technology. And I wonder if it's, I think this, I think this the cycle is changing I think. And I wonder if you have an opinion here where people, I think organizations are going to look at Technology completely different than they did like in the early 2000s when it was just easy to cut. >>No, I think the other point I will add to it. I agree with the gym. So we typically look at our away but it doesn't always have to be the cost. Right? If you look from the outcomes of the value, there are other measures also right? If you look at the how automation was able to help in the Covid generate. It was never about costs at that time. It was about a human lives. So you always may not be able to quantify it what you look at. Okay. What how are we maximizing the value or what kind of situations where we are and where we may not even have a human power to do that work. And we are running against the time. It could be the compliance needs. I'll give example of our covid use case which was pretty big success uh within L. A. County we deployed bots for the covid contact tracing program. So we were actually interviewing all the people who were testing positive so that we actually can keep track of them and then bring back that data within our HR so that our criminologists actually can look at the trends and see how we are doing as a county as compared to other counties and nationally. And we were in the peak, we were interviewing about 5000 people a day And we had to process that data manually into our nature and we deployed 15 members to do that. And they were doing like about 600 interviews a day. So every day we had a backlog of 2500 interviews. So it is not about a cost saving or a dollar value here because nobody planned for these unplanned events and now we don't have a time and money to find more data entry operators and parts were able to actually clear up all the backlog. So the value which we were able to bring it is way beyond the cost element. >>I I believe that 100% and I've been fighting this battle for a long time and it's easier to fight now because we're in this economic cycle even despite the pandemic, but I think it can be quantified. I honestly believe it can be tied to the income statement or in the case of a public sector, it could be tied to the budget and the mission how that budget supports the mission of the company. But I really believe it. And and I've always said that those soft factors are dwarf the cost savings, but sometimes, you know, sometimes the CFO doesn't listen, you know, because he or she has to cut. I think automation could change that >>for public sector. We look at how we can do more about it. So it's because we don't look at bottom line, it's about the tax dollars, we have limited dollars, but how we can maximize the value which we are giving to residents, it is not about a profit for us. We look at the different lens when it comes to the commercial >>Side, it's similar for us. So as a as a health care pair, because we're a mutual right? Our members and we have 17 million of them are really the folks that own the company and we're very purpose driven. Our our purpose is to do everything in our power to stand by members in sickness and in health. So how do you get the highest quality, cost effective health care for them? So if automation allows you to be more effective and actually keep that cost down, that means you can cover more people and provide higher quality care to our members. So that's really the driver for mission driven, >>I was gonna ask you as a member as one of your 17 million members, what are some of the ways in which automation is benefiting me? >>Um you know, a number of different ways. First off, you know, um it lowers our administrative costs, right? So that means we can actually lower our rights as as we go out and and and work with folks? That's probably the the the the bottom line impact, but we're also automating processes uh to to make it easier for the member. Right? Uh the example I used earlier was the equivalent of no surprises. Right. How do we take the member out of the middle of this dispute between, you know, out of network providers and the payer and just make it go away. Right, and we take care of it. Um but that that creates potentially administrative burden on our side, but we want to keep their costs down and we do it efficiently using it. So there's a number of use cases that we've we've done across, you know, different parts of our business. We automate a lot of our customer service, right? When you call um there's bots in the background that are helping that that agent do their job. And what that means is you're on the show, you're on the phone a lot shorter of a period of time. And that agent can be more concise and more accurate in answering your question. >>So your employee experience is dramatically improved, as is the member experience? >>Yes, they go hand in hand. They do go hand, unhappy members means unhappy employees, 100% >>mentioned scale before, you said you can't scale in this particular, the departmental pockets. Talk about scale a little bit. I'm curious as to how important cloud is to scale. Is it not matter. Can you scale without cloud? What are the other dimensions of scale? >>Well, you know, especially with my CTO had, we're we're pushing very heavily to cloud. We view ourselves as a cloud first. We want to do things in a cloud versus our own data centers, partially because of the scale that it gives us. But because we're healthcare, we have to do it very securely. So. We are very meticulous about guarding our data, how we encrypt information um, not only in our data center but in the cloud and controlling the keys and having all the controls in place. You know, the C. So and I are probably the best friends right now in the company because we have to do it together and you have to take that that security mind set up front. Right cloud first. Put security first with it. Um, so we're moving what we can to the cloud because we think it's just going to give us better scale as we grow and better economics overall, >>Any thoughts on that? I think a similar thoughts but if we look from L. A. county because of the sheer volume itself because the data which we are talking about. We had 40 departments within the county. Each department is serving a different business purpose for the resident beit voting or B justice or being social services and all and the amount of data which we are generating for 10 million residents and the amount of duplicate asi which it comes out because it's a very government centering model. You have a different systems and they may not be talking to each other. The amount of diplomacy and identity delicacy which we are creating and as we are enabling the interoperability between these functions to give us seamless experience keeping security in mind so fully agree on that because the end of the day we have to ensure that customer guarantee but it's a sheer volume that as and when we are adding these data sets and the patient's data as well as the residents data and now we have started adding a machine data because we have deployed so many IOT solutions so the data which is coming from those machines, the logs and all its exponential so that's where the scale comes into picture and how we can ensure that we are future ready for the upscale which we need and that's where cloud ability definitely helps a lot. >>What do you mean by future ready? >>So if you look at from a future smart city or a smart community perspective, imagine when machines are everywhere machines and IOT solutions are deployed, beat even healthcare, your bad information, you're even patient information, everything is interconnected and amount of data which is getting generated in that your automobile they're going to start talking to entertainment or we have to potentially track a single resident might be going same person going to the justice or maybe same person might be having a mental health issues, A same person might be looking for a social services, how we're going to connect those dots and what all systems they are touching. So all that interconnections needs to happen. So that exponential increase of data is a future readiness, which I'm talking about. Are we future ready from a technology perspective? Are we future ready from the other ecosystem perspective and how and how we're gonna manage those situations? Uh, so those are the things which we >>look at it and it's a it's a multiplier to, right? We all have this influx of information and you need to figure out what to do with it. Right. This is where artificial intelligence, machine learning is so important. But you also have interoperability standards that are coming. So now we're we have this massive data that each of our organizations have. But now you have interoperability which is a good thing for the member saying now I need to be able to share that data. Yeah, I wanted to ask you about >>that because a lot of changes in health care, um, are meaningful use. You have to show that to get paid but the standards weren't mature. Right? And so now that's changing what role does automation play in facilitating those standards. >>So, you know, we're big, big supporters of the fire standard that's out there um to in order to be able to support the standards and and create a P. I. S. And and pull together the information. What what will happen sometimes in the background is there's actually um artificial intelligence, machine learning models that create algorithms right? The output of that though often has to be active. Now a person can do something with that information or a vodka. Right? So when you start taking the ideal of artificial intelligence and now you have a robotic process that can use that to pull together the information and assimilated in a way to make it higher quality. But now it's available. It's kind of in the background. You don't see it but it's there helping. >>What are some of the things that you see? I know we're out of time but I just have a couple more questions. Some of the things that you see here we are you I path forward for we're in person. This is a bold company that's growing very quickly. Some of the announcements that were made, what are what are some of your reaction to that? And how do you see it helping move blue crush blue shield forward even >>faster. Well you know a lot of the announcements in terms of some of the features that that they've added around their robotics processing are great right? The fact that they're in the cloud and and some of the capabilities and and and better ability to to support that the process mining is key. Right. In order for abouts to be effective, you have to understand your process and you just don't want to necessarily automate the bad practices. Right? So you want to take a look at those processes to figure out how you can automate things smartly. Um and some of their capabilities around that are very interesting. We're going to explore that quite a bit but but I think they're the ambition here is beyond robotics. Right. It's actually creating um you know, applications that actually are using bots in the background which is very intriguing and has a lot of potential potentially to drive even more digital transformation. This can really affect all of our workers and allow us to take digital solutions out to the market a lot faster >>and to see what was going to ask you, you are here for four weeks at UI Path, you got to meet a lot of your colleagues, which is great. But what about this company attracted you to leave your former role and come over here to the technology vendor side. >>Well, I think I was able to achieve the similar role within L. A. County, able to establish the automation practice and achieve the maturity, able to stand up things and I feel that this is the same practitioner activity which I can actually take it back to the other clients ceos because of one thing which I really like about your hypothesis. RP is just a small component of it. I really want to change that mindset that we have to start looking ui path as an end to end full automation enterprise solution and it is not only the business automation, it's the idea automation and it's a plus combination and whether we are developing a new industry solutions with our partners to help the different industry segments and we actually helping Ceo in the center of it because Ceo is the one who is driving the automation, enabling the business automation and actually managing the automation ceo and the governess. So CEO is in left and center of it and my role is to ensure that I actually help those Ceos to make successful and get that maturity and you will path as a platform is giving that ability of length and breath and that's what is really fascinating me and I'm really looking forward that how that spectrum is changing that we are getting matured in a process mining area and how we are expanding our horizons to look at the whole automation suit, not just the R. P. Product and that's something which I'm really looking forward and seeing that how we're going to continue expanding other magic quadrants and we're actually going to give the seamless experience so the client doesn't have to worry about okay for this, I have to pick this and further, I have to pick something else >>that's seamless experience is absolutely table stakes these days. Guys, we're out of time. But thank you so much for joining. David me, talking about automation and health care. Your recommendations for best practices, how to go about doing that and and the change management piece. That's a critical piece. We appreciate your time. >>Thanks for having. Thank >>you. Our pleasure for day Volonte. I'm lisa martin live in las Vegas. The cubes coverage of you a path forward for continues next. Mhm. Mhm mm.

Upbeat Music >> From the Bellagio Hotel in Las Vegas, it's theCUBE. Covering UiPath FORWARD IV. Brought to you by UiPath. >> Live, from Las Vegas, it's theCUBE at UiPath Forward IV. Lisa Martin here with Dave Vellante. Day 2 of our coverage. We've been getting a lot of really great perspectives on automation and how it is impacting, significantly, every industry. We're pleased to have, from the keynote stage, Junaid Amed, the corporate Vice President of Finance at Applied Materials. He's going to talk us through why you have a why-can't-we-automate-it-all attitude. Junaid, welcome to the program. >> Thank you so much. Pleasure to be here. >> So you have a really aggressive strategy for digital transformation automation led digital transformation. Your keynote this morning was great. It was, I just thought, strategically, it was so well thought out. And then, when you got up here before we went live, you started talking about how fast the time frame was. >> Yes. >> Give the audience an overview of the strategy, what you're aiming to do and how quickly you're expecting to see change. >> Yeah, absolutely. So when we set out, when we launched about two and a half years ago, the company had doubled in size the prior five years. We were looking for it to double again. We were honest with ourselves, with the CFO and the finance leadership team, could we support the new wave of growth? And the answer is no. Okay, what do we do? We knew we had to do something, not just more things but take a complete new view on things. That's how this whole initiative got incubated. And we took a bold approach. We said, we don't want just to cover the next five years, let's cover the next 20 years. Set ourselves up to make sure we do this right for the company and for our people. So, we basically set some very ambitious goals. Which is, the key KPI that we set at our true north is, we're going to get 50 % of finance work effort, all oriented around decision support. That's what helps move the needle for the company. Sure, we have our responsibilities to close the books, to do all the transactional stuff, to do all the reporting stuff. We will do that. But that can't be the mainstay anymore. That's just table stakes. And the business is screaming for this. It's just that we didn't have the levers and the tools to be able to do it. To pivot. But given the technological advancements, we said, "This is possible now." And that's- >> I think we have to set the table here with your industry. Because you started your journey to PA automation in 2019. >> Yes. >> You participate in one of the most challenging, if not the most challenging, industry on the planet. >> Junaid: Hundred percent. >> Everybody, I don't know, maybe not the insiders but everybody else missed, absolutely no, the insiders missed it too. What was the impact of the pandemic, right? And now, chips are every part of our lives. We've got this massive chip shortage. And you know, Wall Street missed it. They said, "Oh, sell Applied Materials. Sell every semiconductor company." And then they realized, "Oh wow," kind of late into the cycle, that this is like a multi-year, perhaps a decade long transition to, maybe this never ending demand, who knows? So that's the backdrop of your business. That was driving it. What was it like inside your company? >> So Dave, you know, what we could see, obviously we couldn't predict the pandemic. We could see long term growth, right? Really tangible market inflection on the back of AI big data. If you want to say where we made a big bet as a company? We went all in on AI. Right? We believed in that growth, at a time when I think not everyone was so convinced. Okay, is this going to be- How strong is this going to hit us? So, we had the benefit of going all in on AI and saying this is another big computing wave. The next big wave of computing. Coming off of mobile and social media. And Gary Dickerson, our CEO, bet the company that we're going to enable this growth. This is real. This is going to touch the whole global economy. So yes, that's a bet, a successful bet, the company made. No one could foresee what would the pandemic do but we had the good fortune of saying we were reacting to the growth, that we were committed to service. And we knew we had to get ahead of it. So we quickly organized and got finance, our organization well positioned to successfully support the company. Now, we got hit with the pandemic. Luckily for us, we're proactive and then, you know what we did? We accelerated. >> So your move to automation was an offensive move- >> Junaid: Hundred percent. >> Not a panic move to respond to a pandemic. >> Hundred percent. What do investors want? Operating leverage. Operating leverage. >> Yeah. >> Okay. And then, right now all the models have a certain baseline. Size of company, complexity. Okay, you need a certain amount of leverage coming out of this model. The models are going to change. Those that don't change ahead of the models, they're going to play catch up. It's not a fun ride. We wanted to be ahead. >> Well, I mean, talk about operating leverage. You're a company with what? 120+ Billion dollar market cap. You've got a 20+ Billion dollar revenue and you sell extremely expensive equipment. >> Extremely. >> And then a 5X revenue multiple. That's a trailing revenue multiple. I mean that's, that's impressive. That's operating leverage. >> Yes and but the bar keeps moving. You've got to stay ahead, right? You've got to be a leader. We're a leader. We've been a leader for five decades. It's the leadership mindset, I would say, in the company and our leadership team, that really propelled us towards this. The leadership of our CFO, Dan Durn, who invested. He made a bet. No one, you know, now we're sitting here, over almost 300,000 hours automated. We didn't have the playbook when we did it. >> You created the playbook. >> We created the playbook. >> Talk to me about the appetite, because obviously aggressive leadership, bold leadership, talk to me about the appetite to be able to be able to transform so quickly. Such that when, as Dave said, you're on the offensive, such that when the pandemic came, you leveraged that as an accelerator of what you've already been doing. Because culturally, that's challenging for folks to get on board to. How did you do that? >> I have to say, it is challenging. And it's at time's it feels counter-intuitive. We were going through the pandemic. We were having a large M&A integration happening, okay and we're transforming finance. And we're a resource constrained organization. Then you tell your people, "We've got more work to do. Transformation." And you're like, "Is that the right thing to do? Isn't everyone going to leave?" But when you dig deep, you say, "How do you get mind share?" How do you, first of all, you have to get people to see the value and then you have to make sure you do it fast enough, where they want to stick around. It's counter-intuitive. "Hey, we're going to launch this new platform. It's going to take three and half years. All right everyone, we're going to do this." What happens? People are like, in-out. Okay yeah, it'll come, we'll deal with it. Then instead, you say, "Hey, we're going to transform the way we plan. Completely. Top to bottom. 10 months. We're going to do it. Here's what you're going to be at your hands- Here's what you're going to have at your disposal in 10 months, all right? Oh, by the way, we're just showing you the high level. You get to really design. What do you want?" Now, when you have credibility, street cred with your organization, and you come out and say, "I'm going to give you top to bottom agility around forecasting and you get to have input on what you really want." Now people get excited. Like, "Oh, I'm going to work 25% more but wait a second, I'm really excited about what I get at the end of 10 months." >> So, the world was betting several years ago on the consolidation of fabs. "Oh, that's bad for Applied Materials." The exact opposite happened. You know, ARM changed the model, WAYFA volume's going through the roof. Now Intel is basically following that playbook, which is wonderful, they're breaking ground in Arizona. Which is, you have these massive tailwinds behind you. So I'm interested in how you forecast that and what role automation plays in that forecasting. >> Well, if you think about it, the fundamental demand isn't changing. Capacity has to go in. People think, wait a second, so and so is going to build less or whatever, The capacity, maybe geographically, is going to get dispersed out but it still has to go in. So I think it doesn't change the fundamental demand statement. Then, how does automation play into- I just thing that the fundamental nature and pace of business is changing. For us. And our customers are going through the same. So we have to be more reactive, we have to be able to respond to their needs. That whole thing cascades down into the organization. All the way deep into finance analyst forecasting, right? So, if everyone has to work off a weekly, monthly, quarterly cadence, you're too slow. Too late. Doesn't matter how good your plan is. It's old. It's stale. We're moving into a time and era where everything happens realtime. It always happened realtime but we just never had the tools to react realtime. Now, we have realtime business performance, enterprise grade dashboards. Any minute of the day you can see what the revenue forecast is, what the margin associated with that is. Yes, when we get into the official commit cycle everything firms up but it's not the big crank, right? You're fine tuning the knobs now. Which is great. What do you want in a plan? You want greater optionality. Is there a perfect plan? Of course there isn't. What is the North Star of forecasting? Give me as much options as- viable options and then let me decide. Because there's trade-offs. There's no one perfect plan. But you were limited. It just took too long to put a plan together. So you had very small degrees of freedom around it. Viable plans. We're changing all of that. >> This might be out of your swim lane but you had a slide up today and it had the IT in the middle- >> Yes. >> So technology's fundamental. And then, you had the elephant. The Hadoop elephant in the room. So I have to ask you, you guys announced this thing earlier this year called AI to the power of X, actionable insights. I remember reading about it, it's like you're collecting data across all the estate. So I'm like, wow this is a data company. Becoming a data company. So we've been talking a lot and of course the CFO purview is the reporting and I get that. The close, daily close, virtual close, all that. But then there's this whole line-of-business data play. >> Yes. >> And I'm wondering how automation fits there. I mean, that's got to be part of the vision. >> Yeah. Now, I can't speak to the capabilities you're talking to but we are leveraging some of that infrastructure, right? We have amazing IT organization. I have to say, we within Applied, we're a latecomer. From a product, customer product standpoint, already there is so much AI work being done. So we had the benefit of leveraging some of their capabilities for finance, when we launched Agile Finance. There is a lot going on over there. I think we actually enhanced that by introducing these RPA capabilities. And we did so from partnering with, I wouldn't say partnering, IT co-piloted this with us. Fundamentally co-piloted this, okay. And now, IT is taking it to other organizations. And they're taking it to product, they're taking it to operation, they're taking it to sales. So it will have a role. Hundred percent. But they're obviously starting, over the past three to six months is when they got started. So the answer is yes, for sure but I can't speak to exactly how it plays into that specific technology. >> But you addressed the dynamic. Which is, it started in a quick wind part of the company, finance. >> Yes. >> Which is logical. That's where I first introduced RPA a decade ago. A CFO conference, right? Then that now applies to the rest of the business. They're talking about operating leverage- >> Fundamental. Yeah. Hundred percent. >> How do you get that buy-in? How do you get finance and how do you get IT to work with finance, such that IT becomes a catalyst in all these downstream reactions to get this going across the company? >> Important question. >> Well they work for you. >> They don't. >> Oh they don't. >> They don't work for us. They work for me. I'm a customer of theirs. >> Okay. >> The first person that I needed to convince that we were serious and we're going to do it is the CIO. Okay, so you ask how do you get IT bought in? Well first thing, you have to get them in the tent. This is not about, "Oh, can you go do this for me? I need this from you. Can you do that?" Too slow, okay? This RPA, especially RPA, fundamentally, is such a, it's a technology that really needs to get embedded throughout the IT operating model. So you really need IT co-piloting this with you. This is how we did it. We said we're going to learn together. This is a must have for finance. We believe strongly this is going to become a must have for the enterprise but we're going to make the investment. In that must have for the enterprise, IT has to play the roll, right? So we started this together and we learned together and they've been fundamental in our being able to get to scale in 12 months. >> How do you federate governance? Who in the organization, what part of the organization owns governance, if you will? >> Yeah. So we created, established an RPA COE. They own the governance, the policies, the processes. Then, obviously there's a role to play for the business side. So we finance a business organization to them and there's roles to play. We actually, like I showed today in the presentation, there's multiple other players across the enterprise that have to vet these automations, right? Especially in finance. We have to be SOX compliant, we have to be data privacy compliant. We set all of those processes up. So, multiple parties have to engage but engage in an efficient way. >> We're seeing the CFO role emerge. I think of you as a CFO. I mean, I just use that umbrella, emerge as an innovator. I see this all of the place now, especially in Silicon Valley. You look at a company like Snowflake, I don't know if you know Mike Scarpelli but he kind of changed the world of software in some ways. So you're seeing very innovative CFOs emerge, that are technology savvy, they understand the operating leverage, we've used that term several times today, that you can get out of technology. It just reminds me, I don't know how long ago it was when Nick Carr wrote the book Does IT Matter. It seems like technology has never been more important. Along with people and process, of course, but in terms of creating that operating leverage, it's really a key part of the equation, the playbook going forward. >> I think it is a mindset change. We're trying to drive mindset change, right? But it's also, I think, come about because I think technology has become more friendly to non IT people. I think that's a fundamental driver. All these SaaS platforms in the market place, right? What did they design for? Business users. Of course IT has a very prominent role in that whole process and supporting it and implementing it. But the target audience is business users. What was the target audience for ERP? IT. Okay. Fundamental, the technology is changing by design and you're seeing now the impact of that. Where, "Hey wait, I can do this. I can do this by myself." Okay. IT always has been and will be a very important partner. They will service your data needs. This is how we're setting up the collaboration, right? But we really want the finance users to be able to iterate, model, analyze on the fly, in the moment. And they need to do it alone. >> Self serve, yeah. >> That's it. >> Self serve in realtime. I think one of the things, you mentioned it this morning, you mentioned it on our program and one of the things we've learned in the pandemic, that realtime and access to realtime data is no longer a nice-to-have. >> Yes. >> It's really a business critical element of any industry. >> Hundred percent. >> When do you think you'll put crypto on your balance sheet? I ask all the CFOs. >> He's been asking everyone that. >> There's an easy answer. I'm not authorized to answer. Above my pay grade. >> That's a good answer. >> That's good. >> Junaid, thank you so much for joining us. Talking to us about the transformation at Applied Materials, how you're partnering with UiPath to achieve that and the aggressive strategy that you've set out and congratulations on the success of it. We'll look forward to see what's going on in the next couple years. >> Great story. >> Of course. Thank you very much. Thank you for having me. >> Our pleasure. For Dave Vellante in Las Vegas, I'm Lisa Martin. You're watching theCUBE at UiPath Forward IV. Day two of our coverage. Stick around, we'll be right back with our next guest. (upbeat music)

>>Hi and welcome back to Red Hat. Summit 2020. This is the Cube, and I'm your host. Stew minimum. We're talking so many topics. This event happening globally. We're treating our partners in the red hat executives where they are around the globe. And I guess right now is Nick Carr said, Who's the senior director of technology strategy with Red Hat, And Nic is coming to us. He's early in the Bahamas, speaking to us from his boat, though. Nick, pleasure to see you. And thanks so much for joining us. >>Very nice to meet you. Yeah, remote employees. And I enjoy that a lot. >>Absolutely. So we've been talking your team a lot. Of course. You know, many employees of Red Hat already were remote, but everyone now is working where they are. You're gonna be about a topic, of course, which is even more about riveted solutions. And where things are, we're going to talk about edge and five G before we get into the topic. It's a little bit about your background, how long you've been with red hat. And you know what? Your what your role is. >>So I joined right as a little more than five years ago after the acquisition. Off of all the companies that was working on open stack. Interesting technology. I've been in open source for the past 20 more years. Um, I was, uh, working miss of many distributions of Lennox over the years, so I consider myself in open source veteran. >>Excellent. I I remember that acquisition. We had the Cube at the open stack summit for many years on that, um, you know, new the company before the acquisition >>of the >>brand. And frankly, >>though, let's talk about it. First of all, you know, you talk about edge. Edge means different things to a >>lot of people >>are talking about it >>from a >>career perspective. You know, every customer in the Iot piece. Where does Red Hat into the whole notion of edge on? You know what kind of pieces of the portfolio? Yeah. >>So obviously, edge is about building an infrastructure that goes as far as possible to be as close as possible to where people are either producing or consuming data and building infrastructure as always, being the very heart off what Red Hat has been doing. And we've been growing. That's infrastructure capability. over time. So that means that today we feel the need to fulfill the requirements of those customers that want to extend their infrastructure to there. Because when we say the edge, we have to be countries that we're talking about. Like the layers of an onion more You dig into it. The more layers you find, the more particle case you have. There's no way there is a single. >>Yeah, no, you're absolutely right. So, you know, back in the open stack days, we talked a lot about in it, though Some of the barriers I know I've spoken to prizes. Who's, You know, we are of red Hat, though, you know, Maybe start there and help us understand. You know, where are we with the solution? Uh, talk about how five g fits into it. Of course. Everybody's talking about five feet. Well, that will take time, but help us understand where we are today. >>So, um, obviously for us, the edge years, just an extension of our open ivory clouds. Right? We have always been very vocal in saying that you need to be able to deploy the same workload in any place, and the edges are Justin extensions off these anyplace. So the same strategy that we've been developing first we use open stack, uh then with open shift and making open shift are both our development and our deployment platform for all types of workloads having open shift now, this report normally container based workloads, but also the visualization based workloads are exactly what we are doing at the edge. We want people to be able to deploy a single type of platform on various types of fruit brands managers globally. Ah is complete consistency so that there is no extra cost in maintaining those thousands, sometimes millions off added location into their existing infrastructure off course. In order to do that, we need to develop new tools to do the management to develop new AI or machine learning technology, to help people process not only the data coming from the platform, but also the management of the platform itself. We are reaching such scales that we wouldn't be able to do it. We've out. You are no from the platform yourself. >>Yeah, absolutely. And of course, scale is a relative before rise in. Yeah, I've talked to a couple of times. My understanding you've got news related. This that horizon went off? >>Yeah. This week Horizon has bean announcing ah, reinforce partnership between our two companies to help them heal their edge Platform. Ah, here we are talking about the first step in their edge platform which years? What we call the extension off the board we are talking about developing small data centers are going to be closer to the certainly. Um, And here we are talking about scales that, um can comprise to hundreds of data center, each having to 20 machines or more, um, to do all the processing of their future five g network and further, um, five g years, one off the enabler off edge. But it's also the reason for telcos to start deploying their edge network because the have a requirement to boot treatments off the information closer to where the five g antennas. And this is what we are developing. >>Alright. So, Nick, we talked. You've talked a minute ago about open stack and open fifth, help our audience understand a little bit. We've already talked a lot of customers. You don't. You can have one without the other, or you can layer off of the open stack when it comes to the the solution that you're talking about Verizon or ah, you know, other other service providers out there is it? Is it one is in both eyes that I've been there, Help us understand. >>So currently we have a complete shorts. We can do an edge platform. So Levi's open stack. You've got multiple customer doing that around the world. We can build an edge platform. We is open shift on top of the stack. But if we look at a future as we are, you know, designing it, we are looking at enabling simplicity and simplicity. Means deploying a single seeing open shift on to bare metal and have these bare metal platform deal we both vm and container so that you only have one AP I. You only have one management. You only have one thing to worry about. And since open shift and bark the OS, um, there is extreme simplicity in the methodology for updating or upgrading, and I think this is going to be a key point, making things simple, reducing the number of layers in your set. >>All right, that that really intrigued Nick, help us understand a little bit this ICO, Obviously any red hat doing is open source. It's how you're for that, you know, Red hat does. But you know how you're involved in the industry to help make the word that as edge solutions roll out that customers have flexibility in the first place. >>So you have multiple tee off partnership in this industry, you've got the partnership that are built around community and we are participating in numerous community, like the Lennox Foundation. Edge on many, many more. And this is where we are building the fundamental block off our future solutions we have. Partnership also is multiple vendor. Every time you're dealing with is a specific vertical. You will have a certain number of vendors that are going to be the one enabling 80% of the applications are going to be deployed, and that's okay for the edge. And then you have the partnership we made. We see our customers because the best source off requirements are always our customers. And that's something that we've now made a strong principle, which is to always find early adopters with when we are going to build a solution in a vertical sector on the horizon is one of them has been one of them. For what, a few years now and then replicate this success on to other customers of same sex. And we are reproducing this in the industry and manufacturing sector and in many other virtual. >>Excellent. Uh, you talked earlier about the open hybrid cloud. Obviously talk about they right, Wild help us understand, Nick. You know, edge and cloud. How do they actually go together? Many people. First of all, the people living article that was, you know, edge kills the cloud we've been talking about for a while. We know everything in i t is always additive. But how should customers on the surface but really be thinking about how edge cloud fit together >>in our design? The cloud and the edge is the same thing. You address the edge, you address the cloud, you should address your on premise art where the same way you use the same guy. And this driving FBI ease of communities, FBI, which we deliver through open ship. Um, soon. What is the difference? The difference is going to be who owns the edge, or we also machine running in your cloud who owns the machine running in your private data center. What network you're using, you're going to have Ah, a lot of constrained are going to be a bit more complex when you aren't yet. For example, you are sometimes going to go through the satellite connection. These huge delays in communication you're sometime going to put machines location that are absolutely not secure. So you need to have security layers. You're ensuring that nobody can remember these machines. These are you know it. But overall, once the deployment has done, we really, really on. People should consider that's their edge piece parts of their cloud or vice versa. >>Yeah, Nick, you brought up a lot of good points there. Security, of course. Critical. A one piece that I want to get your honest about. So we're spending a few years really looking at in a worker's process at the edge. What that's brought back core talk about AI work. Both generally understood praying things out at the edge. That's gonna happen. You know more of the core and then get out of the overall devices. What do you seeing where your customers But that overall, when it comes to their data. And >>from a technical perspective, data is the real real motivation about yet they are generating so much data that we are not able to process it anymore in a central location. So we have to process this data locally where it is generated. Or I suppose it's possible to where it is generated before sending, Let's say, a summary of these data or alerts or whatever the business process that pulls for to the center of operation. The use cases that we are demonstrating in this week, uh, that you can watch through the demo booth or you can watch increases. Ah, known presentation. Use the pays off manufacturer, which is installing sensors on many of the machine producing oh stuff. And when you have the right sensors like the vibration sensor or a temperature sensor, you can very easily develop knowledge off. Oh, this machine is going to break in a short amount of time. Maybe I should start scheduling some preventive maintenance on these machines, and you can do that by just actually leading the data and have humans read it. And you can do that a lot more efficiently. Training a machine learning algorithm This is what we are demonstrating that is processing the data and sending the alerts in real part when issues are discovered. Um, all this off course needs to be down in a very scalable fashion. Here we are talking about a use case where the customer may have 50 factories >>around the world. >>Are you updates all these machine learning models in all the factories when you have an update percent to learn about something you so data and data processing and now the eye. But big data are the heart off all of the use cases we, uh, discovered around old verticals for edge. And this is why we are now almost joining forces between the team working on AI. That's right out producing the open data hub and the team marking teams working on our solution. >>Yeah, I'm really glad you brought up manufacturing as the is one of the verticals. Look at their one of the turns and challenges we saw with all of that is yeah, some of the organization, Specifically, if you look at manufacturing, it could be an ot. Um, I'm curious is you're seeing solutions. Roll out your work, Aziz. How Customers are getting beyond those barriers. You know, some of the traditional silos where there was thoroughly collaborate. >>Well, it's always Ah, problem. Every time you introduce a change, you have to manage this in every project off, deploying something you anywhere well, fail if you do not account for the human factor and edge is no different in that. And when you're talking about the factory, if you're not directly talking with the people on the floor well, regarding their needs, you're only talking is a central guy. And you just arrived one day saying, Oh, everything is going to change. It's going to be a failure that the same way is a failure when the government make a decision without going through a consultative process before implementing it. So, um, nothing new, I would say. But as usual, And maybe because of the scale of edge, yeah, we will need to ensure that our customers are aware of those challenges that lay ahead of us. >>Alright, Well, next sounds Sounds like a lot of good progress. Been made definitely further breakout. What? From summit? You learn more. Thank you so much for joining. >>Thank you for having me >>all right. More coverage from the Cube at Red Hat Summit 2020. I'm screaming a man and as always what? Alright, Nick. Good stuff.

>> From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hello everyone and welcome to this week's episode of theCUBE Insights, powered by ETR. In this Breaking Analysis I want to lay out my 2020 predictions using insights gleaned from theCUBE blended with ETR spending data. You know, 2019 marked our 10th year of doing theCUBE. Over that time we've had the pleasure of covering nearly 1000 events and milestones, including the exit from the great softness of 2008 and 2009. You know theCUBE has extensively tracked a 10 year bull market. We've covered the era of data. We saw the rise and profitless prosperity of the big data and opensource Hadoop movement, where we predicted the practitioners, not vendors, would benefit the most from big data. We've covered many dozens of acquisitions including the 60 billion dollar chess move made by Michael Dell acquiring EMC, and a launch of hundreds of startups in flash, hyper-converged, big data, AI, blockchain, crypto, security and SaaS. There'll be other days to talk about theCUBE and review that, today's all about predicting the future, using spending data and insights from the thousands of interviews we've done on theCUBE. So let's get right into the ETR data and start with the high-level spending. Remember in October, ETR released its survey results and stated that we're coming out of a multiyear investment cycle in digital transformation. Enterprise IT buyers have learned what works, and on which technologies they're going to double down. They're now narrowing their investments on emerging technologies, picking those winners for the next gen tech, and at the same time, they're cutting redundancies from legacy players that they were keeping on as a hedge. Buyers are picking bundled suites from a handful of mega vendors, and solidifying their investments. We're seeing a multi-generational dynamic repeat itself, where buyers are creating a balance between the convenience of packaged offerings, i.e. bundles, and leveraging best of breed technologies to drive innovation. So on balance, the ETR data shows that a contraction in spending and tepid CIO sentiment is impacting both emerging vendors as well as traditional players, and these trends are most pronounced in the very largest organizations, which have always been the best bellwether in ETR's data sets. Let me share with you what one IT executive said recently that I think really sums up the situation quite well. He said, "ETR's findings mirror what we're doing today, "in that we spend most of 2018 bringing in "a lot of the new, core technology. "I believe what you're seeing now is not a lull in spend, "but an operationalization of what we've already purchased. "We're not spending on what's next yet, "because we're still rolling out what we just bought." This is from a VP of global IT at a large public manufacturing company, I said he, it could be a she as well. I think that she's summing it up correctly, and it reflects many of what customers on theCUBE tell us. Now, let's take a look at the macroeconomy. GDP growth is going to come in at about 2.3% this year, give or take. It's not going to hit the Trump administration's goal of 3% plus, but consumers are clearly powering steady growth. At least for now. IT spending should grow at about a point or two above GDP, so let's put that at, say, 4%. We're right in the middle of a Santa Claus rally, and the S&P is above 3200 today. Tech has been a powerful tailwind for stocks, and I think stocks, tech stock's going to take a breath in early 2020, but I expect continued strong growth in the economy and tech spending after a Q1 pause. I could see the S&P flirting with 3700 or even higher in 2020, and I think the tech sector will be a benefactor of that momentum, providing an impetus for continued growth. Here's my thinking on that. So much of 2020 is going to be about the election, and to me the election is going to be really about the economy. And I predict the economy is going to remain steady. And as the IT leader I quoted earlier said, customers will be operationalizing what's been previously purchased. Here's what's different in 2020. Tech projects have historically been very risky investments, and have required higher internal rates of return, IRRs, to get approved by CFOs. But the cloud has altered two factors. One, is that it's allowed more experimentation for way less money. The second is cloud, by shifting CAPEX to OPEX, allows for much more incremental, lower risk investments. So I think you'll see continued steady growth, powered by the cloud, which allows experimentation, and importantly higher hit rates of success. These successful projects will throw off cash for companies, and CFOs are getting on board because they realize it's driving innovation. They also realize that IT does matter, maybe not in the form that Nick Carr envisioned, but a new generation of IT that creates competitive advantage. This brings me to my first main prediction, which is the growth of cloud computing is going to moderate, but the cloud will continue to steal significant share from on-prem spending. Now the narrative that the pendulum is swinging back in my view, is a false narrative. Rather, the pendulum has swung, and the cloud is the underpinning of innovation. Now having said that, I do think we're seeing a bit of an equilibrium in spending, where buyers have identified those workloads that are going to remain on-prem, which is why you see, for example, AWS, Azure, and Google making moves in hybrid. Hybrid slash on-prem offerings. What this chart here shows from ETR, so from 2010 through October '19 survey on cloud spending, I had to block out the 2020 survey as it's currently in the field, I'm not allowed to show that data. The yellow line is market share, which in ETR parlance, as you remember, is pervasiveness, or mentions in their survey. The blue line is spending momentum, measured as net score, which essentially subtracts the percent of customers spending less from those spending more. The long, steady march of cloud, as you can see, continues, and there's no indication that it's going to abate. That said, the penetration of cloud has become much more meaningful, so share gains will be more hard-fought for the cloud guys. Now, you may see this as a non-prediction, or a hedge. It's not, let me be clear. Cloud will continue to steal share from on-prem, but share gains for the cloud vendors will be more difficult. Which brings me to part B of this prediction. What I'm showing in this chart is market share from ETR's January 2016 survey through October '19. And I'm showing spending for three on-prem vendors within AWS, Azure, and Google Cloud accounts. And I'm picking on Oracle, IBM, and Dell EMC as three prominent on-prem proxies, and you can see the steady decline in market share for these companies. And even though there's a bit of an uptick in October, I don't see this as a reversal. What's going to happen is that traditional on-prem vendors are going to step up their cloud strategies. Specifically with multicloud management. This is going to be the case with Dell, who's going to leverage VMware, and in the case of IBM, they'll try to take advantage of Red Hat in that multicloud game. Now both IBM and Oracle, who each have public clouds are going to dig their heels in, they're going to get customers in a headlock, and provide big financial incentives for them to use their captive clouds. All right, so with the high-level spending comments that I made earlier, and that cloud discussion that we just had as a backdrop, the question is, which companies will do well in the coming year? I'm going to call out five companies, that I want to highlight where the ETR data intersects what we're seeing on theCUBE. The prediction is these five players will do well in 2020, they're going to power through any downturn in spending, and they're going to thrive in the face of the cloud share shift. So the chart here shows data from the ETR October 2019 survey, and it lays out net score or spending momentum for these companies, that I am predicting will be winners in 2020 and beyond. And the five companies are UIPath, Snowflake, Databricks, HashiCorp, and Rubrik. Let me start with UIPath. They are the leader in robotic process automation. I think RPA is going to do well even in a downturn, because more companies will be looking to automate and save money, even in a softer climate. Automation Anywhere is another player in this space, they're doing pretty well, and I predict that UIPath will come out on top of this space, but both UIPath and Automation Anywhere can thrive. Next company is Snowflake, they are changing the analytic database market, and I've covered them before in previous Breaking Analysis segments. They are going to continue to grow nicely in my view. They are 100% cloud-based, and they participate in all popular cloud platforms. Now ironically, they compete with AWS RedShift, who continues to copy some of the innovations that Snowflake has popularized. But AWS and Snowflake are strong partners, so there's room for both companies to thrive. Snowflake especially, as they play in clouds other than just AWS. Which brings me to Databricks. We're seeing a new type of workload emerge in the cloud for modern analytic databases, where organizations are taking all this data that they have, lots of it in the cloud, and they're structuring it within a Snowflake database, or RedShift, and they're bringing Databricks tooling to the equation to be able to query and visualize the data in near real time. Now of course, as I say, AWS plays here with RedShift, and they're selling a lot of EC2, so they love Snowflake. All major cloud players are seeing this type of workload enter the mix, and it's going to be a strong area of growth in 2020 and beyond. Next thing I want to talk about is HashiCorp. HashiCorp is capitalizing on this trend toward cloud-native computing. The company provides opensource tooling for developers, and is all about simplifying application deployment independent of the underlying platform, whether it's virtual, container, or cloud. Five years ago, the players in the space that got all the attention on theCUBE were Chef, Puppet, Ansible and Salt, and today, especially again on theCUBE, you hear the most about Hashi and Ansible, and in fact we were at AnsibleFest with theCUBE, and we heard lots about HashiCorp, so they both complement and compete with the older players. To me, this reminds me of Spark within the Hadoop ecosystem. Hashi has raised about 174 million in VC, and as you can see they have very strong spending momentum in the ETR dataset, with a net score, as shown, of 63%. Now finally, I want to talk about Rubrik, which has been a consistent performer in the ETR dataset. They're trying to transform backup into data management as a discipline. They compete with established players in the data protection space, guys like Veritas, Dell EMC, IBM and CommVault. Now Rubrik is not the only new or newish player here, that's doing very well, Cohesity, who's relatively new, Veeam, which has been around for a decade, both doing very well and showing up strong in ETR surveys, especially Veeam, but Rubrik has been a consistently strong performer and has been outpacing the others, so I want to call them out. Look for these five to do very well in 2020, and into the next decade. So that brings me to my next prediction, I want to talk about Kubernetes. This prediction is twofold. Kubernetes is going to continue its strong showing as this data from ETR shows. This is Kubernetes' market share in the October 2019 survey, so Kubernetes spend had a 76% net score. So very very strong. But the other part of the prediction is that Kubernetes will become embedded into virtually every platform, and people will stop thinking about it as a separate market. Already today, there's little discussion of the idea of a Kubernetes distro, I mean Anthos is an example of a Kubernetes stack, but it can be run in the cloud, it can be run on-prem, anywhere. VMware Tanzu, Microsoft Azure Arc are other examples, they're really not stacks, but they're management platforms that can manage anyone's Kubernetes instances. I like to think of this as kind of like flash. You remember when everyone looked at flash storage as a separate market, well today it's just embedded everywhere. And that's kind of what's happening with Kubernetes. So spending momentum is going to continue to be strong, but by 2023, Kubernetes will be ubiquitous, and not really thought of as a separate entity. All right, for my next prediction, I want to talk about cybersecurity. I did a Breaking Analysis earlier this year on security, and I showed this slide. And as you can see, I've added a little something in the red stars for my prediction. So what this chart shows is two views of net score, the left-hand side shows the ranking by net score, and you can see CrowdStrike, Okta, Shape Security, which was just, by the way, bought by F5, that was an announcement. Twistlock, which is now Palo Alto Networks, and you can see the others down that list. On the right-hand side is net score, but it's ranked by shared N, which is a measure of pervasiveness in the ETR dataset. What I've added is the four star companies, that is those companies that have both spending momentum and are pervasive in the ETR survey. So the prediction is 2020 we'll see the four star companies maintain their position and gain strength in 2020. These include established players with portfolios where they can bundle like Microsoft, Cisco, Palo Alto Networks, Splunk, Proofpoint, Fortinet, and CyberArk Software. And then the newer companies like Okta and CrowdStrike are going to continue to gain share faster than the larger players. Now you also may see companies like SailPoint, Illumio, and SentinelOne emerge as four star companies over the next 24 months. Now the one company that's not on this list that is a major player in security is AWS. AWS is the cloud security leader, and is in a category all by itself in many ways. As I said in my security segment earlier this year, the market is incredibly fragmented, and it's going to stay that way. Each year we look back and say "Did we spend more on security?" and "Are we more safe?" And every year the answer is yes, and no. And 2020 will be no different. Now if you look at the various data sources, we spend approximately 120 billion dollars annually on cybersecurity. The worldwide economy is about 85 trillion in dollar terms, so on balance, we spend about .14% on securing our economy, so we're barely scratching the surface. The market is going to remain highly fragmented, the rich will get richer if they have four stars, new players will continue to enter the space, and M&A will continue to be robust. Now if you exclude my long shot that the S&P will break through 3700 next year, that makes nine predictions. For my 10th and final prediction, I don't have hard data from ETR, but I have a strong opinion on this, and that is that the edge will be won by developers, you've heard me talk about this before. Specifically, platforms like Outposts, which are essentially programmable infrastructure which bring a cloud development platform to the edge, is how that space will evolve. It won't be won by shoving traditional servers and storage boxes out to the edge. Rather, it will grow by coders being able to build new applications and workloads on top of infrastructure as code. Okay, that wraps up my 2020 predictions. I'd very much like to hear your opinion, so you can leave your thoughts or your own predictions in the comments sections of this video, or go to my LinkedIn posts. You can reach me @DVellante on Twitter, love to hear your thoughts. And don't forget, this series is available on iTunes, Spotify, and other podcast platforms for your listening pleasure. I'd like to wish everyone a safe and restful holiday season and a prosperous, healthy 2020. Enjoy your families, enjoy this time, this is Dave Vellante, signing out from the latest episode of theCUBE Insights powered by ETR, thanks for watching, everybody. We'll see you next time. (techno music)

>> Live from Orlando, Florida its theCUBE covering Enterprise Connect 2019. Brought to you by Five9. >> Hello from Orlando, Lisa Martin with Stu Miniman theCUBE. We are live, day three at Enterprise Connect 2019. We have been in Five9's booth all week and we're very excited to welcome to the program for the first time Harry Moseley the CIO of Zoom Video Communications. Harry thanks so much for joining Stu and me on The CUBE today. >> Lisa, Stu its a pleasure to be here, thank you for having me. >> And you're a hall of famer, you have been inducted into the CIO Magazine's hall of fame and recognized as one of the world's top 100 CIO's be Computer World >> Yes that's right >> So we're in the presence of a VIP >> (chuckles) Well thank you for that it's, as I say its all credit back to the wonderful people that have supported me throughout my career. And I've worked with some amazing people and leaders and, who have supported me and the visions that I've created for their organizations. And so, I understand its about me but it's also about the great teams that I've worked with in my past. I can't make this stuff up, yep. >> Harry, we love talking to CIO's especially one with such a distinguished career as yours 'cause the role of CIO has gone through a lot of changes. IT has gone through a lot of changes. You know we've been doing this program for nine years. Remember reading Nick Carr's IT, does IT matter? And you know, we believe IT matters more than ever Not just IT, the business, the relationship maybe give us a little more of your view point as to the role of the CIO and technology, at a show like this. We hear about the CMO and the business and IT all working together. >> Yeah so its actually, in my opinion, there's never been a better time to be a CIO, irrespective of the company you are in, whether its a tech company like where I'm, you know Zoom Video Communications or any one of the prior companies I worked for, professional services, financial services. But even when you think about it like trucking, You think about trucking as an industry, you think about trucking as a company, its like it was a very sort of brick and mortars? But now its all about digital, right? A friend of mine runs a shipping container company and to think that they load five miles of wagons every day. And so I said to him, "how long does it take to load a wagon on a truck?" "It takes four minutes, and you know what Harry, "we're working that down to three. "And that'll increase our revenue by 20 to 25 percent.' And so its just fantastic. And the pace of change, you know it's just growing exponentially. It's just fascinating, the things that we can actually do today we only dreamed about them a year ago. And you think about it sort of' I can't wait to be back here next year, 'cause we're going to just lift the roof off this place in terms of the capabilities. And so its fantastic, yeah it's just absolutely fantastic. >> So looking at, a lot of us know Zoom for video conferencing and different things like that, but you said something very interesting in your fireside chat this morning that I hadn't thought about, and that is when, either going from audio to video, when you're on a video chat you really can't or shouldn't multi-task. So in terms of capturing peoples attention, enabling meetings to happen maybe more on time, faster, more productive. Thought that was an interesting realization, I thought, you're right. >> It just clicks, it just works. You know mobile, you know when I go back to my you know sort of' going back and again, thank you for the recognition from the key note. But when I go back earlier in my career it's like dialing that number, dialing that ten digit number, misdialing that number, what happened? I got to' hang up, I got to' get a dial tone, I got to' dial the numbers again. Now I'm like two minutes late and I know I'm late more often than I'd like, but when its late because of something like that, that's frustrating. That's really frustrating. And so the notion that you can just click on your mobile device, you can click on your laptop, I have no stress anymore, in joining meetings anywhere. I love telling the story about how I had a client meeting, I was in O'Hare Airport and I joined the client prospect meeting. I joined the prospect meeting on my phone using the free wifi service at O'Hare Airport. Put up my virtual background on my phone I just showed you this Stu, with our logo shared the content off of my phone 18 minutes into this 30 minutes call, the person I was talking to, the CIO for this firm called a halt to the meeting. This is what exactly what happened. Enough, I've heard enough. (announcement in background) >> Keep going. >> Keep going, okay. Enough, I didn't know what enough meant. And so I was a little spooked by that if you will. He goes, "you're on a phone, you're in O'Hare Airport, "you've got a virtual background, "you're sharing content, its all flawless. "Its like this is an amazing experience "that we can't get from all the technology "investment we've done in this space "for our company. "So guys, enough. "We're starting a proof of concept on Monday. "No more discussions about it. "Harry, looking forward to being a business partner." >> Does it get better than that? >> It doesn't get better than that. Its like you know, you hop through security, you get on a plane, and its cruisin' all the way home. >> Yeah I mean Harry, I do have to say, you know disclaimer, we are Zoom customers I'm actually a Zoom admin and its that simplicity that you've built into it is the experience, makes it easy. >> And then when you, and Stu, sorry to interrupt you but I got really excited about this stuff as you can tell. But, and then you look at the enterprise. So you're admin? You get into the enterprise management portal and its like Stu, I had a really bad experience. Oh let me look that up, oh yeah, okay. Where were you? You know, I was in outer Mongolia Ah okay, about five minutes into the call you had some packet loss, its like yeah it wasn't. But it still maintains the connection, right? So you can actually, so our Enterprise Management Portal is awesome. >> Yeah so that actually where I was going with the question, is you know I remember back, I actually worked for Lucent right after they spun out from AT&T. And we had videos talking about pervasive video everywhere, in my home in the business. Feels like we're almost there but still even when I have a team get together my folks that live in Silicon Valley, their connectivity's awful. You know when they have their, and its like oh well my computer or my phone don't have the cycles to be able to run. Maybe we have to turn off some of the video Are we getting there, will 5G solve some of these issues? Will the next generation of phones and computers keep up with it? Because it's, I'm sure you can guess we're big fans of video. It's a lot of what we do. >> Because video is the new voice, right. We like video. If I can only hear you and I can't see you, then when I make a statement I can't see you nodding. If I say something you like, you nod. So we get that concurrency of the experience Again it comes back Stu, where were we a year ago? The capabilities we had, where will we be a year from today? Whether its AI, whether its the power in the device in front of us whether its the network, you know, 5G is becoming a reality. It's going to take some time to get there but you've got sort of great technologies and capabilities, that you know, you look at the introduction of our real-time transcription services. I mean how cool is that? I'm sure there's lots of questions, so lots of people would ask about that real-time transcription in terms of, well what's next? I'm not going to talk about what's next. But as they say in life, watch this space. >> Yeah, just you made some announcements at the show with some partners I actually believe Otter AI is one of the ones you mentioned there. I got a demo of their thing, real time, a little bit of AI built in there. Can you talk about some of those partnerships? >> Yeah so we have great, we love our partnerships right? Whether its on the AI space, with Apple and Siri and Amazon and Otter. We also love our partnerships with Questron and Logitek and HP, and Polly of course. Again its the notion of, we have terrific software. You guys realize that, right? Its terrific software, proprietary QOS proprietary capabilities, its like its a fantastic experience every time on our software. These partners have great technologies too. But they're more on the hardware side, we are software engineers at our core. As Andreson said, I think it was about ten years go, "software is the easing thing in the world "so you take terrific software "you imbed it in terrific hardware "with terrific partners and what happens "is you get exceptional experiences." And that's what we want to deliver to people. So its not about the technology, its about the people. Its about making people happy, making easy, taking stress off the table. You go to the meeting, you light it up, you share the content, you record it, you can watch it later, its just terrific. >> So the people, the experiences you about we've been hearing that thematically for the last three days. As we know as consumers, the consumer behavior is driving so much of this change that has to happen, for companies to not just digitally transform, but to be competitive. We're in Five9's booth and they've mentioned they've got five billion minutes of recorded customer conversations. You guys can record, but its not just about the recording of the voice and the video and the transcription. Tell us about what you're doing to enable the context, so that the data and the recordings have much more value. >> Yeah so , I mean its the notion of being able to sort of rewind and replay. I'll give you another example if I may. Coming out of an office in Palo Alto jumped in the Uber, going back to San Jose for a client meeting. I'm a New Yorker as we talked about a few minutes ago and, I don't know the traffic patterns in Southern, in the Valley. And its about 5:00 o'clock, 5:15. San Jose meetings 5:45. Normally it would be fine, but its rush hour, what do I know about rush hour? I know a lot more now than then. I realize I'm not going to be able to make it on time. Put up the client logo, virtual background on the phone, in the Uber, client gets on the call, Harry where are you? I'm in the back of an Uber. Again, the same sort of experience. Then he asks the question, "well with this recording capability, "can I watch it at 35,000 feet?" Of course you can. And that was it. That was the magic moment for this particular client, because he said "I'm client facing all the time. "I don't get it in time, "I don't always make my management meetings "so I won't have to ask my colleagues what happened "and get their interpretation of the meeting. "I can actually watch the meeting "when I'm at 35,000 feet on a plane, going to Europe." So that's what this is all about. >> Alright, well Harry obviously this space excites you a bunch. Can you bring us back a little bit? This brought you out of retirement and the chase, the space is changing so fast. We come a year from now, what kind of things do we think we'll be talking about, and what's going to keep you excited going forward? >> So lets talk about the first part first and then sort of' break it into two. So yes I had a fantastic career and I retired and so when I met Eric and I met the leadership team at Zoom and I dug into the technology and I understood sort of' A, the culture of the company which is amazing. When I understood the product capability and how this was built as video first, and how we would have this maniacal focus if you will on sort of being a software company at our core. And how it was all about the people. That was sort of a very big part of my decision. So that was one. Two is, look we have a labor shortage right? We can't hire enough people, we can't hire the people, we have more jobs than we have people. So and so, retaining talent is really important. Giving them the technology and the studies that have been done, if you make an investment in the technology, that helps with retention. That helps with profit. It helps with, product innovation. So investment in the people. And the ability to collaborate. It's very hard to work if you don't collaborate, right? It just makes it really, very lumpy if you will. So the ability to collaborate locally, nationally, and globally, and people say, well what's collaborating locally? It's kind of like we can just walk down the corridor. Yeah, well if you're in two different buildings how do you get there? And then it gives us, a foot of snow between you, its makes it really hard. So collaborating locally, nationally, and globally is super important. So you put all that together that was the, what convinced me to say okay you know what, retirement, we're just going to put a pause button on that. And we're going to gave some fun over here. And that really has been, so I've, over a year now and its been absolutely amazing. So yes, big advances. What's in the the future? I think the future, you know there's been a lot of discussion around AI. We hear that its like, all the time. And we've seen from a variety of different providers this week in terms of their, their thoughts around how they're going to leverage AI. Its not about the technology, its about the end of the its about the user experience. And you look at the things that we started to do, we talked about real-time transcriptions a few moments ago, you look at the partnership that we have with Linkedin where you can hover over the name and their Linkinin profile pops up. You're going to see this, I just see this as an exponential change in these abilities. Because you have these building blocks today that you can grow on an exponential basis. So, the world is our oyster, is how I fundamentally think about it. And the art of the possible is now possible, And so lets, I think the future is going to' be absolutely amazing. Who would have, sorry Lisa, who would have thought a year ago, you could get on a plane using facial recognition? Let me just throw that out there. I mean, that's pretty amazing. Who would have thought a year ago that when you rent a car, you can just look at the camera on the way out and you're approved to go? Who would have thought that? >> So with that speed I'm curious to get your take on how Zoom is facilitating adoption. You mentioned some great customers examples where your engagement with them via Zoom Video Conference basically sold the POC in and of itself, with you at an airport >> That's a great questions. >> I guess O'Hare has pretty good wifi. >> What's that? >> O'Hare has pretty good wifi. >> A little choppy but, but it worked. >> It worked. >> Because of our great software, yeah. >> There you go, but in terms of adoption so as customers understand, alright our consumers are so demanding, we have to be able to react, and facilitate collaboration internally and externally. How, what are some of the tools and the techniques that Zoom delivers to enable those guys and gals to go I get it, I'm going to use it, And I'm actually going to actually use it successfully? >> This is a question, I don't know how many clients, CIOs, CTOs, C suite execs I talk to, and they all say, they all ask me similar sorts of questions. Like we're not a video first culture. Its like video, its kind of like we're a phone culture. And then I, so I throw that right back at them and I say and why is that? Because we don't have a good video platform. Aha. Now, when you have good video, when it just works when its easy, when its seamless, when its platform agnostic. IOS, Andriod, Mac, Windows, Linux, VDI, web. When you have this sort of, this platform when you're agnostic to the platform, and its a consistent high quality experience, you use it. So its the notion of, Lisa, it's the notion of would we rather get into a room and, would we rather get into a room and have a face to face meeting? Absolutely. So why would you get on a call and not like to see the people you're talking to. You like to see the people. Why, because its a video first. >> Unless its just one of those meetings that's on my calender and I didn't want to be there and I'm not going to listen. But I totally agree with you Harry. So, another hot button topic that I think we're at the center of here and that I'm sure you have an opinion on. Remote workers. So we watched some really big companies I think really got back in the dialogue a coupla' years ago when Yahoo was like okay, everybody's got to' come in work for us and we've seen some very large public companies that said you need to be in your workforce. and as I said, I'm sure you've got some pretty strong opinions on this >> I don't know what's going on here, quite honestly Stu but its like I think you're reading my brain because these are things I love talking about. So yeah, its. Sorry repeat the question? >> Remote workers. >> Remote workers, yeah. So first of all, I was at an event recently we talked about remote work. We didn't like the term. Its a distributed workforce. >> Yes. Because if you say you're a remote worker its kind like, that doesn't give you that warm feeling of being part of the organization. So we call it, so we said, we should drop calling people remote workers and we should call them a distributed work force. So that's one. Two is, I'm in New york, I'm in Orlando, I'm in Chicago, I'm in Atlanta, I'm in Denver. I'm on planes, I'm in an Uber. I don't feel disconnected at all. Why? Because I can see my colleagues, and its immersive. They share content with me. I'm walking down Park Avenue and I've got my phone and they're sharing content and I'm zooming in and I can see them and I can hear them and I'm giving feedback and I'm marking up on my phone, as I'm walking. So I don't feel, and then when I go to, its fascinating, and then I go to San Jose and I'm walking around the office and I'm seeing people physically. It doesn't feel like I haven't seen them, its really funny. I was in San Jose last week, Wednesday and Thursday in San Jose, took the red-eye back. Hate the red-eye but, I don't like flying during the day, I think it's inefficient, a waste of time. Took the red-eye back, now I'm on calls Friday morning from my office at home with my green screen, Zoom background and everybody's got, it's like I'm talking to the same people I was talking to yesterday but they were in the flesh, now they're on video. It's like Harry where are you, why didn't you come to the room? Well I'm back in New York. It's just just that simple, yep. >> That simple and really it sounds like Harry, what Zoom is delivering is a cultural transformation for some of these newer or older companies who, there is no reason not to be a video culture. We thank you so much for taking some time >> Thank you, thank you >> To stop by theCUBE and chat with Stu and me about all of the exciting things that brought you back into tech. and I'm excited to dial up how I'm using Zoom. >> Well we can take five minutes after this and I can show you some cool tricks >> Wow, from the CIO himself. Harry Moseley, thank you so much for your time. >> Thank you, thank you >> Great to have you on the program. For Stu Miniman, I'm Lisa Martin and you're watching theCUBE (upbeat tune)

(upbeat music) >> Live from Las Vegas. It's the Cube. Covering, Boomi World, 2018. Brought to you by Dell Boomi. >> Hello everyone, welcome to the live Cube coverage here in Las Vegas, the Wynn Hotel for Dell Boomi World 18. So, exclusive coverage. We're here all day. Wall to wall coverage covering the impact of cloud native to application developers and owners and for businesses. I'm John Furrier with Lisa Martin here. We're here with Michael Dell. 13th time on the Cube. He's the founder and CEO of Dell Technologies. Continuing to defy logic. Growing leaps and bounds. Continuing to do more in the new era of IT and computing. Mike, great to see you. Thanks for coming. >> Great to be with you. Lisa, John, always fun. And here at Boomi World it's really exciting to see the ecosystem continue to grow. As people try to connect everything together Boomi is right there. Incredible business last quarter. Booking growth, 80%, 7500 customers. I still can't find a customer that doesn't need Boomi. The team continues to evolve what the capabilities. We've just had a great show here. 1000 customers showed up. Lot's of great customer stories about how they're integrating all their apps and data together. With the tsunami of data that is coming, it just gets more and more important and interesting and fun. >> You know, you mentioned on the key note stage with CEO Boomi, talking about some performance numbers that you always throw out, server growth. Continuing to grow, okay. The pundants were saying oh servers, that's cloud server-less. You still need compute, networking and storage but they do change with the cloud and SaaS has proven that business model of as a service is key. Boomi's got this little secret weapon around the unified platform that integrates a lot of these traditional components that is still going to be foundational but yet set up the next wave around AI, Edge, data tsunami that you mentioned. This is a key variable in the architectural shift. Can you talk about how you see that playing out? Because you got a couple big pieces on the chess board. VMWare, the continuous Dell Technologies portfolio kind of as the table stakes. This is kind of interesting new architecture. Explain how you see that. >> Pivotal, Dell EMC, VMWare. >> So a lot of pieces. >> Right. >> How does Boomi play into that? Because if it does be a glue layer if you will for lack of a better word, it can be very powerful. >> Yeah, so the challenge is when you go to Software as a Service, how do you connect the things together? Now, connecting 1 or 2 together is pretty straight forward. But when you start having 50 or 100 of these things, and then you've got on premise systems and now you want to have actions like an employee does something and based on their roll then something else happens, you have work flow. And then you get this, you go from a couple billion PCs to 5 billion smart phones to 100s of billions of connected things out there with this explosion in the edge. How you integrate and connect everything together with work flow and do it securely is super, super important. So we're seeing just an explosion of use cases. There was some great examples from a city digitizing and being able to detect leaks and when traffic lights aren't working. The used cases are pretty unlimited and Boomi and Pivitol play sort of at the top layer for us so the applications and integrating all the data and allowing customers to express their competitive advantage with software and data and AI and machine learning. And then of course we've got VM Ware to virtualize everything from the data center to the network and beyond. With NSX, what we're doing with NFE and software to fine win. And then of course we're the initial infrastructure company. Absolute number 1 in all aspects of the data center. And growing much faster than any of the competitors. >> And I want to also get your thoughts on VM Ware announced up to this morning, actually Barcelona time for VM Ware Europe, the acquisition of Heptio. >> Absolutely. >> Okay, Pat Kelson said in VM World, we're going in, we're going to make Kubernetes the dial tone. This is a key architectural component around orchestration. Containers certainly everyone knows, that's been standardized. People love containers. They're using them. As applications need to be more efficiently built out, out of the Boomi's value proposition, Kubernetes and these cloud native things are super important. What's your view on that? Great acquisitions, very young company? Not 34 billion dollars for a Red Hat like IBM bought but a small tuck in. How important is that trend for you? >> Well, think about what we've done with Pivitol and VM Ware together with the Pivitol container service and now adding Heptio with 2 of the 3 founders of the whole Kubernetes movement. We're going to be making Kubernetes just part of the dial tone of vSpheres. So for virtually all the customers out there, 600000 of them that use vSphere, it'll just be super easy to now have Kubernetes containers built into their vSphere environment. That's the vision. We've got a great team working on it across VM Ware and Pivitol and now the Heptio team. Adding to it. We're super pumped about all this. >> If your friend asked you at a party this weekend, hey Michael, why is Kubernetes important? What do you say to that? >> I guess it would depend on how much they know about this. >> They're a business owner responsible for application development. >> Yeah. >> They are owning to transform their organization. They realize clouds going to be a part of it. They here Kubernetes really popular, it's trending. But it's a technology. A lot of people are now getting this for the first time and seeing it as the early dopples have shown it. They try to want to know the impact and why it's important. Why is Kubernetes important as you start to get into this orchestration of apps and work loads across clouds. Why is it important? >> I think people don't want to get locked in to a particular place when it comes to their infrastructure. Kubernetes has clearly won the battle in terms of being able to be that abstraction layer. That's the simple thing that is super exciting. When it sort of went from cloud to hybrid cloud to multi cloud, people realized they wanted a 2 way street where they could move things back and forth. And now with the edge, they want to move it to the edge. With the distributed core. This explosion in data, this dat tsunami really requires a whole new set of tools in terms of the software infrastructure to be able to make it all work. >> So transformation is ... You're talking about Dell Technologies now. 34 years later you have 7 corporations under that. Done a lot to keep those brands, as they're very valuable. Dell Boomi as a business unit. Transformation is essential and Dell Boomi wants to be the transformation partner. It's also incredibly difficult. IT transformation. Digital, security, workforce. Dell Boomi works and Dell Technologies with a lot of large enterprise organizations that are still probably fairly not as well connected as they should be to find new value, new business dreams. How do you talk with customers, large enterprises that need to transform to stay competitive? Where do they start? And how dose the Dell transformation story in and of itself help those customers feel confident in what Dell Technologies can deliver? >> Right, well first thing I'd say is we actually work with customers of all sizes. We have an enormous business with small and medium and large customers. We're number 1 across the whole spectrum. We serve 99% of the Fortune 500. Since your question is about those types. They're looking at the digital transformation and figuring out this is really not an IT project. It's about technology becoming pervasive in everything that they're doing. From sells to marketing, to product creation to their whole fundamental strategy. So then it shows up in the office of the CEO and business line executives and they're having to reimagine. And so they look for a partner and Dell Technologies is very unique. 2 years and 2 months ago we put together all these companies and it's been fabulous. We've been growing double digits consistently and the response has been great because we can deliver a complete set of capabilities. Now you're right, change management, and how do I do it in my company, that's a big deal. So they're pulling on us to bring them more of a ... The don't want us to show up with a bunch of parts and drop em off. They want us to actually build them a solution that is specific to their needs. Help them implement it. In many cases, run it for them. So we do much of that ourselves with our own services organization. 60000 plus people in our services organization. And of course we have the best, all the great SIs out there that are helping customers implement and run and manage like I said, 99% of the Fortune 500. We're right there with them in this digital transformation. Of course we do the IT, the workforce, the PCs and of course security. Unbelievably important. Your whole brand trust is all based on that so we wrap the whole thing with security and no company has the breath that we have. I think we've kind of won the hearts and minds of the decision makers because of the capabilities that we have. Not that we take it for granted. We have to go earn that trust every single day. We have unbelievably talented people in our company. Over 20000 engineers. Scientists, PHDs. About 90% of them are software engineers. This is a very different company than it was 5 or 10 years ago. We're having a blast. It's a rocket ship, so. >> I had a chance to interview an IT leader and his name is Allen Bean. He's the global CTO and head of IT innovation at Proctor and Gamble. He brought the cloud to Coca-Cola. Has had a career all in IT going back to DHL in the 90s and 80s. So we were talking and I asked him, does IT matter. And Dave Alampi always brings up the book by Nick Carr. And we always talk about it. >> Love it. Such a fun topper, yeah. >> And so he says, quote, at that time some people thought it didn't matter, everyone was kind of complaining, but he says it does matter. It's a competitive advantage. And over the decades IT was outsourced. And now people are trying to bring that back in and make it a competitive advantage. This is now ... It's a mandate basically. So as people who have been kind of anemic with IT, they've got people running stuff but eventually outsource all the value. They got to bring that value in. Cloud is that opportunity. How do you respond to the leaders out there trying to figure this out. What are the keys to success around bringing back the competitive advantage and using the cloud for things that aren't core to the core competency but getting that core competency nailed down. What's your vision. >> Yeah, well, look, I mean, it's all about understanding what is your competitive differentiation and advantage as a business. And if you give that away to somebody else, you're going to be out of business in not too much time. Packers applications are great for things that aren't differentiated. But if you actually do something that's unique and valuable and special and you can't express that in software with your own data, you're going to have a problem, right? This is what companies are figuring out. This is what we're doing with Pivitol and Boomi allowing companies to build all this together. And look I think as it relates to cloud, customers have figured out it's multi cloud, right? It's a workload dependent discussion. Some workloads are great in the public cloud but in many cases, not so much, right? As we've modernized and automated the infrastructure we have customers that tell us hey our private cloud for our predictable workload, which is 90%, is 5, 6 times less expensive than AWS. We're building these converge, hyper converge, like the fast track to the automated modernized infrastructure. And look, you can decide. But we're seeing customers that want to move things back and forth and we're seeing a bit of a boomerang. Where customers have said oh everything you upload to the cloud, and no, not everything. >> And the digital transformation really is making IT a competitive advantage. So I had a long ranging interview. It's up on YouTube. I asked him a final question. I always said, okay, so you know, he's transforming Proctor and Gamble. I said okay, as you look ads and all those things what's the next mountain that you're going to climb? You're an IT pro, you said in the agenda. And I'll read you the quote. I want to get your reaction. He said, "I think we're looking forward. Latency is still an issue. We have to find ways to defeat latency and we're not going to do it through basic physics, we're going to have to change out business models, change our technology, distribution, change everything that we're doing. Consumers and customers are demanding instant access to enhanced information through AI and machine learning right at the point when they want it." So this is his next mountain. This is kind of what you were talking about on the stage here at the Dell Boomi event around the impact of AI and data. What's your reaction to that quote? >> Well to me this is all about the edge and 5G coming around the corner. And you look at all the big telcos. They're all piling in on 5G because it's 1000 times faster and 1000 times less latency. That's going to be a big turbo charge. The rocket ship. And it will just create an explosion in data and compute on the edge. And a lot of it's going to stay on the edge. Because you'll have these edge devices talking to each other. A whole new class of applications and capabilities because of that. That's super exciting. We're already seeing it with this build out of distributed core. And that's why we see so much growth in the data center business. >> So Michael, Dell Boomi, if you look at Boomi for a second, was named by the Gartner Magic Quadrant of 2018 as a leader in Ipads. Today they talked about ... >> Again, I think 6th or 7th year in a row. It's been there for quite some time. >> An established leader in an established market. But today they were talking about, hey we want to change the, we want to redefine the I in Ipads to intelligence. How is Dell Technologies and Boomi particularly starting to leverage terra bites and terra bites of customer meta data to make your systems smarter? To enable businesses to truly connect. Prim, edge devices as things continue to get more distributed and data becomes more critical? >> Yeah, so, the key to AI and all of its variance of machine learning, deep learning neural network is the data. The data is the fuel for the rocket ship of AI. And the challenge is, if you have your data spread out in 100 softwares of service providers and 3 public clouds and here and there and where's all your data? We don't really know. How do you fuel the rocket? It becomes a very difficult problem. This is the problem that we're beginning to address for our customers. We're going to have an event all about AI coming up I think next week. Where we're going to be talking much more about this. We got a number of offerings that we're rolling out. We've been helping customers for years build their data lakes and curate the data. And of course Pivitol and Boomi are essential to how you bring all of this together and make sense of it. Because if you just have all the data but you can't actually use it. If you're not already using AI and it's variance to improve your products and services, you're doing it wrong. We've identified over 450 projects just within Dell Technologies internally. As I mentioned on stage, we've sold about 700 million computers since I started in my dorm room. We have enormous telemetry data. Imagine, if you will, that something doesn't work exactly the way it's supposed to. Okay? What's the chance that has never happened before? >> Zero. >> The answers almost zero, right? Our job is to take all this data that we have, use all this intelligence and actually prevent it from happening. So we're building all kinds of intelligence and AI and preventative technology into all of our solutions from the data center to the desk top to the edge, to the multi cloud so that all these systems are just self healing and auto magically way more reliable. >> Auto magically, I like that. It just sounds like what you're saying is Dell Technologies articulating it's value and it's differentiation because you're using that data. >> You have to. >> To identify insight, to take action immediately. >> And to your point about the big companies, they have an advantage but it's a bit of a time value expiring advantage. They have the data that the new entrance don't have. >> Right. >> But they have to activate it quickly with this new computer science or else they'll be dinosaurs, right? Nobody wants to be a dinosaur. >> Michael, what's the business drivers, and you talk to customers all the time, that they're seeing and that matter most to them. Is it agility, is it transform the customer employee experience, compliant security? How would you view the pattern around the most important business driver for your customers that are trying to put the business transformation together with digital. Could you comment just anecdotally what you see? >> I think every customer is a little bit different in their journey. Some customers, security is number 1. Because of the kind of business that they're in and it just has to be that way. For other customers it's how do I increase my speed to the solution. It used to be we need a new feature. We'll get it in a year or 2. How about never. Does never work for you? That's kind of the old IT. Now with agile development you've got, what we're doing with Pivotol cloud foundry, you've got companies implementing, these are giant companies. Biggest companies in the world. They're implementing new things like in 2 or 3 weeks. It's amazing how fast. Speed and as a chief executive, that's what you crave. How can I take this new requirement that I heard from the customer and turn it into a feature that I can go offer very, very quickly? That's what you want to be able to do. It's what we used to be able to do when we were little tiny cubs. How do you do it with 200000 people? >> I want to get your thoughts on a trend that you popularized early on in your career, the direct business model, you also had the just in time manufacturing kind of ethos of build it, build to order, really streamline efficiency. So I want to kind of take the leap to now a new generation with cloud native where you have workflows and efficiencies. You have integration. So in a way the customers are now going direct to their customers and wanting to compose and build solutions. As you said on stage, these are going to be new problems that not yet have been identified. New solutions. So that customers have to be what you did. They got to build their own. So they got to build their own, they got to have the suppliers, they got to have the code. How do you see customers being successful if they want to take that efficiency approach? Kind of be 5 nines if you will in this new modern era. Because this is the challenge that they have. They have to build their own. They need suppliers. They need you guys. How do you see the customers being successful in that scenario? >> Yeah, I think what they're trying to do is shrink the time from when at that point of customer interaction, they can use the data to make the service and the product better and if it's like this lengthy value chain with all these different intermediaries and it takes weeks or months or never, that's just way too slow. They want it to be like instantaneous. How do they create that direct relationship with their customers? I only had 1000 dollars when I started so we couldn't really afford much so each dollar you invest very carefully. We just kind of out of necessity came up with some ideas that ... >> You were efficient because you had to be. >> We didn't have any choice, right? >> So when we talk about integration, we talk about it's the foundation of digital transformation, we've talked about IT, security, workforce. One of the things that you mentioned earlier that I'd like to get your perspective on, a different view of transformation is cultural. An enterprise organization as you mentioned has a huge advantage of a tremendous wealth of data. With that amount of data and the need for speed as you just talked about, where, in your opinion, and your experience, is cultural transformation as an enabler of an enterprise to really be able to react that quickly to develop new products, new revenue strengths? >> Yeah, I think it's a big challenge. And a lot of customers struggle with change management. You never want a good crisis go to waste. We sort of grew up in the business where it was change or die, quick or dead. If you don't do it you're gone, right? This was just the way our business, this was just how we had to compete. It's what we grew up in. And I think what's happened is more and more businesses are that way now. It requires the business leaders to say hey friends, we've got a real challenge here and we've got to move faster. It is change or die, it's quick or dead, I think for all businesses because this is the fastest time ever but it's the slowest time relative to the future. It's just going to get faster and faster. If companies ... The only way you get good at change is to do it more frequently. And so if you've never changed anything for 80 years in your company and all the sudden you start trying to change, it's really hard. You just have to start. >> How do you inspire say employees at Dell Technologies who've been with you for a very long time to be able to be open and agile themselves to help facilitate this transformation? >> I believe we built it into our culture that they understand that change is good as opposed to change is bad. If you fear something well then it's bad, right? We precondition people to say okay we're going to change something. Not to say every time we change something it works perfectly. We make mistakes, we learn, we trial and error. That's all fine. Fail fast. But you need a culture where you can embrace change. No question about it. I think a lot of companies that didn't really have that are figuring that out and either by crisis or by leadership or by some combination they're then forced into it. For me, it's what we grew up in. Because hey it's a tough world out there. >> Mike, I want to ask you a final question. Thanks for coming on and spending the time with us. Great interview here. Good length. Recently in the news with a lot of commentary from us as well as the industry around IBM buying Red Hat. I made a comment around the innovation piece of this and I want to get your thoughts on that because when you bought EMC, it was a merger of equals. You integrated that and the growth that you've been successful since then, I want to get your perspective. I want you to take a minute to explain to folks watching, when you did the merger equal with EMC, what happened? You've been successful integrating the organization. What innovative things have you done since the EMC merger of equals? Take a minute to explain, again, there's a lot of moving pieces on the table. You got VM Wares, you got Pivitol, you got Boomi. A lot of moving parts in your plan. You've been successful with the numbers. Financial performance shows it. Take a minute to explain what happened, where's the innovation coming out of Dell Technologies? >> So in hind sight, it looks pretty obvious, right? You take the leader and servers and the leader in storage and you say hey infrastructure hardware goes together. And by the way, if you have the leader of infrastructure software, VM Wares, you put that all together. Wow, that'd be really great. And turns out it was. It was actually much better than we thought. And so customers have really bought into that and then with Pivitol and Boomi and Rsave, Virtustream, Secureworks etc., we have such a complete set of capabilities that customers have said, hey, why do I want to buy from 20 smaller less capable companies and integrate it myself versus you guys will just do all this for me. If they were buying from 2 or 3 or 4 parts of Dell Technologies they'll say, well, why don't we just take the others, right? We been picking up huge amounts of share across the whole business. I'm talking about like 10s of billions of dollars of growth here. There's clearly a consolidation going on in the kind of existing parts of the industry but we've also got massive investments in the new cloud native parts and software defined, and security. It's been a real blessing to be able to pull all of these teams together. We had this relationship with EMC going back from 2001. We were very early supporters of VM Ware. We had a theory of victory and it's played out very well. The teams have really gelled enormously well and the customers have continued to give us their trust. >> I think, first of all servers, storage, networking is never going away. It's the holy trinity of anything in computing. Just looks different and consumes differently. But I think people underestimate the execution innovation that you guys have done. You didn't skip a beat. VM Ware didn't skip a beat. So things have happened, so that was a challenge of the integration. >> Not everybody predicted that it was going to go that way. It's actually gone much better than even we had planned. The revenue synergies have been much larger. >> Well congratulations and thanks for taking the time on the Cube. Michael Dell is here inside the Cube here at Boomi World 18. Dell Boomi World. It's the part of Dell Technologies. We think of them being the power engine for data processing, data growth, powering AI, integrating all the application workloads. I'm John Furrier with Lisa Martin. Stay tuned for more coverage after this short break. (upbeat music) >> Since the dawn of the cloud, the Cube has been there. Connected.

(upbeat inspirational music) >> Hello everyone, I'm John Furrier in the Palo Alto Studios for Cube Conversation. I'm here with David Link who's the CEO of ScienceLogic. David, thanks for coming in. Good to see you. >> Great to be here, John. >> So, thanks for coming in. You came in from D.C., that's where your headquarters and ScienceLogic, you guys are having good business run right now. You're self-funded early on, now you get to venture back. Take a minute to explain how you guys got started, what does the company do? >> So, this is the classic story of entrepreneurship. We started in the garage. Myself and a couple of co-founders believed that IT management operations was broken and it was broken because a lot of the industry had really focused on having silos of data, the silos of data, the network, the application, the security, the storage, now cloud, containers and every technology had its own data silo of manageability. We believe that that was intrinsically wrong to understand how the service that combined all these different applications and technologies was behaving. We wanted a service view, so we brought it all together, kicked off, really the first seven years we boot strapped the company, the first year and a half we coded, got the product to market, it grew very quickly, got to the Inc. 500 a couple times, and then we attracted a lot of financing options. We had about 250 companies approach us. We never made one outbound call and fortunately, we had some really great and strong investors in EA, then Intel Capital, and three and a half years ago, our last round of financing was with Goldman Sachs and they've really been a great catalyst to help us continue our growth over the last five years. I think we've grown about 540% on the revenue side, so it's been an exciting time. >> Well congratulations. It's always a good success story to be a hot deal when you don't have to make any calls, they come to you. >> Yes. >> And that's good, that's part of growth, but I got to ask you what year did you start the company up? >> 2003. >> So, it's not obvious then, it's obvious to you as a visionary, but now people now know IT operations is broken. Cloud highlights it in a big way. The lights get turned on, the cockroaches are running around, but web services were still booming at that time. You start to see the beginning of the whole web services movement, you guys saw this early. Now, it's well recognized that IT operations can be automated away and Cloud certainly has an automations vibe to it. AI has been a big part of the AI operations. Is this kind of where you guys started with that vision? Was the original vision kind of where it is today? Take us through kind of what you saw and what's happening today. >> So, thematically we have this next wave of the computer architecture, Cloud computer architecture, edge computing where the way you manage that kind of infrastructure is different than the classic client server. There are different needs, different requirements, and that thematically has led with the change of infrastructure. Applications are changing and applications are now more infrastructure-aware. When we started the company, usually applications sat on one system or a cluster of systems and they weren't widely distributed. So now that the applications profile is changing, the architects are changing to microservices, that really puts huge strain on our industry. The industry, the total adjustable market, is about 25 billion dollars a year annual spent on tools. John, if you can imagine that. 25 billion a year is spent. It's going through an amazing, I would say, tectonic shift because why? Infrastructure's shifting and as more people move workloads to the Cloud into what I would call ephemeral workloads where they're moving around, that causes all kinds of pressure on the systems and record to manage that so that you understand what is happening at this moment in time. Where is it? What Cloud is it running on? How's the application performing? And you really need to tie the application to the infrastructure real-time. >> I want to get your thoughts on this. I interviewed a CIO this past week for a big company. I won't say the name 'cause we haven't published the video yet, but he told me candidly, he said that, look it, we outsourced everything and we outsourced our way into oblivion and what he meant by that was is that the core competency of IT, and he reference the book, Nick Carr, IT Doesn't Matter, which kind of was true, but wasn't true. Now, IT has a competitive advantage and essentially, they had this anemic IT department that was outsourced and they lost their competitive advantage, so he's like the reinvestment in IT is more than ever now because of Cloud, because of these new environments. So, I kind of believe that to be true. I'm sure you do too, but the reaction really is is you've got a lot of Legacy vendors that were dictating how to do things. >> Yes. >> I'm IBM, I'm Oracle, you got to do it this way and you were kind of constrained, IT was constrained by that. Now, you got to be much more agile, you have workloads that are dynamic, provisioning, orchestration, this is a whole new dynamic. What's the impact to the IT buyer, the IT environment with this new model, this new modern dynamic, new modern era? >> When you think about CIOs and CEOs, the pressure that they have to be Cloud first. Cloud first is such a strong... At the Board level, there's pressure. The adoption of Cloud now is happening faster and more rapidly than the adoption of virtualization, maybe it's doubling in the speed in the time warp, but what that means is that most CIOs are dealing with as many as nine to 11 Clouds, not one. You have a federation of Clouds: Private Clouds, public Clouds, software as a service Clouds, and that's your IT landscape, so it's changing so quickly that you have to think of it in a more federated approach. That means that the way you used to manage your private systems, and now your public systems, are really different and you've got to look at them more holistically because often they're communicating with one another in hybrid architectures. So, that's really the heart at our mission, to provide the context of how all the services you're trying to deliver as a CIO are behaving. What's their availability? What's the risk of the service having a problem? And knowing that real-time is ultimately what you want to do with your Cloud first strategy, but you need the right tooling operationally to affect that kind of outcome for your team. >> So, what's the core problem that you guys are solving? 'Cause obviously, there's a lot of complexity now, it's a new environment, so I still got the baggage of some Legacy environments. Is it monitoring you're solving? I guess, what's the core problem is my question that you guys are solving? If you had to kind of finish that, the core problem is blank. >> The core problem is visibility. The Holy Grail is application to infrastructure and the problem is that's becoming so complicated because everything is moving around. The more abstraction layers where it's a container, which is abstracted on top of a virtual machine, which is on top of bare-metal server. SD-WAN is an abstraction on top of an MPLS network. So, you have all of these layers that get from a software-defined perspective, they get abstracted away from the actual equipment that it's running on. Well, when that happens, where is the problem? Because it's moving around. The problem isn't in one place. So, that application to infrastructure awareness, it's almost like one of the things that we've looked at in the world of Facebook. You've got a lot of relationships, you've got videos, you've got friends, you've got all these different connections that are constantly moving around with data streams. What we do as a company is pull all these different data streams from the technologies themselves, from the Cloud providers, from the application layer, pull it together in a data hub that we can then understand how they all relate to one another so you can really, truly understand service impact and that is the crux of the problem most companies are dealing with now. You've got to fight with your Legacy, 'cause you still have that and it's not going away tomorrow, so you've got to make sure you're good at that, you've also got Cloud, the Cloud first initiative, and then you've got in between systems that are using both. That's really where we play. We're really good at the Legacy, we're good at Cloud, and connecting the two together and that is a really tough space because most Legacy providers really didn't get good with managing hyperactive ephemeral Cloud estates. The guys who started over the last five years building tools to manage the Cloud are really good at Cloud, but they don't cover Legacy. They're not going to cover a net app or hyper-converge, typically. So, we combine the both, Legacy and Cloud together in one management system, monitoring management paradigm, and then there's an automation engine where we actually proactively remediate problems real-time. So, the three together is where algorithmic operations, AI Ops, comes together. >> David, I want to dig into the offering, but before we get there, I want to get your thoughts on two trends: one is multi-Cloud. Recently, we've seen a lot of hybrid Cloud discussion, but now the big hubbub is multi-Cloud and the other one is AI Operations. So, I've been saying on The Cube, everyone who's in IT Operations is screwed, going to get automated away by AI. It's kind of tongue in cheek, but it's kind of a reality is that those old business models that were based upon certain service levels are going to be done in software. Now, you've got multi-Cloud. So, first question is what is multi-Cloud definition that you have for that? What does it mean? What is multi-Cloud? >> In our world, multi-Cloud is... Most large organizations use more than one Cloud and half of that is driven by what Cloud is best to operate a particular application profile? Amazon's really good at a lot of application profiles, but Azure might be better at certain Microsoft profiles, and then Google has profiles, and IBM Watson has profiles. Depending upon what you're trying to do with the application, where it was born, how it's living, how it's been re-factored, you're going to use one Cloud or the other, but most customers that we see have many Clouds. There really isn't one Cloud management scape when you're using... Vendors are still reasonably proprietary in the public hyper-scales. >> Some are better than others. >> And some are better. It depends on the use case. So, we try to bring all that together so that you're not looking at four panels, you're looking at one. >> So, you make it easy with one dash port. Okay, AI Operations. This is a hot trend, a lot of venture capitals are funding companies that have AI Ops in it, machine-learning obviously booming, no doubt software automation is coming. I'm seeing it everywhere. What does that mean? What is the definition of AI Operations? I mean, I'm bombastic at saying the industry sectors is going to crumble. I kind of think it will, but it will shift, but what is the impact to IT Operations with AI and what is AI Ops? >> We like to think of it as a life cycle. So, when you look at the life cycle of operations you have at the beginning of the life cycle, provisioning, so when we think about algorithmic, there's many different layers of automation: machine learning, cognitive learning, and you're going to use different parts of algorithmic operations for different parts of the life cycle. So at the very beginning, you're going to connect generally to a provisioning system so you know what's been provisioned or de-provisioned so we can automatically align a manageability template because nobody can be on a keyboard now, John. This has to be all machine to machine. So, once then it gets provisioned, then there's the run operate part and how do you learn from the normal operating conditions that you're looking for? The anomalies that you would look for to detect things aren't behaving appropriately? And then, once you understand those anomalies and the patterns, you can remediate them proactively, adding resources, decreasing resources, changing configurations, those are the things that kind of that last tier, and then that final tier, when there is a problem, if there is a problem, you've got to then raise a ticket, you've got to then work through the incident management of that ticket so there's another multi-step layers of automation to the incident management orchestration layer of solving problems, closing out a ticket. So, we have so many different layers across that life cycle that we plug into, most of which are native to our core platform. >> And your secret sauce is managing all the workloads that are moving around really fast, so to complicate that even further, you've got a lot of stuff moving around to track it all. I love what you said about not typing on the keyboard anymore, but essentially I'll translate that from what I heard was command line interface of CLIs has been the primary mechanism for dealing with either network and or storage, which is moving packets from here to there and moving storage from now to then, storing stuff. So, CLI is moving to a programmable model? This is the big takeaway. So, I totally think this is the mega trend. The command line interface mode of operation is moving to programmable, which hits your run and operate. >> Correct. >> This is the mega trend. Your thoughts? >> It is and that's one of the layers of complication because instead of a CLI, it's an API, and it's usually a restful API or a graph API. Those APIs are very different in construct and instead of talking to one device, that one device is virtualized into a hundred or a thousand and so with one API call, you actually create a thousand devices versus one device and understanding how one system is behaving, like a CLI would be to one system, right? So, that is a layer of complication where when we make an API call, we break it up into hundreds of things that then we track and understand the tenancy of what is a multi-tenant nature of that? What is the organization? What is the service view for all these little components that are part of one API call? And that abstraction layer makes it really difficult for the enterprise because the one thing about our API economy right now, there is no standard. Every vendor chooses their own formats for their products and in some cases, many formats for products in a product family. So, that layer of complexity, John, is what we're really solving for. The customer doesn't have to worry about that. We take care of that for them, but you're right, the API has become the CLI and it's just a level of complexity beyond what most enterprises are wanting to deal with themselves. That's why they bring us in to help. >> That is so important too that the data's in the API. >> That's right. >> That's key and Cloud's got orchestration challenges, state and state-less applications. All right, let's get into ScienceLogic's offering. So, what do you guys provide to customers? Talk about the product. How do you guys deliver it? Is it software, is it Cloud, is it service, is it appliance? Take us through the offering. What's the key secret sauce? How do people buy and use your product? >> So, our product's delivered as a service. You can use it in the Cloud. We deliver it as a service in our Cloud, but we also provide it if customers are using Amazon or IBM or Google or Microsoft. They can put our product, same code-base, same product, they subscribe to it, it's a subscription license model, so it's a pay-as-you-go and you pay for the number of devices that are under management. Typically, there are some customers, whether it's in the government, financial services, or international locations where they might want to deploy our product on premise, so we offer the same mode, either in the Cloud or on premise, but most customers now are choosing to deploy the product in the Cloud and that is a really easy... It's easy to get >> That's good for you guys. >> It's great for us because there's consistency of operations, we can keep everything up to date, and most customers want technology delivered as a service. They just want it to work. They want it to solve the business problem and do it easily, efficiently, even better, solve complex problems in an easy format. >> Give some customer examples or benefits or anecdotal stories around customers that have used your service that extracted benefits and value out of it, and second part of that question is when does someone know they need your product? What are the smoke signals? Is something breaking or is it just pain? When do they know to call you guys? So first one is customer examples or stories and then how does someone know who's watching this, hey I might need these guys? >> There are four segments that we cover. We have customers all over the world. There's enterprise customers. This is really a product for large enterprise, Fortune 1000 companies, so Clorox would be a customer, Hughes Satellite would be a customer, Cisco Systems out here in the valley is a customer, Dell, EMC, so it depends on what problem we're trying to solve for the customer. >> So large IT deployments basically? >> Very large, multinational, big networks, hundreds of thousands of devices, tens of thousands of devices is where those companies have immense complexity, lots of heterogeneous technology that comes together to deliver a service. They need a really robust solution to manage that proactively. So, enterprise customers, service providers, so a lot of managed service providers, infrastructure service providers, Telcos, they all use it, so I think we have about 60% of the infrastructure as a service providers use our product to deliver managed services to their customers and then the federal government all over the world, we have government customers around the world. I think right now about 70,000 organizations use our product every day and it's fairly evenly split, AMIA and AsiaPac, and then the US is our biggest market. >> You know, it's interesting you mention heterogeneous. I always kind of smile because you mentioned client server earlier. Every wave has their reflection point and I think what's going on with Cloud and I'd love to get your reaction is that Cloud, where it's winning, is it's a scale out, large scale, pool of resources. We look at what's going on with Amazon, all this, is that you don't need to know what service they have, just get more servers, so you're scaling out. >> Yes. >> But now, you need to have heterogeneous components. It's not just X-86. You could have a GPU, you have other stuff, AI going on, so heterogeneous is different now, but it's still the same came, it's still complex, it needs to be abstracted away. Is this kind of the key area that you're riding on? Is that right? What's your thoughts about that concept? >> Well to a large degree, John, the Cloud providers have really provided a layer for you to not have to worry about that, but we've seen customers actually with hyper-converged environments that they build in-house and or systems that they built because of geo-fencing in different countries that need the data kept in the country. There are requirements that drive people to build their own system, so the real thing that we're seeing a tremendous struggle with right now is that context, understanding what connects to what. All the different technologies that come together, all the heterogeneity that comes together to deliver a service, and whether you buy best in class technologies to solve one part of the stack, the landscape of whether it's your load balancer or a caching server or the database or the server, the network, all those different components, the security layer, those components that come together, often people have chosen specific technologies to solve those problems. The Cloud kind of abstracts that away with they hyper-scalers, but often you're putting infrastructure that you have on prem combined with infrastructure in the Cloud to deliver an aggregate solution so that multi-tiered architecture, just like back in the day, a three-tiered architecture, we're seeing those emerging again with public Cloud because you might want the data that actually generates the information on the web client's side to be in your data center, but you still have to understand how the service is behaving. So, we really look at all layers of the stack to solve the problem and that's really hard to do. >> Well David, great to have this conversation. Before we end, I want you to get a quick plug in for the company. How many employees, offices? What's the revenue like? What's your goals? You don't have to share the revenue if you don't want to, but if you want to, you can. Give a plug for the company. What's happening? >> Well, I'm really proud of what the team's done. We've got a great team of employees, about 370 employees today, full-time, they're spread all over the world, probably 80% are here in the Americas and the vision for the company, we think that this is a big opportunity. We are far from done. We really started the company to disrupt the industry 'cause the industry, as I said, was a silo industry and it really is, 20 years later, it's still that way. It's not really converged into a unified solution. We have great aspirations. Every year we've been growing the business 40, 50% a year for the last several years, and this year, we'll round over 100 million within the next 12 months of our run rate, so it's an exciting time for the company. >> Well, you've got a great model, SAS, in a massively growing and changing market, complex market, heterogeneous networks, apps are all being abstracted away and automation's driving this, so I think it's a perfect storm of innovation. Congratulations and thanks for chatting on The Cube here in Palo Alto. >> Love to be here, John. Thanks for having me. >> John Ferrier here, Cube Conversation, and we're here with David Link, CEO of ScienceLogic, and also the founder. Self-funded, big venture rounds, growing like a weed, based in D.C. This is the Cube Conversation. I'm John Furrier. Thanks for watching. (dramatic inspirational music)

(upbeat music) >> Live from San Francisco, it's theCUBE covering Google Cloud Next 2018, brought to you by Google Cloud, and it's Ecosystem Partners. >> Hello everyone, and welcome back theCUBE live coverage, here in San Francisco, the Moscone South. I'm John Furrier with the SiliconANGLE on theCube, with my cohost Dave Vellante, for next three days. Day one, wrap up of Google Next here. Google Cloud's premiere event. This is a different Google. It's a world changing event, in my opinion, of Google. Dave, I want to analyze day one as we put it in the books. Let's analyze and let's look at it, and critique and observe the moves that Google's making vis-à-vis the competition. And Diane Greene, who's on theCUBE earlier, great guest. Kind of in her comfort zone here on theCUBE because she talks, she's an engineer, she's super smart. She thinks free thoughts but she really has a good chessboard view of the landscape. My big walk away today is that she's got full command of what she wants to do, but she's in an uncomfortable position that I think she's not used to. And that is at VMworld, at VMware, she didn't have competition. First mover, changes the market. Certainly, winning at all fronts when VMware was starting. And they morphed over and then you know the history of Vmware: sold to EMC and then now the rest is history. But they really changed the category. They created a category. And were very successful in IT with virtual machines. She's got competition in Cloud. She's playing from behind. She's got the big guns. She's going to bring out the howitzers, you know? I mean she's got Spanner, BigQuery, all the Scale, Kubernetes. Which the internal name is Borg which has been running on the Google infrastructure. Provisioning services on all their applications with billions and billions of users. If she can translate that, that's key. So that's one observation. And the second one is that Google is taking a data centric view. Their competitive advantage is dealing with data. And if you look at everything that they're doing from TensorFlow for AI and all the themes here. They are positioning Google as with a place to bring your data. Okay, that is clear to me as a stake in the ground. With the large scale technical infrastructure they're going to roll out with SREs. Those two things to me are the front and center major power moves that they're making. The rest wrapping around it is Kubernetes, Istio, a service oriented architecture managing services not products and providing large scale value to their customers that don't want to be Google. They want to be like Google in the benefits of Scale, which comes in automation. And I think I head room for Google Cloud is IT operations. So that's kind of like my take. I think day one, the people we've had on from Google sharp as nails, no enterprise tech. Jennifer Lin, Deepti, Diane Greene. The list goes on and on. What's your take? >> Well so, first of all with what's goin' on here and Diane Greene, the game she's playing now. Completely different obviously than VMware. Where it was all about cutting costs. Vmware, when you think about it, sold for $635 million to EMC way back when. So, it was just a little scratch compared to what we're talkin' about now. She didn't have the resources. The IT business, you remember Nick Carr's famous piece on HBR 'Does IT Matter?' That was the sentiment back then. IT, waste of time, undifferentiated. Just cut costs. Cut, cut, cut. Perfect for Vmware. The game they're playing now is totally different. As you said they were late to the enterprise. Ironically, late to the "enterprise cloud" >> They got competition >> They got competition. Obviously the two big ones Microsoft and, of course, AWS. But so what might take away here is: the differentiation. So they're not panicking. They're obviously playing the open source card. Kubernetes, TensorFlow, etc. Giving back to the community. Data, they're definitely going to lead in AI and machine intelligence. No question about it. So they're going to play that card. The database, we had the folks from Cloud Spanner on today. Amazing technology. Where as you think about it, they're talkin' about a transaction-oriented database. We heard a customer today, talking about we replaced Oracle. Right? We got rid of Oracle, now-- >> When was the last time you heard that? Not many times. >> It's not often. No, and they're only $120 million company. But to her point was it's game changing for us. It's a 10-X value proposition. And we're getting the same quality that we're getting out of our Oracle databases. They're leading with apps on Google Cloud. Twitter is there. Spotify. They obviously have a lot of history. So that's part of it, part to focus. We on SiliconANGLE.com, there's a great article by Mark Albertson. He talked about the-- he compared the partner Ecosystem. Google's only about 13,000 partners. Amazon 100,000. Azure 70,000. So a long way to go there. Serverless, this is they're catching up on serverless. But they're still behind. Kind of still in Beta, right? &But serverless, John, I'd love your take on this. Can be as profound as virtualization was. Last to developer love. They've got juice with developers. And then the technology. Massive scale. We heard things about Spanner, the relational semantics. BigQuery, Kubernetes, TensorFlow. They have this automate or die culture. You talked about this in your article. That's a bottoms-up engineering culture. Much different than the traditional enterprise top-down "Go take that hill! "You're going to get shot at but take that hill by midnight" >> It's true. Well I mean, first of all, I think developers are in charge. I think one of the things that's happening is that it's clear is that every company, whether you're a start up or large enterprise, has to come to grips with if they're going to be a software company. And that's easy to say "Oh, that's easy. You just hire some software developers" No, it's not that easy. One, there's software developers coming out. But the way IT was built and the way people were buying IT, it's just not compatible with what software developers want to do. They want to work in a company that's actually building software. They don't want to be servicing infrastructure. So, saying that everyone's going to be a software company is one thing. That's true. And so that's the challenge. And I think Google has an opportunity. Just like Oedipus has been dominating with service-oriented approach managing services. By creating building blocks that create large Scale that allow people to write software easily. And I think that's the keyword. How do I make things common interface. You asked Diane Greene about common primitives. They're going to do the foundational work needed. It might be slower. But at a core primitive, they'll do that work. Because it'll make everything a faster. This is a different mind shift. So again, you also asked one of the guests, I forget who it was, IT moves at a very slow speeds. It's like a caravan-- >> You said glacial >> But yeah, well that used to be. But they have to move faster. So the challenge is: how do you blend the speed of technology, specifically on how modern software is being written, when you have Cloud Scale opportunities? Because this is not a cost cutting environment. People want to press the gas, not the brake. So you have a flywheel developing in technology, where if you are right on a business model observation, where you can create differentiation for a business, this is now the Cloud's customers. You know, you're a bank, you're a financial institution, you're manufacturing, you're a media company. If you can see an opportunity to create a competitive advantage, the Cloud is going to get you there really fast. So, I'm not too hung up on who has the better serverless. I look at it like a car. I want to drive the car. I always want to make sure the engine doesn't fall out or tires don't break. But so you got to look at it, this is a whole 'nother world. If you're not in the Cloud, you're basically on horse and buggy. So yeah, you're not going to have to buy hay. You don't have to deal with horses and clean up all the horse crap on the street. I mean all of that goes away. So IT, buying IT, is like horse and buggy. Cloud is like the sports car. And the question is 'Do I need air-conditioning?' 'Do I need power windows?' This is a whole new view. And people just want to get the job done. So this is about business. Future work. Making money. >> So-- >> And technology is going to facilitate that. So I think the Cloud game is going to get different very fast. >> Well I want to pick up on a couple things you said. Software, every company's becoming a software company. Take Andreessen, said 'Software is eating the world' If software's eating the world, data is eating software. So you've got to become a data company, as well as, a software company. And data has to be at the core of your business in order to compete. And data is not at the core of most company's businesses. So how do they close that gap? >> Yeah >> You've talked about the innovation sandwich. Cloud, data, and AI are sort of the cocktail that's going to drive innovation in the future. So if data is not at the core of your company, how are you going to close that AI gap? Well the way you're going to close is you're going to buy AI from companies like Google and Amazon and others. So that's one point. >> Yeah, and if you don't have an innovation sandwich, if you don't have the data, it's a wish sandwich. You wish you had some meat. >> You wish you had it right (Laughing) Wish I had some meat. You know the other thing is, you mentioned Diane Greene in her keynotes said "We provide consistency "with a common core set of primitives" And I asked her about that because it's really different than what Amazon does. So Amazon, if you think about Amazon data pipeline, and we know because were customers. We use DynamoDB, we use S3, we use all these different services in the data pipeline. Well, each of those has a different API. And you got to learn that world. What Google's doing, they're just simplifying that with a common set of primitives. Now, Diane mentioned, she said there's a trade off. It takes us longer to get to market if-- >> Yeah, but the problem is, here's the problem. Multicloud is a real dynamic. So even though they have a common set of primitives, if you go to Azure or AWS you still have different primitives over there. So the world of Multicloud isn't as simple as saying 'moving workloads' yet. So although you're startin' to see good signs within Google to say 'Oh, that's on prim, that's in the Cloud' 'Okay that's hybrid' within Google. The question is when I don't have to hire an IT staff to manage my deployments on Azure or my deployments on AWS. That's a whole different world. You still got to learn skill sets on those other-- >> That's true >> On other Clouds >> But as your pipeline, as your data pipeline grows and gets more and more complex, you've got to have skill sets that grow. And that's fine. But then it's really hard to predict where I should put data sometimes and what. Until you get the bill at the end of the month and you go "Oh I should've put that in S3 instead of Aurora" Or whatever it is. And so Google is trying to simplify that and solve that problem. Just a different philosophy. Stu Miniman asked Andy Jassy about this, and his answer on theCUBE was 'Look we want to have fine grain control over those primitives in case the market changes. We can make the change and it doesn't affect all the other APIs we have' So that was the trade off that they made. Number one. Number two is that we can get to market faster. And Diane admitted it slows us down but it simplifies things. Different philosophy. Which comes back to differentiation. If you're going to win in the enterprise you have to believe. I get the sense that these guys believe. >> Well and I think there's a belief but as an architectural decision, Amazon and Google are completely different animals. If you look at Amazon and you look at some of the decisions they make. Their client base is significantly larger. They've been in business longer. The sets of services they have dwarf Google. Google is like on the bar chart Andy Jassy puts up, it's like here, and then everyone else is down here, and Google's down here. >> Yeah and the customer references, I mean, it's just off the charts >> So Google is doing, they're picking their spots to compete in. But they're doing it in a very smart engineering way. They can bring out the big guns. And this is what I would do. I love this strategy. You got hardened large scale technology that's been used internally and you're not trying to peddle that to customers. You're tweaking it and making it consumable. Bigtable, BigQuery, Spanner. This is tech. Kubernetes. This is Google essentially being smart. Consuming the tech is not necessarily shoving it down someone's throat. Amazon, on the other hand, has more of a composability side. And some people will use some services on Amazon and not others. I wouldn't judge that right now. It's too early to tell. But these are philosophy decisions. We'll see how the bet pans out. That's a little bit longer term. >> I want to ask you about the Cisco deal. It seems like a match made in heaven. And I want to talk specifically about some of the enterprise guys, particularly Dell, Cisco, and HPE. So you got Dell, with VMware, in bed with Amazon in a big way. We were just down at DC last month, we heard all about that. And we're going to hear more about it this fall at re:Invent. Cisco today does a deal with Google. Perfect match, right? Cisco needs a cloud, Google needs an enterprise partner. Boom. Where's that leave HP? HP's got no cloud. All right, and are they trying to align? I guess Azure, right? >> Google's ascension-- >> Is that where they go? They fall to Azure? >> Well that's what habit is. That's the relationship. The Wintel. >> Right >> But back up with HP for a second. The ascension of Google Cloud into the upper echelon of players will hurt a few people. One of them's obviously Oracle, right? And they've mentioned Oracle and the Cloud Spanner thing. So I think Oracle will be flat-footed by, if Google Cloud continues the ascension. HPE has to rethink, and they kind of look bad on this, because they should be partnering with Google Cloud because they have no Cloud themselves. And the same with Dell. If I'm Dell and HP, I got to get out of the ITOps decimation that's coming. Because IT operations and the manageability piece is going to absolutely be decimated in the next five years. If you're in the ITOps business or IT management, ITOM, ITIL, it's going to get crushed. It's going to get absolutely decimated. It's going to get vaporized. The value is going to be shifted to another part of the stack. And if you're not looking at that if your HPE, you could essentially get flat-footed and get crushed. So HP's got to be thinking differently. But what Google and Amazon have, in my opinion, and you could even stretch and say Alibaba if you want a gateway to China, is that what the Wintel relationship of Windows and Intel back in the 80s and 90s that created massive innovations So I see a similar dynamic going on now, where the Cloud players, we call them Cloud native, Amazon and Google for instance, are creating that new dynamic. I didn't mention Microsoft because I don't consider them yet in the formal position to be truly enabling the kind of value that Google and Amazon will value because-- >> Really? Why not? >> Because of the tech. Well and I think Amazon is more, I mean Microsoft is more of a compatibility mode (Talking over each Other) I run Microsoft. I've got a single server. I've got Office. Azure's got good enough, I'm not really looking for 10-X improvement. So I think a lot of Microsoft's success is just holding the line. And the growth and the stock has been a function of the operating model of Cloud. And we'll see what they do at their show. But I think Microsoft has got to up their game a bit. Now they're not mailing it in. They're doing a good job. But I just think that Google and Amazon are stronger Cloud native players straight up on paper, right? And if you look up their capability. So the HPEs and the Ecosystems have to figure out who's the new partner that's going to make the market. And rising tide will float all boats. So to me, if I am at HP I'm thinking to myself "Okay, I got to manage services. "I better get out in front of the next wave "or I'm driftwood" >> Well Oracle is an interesting case too. You mentioned Oracle. And somebody said to me today 'Oracle they're really hurting' And I'm like most companies would love to be hurting that badly but-- >> Oracles not hurting >> Their strategy of same-same but it's the same Oracle stack brought into the Cloud. They're sending a message to the customers 'Look you don't have to go to another Cloud. 'We've got you covered. We're investing in R&D', which they do by the way. But it was really interesting to hear from the Cloud Spanner customer today that they got a 10-X value, 10-X reduction in costs, and a 10-X capability of scaling relative to Oracle that was powerful to hear that. >> There's no doubt in my mind. Oracle's not hurting. Oracle's got thousands and thousands of customers that do hundreds of millions of dollars in revenue. And categories that people would love to have. The question on Oracle is the price pressure is an innovator's dilemma because there's no doubt that Oracle could just snap a few fingers and replicate the kind of deliverables that people are offering. The question is can they get the premium that they're used to getting. One. Number two, if everyone's a software company, are they truly delivering the value that's expected. To be a software company, to be competitive, not to make the lights run-- >> To enable >> To enable competitive-- (Talking over each other) Competitive advantage at a level, that's to me, going to be the real test of how Cloud morphs. And I question that you got to be agile and have a real top line revenue numbers where using technology at a cost benefit ratio that drives value-- >> But with Oracle-- >> If Oracle can get there then that's what we'll see >> The reason why they'll continue to win is because they move at the speed of the CIO. The CIO, and they'll say all the right things: AI-infused, block chain, and machine learning, and all that stuff. And the CIOs will eat it up because it's a safe bet. >> Well, I want to get your thoughts because I talked about this a couple years ago. Last year we started harping on it. We got it more into theCUBE conversation around Cloud being horizontally scalable yet at the top of the stack you've got vertical differentiation. That's great for data. Diane Greene in her key notes said that the vertical focus with engineering resources tied to it it's a key part of their strategy. Highlighted healthcare was their first vertical. Talked about National Institute of Health deal-- >> Retail >> NGOs, financial service, manufacturing, transportation, gaming and media. You got Fortnight on there, a customer in both Clouds. Start ups and retail. >> Yeah he had the target cities >> Vertical strategy is kind of an old enterprise play book TABE. Is that a viable one? Because now with the kind of data, if you got the data sandwich, maybe specialism and verticals can Scale. Your thoughts? >> I'll tell you why it is. I'll tell you why it's viable. Because of digital. So for years, these vertical stacks have been hardened. And the expertise and the business process and the knowledge within that vertical industry, retail, transportation, financial services, etc., has been hardened. But with digital, you're seeing it all over the place. Amazon getting into content. Apple getting into content. Amazon getting into groceries. Google getting into healthcare. So digital allows you to not only disrupt horizontally at the technology layer, but also vertically within industries. I think it's a very powerful disruption agenda. >> Analytics seems to be the killer app. That's the theme here: data. Maybe take it to the next step. That's where the specialism is. That's where the value's created. Why not have vertical specialty? >> No and >> Makes a lot of sense >> And it's a different spin. It's not the traditional-- >> Stack >> Sort of hire a bunch of people with that knowledge in that stack. No, it's really innovate and change the game and change the business model. I love it. >> That was a great surprise to me. Dave, great kicking off day one here this morning. Ending day one here with this wrap up. We got three days of wall-to-wall coverage. Go to siliconANGLE.com. We've got a great Cloud special Rob Hof, veteran chief of the team. Mark Albertson, and the rest of the crew, put some great stories together. Go to theCUBE.net and check out the video coverage there. That's where we're going to be live. And of course WIKIBAN.com for the analyst coverage from Peter Burris and his team. Check that out. Of course theCUBE here. Day one. Thanks for watching. See you tomorrow

>> Live from San Francisco, it's theCUBE, covering Google Cloud Next 2018, brought to you by Google Cloud and its ecosystem partners. (electronic music) >> Hello, everyone, welcome to theCUBE, here, live in San Francisco at Masconi South. We're here with Google Cloud Next Conference. It's Google Next 2018. It's theCUBE's exclusive three days of wall-to-wall coverage. I'm John Furrier, and I'm joined with my co-host Dave Vallente. Jeff Rick's here, the whole team is here. This is a big break out moment for Google Cloud and we're going to break it down for you. Going to have interviews with Diane Green coming in today, Google Executives, Google's top women in the Cloud, top customers, and top people within the ecosystem. Google Cloud is really going to the next level. This show is really about coming out party for two years of work that Diane Green and her team have been doing, transforming Google from the largest Cloud for their own business, to making Google Cloud consumable and easy to use with the technology for large enterprise customers as well as developers around the world, global platform. Dave, we had the keynote here. I'd say Google we're seeing, introduce their Google Cloud service platform GCP certifying partners, Cisco announced on stage they are re-selling Google Cloud, which takes a big objection off the table around not having a quote, "Enterprise ready sales force". Google is in every large enterprise, Google's Cloud is morphing into a large scale technology driven Cloud. The number one advantage they have is their technology, their OpenSource, and now a partnership with Cisco, and all the machine learning and all the infrastructure that they have are bringing out a new look. This is Google's coming out party. This is really two years of hard work, that Diane Green and the team have accomplished. Working, bringing on new people, bringing on a whole new set of capabilities. Checking the boxes for the table stakes, trying to get it to pull position, for the Cloud game, obviously Amazon is significantly ahead of everybody. Microsoft making great progress, their stock is up. Microsoft, although leveraging their core confidency, the enterprise and the office, and all the existing business that they do. Again a B to B, Google bringing in end-user centric view with all the automation. Big announcements. Google Cloud services platform, Histeo is now shipping in production, doubling down on Kubernetes, this is Google looking at new abstraction layers for developers and businesses. Diane Green, not the most elegant in her keynotes, but really hitting all her marks that she needed to hit. Big customer references, and really showcasing their competitive advantage, what they want to do, the posture of Google Cloud is clear, next is the execution. >> So here at Google Next 25,000 registered people, so big crowd. Diane Green said on stage 3000 engineers here, we want to talk to you. The Cisco announcements, classic case of a company without a Cloud, wanting to partner up with somebody that has a Cloud, Google, and Google, without a big enterprise sales presence. Obviously Cisco brings that. So kind of match made in heaven. Obviously, Cisco's got relationships with other Cloud providers, particularly Microsoft but, to me this makes a lot of sense. It's going GA in August, you also saw underneath that, GKE, Google Kubernetes Engine, now it's on prem, so you're seeing recognition of hybrid. We heard Diane Green talk about two years ago when she started John, she got a lot of heat from the analysts. You're not really an enterprise company, you got a long way to go, it's going to take you a decade. She basically laid down the gun and said, we are there. We'll talk about that. We'll talk about what leadership means. You just made a comment that Amazon is obviously in the lead. What is leadership? How does Google define leadership? Clearly they're leading in aspects of the Cloud. Scale, automation, OpenSource, contributing a lot, it makes me wonder, does this hundred plus billion dollar company with a hundred billion dollars in the bank, do they really care about how much money they make in the enterprise? Or are they trying to sort of change the way in which people do development, do programming, that's maybe a form of leadership that we really haven't often seen in the industry. I mean I go back, I harken back, not that it's an exact comparison, but you think about Xerox park and all the contributions they made to the industry, think about the contributions that Google's making with TensorFlow, with Kubernetes, with Istio, a lot of OpenSource chops giving to the community. And taking their time about monetizing it, not that a couple billion dollars or billion dollars a quarter is not monetization, but compared to 25 billion of Amazon, and what Microsoft's doing it's much smaller market share. >> I mean that's a great point about the monet, all the analysts and all the Wall Street guys are going to go to try to figure out, squint through the numbers try to figure out how you make money on this. We've been talking to a lot of the Google Executives and a lot of the engineers leading up to Google Next, we've had great relationship, some of their inside people. The common theme Dave that I'm hearing is absolutely they're playing the long game, but if Google's smart, they will leverage their retail business, ads and other things, and not focus on the short-term monetization, and that's pretty clear, some of the posture. That they're looking at this as an engineering culture, engineering DNA, OpenSource DNA, and they're about speed. When I press Google people and say, "What is the DNA of Google Cloud?". It all comes back down to the same thing, inclusive, open, speed. They're going to focus on how to make things faster, that has always been the culture at Google, make page loads faster, make things go faster. Amazon has the notion of, ship things as fast as possible at lower prices. Amazon is make stuff go faster and make it easy to use from a consumer standpoint so, easy of use has always been a consumer DNA of Google, and now with Cloud, if they don't focus on the short-term, they continue to march the cadence of open, speed, ease of use, and take that user-centric view, to make things easier that's key. I'm really impressed with the announcement, one little kind of technical kind of nuance is this Istio. Istio is an extension of Kubernetes, and this is where you're starting to see some signals from Google on where they're going to be scanning through with (mumbles). And that is as Kubernetes builds on top of containers, and as Kubernetes starts to be more of an orchestration layer, the services that are deployed in the Cloud are going to have more and more functionality. This is classic moving up the stack. This is an only an opportunity to build abstraction layers, that make things really easy to consume, and make things faster. If they can get that position, that beach head, they will enable developer greatness, and that'll maybe hopefully change the game a little bit, and sling shot them into a position that's different than what Amazon, I mean, what Microsoft's doing. Microsoft's just brute force, throwing everything at Cloud. The numbers look good on paper, but will that truly translate to ease of use, large scale, global deployment, managing data at scale. I mean Google's great some technology, and that is their number one thing that they have a their disposal. >> Well Istio, the classic case of dog fooding, right John? I mean there's Google, using tons and tons of micro services for its own purposes, enter gate, how do we simplify this? How do we automate this? And how do we pay it forward? And that's what they do, that's their culture. This is a company that's, again, talk about leadership, they spent well over $10 billion a year on Capex, you can argue easily they got the biggest Cloud in the world, certainly they got more underwater cable, the biggest network in the world, so these are forms of leadership. Diane Green talked about information technology powering every aspect of the business. I mean we've heard that since Nick Carr said IT doesn't matter, but now it seems like more than ever, it's more important. She also said CIO's realized they're not in the data center business, but yet they only have a small fraction of their workloads in the Cloud. This is why she said Google is seeing, and others I'm sure, seeing such big growth in the Cloud. But then she underscored, but we're modern Cloud. We're not lift and shift Cloud. We're not doing what Oracle's doing and sticking the existing apps in the Cloud. We're doing things differently. You talk about this a lot John, you talked to a couple of really high level women in Google, about the new development model, the new programming model, they're really changing the way in which people think about software development. >> Yeah I mean I think one of the things that's clear is that, the modern era can hear around software development. Software development life cycle, certainly we hear, Agile have been going on for the DevOps movement and that's kind of been out there, but what's changing now is that software engineering, or software development, isn't just computer science. You don't need three computer science degrees to do Cloud and do development. The aperture is widening on what computer science is, that's opening up more women in tech, and as Diane Green pointed out on her keynote, there's a re-engineering of business going on, there's new discoveries happening, and half the population is women, and so women should be part of making the products consumed by women and other people. So there's a huge opportunity to fill the gender diversity gap, but more importantly I think what's interesting about Google Cloud in particular is that they kind of figured out something, and it might have been a pop to their arrogance balloon but it used to be, "Oh, everyone wants to be like Google, 'cause we're so huge and we're great". 'Cause they are. Their technology is phenomenal, you look at what Google's built and Urs has been on stage, they have built probably the best most complex system to power their business, and all of a sudden that's come out from map produced paper, Kubernetes, which they're now doubling down on, Google has done amazing. They're about 10 to 15 years ahead of the market in terms of technology by my estimate. The problem that they've had when they first started doing Cloud was, oh just, you want to be like Google. No people don't want to be like Google, people can't be like Google, what they now understand is that people want what Google has, and that's ease of use, DevOps, fully com instead of libraries, com instead of interfaces, really ease of rolling out at scale applications. That's different. People want the benefits of what Google has for their business, not, they don't want to be like Google. I think that was the, I think that Diane Green two years ago, came in and reset. They've hired great enterprise people, and the question is can they catch up? How fast can they catch up? They're checking the boxes, they're doing the table stakes, and can they harvest the best that they're making? Auto ML is a great example. IT operations is going to be decimated as an industry sector. All the industry analysts and the financial analysts have not yet observed this but, anyone who's in the business of IT operations is going to get decimated. Automation's going to take that away and make it a service, it's going to be a human component, but the value is going to shift up the stack. This is something that we're seeing as to look at value of start ups, IT operations, AI operations, this is a new category of the industry, and Google is betting on that. That to me is a big tell sign. >> And we've been talking about the economics of that for years, but I want to come back to something you said. Google clearly was late to the enterprise party, and I think part of the reason you were touching on this is I think they underestimated the degree to which organizations, enterprise in particular, have all this technical debt built up. You can't just rip out and replace, these companies are making money with their existing Oracle databases, with their existing outdated processes, but they're making money, they're meeting Wall Street expectations, they're making their big bonuses so they can't just stop doing that. It'd be like Google to your point, but Google is playing the long game, they are doing something differently, and they're trying to help people get to this new era of software development, so I think that's a very very important point. >> Melody Meckfessel, one of the VP of Engineering, she is going to announce a survey that she did. It's interesting, they pulled the human aspect of development, and they asked the question, "What do you care about?". And developers care about generally the enterprise and kind of Cloud native developers, really two things. Technical debt, and time to push code. If technical debt accumulates, that's a huge problem, makes them unhappy, makes them kind of, not happy with how things are going, and then also speed. If you're shipping code it takes more than a few minutes to get back the commits that it hit. That's a problem. This is a huge issue. You said technical debt. Enterprise IT has been accumulating decades of technical debt, that's now running the company. So as re-engineering the business theme that Diane Green points out, really is spot on, people are going to stop buying IT and be deploying services more in the future, and using those services to drive business value. This to me is a big shift, this is what's going to hurt in (mumbles) and enterprises that, no one's buying IT. They're building platforms, the product is the platform, and the sense of services will enable applications to sit on top of them. This is an absolute mindset shift, and that impacts every vertical that we cover. You've covered IOT and everything else. The way CIOs think about this is they think about a portfolio, and it's just to simplify it. It's like run the business, grow the business, transform the business. And by far, the biggest investments are in run the business, and they can't stop running the business, they can't stop investing in running that business. What they can do is say, okay we can grow the business with these new projects and these new initiatives, and we can transform the business with new models of software development, as we transform into a digital company as a software company. So that it increasingly going to be pouring investments there, and it's slowly sunset, the run the business apps. It happens over decades. It doesn't happen over night. >> Well that's actually the number one point I think that didn't come out in the keynote but Earl's talked about it, where he said the old model is lift and shift. When we covered at the Linux foundation, and the CNC app, and the other shows that we go to is that what containers and Kubernetes are bringing to the market, the real value of that, is that existing IT CIOs don't have to rip and replace old apps, and that's a lot of pressure, the engineering requirements, there's personnel requirements, there's migration, so with Kubernetes and containers, containers and Kubernetes, you can essentially keep them around for as long as they need to be around. So you can sunset the applications and let the apps take its natural life cycle course, while bringing in new functionality. So if you want to be Cloud native right out of the gate, with Google Cloud, and some of these great services, like AI and machine learning that's going on, you can actually bring it in natively, containerize and with Kubernetes and now Istio, build a set of services to connect existing applications, and not feel the pressure and the heat, the budget for it, the engineer for it, to actually hire against it, to manage the existing life cycle. This is a huge accelerant for Cloud native. The rip and replace doesn't have to happen. You can certainly sunset applications at will, but you need to kill the old, to bring in the new. This is a very very important point. >> Yeah so a couple things that Diane Green hit on that I just want to go quickly through her keynote. She talked about, like you say, a small fraction of workloads are actually in the Cloud, but she asked the question, why Google? She said "Look, we're an enterprise company, but we're a modern enterprise company. We take all the information from that Cloud, we organize it, we allow you to put it back intelligently. We've got a global Cloud and it's unbelievably complex. We've got 20 years of scaling and optimizing, with that elite team. We've the most advanced Cloud in the world". She said, she didn't give the number, but many many football size, football stadium size data centers around the world that are carbon neutral with tons of fiber under the ocean, specialized processors, talked about Spanner, which is this amazing distributed, globally distributed consistent transactional database, big query, and she also talked about a consistency with a common core set of primitives. Now I want to ask her about that, 'cause I think she was taking a shot at Amazon, but I'm not sure, if they have a, to make a similar statement, so we're going to ask her about that when she comes on. She also said, the last thing I'll share with you is, "AI and security are basically hand in hand". She said security is what everybody's worried about, AI is the big opportunity, those are the two areas where Google is putting some of its greatest resources. >> That was my favorite sound bite by the way, she said, "Security's the number one worry, and AI is the number one opportunity". Really kind of points to it. On the primitive things, I don't think that's so much a shot at Amazon, as in it's more of multi Cloud. We've been kind of seeing multi Cloud vapor ware for months, past year, 'cause it kind of is. What we were seeing with Cloud native community and OpenSource is multi Cloud can only happen if you can run the same map across multiple Clouds with common interfaces, and that ultimately is I think what they're trying to solve. My favorite sound bites from her keynote is, she said, quote, "We've got 20 years scaling Google Cloud", it's obviously very large, number one Cloud, if you want to put Clouds in benchmarks and without (mumbles) of the enterprise number one, in terms of tech and scale. But she says, "My main job at Google two years ago was surfacing the great technologies and services, and make it easy to use. We have a technical infrastructure, TI, that has big query, Spanner, and then consistencies across all primitives", and she said on top of the technical infrastructure they got Gmail, Gsuite, maps, et cetera et cetera, powering at large scale, dealing with all the threat intelligence, and a ton of body of technology around II. And then to cap it all off, leader in OpenSource. To me this is where Google's betting big, with security as the number one worry, which is a major check box with AI kind of the catnip for developers. And they got security features. If you compare Amazon to Google Cloud, Amazon wins on sense of services in terms of number of features, but the question is, does Google have the right features? These are the questions we're going to have. And the dig at Amazon was Reed Hastings, Netflix CEO, friend of Diane Green, I've seen them both speak at Stanford, so she bumped into, what she said, "Reed Hastings is a power user of Google Chrome and Gsuite", and kind of said how great it is, but that's not Netflix. Now Netflix is an Amazon customer, so interesting jab there was about Reed Hastings personally but not about Netflix being a customer of Google Cloud. The question is, can Diane Green convince Reed Hastings to move Netflix from Amazon to Google Cloud? That's the question I'm going to ask her. >> The other piece of the keynote that I thought was quite interesting was Urs Holzle, who's the Senior Vice President of Technology Infrastructure who was doing Cloud before anybody talked about Cloud, he said, "Cloud's a fundamental shift in computing. GCP gives you access to unlimited computing on the world's largest network". Talked about Spanner, the globally consistent distributed database, ML APIs for doing speech and natural language recognition. Big query, the big data warehouse, basically a silo buster, but he said what's still missing, is essentially that hybrid (mumbles) all the Cloud's are different. I interpreted that meaning closed. So he said, "Things like setting up a network, provisioning a virtual machine, are all different". And basically to your point John, that stuff is going to get automated away. So Istio, they talked about Apogee, visibility, orchestration, serverless, they talked about GKE on prem, which is Google Kubernetes Engine on prem, and then Cisco came out on stage. The big partnership, the big news from the keynote. >> Lets talk about what we're going to look for this week in Google Cloud, and also within the industry. Dave I'll start. I'm looking for Google's technology architecture map, which I love, I think they've got a great solution, does that translate to the enterprise? In other words, can they take what Google has and make it usable and consumable for enterprises without having the be like Google strategy, use what Google has benefited from, in a way that enterprises can consume. I'm going to look for that, see how the technology can fit in there. And then I think the most important thing that I'm going to swing through all the hype here and the comment and the news and Kool Aid that they're spreading around, is how are they making the ecosystem money? Because if Google Cloud wants to take the long game, they got to secure the beach head of the viable, large scale Cloud which I think they're doing extremely well. Can they translate that into a ecosystem flourishing market? Does that make money for developers? They talk about going into verticals as a core strategy and healthcare being one. Can they go in there, in financial services, manufacturing, transportation, gaming and media, and attract the kind of partners and business customers that allow them to do better business? Does it translate the distribution for developers? Do businesses make more money with Google? That to me is the ultimate tell sign with how Google Cloud translates to the market place. Ecosystem, benchmark, and value to customers in terms of money making, utility of the users, and their customers' customers. >> So two things for me John. One is the same as yours is ecosystem. I learned from the SiliconANGLE editorial team, by the way, go to siliconangle.com, there's some great editorial to drop this week in support of just what's going on in Cloud and Google Next, but I learned from reading that stuff, Google late to the party. Only 13,000 partners. Amazon's got 100,000 Cloud partners. (mumbles) has 70,000 Cloud partners. Where, what's the ecosystem strategy, how are they going to grow? How are they going to help make money? The second thing is, basic question, I want to understand what Google wants in the Cloud. What's their objective? I know Amazon wants to dominate infrastructures of services, and be the leader there. I know that Microsoft wants to take its existing software state, bring it to the Cloud. I'm not really clear on what exactly Google's objectives are. So I want to get clarity on that. >> I think it's going to be developers, and one of the things we're going to dig into as the OpenSource. theCUBE coverage here in San Francisco, live coverage of three days wall-to-wall, (mumbles) Dave Vallante, stay with us. thecube.net is where you can find the live feed if you're watching this on SiliconANGLE or around the web, or with Syndicate. Go to thecube.net to get all the content, and siliconangle.com has a Cloud special this week. The team is putting out a ton of content. Covering the news, critical analysis, and what it means and the impact of Google Cloud into the industry and to their customers. So I'm John Furrier, Dave Vallante, stay with us, live coverage here, be right back. (electronic music)

(electronic music) - Welcome to theCube Insights. A podcast that is typically taken from Siliconangle media's theCube interviews, where we share the best of our teams insights from all events we go to and from time to time we want to be able to extract some of our learnings when we're back at the ranch. Joining me for this segment is co-founder, co-CEO, benevolent dictator of a community, my boss, Dave Vellante. - Hey Stu. - Dave. Good to see you dressed down. - Yeah, well. Podcast, right? We got toys, props and no tie. - Yeah, I love seeing this ... we were just talking, John Furrier, who we could really make a claim to say we wouldn't have the state of podcasting today, definitely in tech, if it wasn't for what John had done back in the day with PodTech and it's one of those things, we've talked about podcasts for years but I'd gotten feedback from the community that said, "Wow, you guys have grown and go to so many shows that we want to listen to you guys as to: what was interesting at this show, what did you guys take out of it, what cool people did you interview?" We said, "Well, of course all over youtube, our website thecube.net but it made a lot of sense to put them in podcast form because podcasts have had a great renaissance over the last couple of years. - Yeah, and it's pretty straight forward, as Stu, for us to do this because virtually every show we do, even if it's a sponsor show, we do our own independent analysis upfront and at the tail end, a lot of our people in our community said, "We listen to that, to get the low down on the show and get your unfiltered opinion." And so, why not? - Yeah, Dave. Great point. I love, from when I first came on board, you always said, "Stu, speak your mind. Say what the community; what are the users saying? What does everybody talk about?" As I always say, if there is an elephant in the room we want to put it on the table and take a bite out it. And even, yes, we get sponsored by the companies to be there. We're fully transparent as to who pays us. But from the first Cube event, at the end of the day, where after keynote, we're gonna tell you exactly what we think and we're always welcome for debate. For people to come back, push on what we're saying and help bring us more data because at the end of the day, data and what's actually happening in the world will help shape our opinions and help us move in the direction where we think things should go. - I think the other thing is too, is a lot of folks ask us to come in and talk to them about what we've learned over the past year, the past six months. This is a great way for us to just hit the podcast and just go through, and this is what I do, just go through some of the shows that I wasn't able to attend and see what the other hosts were saying. So, how do you find these things? - Yeah, so first of all, great. theCube insights is the branding we have on it. We're on iTunes, We're on Spotify, We're on Google Play, Buzzsprout's what we use to be able to get it out there. It's an RSS on wikibon.com. I will embed them every once in a while or link to them. We plan to put them out, on average, it's once a week. We wanna have that regular cadence Typically on Thursday from a show that we've been out the spring season is really busy, so we've often been doing two a week at this point, but regular cadence, just podcasts are often a little tough to Google for so if you go into your favorite player and look at thecube insights and if you can't find it just hit you, me, somebody on the team up. - So you just searched thecube insights in one of those players? - Yeah absolutely, I've been sitting with a lot of people and right now it's been word of mouth, this is the first time we're actually really explaining what we're doing but thecube one word, insights is the second word I found it real quick in iTunes I find it in Google Play, Spotify is great for that and or your favorite podcast player Let us know if we're not there. - So maybe talk about some of the things we're seeing. - Yeah absolutely - The last few months. - So, right when we're here, what are our key learning? So for the last year or two Dave, I've really been helping look at the companies that are in this space, How are they dealing with multi cloud? And the refinement I've had in 2018 right now is that multi cloud or hybrid cloud seems to be, where everyone's Landing up and part of it is that everything in IT is heterogeneous but when I talk about a software company, really, where is their strength? are they an infrastructure company that really is trying to modernize what's happening in the data center are they born with cloud are they helping there? or are they really a software that can live in SAAS, in private cloud and public cloud? I kinda picture a company and where's their center of gravity? Do they lean very heavily towards private cloud, and they say public cloud it's too expensive and it's hard and You're gonna lose your job over it or are they somebody that's in the public cloud saying: there's nothing that should live in the data center and you should be a 100% public cloud, go adopt severless and it's great and the reality is that customers use a lot of these tools, lots of SAAS, multiple public Cloud for what they're doing and absolutely their stuff that's living in the data center And will continue for a long time. what do you see in it Dave? - My sort of takeaway in the last several months, half a year, a year is we used to talk about cloud big data, mobile and social as the forward drivers. I feel like it's kinda been there done that, That's getting a little bit long in the tooth and I think there's like the 3DS now, it's digital transformation, it's data first, is sort of the second D and disruption is the 3rd D And I think if you check on one of the podcast we did on scene digital, with David Michella. I think he did a really of laying out how the industry is changing there's a whole new set of words coming in, we're moving beyond that cloud big data, social mobile era into an era that's really defined by this matrix that he talks about. So check that out I won't go into it in detail here but at the top of that matrix is machine intelligence or what people call AI. And it's powering virtually everything and it's been embedded in all types of different applications and you clearly see that to the extent that organizations are able to Leverage the services, those digital services in that matrix, which are all about data, they're driving change. So it's digital transformation actually is real, data first really means You gotta put data at the core of your enterprise and if you look at the top five companies in terms of market cap the Googles, the Facebooks, the Amazons, the Microsofts Etc. Those top five companies are really data first. But People sometimes call data-driven, and then disruption everywhere, one of my favorite disruptions scenarios is of course crypto and blockchain And of course I have my book "The Enigma war" which is all about crypto, cryptography and we're seeing just massive Innovation going on as a result of both blockchain and crypto economics, so we've been really excited to cover, I think we've done eight or nine shows this year on crypto and blockchain. - Yeah it's an interesting one Dave because absolutely when you mention cryptocurrency and Bitcoin, there's still a lot of people in the room that look at you, Come on, there's crazy folks and it's money, it's speculation and it's ridiculous. What does that have to do with technology? But we've been covering for a couple of years now, the hyper ledger and some of these underlying pieces. You and I both watch Silicon Valley and I thought they actually did a really good job this year talking about the new distributed internet and how we're gonna build these things and that's really underneath one of the things that these technologies are building towards. - Well the internet was originally conceived as this decentralized network and well it physically is a decentralized network, it's owned essentially controlled by an oligopoly of behemoths and so what I've learned about cryptocurrency is that internet was built on protocols that were funded by the government and university collaboration so for instance SMTP Gmail's built on SMTP (mumbles) TCPIP, DNS Etc. Are all protocols that were funded essentially by the government, Linux itself came out of universities early developers didn't get paid for developing the technologies there and what happened after the big giants co-opted those protocols and basically now run the internet, development in those protocol stopped. Well Bitcoin and Ethereum and all these other protocols that are been developed around tokens, are driving innovation and building out really a new decentralized internet. So there's tons of innovation and funding going on, that I think people overlook the mainstream media talks all about fraud and these ICO's that are BS Etc. And there's certainly a lot of that it's the Wild West right now. But there's really a lot of high quality innovation going on, hard to tell what's gonna last and what's gonna fizzle but I guarantee there's some tech that's being developed that will stay the course. - Yeah I love....I believe you've read the Nick Carr book "The Shallows", Dave. He really talked about when we built the internet, there's two things one is like a push information, And that easy but building community and being able to share is really tough. I actually saw at an innovation conference I went to, the guy that created the pop-up ad like comes and he apologizes greatly, he said "I did a horrible horrible thing to the internet". - Yeah he did - Because I helped make it easier to have ads be how we monetize things, and the idea around the internet originally was how do I do micropayments? how do I really incent people to share? and that's one of the things we're looking at. - Ad base business models have an inherent incentive for large organizations that are centralized to basically co-opt our data and do onerous things with them And that's clearly what's happened. users wanna take back control of their data and so you're seeing this, they call it a Matrix. Silicon Valley I think you're right did a good job of laying that out, the show was actually sometimes half amazingly accurate and so a lot of development going on there. Anywhere you see a centralized, so called trusted third-party where they're a gatekeeper and they're adjudicating essentially. That's where crypto and token economics is really attacking, it's the confluence of software engineering, Cryptography and game theory. This is the other beautiful thing about crypto is that there is alignment of incentives between the investor, the entrepreneur, the customer and the product community. and so right now everybody is winning, maybe it's a bubble but usually when these bubbles burst something lives on, i got some beautiful tulips in my front yard. - Yeah so I love getting Insight into the things that you've been thinking of, John Furrier, the team, Peter Borus, our whole analyst team. Let's bring it back to thecube for a second Dave, we've done a ton of interviews I'm almost up to 200 views this year we did 1600 as a team last year. I'll mention two because one, I was absolutely giddy and you helped me get this interview, Walter isaacson at The Dell Show, One of my favorite authors I'm working through his DaVinci book right now which is amazing he talks about how a humanities and technology, the Marrying of that. Of course a lot of people read the Steve Jobs interview, I love the Einstein book that he did, the innovators. But if you listen to the Michael Dell interview that I did and then the Walter isaacson I think he might be working on a biography of Michael Dell, which i've talk to a lot of people, and they're like i'd love to read that. He's brilliant, amazing guy I can't tell you how many people have stopped me and said I listened to that Michael Dell interview. The other one, Customers. Love talking about customers especially people that they're chewing glass, they're breaking down new barriers. Key Toms and I interviewed It was Vijay Luthra from Northern trust. Kissed a chicago guy And he's like "this is one of the oldest and most conservative financial institutions out there". And they're actually gonna be on the stage at DockerCon talking about containers they're playing with severless technology, how the financial institutions get involved in the data economy, Leverage this kind of environment while still maintaining security so it was one that I really enjoyed. How about...... what's jumped out of you in all your years? - (Mumbles) reminds me of the quote (mumbles) software is eating the world, well data is eating software so every company is.... it reminds me of the NASDAQ interview that I did Recently and all we talked about, we didn't talk about their IT, we talked about how they're pointing their technology to help other exchanges get launched around the world and so it's a classic case of procurer of technology now becoming a seller of technology, and we've seen that everywhere. I think what's gonna be interesting Stu is AI, I think that more AI is gonna be bought, than built by these companies and that's how they will close the gap, I don't think the average everyday global 2000 company is gonna be an AI innovator in terms of what they develop, I think how they apply it is where the Innovation is gonna be. - Yeah Dave we had this discussion when it was (mumbles) It was the practitioners that will Leverage this will make a whole lot more money than the people that made it. - We're certainly seeing that. - Yeah I saw.....I said like Linux became pervasive, it took RedHat a long time to become a billion dollar company, because the open stack go along way there. Any final thoughts you wanna go on Dave? - Well so yeah, check out thecube.net, check out thecube insights, find that on whatever your favorite podcast player is, we're gonna be all over the place thecube.net will tell you where we're gonna be obviously, siliconangle.com, wikibon.com for all the research. - Alright and be sure to hit us up on Twitter if you have questions. He's D Villante on twitter, Angus stu S-T-U, Furrier is @Furrier, Peter Borus is PL Borus on twitter, Our whole team. wikibon.com for the research, siliconangle.com for the news and of course thecube.net for all the video. - And @ TheCube - And @TheCube of course on Twitter for our main feed And we're also up on Instagram now, so check out thecube signal on one word, give you a little bit of behind the scenes fun our phenomenal production team help to bring the buzz and the energy for all the things we do so for Dave Vellante, I'm Stu Miniman, thanks so much for listening to this special episode of thecube insights. 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>> 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)

(electronic music) >> Narrator: Live from Washington D.C., it's theCUBE covering .NEXT Conference. Brought to you by Nutanix. >> Welcome back to .NEXT, everybody, Nutanix' big customer event. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante, and I'm here with my co-host, Stu Miniman. Virginia Gambale is here. She's the managing partner at Azimuth Partners, LLC. Virginia, thanks for coming on theCUBE. >> Oh, my pleasure. >> So tell us about Azimuth. What do you guys do? >> Well, we focus on helping companies grow, transform, and remain or become relevant. We work at both ends of the spectrum, so we work with early stage private companies that are either trying to raise capital, prepare to go public, or just get to that next level of growth. And then on the large public side, we work with companies who are more legacy-oriented in their traditional products and services, and really help them jumpstart a transformation process. Whether it be through setting up an investment venture arm, or through creating a transformative independent business that begins to create a different model, but at a distance from the original organization. >> You're a former CIO, you're an investor, you're a board member; a board member of our favorite airline, Jet Blue, and a strategic advisor. >> The best. (laughs) >> You're the best. >> Boston Base. >> We love Jet Blue. >> So, you know, a good hub, (mumbles). >> Best app. You know. >> That's right. >> Love you guys. So kind of an interesting and varied background. How did you get to this spot? >> I'm always focused, from the time I was a CIO, on looking at the companies that are going to change the game, and they could be the smallest companies that really have something that will allow us to leapfrog. I really believe in the concept of leapfrogging next chapter, and you want to be there first if you can. So, that's been the thread in my life, whether it be in a financial services business or an airline. It's always trying to double, triple, and multiply the value of the company, and also its relevance with its customers. >> So you believe technology is a sustainable differentiator, presumably, and despite what Nick Carr wrote way back when. >> I was one of those CIOs where the consultants would say, "Don't say what you're saying, because you're saying that technology is the driver for the business model, and we're saying it's an enabler," and I'd say, "No, it's really a driver." So I'm really happy that we've come into that, where it's not only acceptable, but it's the right thing to think about when you're sitting at a board. "How is technology going to drive my business?" And its relevance with my customers. >> Well, there certainly was a period of time where CEOs could call that into question because, as a CIO, you were spending a lot of money on heavy lifting that maybe wasn't adding value to the business, but now every company is a technology company. >> It is. >> There's far more SAS companies outside of tech than there are inside of tech. Everybody talks about the buzz word of digital disruption, but it feels like that's actually happening. Brings us to Nutanix. I mean, that's kind of my view anyway, what they're doing is to try to help us cut out that IT labor cost and shift the resource elsewhere. What's your take? >> Well, many times I talk about capital allocation. When you're sitting at a board level, you really want to be allocating your capital efficiently, and on the right aspects of your business going forward. And Nutanix, I think, offers incredible value proposition. If I can literally take my infrastructure costs down by 60 or more percent, and actually redeploy that capital into game-changing technology, then, to me, it's a no-brainer. >> Yeah. Virginia, I love that. When we came to the first Nutanix conference in Miami two years ago, it was great to hear IT people say, "I got my weekends back," but what's exciting is when we had PXP Solutions on, who's in the financial tech industry today, and he said, "What Nutanix allows me to do is allow my team to work on the fun stuff," which means they're off coding, or they're creating a new app, or, you know, creating more value for the business rather than just, you know, running around keeping the lights on. >> And I see the early adopters of Nutanix actually are the more vision-oriented CIOs who get that. It doesn't mean that we are going to not be able to use the talent that we have on board, but again, we have to use it more efficiently and to the best yield that we possibly can. And so I think the companies that are a little afraid, or they actually delegate that to a group who is concerned that that may mean they will no longer exist, we have to really break down that misconception. >> And Virginia, it often requires either some retraining, or, you know, there might be changes in kind of the makeup of your environment. What are you seeing out there? What are you advising companies as to how they manage their IT staff? >> Well, what's really interesting more and more now is Nutanix is now public and it's continuing on with its future strategy. I really believe they are completely redefining the concept of Cloud in context of the new world, and so the possibilities of starting businesses, transforming businesses in a very quick-start manner, but also deploying fundamentals of other industries where some industries thought they never could, so speed of execution and processing of enormous amounts of data, again, are made possible with a Nutanix type infrastructure. >> So, you're giving a keynote later on. Today, or is it tomorrow? >> Today. Yes. >> Okay. What are you talking about? Can you just set that up for us? >> Well, today I'm on a panel with a few other constituents who represent different aspects of the world today. And tomorrow, I'm going to be focused on a topic that's near and dear to my heart, which is in the executive session, and that is where we're going to talk about the market today as established in Wall Street is really focused on any number that is already public and how they can analyze that to the nth degree. But the question they really should be asking is, "How much are you spending on technology? How are you using your technology dollars? What are you doing with them?" And instead, if you think about the Amazon moment, which I call the "a-ha!" moment. I loved listening to Bloomberg Radio the day that AWS really became known as a business entity within Amazon, which was in the fall a couple of years ago. And the analysts on that call were actually saying, "I'm going to have to rewrite my model," because for so long we were saying Amazon was not profitable, and we would sort of discount that stock because of that. But meanwhile, they were siphoning off, you know, billions of dollars to create a business that is actually going to continue to support the technology revolution that's happening today. >> Well, so, let's unpack that a little bit. So investors today, they clearly want growth. You look at a company like Nutanix, Pure, you know, decent valuations, whereas companies like IBM struggle. You know, whatever, 12 straight quarters or 26 straight quarters of declining revenue. Amazon growing nicely. Throwing off a ton of cash. Not necessarily profitable. Do investors have that wrong in your mind? >> I really do. You know, I think that all the long-term businesses that have existed are standing at the edge of a cliff today, looking down at the abyss. And that is the reality. And so, if they listen to Wall Street, they're just going to perpetuate that getting closer and closer to the end of the cliff before they're going to fall off. Wall Street should actually be facilitating a conversation which allows them some time to actually speak about a transformative process. I would put my money into a company who talks about transforming their business or investing in new technologies as opposed to someone who's standing up there as The Emperor Has No Clothes and saying, "Oh, no, business as usual. In fact, we're cranking out higher margins." To me, that's a warning signal. >> What do you think of the private equity model these days? We've talked on theCUBE a lot about how it's changed quite a bit. You know, it used to be just suck as much cash out of the business as you can and leave the carcass for somebody else, but you're seeing some strategic investors... You see companies like certainly Riverbed, BMC's gone private, Dell obviously appears to be doing quite well. They're not on the 90-day shot clock. IN4's another one that we track. There are many, many more. I'm sorry I'm leaving some out. But is there a new private equity model in your mind where they're trying to invest more, get the valuations up, and maybe go back to the public markets? What are your thoughts on that? >> Certainly I see there are two models that are taking place. There's the private equity model where people are saying, "I need air cover," so I have to take my company private in order to reinvent it. But only still a small percentage of those private equity investors are really investing in the fundamental transformative aspects of those businesses There are still a lot of them who still see the opportunity to really manage the balance sheet, and the pure financials in order to make it look good and put it back out in the market. And there's several examples of that, I think. The other is the activist investor who is standing by, listening to the analyst conversation as I am, and saying, "Well, this is not going to bode well for this stock or for this company, and we want to proactively now start to influence how capital is allocated and how the company starts to make those transformative decisions." >> Well, and oftentimes, they're pushing for for a buyback or a dividend. I mean, that's kind of what happened to EMC. They couldn't weather the storm. Again, is that a good thing or a bad thing? >> Well, some of them, again, are in for the short-term gain, right? But there are increasing numbers of firms that actually believe that that is the way to transform an industry, whether it be media or the airline industry, or consumer goods is by beginning to get in and take seats on the board. Because at the end of the day, the buck starts and stops at the board level no matter what. >> Yeah. Virginia, wondering... You've been a CIO. What's your opinion on the role of the CIO going forward when we have things like the public Cloud, we're making infrastructure invisible, you know, great shift into kind of the roles and responsibility. What's the CIO of the future look like? >> I think this is a pivot point for a CIO. And whereas before the real enablement of the Cloud, CIOs had really A They were either going to become a chief digital officer, or they were going to stay sort of running the day-to-day shop. Because they didn't have the tools to be able to transform their existing day of operations. Today I think actually the CIO has the opportunity to make the choice, "Do I want to be driving the digital business in terms of product and service and move into that area, or do I actually want to begin to drive a transformation of my original cost structure and then begin to have the dialogue where the two are meeting now?" So the chief digital officer and the work the chief digital officer is doing is becoming day-to-day of operations, and the CIO is handling day of operations. So they actually have the ability to meet and transform the company. So I think that is a really important question that CIOs need to be asking themselves today. "Which of these roles do I see myself in?" >> We only got a couple of minutes. I got so many questions for you. So what's rhe I'm going to totally pivot here. The security discussion at the board level. What is that like now? How has it changed? And how should the CIO be communicating to the boards about security? >> Well, I fall in the camp, and I think I was one of the early drivers of making sure that the chief information security officer does not report to the CIO. It's a conflict of interest to me, plain and simple, like any audit principles one would have. But, and I think that will change over time in terms of the security that we are so hypervigilant about will become threads within the fabric of our infrastructure, and it will become day-to-day needs that will be put in by the CIO. Today they have to work very complimentary and very cooperatively, and so one should not feel that a CIO is failing in their job because the CISO is on top of them. Their job as the CISO is to be out in the market, and be understanding what is happening in the world today, and to the degree they can anticipate what will happen. They also need to be talking to the boards and educating the boards. Boards today have become... I would say cyber security is one of the main top three topics on conversation with every board. It should be talked about at every board meeting, at least a readout as to where we are, and what's happening and what are we doing? So it's a very important role. >> Before we go, I just want ask you about women in tech. About, we know, 50% of the population roughly are women. Only 17% of the tech industry comprises women. Thoughts on that? Do you feel like this industry is making progress, is going in any movement, wrong direction, right direction? What can be done? >> I think there are a lot of different philosophies in the world today about helping drive more women into tech. Certainly I've been in this business for, I hate to say, but it's multiple decades, and I was the only woman CIO at the time I was the CIO, or one of the first women board members sitting at a board table of all men. And some of the arguments say that women should be coding from very early ages, and that we have to get women coding. You know, I think women, just like men, fall into the category of broad spectrum talents. Not every woman is suited for a code job, but today, the great thing about technology is, we have visualization components, we have design components, we have strategy components more than ever, and I think when we educate our young girls, and I have one myself, we should understand where their best talents are, where their interests are, and help shape them in the areas that are tech-related, but not hardcore coding at all. There's a lot of organizations about women who code, and I think that's great, but that's not all that women need to do to be in the tech world and be successful in the tech world. >> Love it. Alright, we're out of time. My last question is sort of advice for Nutanix. What do you think Nutanix should be doing? What can you share with us? >> I'm very impressed by the CEO, because I think the first and foremost role of a CEO is to have vision, and I really believe that this CEO has vision. The difficulty now, once you're in the public markets, and you're under the scrutiny of a public market, and yet you as a company are in your infancy in how you grow, they have to walk that line between, "Yes, I hear you, Wall Street, but these are the things that I need to do to be the best, the biggest, and the most enabling company to my customers that I can possibly be." And that is a fundamental that they can never lose sight of. Don't listen to the street too much, and don't err on the side of only one way. >> Great. Virginia, really a pleasure having you on. I hope you come back to theCUBE. >> Yes, thank you, thank you. >> Appreciate it. Alright, keep it right there, everybody. Stu and I will be back in D.C. at the .NEXT Conference right after this short break. (electronic music)

(electronic music) >> Narrator: Live, from Orlando, Florida, it's theCUBE! Covering ServiceNOW Knowledge17. Brought to you by ServiceNOW. >> Welcome back to Orlando, everybody. This is theCUBE, the leader in live tech coverage. I'm Dave Vellante with my co-host Jeff Frick, Link Alander is here as the Chief Information Officer at Lone Star College. Cubealom, Link, great to see you again. >> Good seeing you again too. >> Another ServiceNOW Knowledge, although, not like the other ones, I mean, things changing, we're in a different venue, we got a new leader, new topics, is it old wine, same wine new bottle, or is it all sort of new stuff? What's going on in your world? >> Well you know, it's early on in the conference to see what the changes are, and it was kind of interesting as the change transformed, I didn't make his 100 day visits, 100 customers, he had an event in Houston, I was actually out of town at the time, so I was really looking forward to going to that event. But when you think about it, you know, Frank took it to a certain level, and now, we're looking at a total different change and transformation again, to where, what is next? And when you start talking about the A.I., the predictive analytics, proactive vs. reactive, and those types of shifts, that's really what we have to have. So, yeah, it is a change. It's a significant change, and you know I liked earlier in the segment, I was listening to him and talking about the fact that, you know, where are your trusted partners at, where do you invest and where will you align your strategy to, and that makes a big difference for us. >> So from a customer standpoint, it's sounds like you're embracing that change, I mean, you know, Wall Street's been a little reticent, I mean obviously they're happy with ServiceNOW and the stock's up, but I thought Jim Cramer was going to cry when Frank Slootman told him he was leaving. And some of the analysts yesterday said, "Oh, the stock will be at 102 if Frank were still here." and so, that's fine, you know, whatever. The stock market's going to do what it does. But from a customer perspective, you seem pretty comfortable with the changes. >> You know, it's really interesting, 'cause Frank and I had a relationship that went back to Data Domain. So I'd worked with Frank in different roles and different times, so when I first heard it, I was kind of like, what's going to happen? Immediately I started looking at what happened with Pat, and I talked to a bunch of my friends at ServiceNOW, and they're like, "Oh, no, "this was probably the smoothest transition ever." You know, it's like, "Yeah I'm leaving, "and guess what, here's my successor." So it was a different approach that you don't see often in technology companies. And you think about technology right now, how disruptive everything is. I mean, what do you take the split of HP, you take EMC and Dell, and all these other shifts that are happening in the technology, everything's shaking up. This is not really shaking up, this is just a new direction, and where ServiceNOW wants to head in the future. >> You know, that's interesting. You're right, I mean, transitions in big tech are not really ever this, apparently it was pretty smooth. I mean look at EMC, for example. I mean they couldn't find a successor. I mean it was, "Well, it's not Gelsinger, "well, it's not Gould, I don't really know." So Michael Dell had to come in, a pretty good successor, I guess. So that's maybe, I dunno, maybe a testament to Frank, maybe it's the culture of ServiceNOW, but from a customer standpoint again, you're seeing huge opportunities, you mentioned machine learning. What are you doing with those types of things, and how are you applying them? >> Well, we see these are the newer opportunities. So, from the IT service management and the enterprise service management has taken us to a new direction. And when you look at the customer service platform and what can we do differently and how can we help our customers out, and I have a 100,000 students out there that are expecting good support and need to navigate educational systems, which, it doesn't matter, we're just not easy to navigate. It's not like going out shopping. We have our own challenges that are out there. So, you know as we look at the next generation we're looking at how much more automation can I put into play so that the technicians and the practitioners can actually focus on the real challenges that are out there. Because a lot of times they are dealing with small issues that, they bog them down, and they don't get to focus on the bigger direction. So that's what we see on that side. You know, predictive analytics and A.I. in education have been a big item. We've been doing predictive analytics with students trying to figure out, you know, what's their likelihood of success, and how can we intervene to help a student out. And so when you look at things in that different direction, now all of a sudden you apply it in the IT space, which machine learning, it's a lot easier than understanding human behavior. >> So talk a little more about that. I mean, I remember when we were in college, you know, the professors that would look around and bunch of you aren't going to make it. >> Now we have a dashboard that shows that, by the way. (chuckles) >> Now you've got the data. >> Red. >> So, okay, so you've had years of data you've been collecting, what kind of things can you do proactively to help students? >> Well some of the interesting things for us, so you know, in our industry, from the community college perspective we're very dynamic. We can address change in the industry, needs of the community, so we're able to introduce programs and activities very quickly. Now when it comes down to students, you're sitting here looking at them going, okay, why are we losing these students? Why are students leaving us early? Why are they not completing? And, it was really interesting when we ran the data out, and we started seeing that it was our high achievers that were leaving us early. So actually our chancellor at the time really thought about this a lot, and looked at some different pieces of the data, and boosted our honors college, which then improved our retention of these 3.3, 3.4 GPA students. On the other spectrum we were all thinking, okay, well we need to focus on, where's that other student at, how do we save that student? And they've always had those interventions. So now they're enhanced. Now you have the opportunity for a dean or a chair to say, okay if I reach this one little group of students, maybe I can make a difference in their lives and their careers. So they're able to look at the data, look at the data sets, and then actually just reach out and touch 'em. And see what they can make a difference of. >> I wonder if we can talk a little bit about some of the practical things about ServiceNOW generally and IT service management, when we first, our first Knowledge was in 2013 and Jeff and I were talking in our open, when we talked to customers about, well, did you adopt a single CMDB? Have you adopted aggressively a service catalog? A lot of times the answer was, "Well, kind of." But it kind of gets political, we have our own little silo, but not across the organization. That seems to have changed. What was your experience in that regard, and how about, can you share with us what you're seeing with your peers with regard to those two items and then we can talk a little bit further. >> Okay, sure, you know, from the start we actually went all in. We're long term customer, late 2009, 2010, we adopted ServiceNOW, and we immediately looked at it as IT service management. How do we transform the way we do business and what do we do? So the service catalog was very basic at first, now our service catalog is pretty amazing. Our knowledge bases were primitive, now customer service, they can address their items. So that made a significant enhancement but really what it brought forward is our enterprise service management. So for example, while I was waiting here, I was actually approving a legal certification for a contract I have going across in ServiceNOW. So it's really handy, I'm sitting in a conference, and I have a legal matter to deal with, and a couple clicks and I'm taken care of. The same goes now for our HR side. So HR adopted in two years ago now, and you're seeing that workflow, all the power of the workflow coming in to help employees out. We've got a long way to go to get to that, whatever you want to consider utopia of service management is, but we're far along that journey. And we're just constantly looking for new ways to improve that. From the peers' perspective it's also very interesting, so I talk to, I deal with a lot of our peers, especially in the state of Texas, but then also nationally in different groups, and their movements are a little slower in the process because of that decentralization where from our perspective we're 100% centralized, so it's a lot easier to implement and not have those verticals to knock down. And they're knocking IT verticals down, they're not knocking other verticals down. So, it's a little more challenging, but I've seen some pretty impressive successes. Even in those areas where they have different verticals of IT across their organization, they've done a phenomenal job about bringing them into the fold and trying to consolidate those services and show those services better to the customer. The consumerization part is the harder part. It's trying to deliver services now like consumer IT but still maintaining that enterprise level. And that's probably the biggest challenges we're facing right now, is trying to create that consumer look and feel. >> Is that a UX challenge that ServiceNOW needs to address, or is that something that you guys have control over? >> Well, actually they've done a great job, as far as changing the dynamics of how things are working, so they've done a great job there, it's more on our perspective of using a customer-centric approach and looking at how does our customer view these services, what happens, how do they engage those services? It's very similar when we're dealing with students and we're trying to understand how they use our systems. Well they have their own way, we know how they're supposed to be used, but they have their own way they use the system. And so it's looking for that customer-centric approach, it's trying to understand their behaviors and work from those directions. >> And how much of that do you do with good old-fashioned sitting down and watching people interact with the application? I mean, that was a great thing that LinkedIn, or excuse me, Intuit used to always do with their early QuickBook days, right, a lot of just sit down and watch people interact with the application versus using machine learning and using kind of more aggregated data with your, like you said your huge client set to start to figure out how they're actually engaging with the application. >> It's really a combination of both, it really is. I mean, one of the things is, doesn't matter what the machine can tell us, they can give us a pattern and a history, but we don't understand the why sometimes. Why, what did we do? We saw that recently as we were reviewing some of our registration processes. And we were watching it because we use another product that monitors customer experience on the registration cycle. And we were watching something strange and we couldn't figure out why they were going in a certain direction. We looked at it, we didn't see it, but the students did, and there was actually a navigation on that page that sent them in a different direction, it was never meant to be there to do. It was for certain situations, not all situations. So you have to take a combination. You need the data from the machine, the machines can tell you all kinds of patterns on what's happening, but you do need that human part. That's also where IT, when you start talking about the C-Suite and having those discussions, that's where IT always failed, you know, we always talk ones and zeroes, everybody else is trying to have a conversation. So now all of a sudden it's about having that conversation. How can we talk about, here are the challenges, here's what you see, here's what you'd like to do, and how do we address that and move forward with it? So that makes a difference. >> It's just funny, the impact of again, a registration, what feels from the outside like a very mundane process, and yet, it impacts every single person that you guys do business with. It's their direct connection into your much bigger process, and education and professors, and the resources of the school. >> It's everything. >> It's everything. And that, from the outside looking in, someone might think, "Oh, registration, you know, "it's simple, we've got that defined. "We've been doing that for years." But it's not at all. >> And it has to change and it has to adapt quickly. So we're going through a process now where we're really re-evaluating the entire cycle because higher education, we already throw all these other things out at you, you know, what's a bursar, do you know what a bursar is? (Dave and Jeff laugh) How do you understand that? One of you take care of this problem. And then you deal with federal government changes, the state, you throw all those complexities in there, and now we're going through a process where we're, we've already started through some of the initial prospecting parts, but how do we simplify it even further? How do we knock down those barriers, or at least make it easier transitioning. We've done a lot of great stuff in the past. And we use a combination of things to get there, it's not just one set of tools that solves a problem. It's a bit of everything. >> And then the, sort of, post, coming out of Y2K, there was a lot of discussion, and then when the market crashed, there was a lot of discussion about IT value. You know, Nick Carr wrote the thing, Does IT Matter, et cetera, et cetera. What's the value discussion like today? I'm particularly interested as somebody who's implemented ServiceNOW, with the single CMDB, and the service catalog that's evolved. What is the value discussion that you have with your so-called line of business folks at the college? >> Well, the key to it is that we always act as an enabler. You know, we're there to support them and help them walk through the business process changes, look at things from different directions. They don't come to us and say, we want this tool, they come to say, this is my business problem. Now help us figure out how to solve that. That's where the IT value comes in. Yes, I have a bunch of very experienced practitioners. We're constantly understanding what trends and changes are happening. But what's the right tool for that problem? And by doing it this way, one, we're understanding the business problems we're trying to solve, but it also gives us a, it improves our agility, which you've heard me talk about probably a dozen times about this agility because that's what it is. Old IT was locked step stuck, and you were always there. Now when you start talking about agility and the ability to address business needs quickly, but yet still keep that same trajectory. I have legacy systems, I have to have those. But what can I put on the top of that, items like platforms as a service, what can I address things differently on? Probably one of the better ones recently we had a faculty recruiting team going out and they wanted, all of a sudden they were like doing Excel spreadsheet, okay, I'm interested in teaching for you in the future, I'm taking this and they're doing an Excel spreadsheet, and we sat down with them and I was in one of their big meetings and I'm like, okay, would you like to do that on an iPad? >> Dave: There's a better way. >> There's an easier way to skin this cat. So we actually turned around, we built a nice app, and ServiceNOW just to collect, hey, I'm taking classes at this university, I'm interested in teaching for Lone Star in the future, I'm in Mathematics, now that same group can turn around and send out a notification every time we're hiring that says, oh hey, we're hiring right now, we're hiring Math professors, so if you're interested, come on and join us. >> So you're observing how the business is approaching solving problems and identifying areas where you can use, for example, in this case, ServiceNOW, to dramatically improve their experience, is that fair? >> I mean, that's the ultimate goal. The ultimate goal is, what is the problem, let us work on the tool, and then make sure we align things directly. 'Cause that's the harder part. I feel I failed my job if they come into me and say, "You know what, I want you to buy this, "because this is going to solve my problem." Well what's your problem? >> Well, what's interesting is, you know, you've been in IT a long time, and I've observed a lot of interactions between business and IT, when the business people try to tell IT people how to do it, it never works. But what you're saying is, you have enough visibility on the business and understanding of how technology can able, you can actually tell the business people, "Hey, there's a better way." >> That's the perfect way to approach it is, what is the best way we can do this for you. Whether that is in our legacy ERP, and I mean ours is not really a legacy, but in our ERP, or do I put this in the ServiceNOW platform, or do I put it in another platform? And how do we address that problem quickly and easily? >> How about another question, I always like to pick your brain, 'cause you know this stuff so well. How about custom mods? We've probably talked about this before a little bit, but you sort of have a philosophy of trying to avoid them at all costs? >> Absolutely. >> And you've succeeded at that? >> Ah yes, yeah. On the ERP side, we're still less than 10% customized on that platform, and you know, we've held that line. Because we can address the business problems, there's ways to address it without doing all these massive customizations. Sometimes it's just about really understanding the true business process. It's walking back to the old days of understanding what the process is, and then how does the technology adapt to that process. There's things that you can switch on and switch off that is not a custom mod, so your upgrades will process faster. Then there's other times when, like you said, we come in and we could have gone with that recruiting team, we could have gone and put it in our ERP, but we're like, well why? We're just picking up context, we're looking for these things. We need something quick and agile. So ServiceNOW was the perfect jump for it. A quick app. >> And are they coming to you earlier and earlier in the process? Do they get it, that you are an enabler of problem-solving, not necessarily and implementer of what I think I need? >> Absolutely. I mean, and the team we have is phenomenal, so, you know every once in a while, they're like, "Hey, we need this." Well, do you really need that or what do you need? And then we start that conversation. But it comes down to, it's not just myself. And I think that's really the key for any IT leader, is it's about the whole team's perspective. It's not going in with a technology solution as much as it is trying to understand the business problem first. Work through the technology solution. Find out what adapts and what will meet their needs. >> So single CMDB, adopt service catalog, avoid custom mods, anything else you'd tell folks that are just getting started with ServiceNOW? >> I mean, always be proactive. You're always out there trying to have that discussion with people to understand that you're there to help them and there to move it forward, it's just engage in that conversation. And that's the hard part, sometimes IT people don't want to jump into that conversation. What about that business side? I'm lucky, I have a passion for higher ed. This is why I've stayed in higher ed. To me, I get the reward this week when I get back from Orlando, it's graduation time, and you get to see your success walk across the stage. And each one of those students, whether they're moving on to another degree, whether they're moving into the workforce, I mean, that's something that you get out of this that is so impressive when in my field. So the same goes for how you treat your customers. Your employees, or your students, it's about how they feel at the end of the day. Did I do my best to help them out? >> That's got to be really gratifying. You know, in this day of man versus machine, the answer is education, so Link congratulations, and thanks very much for coming back on theCUBE. I love the conversations, we always ask you anything we want, but it's good to see you again. >> Good seeing you. >> Good seeing you Link. >> Alright, keep right there everybody, we'll be right back with our next guest, this is theCUBE, we're live from Knowledge17, #Know17. We'll be right back. (electronic music)

but cute at servicenow knowledge 14 is sponsored by service now here are your hosts Dave vellante and Jeff Creek we're back hi everybody this is Dave vellante with Jeff Frick we're here live at knowledge 14 this is service now it's big customer event about 6,600 people up from about four thousand last year as we've been saying it's kind of tracking the growth of service now which has been pretty meteoric we heard from Mike scarpelli the CFO Frank's loot men they're really doubling down and it's exciting to see we're here in San Francisco where all the action is Jeffrey Moore is here author consultant pundits all-around smart guy cube alum greatly again thank you here so um so you're speaking at the CIO decisions i love the fact that they got so many CIOs here who real CIA a lot of times these conferences you get to you know the infrastructure guys but so what's the vibe like over there well you know it's kind of cool because if you think about service now and you go back to say 10 years this was all about how to make IT more productive around the ITIL model and you know and you'd use these automated services to do this stuff what's happening and Frank nailed it in the keynote he said look this infrastructure can be turned inside out and you can service enable the entire enterprise not just IT need a service enterprise you know HR you can decision a marketing eight-day any other shared service you can turn into a bunch of services that you can sort of call in and use service now as a platform so so the cios it was all about well that that's a different that's a different vision and so how do we map from the old way of sort of thinking about this is an internal productivity facility to this new way of saying no this is an enterprise enablement platform that's a big that's a big move a little bit like Salesforce going to force calm that same flavor yes sir frank's keynote was talking about how the CIO has to become you know more business savvy and of course we've heard that a lot for years and years and years but in fact a number of the folks that we've had on here at the service now are actually of that hill maybe they came from the business but most CIOs didn't necessarily come from the business they weren't P&L managers they weren't running sales do you see that changing yeah I think what happened in the 20th century was IT was sufficiently complex that frankly you had to be a technical person to do it it just it was just really hard and and yes you needed business consultants but the end of the day you needed ten percent business consultants and ninety percent technical people I think we've come a long way since then in the next generation of stuff is more around systems of engagement these things that that communicate with each other as opposed to systems of record and so the profile the winning IT strategy is migrating from help us run information about our business in the back office to help us actually re-engineer the dynamics of our business in the world in the present and that's like going from from data to behavior them it's a big we call it going from systems of record to systems of engagement it's a big show and is that that transition in your mind is very disruptive so what happens to all those purveyors and buyers of systems of engagement to they morph into obsessive record do they morph into systems of engagement do they just get blown away no it's interesting so so so first of all you're never going to get rid of your systems of record but at the margin we've probably extracted most of the lifetime value from that investment already so you need to maintain them and so the industry is consolidating a round of an anchor set of vendors who we trust to do that but the growth is going to be like if you look at systems of engagement we might have gotten five percent of the lifetime value there so at their margin if you have a dollar to spend people want to spend it in there so the challenge of being an incumbent is I'm not going to lose my base but man the growth is happening over here so the real challenge for that for the incumbent vendors is how can i participate in the new world and still maintain my relationships in the old world whereas the new guys are just coming and saying i don't i'll leave the old world of you guys i just want to play over here i can get your take on the structure of the IT business is you've observed as have i sort of these disruptions and these changes over time so obviously we went from being framed at pc you saw that the competitive line started to get more disintegrated yes i could use that that term a competition occurred on those I see that Intel's ascendancy in Microsoft and Oracle the best database companies the emc was the storage company and everything was sort of you know siloed and but leadership the leadership matrix has largely stayed intact I mean even IBM and okay HP said its ends up and down but it's largely stayed intact do you see the cloud changing that fundamentally changing the economic yes I think yes I think what happened is so in the client server error we did we built the stack what you're just described and every layer of the stack had a leader now I think since 2000 y2k that stack is being compressed meaning there are fewer and fewer vendors that are still in the in that in that leadership cadre and as we go to like cloud and computing the service you start saying well yeah i still have cisco in there i still have IBM in there but maybe i'm buying them as a service rather than as a set of equipment so you kind of can feel that world just I think compressing this look is the right word and where is the experimentation the opportunity to sort of find new places to go to it's very much in this world outboard of the IT data center where it it is about engaging engaging with your customer engaging with your employee engaging with your supply chain and using mobile things and social and you know analytics and cloud and all these new technologies the freedom to do that is is actually outboard of the of the old style I show you what you described as sort of an oligopoly and you've got these big whales and I've always asking you know guys who follow this it are we going to see somebody to disrupt that Amazon is the obvious you have to go to them a three billion dollar you know company growing at sixty percent a year with marginal economics of services that look like software yep but at the same time it's okay they've got this huge lead but it doesn't just make sense to me that it's sustainable I mean because hardware economics never will go to 0 so you would think that somebody was almost like the IBM early pc days remember IBM heavily yep we're domin to play that's kind of what kind of way amazon is now do you do you see that you see more competition from amazon why is it that they don't have direct competition so the less of the last book i wrote in the last the thing i've been working on most recently is around why is it so hard for the established incumbents to catch the next wave and the problem is so you look at why amazon's why is Amazon so unopposed in many of its initiatives well their business model in the economic model is completely divorced from the incumbent model and so you look at the incumbent in there going it's not that I don't see what the guys are doing I get what they're doing I just don't see how I can get my investors or my my whole infrastructure on to that new place in my example that was code at so you know Antonio Perez came from HP he knew what he was getting into he understood digital everybody at Kodak understood digital but they couldn't get to the other place so in this it would call it escape velocity how do you free yourself from your own paths and you you really do have to take a pretty dramatic approach to it and I think by the way i think i'm looking at microsoft in particular i think it I think Microsoft's going to give a very very big run at doing it and but I think that they're still more the exception than the rule you would wish that every one of those vendors would say look you know because every CIO here if any of those vendors came to him and said hey we're going to really try to play here will you help they'd say yes they don't want to change their relationships but but we get trapped in these business models and then you sort of grind and you grind and grind and after a while it's like well man you've just ground yourself to do I owe the classic label Christensen right individuals dilemma and it also makes a question is d said David's been the same characters kind of changing companies had not Jeff Bezos and Amazon come in with a completely different model to drive cloud with the other people who still has to transfer so they want to give credit to you want to bet it to be so so you want to give credit to Benioff by the way Benioff has been has been the kind of prow of a ship that brings in the illusory at work day brings in netsuite brings in service service now you know so the software-as-a-service thing is coming in at one level and remember if you were an on-premise guy it's very very how many years did did SI p commit an enormous amount of money to say we're going to have a great cloud offering and it just it's so hard so so it is so and then you're looking now at this sort of this next layer of collaborative IT and you're seeing box and octant hang all these cool thing and analytics and splunk consumer logic and all these companies going really I mean I you know I mean if your fear of my age is like okay you have a t-shirt they got love to you think I'm a teacher but but but the point is this free space and they're saying there's these cool problems to solve we're not encumbered by any of the legacy we're going to race ahead and so if you're a CIO well we spent most of our time with the cios today was ok i have established set of relationships here i'm not going to abandon them but at the margin i need them to help me think about the future I thought these really start sparkly new startups some i'm sure not going to exist next year but some are going to be the leaders so how play that game right now and and the pressure it's putting on the IT organization is the people I know that are good at this are not the people that are good at this and so how do I so we had to talk about talent and how do you manage and how do you create career paths and and is it or do you have a infrastructure officer vs an innovation office I'm it was all around that same prob right and then oh by the way there's Hadoop and mobile and big data and some of these other just open source innovations that are being just thrown all these guys played it is so from a technology plate from a technology play if you're technologists it's like bring it on right but I think the interesting thing is and most of my career aighty was about the business so you ran a business and you had IT systems which gave you information about your business what's happened in the last 15 years is that more and more sectors of the economy i T is becoming the business so you saw what happened the newspapers in facilitate with IT isn't about the newspaper business IT is displacing the newspaper business Google is displaced in the media business amazon is displacing retail you know mobile banking is displacing banking Airbnb uber I mean this so there we have the taxi guys are worried them it and so you start saying it isn't IT isn't about the business it's a digital world and and so all of us and that was it i think that was probably at the core of the discussion so which cio am i what do I have permission to be would do my colleagues get this you know am I competent to do it if they do I mean you've talked about this a lot and you've given a number of examples so so was nicked car just dead wrong in 2003 or just to a narrow it is to keep what he was saying I believe is that systems of record okay are dead I think at that time by the way it wasn't obvious there was anything else because it no serious i can remember to you know the whole venture community kind of abandoned itv4 about researcher ivan on 101 yeah it was and even in the end even in the physical infrastructure there's still the idea is the basis of the competitive and about the reporting system yeah and i think this issue about so i think there's still a few businesses we're really IT still is about the business and you know what you can kind of stick with whatever you were doing you'll be okay but if your business is under an existential threat meaning the new IT model eviscerates your business model which arguably you could say all those both those incumbent stack vendors you know I mean cloud does eviscerate the on-premise hardware data center business model which was the fundamental foundation of IT as I knew it for all my business career and now all this it's like holy how do i how do i how do I deal with it so we talk about Amazon as a potential you know new you know big whale Salesforce is obviously he's got it but they've been around since 99 there's going to be exception mm-hmm proves the rule I don't maybe a service now or a workday you know we'll see if this market is big enough it looks like it it might be what often happens is they these guys let's get gobbled up or Larry Ellison writes a check you say these to denigrate people who write write checks not code I think the biggest matter and they got such mass never was afraid to reinvent himself change the game change the dynamics of the industry so do you think we will see a another big player and where will that comfort will it be the SAS guys will it be the sum of the guys out of the hadoop world what I don't think it will so here here's what I don't think will work I don't think you can be an established incumbent vendor under this compression power and write a check and get yourself back I think what happens when you write a check if you just bring a hot property into cold molecules and it loses its exactly exactly so I don't think that will work I think if you want to be one of these incumbents and succeed over here you have to actually pull part of your own DNA and capability and we literally just jump and then I think you can acquire it to it to build a thing there but what Larry did was he consolidate he basically was the first guy to figure out Nick Carr is right I need to buy up all the properties yep and brother George ball and run a maintenance business which by the way came to read and Georgia computer associates had that play up in the eighties it's the same play with this is a different plan well I love what you say in emc is an interesting one to watch the way to chi is setting up this Federation with pivotal and VMware you know who see we'll see what happens with the quarry NC and I think VI 3 of 8 yeah I think that that is I mean VMware's one of the wonderful examples of think we're a company did not cause the hot molecules become the cold molecules the thing you wonder there though is it feels a little bit like a like a holding company if you will and so and by the way vmware is in a curious tweener right like they kind of were the most they made the old stack incredibly productive so in some sense they can feel like they're part of the old world right they're probably the newest kid on the old world but then you think well yeah but I want to look at their plan now they want to be into software-defined networks they wanted me to software-defined data centers they definitely want to play over here and what it's in this case so state partners Wow one could argue that that was it because of what big in the cloud virtualize computing absolutely absolutely so what're you working on these days that's exciting well so that I think this issue of working with management teams to say okay look this is a self-imposed exile that we're putting ourselves under you know we get it i'll call it the Kodak problem because I don't want to talk about anybody in high tech specifically at the moment but the point is every management team in the established vendor group puts itself on a self imposed discipline to make you know certain kinds of eps things certain kinds of growth you know whatever it is the expectations of their investors and you look at the situation you say guys that is a slope glide path to extinction we all know that and by the way off the record they know it's no it's not that that is this is not a failure of it like this is a failure of will so then the question is well so how do you negotiate a different path and part of it is you have to make you have you have to be able to tell a story of your investors part of it is you have to negotiate a different operating model inside the company and what they've done so far is they said well okay we've got our established businesses and we've got our innovative businesses and we know enough to keep them apart so that part is not the problem and they actually come up with cool stuff the the moment of truth is when can you scale any of these innovative businesses to compete to actually be a material part of your historical portfolio meaning in my terminology at least ten percent of your total revenue going to twenty percent in what happens in that journey is it a key point you have to draw on the resources of your established business and all the people that make their living and they're compensated on getting the next quarter in the next quarter go guys I can't make the quarter and do this and you've got it you've got to find a way to say you know if we don't figure out a way to pull some of that resource over here and play our next hand will invent everything in the world but we'll never get it to scale and so there's there's a bunch of stuff around business model planning and then Investor Relations organizational development it's all around saying and the key there's two key ideas idea number one is it's a go-to-market problem not an RD problem you do not have an innovation problem you can't get your thing to market and the second cool idea is you can only do one of the time and everybody says well but give have the risk to so high you got a three or four or five of these things maybe want to work it's like know the sacrifice is so great if you put two or more horses in the race people people won't even run so the other one that's a focus and don't it's ok not to make the quarter that's like on American looking like michael dunn right i mean that's obsessively what he's hoping to be able to do and i think one of the reasons you see people go private is to say i can't play this game bye-bye normal public company protocol i mean i like to but i can't get there from here now i actually don't think every company ought to have to go private to do this but i think they do have to change their playboys all right Jeff we have to leave it there hey great to see you thank you very much me feel smarter just hanging out with you right there buddy we'll be right back after this is the cube you