>>Okay. We're here with the rest of the child who was the chief product officer at Altryx and Adam Wilson, the CEO of Trifacta. Now of course, part of Altryx just closed this quarter. Gentlemen. Welcome. >>Great to be here. >>Okay. So rest, let me start with you. In my opening remarks, I talked about Altrix is traditional position serving business analysts and how the hyper Anna acquisition brought you deeper into the business user space. What does Trifacta bring to your portfolio? Why'd you buy the company? >>Yeah. Thank you. Thank you for the question. Um, you know, we see, uh, we see a massive opportunity of helping, um, brands, um, democratize the use of analytics across their business. Um, every knowledge worker, every individual in the company should have access to analytics. It's no longer optional, um, as they navigate, uh, their businesses with that in mind, you know, we know designer and are the products that Ultrix has been selling the past decade or so do a really great job, um, addressing the business analysts, uh, with, um, hyperaware, um, now kind of renamed, um, Altrix auto insights. Uh, we even speak with the, uh, business owner of the line of business owner. Who's looking for insights that aren't real in traditional dashboards and so on. Um, but we see this opportunity of really helping the data engineering teams and it organizations, um, to also make better use of analytics. Um, and that's where the drive factor comes in for us. Um, drive factor has the best data engineering cloud in the planet. Um, they have an established track record of working across multiple cloud platforms and helping data engineers, um, do better data pipelining and work better with, uh, this massive kind of cloud transformation that's happening in every business. Um, and so Trifacta made so much sense for us. >>Yeah. Thank you for that. I mean, look, you could have built it yourself. Would've taken, you know, who knows how long, but, uh, so definitely a great time to market move, Adam. I wonder if we could dig into Trifacta some more, I mean, I remember interviewing Joe Hellerstein in the early days. You've talked about this as well, uh, on the cube coming at the problem of taking data from raw refined to an experience point of view. And Joe in the early days, talked about flipping the model and starting with data visualization, something Jeff, her was expert at. So maybe explain how we got here. We used to have this cumbersome process of ETL and you may be in some others changed that model with ELL and then T explain how Trifacta really changed the data engineering game. >>Yeah, that's exactly right. Uh, David, it's been a really interesting journey for us because I think the original hypothesis coming out of the campus research, uh, at Berkeley and Stanford that really birthed Trifacta was, you know, why is it that the people who know the data best can't do the work? You know, why is this become the exclusive purview of the highly technical and, you know, can we rethink this and make this a user experience, problem powered by machine learning that will take some of the more complicated things that people want to do with data and really helped to automate those. So, so a, a broader set of users can, um, can really see for themselves and help themselves. And, and I think that, um, there was a lot of pent up frustration out there because people have been told for, you know, for a decade now to be more data-driven and then the whole time they're saying, well, then give me the data, you know, in the shape that I can use it with the right level of quality and I'm happy to be, but don't tell me to be more data driven and then, and, and not empower me, um, to, to get in there and to actually start to work with the data in meaningful ways. >>And so, um, that was really, you know, what, you know, the origin story of the company. And I think as, as we, um, you know, saw over the course of the last 5, 6, 7 years that, um, you know, a real, uh, excitement to embrace this idea of, of trying to think about data engineering differently, trying to democratize the, the ETL process and to also leverage all of these exciting new, uh, engines and platforms that are out there that allow for processing, you know, ever more diverse data sets, ever larger data sets and new and interesting ways. And that's where a lot of the push down or the ELT approaches that, you know, I think it could really won the day. Um, and that, and that for us was a hallmark of the solution from the very beginning. >>Yeah, this is a huge point that you're making. This is first of all, there's a large business, it's probably about a hundred billion dollar Tam. Uh, and the, the point you're making is we've looked, we've contextualized most of our operational systems, but the big data pipelines hasn't gotten there. And maybe we could talk about that a little bit because democratizing data is Nirvana, but it's been historically very difficult. You've got a number of companies it's very fragmented and they're all trying to attack their little piece of the problem to achieve an outcome, but it's been hard. And so what's going to be different about Altryx as you bring these puzzle pieces together, how is this going to impact your customers who would like to take that one? >>Yeah, maybe, maybe I'll take a crack at it. And Adam will, um, add on, um, you know, there hasn't been a single platform, uh, for analytics automation in the enterprise, right? People have relied on, uh, different products, um, to solve kind of, uh, smaller problems, um, across this analytics, automation, data transformation domain. Um, and, um, I think uniquely altereds has that opportunity. Uh, we've got 7,000 plus customers who rely on analytics for, um, data management, for analytics or AI and ML, uh, for transformations, uh, for reporting and visualization for automated insights and so on. And so by bringing drive factor, we have the opportunity to scale this even further and solve for more use cases, expand the scenarios where it's gets applied and so multiple personas. Um, and now we just talked about the data engineers. They are really a growing stakeholder in this transformation of data and analytics. >>Yeah, good. Maybe we can stay on this for a minute cause you, you you're right. You bring it together. Now that at least 3% is the business analyst, the end user slash business user. And now the data engineer, which is really out of an it role in a lot of companies, and you've used this term, the data engineering cloud, what is that, how is it going to integrate in with, or support these other personas? And, and how's it going to integrate into the broader ecosystem of clouds and cloud data warehouses or any other data stores? >>Yeah, no, that's great. Uh, yeah, I think for us, we really looked at this and said, you know, we want to build an open and interactive cloud platform for data engineers, you know, to collaboratively profile pipeline, um, and prepare data for analysis. And that really meant collaborating with the analysts that were in the line of business. And so this is why a big reason why this combination is so magic because ultimately if we can get the data engineers that are creating the data products together with the analysts that are, uh, in the line of business that are driving a lot of the decision-making and allow for that, what I would describe as collaborative curation of the data together, so that you're starting to see, um, uh, you know, increasing returns to scale as this, uh, as this rolls out. I just think that is an incredibly powerful combination and, and frankly, something that the market has not cracked the code on yet. And so, um, I think when we, when I sat down with Suresh and with mark and the team at Ultrix, that was really part of the, the, the big idea, the big vision that that was painted and, and got us really energized about the acquisition and about the potential of the combination. >>Yeah. And you're really, you're obviously riding the cloud and the cloud native wave. Um, and, but specifically we're seeing, you know, I almost don't even want to call it a data warehouse anyway, because when you look at what's, for instance, snowflake is doing, of course their marketing is around the data cloud, but I actually think there's real justification for that because it's not like the traditional data warehouse, right. It's, it's simplified get there fast, don't necessarily have to go through the central organization to share data. Uh, and, and, and, but it's really all about simplification, right? Isn't that really what the democratization comes down to. >>Yeah. It's simplification and collaboration. Right. I don't want to, I want to kind of just, um, what Adam said resonates with me deeply, um, analytics is one of those, um, massive disciplines, an enterprise that's really had the weakest of tools. Um, and we just have interfaces to collaborate with, and I think truly this was Alteryx's and a superpower was helping the analysts get more out of their data, get more out of the analytics, like imagine a world where these people are collaborating and sharing insights in real time and sharing workflows and getting access to new data sources, um, understanding data models better, I think, um, uh, curating those insights. I boring Adam's phrase again. Um, I think that creates a real value inside the organization, uh, because frankly in scaling analytics and democratizing analytics and data, we're still in such early phases of this journey. >>So how should we think about designer cloud, which is from Altryx it's really been the on-prem and the server desktop offering. And of course Trifacta is with cloud cloud data warehouses. Right. Uh, how, how should we think about those two products? >>Yeah, I think, I think you should think about them and, uh, um, as, as very complimentary right design a cloud really shares a lot of DNA and heritage with, uh, designer desktop, um, the low code tooling and that interface, uh, that really appeals to the business analysts, um, and gets a lot of the things that they do well, we've also built it with interoperability in mind, right. So if you started building your workflows in designer desktop, you want to share that with design and cloud, we want to make it super easy for you to do that. Um, and I think over time now we're only a week into, um, this Alliance with, um, with Trifacta. Um, I think we have to get deeper inside to think about what does the data engineer really need what's business analysts really need and how to design a cloud, and Trifacta really support both of those requirements, uh, while kind of continue to build on the tri-factor on the amazing tri-factor cloud platform. >>You know, >>I was just going to say, I think that's one of the things that, um, you know, creates a lot of, uh, opportunity as we go forward, because ultimately, you know, Trifacta took a platform, uh, first mentality to everything that we built. So thinking about openness and extensibility and, um, and how over time people could build things on top of, by factor that are a variety of analytic tool chain, or analytic applications. And so, uh, when you think about, um, Ultrix now starting to, uh, to move some of its capabilities or to provide additional capabilities, uh, in the cloud, um, you know, Trifacta becomes a platform that can accelerate, you know, all of that work and create, uh, uh, a cohesive set of, of cloud-based services that, um, share a common platform. And that maintains independence because both companies, um, have been, uh, you know, fiercely independent, uh, and really giving people choice. >>Um, so making sure that whether you're, uh, you know, picking one cloud platform and other, whether you're running things on the desktop, uh, whether you're running in hybrid environments, that, um, no matter what your decision, um, you're always in a position to be able to get out your data. You're always in a position to be able to cleanse transform shape structure, that data, and ultimately to deliver, uh, the analytics that you need. And so I think in that sense, um, uh, you know, this, this again is another reason why the combination, you know, fits so well together, giving people, um, the choice. Um, and as they, as they think about their analytics strategy and their platform strategy going forward, >>Yeah. I make a chuckle, but I, one of the reasons I always liked Altryx is cause you kinda did the little end run on it. It can be a blocker sometimes, but that created problems, right? Because the current organization said, wow, there's big data stuff is taken off, but we need security. We need governance. And, and it was interesting because he got, you know, ETTL has been complex, whereas the visualization tools, they really, you know, really weren't great at governance and security. It took some time there. So that's not, not their heritage. You're bringing those worlds together. And I'm interested, you guys just had your sales kickoff, you know, what was their reaction like, uh, maybe Suresh, you could start off and maybe Adam, you could bring us home. >>Yeah. Um, thanks for asking about our sales kickoff. So we met for the first time and kind of two years, right. For, as, as it is for many of us, um, in person, uh, um, which I think was, uh, was a real breakthrough as Qualtrics has been on its transformation journey. Uh, we had a Trifacta to, um, the, the party such as the tour, um, and getting all of our sales teams and product organizations, um, to meet in person in one location. I thought that was very powerful for us, the company. Uh, but then I tell you, um, um, the reception for Trifacta was beyond anything I could have imagined. Uh, we were working Adam and I were working so hard on, on the deal and the core hypothesis and so on. And then you step back and you kind of share the vision, uh, with the field organization and it blows you away, the energy that it creates among our sellers, our partners, and I'm sure Adam will, and his team were mocked every single day with questions and opportunities to bring them in. >>But Adam, maybe he's chair. Yeah, I know it was, uh, it was through the roof. I mean, uh, uh, the, uh, the amount of energy, the, uh, certainly how welcoming everybody was, uh, uh, you know, just, I think the story makes so much sense together. I think culturally, the company is, are very aligned. Um, and, uh, it was a real, uh, real capstone moment, uh, to be able to complete the acquisition and to, and to close and announced, you know, at the kickoff event. And, um, I think, you know, for us, when we really thought about it, you know, when we ended the story, that we was just, you have this opportunity to really cater to what the end-users, you know, care about, which is a lot about interactivity and self-service, and at the same time. And that's, and that's a lot of the goodness that, um, that Ultrix has brought, you know, through, you know, you know, years and years of, of building a very vibrant community of, you know, thousands, hundreds of thousands of users. >>And on the other side, you know, Trifacta bringing in this data engineering focus, that's really about, uh, the governance things that you mentioned and the openness, um, that, that it cares deeply about. And all of a sudden, now you have a chance to put that together into a complete story where the data engineering cloud and analytics, automation, you know, coming together. And, um, and I just think, you know, the lights went on, um, you know, for people instantaneously and, you know, this is a story that, um, that I think the market is really hungry for. And certainly the reception we got from, uh, from the broader team at kickoff was, uh, was a great indication of that. >>Well, I think the story hangs together really well, you know, one of the better ones I've seen in, in this space, um, and, and you guys coming off a really, really strong quarter. So congratulations on that Jensen. We have to leave it there. I really appreciate your time today. Yeah. Take a look at this short video. And when we come back, we're going to dig into the ecosystem and the integration into cloud data warehouses and how leading organizations are creating modern data teams and accelerating their digital businesses. You're watching the cube, your leader in enterprise tech coverage.

>>Alteryx is a company with a long history that goes all the way back to the late 1990s. Now the one consistent theme over 20 plus years has been that Ultrix has always been a data company early in the big data and Hadoop cycle. It saw the need to combine and prep different data types so that organizations could analyze data and take action Altrix and similar companies played a critical role in helping companies become data-driven. The problem was the decade of big data, brought a lot of complexities and required immense skills just to get the technology to work as advertised this in turn limited, the pace of adoption and the number of companies that could really lean in and take advantage of the cloud began to change all that and set the foundation for today's theme to Zuora of digital transformation. We hear that phrase a ton digital transformation. >>People used to think it was a buzzword, but of course we learned from the pandemic that if you're not a digital business, you're out of business and a key tenant of digital transformation is democratizing data, meaning enabling, not just hypo hyper specialized experts, but anyone business users to put data to work. Now back to Ultrix, the company has embarked on a major transformation of its own. Over the past couple of years, brought in new management, they've changed the way in which it engaged with customers with the new subscription model and it's topgraded its talent pool. 2021 was even more significant because of two acquisitions that Altrix made hyper Ana and trifecta. Why are these acquisitions important? Well, traditionally Altryx sold to business analysts that were part of the data pipeline. These were fairly technical people who had certain skills and were trained in things like writing Python code with hyper Ana Altryx has added a new persona, the business user, anyone in the business who wanted to gain insights from data and, or let's say use AI without having to be a deep technical expert. >>And then Trifacta a company started in the early days of big data by cube alum, Joe Hellerstein and his colleagues at Berkeley. They knocked down the data engineering persona, and this gives Altryx a complimentary extension into it where things like governance and security are paramount. So as we enter 2022, the post isolation economy is here and we do so with a digital foundation built on the confluence of cloud native technologies, data democratization and machine intelligence or AI, if you prefer. And Altryx is entering that new era with an expanded portfolio, new go-to market vectors, a recurring revenue business model, and a brand new outlook on how to solve customer problems and scale a company. My name is Dave Vellante with the cube and I'll be your host today. And the next hour, we're going to explore the opportunities in this new data market. And we have three segments where we dig into these trends and themes. First we'll talk to Jay Henderson, vice president of product management at Ultrix about cloud acceleration and simplifying complex data operations. Then we'll bring in Suresh Vetol who's the chief product officer at Altrix and Adam Wilson, the CEO of Trifacta, which of course is now part of Altrix. And finally, we'll hear about how Altryx is partnering with snowflake and the ecosystem and how they're integrating with data platforms like snowflake and what this means for customers. And we may have a few surprises sprinkled in as well into the conversation let's get started. >>We're kicking off the program with our first segment. Jay Henderson is the vice president of product management Altryx and we're going to talk about the trends and data, where we came from, how we got here, where we're going. We get some launch news. Well, Jay, welcome to the cube. >>Great to be here, really excited to share some of the things we're working on. >>Yeah. Thank you. So look, you have a deep product background, product management, product marketing, you've done strategy work. You've been around software and data, your entire career, and we're seeing the collision of software data cloud machine intelligence. Let's start with the customer and maybe we can work back from there. So if you're an analytics or data executive in an organization, w J what's your north star, where are you trying to take your company from a data and analytics point of view? >>Yeah, I mean, you know, look, I think all organizations are really struggling to get insights out of their data. I think one of the things that we see is you've got digital exhaust, creating large volumes of data storage is really cheap, so it doesn't cost them much to keep it. And that results in a situation where the organization's, you know, drowning in data, but somehow still starving for insights. And so I think, uh, you know, when I talk to customers, they're really excited to figure out how they can put analytics in the hands of every single person in their organization, and really start to democratize the analytics, um, and, you know, let the, the business users and the whole organization get value out of all that data they have. >>And we're going to dig into that throughout this program data, I like to say is plentiful insights, not always so much. Tell us about your launch today, Jay, and thinking about the trends that you just highlighted, the direction that your customers want to go and the problems that you're solving, what role does the cloud play in? What is what you're launching? How does that fit in? >>Yeah, we're, we're really excited today. We're launching the Altryx analytics cloud. That's really a portfolio of cloud-based solutions that have all been built from the ground up to be cloud native, um, and to take advantage of things like based access. So that it's really easy to give anyone access, including folks on a Mac. Um, it, you know, it also lets you take advantage of elastic compute so that you can do, you know, in database processing and cloud native, um, solutions that are gonna scale to solve the most complex problems. So we've got a portfolio of solutions, things like designer cloud, which is our flagship designer product in a browser and on the cloud, but we've got ultra to machine learning, which helps up-skill regular old analysts with advanced machine learning capabilities. We've got auto insights, which brings a business users into the fold and automatically unearths insights using AI and machine learning. And we've got our latest edition, which is Trifacta that helps data engineers do data pipelining and really, um, you know, create a lot of the underlying data sets that are used in some of this, uh, downstream analytics. >>Let's dig into some of those roles if we could a little bit, I mean, you've traditionally Altryx has served the business analysts and that's what designer cloud is fit for, I believe. And you've explained, you know, kind of the scope, sorry, you've expanded that scope into the, to the business user with hyper Anna. And we're in a moment we're going to talk to Adam Wilson and Suresh, uh, about Trifacta and that recent acquisition takes you, as you said, into the data engineering space in it. But in thinking about the business analyst role, what's unique about designer cloud cloud, and how does it help these individuals? >>Yeah, I mean, you know, really, I go back to some of the feedback we've had from our customers, which is, um, you know, they oftentimes have dozens or hundreds of seats of our designer desktop product, you know, really, as they look to take the next step, they're trying to figure out how do I give access to that? Those types of analytics to thousands of people within the organization and designer cloud is, is really great for that. You've got the browser-based interface. So if folks are on a Mac, they can really easily just pop, open the browser and get access to all of those, uh, prep and blend capabilities to a lot of the analysis we're doing. Um, it's a great way to scale up access to the analytics and then start to put it in the hands of really anyone in the organization, not just those highly skilled power users. >>Okay, great. So now then you add in the hyper Anna acquisition. So now you're targeting the business user Trifacta comes into the mix that deeper it angle that we talked about, how does this all fit together? How should we be thinking about the new Altryx portfolio? >>Yeah, I mean, I think it's pretty exciting. Um, you know, when you think about democratizing analytics and providing access to all these different groups of people, um, you've not been able to do it through one platform before. Um, you know, it's not going to be one interface that meets the, of all these different groups within the organization. You really do need purpose built specialized capabilities for each group. And finally, today with the announcement of the alternates analytics cloud, we brought together all of those different capabilities, all of those different interfaces into a single in the end application. So really finally delivering on the promise of providing analytics to all, >>How much of this you've been able to share with your customers and maybe your partners. I mean, I know OD is fairly new, but if you've been able to get any feedback from them, what are they saying about it? >>Uh, I mean, it's, it's pretty amazing. Um, we ran a early access, limited availability program that led us put a lot of this technology in the hands of over 600 customers, um, over the last few months. So we have gotten a lot of feedback. I tell you, um, it's been overwhelmingly positive. I think organizations are really excited to unlock the insights that have been hidden in all this data. They've got, they're excited to be able to use analytics in every decision that they're making so that the decisions they have or more informed and produce better business outcomes. Um, and, and this idea that they're going to move from, you know, dozens to hundreds or thousands of people who have access to these kinds of capabilities, I think has been a really exciting thing that is going to accelerate the transformation that these customers are on. >>Yeah, those are good. Good, good numbers for, for preview mode. Let's, let's talk a little bit about vision. So it's democratizing data is the ultimate goal, which frankly has been elusive for most organizations over time. How's your cloud going to address the challenges of putting data to work across the entire enterprise? >>Yeah, I mean, I tend to think about the future and some of the investments we're making in our products and our roadmap across four big themes, you know, in the, and these are really kind of enduring themes that you're going to see us making investments in over the next few years, the first is having cloud centricity. You know, the data gravity has been moving to the cloud. We need to be able to provide access, to be able to ingest and manipulate that data, to be able to write back to it, to provide cloud solution. So the first one is really around cloud centricity. The second is around big data fluency. Once you have all of the data, you need to be able to manipulate it in a performant manner. So having the elastic cloud infrastructure and in database processing is so important, the third is around making AI a strategic advantage. >>So, uh, you know, getting everyone involved and accessing AI and machine learning to unlock those insights, getting it out of the hands of the small group of data scientists, putting it in the hands of analysts and business users. Um, and then the fourth thing is really providing access across the entire organization. You know, it and data engineers, uh, as well as business owners and analysts. So, um, cloud centricity, big data fluency, um, AI is a strategic advantage and, uh, personas across the organization are really the four big themes you're going to see us, uh, working on over the next few months and, uh, coming coming year. >>That's good. Thank you for that. So, so on a related question, how do you see the data organizations evolving? I mean, traditionally you've had, you know, monolithic organizations, uh, very specialized or I might even say hyper specialized roles and, and your, your mission of course is the customer. You, you, you, you and your customers, they want to democratize the data. And so it seems logical that domain leaders are going to take more responsibility for data, life cycles, data ownerships, low code becomes more important. And perhaps this kind of challenges, the historically highly centralized and really specialized roles that I just talked about. How do you see that evolving and, and, and what role will Altryx play? >>Yeah. Um, you know, I think we'll see sort of a more federated systems start to emerge. Those centralized groups are going to continue to exist. Um, but they're going to start to empower, you know, in a much more de-centralized way, the people who are closer to the business problems and have better business understanding. I think that's going to let the centralized highly skilled teams work on, uh, problems that are of higher value to the organization. The kinds of problems where one or 2% lift in the model results in millions of dollars a day for the business. And then by pushing some of the analytics out to, uh, closer to the edge and closer to the business, you'll be able to apply those analytics in every single decision. So I think you're going to see, you know, both the decentralized and centralized models start to work in harmony and a little bit more about almost a federated sort of a way. And I think, you know, the exciting thing for us at Altryx is, you know, we want to facilitate that. We want to give analytic capabilities and solutions to both groups and types of people. We want to help them collaborate better, um, and drive business outcomes with the analytics they're using. >>Yeah. I mean, I think my take on another one, if you could comment is to me, the technology should be an operational detail and it has been the, the, the dog that wags the tail, or maybe the other way around, you mentioned digital exhaust before. I mean, essentially it's digital exhaust coming out of operationals systems that then somehow, eventually end up in the hand of the domain users. And I wonder if increasingly we're going to see those domain users, users, those, those line of business experts get more access. That's your goal. And then even go beyond analytics, start to build data products that could be monetized, and that maybe it's going to take a decade to play out, but that is sort of a new era of data. Do you see it that way? >>Absolutely. We're actually making big investments in our products and capabilities to be able to create analytic applications and to enable somebody who's an analyst or business user to create an application on top of the data and analytics layers that they have, um, really to help democratize the analytics, to help prepackage some of the analytics that can drive more insights. So I think that's definitely a trend we're going to see more. >>Yeah. And to your point, if you can federate the governance and automate that, then that can happen. I mean, that's a key part of it, obviously. So, all right, Jay, we have to leave it there up next. We take a deep dive into the Altryx recent acquisition of Trifacta with Adam Wilson who led Trifacta for more than seven years. It's the recipe. Tyler is the chief product officer at Altryx to explain the rationale behind the acquisition and how it's going to impact customers. Keep it right there. You're watching the cube. You're a leader in enterprise tech coverage. >>It's go time, get ready to accelerate your data analytics journey with a unified cloud native platform. That's accessible for everyone on the go from home to office and everywhere in between effortless analytics to help you go from ideas to outcomes and no time. It's your time to shine. It's Altryx analytics cloud time. >>Okay. We're here with. Who's the chief product officer at Altryx and Adam Wilson, the CEO of Trifacta. Now of course, part of Altryx just closed this quarter. Gentlemen. Welcome. >>Great to be here. >>Okay. So let me start with you. In my opening remarks, I talked about Altrix is traditional position serving business analysts and how the hyper Anna acquisition brought you deeper into the business user space. What does Trifacta bring to your portfolio? Why'd you buy the company? >>Yeah. Thank you. Thank you for the question. Um, you know, we see, uh, we see a massive opportunity of helping, um, brands, um, democratize the use of analytics across their business. Um, every knowledge worker, every individual in the company should have access to analytics. It's no longer optional, um, as they navigate their businesses with that in mind, you know, we know designer and are the products that Altrix has been selling the past decade or so do a really great job, um, addressing the business analysts, uh, with, um, hyper Rana now kind of renamed, um, Altrix auto. We even speak with the business owner and the line of business owner. Who's looking for insights that aren't real in traditional dashboards and so on. Um, but we see this opportunity of really helping the data engineering teams and it organizations, um, to also make better use of analytics. Um, and that's where the drive factor comes in for us. Um, drive factor has the best data engineering cloud in the planet. Um, they have an established track record of working across multiple cloud platforms and helping data engineers, um, do better data pipelining and work better with, uh, this massive kind of cloud transformation that's happening in every business. Um, and so fact made so much sense for us. >>Yeah. Thank you for that. I mean, you, look, you could have built it yourself would have taken, you know, who knows how long, you know, but, uh, so definitely a great time to market move, Adam. I wonder if we could dig into Trifacta some more, I mean, I remember interviewing Joe Hellerstein in the early days. You've talked about this as well, uh, on the cube coming at the problem of taking data from raw refined to an experience point of view. And Joe in the early days, talked about flipping the model and starting with data visualization, something Jeff, her was expert at. So maybe explain how we got here. We used to have this cumbersome process of ETL and you may be in some others changed that model with ELL and then T explain how Trifacta really changed the data engineering game. >>Yeah, that's exactly right. Uh, David, it's been a really interesting journey for us because I think the original hypothesis coming out of the campus research, uh, at Berkeley and Stanford that really birth Trifacta was, you know, why is it that the people who know the data best can't do the work? You know, why is this become the exclusive purview of the highly technical? And, you know, can we rethink this and make this a user experience, problem powered by machine learning that will take some of the more complicated things that people want to do with data and really help to automate those. So, so a broader set of, of users can, um, can really see for themselves and help themselves. And, and I think that, um, there was a lot of pent up frustration out there because people have been told for, you know, for a decade now to be more data-driven and then the whole time they're saying, well, then give me the data, you know, in the shape that I could use it with the right level of quality and I'm happy to be, but don't tell me to be more data-driven and then, and, and not empower me, um, to, to get in there and to actually start to work with the data in meaningful ways. >>And so, um, that was really, you know, what, you know, the origin story of the company and I think is, as we, um, saw over the course of the last 5, 6, 7 years that, um, you know, uh, real, uh, excitement to embrace this idea of, of trying to think about data engineering differently, trying to democratize the, the ETL process and to also leverage all these exciting new, uh, engines and platforms that are out there that allow for processing, you know, ever more diverse data sets, ever larger data sets and new and interesting ways. And that's where a lot of the push-down or the ELT approaches that, you know, I think it could really won the day. Um, and that, and that for us was a hallmark of the solution from the very beginning. >>Yeah, this is a huge point that you're making is, is first of all, there's a large business, it's probably about a hundred billion dollar Tam. Uh, and the, the point you're making, because we've looked, we've contextualized most of our operational systems, but the big data pipeline is hasn't gotten there. But, and maybe we could talk about that a little bit because democratizing data is Nirvana, but it's been historically very difficult. You've got a number of companies it's very fragmented and they're all trying to attack their little piece of the problem to achieve an outcome, but it's been hard. And so what's going to be different about Altryx as you bring these puzzle pieces together, how is this going to impact your customers who would like to take that one? >>Yeah, maybe, maybe I'll take a crack at it. And Adam will, um, add on, um, you know, there hasn't been a single platform for analytics, automation in the enterprise, right? People have relied on, uh, different products, um, to solve kind of, uh, smaller problems, um, across this analytics, automation, data transformation domain. Um, and, um, I think uniquely Alcon's has that opportunity. Uh, we've got 7,000 plus customers who rely on analytics for, um, data management, for analytics, for AI and ML, uh, for transformations, uh, for reporting and visualization for automated insights and so on. Um, and so by bringing drive factor, we have the opportunity to scale this even further and solve for more use cases, expand the scenarios where it's applied and so multiple personas. Um, and we just talked about the data engineers. They are really a growing stakeholder in this transformation of data and analytics. >>Yeah, good. Maybe we can stay on this for a minute cause you, you you're right. You bring it together. Now at least three personas the business analyst, the end user slash business user. And now the data engineer, which is really out of an it role in a lot of companies, and you've used this term, the data engineering cloud, what is that? How is it going to integrate in with, or support these other personas? And, and how's it going to integrate into the broader ecosystem of clouds and cloud data warehouses or any other data stores? >>Yeah, no, that's great. Uh, yeah, I think for us, we really looked at this and said, you know, we want to build an open and interactive cloud platform for data engineers, you know, to collaboratively profile pipeline, um, and prepare data for analysis. And that really meant collaborating with the analysts that were in the line of business. And so this is why a big reason why this combination is so magic because ultimately if we can get the data engineers that are creating the data products together with the analysts that are in the line of business that are driving a lot of the decision making and allow for that, what I would describe as collaborative curation of the data together, so that you're starting to see, um, uh, you know, increasing returns to scale as this, uh, as this rolls out. I just think that is an incredibly powerful combination and, and frankly, something that the market is not crack the code on yet. And so, um, I think when we, when I sat down with Suresh and with mark and the team at Ultrix, that was really part of the, the, the big idea, the big vision that was painted and got us really energized about the acquisition and about the potential of the combination. >>And you're really, you're obviously writing the cloud and the cloud native wave. Um, and, but specifically we're seeing, you know, I almost don't even want to call it a data warehouse anyway, because when you look at what's, for instance, Snowflake's doing, of course their marketing is around the data cloud, but I actually think there's real justification for that because it's not like the traditional data warehouse, right. It's, it's simplified get there fast, don't necessarily have to go through the central organization to share data. Uh, and, and, and, but it's really all about simplification, right? Isn't that really what the democratization comes down to. >>Yeah. It's simplification and collaboration. Right. I don't want to, I want to kind of just what Adam said resonates with me deeply. Um, analytics is one of those, um, massive disciplines inside an enterprise that's really had the weakest of tools. Um, and we just have interfaces to collaborate with, and I think truly this was all drinks and a superpower was helping the analysts get more out of their data, get more out of the analytics, like imagine a world where these people are collaborating and sharing insights in real time and sharing workflows and getting access to new data sources, um, understanding data models better, I think, um, uh, curating those insights. I boring Adam's phrase again. Um, I think that creates a real value inside the organization because frankly in scaling analytics and democratizing analytics and data, we're still in such early phases of this journey. >>So how should we think about designer cloud, which is from Altrix it's really been the on-prem and the server desktop offering. And of course Trifacta is with cloud cloud data warehouses. Right. Uh, how, how should we think about those two products? Yeah, >>I think, I think you should think about them. And, uh, um, as, as very complimentary right designer cloud really shares a lot of DNA and heritage with, uh, designer desktop, um, the low code tooling and that interface, uh, the really appeals to the business analysts, um, and gets a lot of the things that they do well, we've also built it with interoperability in mind, right. So if you started building your workflows in designer desktop, you want to share that with design and cloud, we want to make it super easy for you to do that. Um, and I think over time now we're only a week into, um, this Alliance with, um, with, um, Trifacta, um, I think we have to get deeper inside to think about what does the data engineer really need? What's the business analysts really need and how to design a cloud, and Trifacta really support both of those requirements, uh, while kind of continue to build on the trifecta on the amazing Trifacta cloud platform. >>You know, >>I think we're just going to say, I think that's one of the things that, um, you know, creates a lot of, uh, opportunity as we go forward, because ultimately, you know, Trifacta took a platform, uh, first mentality to everything that we built. So thinking about openness and extensibility and, um, and how over time people could build things on top of factor that are a variety of analytic tool chain, or analytic applications. And so, uh, when you think about, um, Ultrix now starting to, uh, to move some of its capabilities or to provide additional capabilities, uh, in the cloud, um, you know, Trifacta becomes a platform that can accelerate, you know, all of that work and create, uh, uh, a cohesive set of, of cloud-based services that, um, share a common platform. And that maintains independence because both companies, um, have been, uh, you know, fiercely independent, uh, and, and really giving people choice. >>Um, so making sure that whether you're, uh, you know, picking one cloud platform and other, whether you're running things on the desktop, uh, whether you're running in hybrid environments, that, um, no matter what your decision, um, you're always in a position to be able to get out your data. You're always in a position to be able to cleanse transform shape structure, that data, and ultimately to deliver, uh, the analytics that you need. And so I think in that sense, um, uh, you know, this, this again is another reason why the combination, you know, fits so well together, giving people, um, the choice. Um, and as they, as they think about their analytics strategy and their platform strategy going forward, >>Yeah. I make a chuckle, but one of the reasons I always liked Altrix is cause you kinda did the little end run on it. It can be a blocker sometimes, but that created problems, right? Because the organization said, wow, this big data stuff has taken off, but we need security. We need governance. And it's interesting because you've got, you know, ETL has been complex, whereas the visualization tools, they really, you know, really weren't great at governance and security. It took some time there. So that's not, not their heritage. You're bringing those worlds together. And I'm interested, you guys just had your sales kickoff, you know, what was their reaction like? Uh, maybe Suresh, you could start off and maybe Adam, you could bring us home. >>Um, thanks for asking about our sales kickoff. So we met for the first time and you've got a two years, right. For, as, as it is for many of us, um, in person, uh, um, which I think was a, was a real breakthrough as Qualtrics has been on its transformation journey. Uh, we added a Trifacta to, um, the, the potty such as the tour, um, and getting all of our sales teams and product organizations, um, to meet in person in one location. I thought that was very powerful for other the company. Uh, but then I tell you, um, um, the reception for Trifacta was beyond anything I could have imagined. Uh, we were working out him and I will, when he's so hot on, on the deal and the core hypotheses and so on. And then you step back and you're going to share the vision with the field organization, and it blows you away, the energy that it creates among our sellers out of partners. >>And I'm sure Madam will and his team were mocked, um, every single day, uh, with questions and opportunities to bring them in. But Adam, maybe you should share. Yeah, no, it was, uh, it was through the roof. I mean, uh, uh, the, uh, the amount of energy, the, uh, certainly how welcoming everybody was, uh, uh, you know, just, I think the story makes so much sense together. I think culturally, the company is, are very aligned. Um, and, uh, it was a real, uh, real capstone moment, uh, to be able to complete the acquisition and to, and to close and announced, you know, at the kickoff event. And, um, I think, you know, for us, when we really thought about it, you know, when we ended, the story that we told was just, you have this opportunity to really cater to what the end users care about, which is a lot about interactivity and self-service, and at the same time. >>And that's, and that's a lot of the goodness that, um, that Altryx is, has brought, you know, through, you know, you know, years and years of, of building a very vibrant community of, you know, thousands, hundreds of thousands of users. And on the other side, you know, Trifacta bringing in this data engineering focus, that's really about, uh, the governance things that you mentioned and the openness, um, that, that it cares deeply about. And all of a sudden, now you have a chance to put that together into a complete story where the data engineering cloud and analytics, automation, you know, coming together. And, um, and I just think, you know, the lights went on, um, you know, for people instantaneously and, you know, this is a story that, um, that I think the market is really hungry for. And certainly the reception we got from, uh, from the broader team at kickoff was, uh, was a great indication. >>Well, I think the story hangs together really well, you know, one of the better ones I've seen in, in this space, um, and, and you guys coming off a really, really strong quarter. So congratulations on that jets. We have to leave it there. I really appreciate your time today. Yeah. Take a look at this short video. And when we come back, we're going to dig into the ecosystem and the integration into cloud data warehouses and how leading organizations are creating modern data teams and accelerating their digital businesses. You're watching the cube you're leader in enterprise tech coverage. >>This is your data housed neatly insecurely in the snowflake data cloud. And all of it has potential the potential to solve complex business problems, deliver personalized financial offerings, protect supply chains from disruption, cut costs, forecast, grow and innovate. All you need to do is put your data in the hands of the right people and give it an opportunity. Luckily for you. That's the easy part because snowflake works with Alteryx and Alteryx turns data into breakthroughs with just a click. Your organization can automate analytics with drag and drop building blocks, easily access snowflake data with both sequel and no SQL options, share insights, powered by Alteryx data science and push processing to snowflake for lightning, fast performance, you get answers you can put to work in your teams, get repeatable processes they can share in that's exciting because not only is your data no longer sitting around in silos, it's also mobilized for the next opportunity. Turn your data into a breakthrough Alteryx and snowflake >>Okay. We're back here in the queue, focusing on the business promise of the cloud democratizing data, making it accessible and enabling everyone to get value from analytics, insights, and data. We're now moving into the eco systems segment the power of many versus the resources of one. And we're pleased to welcome. Barb Hills camp was the senior vice president partners and alliances at Ultrix and a special guest Terek do week head of technology alliances at snowflake folks. Welcome. Good to see you. >>Thank you. Thanks for having me. Good to see >>Dave. Great to see you guys. So cloud migration, it's one of the hottest topics. It's the top one of the top initiatives of senior technology leaders. We have survey data with our partner ETR it's number two behind security, and just ahead of analytics. So we're hovering around all the hot topics here. Barb, what are you seeing with respect to customer, you know, cloud migration momentum, and how does the Ultrix partner strategy fit? >>Yeah, sure. Partners are central company's strategy. They always have been. We recognize that our partners have deep customer relationships. And when you connect that with their domain expertise, they're really helping customers on their cloud and business transformation journey. We've been helping customers achieve their desired outcomes with our partner community for quite some time. And our partner base has been growing an average of 30% year over year, that partner community and strategy now addresses several kinds of partners, spanning solution providers to global SIS and technology partners, such as snowflake and together, we help our customers realize the business promise of their journey to the cloud. Snowflake provides a scalable storage system altereds provides the business user friendly front end. So for example, it departments depend on snowflake to consolidate data across systems into one data cloud with Altryx business users can easily unlock that data in snowflake solving real business outcomes. Our GSI and solution provider partners are instrumental in providing that end to end benefit of a modern analytic stack in the cloud providing platform, guidance, deployment, support, and other professional services. >>Great. Let's get a little bit more into the relationship between Altrix and S in snowflake, the partnership, maybe a little bit about the history, you know, what are the critical aspects that we should really focus on? Barb? Maybe you could start an Interra kindly way in as well. >>Yeah, so the relationship started in 2020 and all shirts made a big bag deep with snowflake co-innovating and optimizing cloud use cases together. We are supporting customers who are looking for that modern analytic stack to replace an old one or to implement their first analytic strategy. And our joint customers want to self-serve with data-driven analytics, leveraging all the benefits of the cloud, scalability, accessibility, governance, and optimizing their costs. Um, Altrix proudly achieved. Snowflake's highest elite tier in their partner program last year. And to do that, we completed a rigorous third party testing process, which also helped us make some recommended improvements to our joint stack. We wanted customers to have confidence. They would benefit from high quality and performance in their investment with us then to help customers get the most value out of the destroyed solution. We developed two great assets. One is the officer starter kit for snowflake, and we coauthored a joint best practices guide. >>The starter kit contains documentation, business workflows, and videos, helping customers to get going more easily with an altered since snowflake solution. And the best practices guide is more of a technical document, bringing together experiences and guidance on how Altryx and snowflake can be deployed together. Internally. We also built a full enablement catalog resources, right? We wanted to provide our account executives more about the value of the snowflake relationship. How do we engage and some best practices. And now we have hundreds of joint customers such as Juniper and Sainsbury who are actively using our joint solution, solving big business problems much faster. >>Cool. Kara, can you give us your perspective on the partnership? >>Yeah, definitely. Dave, so as Barb mentioned, we've got this standing very successful partnership going back years with hundreds of happy joint customers. And when I look at the beginning, Altrix has helped pioneer the concept of self-service analytics, especially with use cases that we worked on with for, for data prep for BI users like Tableau and as Altryx has evolved to now becoming from data prep to now becoming a full end to end data science platform. It's really opened up a lot more opportunities for our partnership. Altryx has invested heavily over the last two years in areas of deep integration for customers to fully be able to expand their investment, both technologies. And those investments include things like in database pushed down, right? So customers can, can leverage that elastic platform, that being the snowflake data cloud, uh, with Alteryx orchestrating the end to end machine learning workflows Alteryx also invested heavily in snow park, a feature we released last year around this concept of data programmability. So all users were regardless of their business analysts, regardless of their data, scientists can use their tools of choice in order to consume and get at data. And now with Altryx cloud, we think it's going to open up even more opportunities. It's going to be a big year for the partnership. >>Yeah. So, you know, Terike, we we've covered snowflake pretty extensively and you initially solve what I used to call the, I still call the snake swallowing the basketball problem and cloud data warehouse changed all that because you had virtually infinite resources, but so that's obviously one of the problems that you guys solved early on, but what are some of the common challenges or patterns or trends that you see with snowflake customers and where does Altryx come in? >>Sure. Dave there's there's handful, um, that I can come up with today, the big challenges or trends for us, and Altrix really helps us across all of them. Um, there are three particular ones I'm going to talk about the first one being self-service analytics. If we think about it, every organization is trying to democratize data. Every organization wants to empower all their users, business users, um, you know, the, the technology users, but the business users, right? I think every organization has realized that if everyone has access to data and everyone can do something with data, it's going to make them competitively, give them a competitive advantage with Altrix is something we share that vision of putting that power in the hands of everyday users, regardless of the skillsets. So, um, with self-service analytics, with Ultrix designer they've they started out with self-service analytics as the forefront, and we're just scratching the surface. >>I think there was an analyst, um, report that shows that less than 20% of organizations are truly getting self-service analytics to their end users. Now, with Altryx going to Ultrix cloud, we think that's going to be a huge opportunity for us. Um, and then that opens up the second challenge, which is machine learning and AI, every organization is trying to get predictive analytics into every application that they have in order to be competitive in order to be competitive. Um, and with Altryx creating this platform so they can cater to both the everyday business user, the quote unquote, citizen data scientists, and making a code friendly for data scientists to be able to get at their notebooks and all the different tools that they want to use. Um, they fully integrated in our snow park platform, which I talked about before, so that now we get an end to end solution caring to all, all lines of business. >>And then finally this concept of data marketplaces, right? We, we created snowflake from the ground up to be able to solve the data sharing problem, the big data problem, the data sharing problem. And Altryx um, if we look at mobilizing your data, getting access to third-party datasets, to enrich with your own data sets, to enrich with, um, with your suppliers and with your partners, data sets, that's what all customers are trying to do in order to get a more comprehensive 360 view, um, within their, their data applications. And so with Altryx alterations, we're working on third-party data sets and marketplaces for quite some time. Now we're working on how do we integrate what Altrix is providing with the snowflake data marketplace so that we can enrich these workflows, these great, great workflows that Altrix writing provides. Now we can add third party data into that workflow. So that opens up a ton of opportunities, Dave. So those are three I see, uh, easily that we're going to be able to solve a lot of customer challenges with. >>So thank you for that. Terrick so let's stay on cloud a little bit. I mean, Altrix is undergoing a major transformation, big focus on the cloud. How does this cloud launch impact the partnership Terike from snowflakes perspective and then Barb, maybe, please add some color. >>Yeah, sure. Dave snowflake started as a cloud data platform. We saw our founders really saw the challenges that customers are having with becoming data-driven. And the biggest challenge was the complexity of having imagine infrastructure to even be able to do it, to get applications off the ground. And so we created something to be cloud-native. We created to be a SAS managed service. So now that that Altrix is moving to the same model, right? A cloud platform, a SAS managed service, we're just, we're just removing more of the friction. So we're going to be able to start to package these end to end solutions that are SAS based that are fully managed. So customers can, can go faster and they don't have to worry about all of the underlying complexities of, of, of stitching things together. Right? So, um, so that's, what's exciting from my viewpoint >>And I'll follow up. So as you said, we're investing heavily in the cloud a year ago, we had two pre desktop products, and today we have four cloud products with cloud. We can provide our users with more flexibility. We want to make it easier for the users to leverage their snowflake data in the Alteryx platform, whether they're using our beloved on-premise solution or the new cloud products were committed to that continued investment in the cloud, enabling our joint partner solutions to meet customer requirements, wherever they store their data. And we're working with snowflake, we're doing just that. So as customers look for a modern analytic stack, they expect that data to be easily accessible, right within a fast, secure and scalable platform. And the launch of our cloud strategy is a huge leap forward in making Altrix more widely accessible to all users in all types of roles, our GSI and our solution provider partners have asked for these cloud capabilities at scale, and they're excited to better support our customers, cloud and analytic >>Are. How about you go to market strategy? How would you describe your joint go to market strategy with snowflake? >>Sure. It's simple. We've got to work backwards from our customer's challenges, right? Driving transformation to solve problems, gain efficiencies, or help them save money. So whether it's with snowflake or other GSI, other partner types, we've outlined a joint journey together from recruit solution development, activation enablement, and then strengthening our go to market strategies to optimize our results together. We launched an updated partner program and within that framework, we've created new benefits for our partners around opportunity registration, new role based enablement and training, basically extending everything we do internally for our own go-to-market teams to our partners. We're offering partner, marketing resources and funding to reach new customers together. And as a matter of fact, we recently launched a fantastic video with snowflake. I love this video that very simply describes the path to insights starting with your snowflake data. Right? We do joint customer webinars. We're working on joint hands-on labs and have a wonderful landing page with a lot of assets for our customers. Once we have an interested customer, we engage our respective account managers, collaborating through discovery questions, proof of concepts really showcasing the desired outcome. And when you combine that with our partners technology or domain expertise, it's quite powerful, >>Dark. How do you see it? You'll go to market strategy. >>Yeah. Dave we've. Um, so we initially started selling, we initially sold snowflake as technology, right? Uh, looking at positioning the diff the architectural differentiators and the scale and concurrency. And we noticed as we got up into the larger enterprise customers, we're starting to see how do they solve their business problems using the technology, as well as them coming to us and saying, look, we want to also know how do you, how do you continue to map back to the specific prescriptive business problems we're having? And so we shifted to an industry focus last year, and this is an area where Altrix has been mature for probably since their inception selling to the line of business, right? Having prescriptive use cases that are particular to an industry like financial services, like retail, like healthcare and life sciences. And so, um, Barb talked about these, these starter kits where it's prescriptive, you've got a demo and, um, a way that customers can get off the ground and running, right? >>Cause we want to be able to shrink that time to market, the time to value that customers can watch these applications. And we want to be able to, to tell them specifically how we can map back to their business initiatives. So I see a huge opportunity to align on these industry solutions. As BARR mentioned, we're already doing that where we've released a few around financial services working in healthcare and retail as well. So that is going to be a way for us to allow customers to go even faster and start to map two lines of business with Alteryx. >>Great. Thanks Derek. Bob, what can we expect if we're observing this relationship? What should we look for in the coming year? >>A lot specifically with snowflake, we'll continue to invest in the partnership. Uh, we're co innovators in this journey, including snow park extensibility efforts, which Derek will tell you more about shortly. We're also launching these great news strategic solution blueprints, and extending that at no charge to our partners with snowflake, we're already collaborating with their retail and CPG team for industry blueprints. We're working with their data marketplace team to highlight solutions, working with that data in their marketplace. More broadly, as I mentioned, we're relaunching the ultra partner program designed to really better support the unique partner types in our global ecosystem, introducing new benefits so that with every partner, achievement or investment with ultra score, providing our partners with earlier access to benefits, um, I could talk about our program for 30 minutes. I know we don't have time. The key message here Alteryx is investing in our partner community across the business, recognizing the incredible value that they bring to our customers every day. >>Tarik will give you the last word. What should we be looking for from, >>Yeah, thanks. Thanks, Dave. As BARR mentioned, Altrix has been the forefront of innovating with us. They've been integrating into, uh, making sure again, that customers get the full investment out of snowflake things like in database push down that I talked about before that extensibility is really what we're excited about. Um, the ability for Ultrix to plug into this extensibility framework that we call snow park and to be able to extend out, um, ways that the end users can consume snowflake through, through sequel, which has traditionally been the way that you consume snowflake as well as Java and Scala, not Python. So we're excited about those, those capabilities. And then we're also excited about the ability to plug into the data marketplace to provide third party data sets, right there probably day sets in, in financial services, third party, data sets and retail. So now customers can build their data applications from end to end using ultrasound snowflake when the comprehensive 360 view of their customers, of their partners, of even their employees. Right? I think it's exciting to see what we're going to be able to do together with these upcoming innovations. Great >>Barb Tara, thanks so much for coming on the program, got to leave it right there in a moment, I'll be back with some closing thoughts in a summary, don't go away. >>1200 hours of wind tunnel testing, 30 million race simulations, 2.4 second pit stops make that 2.3. The sector times out the wazoo, whites are much of this velocity's pressures, temperatures, 80,000 components generating 11.8 billion data points and one analytics platform to make sense of it all. When McLaren needs to turn complex data into insights, they turn to Altryx Qualtrics analytics, automation, >>Okay, let's summarize and wrap up the session. We can pretty much agree the data is plentiful, but organizations continue to struggle to get maximum value out of their data investments. The ROI has been elusive. There are many reasons for that complexity data, trust silos, lack of talent and the like, but the opportunity to transform data operations and drive tangible value is immense collaboration across various roles. And disciplines is part of the answer as is democratizing data. This means putting data in the hands of those domain experts that are closest to the customer and really understand where the opportunity exists and how to best address them. We heard from Jay Henderson that we have all this data exhaust and cheap storage. It allows us to keep it for a long time. It's true, but as he pointed out that doesn't solve the fundamental problem. Data is spewing out from our operational systems, but much of it lacks business context for the data teams chartered with analyzing that data. >>So we heard about the trend toward low code development and federating data access. The reason this is important is because the business lines have the context and the more responsibility they take for data, the more quickly and effectively organizations are going to be able to put data to work. We also talked about the harmonization between centralized teams and enabling decentralized data flows. I mean, after all data by its very nature is distributed. And importantly, as we heard from Adam Wilson and Suresh Vittol to support this model, you have to have strong governance and service the needs of it and engineering teams. And that's where the trifecta acquisition fits into the equation. Finally, we heard about a key partnership between Altrix and snowflake and how the migration to cloud data warehouses is evolving into a global data cloud. This enables data sharing across teams and ecosystems and vertical markets at massive scale all while maintaining the governance required to protect the organizations and individuals alike. >>This is a new and emerging business model that is very exciting and points the way to the next generation of data innovation in the coming decade. We're decentralized domain teams get more facile access to data. Self-service take more responsibility for quality value and data innovation. While at the same time, the governance security and privacy edicts of an organization are centralized in programmatically enforced throughout an enterprise and an external ecosystem. This is Dave Volante. All these videos are available on demand@theqm.net altrix.com. Thanks for watching accelerating automated analytics in the cloud made possible by Altryx. And thanks for watching the queue, your leader in enterprise tech coverage. We'll see you next time.

>> Welcome back to the cubes, ongoing coverage of VMworld 2021 the second year in a row. We've done this virtually. My name is Dave Volante and long time VMware technologist and new CTO kit Colbert is here. Kit welcome good to see you again. >> Thanks Dave, super excited to be here. >> So let's talk about your new role, you've been at VMware. You've touched all the bases, so to speak and, you know, love the career evolution, you're ready for this job. So tell us about that role. >> Well, I hope so. I don't know. It's definitely a big step up been here at VMware for 18 years now, which if you're not Silicon valley, you know, that's a long time. It's probably like four or five normal Silicon valley lifetime in terms of stints at a company. But I love it. I love the company, I love the culture. I love the technology and I'm super passionate, super excited about it. And so, you know, the, the new role previously, I was CTO for one of our business groups and focused on a specific set of our products and services. But now as the corporate CTO, I really am overseeing all of VMware, R and D. In the sense of really trying to drive a whole bunch of core engineering transformations, right? Where we've talked a lot about our shift toward becoming a SAS company. So, you know, a cloud services company. And so there's a lot of changes. We got to make internally, technologies, platform services we need to build out, you know, the, the sort of culture aspects of it again. And so, you know, I'm kind of sitting at the center of that and it's, I'll be honest, it's big, there's a lot of stuff to go and do, but I am just super excited about it. Wake up every day, really excited to meet a whole bunch of new people across the organization and to learn all the cool things we're doing, it's just, well, you know, I'll say it again, like the level of innovation happening inside of VMware is just insane. And it's really cool now that I get kind of more of a front and center road to see everything that's happening. >> Well and when I was preparing for the interview with Ragu, I was thinking about, you know, I've been following VMware for a long time, and I sort of noted that it's like the fourth wave of executive management and sort of went back and said, okay, yes, we know it started with, you know, workstation. Okay, fine. But then really quickly went into really changing the way in which we think about servers, server utilization and driving. I remember the first time I ever saw a demo, I said, wow, this is going to be completely game changing. And really, and then, and then thought about the era of the software defined data center, fine tuning the cloud strategy. And then this explosion of innovation, whether it was the sort of NSX piece, the acquisitions you've made around security, again, more cloud expansion. And now you're laying out sort of this Switzerland from multi-cloud combined with this as you're pointing out this as a service model. So when you think about the technical vision of the company transforming into a cloud and subscription model, what does that mean from a sort of architectural standpoint or a mindset perspective? >> Oh yeah. Both great questions, both sort of key focus areas for me. And by the way, it's something I've been thinking about for quite a while, right? Yeah so you're right. Like we are on our third or fourth lap of the track depending on, on how you count. But I also think that this one that this notion of getting into multicloud of becoming a real cloud services company is going to be probably the biggest one for us. And the biggest transformation that we're going to have to make. You know, we, we did extend from core compute virtualization to network and storage, but the software defined data center. But now these things I think are a bit more fundamental. So, you know, how are we thinking about it? But we're thinking about it in a few different ways. I do think, as you mentioned, the mindset is definitely the most important thing. This notion that, you know, we no longer really have product teams purely. They should be thinking of themselves as service teams and the idea being that they are operating and accountable for the availability of their cloud service. And so this means we really need to step up our game. We have in terms of the types of tooling that we built, but really it's about getting these developers engaged with that, to know that, hey, like what matters most of all right now is that service availability. In addition to things like security compliance, et cetera, but we have monitoring systems to tell you, hey, there's a problem. And that you need to go jump on those things immediately. This is not like, you know, a normal bug that comes in, oh, I'll get to it tomorrow or whatever. It's like, no, no, no, you got to step up and really get there immediately. And so there is that big mindset shift. That's something we've been driving the past few years, but we need to continue to push there. And as part of that, you know, the other thing we're doing is that what we've seen is that a lot of our individual teams have gone out and build like really great cloud services. But what we really want to build to enable us to accelerate that is a platform, a true SaaS platform and leveraging all these great capabilities that we have to help all of our teams go faster. So it gets to things like standardization and really raising the bar across the board to allow all these teams to focus on what makes their products or services unique and differentiated rather than, you know, just doing the basic blocking and tackling. So those are a couple of things I'm really focused on both driving the mindset shift. You know, I think when I, you know, as I was taking on this role, I did a lot of reading on other CTOs and, you know, how do they view their roles within their companies? And one of the things I did hear there was that the CTO is kind of the I dunno, the keeper is the right word, but the keeper of the engineering culture, right. That you want to really be a steward for that to help take it forward in the right sort of directions that align with the strategic direction of the business. And so that's a big aspect for what I'm thinking about. And the second one, the SAS platform, one of the really interesting things about this reorg that we've done internally is that traditionally CTO has kind of focused, you know, outbound, maybe a little bit inbound, but typically don't have large engineering organizations, but here what we want to do, because this, this SAS platform is so important to us. We did centralize it within the office of the CTO. And so now, you know, my customers from an engineering standpoint are all the internal business units. So a lot of really big changes inside VMware, but I think this is the sort of stuff we need to do to help us really accelerate toward the multi-cloud vision that we're painting. >> Well, VMware has always had a super strong engineering culture. And I like the way you phrase that the steward of the engineering culture, when you think about a product mindset, when, of course correct me, if I'm off here, but when you're building a product and you're making that thing rock solid, you want more rich to talk about the hardened top, and so it seems to me that the services mindset expands the mind a little bit in terms of what other services can I integrate to make my service better. Whether that's a machine intelligence service or a security service, or, you know, the dozens of other services that you guys are now building the combination of that innovation is, has like a step function and a lever on top of the sort of traditional product mindset. >> Yeah, there is, I think you're absolutely right. There's a ton of like really fundamental mental mindset shifts, right? That are a part of that. And the integration piece, you mentioned super critical, but I also think it's, it's actually taking a step back and looking at the life cycle more holistically when you're thinking about a product you're thinking about, okay, I get the bits together, I'm going to ship it out, but then it's really up to the customer to go deploy that, to operate it and, you know, deal with problems and bugs that come up. And when you're delivering a cloud service, those are all problems that you, as the application creator have to deal with. And so you got to be on top of all those things. And, you know, if you design something in such a way that it becomes kind of hard to bug it runtime, well, that's going to directly impact your availability that might have, you know, contractual obligations with an SLA impact to a customer. So there's some really big implications there that I think traditionally product teams didn't always fully think through, but now that they sort of have to with a cloud service. The other point, I think that's really important, there is the notion of simplicity and ease of use experience is always important, right? Customer experience, user experience, but it gets even more magnified in a SaaS type of environment because the idea is that you shouldn't have to talk to anybody view, you as a user, should be able to go and call an API and start using this thing right and swipe a credit card and you're good to go. And so, you know, that sort of maniacal focus on how you just remove roadblocks, remove any unnecessary things between that customer and getting the value that they're looking for. So in general, the thing that I really love about SaaS and cloud services is that they really align incentives very well. What you want to do as an application builder, as a solution builder really aligns well with what customers are looking for. And you can get that feedback very, very rapidly, which allows for much quicker evolution of the underlying product and application. >> So one of the other things I learned from my interview with Ragu and I couldn't go deep into it. I did a little bit with summit, but I want to get your perspectives as well as I always talk about this obstruction layer across clouds, hybrid, multicloud edge extract, extracting, the complexity of the, you know, the underlying complexity, and Ragu was sort of it's nuance, but he said, okay, but the thing is, we're not trying to limit access to the primitives. We want to allow developers to go there to the extent they want to and my takeaway was okay, but the, the abstraction is you want to be that single management layer with access to the deep primitives and APIs of the respective clouds. But simplify to your point across those estates at the management layer, and maybe you could add some color to that. >> Yeah you know, it's a really interesting question. And but let me tell you about how we think about it because you're right. And that the, you know, the abstractions can sometimes find the underlying primitives and capabilities. And so Ragu is getting at, hey, like we don't necessarily force you one way or the other. And here's the way to think about it is that it's really about delivering optionality. And we do that through offering these abstractions at different layers. So to your point, Dave, like we have a management capabilities that can enable you to manage consistently across all types of clouds, public, private, edge, et cetera, irrespective of what that underlying infrastructure is. And so you look at things that are like our V realize suite of products or cloud health or tons, and tons of mission control is really focused on that one as well. But then we also have our infrastructure layer. That's what we're doing with VMware cloud and this notion of delivering consistent infrastructure. Now, even though, the core sort of IS layer is more consistent, you still get great flexibility in terms of the higher level services. If you want to use a database from one of the public clouds or messaging system or streaming services, you know, AI, whatever it is, you still got that sort of optionality as well. And so the reason that we offer these different things is because customers are just in different places. As a matter of fact, a single customer may have all of those different use cases, right? They may have some apps where they're moving from on-prem and the cloud, they want to do that very quickly. So, boom, we can just do it really fast with VMware cloud consistent infrastructure, we can vMotion that thing up in the cloud. Great. But for other ones, maybe a modern app they're building and maybe a team has chosen to use native AWS for that, but they want to leverage Kubernetes. So there you could put in a ton of mission control to give them that, you know, consistent management across sites or leverage cloud health to understand costs and to really enable the application teams to manage costs on their own. So I think, you know, I always go back to that concept of optionality, like we offer sort of these different levels of abstraction. And it really depends on what the use case is because the reality is especially for a complex enterprise, they're likely going to have all those use cases. >> You know. I want to stay on optionality for a moment because you're essentially becoming a cloud company. I'm expanding the definition of cloud and that's, which I think is appropriate because the cloud is expanding. It's going on, prem, it's going out to the edge hybrid connections across clouds, et cetera. And when you look at the public cloud players there, they all are deep into what I'll call data management. I'm not even sure what that term means anymore sometimes, but certainly they all own own databases, but they also offer databases from folks. You I go back to something Moritz said with the software mainframe that we want to be able to run any workload, you know, anywhere and, and have high reliability recovery, you know, lowest costs, et cetera. It doesn't seem as though you're going to run those, those workloads project Monterey is about supporting new workloads, but it doesn't seem like you have aspirations to, own sort of the database layer, for example, what's your philosophy around that? >> Not generally I mean, we do have some solutions like Greenplum, for instance, that play in that space, more of a data warehouse solution. But generally speaking, you're absolutely right. You know, VMware success was built through tight partnerships. We have a very, very broad partner network. And of course we see hyperscalers as great partners as well. And so, you know, I think if we get back to like, what's the core of VMware, it really is providing those powerful abstractions in the right places, at the infrastructure level, at the management level and so forth. But yeah, we're not trying to necessarily compete with everyone reinvent the world, what we're trying to do is, and by the way, if I just take a step back when we talk to customers, what really drives them toward multi clouds toward using multiple clouds is the fact that they want to get after these, what we call best of breed cloud services, that many of the different public clouds offer databases and AI and ML systems. And for each app team, the exact one that perfectly meets their needs, maybe different, right? Maybe on one cloud versus another cloud. And so that is really the optionality that we want to optimize for when we talk to those customers that they want the easiest way of getting that app onto that cloud. So we can take advantage of that cloud service, but what they worry about is the lack of consistency there. And that goes across the board. You know, if something fails at two AM, you have to wake up and go fix it. Do you have like the right sort of tooling in place, if it's fails on one cloud versus another, do you have to like, you know, scramble to figure out which tools to go use, how to go, you know, which dashboard to look at? I was like, no, they want kind of a consistent one. When you think about, from a security perspective, how do you drive a secure software supply chain? How do you prevent the types of attacks that we've seen in the past few years where people insert malicious code into your supply chain, and now you're running with hack code out there. And if you have different teams doing different things across different clouds, well, that's going to just open up sort of a can of worm, of different possibilities there for hackers to get in. So that's why this consistency is so important. And so, you know, if, I guess if we refine, the optionality a little bit, that point it's about getting optionality around cloud services and that those, like, those are the things that really differentiate. And so that, you know, we're not trying to compete with that. We're saying, hey, like we want to bring customers to those and give them the best experience that they can irrespective of whether that's in the public cloud or on prem or even at the edge. >> That's a huge technical challenge and amazing value for customers, I want to ask you, there's a lot of talk about ESG today. How does that fit into the CTO mindset? Is it a bolt-on, is it as it is fundamental component? >> Yeah the idea there is that if we look at the core values for VMware, this is something that's hugely important and something that we've actually been focused on for quite a while. We now have a whole team focused on this really being a force multiplier to help keep us honest across VMware, to help ensure equity and in many different ways that we have an air continue to increase. For instance, the amount of female representation within our organization or underrepresented minorities or communities ensuring that, you know, pay is equal across the company. You know, these different sorts of things, but also around sustainability. They actually have a number of folks working very closely with our teams to drive sustainability into our products. You know, vSphere is great because it reduces the amount of physical servers you need. So by definition reduces the carbon footprint there, but now, you know, I'm taking a step further. We have cloud partners that we're working with to ensure that they have net zero carbon emissions, you know, using a hundred percent renewables by 2030. And in fact, that's something that we ourselves have signed up for. As you know, today we are carbon neutral, but what we want to get to is to be net carbon zero by 2030, which is an absolutely huge lift. And that's, by the way, not just for VMware, our operations, our offices, but also for our supply chain as well. And so, you know, when you look across this, you know, as well as efforts around diversity and inclusion, this is something that is very core to what we do as a company, but it's also a personal passion of mine. The ESG office actually lives within my organization. And it does that because what I view the office of the CTO as being as really a force multiplier, as I said before, like, yes, the team is located here, but their purview is across all of engineering. And in fact, all of VMware. So I think, you know, when we look at this, it's about getting the best talent we have, very diverse talent increasing our ability to deliver innovative products, but also doing so in a way that's good for the planet that is sustainable and that is giving back to the community. But I think, you know, I'm looking at measuring success in a few different ways. First of all, as I said before, the ESG component and in diversity equity inclusion in particular, in terms of our workforce, extraordinarily important to me and something we're going to be really pushing hard on, you know, as we all know, you know, women, underrepresented minorities, not very well represented in general in Silicon valley. So something that we all need to step up on. And so we're going to be putting a lot of effort in there and that will actually help drive as I said before, all of these innovations, this fundamental shift in mindset, I mean that requires diverse perspectives. It requires pushing us out of our comfort zone, but the net result of that is, so what you're going to see is a much faster cadence of releases of innovation coming from VMware. So there's some just insanely exciting things that are happening in the labs right now that we're cooking up. But, you know, as we start making this shift, we're going to be delivering those faster and faster to our customers and our partners. >> You know, I'm interested to hear that it's a passion of yours. There was an article, I think it was last week in the wall street journal was this, it was an insert section on, on women in the workforce. And there was a stat in there, which I thought was pretty interesting. I'll run it by you see what you think it said that, you know, it's talking about COVID and post COVID and the stresses. And it's interesting to me because a lot of executives are, and you know, I'm, I'm with them is, hey, work from home. This is some beautiful thing. It's good for business too, because you know, everybody's more productive, but then you have this perpetual workday now it's like we never sleep. And then it goes bleeds in the weekends. And the stat from Qualtrics, which was published in the journal, said that, I think it said 30% of working women said that they, their mental health has declined since COVID. And that number was only 15% for working men, still notable but half. And so, you know, one has to question maybe that perpetual work week, and, you know, maybe there's a benefit from business productivity, but then there's the other side of that as well. And a lot of women have left the workforce, a lot of working previously working moms. And so there's a, there's an untapped labor pool there, and there's this huge labor shortage. And so these are important issues, but they're not easy ones to solve, are they? >> No, no, no. It's something we've been putting a lot of thought into at VMware. So we do have a flexible program that we're rolling out in terms of work. People can come into the office if they want to, of course, you know, where we have offices, where it's safe to do so where the government is allowed that our people can and people can have an actual desk there, or sometimes they can say, hey, I only want to come in once or twice a week. And then we say, okay, we'll have some floating desks that you can take. And others are saying, I want to be fully remote. So we give people a pretty broad range in terms of how they want to address that. But I do think to your point though, and this is something I've been really trying to do already is to create a more inclusive environment by doing a number of different things. And so it's being thoughtful around when you're sending emails 'cause like I do like the, my sort of schedule as I do tend to like fire off a lot of emails late at night after the kids are in bed and get a little quiet time, some thinking time, but I make it very clear that I'm not expecting an immediate response don't worry about it. I'm just, this is my work time. Doesn't have to be your work time. And so really setting those, I guess, boundaries very well explicitly and kind of the, the expectations name is a better term setting that explicitly trying to schedule meetings, not at times where you're going to have to drop the kids off at school or pick them to take over your life. And so we really try to emphasize boundaries and, and really studying those things appropriately. But honestly, it's something that we're still working on and I'm still learning and so I'd love to get feedback from folks, but those are some of the early thinkings. But I would say that we at VMware are taking it very, very seriously and really supporting our employees in terms of navigating that work-life balance. >> Well, okay. Congratulations on the new role and it's great to see you again I hope I hope next year we could be face-to-face always a pleasure to have you on the cube. >> Thanks, Dave. Appreciate it being here. >> Alright and thank you for watching the cubes continuous coverage of VMworld 2021, the virtual edition. Keep it right there for more right after this.

>>From the cube studios in Palo Alto, in Boston, bringing you data-driven insights from the cube and ETR. This is breaking analysis with Dave Vellante >>UI path has always been an unconventional company. You know, it started with humble beginnings. It was essentially a software development shop. And then it caught lightning in a bottle with its computer vision technology. And it's really it's simplification mantra. And it created a very easy to deploy software robot system for bespoke departments. So they could automate mundane tasks. You know, you know, the story, the company grew rapidly was able to go public early this year. Now consistent with its out of the ordinary approach. While other firms are shutting down travel and physical events, UI path is moving ahead with forward for its annual user conference next week with a live audience there at the Bellagio in Las Vegas, it's also fast-forwarding as a company determined to lead the charge beyond RPA and execute on a more all encompassing enterprise automation agenda. Hello everyone. And welcome to this week's Wiki bond Cuban sites powered by ETR in this breaking analysis and a head of forward four we'll update you in the RPA market. >>The progress that UI path has made since its IPO and bringing some ETR customer survey data to contextualize the company's position in the overall market and relative to the competition. Here's a quick rundown of today's agenda. First, I want to tell you the cube is going to be at forward for, at the Bellagio next week, UI paths. This is their big customer event. It's live. It's a physical event. It's primarily outdoors. You have to be vaccinated to attend. Now it's not completely out of the ordinary John furrier and the cube. We're at AWS public sector this past week. And we were at mobile world Congress and one of the first big hybrid events of the year at Barcelona. And we thought that event would kick off the fall event season live event in earnest, but the COVID crisis has caused many tech firms. Most tech firms actually to hit the pause button, not UI path. >>They're moving ahead, they're going forward. And we see a growing trend for smaller VIP events with a virtual component topic, maybe for another day. Now we've talked extensively about the productivity challenges and the automation mandate. The pandemic has thrust upon us. Now we've seen pretty dramatic productivity improvements as remote work kicked in, but it's brought new stresses. For example, according to Qualtrics, 32% of working moms said their mental health has declined since the pandemic hit. 15% of working dads said the same by the way. So one has to question the sustainability of this perpetual Workday, and we're seeing a continuum of automation solutions emerging. And we'll talk about that today. We're seeing tons of MNA, M and a as well, but now in that continuum on the left side of the spectrum, there's Microsoft who in some ways they stand alone and that Azure is becoming ubiquitous as a SAS cloud collaboration and productivity platform. >>Microsoft is everywhere and in virtually every market with their video conferencing security database, cloud CRM, analytics, you name it, Microsoft is pretty much there. And RPA is no different with the acquisition of soft emotive. Last year, Microsoft entered the RTA market in earnest and is penetrating very deeply into the space, particularly as it pertains to personal approach, personal productivity building on its software state. Now in the middle of that spectrum, if you will, we're seeing more M and a, and that's defined really by the big software giants. Think of this domain as integrated software plays SAP, they acquired contexture, uh, uh, they also acquired a company called process insight service now acquired Intella bought Salesforce service trace. We see in for entering the fray. And I, I would put even Pega Pega systems in this camp, software companies focused on integrating RPA into their broader workflows into their software platforms. >>And this is important because these platforms are entrenched. They're walled gardens of sorts and complicated with lots of touchpoints and integration points. And frankly, they're much harder to automate because of their entrenched legacy. Now on the far side of that, spectrum are the horizontal automation players and that's being led by UI path with automate automation anywhere as the number two player in this domain. And I didn't even put blue prism prism in there more M and a recently announced, uh, that Vista is going to acquire them. Vista also owns TIBCO. They're going to merge those two companies, you know, tip goes kind of an integration play. And so again, I'm, I might, I would put them in that, you know, horizontal piece of the spectrum. So with that as background, we're going to look at how UI path has performed since we last covered them at IPO. >>And then we'll bring in some ETR survey data to get the spending view from customers. And then we'll wrap up now just to emphasize the importance of, of automation and the automation mandate mandate. We talk about it all the time in this program, we use this ETR chart. It's a two dimensional view with net score, which is a measure of spending momentum on the vertical axis and market share, which is a proxy for pervasiveness in the dataset. That's on the horizontal axis. Now note that red dotted line at signifies companies with an elevated position on the net score, vertical axis, anything over that is considered pretty good, very good. Now this shows every spending segment within the ETR taxonomy and the four spending categories with the greatest velocity are AI cloud containers and RPA. And they've topped the charts for quite a while. Now they're the only four categories which have sustained above that 40% line consistently throughout the pandemic. >>And even before now, the impressive thing about cloud of course, is it has a spending has both spending momentum on the vertical axis at a very large share of the, of the market share of presence in the dataset. The point is RPA is nascent still. It has an affinity with AI as a means of more intelligently identifying and streamlining process improvements. And so we expect those to, to remain elevated and grow to the right together, UI path pegs it's Tam, total available market at 60 billion. And the reality is that could be understated. Okay. As we reported from the UI path S one analysis, we did pre IPO. The company at that time had an AR annual recurring revenue of $580 million and was growing at 65% annually at nearly 8,000 customers at the time, a thousand of which had an ARR in excess of a hundred K and a net revenue retention, the company had with 145%. >>So let's take a look at the picture six months forward. We mentioned the $60 billion Tam ARR now up over 725 million on its way to a billion ARR holding pretty steady at 60% growth as is an RR net revenue retention, and more than a thousand new customers in 200 more with over a hundred thousand in ARR and a small operating profit, which by the way, exceeded the consensus pretty substantially. Profitability is not shown here and no one seems to care anyway, these days it's all about growing into that Tam. Well, that's a pretty good looking picture. Isn't it? The company had a beat and a raise for the quarter early this month. So looking good, right? Well, you ask how come the stock's not doing better. That's an interesting question. So let's first look at the stocks performance on a relative basis. Here, we show you I pass performance against Pega systems and blue prism. >>The other two publicly traded automation, pure plays, you know, sort of in the case of Pega. So UI path outperformed post its IPO, but since the early summer Pega has been the big winner. Well, UI path slowly decelerated, you see blue prism was the laggard until it was announced. It was in an acquisition talks with a couple of PE firms and the prospects of a bidding war sent that yellow line up. As you can see UI path, as you can see on the inset has a much higher valuation than Pega and way higher than blue prison. Pega. Interestingly is growing revenues nicely at around 40%. And I think what's happening is the street simply wants more, even though UI path beat and raised wall street, still getting comfortable with which is new to the public market game. And the company just needs to demonstrate a track record and build trust. >>There's also some education around billings and multi-year contracts that the company addressed on its last earnings call, but the street was concerned about ARR from new logos. It appears to be slowing down sequentially in a notable decline in billings momentum, which UI pass CEO, CFO addressed on the earnings call saying, look, they don't need to trade margin for prepaid multi-year deals, given the strong cash position while I give anything up. And even though I said, nobody cares about profitability. Well, I guess that's true until you guide for an operating loss. When you've been showing a small profit in recent recent quarters, which you AIPAC did, then all of a sudden people care. So UI path, isn't a bit of an unknown territory to the street and it has a valuation that's pretty rich, very rich, actually at 30 times, a revenue multiple greater than 30 times revenue, multiple. >>So that's why in, in my view, investors are being cautious, but I want to address a dynamic that we've seen with these high growth rocket ship companies, something we talked about with snowflake. And I think you're seeing some of that here with UI paths, different model in the sense that snowflake is pure cloud, but I'm talking about concerns around ARR from new logos and in that growth on a sequential basis. And here's what's happening in my view with UI path, you have a company that started within departments with a small average contract size in ACV, maybe 25,000, maybe 50,000, but not deep six figure deals that wasn't UI paths play it because the company focused so heavily on simplicity and made it really easy to adopt customer saw really fast ROI. I mean breakeven in months. So you very quickly saw expansion into other departments. >>So when ACV started to rise and installations expanded within each customer UI path realized it had to move beyond being a point product. And it started thinking about a platform and making acquisitions like process gold and others, and this marked a much deeper expansion into the customer base. And you can see that here in this UI path, a chart that they shared at their investor deck customers that bought in 2016 and 2017 expanded their they've expanded their spend 15, 13, 15, 18 20 X. So the LTV, the lifetime value of the customer is growing dramatically. And because UI path has focused on simplicity, it has a very facile freemium model, much easier to try before you buy than its competitors. It's CAC, it's customer acquisition costs are likely much lower than some of its peers. And that's a key dynamic. So don't get freaked out by some of those concerns that we raised earlier, because just like snowflake what's happening is the company for sure is gaining new customers. >>Maybe just not at the same rate, but don't miss the forest through the trees. I E they're getting more money from their existing customers, which means retention, loyalty and growth. Speaking of forests, this chart is the dynamic I'm talking about. It's an ETR graphic that shows the components of net score or against spending momentum net score breaks down into five areas that lime green at the top is new additions. Okay? So that's only 11% of the customer mentions by the way, we're talking about more than 125 responses for UI path. So it's meaningful. It's, it's actually larger in this survey, uh, or certainly comparable to Microsoft. So that says something right there. The next bar is the forest green forest. Green is where I want you to focus. That's customer spending 6% or more in the second half of the year, relative to the first half. >>The gray is flat spending, which is quite large, the pink or light red that's spending customer spending 6% or worse. That's a 4% number, but look at the bottom bar. There is no bar that's churn. 0% of the respondents in the survey are churning and churn is the silent killer of SAS companies, 0% defections. So you've got 46% spending, more nobody leaving. That's the dynamic that is powering UI path right now. And I would take this picture any day over a larger lime green and a smaller forest green and a bigger churn number. Okay. So it's pretty good. It's not snowflake good, but it's solid. So how does this picture compare to UI pass peers? Well, let's take a look at that. So this is ETR data, same data showing the granularity net score for Microsoft power, automate UI path automation, anywhere blue prism and Pega. >>So as we said before, Microsoft is ubiquitous. What can we say about that? But UI path is right there with a more robust platform, not to overlook Microsoft. You can't, but UI path, it'll tell you that they don't compete head to head for enterprise automation deals with Microsoft. Now, maybe they will over time. They do however, compete head to head with automation anywhere. And their picture is quite strong. As you can see here, it has this blue Prism's picture and even Pega, although blue prism, automation, anywhere UI path and power automate all have net scores on this chart. As you can see the table in the upper right over 40% Pega does not. But again, we don't see Pega as a pure play RPA vendor. It's a little bit of sort of apples and oranges there, but they do sell RPA and ETR captures in their taxonomy. >>So why not include them also note that UI path has, as I said before, more mentions in the survey than power automate, which is actually quite interesting, given the ubiquity of Microsoft. Now, one other notable notable note is the bright red that's defections and only UI path is showing zero defections. Everybody else has at least even of the slim, some defections. Okay. So take that as you will, but it's another data 0.1. That's powerful, not only for UI path, but really for the entire sector. Now, the last ETR data point that we want to share is our famous two dimensional view. Like the sector chart we showed earlier, this graphic shows net score on the vertical axis. That's against spending velocity and market share or pervasiveness on the horizontal axis. So as we said earlier, UI path actually has greater presence in the survey than the ever-present Microsoft. >>Remember, this is the July survey. We don't have full results from the September, October survey yet. And we can't release them until ETR is out of its quiet period. But I expect the entire sector, like everything is going to be slightly down because as we reported last week, tech spending is moderated slightly in the second half of this year, but we don't expect the picture to change dramatically. UI path and power automate, we think are going to lead and market presence in those two plus automation anywhere are going to show strength and spending momentum as well. Most of the sector. And we'll see who comes in above the 40% line. Okay. What to watch at forward four. So in summary, I'll be looking for a few things. One UI path has hinted toward a big platform announcement that will deepen its capabilities to go beyond being an RPA point tool into much more of an enterprise automation platform rewriting a lot of the code Linux cloud, better automation of the UI. >>You're going to hear all kinds of new product announcements that are coming. So I'll be listening for those details. I want to hear more from customers to further confirm what I've been hearing from them over the last couple of years and get more data, especially on that ROI on that land and expand. I want to understand that dynamic and that true enterprise automation. It's going to be good to get an update face to face and test some of our assumptions here and see where the gaps are and where UI path can improve. Third. I want to talk to ecosystem players to see where they are in participating in the value chain here. What kind of partner has UI path become since it's IPO? Are they investing more in the ecosystem? How to partners fit into that flywheel fourth, I want to hear from UI path management, Daniel DNAs, and other UI path leaders, they're exiting toddler Ville and coming into an adolescent phase or early adulthood. >>And what does that progression look like? How does it feel? What's the vibe at the show. And finally, I'm very excited to participate in a live in-person event to see what's working, see how a hybrid events are evolving. We got a good glimpse at mobile world Congress and this week, and, uh, in DC and public sector summit, here's, you know, the cube has been doing hybrid events for years, and we intend to continue to lead in this regard and bring you the best, real time information as possible. Okay. That's it for today. Remember, these episodes are all available as podcasts, wherever you listen. All you do is search braking analysis podcast. We publish each week on Wiki bond.com and siliconangle.com. And you can always connect on twitter@devolanteoremailmeatdaviddotvolanteatsiliconangle.com. Appreciate the comments on LinkedIn. And don't forget to check out E T r.plus for all the survey data. This is Dave Volante for the cube insights powered by ETR be well, and we'll see you next time.

>>From the Bellagio hotel in Las Vegas, it's the cube covering UI path forward for brought to you by UI path. >>Welcome back to the queue. We are live at the Bellagio in Las Vegas, Lisa Martin, with Dave Volante UI path forward for it is so great to be sitting in an anchor desk next to Dave and with guests in person, we're going to be talking about automation workforce of the future. I've got two guests here with Dave and me. Kevin crone is here intelligent automation and digital upskilling leader from PWC. Kevin. Welcome. Thank you. Can't wait to talk about upskilling and Bettina Koblick is here the chief people officer at UiPath. Welcome to the program. Thanks for having me. So, as I understand that PWC has embedded UI path into a couple of product offerings. One of them we're going to talk about today, Kevin that's pro pro edge. Talk to me about that. What is that? >>So, um, as we look at, uh, challenges that C-suite leaders are facing, I think one of the biggest emerging challenges right now is around the topic of upscaling. There's the number of jobs that are being displaced, um, is growing by automation. But on the flip side, the number of jobs that are emerging is actually greater and there is a consistent challenge that gets cited there. All of our research through our CEO survey, their work we've done with the world economic forum and other sources around the need to fill that gap. And most leaders feel like they're not doing a good job to, to fill that. So, um, we at PWC have invested in developing a, a new software product called pro edge, which is really focused on, um, identifying the skills needed for the future, teaching those skills and helping to scale the usage of the skills and the organization. And one of the key skills as we look at the digital space is UI path. And we really think that, you know, teaching non technologists around the use of tools like robotic process automation is going to be one of those critical kind of must have skills in the future. >>And patina, you guys are using pro edge. Why, why, why? I mean, you're like the automation pros, what do you need? >>We need it because we have the same, um, challenges that every other company has that introduced us automation, right? People, um, people's time, their tasks that they have been doing are basically displaced. Um, and we're trying to figure out how do we up-skill re-skill how do we position people who now no longer are work working on maybe 50% of what they've done in the past for their next role? Um, so it's incredibly important for us, >>You know, you know this well, Tina and Kevin, you as well, when, when the automation trend RPA first hit, it was like, oh yeah, the trade press, come on. It's going to take away jobs, blah, blah, blah. Now we're working perpetual workdays, right? We all weekend all night, you never stopped working. You're always on. So I think people will brace automation, but as the chief people officer, first of all, how, how was it getting through the pandemic? And have you seen, I presume that UI path folks embrace automation, of course it's in your DNA, but have you seen others sort of, is that narrative done in, is COVID effected that >>I think COVID has affected it, um, for a number of reasons, because so many things shifted in how we do work. Number one, and I can talk about that a little more, but I yesterday I was in a customer advisory board meeting actually with Kevin. And the biggest conversation was not about the technology. It was around what happens when automation is introduced to a company and what happens with people, um, as to whether they want, they're willing to adopt, embrace, have an automation mindset. So that conversation isn't done at all. And it's probably one of the biggest conversations after, you know, adopting the technology, trying to introduce it as how do you drive adoption. And a lot of that is people's people's ability to understand how it will make their life easier, but then not be afraid about what's next. Uh, so I think it's absolutely still a conversation. I don't know if you feel the same. Yeah, >>Yeah. It it's been interesting. I think during the pandemic cause peoples, you know, day to day work lives have gone up ended and he start to think about, um, you know, the, the mixture between what I'll call kind of transaction oriented type work versus analytical type work. And if it just, you know, historically everyone's always said we should do less transaction work and more analytic work. But I think the pandemic was almost like forced that conversation on steroids and people's lot. You I've had to figure out that, like, I don't want to do this type of work and I'm being, I have more demands on me and I'm being asked to do other things, how can I do this more effectively? And so part of this becomes learning these skills to automate the things in front of you right now, the part of this becomes, I need to be able to, to actually have that analytical skill set in the future. And I think that is almost a precursor for what we see happening. And that was, that was the fun part of the conversation yesterday is thinking about, okay, well, what is the, you know, what is the, uh, the accounting analyst role five years from now and what someone does today versus what someone does in five years and how do you actually plan for that, >>The patina, where in your organization, like who's using it and talk to me about the adoption and their willingness to embrace it. >>Yeah. So we are, we've introduced it to our finance organization. One of the reasons we did that is because our finance organization is also a big user of automation, right? So, um, what's been really interesting is that because the technology or because pro edge kind of takes biases out of mapping, what a person can do, um, what learning paths there are for them and what their job will look like in the future, in which job do they go to or could be a potential path. I think it actually motivates people much beyond having work shifting because of automation. Because in addition, you also get to see a path, right. And everywhere you turn, just want to know what's the possibility for the future. So, um, while I'd like to say it was genius for us to envision that it's, it's a pleasant surprise and something, we should talk about more, >>I'm sensing a journey. It's always the case where I know I call it the force March to digital. We were thrown into this. And so, so much was unknown. And I know our team, I mean our producers and it's death by a thousand paper cuts in any one individual thing is not that bad, but yeah, the Moffitt, it's just, that's what kills your work day, your work week and your mental health. And so maybe it's, that's kind of the starting point is, are pigs a band-aid for, for, for, for that fundamental, but then it's wow. I can see the light bulb goes off. I can see the potential, that's where the digital upskilling comes in. I mean, maybe that's oversimplifying it, but how do you see that journey? Yeah. >>Yeah. I think there's a couple of different pieces with this cause, you know, and it goes back to the divide between the things you need to do now. And how do you think about making your life easier, but then it really goes to what you need to do in the future. And that journey to actually get there is tough because it's not just a question of, Hey, I need to pick up a textbook or pick up an online training module. And I'm just going to become an expert. It's really thinking about what are the, what's the combination of different skills. I need to learn. Some of that's going to be hands on technical skills. It's going to be platforms like UI path. It may be other complimentary platforms in the analytics space and other things. Um, some of this may also be on the kind of softer side. >>How do I learn how to work in a more agile way and have a design thinking mindset, have a product mindset, but then it's really how's that going to change my role in the future. And how do I actually, for lack of a better word, start to embed these practices in my job in a way that I'm actually learning these skills and it will stick. And how do you actually manage that co culture change? Um, for lack of better word over time. That was probably the biggest thing I picked up from yesterday was just some of this talk around change management and culture, uh, which is, you know, we, we have a lot of, for lack of better word techie. Cause if this conference would like to think about all the cool stuff that technology doing, but the big lesson learned is really, you know, you actually have to make the stick inside an organization. >>And in the last year, Kevin, I'm curious about the adoption because you know, everything we've seen so much acceleration in the last year that digital acceleration, the acceleration in automation, we've also seen tremendous, uh, people and from a cultural perspective, I'd love to, for you to shed some light on what you've seen since you've rolled this product out, how is the pandemic, has it been an enabler of that change management and that cultural change, which historically is very hard to do. >>It's very hard. And I think this, if, if I want to CFO or COO two years ago and talked about the skills gap in what was happening, the organization, I would probably get someone that would be on and say, okay, yeah, that, that, that is happening. We need to think about this, but I got 50 other things I need to worry about. You know, I think over the past year a while, things like, you know, TA TA, well, time is a big, uh, luxury or having excess time is a big luxury that most people don't have. I think there's a recognition that, um, it's a challenging work environment right now. We're trying to get more done. People are not in person. Um, people have, you know, there's issues with, with mental health and other challenges and there's, uh, almost like a renewed focus on how do we make employees lives better and better can mean different things. >>But when I think about it, it's, it's giving people a hope that they have a future career path, that their job is not going to be eliminated, that they're developing the right skills and they're being given the capacity to actually do that now. And so a lot of the discussions have really been are around that fact. And I would say probably more so than the traditional just cost saving discussion than most automation, um, threads in with RPA begin with this really, you know, became, um, we need to do this and we need to, you know, send a message to our employees that we really care about you. And this is something that is really going to be us investing in you as a perk in the future. >>What's the role of the head of human capital management in the context of automation? Is she the champion? Is she the therapist? Is she the change agent? Well, how do you see that? >>Well, clearly he should have been talking to the head of people, um, two years ago. We even, because, uh, the way I think about it, and I think a lot of people in my role think about it is, you know, a CFO really looks after the financial health of the company. Um, the focus for us is looking after the people, health of the company, right? And so I think, um, in my career, what I've learned is that change is constant. We all know this and, um, change for people is difficult. So the way I think about introducing new technology, introducing automation, introducing anything that changes or being forced to change because of something like a pandemic, um, what I really ended up thinking a lot about is how does that impact people and how do we, how do we help them through it? Um, so that's my lens. And I think that's a chief people officer lens to all of this, but makes a perfect partnership with platforms that make this easy for us. Because if you can imagine, uh, a C-suite person comes to, uh, comes to an HR department and says, tell me what we should do here. How do we develop all our people? And it's, it's an overwhelming task. What pro edge does is just beautifully delivers this on a platter, um, in a way that we could never do manually. So it's >>Talk to me a little bit Bettina about the last year and a half. And obviously as being the chief people, officer, you came in, you said about five months ago, but obviously during a very, very challenging time, I always think that the employee experience is directly related to the customer experience. I see them as inextricably linked, how have you been able to foster a good employee experience in your time here in a very strange world so that the customer experience, I mean, you guys are a fast moving company, 8,000 plus customers. So that, that customer experience is a stellar as UI path has always had to be. >>Yeah, I think for us, it came down to just some simple things. Um, one is just being flexible. Uh, there was not a one size fits all. We had to recognize that we have to meet people in a place that works for them, everybody, uh, dealt with a different reality and the same for our customers. Um, and I agree with you. I think employees that feel enabled that feel safe, that feel they have a future, um, have a much different relationship with their customers, um, then employees that are worried about their safety and security and whatnot. So we really took an approach of flexibility, safety, um, meeting people where they are jumping in when there were big crises in India and whatnot to really, really take care of our people and help them understand that we're here for >>Big impact on mental health. Did you see that, um, there was an insert in the wall street journal. I think it was last week, uh, women at work. Um, and it was a stat in there. I don't know if you're a working mom, but it said that, uh, 30, it was Qualtrics was the source. 30% of working moms said their mental health had declined since the pandemic. Interestingly only 15. I said only 15% of working dads. Um, so that was sort of interesting, uh, and notable, uh, but you know, to your point, CFO, financial health of the company, the chief people officer, the, the human capital health. Yeah. >>Um, very much so. And by the way, I'm not surprised by that stat as a woman. >>I thought it was, I thought it was low. I was talking to my wife about it the other day. She's not a working mom, but she's like my mental health, even though I'm not a working mom, I have my mental health. I'm a working dad, but, but I got it easier than she does, but, but, and I'm not surprised at the disparity. I'm surprised that the only 30% and 50%, I think it's a lot higher than that. And people may be just like, I don't know if that's actually, maybe some people like working at home and that's, I could see that both sides of that equation. Yeah. >>There's also a stigma around mental health that we've, that's been addressed in. So even during the Olympic coverage this last summer, but having your team be really focused and enabled and knowing that they took to your point, Kevin, from an upscale perspective, that they have a path where they can go, they can increase their own value to the company. >>I completely agree. And I think, uh, other studies show that what people really want is a future at work. And, and this is what I think privilege dresses. Beautiful. >>Yeah. It's interesting. Right. Cause I think when you talk about some of the mental health challenges, I think it can get down very quickly to a cab just on this crazy schedule or I'm on zoom for 14 hours a day. And I, I don't have the time to breathe in my time commuting where I may have had time to decompress. It's just been replaced with more meetings. And I think that that may be the, like the surface issue, but I actually think if you go below the surface, not being in the office, not having some of the in-person networking, not having some of that creates anxiety about the future. And you're not really sure around, okay, what does my career path look like? I may not be getting the amount of career counseling that I used to get just by impromptu conversations or, you know, just by more traditional ways. Um, but I think the reality is when we look at the way most companies are thinking about their future work models. It's not going to go back to the way the world operated two years ago, it's, we're going to be in some sort of hybrid model. And so it really becomes more important to actually dig below where maybe some of the challenges were in the passengers, not surfaced. And I think upskilling and thinking about, um, kind of role skills and roles, it just becomes a much more important conversation. >>Absolutely. Last question, Bettina for you, we're almost out of time, but you started this in the, in financial, in the finance organization. What do you see over the next couple of years in terms of being very much UI path land and expand with your customers? Where do you see it rolling out across two iPads. >>We're already talking to our sales enablement group. Um, for a couple of reasons we want them to experience it. We want them to have also, we want them to have the conversations with our customers much like what we learned yesterday, right? It's a multi-dimensional conversation. It's not just a financial ROI, it's a people journey, change management. So we'll, we're taking it to our sales enablement group. We're absolutely gonna use it in HR, uh, obviously. Um, and I, I would just think we'll use it in two years. It'll be enterprise wide >>Different is pro edge in the marketplace. And just in, particularly in terms of its business impact. >>Yeah. I take a stab. So when we think about the challenge in a topic like digital upskilling, I think in traditional approaches to learning, it would be okay, we're going to enroll someone in a learning program. You know, you're going to go through, do certain amount of self study. Maybe there's a class, the some classroom based training. And that's it. I think for us, we saw two different challenges on both sides of that. One was trying to identify who needs to learn, what, and what part of the organization, why is that important? What an executive may need to learn is going to be different from what someone who does the transaction processing, uh, for their, their full-time job needs to learn and learning kind of from basic digital acumen through kind of hands-on skills. What are the different, um, pieces? I think probably the more interesting part is the back end of that. >>And thinking about, you know, how do you actually put these skills into practice and how do you put scale? One of the buzzwords that's thrown around at this conference a lot is the concept of citizen led automation as a topic. And really how, how do you have your, does this users building bots or creating data dashboards or doing other things that is, um, that's challenging. So as we design the product, what we really wanted to think about was that end to end journey from kind of the point of identifying skills through the point of scaling a citizen led effort. It's one of the things we're really excited to be working with UI path on is one of the core technologies that we, that we view in this ecosystem is really thinking about how do you make that happen? And if the outcome is not just people are new things, but the outcome are, people are actually creating solutions that are, that are having an impact on their job on a day to day basis. We think that's a really powerful concept. >>It's really important work, what you guys are doing. Thank you both for joining David me on the program today, talking about this very interesting symbiotic relationship partners, PWC UI path customers. Really interesting, great work that you're doing. Thanks for joining us. Thank you so much for having us for Dave Volante. I'm Lisa Martin. You're watching the cube live from Las Vegas at the Bellagio UI path forward for it. We'll be right back, stick around.

(slow music) >> Welcome back to theCUBE's ongoing coverage of VMworld 2021, the second year in a row we've done this virtually. My name is Dave Vellante and long-time VMware technologist and new CTO Kit Colbert is here. Kit, welcome. Good to see you again. >> Thanks, Dave. Super excited to be here. >> So let's talk about your new role. You've been at VMware. You've touched all the bases so to speak (Kit chuckles) and, you know, love the career evolution. You're ready for this job. So tell us about that role. >> Well, I hope so. I don't know. It's definitely a big step up. Been here at VMware for 18 years now, which, if know Silicon Valley, you know that's a long time. It's probably like four or five normal Silicon Valley lifetime's in terms of stints at a company. But I love it. I love the company. I love the culture. I love the technology and I'm super passionate, super excited about it. And so, you know, previously I was CTO for one of our business groups and focused on a specific set of our products and services. But now, as the corporate CTO, I really am overseeing all of VMware R&D. In the sense of really trying to drive a whole bunch of core engineering transformations, right, where we've talked a lot about our shift toward becoming a SaaS company. So, you know, a cloud services company. And so there's a lot of changes we got to make internally. Technologies, platform services we need to build out, you know, the sort of culture aspects of it again. And so, you know, I'm kind of sitting at the center of that and, I'll be honest, it's big, there's a lot of stuff to go and do, but I am just super excited about it. Wake up every day, really excited to meet a whole bunch of new people across the organization and to learn all the cool things we're doing. Well, you know, I'll say it again, like the level of innovation happening inside VMware is just insane. And it's really cool now that I get kind of more of a front and center row to see everything that's happening. >> And when I was preparing for the interview with Raghu, you know, I've been following VMware for a long time, and I sort of noted that it's like the fourth, you know, wave of executive management and I sort of went back and said, okay, yes, we know it started with, you know, Workstation. Okay, fine. But then really quickly went into really changing the way in which we think about servers, and server utilization, and driving. I remember the first time I ever saw a demo, I said, "Wow, this is going to be completely game-changing." And then thought about the era of the software-defined data center, fine-tuning the cloud strategy, and then this explosion of innovation, whether it was this sort of NSX piece, the acquisitions you've made around security, again, more cloud expansion. And now you're laying out sort of this Switzerland from Multi-Cloud combined with, as you're pointing out, this as a service model. So when you think about the technical vision of the company transforming into a cloud and subscription model, what does that mean from a sort of architectural standpoint >> Yeah. >> Or a mindset perspective? >> Oh yeah. Both great questions and both sort of key focus areas for me, and by the way, it's something I've been thinking about for quite a while, right? Yeah, so you're right. Like we are on our third or fourth lap of the track depending on how you count. But I also think that this notion of getting into Multi-Cloud, of becoming a real cloud services company is going to be probably the biggest one for us. And the biggest transformation that we're going to have to make, you know, we did extend from core compute virtualization to network and storage with the software-defined data center. But now these things I think are a bit more fundamental. So, you know, how are we thinking about it? Well, we're thinking about it in a few different ways. I do think, as you mentioned, the mindset is definitely the most important thing. This notion that, you know, we no longer really have product teams purely, they should be thinking of themselves as service teams and the idea being that they are operating and accountable for the availability of their cloud service. And so this means we really needed to step up our game, and we have in terms of the types of tooling that we built, but really it's about getting these developers engaged with that, to know that, hey, like what matters most of all right now is that service availability, in addition to things like security, compliance, et cetera. But we have monitoring systems to tell you, hey, like there's a problem. And that you need to go jump on those things immediately. This is not like, you know, a normal bug that comes in, oh, I'll get to it tomorrow or whatever. It's like, no, no, you got to step up and really get there immediately. And so there is that big mindset shift and that's something we've been driving for the past few years, but we need to continue to push there. And as part of that, you know, what we've seen is that a lot of our individual teams have gone out and build like really great cloud services, but what we really want to build to enable us to accelerate that, is a platform, a true, you know, SaaS platform and leveraging all these great capabilities that we have to help all of our teams go faster. And so it gets to things like standardization and really raising the bar across the board to allow all these teams to focus on what makes their products or services unique and differentiated rather than, you know, just doing the basic blocking and tackling. So those are couple of things I'm really focused on. Both driving the mindset shift. You know, as I was taking on this role, I did a lot of reading on other CTOs and, you know, how do they view their roles within their companies? And one of the things I did hear there was that the CTO is kind of the, I don't know if the keeper is the right word, but the keeper of the engineering culture, right, that you want to really be a steward for that to help take it forward in the right sort of directions that aligned with the strategic direction of the business. And so that's a big aspect for what I'm thinking about. And the second one in the SaaS platform, one of the really interesting things about this reorg that we've done internally is, that traditionally CTO is kind of focused, you know, outbound, maybe a little bit inbound, but typically don't have large engineering organizations, but here, what we want to do, because the SaaS platform is so important to us. We did centralize it within the office of the CTO. And so now, you know, my customers, from an engineering standpoint, are all the internal business units. So a lot of really big changes inside VMware, but I think this is the sort of stuff we need to do to help us really accelerate toward the multi-cloud vision that we're painting. >> Well, VMware has always had a superstrong engineering culture, and I liked the way you phrase that, "The steward of the engineering culture," when you think about a product mindset, 'course correct me, if I'm off here, but when you're building a product and you're making that thing rock-solid, you know, Maritz used to talk about the hardened top. And so it seems to me that the services mindset expands the mind a little bit in terms of what other services can I integrate to make my service better, whether that's a machine, intelligence service, or a security service or, you know, the dozens of other services that you guys are now building, the combination of that innovation has like a step function and a lever on top of the sort of traditional product mindset. >> Yeah, I think you're absolutely right there's a ton of like really fundamental mental mindset shifts, right? That are a part of that. And the integration piece you mentioned, super critical, but I also think it's actually taking a step back and looking at the life cycle more holistically. When you're thinking about a product, you're thinking about, okay, I'ma get the bits together, I'm going to ship it out. But then it's really up to the customer to go deploy that, to operate it, to, you know, deal with problems and bugs that come up. And when you're delivering a cloud service, those are all problems that you, as the application creator, have to deal with. And so you've got to be on top of all those things. And, you know, if you design something in such a way that it becomes kind of hard to debug at runtime, well, that's going to directly impact your availability, that might have, you know, contractual obligations with an SLA impact to a customer. So there's some really big implications there that I think traditionally product teams didn't always fully think through, but now that they sort of have to with like a cloud service. The other point, I think that's really important there, is the notion of simplicity and ease of use. Experience is always important, right? Customer experience, user experience, but it gets even more magnified in a SaaS type of environment because the idea is that you shouldn't have to talk to anybody. You, as a user, should be able to go and call an API and start using this thing, right, and swipe a credit card and you're good to go. And so, you know, that sort of maniacal focus on how you just remove roadblocks, remove any unnecessary things between that customer and getting the value that they're looking for. So in general, the thing that I really love about SaaS and cloud services is that they really align incentives very well. What you want to do, as an application builder, as a solution builder, really aligns well with what customers are looking for. And you can get that feedback very, very rapidly, which allows for much quicker evolution of the underlying product and application. >> So one of the other things I learned from my interview with Raghu, and I couldn't go deep into it, I did a little bit with Sumit, but I wonder if I get your perspectives as well. I always talk about this abstraction layer across clouds, hybrid, multi-cloud, edge, abstracting, you know, the underlying complexity, and Raghu, it's nuance, but he said, "Okay, but the thing is, we're not trying to limit access to the primitives. We want to allow developers to go there to the extent." And my takeaway was okay, but the abstraction is you want to be that single management layer with access to the deep primitives and APIs of the respective clouds. But simplify, to your point, across those estates at the management layer, maybe you could add some color to that. >> Yeah, you know, it's a really interesting question. But let me tell you about how we think about it because you're right. In that, you know, the abstractions can sometimes find the underlying primitives and capabilities. And so Raghu getting at, hey, like we don't necessarily force you one way or the other. And here's the way to think about it, is that it's really about delivering optionality. And we do that through offering these abstractions at different layers. So to your point, Dave, like we have a management capabilities that can enable you to manage consistently across all types of clouds, public, private, edge, et cetera, irrespective of what that underlying infrastructure is. And so you'll look at things that are like our vRealize suite of products, or CloudHealth, or Tanzu, Tanzu Mission Control is really focused on that one as well. But then we also have our infrastructure layer. That's what we're doing with VMware Cloud. And this notion of delivering consistent infrastructure. Now, even though the core, sort of IIS layer, is more consistent, you still get great flexibility in terms of the higher-level services. If you want to use a database from one of the public clouds, or a messaging system, or streaming service, or, you know, AI, whatever it is, you still got that sort of optionality as well. And so the reason that we offer these different things is because customers are just in different places. As a matter of fact, a single customer may have all of those different use cases, right? They may have some apps where they're moving from on-prem into the cloud. They want to do that very quickly. So, boom, we can just do it really fast with VMware Cloud, consistent infrastructure. We can VMotion that thing up in the Cloud, great. But for other ones, maybe a modern app they're building, and maybe a team has chosen to use native AWS for that, but they want to leverage Kubernetes. So there you could put in a Tanzu Mission Control to give them that, you know, consistent management across sites, or leverage CloudHealth to understand costs and to really enable the application teams to manage costs on their own. So, you know, I always go back to that concept of optionality, like we offer sort of these different levels of abstraction, and it really depends on what the use case is because the reality is, especially for a complex enterprise, they're likely going to have all of those use cases. >> You know, I want to stay on optionality for a moment because you're essentially becoming a cloud company. I'm expanding the definition of cloud, which I think is appropriate 'cause the cloud is expanding. It's going on-prem, it's going out to the edge, there's hybrid connections, across clouds, et cetera. And when you look at the public cloud players, they all are deep into what I'll call data management. I'm not even sure what that term means anymore sometimes, but certainly they all own, own, databases, but they also offer databases from folks. I go back to something Maritz said with the software mainframe that we want to be able to run any workload, you know, anywhere and have high reliability, recovery, you know, lowest costs, et cetera. So you're going to run those workloads. Project Monterey is about supporting new workloads, but it doesn't seem like you have aspirations to own sort of the database layer, for example, what's your philosophy around that? >> Yeah. Not generally. I mean, we do have some solutions like Greenplum, for instance, that play in that space, more of a data warehouse solution, but generally speaking, you're absolutely right. You know, VMware success was built through tight partnerships. We have a very, very broad partner network. And of course, we see hyperscalers as great partners as well. And so, I think if we get back to like, what's the core of VMware, it really is providing those powerful abstractions in the right places, at the infrastructure level, at the management level, and so forth. But yeah, we're not trying to necessarily compete with everyone, reinvent the world. And by the way, if I just take a step back, when we talk to customers, what really drives them toward using multiple clouds is the fact that they want to get after these, what we call, best of breed cloud services, that many of the different public clouds offer databases and AI and ML systems. And for each app team, the exact one that perfectly meets their needs may be different, right? Maybe on one conference is another cloud. And so that is really the optionality that we want to optimize for when we talk to those customers. They want the easiest way of getting that app onto that cloud, so we can take advantage of that cloud service, but what they worry about is the lack of consistency there. And that goes across the board. You know, if something fails at 2:00 am, and you have to wake up and go fix it. Do you have like the right sort of tooling in place, if it's fails on one cloud versus another, do you have to like, you know, scramble to figure out which tools to go use, you know, which dashboard to look at? It's like, no, that you want kind of a consistent one. When you think about, from a security perspective, how do you drive a secure software supply chain? How do you prevent the types of attacks that we've seen in the past few years? Where people insert malicious code into your supply chain and now you're running with hack code out there. And if you have different teams doing different things across different clouds, well, that's going to just open up sort of a can of worm of different possibilities there for hackers to get in. So that's why this consistency is so important. And so, you know, I guess, if we refine the optionality a little bit, that point, it's about getting optionality around cloud services and then like those are the things that really differentiate. And so, you know, we're not trynna compete with that. We're saying, hey, like we want to bring customers to those and give them the best experience that they can, irrespective of whether that's in the public cloud, or on-prem, or even at the edge. >> And that's a huge technical challenge and amazing value for customers. I want to ask you, there's a lot of talk about ESG today. How does that fit into the CTO mindset? >> Yeah. >> Is it a bolt-on, is it a fundamental component? >> Yeah. Yeah, so ESG is talking about environment, sustainability, and governance. And so, you know, it's not an environment, excuse me, equity, (Kit chuckles) equity, sustainability, and governance. Getting my acronyms wrong, which as the technologist, really a faux pas, but any case, equity, sustainability, and governance. And the idea there is that if we look at the core values for VMware, this is something that's hugely important. And something that we've actually been focused on for quite a while. We now have a whole team focused on this, really being a force multiplier to help keep us honest across VMware, to help ensure equity, and in many different ways, that we have or continue to increase, for instance, the amount of female representation within our organization, or underrepresented minorities or communities, ensuring that, you know, pay is equal across the company. You know, these different sorts of things, but also around sustainability. They actually have a number of folks working very closely with our teams to drive sustainability into our products. You know, vSphere is great because it reduces the amount of physical servers you need. So by definition reduces the carbon footprint there. But now, you know, taking a step further. We have cloud partners that we're working with to ensure that they have net-zero carbon emissions, you know, using 100% renewables by 2030. And in fact, that's something that, we ourselves, have signed up for, you know, today we are carbon-neutral, but what we want to get to is to be net carbon zero by 2030, which is an absolutely huge lift. And that's, by the way, not just for VMware, our operations, our offices, but also for our supply chain as well. And so, you know, when you look across, you know, as well as efforts around diversity and inclusion, this is something that is very core to what we do as a company, but it's also a personal passion of mine. The ESG office actually lives within my organization. And it does that because what I view the office of the CTO as being is really a force multiplier, as I said before, like, yes, the team is located here, but their purview is across all of engineering. And in fact, all of VMware. So I think, you know, when we look at this, it's about getting the best talent we have, very diverse talent, increasing our ability to deliver innovative products, but also doing so in a way that's good for the planet, that is sustainable. And that is giving back to the community. >> You know, by the way, I don't think that was faux pas. (Kit laughs) 'Cause a lot of times, people use environmental, social, and governance, and your equity piece would fall into the S in that equation, the social responsibility, you know, components. So I think you've just done an interesting twist on the acronym. So no mistake there. (Dave chuckles) Just another way to look at it. >> Yup, yup, yup. >> So you're now deep into the CTO role. What should we look for in the, you know, coming months and years? How should we >> Hmm. >> Kind of evaluate progress? What are those sort of milestones that we should be looking at? >> Yeah, so about a month or so into the job now, and so still getting my arms wrapped around, but, you know, I'm looking at measuring success in a few different ways. First of all, as I said before, the ESG component and in diversity, equity inclusion in particular, in terms of our workforce, extraordinarily important to me and something we're going to be really pushing hard on, you know, as we all know, you know, women, underrepresented minorities, not very well represented, in general, in Silicon Valley. So something that we all need to step up on. And so we're going to be putting a lot of effort in there, and that will actually help drive, as I said before, all of these innovations, this fundamental shift in mindset, I mean, that requires diverse perspectives. It requires pushing us out of our comfort zone, but the net result of that, so that what you're going to see, is a much faster cadence of releases of innovation coming from VMware. So there's some just insanely exciting things (Kit laughs) that are happening in the labs right now that we're cooking up. But, you know, as we start making this shift, we're going to be delivering those faster and faster to our customers and our partners. >> You know, I'm interested to hear that it's a passion of yours. There was an article, I think it was last week, in "The Wall Street Journal," it was an insert section on "Women in the Workforce," and there was a stat in there, which I thought was pretty interesting. I'll run it by and you see what you think, you know, it was talking about COVID, and post COVID,and the stresses. And it's interesting to me because a lot of executives, and pfft, you know, I'm with them, said, "Hey, work from home. This a beautiful thing. It's good for business too, because, you know, everybody's more productive," but you have this perpetual workday now. It's like we never sleep. It bleeds in the weekends. And the stat from Qualtrics, which was published in the journal, I think it said, "30% of working women said that their mental health has declined since COVID." And that number was only 15% for working men, is still notable, but half. And so, you know, one has to question maybe that perpetual work week and, you know, maybe there's a benefit from business productivity, but then there's the other side of that as well. And a lot of women have left the workforce, a lot of previously working moms. And so there's an untapped labor pool there, and there's this huge labor shortage. And so these are important issues, but they're not easy ones to solve, are they? >> No, no, no. It's something we've been putting a lot of thought into at VMware. So we do have a flexible program that we're rolling out in terms of work. People can come into the office if they want to, of course, you know, where we have offices where it's safe to do so, where the government has allowed that, and people can have an actual desk there, or sometimes they can say, "Hey, I only want to come in once or twice a week." And then we say, "Okay, we'll have some floating desks that you can take." And others are saying, "I want to be fully remote." So we give people a pretty broad range in terms of how they want to address that. But I do think, to your point though, and this is something I've been really trying to do already is to create a more inclusive environment by doing a number of different things. And so it's being thoughtful around when you're sending emails. 'Cause like my sort of schedule is, I do tend to like fire off emails late at night after the kids are in bed, I get a little quiet time, some thinking time, but I make it very clear that I'm not expecting an immediate response. Don't worry about it. This is my work time. Doesn't have to be your work time. And so really setting those, I guess, boundaries, if you will, explicitly and kind of the expectations maybe is a better term, setting that explicitly, trying to schedule meetings, not at times where you're going to have to drop the kids off at school or pick them (indistinct) and to take over your life. And so we really try to emphasize boundaries and really setting those things appropriately. But honestly, it's something that we're still working on and I'm still learning. And so I'd love to get feedback from folks, but those are some of the early thinkings. But I would say that we at VMware are taking it very, very seriously and really supporting our employees in terms of navigating that work-life balance. >> Well Kit, congratulations on the new role and it's great to see you again. I hope next year we can be face-to-face, always a pleasure to have you on theCUBE. >> Thanks, Dave. Appreciated being here. >> All right, and thank you for watching theCUBE's continuous coverage of VMworld 2021, the virtual edition. Keep it right there for more right after this. (slow music)

>> From The Cube studios in Palo Alto in Boston, bringing you data driven insights from The Cube and ETR, this is Breaking Analysis with Dave Vellante. >> UiPath has always been an unconventional company. You know it started with humble beginnings. It's essentially a software development shop. Then it caught lightning in a bottle with its computer vision technology. It's really, it's simplification mantra and it created a very easy to deploy software robot system for bespoke departments so they could automate mundane tasks. You know the story. The company grew rapidly, was able to go public early this year. Now consistent with its out-of-the-ordinary approach, while other firms are shutting down travel and physical events, UiPath is moving ahead with Forward IV, it's annual user conference next week with a live audience there at the Bellagio in Las Vegas. It's also fast forwarding as a company, determined to lead the charge beyond RPA and execute on a more all-encompassing Enterprise automation agenda. Hello everyone and welcome to this week's Wikibond Cube Insights powered by ETR. In this breaking analysis and ahead of Forward IV, we'll update you in the RPA market the progress that UiPath has made since its IPO and bringing some ETR customer survey data that's contextualized the company's position in the overall market and relative to the competition. Here's a quick rundown of today's agenda. First I want to tell you theCube is going to be at Forward IV at the Bellagio next week. UiPath, this is their big customer event. It's live, it's a physical event. It's primarily outdoors. You have to be vaccinated to attend. Now, this not completely out of the ordinary. John Furrier and theCube were at AWS Public Sector this past week and we were at Mobile World Congress in one of the first big hybrid events of the year at Barcelona. We thought that event would kick of the fall event season, live event in earnest but the COVID crisis has caused many tech firms, most tech firms actually, to hit pause button. Not UiPath, they're moving ahead. They're going forward and we see a growing trend for smaller VIP events with a virtual component, topic maybe for another day. Now we've talked extensively about the productivity challenges and the automation mandate the pandemic has thrust upon us. Now, we've seen pretty dramatic productivity improvements as remote work kicked in but its brought new stresses. For example, according to Qualtrics, 32% of working moms said their mental health has declined since the pandemic hit. 15% of working dads said the same by the way. So, one has to question the sustainability of this perpetual workday. And we're seeing a continuum of automation solutions emerging and we'll talk about that today. We're seeing tons of M&A as well but now, in that continuum, on the left-side of the spectrum, there's Microsoft who in some ways, they stand alone and their Azure is becoming ubiquitous as a SaaS-Cloud collaboration and productivity platform. Microsoft is everywhere and in virtually every market, whether video conferencing, security, database, cloud, CRM, analytics, you name it. Microsoft is pretty much there and RPA is no different. With the acquisition of Softomotive last year, Microsoft entered the RTA market in earnest and is penetrating very deeply into the space, particularly as it pertains to personal productivity building on its software stake. Now in the middle of that spectrum if you will, we're seeing more M&A and that's defined really by the big software giants. Think of this domain as integrated software place. SAP, they acquired Contextere. They also acquired a company called Process Insights, Service now acquired Inttellebot. Salesforce acquired Servicetrace, we see Infor entering the frame and I would put even Pega, Pega systems in this camp. Software companies focused on integrating RPA into their broader workflows, into their software platforms and this is important because these platforms are entrenched Their well guardants of thoughts and complicated with lots of touchpoints and integration points and frankly they are much harder to automate because of their entrenched legacy. Now, on the far side of that spectrum, are the horizontal automation players and that's been let by UiPath with automation anywhere as the number two player in this domain. And I even put a blue prism in there more M&A recently announced that Vista is going to acquire them Vista also owns Tibco, they are going to merge those two companies. You know Tibco is come up with the integration play. So again I would put them in that you know, horizontal piece of the spectrum. So with that as background, we're going to look at how UiPath has performed since we last covered them and IPO and I'm going to bring in some ETR survey data to get the spending view from customers and we'll wrap up. Now, just to emphasize the importance of automation and the automation mandate, we talk about it all the time in this program. We use this ETR chart. It's a two dimensional view with net score which is the measure of spending momentum on the vertical axis and market share which is a proxy for pervasiveness in the data set that's on the horizontal axis. Now note that red dotted line, it signifies companies within elevated position on the net score vertical axis anything over that is considered pretty good. Very good. Now this shows every spending segment within the ETR taxonomy. And the four spending categories with the greatest velocity are AI, cloud, containers and RPA. And they have topped the charts for quite a while now. They are the only 4 categories which have sustained above that 40% line consistently throughout the pandemic and even before. Now the impressive thing about cloud of course is it has both spending momentum on the vertical axis and a very large market share or presence in the data set. The point is RPA is nascent still. It has an affinity with AI as a means of more intelligently identifying and streamlining process improvements. And so we expect those two to remain elevated and grow to the right together. UiPath pegs its TAM, total available market at 60 billion. And the reality is that could be understated. Okay, as we reported from the UiPath S1 analysis we did pre IPO, the company at that time had an ARR annual recurring revenue of $580 million and it was growing at 65% annually. And nearly 8000 customers at the time, a 1000 of which had an ARR in excess of a 100k. And the net revenue retention the company had was over 145%. So let's take a look at the pictures 6 months forward. We mentioned the $60 billion TAM, ARR now up over $726.5 million on its way to a billion ARR holding pretty steady at 60% growth as is NRR, net revenue retention and more then a 1000 new customers and 200 more with over a 100000 in ARR and a small operating profit which by the way exceeded the consensuses pretty substantially. Profitability is not shown here and no one seems to care anyway these days. It's all about growing into that TAM. Well that's a pretty good looking picture, isn't it? The company had a beat and a raise for the quarter earlier this month, so looking good right. Well you ask how come the stock is not doing better. That's an interesting question. So let's first look at the stocks performance on a relative basis. Here we show UiPath performance against Pega systems and blue prism, the other two publicly traded automation. Pure plays sort of in the case of Pega. So UiPath outperformed post its IPO but since the early summer Pega is been the big winner while UiPath slowly decelerated. You see Blue prism was at the lag until it was announced that it was in an acquisition talks with a couple of PE firms and the prospects of a bidding war sent that yellow line up as you can see. UiPath as you can see on the inset, has a much higher valuation than Pega and way higher than blue Prism. Pega interestingly is growing revenues nicely at around 40%. And I think what's happening is that the street simply wants more. Even though UiPath beat and raised, Wallstreet is still getting comfortable with management which is new to the public market game and the company just needs to demonstrate a track record and build trust. There's also some education around billings and multi-year contracts that the company addressed on its last earnings call. But the street was concerned about ARR for new logos. It appears to be slowing down sequentially and a notable decline in billings momentum which UiPath CFO addressed on the earnings call saying look they don't need the trade margin for prepaid multi year deals, given the strong cash position. Why give anything up. And even though I said nobody cares about profitability well, I guess that's true until you guide for an operating loss when you've been showing small profit in recent quarters what UiPath did. Then, obviously people start to care. So UiPath is in bit of an unknown territory to the street and it has a valuation, it's pretty rich. Very rich actually at 30 times revenue multiple or greater than 30 times revenue multiple. So that's why in my view, investors are being cautious. But I want to address a dynamic that we have seen with this high growth rocket chip companies. Something we talked about Snowflake and I think you are seeing some of that here with UiPath. Different model in the sense that Snowflake is pure cloud but I'm talking about concerns around ARR and from new logos and that growth in a sequential basis. And here's what's happening in my view with UiPath. You have a company that started within departments with a smaller average contract size, ACV maybe 25000, may be 50000 but not deep six figure deals. That wasn't UiPath's play. And because the company focused so heavily on simplicity and made it really easy to adapt, customers saw really fast ROI. I mean break-even in months. So we very quickly saw expansion into other departments. So when ACV started to rise and installations expanded within each customer, UiPath realized it had to move beyond a point product and it started thing about a platform and making acquisitions like Processgold and others and this marked a much deeper expansion into the customer base. And you can see that here in this UiPath chart that they shared at their investor deck, customers that bought in 2016 and 2017 expanded their spend 13, 15, 18, 20x So the LTV, life time value of the customer is growing dramatically and because UiPath is focused on simplicity, and has a very facile premium model much easier to try before you buy than its competitors it's CAC, Customer acquisition cost are likely much lower than some of its peers. And that's a key dynamic. So don't get freaked out by some of those concerns that we raised earlier because just like Snowflake what's happening is that the company for sure is gaining new customers, may be just not at the same rate but don't miss the forest through the trees I.e getting more money from their existing customers which means retention, loyalty and growth. Now speaking of forest, this chart is the dynamic I'm talking about, its an ETR graphic that shows the components of net score against spending momentum. Net score breaks down into 5 areas. That lime green at the top is new additions. Okay, so that's only 11% of the customer mentions. By the way we are talking about more than a 125 responses for UiPath. So it's meaningful, it's actually larger in this survey or certainly comparable to Microsoft. So that's just something right there. The next bar is the forest green. Forest green is what I want you to focus. That's customer spending 6% or more in the second half of the year relative to the first half. The gray is flat spending which is quite large. The pink or light red, that's spending customers spending 6% or worse, that's a 4% number. But look at the bottom bar. There is no bar, that's churn. 0% of the responders in the survey are churning. And Churn is the silent killer of SaaS companies. 0% defections. So you've got 46% spending more, nobody leaving. That's the dynamic powering UiPath right now and I would take this picture any day over a larger lime green and a smaller forest green and a bigger churn number. Okay, it's pretty good, not Snowflake good but it's solid. So how does this picture compare to UiPath's peers. Let's take a look at that. So this is ETR data, same data showing the granularity net score for Microsoft power automate, UiPath automation anywhere, Blue Prism and Pega. So as we said before, Microsoft is ubiquitous. What can we say about that. But UiPath is right there with a more robust platform. Not to overlook Microsoft, you can't but UiPath will you that the don't compete head to head for enterprise automation deals with Microsoft and may be they will over time. They do however compete head to head with automation anywhere. And their picture is quite strong as you can see here. You know as is Blue Prism's picture and even Pega. Although Blue Prism automation anywhere UiPtah and power automate all have net scores on this chart as you can see the tables in the upper right over 40%, Pega does not. But you can see Pega as a pure play RPA vendor it's a little bit of sort of apples and oranges there but they do sell RPA and ETR captures in their taxonomy so why not include them. Also note that UiPath has as I said before more mentions in the survey than power automate which is actually quite interesting given the ubiquity of Microsoft. Now, one other notable note is the bright red that's defections and only UiPath is showing zero defections Everybody else has at least little of the slims on defections. Okay, so take that as you will but its another data point, the one that is powerful nit only for UiPath but really for the entire sector. Now the last ETR data point that we want to share is the famous two dimensional view. Like the sector chart we showed earlier, this graphic shows the net score on the vertical axis that's against spending velocity and market share or pervasiveness on the horizontal axis. So as we said earlier, UiPath actually has a greater presence in the survey than the ever present Microsoft. Remember, this is the July survey. We don't have full results from the September-October survey yet and we can't release them until ETR is out of its quiet period but I expect the entire sector, like everything is going to be slightly down because as reported last week tech spending is moderated slightly in the second half of this year. But we don't expect the picture to change dramatically UiPath and power automate we think are going to lead in market presence and those two plus automation anywhere is going to show the strength in spending momentum as will most of the sector. We'll see who comes in above the 40% line. Okay, what to watch at Forward IV. So in summary I'll be looking for a few things. One, UiPath has hinted toward a big platform announcement that will deepen its capabilities to beyond being an RPA point tool into much more of an enterprise automation platform, rewriting a lot of the code Linux, cloud, better automation of the UI, you are going to hear all kind of new product announcements that are coming so I'll be listening for those details. I want to hear more from customers that further confirm what I've been hearing from them over the last couple of years and get more data especially on their ROI, on their land and expand, I want to understand that dynamic and that true enterprise automation. It's going to be good to get an update face to face and test some of our assumptions here and see where the gaps are and where UiPath can improve. Third, I want to talk to ecosystem players to see where they are in participating in the value chain here. What kind of partner has UiPath become since its IPO, are they investing more in the ecosystem, how do partners fit into that flywheel. Fourth, I want to hear from UiPath management Daniel Dines and other UiPath leaders, their exiting toddler wheel and coming into an adolescence phase or early adulthood. And what does that progression look like, how does it feel, what's the vibe at the show. And finally I'm very excited to participate in a live in-person event to see what's working, to see how hybrid events are evolving, we got to good glimpse at Mobile congress and this week in DC at public sector summit. As you know theCube is doing hybrid events for years and we intend to continue to lead in this regard and bring you the best real time information as possible. Okay, that's it for today. Remember these episodes are all available as podcasts wherever you listen, all you do is search breaking analysis podcast. We publish each week on Wikibound.com and Siliconangle.com and you can always connect on twitter @dvellante or email me at David.vellante@siliconangle.com Appreciate the comments on LinkedIn and don't forget to check out ETR.plus for all the survey data. This is Dave Vellante for theCube insights powered by ETR. Be well and will see you next time. (upbeat music)

>> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE in ETR. This is Breaking Analysis with Dave Vellante. >> Every CEO is figuring out the right balance for new hybrid business models. Now, regardless of the chosen approach, which is going to vary, technology executives, they understand they have to accelerate their digital and build resilience as well as optionality into their platforms. Now, this is driving a dramatic shift in IT investments. And at the macro level, we expect total spending to increase at as much as 8% or even more in 2021, compared to last year's contraction. Investments in cybersecurity, cloud collaboration that are enabling hybrid work as well as data, including analytics, AI, and automation are at the top of the spending priorities for CXOs. Hello everyone. And welcome to this week's Wiki Bond Cube insights, powered by ETR. In this Breaking Analysis, we're pleased to welcome back Erik Bradley, who is the chief engagement strategist at our partner, ETR. Now in this segment, we're going to share some of the latest findings from ETR's surveys and provide our commentary on what it means for the markets, for sellers, and for buyers. Erik, great to see you, my friend. Welcome back to Breaking Analysis. >> Thank you for having me, always enjoy it. We've got some fresh data to talk about on this beautiful summer Friday, so I'm ready to go. >> All right. I'm excited too. Okay, last year we saw a contraction in IT spending by at least 5%. And now we're seeing a snapback to, as I said, at least 8% growth relative to last year. You got to go back to 2007 just before the financial crisis to see this type of top line growth. The shift to hybrid work, it's exposed us to new insidious security threats. And we're going to discuss that in a lot more detail. Cloud migration of course picked up dramatically last year, and based on the recent earnings results of the big cloud players, for now we got two quarters of data, that trend continues as organizations are accelerating their digital platform build-outs, and this is bringing a lot of complexity and a greater need for so-called observability solutions, which Erik is going to talk about extensively later on in this segment. Data, we think is entering a new era of de-centralization. We see organizations not only focused on analytics and insights, but actually creating data products. Leading technology organizations like JP Morgan, they're heavily leaning into this trend toward packaging and monetizing data products. And finally, as part of the digital transformation trend, we see no slow down in spending momentum for AI and automation, generally in RPA specifically. Erik, anything you want to add to that top level narrative? >> Yeah, there's a lot to take on the macro takeaways. The first thing I want to state is that that 8, 8.5% number that started off at just 3 to 4% beginning of the year. So as the year has continued, we are just seeing this trend in budgets continue to accelerate, and we don't have any reason to believe that's going to stop. So I think we're going to just keep moving on heading into 2021. And we're going to see a banner year of spend this year and probably next as well. >> All right, now we're going to bring up a chart that shows kind of that progression here of spending momentum. So Erik, I'm going to let you comment on this chart that tracks those projections over time. >> Erik: Yeah. Great. So thank you very much for pulling this up. As you can see in the beginning part of the year, when we asked people, "What do you plan to spend throughout 2021?" They were saying it would be about a 4% increase. Which we were happy with because as you said last year, it was all negative. That continues to accelerate and is only hyper accelerating now as we head into the back half of the year. In addition, after we do this data, I always host a panel of IT end users to kind of get their feedback on what we collected, to a man, every one of them expects continued increase throughout next year. There are some concerns and uncertainty about what we're seeing right now with COVID, but even with that, they're planning their budgets now for 2022 and they're planning for even further increases going forward. >> Dave: Great, thank you. So we circled that 8%. That's really kind of where we thought it was going to land. And so we're happy with that number, but let's take a look at where the action is by technology sector. This chart that we're showing you here, it tracks spending priorities back to last September. When I believe that was the point, Erik, that cyber became the top priority in the survey, ahead of cloud collaboration, analytics, and data, and the other sectors that you see there. Now, Erik, we should explain. These areas, they're the top seven, and they outrank all the other sectors. ETR tracks many, many other sectors, but please weigh in here and share your thoughts on this data. >> Erik: Yeah. Security, security, security. It hasn't changed. It had really hasn't. The hybrid work. The fact that you're behind the firewall one day and then you're outside working from home the next, switching in and out of networks. This is just a field day for bad actors. And we have no choice right now, but to continue to spend, because as you're going to talk about in a minute, hybrid's here to stay. So we have to figure out a way to secure behind the firewall on-prem. We also have to secure our employees and our assets that are not in the office. So it is a main priority. One of the things that point out on this chart, I had a couple of ITN users talk to me about customer experience and automation really need to move from the right part of that chart to the left. So they're seeing more in what you were talking about in RPA and automation, starting to creep up heading into next year. As cloud migration matures, as you know, cybersecurity spending has been ramping up. People are going to see a little bit more on the analytics and a little bit more on the automation side going forward. >> Dave: Great. Now, this next data view- well, first of all, one of the great things about the ETR dataset is that you can ask key questions and get a time series. And I will tell you again, I go back to last March, ETR hit it. They were the first on the work from home trend. And so if you were on that trend, you were able to anticipate it. And a lot of investors I think took advantage of that. Now, but we've shown this before, but there's new data points that we want to introduce. So the data tracks how CIOs and IT buyers have responded to the pandemic since last March. Still 70% of the organizations have employees working remotely, but 39% now have employees fully returning to the office and Erik, the rest of the metrics all point toward positives for IT spending, although accelerating IT deployments there at the right peaked last year, as people realized they had to invest in the future. Your thoughts? >> Erik: Yeah, this is the slide for optimism, without a doubt. Of the entire macro survey we did, this is the most optimistic slide. It's great for overall business. It's great for business travel. This is well beyond just IT. Hiring is up. I've had some people tell me that they possibly can't hire enough people right now. They had to furlough employees, they had to stop projects, and they want to re accelerate those now. But talent is very hard to find. Another point to you about your automation and RPA, another underlying trend for there. The one thing I did want to talk about here is the hybrid workplace, but I believe there's another slide on it. So just to recap on this extremely optimistic, we're seeing a lot of hiring. We're seeing increased spending, and I do believe that that's going to continue. >> Yeah I'm glad you brought that up because a session that you and I did a while ago, we pointed out, it was earlier this year, that the skill shortage is one potential risk to our positive scenario. We'll keep an eye on that, but so I want to show another set of data that we've showed previously, but ETR again, has added some new questions in here. So note here that 60% of employees still work remotely with 33% in a hybrid model currently, and the CIO's expect that to land on about 42% hybrid workforce with around 30% working remotely, which is around, it's been consistent by the way on your surveys, but that's about double the historic norm, Eric. >> Erik: Yeah, and even further to your point Dave, recently I did a panel asking people to give me some feedback on this. And three of those four experts basically said to me, if we had greed run this survey right now, that even more people would be saying remote. That they believe that that number, that's saying they're expecting that number of people to be back in office, is actually too optimistic. They're actually saying that maybe if we had- cause as a survey launched about six, seven weeks ago before this little blip on the radar, before the little COVID hiccup we're seeing now, and they're telling me that they believe if we reran this now that it would be even more remote work, even more hybrid and less returned to the office. So that's just an update I wanted to offer on this slide. >> Dave: Yeah. Thank you for that. I mean, we're still in this kind of day to day, week to week, month to month mode, but I want to do a little double click on this. We're not going to share this data, but there was so much ETR data. We got to be selective. But if you double click on the hybrid models, you'll see that 50% of organizations plan to have time roughly equally split between onsite and remote with again around 30 or 31% mostly remote, with onsite space available if they need it. And Erik, very few don't plan to have some type of hybrid model, at least. >> Yeah, I think it was less than 10% that said it was going to be exclusively onsite. And again, that was a more optimistic scenario six, seven weeks ago than we're seeing right now throughout the country. So I agree with you, hybrid is here to stay. There really is no doubt about it. from everyone I speak to when, you know, I basically make a living talking to IT end users. Hybrid is here to stay. They're planning for it. And that's really the drive behind the spending because you have to support both. You have to give people the option. You have to, from an IT perspective, you also have to support both, right? So if somebody is in office, I need the support staff to be in office. Plus I need them to be able to remote in and fix something from home. So they're spending on both fronts right now. >> Okay. Let's get into some of the vendor performance data. And I want to start with the cloud hyperscalers. It's something that we followed pretty closely. I got some Wiki bond data, that we just had earnings released. So here's data that shows the Q2 revenue shares on the left-hand side in the pie and the growth rates for the big four cloud players on the right hand side. It goes back to Q1 2019. Now the first thing I want to say is these players generated just under $39 billion in the quarter with AWS capturing 50% of that number. I said 39, it was 29 billion, sorry, with AWS capturing 50% of that in the quarter. As you're still tracking around a third in Alibaba and GCP in the, you know, eight or 9% range. But what's most interesting to me, Erik, is that AWS, which generated almost 15 billion in the quarter, was the only player to grow its revenue, both sequentially and year over year. And Erik, I think the street is missing the real story here on Amazon. Amazon announced earnings on Thursday night. The company had a 2% miss on the top line revenues and a meaningful 22% beat on earnings per share. So the retail side of the business missed its revenue targets, so that's why everybody's freaked out. But AWS, the cloud side, saw a 4% revenue beat. So the stock was off more than 70% after hours and into Friday. Now to me, a mix shift toward AWS, that's great news for investors. Now, tepid guidance is a negative, but the shift to a more profitable cloud business is a huge positive. >> Yeah, there's a lot that goes into stock price, right? I remember I was a director of research back in the day. One of my analysts said to me, "Am I crazy for putting a $1,000 target on Amazon?" And I laughed and I said, "No, you're crazy if you don't make it $2,000." (both chuckling) So, you know, at that time it was basically the mix shift towards AWS. You're a thousand percent right. I think the tough year over year comps had something to do with that reaction. That, you know, it's just getting really hard. What's that? The law of large numbers, right? It's really hard to grow at that percentage rate when you're getting this big. But from our data perspective, we're seeing no slowdown in AWS, in cloud, none whatsoever. The only slowdown we're seeing in cloud is GCP. But to, you know, to focus on AWS, extremely strong across the board and not only just in cloud, but in all their data products as well, data and analytics. >> Yeah and I think that the AWS, don't forget folks, that funds Amazon's TAM expansion into so many different places. Okay. As we said at the top, the world of digital and hybrid work, and multi-cloud, it's more complicated than it used to be. And that means if you need to resolve issues, which everybody does, like poor application performance, et cetera, what's happening at the user level, you have to have a better way to sort of see what's going on. And that's what the emergence of the observability space is all about. So Erik, let me set this up and you have a lot of comments here because you've recently had some, and you always have had a lot of round table discussions with CXOs on this topic. So this chart plots net score or spending momentum on the vertical axis, and market share or pervasiveness in the dataset on the horizontal axis. And we inserted a table that shows the data points in detail. Now that red dotted line is just sort of Dave Vellante's subjective mark in the sand for elevated spending levels. And there are three other points here. One is Splunk as well off is two-year peak, as highlighted in the red, but Signal FX, which Splunk acquired, has made a big move northward this last quarter. As has Datadog. So Erik, what can you share with us on this hot, but increasingly crowded space? >> Yeah. I could talk about the space for a long time. As you know, I've gotten some flack over the last year and a half about, you know, kind of pointing out this trend, this negative trend in Splunk. So I do want to be the first one to say that this data set is rebounding. Splunk has been horrific in our data for going back almost two years now, straight downward trend. This is the first time we're seeing any increase, any positivity there. So I do want to be fair and state that because I've been accused of being a little too negative on Splunk in the past. But I would basically say for observability right now, it's a rising tide lifts all boats, if I can use a New England phrase. The data across the board in analytics for these observability players is up, is accelerating. None more so than Datadog. And it's exactly your point, David. The complexity, the increased cloud migration is a perfect setup for Datadog, which is a cloud native. It focuses on microservices. It focuses on cloud observability. Old Splunk was just application monitoring. Don't get me wrong, they're changing, but they were on-prem application monitoring, first and foremost. Datadog came out as cloud native. They, you know, do microservices. This is just a perfect setup for them. And not only is Datadog leading the observability, it's leading the entire analytics sector, all of it. Not just the observability niche. So without a doubt, that is the strongest that we're seeing. It's leading Dynatrace new Relic. The only one that really isn't rebounding is Cisco App Dynamics. That's getting the dreaded legacy word really attached to it. But this space is really on fire, elastic as well, really doing well in this space. New Relic has shown a little bit of improvement as well. And what I heard when I asked my panelists about this, is that because of the maturity of cloud migration, that this observability has to grow. Spending on this has to happen. So they all say the chart looks right. And it's really just about the digital transformation maturity. So that's largely what they think is happening here. And they don't really see it getting, you know, changing anytime soon. >> Yeah, and I would add, and you see that it's getting crowded. You saw a service now acquired LightStep, and they want to get into the game. You mentioned, you know, last deck of the elk stack is, you know, the open source alternative, but then we see a company who's raised a fair amount of money, startup, chaos search, coming in, going after kind of the complexity of the elk stack. You've got honeycomb, which has got a really innovative approach, Jeremy Burton's company observes. So you have venture capital coming in. So we'll see if those guys could be disruptive enough or are they, you know, candidates to get acquired? We'll see how that all- you know that well. The M and A space. You think this space is ripe for M and A? >> I think it's ripe for consolidation, M and A. Something has to shake out. There's no doubt. I do believe that all of these can be standalone. So we shall see what's happened to, you mentioned the Splunk acquisition of Signal FX, just a house cleaning point. That was really nice acceleration by Signal FX, but it was only 20 citations. We'd looked into this a little bit deeper. Our data scientists did. It appears as if the majority of people are just signaling spunk and not FX separately. So moving forward for our data set, we're going to combine those two, so we don't have those anomalies going forward. But that type of acquisition does show what we should expect to see more of in this group going forward. >> Well that's I want to mention. That's one of the challenges that any data company has, and you guys do a great job of it. You're constantly having to reevaluate. There's so much M and A going on in the industry. You've got to pick the right spots in terms of when to consolidate. There's some big, you know, Dell and EMC, for example. You know, you've beautifully worked through that transition. You're seeing, you know, open shift and red hat with IBM. You just got to be flexible. And that's where it's valuable to be able to have a pipeline to guys like Erik, to sort of squint through that. So thank you for that clarification. >> Thank you too, because having a resource like you with industry knowledge really helps us navigate some of those as well for everyone out there. So that's a lot to do with you do Dave, >> Thank you. It's going to be interesting to watch Splunk. Doug Merritt's made some, you know, management changes, not the least of which is bringing in Teresa Carlson to run go to market. So if you know, I'd be interested if they are hitting, bouncing off the bottom and rising up again. They have a great customer base. Okay. Let's look at some of the same dimensions. Go ahead. You got a comment? >> A few of ETR's clients looked at our data and then put a billion dollar investment into it too. So obviously I agree. (Dave laughing) Splunk is looking like it's set for a rebound, and it's definitely something to watch, I agree. >> Not to rat hole in this, but I got to say. When I look back, cause theCUBE gives us kind of early visibility. So companies with momentum and you talk to the customers that all these shows that we go to. I will tell you that three companies stood out last decade. It was Splunk. It was Service Now and Tableau. And you could tell just from just discussions with their customers, the enthusiasm in that customer base. And so that's a real asset, and that helps them build them a moat. So we'll see. All right, let's take a look at the same dimensions now for cyber. This is cybersecurity net score in the vertical, and market share in the horizontal. And I filtered by in greater than a hundred shared in because just gets so crowded. Erik, the only things I would point out here is CrowdStrike and Zscaler continue to shine, CyberArk also showing momentum over that 40% line. Very impressively, Palo Alto networks, which has a big presence in the market. They've bounced back. We predicted that a while back. Your round table suggested people like working with Palo Alto. They're a gold standard. You know, we had reported earlier on that divergence with four to net in terms of valuation and some of the challenges they had in cloud, clearly, you know, back with the momentum. And of course, Microsoft in the upper, right. It's just, they're literally off the charts and obviously a major player here, but your thoughts on cyber? >> Erik: Yeah. Going back to the backdrop. Security, security, security. It has been the number one priority going back to last September. No one sees it changing. It has to happen. The threat vectors are actually expanding and we have no choice but to spend here. So it is not surprising to see. You did name our three favorite names. So as you know, we look at the dataset, we see which ones have the most positive inflections, and we put outlooks on those. And you did mention Zscaler, Okta and CrowdStrike, by far the three standouts that we're seeing. I just recently did a huge panel on Okta talking about their acquisition of Auth Zero. They're pushed into Sale Point space, trying to move just from single sign on and MFA to going to really privileged account management. There is some hurdles there. Really Okta's ability to do this on-prem is something that a little bit of the IT end users are concerned about. But what we're seeing right now, both Okta and Auth Zero are two of the main adopted names in security. They look incredibly well set up. Zscaler as well. With the ZTNA push more towards zero trust, Zscaler came out so hot in their IPO. And everyone was wondering if it was going to trail off just like Snowflake. It's not trailing off. This thing just keeps going up into the right, up into the right. The data supports a lot of tremendous growth for the three names that you just mentioned. >> Yeah. Yeah. I'm glad you brought up Auth Zero. We had reported on that earlier. I just feel like that was a great acquisition. You had Okta doing the belly to belly enterprise, you know, selling. And the one thing that they really lacked was that developer momentum. And that's what Auth Zero brings. Just a smart move by Todd McKinnon and company. And I mean, so this, you know, I want to, I want to pull up another chart show a quick snapshot of some of the players in the survey who show momentum and have you comment on this. We haven't mentioned Snowflake so far, but they remain again with like this gold standard of net score, they've consistently had those high marks with regard to spending velocity. But here's some other data. Erik, how should we interpret this? >> Erik: Yeah, just to harp on Snowflake for a second. Right, I mean the rich get richer. They came out- IPO was so hyped, so it was hard for us as a research company to say, "Oh, you know, well, you know, we agree." But we did. The data is incredible. You can't beat the management team. You can't beat what they're doing. They've got so much cash. I can't wait to see what they do with it. And meanwhile, you would expect something that debuted with that high of a net score, that high of spending velocity to trail off. It would be natural. It's not Dave, it's still accelerating. It's gone even higher. It's at all time highs. And we just don't see it stopping anytime soon. It's a really interesting space right now. Maybe another name to look at on here that I think is pretty interesting, kind of a play on return to business is Kupa. It's a great project expense management tool that got hit really hard. Listen, traveling stopped, business expense stopped, and I did a panel on it. And a lot of our guys basically said, "Yeah, it was the first thing I cut." But we're seeing a huge rebound in spending there in that space. So that's a name that I think might be worth being called out on a positive side. Negative, If you look down to the bottom right of that chart, unfortunately we're seeing some issues in RingCentral and Zoom. Anything that's sort of playing in this next, you know, video conferencing, IP telephony space, they seem to be having really decelerating spending. Also now with Zoom's acquisition of five nine. I'm not really sure how RingCentral's going to compete on that. But yeah, that's one where we debuted for the first time with a negative outlook on that name. And looking and asking to some of the people in our community, a lot of them say externally, you still need IP telepany, but internally you don't. Because the You Cast communication systems are getting so sophisticated, that if I have Teams, if I have Slack, I don't need phones anymore. (chuckling) That you and I can just do a Slack call. We can do a Teams call. And many of them are saying I'm truly ripping out my IP Telepany internally as soon as possible because we just don't need it. So this whole collaboration, productivity space is here to stay. And it's got wide ranging implications to some of these more legacy type of tools. >> You know, one of the other things I'd call out on this chart is Accenture. You and I had a session earlier this year, and we had predicted that that skill shortage was going to lead to an uptick in traditional services. We've certainly seen that. I mean, IBM beat its quarter on the strength of services largely. And seeing Accenture on that is I think confirmation. >> Yeah that was our New Year prediction show, right Dave? When we made top 10 predictions? >> That's right. That was part of our predictions show. Exactly, good memory. >> The data is really showing that continue. People want the projects, they need to do the projects, but hiring is very difficult. So obviously the number one beneficiary there are going to be the Accentures of the world. >> All right. So let's do a quick wrap. I'm going to make a few comments and then have you bring us home, Erik. So we laid out our scenario for the tech spending rebound. We definitely believe last year tracked downward, along with GDP contraction. It was interesting. Gardner doesn't believe, at least factions of Gardner don't believe there's a correlation between GDP and tech spending. But, you know, I personally think there generally is some kind of relatively proportional pattern there. And I think we saw contraction last year. People are concerned about inflation. Of course, that adds some uncertainty. And as well, as you mentioned around the Delta variant. But I feel as though that the boards of directors and CEOs, they've mandated that tech execs have to build out digital platforms for the future. They're data centric. They're highly automated, to your earlier points. They're intelligent with AI infused, and that's going to take investment. I feel like the tech community has said, "Look, we know what to do here. We're dealing with hybrid work. We can't just stop doing what we're doing. Let's move forward." You know, and as you say, we're flying again and so forth. You know, getting hybrid right is a major priority that directly impacts strategies. Technology strategies, particularly around security, cloud, the productivity of remote workers with collaboration. And as we've said many times, we are entering a new era of data that's going to focus on decentralized data, building data products, and Erik let's keep an eye on this observability space. Lot of interest there, and buyers have a number of choices. You know, do they go with a specialist, as we saw recently, we've seen in the past, or did they go with the generalist like Service Now with the acquisition of LightStep? You know, it's going to be interesting. A lot of people are going to get into this space, start bundling into larger platforms. And so as you said, there's probably not enough room for all the players. We're going to see some consolidation there. But anyway, let me give you the final word here. >> Yeah, no, I completely agree with all of it. And I think your earlier points are spot on, that analytics and automation are certainly going to be moving more and more to that left of that chart we had of priorities. I think as we continue that survey heading into 2022, we'll have some fresh data for you again in a few months, that's going to start looking at 2022 priorities and overall spend. And the one other area that I keep hearing about over and over and over again is customer experience. There's a transition from good old CRM to CXM. Right now, everything is digital. It is not going away. So you need an omni-channel support to not only track your customer experience, but improve it. Make sure there's a two way communication. And it's a really interesting space. Salesforce is going to migrate into it. We've got Qualtrics out there. You've got Medallia. You've got FreshWorks, you've got Sprinkler. You got some names out there. And everyone I keep talking to on the IT end user side keeps bringing up customer experience. So let's keep an eye on that as well. >> That's a great point. And again, it brings me back to Service Now. We wrote a piece last week that's sort of, Service Now and Salesforce are on a collision course. We've said that for many, many years. And you've got this platform of platforms. They're just kind of sucking in different functions saying, "Hey, we're friends with everybody." But as you know Erik, software companies, they want to own it all. (both chuckling) All right. Hey Erik, thank you so much. I want to thank you for coming back on. It's always a pleasure to have you on Breaking Analysis. Great to see you. >> Love the partnership. Love the collaboration. Let's go enjoy this summer Friday. >> All right. Let's do. Okay, remember everybody, these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis Podcast, click subscribe to the series. Check out ETR's website at etr.plus. They've just launched a new website. They've got a whole new pricing model. It's great to see that innovation going on. Now remember we also publish a full report every week on WikiBond.com and SiliconAngle.com. You can always email me, appreciate the back channel comments, the metadata insights. David.Vellante@SiliconAngle.com. DM me on Twitter @DVellante or comment on the LinkedIn posts. This is Dave Vellante for Erik Bradley and theCUBE insights powered by ETR. Have a great week, a good rest of summer, be well. And we'll see you next time. (inspiring music)

>> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> In our 2020 predictions post, we said that organizations would begin to operationalize their digital transformation experiments and POCs. We also said that based on spending data that cybersecurity companies like CrowdStrike and Okta were poised to rise above the rest in 2020, and we even said the S&P 500 would surpass 3,700 this year. Little did we know that we'd have a pandemic that would make these predictions a virtual lock, and, of course, COVID did blow us out of the water in some other areas, like our prediction that IT spending would increase plus 4% in 2020, when in reality, we have a dropping by 4%. We made a number of other calls that did pretty well, but I'll let you review last year's predictions at your leisure to see how we did. Hello, everyone. This is Dave Vellante and welcome to this week's Wikibon CUBE Insights powered by ETR. Erik Bradley of ETR is joining me again for this Breaking Analysis, and we're going to lay out our top picks for 2021. Erik, great to see you. Welcome back. Happy to have you on theCUBE, my friend. >> Always great to see you too, Dave. I'm excited about these picks this year. >> Well, let's get right into it. Let's bring up the first prediction here. Tech spending will rebound in 2021. We expect a 4% midpoint increase next year in spending. Erik, there are a number of factors that really support this prediction, which of course is based on ETR's most recent survey work, and we've listed a number of them here in this slide. I wonder if we can talk about that a little bit, the pace of the vaccine rollout. I've called this a forced march to COVID, but I can see people doubling down on things that are working. Productivity improvements are going to go back into the business. People are going to come back to the headquarters and that maybe is going to spur infrastructure on some pent-up demand, and work from home, we're going to talk about that. What are your thoughts on this prediction? >> Well, first of all, you weren't wrong last year. You were just, (laughs) you were just delayed. Just delayed a little bit, that's all. No, very much so. Early on, just three months ago, we were not seeing this optimism. The most recent survey, however, is capturing 4%. I truly believe that still might be a little bit mild. I think it can go even higher, and that's going to be driven by some of the things you've said about. This is a year where a lot of spending was paused on machine learning, on automation, on some of these projects that had to be stopped because of what we all went through. Right now, that is not a nice to have, it's a must have, and that spending is going quickly. There's a rapid pace on that spending, so I do think that's going to push it and, of course, security. We're going to get to this later on so I don't want to bury the lede, but with what's happening right now, every CISO I speak to is not panicked, but they are concerned and there will definitely be increased security spending that might push this 4% even higher. >> Yeah, and as we've reported as well, the survey data shows that there's less freezing of IT, there are fewer layoffs, there's more hiring, we're accelerating IT deployments, so that, I think, 34% last survey, 34% of organizations are accelerating IT deployments over the next three months, so that's great news. >> And also your point too about hiring. I was remiss in not bringing that up because we had layoffs and we had freezes on hiring. Both of that is stopping. As you know, as more head count comes in, whether that be from home or whether that be in your headquarters, both of those require support and require spending. >> All right, let's bring up the next prediction. Remote worker trends are going to become fossilized, settling in at an average of 34% by year-end 2021. Now, I love this chart, you guys. It's been amazingly consistent to me, Erik. We're showing data here from ETR's latest COVID survey. So it shows that prior to the pandemic, about 15 to 16% of employees on average worked remotely. That jumped to where we are today and well into the 70s, and we're going to stay close to that, according to the ETR data, in the first half of 2021, but by the end of the year, it's going to settle in at around 34%. Erik, that's double the pre-pandemic numbers and that's been consistent in your surveys over the past six month, and even within the sub-samples. >> Yeah, super surprised by the consistency, Dave. You're right about that. We were expecting the most recent data to kind of come down, right? We see the vaccines being rolled out. We kind of thought that that number would shift, but it hasn't, it has been dead consistent, and that's just from the data perspective. What we're hearing from the interviews and the feedback is that's not going to change, it really isn't, and there's a main reason for that. Productivity is up, and we'll talk about that in a second, but if you have productivity up and you have employees happy, they're not commuting, they're working more, they're working effectively, there is no reason to rush. And now imagine if you're a company that's trying to hire the best talent and attract the best talent but you're also the only company telling them where they have to live. I mean, good luck with that, right? So even if a few of them decide to make this permanent, that's something where you're going to really have to follow suit to attract talent. >> Yeah, so let's talk about that. Productivity leads us to our next prediction. We can bring that up. Number three is productivity increases are going to lead organizations to double down on the successes of 2020 and productivity apps are going to benefit. Now, of course, I'm always careful to cautious to interpret when you ask somebody by how much did productivity increase. It's a very hard thing to estimate depending on how you measure it. Is it revenue per employee? Is it profit? But nonetheless, the vast majority of people that we talk to are seeing productivity is going up. The productivity apps are really the winners here. Who do you see, Erik, as really benefiting from this trend? This year we saw Zoom, Teams, even Webex benefit, but how do you see this playing out in 2021? >> Well, first of all, the real beneficiaries are the companies themselves because they are getting more productivity, and our data is not only showing more productivity, but that's continuing to increase over time, so that's number one. But you're 100% right that the reason that's happening is because of the support of the applications and what would have been put in place. Now, what we do expect to see here, early on it was a rising tide lifted all boats, even Citrix got pulled up, but over time you realize Citrix is really just about legacy applications. Maybe that's not really the virtualization platform we need or maybe we just don't want to go that route at all. So the ones that we think are going to win longer term are part of this paradigm shift. The easiest one to put out as example is DocuSign. Nobody is going to travel and sit in an office to sign a paper ever again. It's not happening. I don't care if you go back to the office or you go back to headquarters. This is a paradigm shift that is not temporary. It is permanent. Another one that we're seeing is Smartsheet. Early on it started in. I was a little concerned about it 'cause it was a shadow IT type of a company where it was just spreading and spreading and spreading. It's turned out that this, the data on Smartsheet is continuing to be strong. It's an effective tool for project management when you're remotely working, so that's another one I don't see changing anytime. The other one I would call out would be Twilio. Slightly different, yes. It's more about the customer experience, but when you look at how many brick and mortar or how many in-person transactions have moved online and will stay there, companies like Twilio that support that customer experience, I'll throw out a Qualtrics out there as well, not a name we hear about a lot, but that customer experience software is a name that needs to be watched going forward. >> What do you think's going to happen to Zoom and Teams? Certainly Zoom just escalated this year, a huge ascendancy, and Teams I look at a little differently 'cause it's not just video conferencing, and both have done really, really well. How do you interpret the data that you're seeing there? >> There's no way around it, our data is decelerating quickly, really quickly. We were kind of bullish when Zoom first came out on the IPO prospects. It did very well. Obviously what happened in this remote shift turned them into an absolute overnight huge success. I don't see that continuing going forward, and there's a reason. What we're seeing and hearing from our feedback interviews is that now that people recognize this isn't temporary and they're not scrambling and they need to set up for permanency, they're going to consolidate their spend. They don't need to have Teams and Zoom. It's not necessary. They will consolidate where they can. There's always going to be the players that are going to choose Slack and Zoom 'cause they don't want to be on Microsoft architecture. That's fine, but you and I both know that the majority of large enterprises have Microsoft already. It's bundled in in pricing. I just don't see it happening. There's going to be M&A out there, which we can talk about again soon, so maybe Zoom, just like Slack, gets to a point where somebody thinks it's worthwhile, but there's a lot of other video conferencing out there. They're trying to push their telephony. They're trying to push their mobile solutions. There's a lot of companies out there doing it, so we'll see, but the current market cap does not seem to make sense in a permanent remote work situation. >> I think I'm inferring Teams is a little different because it's Microsoft. They've got this huge software estate they can leverage. They can bundle. Now, it's going to be interesting to see how and if Zoom can then expand its TAM, use its recent largesse to really enter potentially new markets. >> It will be, but listen, just the other day there was another headline that one of Zoom's executives out in China was actually blocking content as per directed by the Chinese government. Those are the kind of headlines that just really just get a little bit difficult when you're running a true enterprise size. Zoom is wonderful in the consumer space, but what I do is I research enterprise technology, and it's going to be really, really difficult to make inroads there with Microsoft. >> Yep. I agree. Okay, let's bring up number four, prediction number four. Permanent shifts in CISO strategies lead to measurable share shifts in network security. So the remote work sort of hyper-pivot, we'll call it, it's definitely exposed us. We've seen recent breaches that underscore the need for change. They've been well-publicized. We've talked a lot about identity access management, cloud security, endpoint security, and so as a result, we've seen the upstarts, and just a couple that we called, CrowdStrike, Okta, Zscaler has really benefited and we expect them to continue to show consistent growth, some well over 50% revenue growth. Erik, you really follow this space closely. You've been focused on microsegmentation and other, some of the big players. What are your thoughts here? >> Yeah, first of all, security, number one in spending overall when we started looking and asking people what their priority is going to be. That's not changing, and that was before the SolarWinds breach. I just had a great interview today with a CISO of a global hospitality enterprise to really talk about the implications of this. It is real. Him and his peers are not panicking but pretty close, is the way he put it, so there is spend happening. So first of all, to your point, continued on Okta, continued on identity access. See no reason why that changes. CrowdStrike, continue. What this is going to do is bring in some new areas, like we just mentioned, in network segmentation. Illumio is a pure play in that name that doesn't have a lot of citations, but I have watched over the last week their net spending score go from about 30 to 60%, so I am watching in real time, as this data comes in in the later part of our survey, that it's really happening Forescout is another one that's in there. We're seeing some of the zero trust names really picking up in the last week. Now, to talk about some of the more established names, yeah, Cisco plays in this space and we can talk about Cisco and what they're doing in security forever. They're really reinventing themselves and doing a great job. Palo Alto was in this space as well, but I do believe that network and microsegmentation is going to be something that's going to continue. The other one I'm going to throw out that I'm hearing a lot about lately is user behavior analytics. People need to be able to watch the trends, compare them to past trends, and catch something sooner. Varonis is a name in that space that we're seeing get a lot of adoptions right now. It's early trend, but based on our data, Varonis is a name to watch in that area as well. >> Yeah, and you mentioned Cisco transitioning, reinventing themselves toward a SaaS player. Their subscription, Cisco's security business is a real bright spot for them. Palo Alto, every time I sit in on a VENN, which is ETR's proprietary roundtable, the CISOs, they love Palo Alto. They want to work, many of them, anyway, want to work with Palo Alto. They see them as a thought leader. They seem to be getting their cloud act together. Fortinet has been doing a pretty good job there and especially for mid-market. So we're going to see this equilibrium, best of breed versus the big portfolio companies, and I think 2021 sets up as a really interesting battle for those guys with momentum and those guys with big portfolios. >> I completely agree and you nailed it again. Palo Alto has this perception that they're really thought leaders in the space and people want to work with them, but let's not rule Cisco out. They have a much, much bigger market cap. They are really good at acquisitions. In the past, they maybe didn't integrate them as well, but it seems like they're getting their act together on that. And they're pushing now what they call SecureX, which is sort of like their own full-on platform in the cloud, and they're starting to market that, I'm starting to hear more about it, and I do think Cisco is really changing people's perception of them. We shall see going forward because in the last year, you're 100% right, Palo Alto definitely got a little bit more of the sentiment, of positive sentiment. Now, let's also realize, and we'll talk about this again in a bit, there's a lot of players out there. There will probably be continued consolidation in the security space, that we'll see what happens, but it's an area where spending is increasing, there is a lot of vendors out there to play with, and I do believe we'll see consolidation in that space. >> Yes. No question. A highly fragmented business. A lack of skills is a real challenge. Automation is a big watch word and so I would expect, which brings us, Erik, to prediction number five. Can be hard to do prediction posts without talking about M&A. We see the trend toward increased tech spending driving more IPOs, SPACs and M&A. We've seen some pretty amazing liquidity events this year. Snowflake, obviously a big one. Airbnb, DoorDash, outside of our enterprise tech but still notable. Palantir, JFrog, number of others. UiPath just filed confidentially and their CEO said, "Over the next 12 to 18 months, I would think Automation Anywhere is going to follow suit at some point." Hashicorp was a company we called out in our 2020 predictions as one to watch along with Snowflake and some others, and, Erik, we've seen some real shifts in observability. The ELK Stack gaining prominence with Elastic, ChaosSearch just raised 40 million, and everybody's going after 5G. Lots of M&A opportunities. What are your thoughts? >> I think if we're going to make this a prediction show, I'm going to say that was a great year, but we're going to even have a better year next year. There is a lot of cash on the balance sheet. There are low interest rates. There is a lot of spending momentum in enterprise IT. The three of those set up for a perfect storm of more liquidity events, whether it be continued IPOs, whether it could be M&A, I do expect that to continue. You mentioned a lot of the names. I think you're 100% right. Another one I would throw out there in that observability space, is it's Grafana along with the ELK Stack is really making changes to some of the pure plays in that area. I've been pretty vocal about how I thought Splunk was having some problems. They've already made three acquisitions. They are trying really hard to get back up and keep that growth trajectory and be the great company they always have been, so I think the observability area is certainly one. We have a lot of names in that space that could be taken out. The other one that wasn't mentioned, however, that I'd like to mention is more in the CDN area. Akamai being the grandfather there, and we'll get into it a little bit too, but CloudFlare has a huge market cap, Fastly running a little bit behind that, and then there's Limelight, and there's a few startups in that space and the CDN is really changing. It's not about content delivery as much as it is about edge compute these days, and they would be a real easy takeout for one of these large market cap names that need to get into that spot. >> That's a great call. All right, let's bring up number six, and this is one that's near and dear to my heart. It's more of a longer-term prediction and that prediction is in the 2020s, 75% of large organizations are going to re-architect their big data platforms, and the premise here is we're seeing a rapid shift to cloud database and cross-cloud data sharing and automated governance. And the prediction is that because big data platforms are fundamentally flawed and are not going to be corrected by incremental improvements in data lakes and data warehouses and data hubs, we're going to see a shift toward a domain-centric ownership of the data pipeline where data teams are going to be organized around data product or data service builders and embedded into lines of business. And in this scenario, the technology details and complexity will become abstracted. You've got hyper-specialized data teams today. They serve multiple business owners. There's no domain context. Different data agendas. Those, we think, are going to be subsumed within the business lines, and in the future, the primary metric is going to shift from the cost and the quality of the big data platform outputs to the time it takes to go from idea to revenue generation, and this change is going to take four to five years to coalesce, but it's going to begin in earnest in 2021. Erik, anything you'd add to this? >> I'm going to let you kind of own that one 'cause I completely agree, and for all the listeners out there, that was Dave's original thought and I think it's fantastic and I want to get behind it. One of the things I will say to support that is big data analytics, which is what people are calling it because they got over the hype of machine learning, they're sick of vendors saying machine learning, and I'm hearing more and more people just talk about it as we need big data analytics, we need 'em at the edge, we need 'em faster, we need 'em in real time. That's happening, and what we're seeing more is this is happening with vendor-agnostic tools. This isn't just AWS-aligned. This isn't just GCP-aligned or Azure-aligned. The winners are the Snowflakes. The winners are the Databricks. The winners are the ones that are allowing this interoperability, the portability, which fully supports what you're saying. And then the only other comment I would make, which I really like about your prediction, is about the lines of business owning it 'cause I think this is even bigger. Right now, we track IT spending through the CIO, through the CTO, through IT in general. IT spending is actually becoming more diversified. IT spending is coming under the purview of marketing, it's coming under the purview of sales, so we're seeing more and more IT spending, but it's happening with the business user or the business lines and obviously data first, so I think you're 100% right. >> Yeah, and if you think about it, we've contextualized our operational systems, whether it's the CRM or the supply chain, the logistics, the business lines own their respective data. It's not true for the analytics systems, and we talked about Snowflake and Databricks. I actually see these two companies who were sort of birds of a feather in the early days together, applying Databricks machine learning on top of Snowflake, I actually see them going in diverging places. I see Databricks trying to improve on the data lake. I see Snowflake trying to reinvent the concept of data warehouse to this global mesh, and it's going to be really interesting to see how that shakes out. The data behind Snowflake, obviously very, very exciting. >> Yeah, it's just, real quickly to add on that if we have time, Dave. >> Yeah, sure. >> We all know the valuation of Snowflake, one of the most incredible IPOs I've seen in a long time. The data still supports it. It still supports that growth. Unfortunately for Databricks, their IPO has been a little bit more volatile. If you look at their stock chart every time they report, it's got a little bit of a roller coaster ride going on, and our most recent data for Databricks is actually decelerating, so again, I'm going to use the caveat that we only have about 950 survey responses in. We'll probably get that up to 1,300 or so, so it's not done yet, but right now we are putting Databricks into a category where we're seeing it decelerate a little bit, which is surprising for a company that's just right out of the gate. >> Well, it's interesting because I do see Databricks as more incremental on data lakes and I see Snowflake as more transformative, so at least from a vision standpoint, we'll see if they can execute on that. All right, number seven, let's bring up number seven. This is talking about the cloud, hybrid cloud, multi-cloud. The battle to define hybrid and multi-cloud is going to escalate in 2021. It's already started and it's going to create bifurcated CIO strategies. And, Erik, spending data clearly shows that cloud is continuing its steady margin share gains relative to on-prem, but the definitions of the cloud, they're shifting. Just a couple of years ago, AWS, they never talk about hybrid, just like they don't talk about multi-cloud today, yet AWS continues now to push into on-prem. They treat on-prem as just another node at the edge and they continue to win in the marketplace despite their slower growth rates. Still, they're so large now. 45 billion or so this year. The data is mixed. This ETR data shows that just under 50% of buyers are consolidating workloads, and then a similar, in the cloud workloads, and a similar percentage of customers are spreading evenly across clouds, so really interesting dynamic there. Erik, how do you see it shaking out? >> Yeah, the data is interesting here, and I would actually state that overall spend on the cloud is actually flat from last year, so we're not seeing a huge increase in spend, and coupled with that, we're seeing that the overall market share, which means the amount of responses within our survey, is increasing, certainly increasing. So cloud usage is increasing, but it's happening over an even spectrum. There's no clear winner of that market share increase. So they really, according to our data, the multi-cloud approach is happening and not one particular winner over another. That's just from the data perspective that various do point on AWS. Let's be honest, when they first started, they wanted all the data. They just want to take it from on-prem, put it in their data center. They wanted all of it. They never were interested in actually having interoperability. Then you look at an approach like Google. Google was always about the technology, but not necessarily about the enterprise customer. They come out with Anthos which is allowing you to have interoperability in more cloud. They're not nearly as big, but their growth rate is much higher. Law of numbers, of course. But it really is interesting to see how these cloud players are going to approach this because multi-cloud is happening whether they like it or not. >> Well, I'm glad you brought up multi-cloud in a context of what the data's showing 'cause I would agree we're, and particularly two areas that I would call out in ETR data, VMware Cloud on AWS as well as VM Cloud Foundation are showing real momentum and also OpenStack from Red Hat is showing real progress here and they're making moves. They're putting great solutions inside of AWS, doing some stuff on bare metal, and it's interesting to see. VMware, basically it's the VMware stack. They want to put that everywhere. Whereas Red Hat, similarly, but Red Hat has the developer angle. They're trying to infuse Red Hat in throughout everybody's stack, and so I think Red Hat is going to be really interesting to, especially to the extent that IBM keeps them, sort of lets them do their own thing and doesn't kind of pollute them. So, so far so good there. >> Yeah, I agree with that. I think you brought up the good point about it being developer-friendly. It's a real option as people start kicking a little bit more of new, different developer ways and containers are growing, growing more. They're not testing anymore, but they're real workloads. It is a stack that you could really use. Now, what I would say to caveat that though is I'm not seeing any net new business go to IBM Red Hat. If you were already aligned with that, then yes, you got to love these new tools they're giving you to play with, but I don't see anyone moving to them that wasn't already net new there and I would say the same thing with VMware. Listen, they have a great entrenched base. The longer they can kick that can down the road, that's fantastic, but I don't see net new customers coming onto VMware because of their alignment with AWS. >> Great, thank you for that. That's a good nuance. Number eight, cloud, containers, AI and ML and automation are going to lead 2021 spending velocity, so really is those are the kind of the big four, cloud, containers, AI, automation, And, Erik, this next one's a bit nuanced and it supports our first prediction of a rebound in tech spending next year. We're seeing cloud, containers, AI and automation, in the form of RPA especially, as the areas with the highest net scores or spending momentum, but we put an asterisk around the cloud because you can see in this inserted graphic, which again is preliminary 'cause the survey's still out in the field and it's just a little tidbit here, but cloud is not only above that 40% line of net score, but it has one of the higher sector market shares. Now, as you said, earlier you made a comment that you're not necessarily seeing the kind of growth that you saw before, but it's from a very, very large base. Virtually every sector in the ETR dataset with the exception of outsourcing and IT consulting is seeing meaningful upward spending momentum, and even those two, we're seeing some positive signs. So again, with what we talked about before, with the freezing of the IT projects starting to thaw, things are looking much, much better for 2021. >> I'd agree with that. I'm going to make two quick comments on that, one on the machine learning automation. Without a doubt, that's where we're seeing a lot of the increase right now, and I've had a multiple number of people reach out or in my interviews say to me, "This is very simple. These projects were slated to happen in 2020 and they got paused. It's as simple as that. The business needs to have more machine learning, big data analytics, and it needs to have more automation. This has just been paused and now it's coming back and it's coming back rapidly." Another comment, I'm actually going to post an article on LinkedIn as soon as we're done here. I did an interview with the lead technology director, automation director from Disney, and this guy obviously has a big budget and he was basically saying UiPath and Automation Anywhere dominate RPA, and that on top of it, the COVID crisis greatly accelerated automation, greatly accelerated it because it had to happen, we needed to find a way to get rid of these mundane tasks, we had to put them into real workloads. And another aspect you don't think about, a lot of times with automation, there's people, employees that really have friction. They don't want to adopt it. That went away. So COVID really pushed automation, so we're going to see that happening in machine learning and automation without a doubt. And now for a fun prediction real quick. You brought up the IT outsourcing and consulting. This might be a little bit more out there, the dark horse, but based on our data and what we're seeing and the COVID information about, you said about new projects being unwrapped, new hiring happening, we really do believe that this might be the bottom on IT outsourcing and consulting. >> Great, thank you for that, and then that brings us to number nine here. The automation mandate is accelerating and it will continue to accelerate in 2021. Now, you may say, "Okay, well, this is a lay-up," but not necessarily. UiPath and Automation Anywhere go public and Microsoft remains a threat. Look, UiPath, I've said UiPath and Automation Anywhere, if they were ready to go public, they probably would have already this year, so I think they're still trying to get their proverbial act together, so this is not necessarily a lay-up for them from an operational standpoint. They probably got some things to still clean up, but I think they're going to really try to go for it. If the markets stay positive and tech spending continues to go forward, I think we can see that. And I would say this, automation is going mainstream. The benefits of taking simple RPA tools to automate mundane tasks with software bots, it's both awakened organizations to the possibilities of automation, and combined with COVID, it's caused them to get serious about automation. And we think 2021, we're going to see organizations go beyond implementing point tools, they're going to use the pandemic to restructure their entire business. Erik, how do you see it, and what are the big players like Microsoft that have entered the market? What kind of impact do you see them having? >> Yeah, completely agree with you. This is a year where we go from small workloads into real deployment, and those two are the leader. In our data, UiPath by far the clear leader. We are seeing a lot of adoptions on Automation Anywhere, so they're getting some market sentiment. People are realizing, starting to actually adopt them. And by far, the number one is Microsoft Power Automate. Now, again, we have to be careful because we know Microsoft is entrenched everywhere. We know that they are good at bundling, so if I'm in charge of automation for my enterprise and I'm already a Microsoft customer, I'm going to use it. That doesn't mean it's the best tool to use for the right job. From what I've heard from people, each of these have a certain area where they are better. Some can get more in depth and do heavier lifting. Some are better at doing a lot of projects at once but not in depth, so we're going to see this play out. Right now, according to our data, UiPath is still number one, Automation Anywhere is number two, and Microsoft just by default of being entrenched in all of these enterprises has a lot of market share or mind share. >> And I also want to do a shout out to, or a call out, not really a shout out, but a call out to Pegasystems. We put them in the RPA category. They're covered in the ETR taxonomy. I don't consider them an RPA vendor. They're a business process vendor. They've been around for a long, long time. They've had a great year, done very, very well. The stock has done well. Their spending momentum, the early signs in the latest survey are just becoming, starting to moderate a little bit, but I like what they've done. They're not trying to take UiPath and Automation Anywhere head-on, and so I think there's some possibilities there. You've also got IBM who went to the market, SAP, Infor, and everybody's going to hop on the bandwagon here who's a software player. >> I completely agree, but I do think there's a very strong line in the sand between RPA and business process. I don't know if they're going to be able to make that transition. Now, business process also tends to be extremely costly. RPA came into this with trying to be, prove their ROI, trying to say, "Yeah, we're going to cost a little bit of money, but we're going to make it back." Business process has always been, at least the legacies, the ones you're mentioning, the Pega, the IBMs, really expensive. So again, I'm going to allude to that article I'm about to post. This particular person who's a lead tech automation for a very large company said, "Not only are UiPath and AA dominating RPA, but they're likely going to evolve to take over the business process space as well." So if they are proving what they can do, he's saying there's no real reason they can't turn around and take what Appian's doing, what IBM's doing and what Pega's doing. That's just one man's opinion. Our data is not actually tracking it in that space, so we can't back that, but I did think it was an interesting comment for and an interesting opportunity for UiPath and Automation Anywhere. >> Yeah, it's always great to hear directly from the mouths of the practitioners. All right, brings us to number 10 here. 5G rollouts are going to push new edge IoT workloads and necessitate new system architectures. AI and real-time inferencing, we think, require new thinking, particularly around processor and system design, and the focus is increasingly going to be on efficiency and at much, much lower costs versus what we've known for decades as general purpose workloads accommodating a lot of different use cases. You're seeing alternative processors like Nvidia, certainly the ARM acquisition. You've got companies hitting the market like Fungible with DPAs, and they're dominating these new workloads in the coming decade, we think, and they continue to demonstrate superior price performance metrics. And over the next five years they're going to find their way, we think, into mainstream enterprise workloads and put continued pressure on Intel general purpose microprocessors. Erik, look, we've seen cloud players. They're diversifying their processor suppliers. They're developing their own in-house silicon. This is a multi-year trend that's going to show meaningful progress next year, certainly if you measure it in terms of innovations, announcements and new use cases and funding and M&A activity. Your thoughts? >> Yeah, there's a lot there and I think you're right. It's a big trend that's going to have a wide implication, but right now, it's there's no doubt that the supply and demand is out of whack. You and I might be the only people around who still remember the great chip famine in 1999, but it seems to be happening again and some of that is due to just overwhelming demand, like you mentioned. Things like IoT. Things like 5G. Just the increased power of handheld devices. The remote from work home. All of this is creating a perfect storm, but it also has to do with some of the chip makers themselves kind of misfired, and you probably know the space better than me, so I'll leave you for that on that one. But I also want to talk a little bit, just another aspect of this 5G rollout, in my opinion, is we have to get closer to the edge, we have to get closer to the end consumer, and I do believe the CDN players have an area to play in this. And maybe we can leave that as there and we could do this some other time, but I do believe the CDN players are no longer about content delivery and they're really about edge compute. So as we see IoT and 5G roll out, it's going to have huge implications on the chip supply. No doubt. It's also could have really huge implications for the CDN network. >> All right, there you have it, folks. Erik, it's great working with you. It's been awesome this year. I hope we can do more in 2021. Really been a pleasure. >> Always. Have a great holiday, everybody. Stay safe. >> Yeah, you too. Okay, so look, that's our prediction for 2021 and the coming decade. Remember, all these episodes are available as podcasts. All you got to do is search Breaking Analysis podcast. You'll find it. We publish each week on wikibon.com and siliconangle.com, and you got to check out etr.plus. It's where all the survey action is. Definitely subscribe to their services if you haven't already. You can DM me @dvellante or email me at david.vellante@siliconangle.com. This is Dave Vellante for Erik Bradley for theCUBE Insights powered by ETR. Thanks for watching, everyone. Be well and we'll see you next time. (relaxing music)

>> From Boston, (upbeat music) Massachusetts, it's the Cube, covering Actifio 2019, Data Driven. Brought to you by Actifio. >> Welcome back to Boston everybody. You're watching the Cube, the leader in on the ground tech coverage. My name is Dave Vellante. Stu Miniman is here. John Furrier is also in the house. This is Actifio's Data Driven conference, the second year that they've done this conference, #DataDriven19. Ash Ashutosh is here. He's the founder and CEO of Actifio, a good friend to the Cube, great to see you again. Thanks for coming on. >> Likewise Dave. Always good to see you. >> Yeah, so second year. You chose Boston, that's great. Last year was Miami at the very swanky Fontainebleau Hotel. >> Yup. >> It's a great location. >> Yup. >> Right in the harbor here. So you've got a nice crowd, and you guys focus on the substance, you know. Not a lot of Actifio marketing stuff coming out, as you market through substantive content. Explain that theory. >> Yeah. Well, I think from inception, there's a very fundamental culture the company has had is about driving customer success, and that is the number one and probably the only one that we drive by. And if you truly are focused on customer success, when you bring a whole bunch of customers together, having more customers talk about their success, so that they help and share with other customers who are looking for some of these initiatives, almost becomes natural. People become tired of seeing and sometimes even participating in our own user conferences, where you would bring a whole bunch of very enthusiastic users, lock the doors, and start talking about your vision, and start talking about your roadmap, your new line, your new partnership. One, we believe we should be doing that throughout the year with our customers. Two, we felt it was a lot better if the customer actually talked about how it mattered to them versus how it mattered to us as Actifio. So that was the theme for why Data Driven, in general, and even before that, you used to have some colleague cloud summit as you were transitioning into use of hybrid cloud in 2016. Across the board, I think this is one theme you'll hear from Actifio and the users who are here is we pay a very, very close attention to what users want, and we give them a forum to explain that to share with other users across the world. >> Well, it sounds like a great way to build a company, you know, focus on the customer and the customer success. Sounds simple, it's not. It's very challenging, and you've been a successful entrepreneur. When I've asked you in the past and David, you know, kind of why you started the company, you focused on a problem, and you guys created the category of copy data management, which is a problem. We had copies everywhere, copy creep, and you felt as though, okay, we can help people not only organize that but maybe even get more out of their data. >> Yeah. >> And so, and that has evolved, and obviously on that journey, people wanted to use you for backup. I mean, that's the big problem. >> Yeah. >> And so you created the category. You kind of monetized the backup space and tried to change the way people thought about that, and then all of a sudden, all this VC money sort of flowing into the whole space. >> Yup. >> From your standpoint, what's going on in the marketplace? Why is it so hot today? >> Yeah. Well I think, as you'll see at this conference, there is absolutely no doubt about how data is a strategic asset, and you'll see the more reason acquisitions of Tableau, of Looker, or even Qualtrics, where the use of data, which is what actually users see, has become one of the killer apps for anybody who is running a cloud. Your own business here, right. It's a use of data, and that's the first app that's out there, that's happening across the board. But right behind that, there's an entire ecosystem about supplying that data to these applications that becomes really important. And we figured this out almost nine years ago. We figured out that for an enterprise, having data available as a strategic asset, wherever, whenever they need, and whoever, as long as it complies with the operations requirements. Instantly is absolutely what we should provide. Now in order to do that, the first place to make it available for users was to capture it. And the best place to start was backup, and we always treated copied data, journey begins with capturing data, and backup happens with the best use case, one that you already spend money on. And that's how we always treated backup as a starting point for the journey. We have over 3,600 enterprise users who range from some of the largest financial services, energy, retail, airline industries, service providers, and the focus has been on companies that are at least $500 millions of (mumbles) more normally for a billion or more who really view data as a strategic asset in their digital transformation. And almost 78 percent of our business now comes from people, they are (mumbles) applications faster. So a small person did almost 20 percent now is coming from people using Actifio data for running machine only analytics faster. And almost 100 percent of them obviously collect the data from backup. That's how we view the market. We view it as application, analytics, machine learning, DevOps, down, and infrastructure happens to be a place where you start. It's not lost on anybody in the market that data is important. It's not lost on investors who see this as an opportunity to pursue in a different way. And so you have different approaches being taken, one that starts with more infrastructure, (mumbles) has provided infrastructure to keep all this (mumbles). And we've always focused on the one thing that really matters to the customer, which is applications, and one that matters to every other application that's using this application, which is the data for this application the point in time. So you see a lot of backup-centric appliances. You see a lot of consolidation appliances. So it's a bottom-up approach. It's a great approach for people who want to buy another single-purpose storage. We fundamentally believe you're not going to be a lot on the storage system. We think this, there's a lot of companies who do a phenomenal job, and we're better off being suppliers of a multi-cloud data management, multi-cloud copy data management, and to leverage all this infrastructure. >> No box. >> Completely no box. In fact, that is the reason why we think 2016, when we saw the emergence of cloud in our user community, it took us two years, but we have the world's best multi-cloud, just copy data and data management. The largest software company, enterprise software company in the world uses Actifio today to manage their SaaS offerings in four different public-wide platforms. We couldn't do that if you had a box. You could not. I mean-- >> Because it wouldn't scale. >> Well, firstly, you can't take your box and go into a cloud. They already have infrastructure. >> Right. >> You can't bring the scale out stuff, because they already have scale out. You can't take your scale out and put in another scale out. And if you start from bottom up, you're fundamentally providing infrastructure on top of an infrastructure that's already provided as a service. What you really needed to do was to allow the applications to come back and use any infrastructure that is most relevant for their workload, for their use case, and most importantly, for that particular time. It's really important, especially if data is persistent. It stays there for 20, 30, forever. And the opportunity for me to come back and leverage infrastructure there just happens to be the right one. That's what we try to describe. >> We always say at the Cube that the difference between a business and a digital business is how the business uses data, how it leverages data. >> Yeah, yeah absolutely. >> So that's been a real tailwind for you. You guys have been on the, you know, data virtualization, it was part of that. You know, it seems to me that one of the challenges that incumbents have is their data is locked inside. Frank James talked about it today, and sort of his maturity model. Actually no, it was Brian Regan, >> Yup. >> talking about the extension maturity model. >> Yup. >> Through the early stages, it's siloed. And it's not easy to go, you know, from that siloed data that's built maybe around a modeling plant or a bank, you know, to sort of this virtualized vision. So that's something that you guys caught early on. Clearly, digital transformation has been a tailwind for you guys, but how are your customers capitalizing on your solutions to transform themselves into a data driven company? >> Yeah, well the first thing you're seeing is, as I mentioned 2016. In 2016, 100 percent of our use cases were people who wanted a backup NDR solution that was a 100x faster and 50 percent or 90 percent cheaper and manage large sets of data. From 2016 into now, we have a massive shift of almost, between 56 percent on DevOps, another 20 percent on machine (mumbles). Think about it, you have a bunch of customers, large enterprises, whose number one focus is now around how to use data, and these are people who are consumers of data, not custodians of data, who are our previous customers. The best part is as you saw their own evolution of DevOps, the merge of the consumers and custodians managing as an agile system, that's exactly what's happening in our customer base. These are people who maybe have a role of a chief data officer, whose job is to supply data but also make sure it complies with governance rules. So there's a big shift of how data is now the new infrastructure. Data is now the one that I have to provide and enable access to wherever I need. And that does require a very, very different approach then build a box, you know, build something that centralizes all this silos into one place. When you build a box, fundamentally, you create another silo, 'cause you just broke in the whole idea about I need something that just drops down that is more global as a single lane space versus you know a box that is providing a single lane space and somehow, I'm going to assume that nobody else exists in the world. >> Yeah. I want to come back to sort of building a company and your philosophy there. A couple of questions I have for you. So you mentioned cloud and how you embraced cloud early on. You know, Amazon announces a backup service. You know, we talk to the backup vendors, and they say, yeah, but it's recovery, it's wonky, it's, you know, it's really not that robust. But it's Amazon, and you know, if you don't move fast, you know Amazon's going to gobble you up. You saw with the (mumbles), you know. It was down to cloud era, and (mumbles) reeling, it's like, that was going to take over the world. How do you think about that, maybe not in terms of competition, but in terms of staying ahead, of getting, you know, Uber'd by Amazon? >> Yeah. >> Thoughts on that. >> I think, number one, as Amazon and every other cloud provider has proven, and one that started nine years ago, enterprise cloud is hybrid. It's hybrid not just on frame and cloud, but it's also on frame and multi-cloud. Number one. Two, it's about applications. It is not about infrastructure. It is not about providing a single function that ties to a single platform. I as a customer, and we have several of those, I want to be able to manage my enterprise applications exactly the same way whatever cloud platform I choose to have, and that opens up a very different engineering, marketing, sales challenges, and most importantly, keeping the focus on the user. Now if I'm Amazon, I have a focus on my platform, not exactly the 50 other platforms you want to support. >> Right. >> And that's what we focus on. We focus on the 50 other platforms you want to support at the moment. Second, you know, there's this whole notion of a stacked fallacy. You might have heard of this paradigm where it's a lot easier for people on top of the stack to come down. It's a lot harder to go from bottom up. So if you're Amazon, and you're trying to drive infrastructure as a service, it takes a little while to go up the stack. It's a lot easier for somebody like us to come down from the stack, which is why we also announced Actifio GO, our SaaS offering. >> Right. >> That today, our version runs in Amazon, providing a much more robust, much more multi-cloud, much more heterogenous, and much more enterprise class and enterprise grade solution. And we also announced one for Actifio GO for TCV for IBM cloud. >> Yeah. >> And that's how our customers want it. >> And it's a much more facile experience for the customers. It seems to me that it makes sense what you're saying is you're happy to build on top of Amazon's infrastructure. For them, you know, frankly, people always say, oh, is Amazon going to get into apps? To me, yeah, maybe some day. They don't have to. Give developers tools to build apps seems to me. Last question I have is just the philosophy of building a company. You know, you've raised I think $200 million since inception. That's a lot of money. Software's a capital efficient business, but it fails in comparison to some of what the west coast companies have done. You know, you guys, you know, I'm from Massachusetts, where maybe more conservative. You are very deliberately building a company. How do you think about, you know, the craziness in the west coast. I call it craziness, but it obviously works. You (mumbles) storage, you know, they hit escape velocity, TSX had a very successful IPO. >> Yeah. >> You're kind of slow and steady. Your philosophy there, explain that. >> Yeah, I think a couple of things. One, it was about creating a sustaining company that was growing responsibly. And two, it's also the speed of how much our customers in the market can absorb a paradigm like what we are trying to drive. And most importantly, the class of customer you're focused on. These are, like I said, $1 billion plus in revenue and above. >> Yeah. >> Sales process for them is longer, which is actually where the money goes. The money isn't on software development. It's about supporting these customers on their initiatives. Any of these customers are somewhere about eight years with us and continue to expand. Some of the largest financial institutions have started with about $500,000 and almost $20 million with us. So that journey of making the customer successful costs money, but it builds long-standing customer whose foundation is built on Actifio. We are the data provider for these customers. We are not a widgit who throws something in there and calls you in three years when your maintenance is up. That is not the business we're building. So I don't think it's about east coast, west coast as much as it's about what we deliver requires being at the customer's side, working with them for years, as they go through the transformation, and I don't think we can do that by supporting 10,000 users at the same time. Maybe we can support 1,000, 2,000. And that's just the product and the market is going now. >> True to your mission, close to the customers, you know, clear differentiation at the app levels, I'm going to just say top down. You guys didn't talk about it, but you know, database affinity, some of the unique things you have going on there. Ash, it's great to see you. Congratulations on all your success, and you'll keep it going. Really appreciate it. Have a good day. >> All right, you're welcome. >> Thank you again. Welcome again for Data Driven 19. >> All right. It's great to be here. Actifio Data Driven 19, day one, the Cube, from Boston. We'll be right back right after this short break. >> Thank you. (upbeat music)

>> Live from San Francisco, it's theCUBE covering IBM Think 2019. Brought to you by IBM. >> Hey, welcome back everyone, we're here live with theCUBE's coverage in San Francisco, the Moscone Center for IBM Think 2019. I'm John Furrier, my co-host David Vellante. Dave, we've been doing theCUBE 10 years, our second ever CUBE event was SAP SAPPHIRE, so going back into the archives. >> Great memories. >> SAP, we've been watching the SAP evolve, we've got two guests from SAP. Scot Henney, Global VP of SAP Customer Experience CX and Marcus Venth, who's a Global VP of S/4HANA, Business and Market Development, talking about enterprise, intelligence, making data, making it reason. We've been covering you guys and I got to say, Bill McDermott has always been on the front wave of all the big waves. He was talking about data and iPads right at the beginning. And the things he was talking about in 2012, 2013 is what everyone is doing today. >> Yes. >> This has been a big part of SAP, not new to you this transformation, how's the journey going? How's the partnership going with IBM? >> So, the relationship that we have with IBM is, I guess, about 40 years old and we're not even halfway done yet. You know, we're still working together and successfully delivering great business outcomes for our customers, and I think that's because not only do you have great global reach and scale, but you also understand how data and business processes impact business outcomes. Both in the back office and also in the front office too. So you were mentioning Bill McDermott. We have a phrase with inside SAP CX called, "Be Bold." Right, it's really taken in on the mantra for us and we're making some really bold acquisitions with inside the front office space. So, one of the ones he's done recently that's really focused on data is around Qualtrics. >> Yeah Huge, huge acquisition for us about experiential data and how we bring that back to organizations and we're really keen to work with IBM on that too. >> He said that was a game changer on his press conference. I watched that, I was really interesting acquisition. >> Yeah, bold move. >> Because you bring in real time data, you bring in real telemetry, real analytics, all this stuff together in a kind of new powerful way, with an existing system that SAP has been powering business software, in all these apps, what does it mean? Does this make this enterprise more intelligent, is that where is connects? What's some of the key things there? >> So, that's a really good question. So, if you can connect the back office to the front office and then create trusted relationships, then you're going to deliver a better customer experience. And that has a huge impact on shareholder value. Specifically around Qualtrics. That enables to move that next level on into what we call the experience economy. So, not only do we understand implicit data and explicit data like you were just saying before, how many people have just seen that mail, but also how they react to you. But we could also say, "What do they feel about you? "What else would they like you to do?" "What relationship do they currently have with you "and what would they like to see improve?" >> This is interesting, one of the things we talk about all the time at theCUBE is, you know, 'cause we're in the information business, we're a media company. Information's everywhere. >> Yeah >> It's knowledge and experience is the new thread. >> Totally. >> So the outcome is the word you used to use but now you're thinking, okay, if experience and presence and knowledge, this is a new kind of user experience. Is that what the intelligent enterprise is? I mean, what is the intelligent enterprise? Give us the definition. >> Right, so I think I can take that one. So, simplistically it's about taking data that you've referenced earlier on and applying new technologies to ultimately make business processes or optimize business process or come up with entirely new business models. You know, we talk about Uber and Airbnb and all these but the reality is that there are new business models being enacted within certain industries. Whether it's direct to consumer type changes or changes moving from a productized, or selling products to selling services. And so when we look at intelligent enterprise it's about taking your business partners, which are the stakeholders that make you as a company successful, that would be your customers, your suppliers, your employees and connecting them. And then ultimately leveraging the data that you're collecting as part of those business processes, applying machine learning technology, and then looking at how can we make that more efficient, or how can we now leverage that data to create new insights that then tie in to the customer experience side of things. >> You know it's interesting, John, you talk about McDermott during the big data craze. Bill McDermott never really used that term, at least not that much, but he did talk about the importance of fast data being able to respond quickly. Obviously SAP customers have a lot of data. And so you've got this platform now, this sort of data platform. How are customers making investments to, sort of, alter or modernize that data platform for this purpose? >> So, the digital platform is really interesting because what we're looking for if we look at the sort of components of an intelligent enterprise is three components. There's the intelligence suite which includes the digital core, then there's the platform, and then we have the intelligent technologies like machine learning and artificial intelligence wrapped around all of that. The platform is really helping our customers get to a more standardized approach. Where it's helping them integrate the applications within the suite. It's also a platform with which they can then implement these machine learning scenarios. It's a platform which with they can innovate and build new applications and allowing them to do that means that they can keep their core standard. And that's the key now as customers are thinking more and more about moving to the cloud, it's all about how do I keep my core clean and standard and allow myself to take advantage of those innovations and then move some of those customer specific innovations to the platform and then layer a UI on top of that, that basically means the end user doesn't know which system they're in, they're just leveraging an integrated suite. >> Substracting all the complexities and all that intelligence out. >> Yeah >> What are the obstacles for, it sounds easy, but it's not, it's hard. What are the obstacles, what's it take? Culture, we always talk about cultural sift. >> I mean, the easy, easy one is the organizational challenges, right? We see that the executive support, the charter, having clearly defined objectives and having the talent in-house that has the courage and the skillset to implement those changes. But I think one of the biggest challenges we see touches on what I was saying before where we have a highly customized environment with lots of disparate applications that really are poorly integrated and then trying to get the customers to then move that to a new platform is very difficult. So, with that, they need the courage, in many cases, to leave that stuff behind, right? >> Completely, and I completely concur. So that's the same challenge that we find in the front office. So, we aim to create a phenomenal experience platform for our clients, but unless they're reorganized internally, to remove those siloed thinking around what do sales do, what does marketing do, then they're not going to be able to fully utilize the tools and platforms that we deliver. So, it's actually about a mind shift change and about focusing on the customer. >> I'd like to get your perspective, since you're here, 'cause we go to a lot of events, we go to 120 events last year. We go to CloudNative, Computing Foundation, AWS re:Invent, we're here at IBM Think, we used to go to SAP Sapphire, but that's a different story. But one of the things we hear about is we see new trends like Kubernetes and containers. People are doing it, but they're doing it kind of like in an experimental way, or doing it, you guys are actually implementing technology with customers. >> Yes >> Integrating it in, like, mission critical kind of integrations. You're not standing up to Kubernetes, saying, "Hey we've got a Kubernetes cluster, look at this." In one or two apps, what's your experience with it 'round the integration? Because putting these piece parts together is hard. What are some of the trends that your customers are doing around really standing up cloud-native, intelligent enterprise, apps, what is some of the real use cases that our people are doing? >> I guess first of all, if we're dealing with the SAP portfolio, we're delivering a lot of those integration points out of the box, so that sort of takes away a lot of the guesswork when we talk about integrating sort of disparate applications. And I think one of the key aspects of that is just having, the plumbing is not good enough. You really need to have a data strategy around that where our data hub is then able to provide a consistent master record strategy. Where these systems can then seamlessly talk to each other. 'Cause one of the biggest problems in integrations is not the plumbing, it's actually having these systems being able to talk to each other and rationalize this information. >> Can we, maybe, do a before and after example? I mean, take a supply chain example. So, what's the before look like? What's the after, ideal after state look like, or the sort of outcome that you're looking for? >> So let's take an example, right? Let's say you're buying goods from a supplier and you now want to be connected to that supplier so that you can see where those goods are in transit. And then you want to be notified when there's a delay in those goods so that they can then adjust your production plan to make sure you're still accommodating a customer's order cycle. Now let's say, for instance, that we start recognizing a pattern, or the system starts recognizing a pattern, that every February we seem to see a five day delay, for whatever reason. Now the system can automatically start applying an additional lead time and accommodating for those changes automatically. So, that's what we think of when we think about an intelligent enterprise. It's about an enterprise that live and able to adjust and therefore able to build the trust with the customers in order to fulfill their expectations. >> I think that's a really, really important point. Can I answer that from a customer perspective? >> Yeah, please. >> Please. >> Because we're all consumers as well, of services, and also within our business lives. I think what you want, as a customer, after you've used our services and our systems, is you want to be treated like a person, right? And you want to feel like your data has been treated with some respect, yeah? And then you want to feel that promise that customer has, sorry, that business offered you is being kept. So, you want to be treated like a person, I wasn't just a transaction to you. You understand what I needed, right? And then, you treated my data appropriately. I can trust you with our relationship and I know that you're going to fill in the promise. That's what our platform delivers >> Yeah, 100%, I mean-- >> Yeah >> I ordered something, I want to know if it's not here when you said it was going to be here? I want you to either tell me, tell me why, or do something about it, not force me to call you and find out. I mean that's, it's proactive, it's anticipatory. Not reactive, or no active. >> You got it and that can only be done if you integrate the front office to the back office. And that's what IBM and SAP are working on right now. >> That's great, I mean, that's the greatest segue into my question, which is, here in San Francisco IBM Think 2019, moved from Vegas, now they're doing so, so great. Great venue 30,000 people. What kind of conversations were you guys having here at the show? Take us through a kind of day in the life. What kind of meetings did you have, what were people talking about, what's on the top of minds of meetings, your customers, and your partners at IBM? >> Well, from my perspective, there's a lot of discussion around how to move toward the cloud and what tools we have available, and so with the collaboration with IBM, they've made a tremendous investment in SAP and SAP technologies. They've built the impact assessment tools to help customers evaluate the value and the cost of making that move. And they've also invested in the impact solution, which is the content and pre-configuration to help accelerate implementations and move towards that standard. So, a lot of the discussions I'm having with customers are taking mission critical applications and moving them to the cloud. with the support of partners like that, yeah. >> And at a speed What kind of speed? It used to be weeks, months, days, now what? Cycle time for moving. >> If you go to some of those presentations there's 12, 16 week implementations out there, right? >> And when you say moving to the cloud one could infer actually moving but it may not be moving, it may be bringing the cloud model or operating model to the data, is that fair? >> Absolutely So, when we're looking at the cloud, it's not necessarily a wholesale shift. It could be a hybrid model where we're bringing subsidiaries up on the cloud and looking at more of a two tier deployment model where we're looking at an on-prem for the core business and cloud models for subsidiaries. >> It's funny the apps are driving dictating workloads or dictating what resources and architecture to it. >> So, I've had some really exciting conversations here. I was really really impressed with the conversations I had with the IX teams in IBM but also with the GBS teams. >> What's the IX teams? >> They're a-- >> Experience. >> Okay, okay. >> VR, ART, cool stuff. >> That's it, really, really cool, forward-thinking group of design-thinking experts focused on customer experience. So, the total adjustable market opportunity for CX, commerce, marketing, sales, service is over 30 billion per year. So, I don't have to come in and tell anyone what the size of the market opportunity is, the question is, where do we begin, because there is so much opportunity ahead of us. All of our market is investing around, how do I deliver better customer experience, and that's because it has a really tangible business impact. I mean, I guess, 80% of consumers have said that they have changed brands because of poor customer experience. That's a huge financial cost. And organizations that deliver better customer experience have over 200% more shareholder value delivered back. So, we've got a great business case\ and a great platform, where do we point the gun? >> You know, they bring up a good point, I want to hear your thoughts. Dave and I, internally our research team, had looked at all the successful companies that we cover. >> Yeah >> And look at the successful ones, and, you know, the not so successful ones, and look at why they are successful. And the winners, at the top of the heap, have design thinking in all of their methodologies. >> Yes >> We just had Accenture's Innovation kickoff last week. Design thinking is at the core of this. Can you give us your view on why that's the case? I mean, I'll see, I'm thinking design, is that just customer experience? Is having more or other impacts in terms of other aspects of tech, why is design thinking such a critical component, design thinking a critical component, of these new innovations? >> 'Cause I think people are, okay. So I think thinking is the operative word there. You've got to think about your customer and what they want from you. And what you've got to think about is how do I deliver a service that is compelling to you, rather than a product you may want through a channel you may choose to buy on? So, if you look at all of those organizations, they've gone through that process of thinking, "How does digital improve my customer relationship?" Because ultimately, if you don't own your customer, then you're out of business really soon. >> Marcus, bring intelligent enterprise now in context to that. Does that close the loop on intelligent enterprise equals customer relationships and impact on outcome? Am I, how does that-- >> Intelligent enterprise definitely plays a part in that, right? So I mean, when we're looking at the intelligent enterprise, especially the intelligent suite, we're really tying all the interim components together. Whether it's dealing with your employees, your suppliers, or your customers, right? So, it's really about the full end-to-end process. My particular area is around the digital core, so that's order to cash, procure to pay, order fulfillment, revenue, these are mission critical applications, right? So, when it comes to making that transformation this is not just some thing that you want to take lightly. That's where the partnership with IBM and SAP really counts. 'Cause those are the sort of partners that you want with that kind of transformation. >> You know what's interesting John? I'll make an observation. If we go back to the early days of ERP >> Yeah >> It wasn't clear that SAP was going to win. It was hard to squint through. But if you could've bet on the companies, invested in the companies who adopted ERP early, despite its complexity and the time it took, you actually could have made a lot of money. Because those companies won in the end. And I feel like you guys are on the cusp of the intelligent enterprise narrative of the next wave of competitive advantage. >> If you combine experiential data with operational data, we're going to blow past the competition and create a whole new market category. Thanks for that observation. I completely agree. >> Yeah, and it's back to your front office back office qualigers and that's why McDermott was all giddy about the acquisition. He was like a kid in a candy store. >> We're all in. >> A spring in his step. >> We're all in. >> We don't want Billy, he's already cool. >> Be bold, be bold >> Yeah. He must do a lot of handshakes. Guys, thanks for coming on theCube. Thanks for sharing that insight. Thanks for clarifying the SAP position. Great innovation. Love following you guys, we think highly of the company. Been following you guys for 10 years and look forward to continuing to track it. SAP here on theCUBE talking about innovation, design thinking, customer experience, and intelligent enterprise. theCUBE is bringing all that intelligent data to you live here in Moscone. Stay with us for more coverage after this short break. (techno music)

>> Live, from San Francisco. It's theCUBE. Covering IBM Think 2019. Brought to you by IBM. >> Welcome back to theCUBE's coverage of IBM Think 2019. Here in Moscone, we're talking so much multi clouds. It's been raining all day, really windy. To help us wrap up our third day, what we call theCUBE Insights, I have our co-CEO, Dave Vellante. I'm Stu Miniman and happy to welcome back to the program. It's been at least 15 times on the program, I think our counter is breaking as to how many you've been on, Ray Wang, who is the founder, chairman and analyst with Constellation Research, also the host of dDsrupTV who was gracious enough to have me on the podcast earlier this year, Ray. >> Little reciprocity there, Stu. >> Hey, we got to get you back on, this is awesome! Day three is wrap-up and this is going to be fun. >> Ray, as we say, theCUBE is everywhere, except it's really a subset of what you and the Constellation Research team do, we see you all over the place so thanks for taking time to join us. Alright, so tell us what's going on in your world, Ray. >> So what we're seeing here is actually really interesting, we've got a set of data-driven business models that are being lit up, and you see IBM everywhere in that network. And it's not about Cloud, it's not about AI, it's not about security, it's not about Blockchain. It's really about companies are actually building these digital networks, these business models, and they're lighting them up. IBM-Maersk, we saw things with insurance companies, you see it with food trust, you see it with healthcare. It's happening, and it's the top customers that are doing this. And so it's like we see a flicker of hope here at IBM that they're turning around, they're not just selling services, they're not just selling software, they're actually delivering these business models to executives and companies, and the early adopters are getting it. >> Ray that was one of the questions we had, is what's the theme of the show and-- >> There is no theme! >> You're giving us the theme here of what it should be because we talk digital, we talk cognitive, we talk all these other big thought-y words because we need to think while we're here, right? >> We need to think, we need to think! No, but the thing is this is a theme-less show, people can't figure it out but the main thing is, look, I've got a problem, this digital disruption is happening, my business models are changing. Help me be part of that shift, or I may go away! And people realize that and that's what they're starting to get, and you see that in all the reference customers the people that were on stage. The science slams were also really great. I don't know if you had a chance to catch those but the science slams were kind of a flicker into research, IBM research which is the heart of IBM, is coming up. They're going from concept to commercialization so much faster than they used to be, used to be research would do a project people are like, that's kind of cool, maybe I'll adopt it. They're now saying hey, let's get this into the market, let's get into academia, let's get early adopters on board. >> So Ray, what do you make of the Red Hat deal? What does it say about IBM's strategy? Do you like the deal? What does it say about the industry at large? >> It's a great question. The Red Hat deal to me was overpaid, however, at 20x multiples, that's what PE firms are paying. So every vendor is now competing with PE firms for assets. Red Hat, at about 9x, 10x? Makes a lot of sense, at 20x? It's kind of like, okay, is this the Hail Mary or is this the future strategy or is this basically what the new company is? I would have rather taken that money and put it into venture funds to continue what they're doing with these network models. That would have been a better strategy to me but Red Hat's a great company, you get a great team, you get great COs you get great tooling. >> So you would've rather seen tuck-ins to actually build that network effect that you've been alluding to. Of course that would have taken longer you know, wouldn't have solidified Ginni's legacy. So, it's a big move, a big move on the chessboard. >> Well the legacy's interesting, last year the stock was down some 20-some percent, it's up 20% since January so we're going to see what happens, but it's a doubt component. >> Well I've always said she inherited a bag of rocks from Palmisano at the peak of 2012 and then it got hit hard and she had to architect the transformation. It took, I don't know, five years plus, so, you know, she was dealt a tough hand, in my opinion. >> She had a bad hand, but we've had seven years to play this. I think that's what the market's saying. >> So it's on her, is what you're saying. >> It's now on her. She's got to turn this around, finish the legacy, but you've got a great CEO in waiting with the Red Hat guy. >> Jim Whitehurst you're saying? >> Yeah, he's good >> So she's what, Ginni is 60, 61? Is that about right? >> She's past the retirement age. Normally IBM CEOs would have gone through. >> 61 to 63 I think, is that range maybe, hey, women live longer so maybe they live longer as the CEO of IBM, I don't know. >> She did get a bad hand, but I think when you execute the strategy that money, here's the tough part. Investors are saying, hey, we'd rather take your money, back away from you through stock buybacks, dividends and mergers and acquisitions, and we don't trust you to do the innovation. That's happening to every company, including all of IBM's customers. The problem is if you do that, they're hedging against those companies too. The same investors are taking 50, 100 million, giving it to three kids in a start-up anywhere in the world and saying, hey, go disrupt these guys, so they're betting against their own investments and hedging. So that's the challenge she's up against. >> We talked about in our open for the show here. It's developers, though, that's the business model. We saw IBM struggle for years to get any real traction there, there's little pockets there, they've got great legacy in open source, but Red Hat's got developers. Ray, you go and see a lot of shows, who's doing well with developers out there? >> Microsoft redid their developer network by going younger with GitHub, whole bunch of other acquisitions, this is a great developer buy in that percent. But the other piece that we noticed here was it's the partner developers that are coming in in force. It's not your average developer. I'm going to build a coding and do a mobile app, it's people that work for large system integrators, large networks, small midsize VARs, those are where the developers are coming from and now they have a reason, right? Now they have a reason to build and I think that's been a good turnaround. >> How about Salesforce with the developer angle, what's your radar say there? >> It's not about the developer angle on the Salesforce side, what's interesting about the Salesforce side is Trailhead. This is, like, learning management meets gamification meets a whole LinkedIn training program in the back end. This is the way to actually take out LinkedIn without going after LinkedIn, by giving everyone a badge. There's a couple of million people actually on this thing. Think about this, all getting badges, all training each other, all doing customer support and experience, that's amazing! They crowd-source customer experience and learning right there. And they're building a community and they're building a movement. That's the thing, Salesforce is about a movement. >> Couple of others, SAP and Oracle, give us your update there. >> I think SAP's in the middle of trying to figure out what they have to do to make those investments. We see a lot of partnerships with Microsoft and IBM as they're doing the Cloud upgrades, that's an area. The acquisition of Qualtrics is another great example, 20x. 20x is the number people are now paying for for acquisitions and for assets on that end. And Oracle's going to be interesting to watch, post-Kurian to see how they come at it. They have a lot of the assets, they've got to put them together to get there, and then we've got all these interesting things like ServiceNow and Adobe on the other end. Like, ServiceNow is like, great platform! Awesome, people are building and extending the Cloud in ServiceNow, but no leadership! Right? I mean, you've got a consumer CEO trying to figure out enterprise, a consumer CMO trying to figure out enterprise, and they don't know if am I a platform or am I an app? You've got to figure that out now! People want to work with you! >> Well it is a company in transition at the top, for sure. >> But they can do nothing and still make a ton of money on the way out. >> And they've kicked butt since Donahoe came on, I mean just from a performance standpoint, amazing. >> Oh yeah, performance? You can do nothing and I think it's still going to coast but the thing is at some point it's going to come bite you, you got to figure that out. >> How do you think that Kurian will fit at Google, what's your take there? >> You know, early reactions on Kurian at Google is good, right? The developers are embracing him, he understands what the problems are. Let's be honest, I've said this many times to you guys in private and also in public, you know. It was a mess, it was a cluster before. I mean, you had three years, and you lost traction in the market, right? And it's because you didn't get enterprise, you couldn't figure out partners and, I mean, you paid sales people on consumption! Who does that? You're a sales rep, you're like, I'm not going to do this on consumption! Makes no sense! >> Ray, Kurian had been quoted that no acquisition is off the table, you know, they didn't buy GitHub, they didn't buy Red Hat, do you see them making a 10, 20 million dollar acquisition to get them into the enterprise space? >> Billion. >> Yeah, sorry, 20 billion. >> I think there's a lot that they go after. I know there's rumors about ServiceNow, there's a couple of other things. I think the first acquisition, if I were to make it would be Looker. I mean I love that thing that's on there and buy Snowflake too while you're at it. But we'll see what they do. I think the strategy is they've got to win back the trust of enterprises. People need to know, I'm buying your relationship, I have a relationship, I can count on you to be successful as opposed to, hey, you know, you can get this feature for less and if you do this on a sustained unit or, I want to know I can trust you and build that relationship and I think that's what they're going to focus on. >> Well, come on, isn't Google's business still ads? I mean, that's still where all their revenue is. >> It is, but the other category is $10 billion. That other category of devices and Cloud and all that? That's still a big category and that's where all the growth is. I mean look at this, it's a full frontal assault between Amazon and Google, Amazon Alexa versus Google Home, right? Amazon in ads, $10 billion in ads, going after Google's ad business. Amazon doing an AWS versus Google Cloud. Google's under assault right now! >> Give us the update on Constellation, your conference is really taking off, you've got great buzz in the industry, and congratulations on getting that off the ground. >> And the Tech for Good stuff, loved it. >> Thank you. We had great event, December 10th, talking about the future of the Internet. What it means in terms of, you know, digital rights, human rights in a digital age, was really that conference. Our big flagship conference is November 4th through 7th, it's at Half Moon Bay. We get about 250 CXOs together, about 100 vendors and tech folks that are visionaries and bring them together, that's doing well, and we do our healthcare summits. We brought on a new analyst, David Chou. David Chou, and if you've seen him before, he's like one of the top analysts for CIOs and chief data officers in the healthcare space, he's at HIMSS right now. >> He's awesome, we know him from Twitter. He's been on, he's great. >> Yeah, so we do healthcare summits twice a year and that's been picking up, some of the top thinkers in healthcare. We bring them in to Las Vegas, we do a brainstorming session, we work with them. They think about ideas and then we meet again, so. >> Alright, Ray, we want to give you the final word. We're halfway through IBM Think, what have you been thinking about this and any final musings on the industry? >> So I was very upset last year at how it was run. And I think this has run much better than last year. I think they did a good job. February in San Francisco? Never again, don't do that. I know it's May next year, is when this event's going to be. But I think the main thing is IBM's got to do more events than once a year. If you get enterprise marketing you realize it's at the beginning of the year, it's still sales kick-off and partners. March? March is like closing the quarter, so you do an event in April or May, and you do it in April or May but you have multiple events that are more targeted. This theme-less approach is not working. Right, partners are a little confused but they're here because it's once a year. But more importantly, build that pipeline over the quarters, don't just stop at a certain set of events, and I think they'll get very successful if they do that. >> Alright well, Ray, next time you come on the program, can you please bring a little bit of energy? We'll try to get you on early in the show when you're not so worn down. >> I know. >> Thanks as always. >> Appreciate you coming back on, man. >> Hey thanks, man, it's theCUBE! I love being on this thing.. >> Always a pleasure. >> Alright and, yeah, we always love helping you extract the signal from the noise. We're Dave Vellante, John Furrier, Lisa Martin. I'm Stu Miniman. Thanks for watching day three of theCUBE at IBM Think. Join us tomorrow, thanks for watching. (light music)

>> Narrator: Live from Las Vegas, Nevada, it's theCUBE covering AWS re:Invent 2016. Brought to you by AWS and its ecosystem partners. Now here is your host, John Furrier. >> Hey, welcome back everyone. We are here live in Las Vegas for AWS Amazon Web Services re:Invent 2016, their annual industry conference. The center of the universe in the tech world, 32,000 attendees, broke all records. It grew from 16,000 last year, almost double. I'm John Furrier with theCUBE. We are here getting all of the signal from the noise. Three days of wall-to-wall coverage. Our next guest Ramin Sayar, who's the President and CEO of Sumo Logic. Welcome to theCube, welcome back. >> Very well, thank you much. Nice to be here. >> So, when did you move over to Sumo Logic? >> So interestingly enough, it's two years this Friday. >> Okay so give us a quick update and then I want to dive into the relationship with Amazon. You guys clearly doing big data early. In the wave of the Hadoop is big data, but those other methodologies. Quick history of what you guys are doing now and status of the company. >> Sure. So the company is about seven years old. We were founded, born, actually bred on AWS. We don't have a single server in our place and interesting enough, the premise of founding Sumo, seven and a half years ago, actually was to build a multi-tenant SAAS-based machine data analytics platform to start to address a lot of the security, but also the operational issues that customers were facing. Our founders actually came from a security background and realized that rear-view mirror technologies and looking at historical aspects wasn't good enough. So low and behold, they made a big bet at that time, six years, almost seven years ago, to build exclusively on AWS and today, on an average day, we're ingesting about 70 terabytes of data, we're analyzing over 100 petabytes of data on AWS. >> So talk about the specific implementations. Obviously using all of the services, is there any particular ones, obviously storage, Glacier, you must be using some Glacier, but is it mostly S3, is it ElasticBox Storage? >> S3, C2, we use, obviously, some of the other services, but more importantly, we enable all of the services that AWS provides for their customers to be seamlessly supported by Sumo. So when you log into Sumo or you create a brand new account you give us your credentials, everything from Kinesis to Lambda, to EC2, to ElasticBox Storage, all of those are out-of-the-box that are supported. >> And you guys had a great booth last year. This huge booth, right in the front, with sumo wrestlers. I mean that stole the show in the age of Twitter and Instagram. The share of voice on that was pretty significant. >> Yeah I think there's an underpinning tone there, which is we want to wrangle your data, right. And no one knows big data more than a sumo. And we have earned the right now, after seven years in with 100 petabytes of data that we're analyzing every single day, to be a lot more prescriptive for customers in terms of how to approach the way they build, run, and secure these modern apps. >> We've been following you guys in context of the big data space. I don't think we've had a lot of briefings on the analysis side. I think we should get you guys certainly plugged-in with George Gilbert, our analyst, but what's interesting is the predictive marketing and then a lot of certain verticals were really in early on big data and you guys were there. What's evolved since then? Because now you're seeing, with AWS certainly, you've got streaming, you got redshift doing very well, the services that they've added on over the past few years has been pretty significantly and kind of right in your wheelhouse. >> Yeah. >> John: So what new use-cases are popping up now? What are you guys doing for business? What's some of the profile customers? How are they using Sumo and what's the value for them? >> Great question. So a few things we're seeing. One is with the availability of all these services that Amazon is providing, the cycle time for releasing new code and overall applications is becoming much less. And as a result there's not just a need to move to continuous integration or continuous deployment, it's about continuous updates. So the challenge that brings for a lot of our customers they need real-time visibility. We refer to that as continuous intelligence. So our platform is predicated on the fact that we have near real-time analytics streaming engine that as data is coming in, you can get visibility for your developers, you can get visibility for your operations teams, and you can get visibility for your security compliance teams. So let me give you a couple of examples. You asked for customers, Huddle is one of the customers they spoke about today. >> John: Jeff Frick and I love Huddle. >> Football videos, but you know they support Premier League, they support Aussie rule football, I mean there's a lot of sports right? And so they're uploading video and there's a great service not for just college or high school athletes, but professional athletes to understand their game and analyze their games. So underpinning that, actually Huddle's using Sumo to run their service, to manage their service. Not too distinct from Domo or Qualtrics or other customers like SalesForce, Adobe. We have customers like Land-O-Lakes. We do a lot in media and entertainment, gaming, online retailers. So what do they all have in common? They're either migrating to the cloud, one. Two, they're doing digital transformation or some sort of digital application initiative. Three, they need some way to get visibility real-time into their applications and services from a security perspective, but also an operational perspective. >> What's the driver for customers right now? Because one of the things we hear all the time is people are trying to account for their data. So analytics is kind of like this, well data warehouse was this old mentality, but now smart people started putting into mainstream, but now there's more of a data accountability aspect. The metadata, really valuable. How are customers doing that with you guys? 'Cause I can see them getting their toes wet with Sumo and then getting up and saying "Wow I can use some prescriptive analytics, predictive marketing", whatever the use-case could be, but now you gotta start thinking where's the data coming from and where's it accounted for. Is there a data economy? >> So what's interesting about that, you mentioned metadata, and that's what it's about. Our system, we ingest any type of structured or unstructured data. And we actually analyze a lot of the metadata. In fact, like I mentioned earlier, we're analyzing over 100 petabytes every single day on AWS. And so what we're able to actually help our customers do now is be much more prescriptive and provide insights as to the 1300 customers that are on Sumo, the 74% of them that run on AWS, about a quarter of them are using things like Lambda. Another two-thirds are using EC2, but how? And what types of queries are they doing? And what types of services are they building with Docker containers, or Mesosphere, or others of that type of services? So now we've actually entered a position where we're actually the trusted advisor for a lot of these companies in moving to the cloud, building new, modern apps because we've been doing it for seven and a half years. >> Yeah. >> Ramin: And so the metadata starts to become important because we actually put out a recent survey we called "The state of the modern app". And that whole report was premised on the 100 plus petabytes every single day over a six month period, how are customers using AWS, what services are they using and not using, and what should you consider? The number one thing we found in that report was only half of the customers, of which 74% of the 1300 run on AWS, were actually doing anything with CloudTrail with respect to security. That means the other half are potentially vulnerable to breach. >> John: Yeah. >> John: What percentage? >> 50%. >> So half were exposed. >> Half are exposed >> John: No audit at all. >> Ramin: No audit at all. So now we're actually proactively notifying them saying, "Hey listen for your type of deployment you're using these types of common services. Others similar to you should use the following." >> That brings up a good point. So let's unpack that because what that brings up is a lot of people get into data and they hear all this stuff in the news. Oh big data driven and you know they can drink the Kool-Aid and go "Okay I buy that vision." But there's some pretty urgent issues on the table that people got to deal with in the enterprise and or if they're cloud native and that is security. You mentioned it. I mean that has become such the low-hanging fruit for data analytics. So Splunk being very successful with that. Cyber, we talked to Teresa Carlson earlier. Their public-sector business is exploding, certainly with the CIA and others. I'm sure you guys got some of those clients. But that highlights that yeah that's all fine and dandy to do some nice stuff over here to figure out recommendation engine for this or that, when you got security holes out there. Are you seeing that on your end too? >> Well interestingly enough, that's how we started. We started with the goal of providing analytics and more importantly we wanted to democratize analytics initially for security in the cloud. And so, we actually before Amazon Web Services really built things like PKI or public key encryption or things around encrypting data transfer, we had built that into our system and service. So what we actually are able to do now is not only show how we can encrypt the data and do all this services, but show them how they should actually start to use CloudTrail and how they should architect these modern apps, and what things they should be concerned about from a vulnerability and risk point of view. One of the newest products that we just announced is in early-access around threat vulnerability and threat intelligence because now we're getting a 360 degree view for a lot of our customers because you saw today the hybrid announcement right? That's going to be there for a while. What Sumo allows a lot of our customers to do is from their on-premise data center to their CDNs to all their SAAS applications like SalesForce, or WorkDay, or DropBox, or Box to all those things running on ASH or Amazon and the like, we provide a whole 360 view. And we can actually now >> John: So you get real-time >> John: as well on that? >> Real-time. >> Ramin: So our system and service is predicated on a real-time data streaming engine. >> Yeah so you guys can coexist in multi-cloud world. >> Absolutely. >> John: That's your premise. >> Ramin: No pun intended right? (laughing) >> All right, let's talk about contextual data and what companies should do and why they should get you guys involved in the use-cases of going forward, planning. A lot of conversation here at re:Invent is AWS 2.0. They go on to the next level, Enterprise, a little bit more complicated than say Cloud Native greefield apps. How should they be thinking about their data? You've been doing this for seven years in AWS and you probably have clients that aren't on AWS some are, some aren't, that's the makeup. But generally what's the architecture? What should be holistic concept for CIO, CXO, or down to the practitioner level, what's the guiding principles? >> It starts with a fundamental principle of form follows function. And you know this is a sports analogy, but if you're not formed right, you're not going to function right. So a lot has to do with a conscious decision customers need to make in terms of how they're going to structure their teams and whether they're going to move to a true dev-ops model where they're pushing hourly, daily, weekly, and whether they need to or not for certain applications versus others. And then it goes into function in terms of how they start to architect their applications. What services they need to use. And we've actually learned that over seven and a half, eight years ourselves, seven which years were running on AWS. And so the advice often times we give to a lot of our customers is understand where the mission critical workloads that you need to migrate, categorize those. Second is, which of the greenfield apps you're building and why. And what type of retention and security policies do you need and these are the common services you should probably consider with AWS. And then third is, the other set of applications you don't really care about, leave them for now. Focus on your expertise here. >> It's really triaging the sequence or order of app rollout, basically. Well thanks for coming on theCube. Really appreciate Ramin. I want you to take a minute to close us out and talk about for the folks watching, what's new with Sumo Logic? Why should they be working with you? What's the pitch? What's new? What's relevant for you guys? >> Great, so obviously we're a big data company, but more specifically our service and our strategy was predicated on democratizing analytics. And so we refer to that as continuous intelligence. And so as this digital transformation is taking place, and we're seeing it here, we're seeing it across every part of the businesses, we are well suited for every company that's got either a migration effort or an active, new project going on AWS. And so we can provide a simple, secure, highly scalable machine data analytics platform as a service and that's what Sumo is all about. >> And your business plan for the next year is what? Knock down more customers? Do more product development? All of the above? Channel? What's the strategy? >> So good question. So on one hand we're introducing a new product. We've kind of hinted to some of that today with some threat intelligence. Second is, we just introduced a new product about a month ago that we're starting to monetize. It's about semi-structured data. And third is, we're gonna start to really expand our routes to market and channels. One of the things that we participated in recently with Amazon is the new Amazon SAAS marketplace program. We're in with a handful of companies that participate in design and development there. And so that allows very seamlessly for customers to come try, buy, and decide whether they go month-to-month, semi-annually, or year. >> Well that will accelerate the operational nature of your product. >> Absolutely, but that's the way we sell today. In fact, our whole business model is predicated on land and expand. You're probably familiar with this whole notion of cohorts. >> Yup. >> And that dollar retention. Well the median, if you look at PACCrest and Morgan Stanely and the other firms, tend to be 103 to 105. Best in class tends to be 110 to 115. We've been well north of 160 for 19 straight quarters. >> Well Jassie said that on his keynote today. The bombastic days of handwaving are over. If you don't see it right there, the value, in front of you, don't buy it. >> Don't buy it. >> It's really the marketplace's vision. >> That's marketplace vision and that's what we're all about at Sumo Logic. >> Ramir Sayar, President and CEO of Sumo Logic. Congratulations on your success. Continued success. This is theCube bringing you all the action live in Las Vegas for re:Invent 2016, I'm John Furrier. Be right back with more after this short break. You're watching theCube.