>>from around the globe. It's the Cube with digital coverage of VM World 2020 brought to you by VM Ware and its ecosystem partners. >>Welcome back. I'm stew Minuteman. And this is the Cube coverage of VM World 2020 our 11th year covering the show. And of course, networking has been a big growth story. Four vm where for a number years, going back to the Neisseria acquisition for over billion dollars. Really leveraging all of the virtual networking and SD wins been another hot topic. A couple years ago, it was the Velo Cloud acquisition. And now happy to welcome to the program two of the Velo Cloud business executives. First of all, we have Sanjay you Paul. He is the senior vice president and general manager of that mentioned division of VM Ware. Enjoining him is Craig Connors, whose the vice president and chief technology officer for that same division he was the chief architect of fellow Cloud Craig Sanjay. Thank you for joining us. >>Thank you. >>Thank you. >>Alright, So, Sanjay, first of all nice, you know, call outs and a lot of news that we're gonna get to dig into in the morning Keynote you know Pat Sanjay the team. Uh, you know, a couple of years ago, Pat talked about, you know, the next billion dollar businesses networking your team helping toe add to that. And, ah, a new term thrown out that we're gonna get to talk a little bit about. Our friends at Gartner termed it sassy. So I'll let you, you know, explain a little bit the news that this wonderful new four letter acronym that the Gartner spots that us. Um, why don't you start us there? >>Yeah. I couldn't be more excited to be here at VM World announcing this expansion of what's going on in Ste. Van. So I see Van was all about bringing branch office users to their applications and doing that in a really efficient manner, throwing out all those complex hardware appliances and simplifying everything with software, increasing the quality of experience for the user. But now what has happened is, you know they want security to be dealt off in the same way. Same simplicity and automation, same great user experience. And at the same time, you know, blocking all these attacks that are coming in from various places and covert has just driven that even more meaning that you need to get to networking and network security to be brought together in this simple and automated way while keeping the end user experience be great on while giving I t what they need, which is high security and good manageability. So this acronym sassy, secure access Service edge It really is the bringing together off net networking and network security both as a service. That service angle is really important. And the exciting part about what we're announcing at the at we'd be involved. Here is the expansion off the S, Stephen Pops and Gateways into becoming Sassy pops. And now customers can get a whole slew of services both networking and network security services from the anyway. So that's the announcement. >>Wonderful, Craig. You know, since since since you've helped with so much of the architecture here, I wanna kick out a little bit. When? When it comes to the security stuff that Sandy was talking about. I remember dealing back with land optimization solutions, trying to remember. Okay, wait. When can I compress? When can I encrypt? You know what do I lay on top of it? Um, SD when you know fits into this story, help us understand. What does you Novello Cloud do? What is it from the partner ecosystem? You know, So you know there's there's some good partners that you have helping us. Help us understand. You know what exactly we mean because security is such a broad term. >>Yeah, thanks. So there's four components in the sassy pop that we're bringing together. Obviously, VM Ware Ston is one of those Sanjay mentioned the changing workforce. We have off net users that aren't coming from behind Stu and Branch Mawr and Mawr today. So we also have secure access powered by our workspace. One solution that's bringing those remote users into the sassy pop and then two different security solutions. Secure Web gateway functionality. And that is the next generation secure Web gateway that includes things like DLP and remote browser isolation. And as you saw in the news today that's powered through ROM agreement with Menlo Security. And then we have next Gen firewall ing for securing corporate traffic. And that's powered by our own VM Ware NSX firewall, which has been recently augmented with our last line acquisition. So those are the four key components coming together within our sassy pop. And of course, we also have our continued partnership with the scaler for our our large joint via Mersey Scaler customer base to facilitate that security solution as well. >>Yeah. So, Sanjay, maybe it would make sense. As you said, you've got ah, portfolio now in this market, Uh, got v d I You've got edge walk us. Or if you could, some of the most important use cases for your business. >>Yeah. So you know the use case that has taken off in the last several years since the advent of SD. When is to get sites? So these would be branch offices and a branch office could be an agricultural field. It could be a plane. It could be an oil rig. You know, it could be any one of these. This is a branch office. So these sites how to get them connected to the applications that they need to get access to so telemedicine example. So how do you get doctors, diagnosticians and all that that are sitting in their clinics and hospitals? You get great access to the applications on the applications can be anywhere they don't have to be back in your data centers. You know, after data center consolidation happened, some of the apse you know, we're in the data centers. But then, after the cloud advent came, then the apse were everywhere there in the public cloud, both in I s as well as in SAS. And then now they're moving back towards the edge because of the advent of edge computing. So that's really the primary use case that s Stephen has been all about. And that's where you know, we have staked a claim to be the leader in that space. Now, with Covic, the use cases are expanding and obviously with work from home, you take the same telemedicine example. The doctors and diagnosticians who used to work from hospitals and clinics now have to get it done when they're working from the home. And, of course, this is a business critical app. And so what do you do? How do you get these folks who are at home to get the same quality of experience, the same security, the same manageability, but at the same time, you cannot disturb the other people who are working from home because that is an entire ecosystem. You serve the business user, but you also serve the needs off the home users keeping privacy in mind. So these two cases branch access and then remote access, which great talked about these are the primary use cases, and then they break down by vertical. So depending on whether it's health or it's federal or its manufacturing or its finance, then you have sub use cases underneath that. But this is how we from a from a V C n standpoint, you know, claimed to have 17,000 customers that have deployed our networking solutions. Ah, large fraction of those being our stu and solutions today. >>Yeah. Okay, Craig, one of those terms that gets thrown around a lot in the industry iss scale. I look at certain parts of the market, you know, say kubernetes kubernetes was about, you know, bringing together lots of sites. But now we're spending a lot of time talking about edge, which is a whole different scale. Same thing if you talk about devices and I o t can you speak to us a little bit about, you know, fundamentally, You know that branch architecture, I think, set you up well, but when I start thinking about EJ, it probably is. You know, uh, you know, larger number and some different challenges. So So maybe maybe some differences that happen to happen in the code to make that happen? >>Yeah, absolutely. I mean, I think you know, we've been fortunate in the success that we've had in RST ran deployments. More than 280,000 branches deployed with RST ran solution. So scale is something that's been near and dear to our heart from the beginning. How do you build a multi tenant service in the cloud? How do you build cloud scale? And we brought that aspect into all of these components through container ization, as you mentioned through horizontal scalability, bringing them into our own dedicated pops. Where we control the hardware we control the hyper visor, obviously built on top of the m r E. S s. I that allows us to deliver scale in a way that other competitors may not be able to achieve. >>Yeah, son Sanjay, it's been a couple of years since the acquisition by VM Ware. Give us a little bit of an update, if you would as to, you know, what I'm sure. Obviously, customer reach on adoption greatly increased by by the channel and go to market. But, you know, directionally And you know, any difference in use cases that that you've seen now being part of the M R. >>Yeah, absolutely. No. There's there's been an expansion in the use cases, which is why this fit was very good, meaning Vela Cloud being a part of VM way. So if you look at it, what the wider network does, where the place where you know ties, we tie it all together and tie walk together. If you look at the end User computing, which Greg was mentioning, the clients are digital workspace, workspace. One client. Well, those clients now will connect to our sassy pop. So that's one tie in that obviously we couldn't have and we were an independent company. The other side of it, when you go from the sassy pop into the data center, then we tie into NSX. Not just that the Cloud firewall, but in the data center itself so we can extend micro segmentation. So that's another kid use case that is becoming prevalent. Then the third aspect of this is really when you run inside telecom operators and VM Ware has a very robust business as it goes after telcos with the software stack and so running our gateways running our sassy pops at the telco environment, then gets us to integrate with what's going on with our telecom business unit. We also have what we're doing on our visibility and Tellem entry perspective. So we had acquired a company called Neons A, which were crafting into on edge network intelligence product that then fits into VM Ware's overall. For in the space we have, ah, product suite called We Realize Network Insight. And so that network inside, combined with what we're doing from from a business unit standpoint, gives customers an end to end view from from an individual client through the cloud, even up to an individual container. And so we call this client to cloud to container. All of this is possible because we're part of VM Ware. In the last piece of this is something that's gonna happen. We believe next year, which is edge computing when edge computing comes in. You know, I jokingly say to my team this acronym of Sassy, which is s a s e you gotta insert of sea in the middle. So it becomes s a CSE and out of that pronounced that says sacks E. So I know it sounds a little bit awkward, but that c stands for the compute. So as you put compute in the computer is going to run in the edge, the computer that's going to run in the pop and the sassy is gonna become, you know, sexy. And who better to give that to you than VM Ware? Because, you know, we have that management stack that controls compute for customers today. >>Well, definitely. I think you're you're you're drawing from the Elon Musk school of You know how to name acronyms in products Do so sometimes It's really interesting. Uh, Craig, talk us a little a little bit about that vision to get there, you know? What do we need to do as an industry? How's the product mature? Give us a little bit of that. That that roadmap forward, if you would >>Yeah, I think you know Sassy is really the convergence of five key things. One is this distributed pop architecture. Er So how do you deliver this? Compute and these services near to the customers premise. And that's something that companies like us have have had years of experience and building out. And then the four key components of sassy that we have, you know, zero trust access S t u N next generation firewall ing and secure Web Gateway. We're fortunate, as Sanjay said, to be part of the M where where we don't have to invent some of these components because we already have a works based one and we already have the NSX distributed firewall. And we already have the m r s d when and so ah, lot of companies you'll see are trying to to put all of these parts together. We already had them in house. We're putting them under one umbrella, the one place where we didn't have a technology within VM Ware. That's where we're leveraging these partnerships with memo and see scaler to get it done. >>Sanjay e think the telco use case that you talked about is really important One we've definitely seen, you know, really good adoption from from VM Ware working in those spaces. One place I I wanna understand, though, if you look at vcf and how that moves. Thio ws toe Azure, even toe Oracle's talked about in the keynote this morning. How does SD win fit into just that kind of traditional hybrid cloud deployment we've been talking about for the last couple of years? >>Yeah, that's a great question. So, you know, when you look at Ste Van, that name can notes software defined, but it doesn't. It's not specific to branch office access at all. And when you look at DCF, what VCF is doing is really modernizing your compute stack. And now you can run this modern compute stack of your own data centers. You can run it in the private cloud. You can run it on the public cloud as well, right? So you can put these tax on Amazon, azure, Google and and then run them. So what an STV in architecture allows you to do is not just get your branch and secure users to access the applications that are running on those computes tax. But you can also intermediate between them. So when customers come in and they say that they want simplified networking and security between two public cloud providers, this is the multi cloud use case, then getting that networking toe work in a seamless fashion with high security can be done by an S Stephen architectures. And our sassy pop is perfectly situated to do that. And all you would need to do is add virtual services at the sassy pop. An enterprise customer would come in and they say they want some peanuts here and some VP CS there they want to look at them in an automated fashion. They want to set it up, you know, with the point and click architectures and not have to do all this manual work, and we can get that done. So there's a there's a really good fit between Sassy s Stephen and where VCF is going to solve the multi cloud problem that people are having right now. >>Excellent. I really appreciate that. That that explanation last thing, I guess I'll ask is, you know, here at VM World, I'm sure you've got a lot of breakouts. You've probably got some good customers sharing some of their stories. So anonymous if it has to be. But we would love if you've got either views of some examples, uh, to help bring home that the value that your solutions are delivering. >>Great. When I start with one and then creek and fill in the other one, eso let me start off with the telemedicine example. So we have, you know, customer called M. D. Anderson Cancer Center. And these are the folks in in Texas, and they provide a really, really important service. And that service is, you know, providing patients who are critically ill to give them all the kinds of services, whether they come into the clinic or whether they're across a network connection. And they're radiologists and doctors air sitting at home. So I think it's very important use case and, you know, we started off by deploying in the hospitals and the clinics. But when Cove, it hit there to send a lot of these folks to work from home, and then when they work from home, it's really this device that goes in which you can see here. This is our Belo cloud edge. And this, um, has said in one of the my my favorite song says, There's nothing this box can't do. All right, so this box goes home into the, you know, doctors home, and then they are talking to their patient, getting telemedicine done because it solves the problem off performance. Um, you know that some of those folks have literally said that this thing was a God sent. That's not very often that networking people, you know, have been told that their products are like godsend. So I'll take that to the limit of grain of salt. But we are solving a very important problems increasing the performance were also this is a secure device, so it's not gonna be hacked into and then makes things much more manageable from a nightie standpoint. So this is one of those use cases, and there's plenty of them. But Craig has his favorites all turn it over to him. >>There's so many I could bore you. I think you know one really interesting. One is a new investment banking company that we have is a customer, and they used to go work in the office five days a week, and everything that they did was on their computer in the office and with this pivot to work from home post Kobe, did they think their future is a flexible work workforce where sometimes there in the office and sometimes they're remote. And when the remote there are deep peeing into their desktop, that is sting in their office and with their like to remote access VPN solution, they had to connect, Say, I'm a user sitting in Southern California. I'm connecting my VPN to Chicago to then come across the network back to Los Angeles to get to my desktop so that I can work from home. And now with Sassy, my secure access client from workspace one connects to the closest asi pop I get to my desktop in my office. Tremendously lower, Leighton see tremendously higher quality to experience for the users, whether they're, you know, at home, on the road anywhere they need to access that device. >>Craig Sanjay, thank you so much. Love the customer example. Sanjay. Good job bringing out the box. Uh, show people It's a software world. But the sassy hardware is still needed at times, too. Thanks for joining us. All >>right. Thank you, Stew. Thanks. Great. Cheers. All >>right. Stay with us for more coverage of VM World 2020. I'm still minimum. Thanks. As always for watching the cube

>> Live from Barcelona, Spain. It's the cue covering Sisqo. Live Europe. Brought to you by Cisco and its ecosystem partners. >> Welcome back to sunny Barcelona. Everybody watching the Cube, the leader and live tech coverage. We go out to the events, we extract the signal from the noise we hear There's our third day of coverage that Sisqo live. Barcelona David Lot. John Furrier. This here stew Minutemen all week. John, we've been covering this show. Walter Wall like a canon ae is here is a distinguished engineer and product line. CTO for Cisco Analytics. Welcome to the Cube. You see you again. Welcome back to the Cube. I should say thank you very much. So tell us about your role. You're focused right now on malware encryption. We want to get into that, but but set it up with your roll >> first. Well, I'm trying to raise the cost to the bad guy's hiding in your network. I mean, basically it's it. It it's an economics thing because one there's a lot of places for them to hide. And and they they are innovating just as much as we are. And so if I can make it more expensive for them to hide and operate. Then I'm doing my job. And and that means not only using techniques of the past but developing new techniques. You know, Like I said, it's It's really unlike a regular job. I'm not waiting for the hard drive to fail or a power supply to fail. I have an active adversary that's smart and well funded. So if I if I shipped some innovation, I forced them to innovate and vice versa. >> So you're trying to reduce their our ally and incentives. >> I want to make it too expensive for them to do business. >> So what's the strategy there? Because it's an arms race. Obviously wanted one one. You know, Whitehead over a black hat, kind of continue to do that. Is it decentralized to create more segments? What is the current strategies that you see to make it more complex or less economically viable to just throw resource at a port or whatever? >> There's sort of two dimensions that are driving change one. You know they're trying to make a buck. Okay? And and, you know, we saw the ransomware stuff we saw, you know, things that they did to extract money from a victim. Their latest thing now is they've They've realized that Ransomware wasn't a recurring revenue stream for them. Right? And so what's called crypto jacking is so they essentially have taking the cost structure out of doing crypto mining. You know, when you do crypto mining, you'll make a nickel, maybe ten cents, maybe even twenty cents a day. Just doing this. Mathematical mining, solving these puzzles. And if you had to do that on your own computer, you'd suck up all this electricity and thing. You'd have some cost structure, right and less of a margin. But if you go on, you know, breach a thousand computers, maybe ten thousand, maybe one hundred thousand. Guess what, right you? Not one you're hiding. So guess what? Today you make a nickel tomorrow, you make another nickel. So, you know, if you if you go to the threat wall here, you'd be surprised this crypto mining activity taking place here and nobody knows about it. We have it up on the threat wall because we can detect its behavior. We can't see the actual payload because all encrypted. But we have techniques now. Advanced Analytics by which we can now call out its unique behaviour very distinctly. >> Okay, so you're attacking this problem with with data and analytics. Is that right? What? One of the ingredients of your defense? >> Yeah. I mean, they're sort of Ah, three layer cake There. You first. You have? You know, I always say all telemetry is data, but not all data. Is telemetry. All right? So when you when you go about looking at an observation or domain, you know, Inhumans, we have sight. We have hearing these air just like the network or the endpoint. And there's there's telemetry coming out of that, hopefully from the network itself. Okay, because it's the most pervasive. And so you have this dilemma tree telling you something about the good guys and the bad guys and you, you perform synthesis and analytics, and then you have an analytical outcome. So that's sort of the three layer cake is telemetry, analytics, analytical outcome. And what matters to you and me is really the outcome, right? In this case, detecting malicious activity without doing decryption. >> You mentioned observation. Love this. We've been talking to Cuba in the past about observation space. Having an observation base is critical because you know, people don't write bomb on a manifest and ship it. They they hide it's it's hidden in the network, even their high, but also the meta data. You have to kind extract that out. That's kind of where you get into the analytics. How does that observation space gets set up? Happened? Someone creating observation special? They sharing the space with a public private? This becomes kind of almost Internet infrastructure. Sound familiar? Network opportunity? >> Yeah. You know, there's just three other. The other driver of change is just infrastructure is changing. Okay. You mean the past? Go back. Go back twenty years, you had to rent some real estate. You gotto put up some rocks, some air conditioning, and you were running on raw iron. Then the hyper visors came. Okay, well, I need another observation. A ll. You know, I meet eyes and ears on this hyper visor you got urbanity is now you've got hybrid Cloud. You have even serve Ellis computing, right? These are all things I need eyes and ears. Now, there that traditional methods don't don't get me there so again, being able to respect the fact that there are multiple environments that my digital business thrives on. And it's not just the traditional stuff, you know, there's there's the new stuff that we need to invent ways by which to get the dilemma tree and get the analytical >> talkabout this dynamic because we're seeing this. I think we're just both talking before we came on camera way all got our kind of CS degrees in the eighties. But if you look at the decomposition of building blocks with a P, I's and clouds, it's now a lot of moving to spare it parts for good reasons, but also now, to your point, about having eyes and ears on these components. They're all from different vendors, different clouds. Multi cloud creates Mohr opportunities. But yet more complexity. Software abstractions will help manage that. Now you have almost like an operating system concept around it. How are you guys looking at this? I'll see the intent based networking and hyper flex anywhere. You seeing that vision of data being critical, observation space, etcetera. But if you think about holistically, the network is the computer. Scott McNealy once said. Yeah, I mean, last week, when we are this is actually happening. So it's not just cloud a or cloud be anon premise and EJ, it's the totality of the system. This is what's happening >> ways. It's it's absolutely a reality. And and and the sooner you embrace that, the better. Because when the bad guys embrace it verse, You have problems, right? And and you look at even how they you know how they scale techniques. They use their cloud first, okay, that, you know their innovative buns. And when you look at a cloud, you know, we mentioned the eyes and ears right in the past. You had eyes and ears on a body you own. You're trying to put eyes in here on a body you don't own anymore. This's public cloud, right? So again, the reality is somebody you know. These businesses are somewhere on the journey, right? And the journey goes traditional hyper visor. You have then ultimately hybrid multi clouds. >> So the cost issue comes back. The play of everything sass and cloud. It's just You start a company in the cloud versus standing up here on the check, we see the start of wave from a state sponsored terrorist organization. It's easy for me to start a threat. So this lowers the cost actually threat. So that lowers the IQ you needed to be a hacker. So making it harder also helps that this is kind of where you're going. Explain this dynamic because it's easy to start threats, throw, throw some code at something. I could be in a bedroom anywhere in the world. Or I could be a group that gets free, open source tools sent to me by a state and act on behalf of China. Russia, >> Of course, of course, you know, software, software, infrastructures, infrastructure, right? It's It's the same for the bad guys, the good guys. That's sort of the good news and the bad news. And you look at the way they scale, you know, techniques. They used to stay private saying, You know, all of these things are are valid, no matter what side of the line you sit on, right? Math is still math. And again, you know, I just have Ah, maybe a fascination for how quickly they innovate, How quickly they ship code, how quickly they scale. You know, these botnets are massive, right? If you could get about that, you're looking at a very cloud infrastructure system that expands and contracts. >> So let's let's talk a little more about scale. You got way more good guys on the network than bad guys get you. First of all, most trying to do good and you need more good guys to fight the bad guys up, do things. Those things like infrastructure is code dev ops. Does that help the good guys scale? And and how so? >> You know it does. There's a air. You familiar with the concept called The Loop Joe? It was It was invented by a gentleman, Colonel John Boyd, and he was a jet fighter pilot. Need taught other jet fighter pilots tactics, and he invented this thing called Guadalupe and it's it's o d a observe orient decide. And at all right. And the quicker you can spin your doodle ooh, the more disoriented your adversary ISS. And so speed speed matters. Okay. And so if you can observe Orient, decide, act faster, then your adversary, you created almost a knowledge margin by which they're disoriented. And and the speed of Dev ops has really brought this two defenders. They can essentially push code and reorient themselves in a cycle that's frankly too small of a window for the adversary to even get their bearings right. And so speed doesn't matter. And this >> changing the conditions of the test, if you will. How far the environment, of course, on a rabbit is a strategy whether it's segmenting networks, making things harder to get at. So in a way, complexity is better for security because it's more complex. It costs more to penetrate complex to whom to the adversary of the machine, trying very central data base. Second, just hack in, get all the jewels >> leave. That's right, >> that's right. And and again. You know, I think that all of this new technology and and as you mentioned new processes around these technologies, I think it's it's really changing the game. The things that are very deterministic, very static, very slow moving those things. They're just become easy targets. Low cost targets. If you will >> talk about the innovation that you guys are doing around the encryption detecting malware over encrypted traffic. Yeah, the average person Oh, encrypted traffic is totally secure. But you guys have a method to figure out Mel, where behavior over encrypted, which means the payload can't be penetrated or it's not penetrated. So you write full. We don't know what's in there but through and network trav explain what you're working on. >> Yeah. The paradox begins with the fact that everybody's using networks now. Everything, even your thermostat. You're probably your tea kettle is crossing a network somewhere. And and in that reality, that transmission should be secure. So the good news is, I no longer have to complain as much about looking at somebody's business and saying, Why would you operate in the clear? Okay, now I say, Oh, my God, you're business is about ninety percent dot Okay, when I talked about technology working well for everyone, it works just as well for the bad guys. So I'm not going to tell this this business start operating in the clear anymore, so I can expect for malicious activity. No, we have to now in for malicious activity from behavior. Because the inspection, the direct inspection is no longer available. So that we came up with a technique called encrypted Traffic analytics. And again, we could have done it just in a product. But what we did that was clever was we went to the Enterprise networking group and said, if I could get of new telemetry, I can give you this analytical outcome. Okay? That'll allow us to detect malicious activity without doing decryption. And so the network as a sensor, the routers and switches, all of those things are sending me this. Richard, it's Tellem aji, by which I can infer this malicious activity without doing any secret. >> So payload and network are too separate things contractually because you don't need look at the payload network. >> Yeah. I mean, if you want to think about it this way, all encrypted traffic starts out unencrypted. Okay, It's a very small percentage, but everything in that start up is visible. So we have the routers and switches are sending us that metadata. Then we do something clever. I call it Instead of having direct observation, I need an observational derivative. Okay, I need to see its shape and size over time. So at minute five minute, fifteen minute thirty, I can see it's timing, and I can model on that timing. And this is where machine learning comes in because it's It's a science. That's just it's day has come for behavioral science, so I could train on all this data and say, If this malware looks like this at minute, five minute, ten minute fifteen, then if I see that exact behavior mathematically precise behaviour on your network, I can infer that's the same Mallory >> Okay, And your ability you mentioned just you don't have to decrypt that's that gives you more protection. Obviously, you're not exposed, but also presumably better performance. Is that right, or is that not affected? >> A lot? A lot better performance. The cryptographic protocols themselves are becoming more and more opaque. T L s, which is one of the protocols used to encrypt all of the Web traffic. For instance, they just went through a massive revision from one dot two two version one not three. It is faster, It is stronger. It's just better. But there's less visible fields now in the hitter. So you know things that there's a term being thrown around called Dark Data, and it's getting darker for everyone. >> So, looking at the envelope, looking at the network of fact, this is the key thing. Value. The network is now more important than ever explain why? Well, >> it connects everything right, and there's more things getting connected. And so, as you build, you know you can reach more customers. You can You can operate more efficiently, efficiently. You can. You can bring down your operational costs. There's so many so many benefit. >> FBI's also add more connection points as well. Integration. It's Metcalfe's law within a third dimension That dimension data value >> conductivity. I mean, the message itself is growing exponentially. Right? So that's just incredibly exciting. >> Super awesome topic. Looking forward to continuing this conversation. Great. Great. Come. Super important, cool and relevant and more impactful. A lot more action happening. Okay, Thanks for sharing that. Great. It's so great to have you on a keeper. Right, everybody, we'll be back to wrap Day three. Francisco live Barcelona. You're watching the Cube. Stay right there.

>> live from Las Vegas. It's the cute covering knowledge sixteen Brought to you by service. Now here your host, Dave Alon and Jeffrey >> College sixteen everybody hashtag no. Sixteen. Check out crowd chat dot net slash No. Sixteen. Gonna crowd check going on. Frank's Luminous here is the president and CEO and not so invisible Hand of service now at the helm. Frank, it's great to see you again. Always looked so nice. Job on the keynote this morning. Eleven thousand plus right, actually closer to twelve thousand. About twenty registrations tweeted out again today. M c world was ten thousand this year. So you're bigger than the M C world, at least in attendance. Imagine what it's going to be when you're a twenty four billion dollars company with. But anyway, congratulations. Thank you. Great to see you again. So yeah. So you must feel good about where you were at the financial analyst meeting yesterday. You laid out the vision you guys were on track for sixteen. Still focused on four billion dollars by twenty twenty. We know a lot can happen between now and twenty twenty, but you gotta be feeling pretty good about the tam expansion the product portfolio. The customer acceptance. Give us the update. >> Yeah, way to feel good. I laid out yesterday for the capital markets. Folk folks are framework. Phase one was R R R zero to one hundred. Uh, that was really when we were startup, Fred Laddie was CEO of the company. It was reaching escape velocity. The night came in in two thousand eleven that was faced to, and we're really focused on scale on discipline and really delivering on the promise that have been created. And the company went from one hundred million two billion dollars last year. But now you know, we're we've entered phase three and face tree is a billion to four billion and we're changing. We're changing from a single product single mark, a single channel company to one that's multi products, multi channel and multi market. And it's a transition. We're not assuming that lather rinse repeat is going to take care of it. So we're raising ourselves to another level. We're questioning what we're doing just to keep things, keep everybody on their tell us >> and your keynote this morning to talk about the states. The first greatest yaar pcrm oracle ASAP. and the second greatest state popularized the course by by sales force. Others before salesforce boost sales force Really one and you guys are laying out a vision for a service management across the enterprise, and you touch deeply into those other estates described that strategy and how it's going to affect customers going forward. >> Yeah, our deep belief is that the way we made its work is going to change under the influence ofthe technology. And what's possible? Has it been that long that we sort of got wire to our in boxes and email became our reactive reflects of way off doing things right? There was a time before e mail. Well, there will be a time after e mail as well. A lot of work is going to be defined into work flows. And then the reason is we don't need to reinvent the wheel over and over and over again. Every single time we do something you know when we define work flows, we had the opportunity Teo plant for work. We have the opportunity to motto Orc, we can analyze work. We can figure out what it cost. We can figure out how well we're doing These are This is where efficiency comes from. Essentially, companies will become clouds. They will all becomes, offer companies right, and they all are going to start to manage themselves like that. So the future of rolls and enterprises and institution and jobs, it's less about being into processes that will be in terms of defining and building the process and then managed in the process. These are these are profound fundamental transformations how we >> work. And you spoke on the Kino to about kind of the different point of view within engagement model when you come from and some type of background versus some of the other interaction. Specifically contrast ing serum, Um, in the way that engagement method works. Versace somewhere. Yeah. You solved the problem. Help a person get up off the floor. I love your I followed that. I can't get up example, but then really get to the root cause. And now you know the good position you're in. As that methodology moves beyond just the chorus people, two people doing it functions in all different roles. >> This this this, this our heritage. We've always taking the service management model. It's basically an engagement model an engineering model because we need to do recalls analysis. Why are we talking in the first place and then to fix and change model? It's a holistic process if you just haven't engaged a model that's not that satisfying because we're just trying to relieve the pain of the moment. But we're not prosecuting general line cost. And even if we knew the underlying cause, we're doing nothing about it. And people keep coming back with the same problem over and over again. So it's not so much about just managing the quality, the service. It's about managing the underlying quality off the core product that we're providing, whether that probably product for that product is in service. >> So a few years ago, I said, I thought you were on a collision course with sales force, and you kind of bristled at that and say, I know we're just doing our thing, but you're Tam is now so large. I mean, you're good, becoming a very large software company. You're in rarified air, so essentially everybody's, you know, I'm gonna have you in their line of sites. That's good. In the other hand, you know, it's an interesting position to be in. So what? Your thoughts on that from >> industry landscape. It's a huge market. You know, we're not super fixated on a confrontation with this player, that player. But we have philosophical conviction that doing customer service, you know our way is the right way to do that. And with things moving to Coyote Internet Oh, thanks, it's becoming way more important. It's not enough to say, Hey, my device is not working, you know? Can I reset the device? Can I see what's going on by straight? People have to become way smarter a za function off the software technology that we have just saying Well, you know, take you call and try to figure out what's going on right? And these days, you're already when you have a conductivity problem with tea for your WiFi service and so on, they can already already tell you, you know, what the hell thiss off your device and what what the problem domain really is. We're going to go way further in that direction. I mean, somebody shows of the refrigerators busted somebody shows up at your door. That person knows nothing, right until they literally open the door and they start looking around right. That's going to change because they will already know. And they'LL have to write parts with them, right if parts are actually involved or they can fix it remotely. So that's desk for service models are moving >> well, your tent, You're celebrating your tent in tenth year anniversary now, and the interesting thing about service now is used. You started in it. You call them your peeps. Your fundamental assumption is that it is touching everything in making that bet That has been a tailwind fear. It's quite a bit different than some of the other software companies that you see going >> down. So he's not just touching everything. It is everything that >> sass cos a cloud of Takeda mean more sass Company's coming out of general business. Then there is the technology business. Do you see that trend? >> I think, by the way, salesforce. I commend them for this vision. They've always said every company becomes this offer company that is absolutely and profoundly true. We're all becoming clouds, Um, and we're literally, you know, running as hard as we can, uh, to catch that ball downfield. You know what? This is about >> you guys have built an incredibly viable business now with riel mo mentum. So as you look forward to next ten years, talk about sort of that vision that you see of service management going beyond I t into other functions of the company as well as growing the ecosystem. >> Yeah, so no, our vision and our approach is about looking at work, right? We're not managing records. Whether it's HR or financial records. It's not about the record. It's about the work. If you take a company like sales first, they're focused on the customer. We're focused on the service. The service is the unit of work. So we have a unique focus on zooming in on that unit of work and structuring, defining and managing that. So to us, everything looks like a service at every application, every task, every request. Everything we do has a beginning and an end. And as an opportunity for structuring, automating, analyzing, monitoring all those candle thanks. So our future world, you know, we'll still have email, but so much of what we do in the day to day basis will be structured in systems and by the way, our life is consumers were already living that way. He just don't notice it because that's natural. I mean, uber is a structure of workflow. Even Facebook, in many ways, is that way. Making a reservation is the structural work flow. Ordering something at Amazon structure workflow and it's lights out lightspeed sort of world is trying to go. >> And if you think about growing this company to the to the next phase lots going on, you making acquisitions, you're bringing in a new town. The ecosystem is really an interesting item here because we saw Accenture Pickup Cloud Sherpas this year. We saw fruition and CSC And so you're seeing the big guys now take notice. That's gotta make you feel great. Talk about the ecosystem a little bit, >> Yeah, it's definitely in on inflection in our world when people are not just saying put me in coach, you know I can do this, but they're starting to, you know, put out real capital on buying companies. Now. There's numbers behind service now, and we're not just on an opportunistic thing in their business, but we're an ongoing business on dare doubling down. They're not. There will be many acquisitions off a lot of our service partners and also our technology partner. So we have a hundred seventy partners here. This is really good because we don't want our customers to sort of feel like I'm dependent on service now for everything. We want them to have many choices, not just in deployment partners, but also technology integrations. No value at its offer products. They shouldn't be depending on you for everything on us. >> In terms of emanate, it's been selective. I mean, you know, you know, we see these larger legacy cos they live off of ebony because they can't innovate you guys doing a lot of innovation internally. But But take a minute to talk about Emma and the particular we're interested in how you integrate cos you don't bolt on to the platform, you essentially re platform. You rewrite talk about that a little bit? >> Yes. Are our eminent strategy has been focused on talent and technology. Tellem builds the technology. Technology without the talent is not very useful. You know, in the short time you'LL run out of gas on that so it's always the combination of the people and what they have built that you correct We don't integrate technology that we acquire, we take it apart and we re implement it on our platform. That is a core core commitment that we make to our customer base, that we are not going to saddle you with the problems you've had for the last thirty years, where you are constantly testing and retesting integrations between this assets versus that assets and have whole steps dedicated to sort of keep the patchwork operable. We take that on right. You don't have to worry about it. You turn on the service, it will work with everything else on. Our customers early on, recognized that we were different in that regard. It's very expensive. It's very time consuming. But when we go to buy an asset and a talent pool, we first look at Cannes, where you re platform it's and secondly, does the technical team that comes with it. I want to do that because if somehow there they're not bought in on that strategy, we don't want to go there >> right. I want to shift gears a little bit and talk about your customers. You guys have a very special relationship with your customers and David on the Q. We go to a lot of shows, and there are few people at that elicit the excitement within the room like Fred does when he comes on stage, you know, and we talk a lot about when the founder's still involved in the company. It's really important that I still remember the first time I saw the cakes and twenty thirteen like, What does it do with the cakes and still Crispo post on lengthen five cakes a day? I think he just doesn't follow him. You'LL see cakes from all OVER the WORLD What do you are hearing from your customers? As you guys go to this next phase because you've had a really special relationship, we've gone beyond just when when Fred was running it, you've taken it to a billion. Now you're going to four. What kind of feedback and engagement we haven't out in the field. Don't talk to customers all, >> you know. Yeah, I do a lot. We're very intensely customer phasing company, just just culturally, but we're incredibly dedicated to their success, the way we believe that the value of our company is sort of summed up in the aggregate in terms of how strongly a customers feel about us. Forget all the financial metro. It's how strongly customers feel about you is the ultimate value off your your franchise. The cakes. It's a celebration. One service now goals life. It is. People feel like we let him out of jail. I mean, they have. Pignon goes with the name of the product that they're replacing. Haven't >> seen the >> way, So it's it's what they go from one generation or two generations ago into, Ah, very modern, transformational, empowering, platform. Empowering thing is really important because they are now in charge, right? They're able to make changes on a daily basis. Before they could do nothing. They were dependent on bunch of people that they could never get access to, to make changes for them. It all goes away right, that that's the essence off. But what service now provides >> thiss concept of love, this customer discussion? Because I love initiatives that born in the customer, I think Siam was one of those. I think it came out of Europe. I'm not exactly sure talk about Siam what it is and how it relates to your business. >> Siam feels to us a little bit like the next installment on my tail, sort of the evolution ofthe vital because it's not just service management. It's service, integration and management. But they had a very, very precise definition and framework around what we did. What I till. It's also what we're doing. The Siam were really expanding the scope and sort of adapting it to a much broader context because we think Siam you take its narrow definition very useful, very productive. And we have lots of customers that are pursuing a Siam strategy. But we're saying what semen says, which is now we're going to reorganize our entire enterprise in terms ofthe our service assets, anything that produces the service. But it's an organization or a system or a group of people, whatever it is, as well as everybody that has toe have access to the service. And those were not just people. They're also systems. So they re conceptualize one of this to be an enterprise, very visionary and very, very transformational. You won't recognize enterprise is an institution in the future. There'll be so different that people won't no longer be on in the inside of the process. They will be on the outside of the process, right? Jobs are changing. It's gonna have profound. If one says there will be lots of jobs, well, there will be new jobs and a lot of the old jobs. You know, they're going to go by the wayside >> and, you know, you're obviously in Silicon Valley, and I know there's a lot of work being done about. This is probably not the way we're going to communicate in the future. You guys, this theme of a new way to work today in your keynote, you talked about I ot You threw that buzz word out there and you said, I know before you start rolling your eyes and you guys have a play actually, in I o t again As Jeff said, we go to a lot of these conferences. You hear the similar thing? Digital transformation. I ot your play on aisle is around wearables and really driving some platform innovation to your wrist you have the watch on is that I had guys announced a wearable today, I said, I think I just I tweeted. I think that service now just announced Well, I watch aware a bone some things that we did. And so what's that all about? >> Well, we we've been able Teo, deliver services on watch ever since. Yeah, watch came out because we're a platform. We've been able to do this literally from day one. We're just tryingto inspire our customers to figure out How do you really use a watch? Right? Warm of the struggles that Apple has where the watch is, What's the killer app? It's not replacing Fitbit. You know that that z not enough, right? What's the most killer app for a wearable? And we think you're really time and predictive business metrics. You know, at a glance, because that's where this gramophone you really have to, you know, work to device. This is at a glance, right? And we are really tryingto get to this real time predictive mode off doing things because it's just so much more productive. But as I said in the rap over the keynote right, there's a lot of sizzle people lost watches and *** bang stuff. What enables toe watch. And that's really what we think Apple needs. You know, Forest tries used what enables that watch to become a productive business device, and it's the underlying repository of data that's continually being updated. That's what makes the watch powerful. >> So how did this come about you guys? You obviously like you said you had apse for the watch Your you enable that. But it wasn't good enough for you just didn't fit the use case well enough. But he said, Hey, let's go build it. >> Yeah, there is. There is a design aspect to it. And, you know, it is you heard during the keynote whether people do typically, you know, we're just shrink down to you. I from the bigger form factor to watch. And that's always the first generation >> and my phone on a watch. And >> everybody goes like, Well, that's not it. So and then we go back to the drawing board and we really, really think through the usability off that form factor, which is so tiny >> one of things about knowledge is the content from the customers. So I want to ask you how you spend your time here. Yesterday was a financial analyst meeting. Today you're in the general session and the keynotes. You got a CEO event going on. You had a partner event going on. How do you know. Is there there three francs? >> No, it's, uh it's it's no I I couldn't be more thrilled. We have so much going on at this conference in in years to come. You know that we'LL be vertical Industry conference is going on because we see that as the next evolution next phase of our evolution is that vertical ization is happening already because we have someone e big customers and single verticals. Whether it's financials and pharma retail, those folks can get so much benefit from associating with their counterparts in the same line of business, especially when the value of moves from it to broader enterprise that becomes very pertinent. So we're worked over in the middle of figuring out how to sort of enable ourselves We've enabled ourselves as a multi product organization. That was the whole face three transition. But the vertical ization is something that sort of next in our revolution. >> I mentioned my last question for eventual Silicon Valley. Obviously you're part of of of really set of rising stars and your butchery. You know, Scott decent and saw him the other day seen Cem Riel innovations coming at the same time, hearing a lot of these Caesar. Real nervous. You don't sound nervous. You sound really hopeful. What's your What's your outlook for? >> You know, your situation. We had our financial analyst yesterday, and you know that the capital markets crowd is very nervous. All of us are trying to decide on my in or out, and some things they do both before noon. Uh, I can't run a company that way. Most of the decisions that we make on a daily basis are not with a quarterly oriented. They go on for years and years, so I can't get that excited. You know, about the second floor of the business on a very short term basis, we know were lashed to the mast. We're going to go down with the ship. Were committed, were not interrupt. We're in. We're completely in. So our mindset is that we're just We're fine to be on the ship in running us, right? In January, the capital market sold is off. And in April that came back in were the same company, right? There was no reason to be that excited either to the downside or the upside. Right? This this a marathon companies get billed over long periods of time. >> Yeah, you don't seem like you're on that ninety days shot. Claws clock. Of course, it helps when you have a great customer base together. You got a great team. Frank's Lumen. Thanks so much for first of all, for having us at knowledge, we love this event. It's one of our favorites. And thanks for coming. It's >> great beer. Thank you. >> Alright, keep right, everybody. We'Ll be back with our next guest right after this is the cue. We're alive. Service now. Knowledge. Sixteen. Right back. It's always fun to come back to the cube because