>> Announcer: Live from Washington, DC, it's the Cube, covering .conf2017, brought to you by Splunk. (busy electronic music) >> Welcome back here on the Cube, as we wrap up our coverage of Splunk's .conf2017, we're live in our nation's capital, Washington, DC, just kind of sandwiched between the US Capitol, which is right up there, and they have a little healthcare discussion going on, the White House about a mile and a half in the other direction, they're probably talking healthcare tonight, too, I would imagine, a little bit. We're talking Splunk. Dave Vellante, John Walls. Dave, a good couple, actually, a great couple of days here. Without getting into all the specifics, but just the range of guests that we have talking about the application of Splunk shows you about the breadth of this technology and how it's reaching to so many parts of the American enterprise today. >> Well, John, we've been talking about all week that this is our seventh Splunk .conf. The Cube started following this company pre-IPO, we've seen their rocket ship ascendancy. The kind of last several years, the stock has kind of gone sideways. The street hasn't been as sanguine as before. But it looks like new management, under the guidance of Doug Merritt, a new sales organization, has really started to put this company back on track, not that it was ever off the rails, but you can see a path to go, I mean, it's a $1.2 billion company with a $10 billion valuation, so that's nothing to sneeze at. You can see this company has the potential to really be one of the next big software players. You've seen a number of companies emerge. Salesforce was the cloud company, right? But you've seen a number of companies like Splunk emerge from sort of the mid 2000 time frame into a real powerhouse. I mean, getting to a billion dollar software company, that's a real milestone, not many make it. I'm impressed with that, they're growing at 30% plus per year. The things that we confirm this week that the traditional CIM, security, log file, digging through these log files, that's giving way and has given way to a better way, where you're reading machine data, you're able to search that and begin to automate and remediate in a proactive fashion. To a practitioner, when you talk to people around here, the Splunk way is the better way, no doubt. Now, what you've seen, and I tell you, early on in Splunk I heard from a lot of vendors, "We've got the Splunk killer." Well, Splunk seems alive and well. >> Right, it hasn't happened yet. >> Yeah, and it's because, in my opinion, they're this customer focused company that talks to customers, gets that feedback into their system, and as Doug Merritt would say, they're innovating faster than the competition. Now, there's some startups going after them, probably trying to attack their cloud model, their pricing model. But I feel like Splunk is in a really good position here. The other piece of this is the IT management component of it. You're starting to see a lot of companies really glom onto what they're doing, and what they call, I call it ITOM, they have an acronym they use, ITSI. Really bringing analytics to IT management, understanding what's going wrong, where it's going wrong, and how to remediate it. Those are really the two big use cases. The other concern that we heard from Wall Street was pricing. I don't hear that, certainly from the loyal customers. >> You've asked a lot of folks today, just what do you think, what do you like? The response has been, I'd say, fairly positive. >> Yeah, I've been pushing on the Cube, and also, at lunch, when you're not on camera, I've only really found one area of concern. Somebody in the government said, well, at the volume we're doing, it gets kind of expensive for us. But generally speaking, most users that we've talked to have said, I like that pay by the data drink model, and it's machine data, kind of log data, so it's not like massive amounts of data, although it's going to grow. One of these days it's going to be more metadata than there is data. >> John: Right. >> But I think in general, Splunk has a good handle on that, subscription models moving to a cloud model. But still, plenty of their base is perpetual model. Fundamentally, this company, I think has some significant upside. I think there's still some skeptics out there on the street, but the customer base is not skeptical, and ultimately, that, to me, is the end arbiter. If customers are happy, they're willing to spend, they see value, they're committed, the base is growing, we see 7,000 people here versus 4,000 last year, that's a 40% growth. When we first found this company, we said, this is going to be one of the next big things, along with some others, like ServiceNow, Pin Tableau early on, even though they've had some bumps in the road, guys like Nutanix, Red Hat. You talk to their customers, they're passionate, you definitely see that here. >> Let's talk about the customer focus a little bit, because that's the hallmark, right? It kind of reminds you of AWS a little bit, but, anyway, we're going to focus on the customer. We hear that from everybody who's sat down here and people we've talked to on the show floor, they have, it's a very direct relationship, it's a warm relationship. It's not customer, client, it's right here, they're sympatico. >> Yeah, I mean, I think there are different models. Andy Jassy talks about this, Doug Merritt talked about it. There's a lot of ways to skin the cat. You could be a customer focused, customer first company, where you make all your decisions based on what the customer is saying, and maybe that's an overstatement. But there's another model which is competitor focused. There's a competitor, I'm going to go kill them. There's some very successful examples of that. I mean, I would put EMC in that category, even though they're very customer focused, you cross them as a competitor, they're going to put you in their sites and shoot you. I think Microsoft has some sort of similar characteristics there, you saw Microsoft decimate its competitors in the past. I would say Oracle, in that sense. Not that these companies don't care about their customers, of course they do. But they're fanatical about the competition. >> John: The competition, right, right, right. >> I think companies like Splunk, I think they are concerned about the competition. They don't ignore it, same with AWS. But if you put the customer first, do right by the customer, good things happen, and it's a good philosophy. >> Right. Going forward now, I mean, Splunk is a company that's based on change, right, it's all about transformation, it's all about speed and providing these services. I mean, what do they have to do, in your mind, the next 12, 18 months to really separate themselves and take that quantum leap off the 1.2 where they are now, to get to that maybe $4 billion or $5 billion level? >> Number one is, don't screw it up. I mean, OK, that's obvious. >> Good rule. >> But I think the second thing is, the TAM expansion. One of, I think, Doug Merritt's big challenges is, how do they expand their TAM beyond those two core areas, security, obviously, huge area, and just sort of IT operations management, or again, what I call ITOM, they don't use that term. How do they grow beyond that? Where do they grow? I think there's a couple of ways to think about that. One is, I mean, Splunk is, it can be, it can start delivering apps that are very deep, that's what it's doing around security. You saw ransomware applications, for example, going depth. As a platform, Splunk has breadth. But they don't sell the platform per se. They really, what they do is they sell the solutions around that platform. The platform is there, though. To me, Splunk could become a big data development platform. What I want to see is I want to see this ecosystem grow dramatically. I think that's, for them to get to 5 billion, this ecosystem has to explode. I think they have to start becoming a developer outreach, developer friendly company, so that the ecosystem can innovate on behalf of that platform. They have a very powerful platform. It's like George and I were talking about this morning, it's Hadoop like in it's a big data pipeline, but it's integrated and it's a lot simpler. To us, Splunk can start expanding its TAM by building out applications with its ecosystem on top of that platform. I think that's an interesting challenge. We've tested that a little bit here. Splunk's shy about going there, they haven't gone there yet. I think they have to be careful, because you don't want to scare away the ecosystem either. I mean, remember Microsoft, their timing was good. >> You know what your sweet spot is, too. You can't leave your core. >> Yeah, you don't want to lose that. Like I said, they don't want to screw it up. >> You've got to take care of your core. >> Security's a big market, no question about it, as is the IT ops market as well. But there's a lot more runway. If they're going to get to be a $5 billion or a $10 billion company, it's unquestionable that they're going to bump into the other big platform players. >> Right, right. What's the horizon for something like that? I mean, it's not a 12 month play, right? I mean, you're talking about-- >> No, I think it's a five year vision. But it has to start to unravel over the next 12 to 18 months, in my view. A few things I would look for is, again, expansion of the ecosystem, ie, number of partners, the substance of those partnerships and then purposeful, deliberate developer outreach. I'd love to see these guys do a little dev con within .conf to see who shows up. Again, they don't play up their developer tools in a big way, they're not really, little hackathons going on here, there may be, but they're not front and center, no hackathon award winners that we're interviewing on the Cube. It'd be interesting to see what would happen if they released some low code SDKs. Have a little, I'd like to see them test the water there to see who comes out. I bet you they'd be oversold. >> John: Right. A lot of cool T-shirts, though. >> A lot of cool T-shirts. It's a fun company, too. >> It is, no, it is. >> That's the other thing. I mean, this is geek fest, right? There's a lot of great, fun, senses of humor, there are self deprecating, funny T-shirts. I think we're the only two guys that I've seen in here all week with ties on, as a matter of fact. >> Usually the only one. >> Well, just, I know I was being with you and I had to dress up for the occasion. Really enjoyed it. Great working with you. >> John, thank you, it's been a pleasure. >> Dave Vellante, here on the Cube. He gave you the playbook, Splunk, now just follow it and let's see where you are five years from now, right? He was there for you. We're done, .conf2017 wrapping up our live coverage here on the Cube. It's been great having you along for the ride, so, so long from our nation's capitol. (busy electronic music)