okay we're back this is painful on time with Wikibon org and this is the cube silicon angles continuous production we here at knowledge service now's big customer event i'm here with my co-host Jeff Frick this morning we were broadcasting live from sa p sapphire my colleague john furrier jeff kelly and david foyer were down here but we're here in Las Vegas at the aria hotel we're here with dave schneider who's the senior vice president of worldwide sales and services at service now Dave welcome to the cute thank you for having me a lot of good energy here talking to customers said Brian Lily on from from Equinix great case study great story we were Jeff and I were at the you know the customer event last night just cruising around talking to customers talking to prospects everybody's really excited what are they what are they telling you I think what the colonists is that what what we're all about which is making customers successful in their journey both the IT Service Management and allowing IT to be helpful to the entire organization is actually working and that the value they're getting from the investment around our technology is yielding really good results for their country so when you go to meet customers you know describe paint a picture for us of you know new customers new prospects what's the environment like no I think it range is a lot between customer experiences so as people are becoming more and more comfortable to cloud idea service we're seeing people really just rotate naturally to that wanting to get away from fixed fixed offerings and traditional and hosted systems internal there into internal their networks so we're seeing a lot of excitement about that and then there's some disbelief there's some displeased but actually after all these years of trying that they can actually make IT an effective part of an organization and our tools and our solutions really help them do that so when you say all these years of time what have they tried that's not work it seems like they've tried everything they've tried they tried remedy the tribe Peregrine they tried I have a corona motor tool right absolutely so I think what happens in IT is it you know they've been the Forgotten ones they've been the ones that didn't have the opportunity to invest as the other lines of business for a below best to keep themselves competitive in the marketplace now we're giving them best-in-class tools so that they are no longer hindered by the lack of sophistication they want that so you get your getting penalized in a sense by you know the past failures of other initiatives right that's the big barrier that you have to come over it is that inertia the existing disbelief is that right I think there's some disbelief also I think I T is often starved for resources i T is a cost to an organization not necessarily seen as a benefit by the financial parts of the organization however if used correctly they can be turned into an asset class and make the whole organization more competitive this morning we had GE talking on stage and they were able to do a massive transformation using the tool to generate millions of dollars of cost savings and additional revenue streams yeah I mean I've been saying to me this is all about global scale and demonstrating IT value and excellence throughout the organization are you finding that you're so we talked about sort of your prospects when you go in when you go in after customers implemented let's say for a year or so what's different what's changed and particularly i'm interested in that notion of IT value is their heightened awareness of IT value throughout the organization well so i think part of what happens is IT changes the perception of IT and organization gets changed through the transformation with our tool they go from as we we often say the Department of node or the Department of now that's a real thing and that that kind of confidence the swagger that the people have nit for IT kind of gets reestablished and you see people really proud of doing what they're doing and knowing that they're bringing a real value to their their customer is really an important part of what we do so the new confidence that these organizations have on delivering value of their customer the ability to support and integrate hundreds of tools potentially into a single platform record that's transformative to a CIO or to an IT executive who didn't know where things were in when the bad things would happen they couldn't tell what was causing the event and know how to fix it so what questions do you ask prospective customers what's your sort of list of top two or three questions that you start with I think first of all is why would you continue down the path that you are if there is something better what what would keep you from doing it and then we also look for other initiatives that are important to the business where what's driving them so if they've done a lot of integrations through acquisitions that's a huge opportunity for cost savings and aggregation into one one set of tools okay let's talk a little bit about your sort of sales organization you guys I think have these show you let's let me back up a little bit so you start with it I presume incident management problem management maybe even change management is that right is that the starting point so we get brought in to solve a lot of different problems now in an IT organization so it's not uncommon that someone would think about replacing their old help desk or incident management system we always say help desk is sort of like to four letter words you really try to make the desk go away because our customers don't want us sitting behind desks they want us to be out talking to them or they want to self help themselves and so we start maybe with looking at the historical systems very quickly we try to get into a much broader conversation okay and then my understanding is your sales organization has evolved where you will both look at existing customers helping them utilize the platform further beyond maybe just the core helpdesk an incident management problem management and utilize service now as a platform for other areas can you talk about that a little bit so went once when we get involved with a customer the customer is a customer for life so we kind of have a mantra inside of service now which is love that customer and if you love the customer and you do things for and on behalf of them teaching them about the technology and how they can benefit from it we get additional businesses they're more and more successful so every time we interface with the customer it's an opportunity to throw them an opportunity to make them more successful every time they do something to add technology around us they're saving money and probably growing their license business with us but having a pretty good at bit so it's interesting when we were at the event last night for the people who weren't here there were pictures of cakes all over the place there was there was cakes on the table and there was a slideshow with cakes and I said so what is the story with the cake what's in it and I kind of know the stories but it's good to follow till you said about what's really cared about a lot of us like sugar so there is that there's this common desire to celebrate so actually it was solving not not coming tonight well it's not common IT but it actually started with one customer or a couple different customers well when we went go lives the customer actually themselves they didn't go buy a store-bought cake they baked their own cake and they would decorate the cake in various ways and most of them had service now or Thank You service now it's part of it they really viewed this as a setting free element and so they were celebrating like a birth or a wedding like anything else that we celebrate in life they were celebrating with a kick and so it became a tradition I can't tell you how many hundreds of cakes I've now eaten but it's really a fun thing to do and it kind of keeps on a life about life of its own and sometimes I'll do interim cakes when they do go live with a new module or other aspects and call those cupcakes it's it's interesting as they said we were down at the event last night talking to a lot of customers and potential customers and the vibe is very good and the other vibe that's that that picked up this morning I mean the Kino started at 8am right this is not a sleep and group of people these are people that are up and ready to go everyone was waiting to eat at six thirty they were on the ground and so these are people that are working you know they're they're getting stuff done this is not kind of a hangout tech crowd well I mean there was some hanging out last night there was all hang out last night however I will say this event is all about the customer more than eighty percent of the content is taught by customers to customers they come up with the content they're here because they want to learn and so they don't want to miss a thing they're going to bring the ideas back to their companies and implement change and so they view themselves through service now is an opportunity to make a massive the organization it's obviously a pretty darn good career move for a lot of the customers as well who gets successful with us but most importantly they want to be here and we're thrilled to have them because you know quite honestly I get energy i sat in that keynote presentation and I got so much energy listening to the panel I was fired up and ready to go David you guys have a ninety-six percent renewal rate which is that's the same how is it that you've been able to achieve that what what's the secret sauce behind that what a customer's tell you so it fluctuates a little bit but it's been a 95 plus 4 13 quarters in a row I think really the issue is if you do right by the customers where why would they go somewhere else the alternatives just aren't that good but most importantly if you're delivering value every day through an engagement if you're bringing technology to bear to solve a problem once you solve the problem you don't need to Joe try something else you look two ways to leverage what you've already built and moved forward so the four or five percent of customers that disappear many of those are through acquisitions right companies got acquired and went out of business very rarely is that they made a choice to go with a different technology you guys don't and maybe used to in the early days but you don't sort of overwhelm your messaging with with cloud you know some of these some of the SAS companies do can you talk about sort of how you sell to organizations and a little bit more more depth it's not a it's almost night not a hard core technology sell its really around business process and value can you talk more so we sell to multiple levels in a company so there there are folks that are functionally responsible for different aspects of what we do let it be incident management or help desk let it be people that are trying to build knowledge management systems or trying to do employee self-service those are different constituents that will talk to in a sales campaign and then we often will try to reach the CIO or an executive NIT you give them the message of what we can really provide because you know people don't start off thinking you know I want to replace my helpdesk them and end up with the RP for IT we've got to convince them or give them the possibility that that's or sorry paint the picture that the possibilities are real so to customers do they do I mean a lot so many projects today are not not IT projects their business driven yes and there's a business case around them and the whole ir r and r roi etc and pv whatever it is how do people conduct a business case for service now it ranges dramatically depending on what problem they're trying to solve but you know some of what we do is sort of like an oxygen water problem right you can't live today without breathing or drinking some water you can't live in IT without solving some of these problems so it's an oxygen issue the nice to have things are quickly becoming oxygen issues employee self-service are you kidding me you're not gonna have a system that lets employees help themselves why wouldn't you do that why wouldn't you have an automated password reset process to save money why wouldn't you do cloud provisioning to save money these are these are oxygen issues can't live without them type of problems for IT organizations and the reality is they're not getting the job done today so being able to show them a way to make it transformed is great we do intercede a lot of times during an upgrade process or during that consolidation phase where they realize we've got hundreds of tools and they're all in little islands they're not talking to each other and they don't have any data that they can trust so you strive for this consumer like experience we're hearing that a lot what are your customers telling you about oh how well you're doing that I think the exciting things we're going to see tomorrow with Fred's keynote presentation on the handheld on tablet device interfaces are really all about continuing that push towards consumerization nobody wants to use a green screen interface that was designed in the 80s anymore our customers are wanting the same kind of tools they had or they have when they go home when they use google or they use amazon they want the same kind of experience when they're at work and so we provide them the ability to make that happen and that's really transformative to how people perceive IT it is it is it more the IT staff that wants that type of experience or their their customers their clients and their own company are telling them this is our expectation if she said only use Google is only amazon is no I mean I go as far to say is if I'm going to an old guard custom or the old tools and I'm trying to recruit the generation that's coming into the workforce today and I'm showing user interfaces that looking at acquitted and old that employee base isn't going to stay there very long so if you want to be able to grow your business with today's talent on a global scale you need tools that look familiar and that people want to use I'm looking at your screen over there it looks pretty sexy it doesn't look anything like it did 10 years ago Yeah right so did your workforce like Frank's Lupin you're hiring by Mars what are you hiring what are you looking for we're hiring athletes we're hiring people to care we love that Natalie yeah absolutely i'll check out i mean if i could say it one way is if you want to love your customer and sell transformative technology and you want to be part of something that's bigger than you because that's what i'm looking for i'm looking for people that want to join us create something special make a difference not just in our lives which is nice and fun we're really focused on the customer is when you change your customers experience in their perception it has gifts beyond cakes it has gifts beyond making a great company these are lifelong relationships you'll have and even opportunity to that at service now well the enthusiasm here at knowledge is palpable you talk to the customers and they all smiles on their faces they want to be here they want as you said David share their stories most of the content coming from customers and then of course the cube so keep it right there I'll be back with Jeff brick David thank you very much for coming in the cube and sharing your story this is the cube this is knowledge we're here live in Vegas we'll be right back with our next guest right after this great thanks good

from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hi everybody welcome to this special cube in size powered by ET our enterprise Technology Research our partner who's got this database to solve the spending data and what we're gonna do is a braking analysis on the analytic database market we're seeing that cloud and cloud players are disrupting that marketplace and that marketplace really traditionally has been known as the enterprise data warehouse market so Alex if you wouldn't mind bringing up the first slide I want to talk about some of the trends in the traditional EDW market I almost don't like to use that term anymore because it's sort of a pejorative but let's look at it's a very large market it's about twenty billion dollars today growing it you know high single digits low double digits it's expected to be in the 30 to 35 billion dollar size by mid next decade now historically this is dominated by teradata who started this market really back in the 1980s with the first appliance the first converged appliance or coal with Exadata you know IBM I'll talk about IBM a little bit they bought a company called mateesah back in the day and they've basically this month just basically killed the t's and killed the brand Microsoft has entered the fray and so it's it's been a fairly large market but I say it's failed to really live up to the promises that we heard about in the late 90s early parts of the 2000 namely that you were going to be able to get a 360 degree view of your data and you're gonna have this flexible easy access to the data you know the reality is data warehouses were really expensive they were slow you had to go through a few experts to to get data it took a long time I'll tell you I've done a lot of research on this space and when you talked to the the data warehouse practitioners they would tell you we always had to chase the chips anytime Intel would come out with a new chip we forced it in there because we just didn't have the performance to really run the analytics as we need to it's took so long one practitioner described it as a snake swallowing a basketball so you've got all those data which is the sort of metaphor for the basketball just really practitioners had a hard time standing up infrastructure and what happened as a spate of new players came into the marketplace these these MPP players trying to disrupt the market you had Vertica who was eventually purchased by HP and then they sold them to Micro Focus greenplum was buy bought by EMC and really you know company is de-emphasized greenplum Netezza 1.7 billion dollar acquisition by IBM IBM just this month month killed the brand they're kind of you know refactoring everything par Excel was interesting was it was a company based on an open-source platform that Amazon AWS did a one-time license with and created a redshift it ever actually put a lot of innovation redshift this is really doing well well show you some data on that we've also at the time saw a major shift toward unstructured data and read much much greater emphasis on analytics it coincided with Hadoop which also disrupted the market economics I often joked it the ROI of a dupe was reduction on investment and so you saw all these data lakes being built and of course they turned into the data swamps and you had dozens of companies come into the database space which used to be rather boring but Mike Amazon with dynamodb s AP with HANA data stacks Redis Mongo you know snowflake is another one that I'm going to talk about in detail today so you're starting to see the blurring of lines between relational and non relational and what was was what once thought of is no sequel became not only sequel sequel became the killer app for Hadoop and so at any rate you saw this new class of data stores emerging and snowflake was one of the more interesting and and I want to share some of that data with you some of the spending intentions so over the last several weeks and months we've shared spending intentions from ETR enterprise technology research they're a company that that the manages of the spending data and has a panel of about 4,500 end-users they go out and do spending in tension surveys periodically so Alex if you bring up this survey data I want to show you this so this is spending intentions and and what it shows is that the public cloud vendors in snowflake who really is a database as a service offering so cloud like are really leading the pack here so the sector that I'm showing is the enterprise data warehouse and I've added in the the analytics business intelligence and Big Data section so what this chart shows is the vendor on the left-hand side and then this bar chart has colors the the red is we're leaving the platform the gray is our spending will be flat so this is from the July survey expect to expectations for the second half of 2019 so gray is flat the the dark green is increase and the lime green is we are a new customer coming on to the platform so if you take the the greens and subtract out the red and there's two Reds the dark red is leaving the lighter red is spending less so if you subtract the Reds from the greens you get what's called a net score so the higher the net score the better so you can see here the net score of snowflake is 81% so that very very high you can also see AWS in Microsoft a very high and Google so the cloud vendors of which I would consider a snowflake at cloud vendor like at the cloud model all kicking butt now look at Oracle look at the the incumbents Oracle IBM and Tara data Oracle and IBM are in the single digits for a net score and the Terra data is in a negative 10% so that's obviously not a good sign for those guys so you're seeing share gains from the cloud company snowflake AWS Microsoft and Google at the expense of certainly of teradata but likely IBM and Oracle Oracle's little for animal they got Exadata and they're putting a lot of investments in there maybe talk about that a little bit more now you see on the right hand side this black says shared accounts so the N in this survey this July survey that ETR did is a thousand sixty eight so of a thousand sixty eight customers each er is asking them okay what's your spending going to be on enterprise data warehouse and analytics big data platforms and you can see the number of accounts out of that thousand sixty eight that are being cited so snowflake only had 52 and I'll show you some other data from from past surveys AWS 319 Microsoft the big you know whale here trillion dollar valuation 851 going down the line you see Oracle a number you know very large number and in Tara data and IBM pretty large as well certainly enough to get statistically valid results so takeaway here is snowflake you know very very strong and the other cloud vendors the hyper scale is AWS Microsoft and Google and their data stores doing very well in the marketplace and challenging the incumbents now the next slide that I want to show you is a time series for selected suppliers that can only show five on this chart but it's the spending intentions again in that EDW and analytics bi big data segment and it shows the spending intentions from January 17 survey all the way through July 19 so you can see the the period the periods that ETR takes this the snapshots and again the latest July survey is over a thousand n the other ones are very very large too so you can see here at the very top snowflake is that yellow line and they just showed up in the January 19 a survey and so you're seeing now actually you go back one yeah January 19 survey and then you see them in July you see the net score is the July next net score that I'm showing that's 35 that's the number of accounts out of the corpus of data that snowflake had in the survey back in January and now it's up to 52 you can see they lead the packet just in terms of the spending intention in terms of mentions AWS and Microsoft also up there very strong you see big gap down to Oracle and Terra data I didn't show I BM didn't show Google Google actually would be quite high to just around where Microsoft is but you can see the pressure that the cloud is placing on the incumbents so what are the incumbents going to do about it well certainly you're gonna see you know in the case of Oracle spending a lot of money trying to maybe rethink the the architecture refactor the architecture Oracle open worlds coming up shortly I'm sure you're gonna see a lot of new announcements around Exadata they're putting a lot of wood behind the the exadata arrow so you know we'll keep in touch with that and stay tuned but you can see again the big takeaways here is that cloud guys are really disrupting the traditional edw marketplace alright let's talk a little bit about snowflakes so I'm gonna highlight those guys and maybe give a little bit of inside baseball here but what you need to know about snowflakes so I've put some some points here just some quick points on the slide Alex if you want to bring that up very fast-growing cloud and SAS based data warehousing player growing that couple hundred percent annually their annual recurring revenue very high these guys are getting ready to do an IPO talk about that a little bit they were founded in 2012 and it kind of came out of stealth and hiding in 2014 after bringing Bob Moog Leon from Microsoft as the CEO it was really the background on these guys is they're three engineers from Oracle will probably bored out of their mind like you know what we got this great idea why should we give it to Oracle let's go pop out and start a company and that NIN's and as such they started a snowflake they really are disrupting the incumbents they've raised over 900 million dollars in venture and they've got almost a four billion dollar valuation last May they brought on Frank salute Minh and this is really a pivot point I think for the company and they're getting ready to do an IPO so and so let's talk a little bit about that in a moment but before we do that I want to bring up just this really simple picture of Alex if you if you'd bring this this slide up this block diagram it's like a kindergarten so that you know people like you know I can even understand it but basically the innovation around the snowflake architecture was that they they separated their claim is that they separated the storage from the compute and they've got this other layer called cloud services so let me talk about that for a minute snowflake fundamentally rethought the architecture of the data warehouse to really try to take advantage of the cloud so traditionally enterprise data warehouses are static you've got infrastructure that kind of dictates what you can do with the data warehouse and you got to predict you know your peak needs and you bring in a bunch of storage and compute and you say okay here's the infrastructure and this is what I got it's static if your workload grows or some new compliance regulation comes out or some new data set has to be analyzed well this is what you got you you got your infrastructure and yeah you can add to it in chunks of compute and storage together or you can forklift out and put in new infrastructure or you can chase more chips as I said it's that snake swallowing a basketball was not pretty so very static situation and you have to over provision whereas the cloud is all about you know pay buy the drink and it's about elasticity and on demand resources you got cheap storage and cheap compute and you can just pay for it as you use it so the innovation from snowflake was to separate the compute from storage so that you could independently scale those and decoupling those in a way that allowed you to sort of tune the knobs oh I need more compute dial it up I need more storage dial it up or dial it down and pay for only what you need now another nuance here is traditionally the computing and data warehousing happens on one cluster so you got contention for the resources of that cluster what snowflake does is you can spin up a warehouse on the fly you can size it up you can size it down based on the needs of the workload so that workload is what dictates the infrastructure also in snowflakes architecture you can access the same data from many many different houses so you got again that three layers that I'm showing you the storage the compute and the cloud services so let me go through some examples so you can really better understand this so you've got storage data you got customer data you got you know order data you got log files you might have parts data you know what's an inventory kind of thing and you want to build warehouses based on that data you might have marketing a warehouse you might have a sales warehouse you might have a finance warehouse maybe there's a supply chain warehouse so again by separating the compute from that sort of virtualized compute from the from the storage layer you can access any data leave the data where it is and I'll talk about this in more and bring the compute to the data so this is what in part the cloud layer does they've got security and governance they got data warehouse management in that cloud layer and and resource optimization but the key in in my opinion is this metadata management I think that's part of snowflakes secret sauce is the ability to leave data where it is and have the smarts and the algorithms to really efficiently bring the compute to the data so that you're not moving data around if you think about how traditional data warehouses work you put all the data into a central location so you can you know operate on it well that data movement takes a long long time it's very very complicated so that's part of the secret sauce is knowing what data lives where and efficiently bringing that compute to the data this dramatically improves performance it's a game changer and it's much much less expensive now when I come back to Frank's Luqman this is somebody that I've is a career that I've followed I've known had him on the cube of a number of times I first met Frank Sloot when he was at data domain he took that company took it public and then sold it originally NetApp made a bid for the company EMC Joe Tucci in the defensive play said no we're not gonna let Ned afgan it there was a little auction he ended up selling the company for I think two and a half billion dollars sloop and came in he helped clean up the the data protection business of EMC and then left did a stint as a VC and then took over service now when snoop and took over ServiceNow and a lot of people know this the ServiceNow is the the shiny toy on Wall Street today service that was a mess when saluteth took it over it's about 100 120 million dollar company he and his team took it to 1.2 billion dramatically increased the the valuation and one of the ways they did that was by thinking about the Tam and expanding that Tim that's part of a CEOs job as Tam expansion Steuben is also a great operational guy and he brought in an amazing team to do that I'll talk a little bit about that team effect uh well he just brought in Mike Scarpelli he was the CFO was the CFO of ServiceNow brought him in to run finance for snowflake so you've seen that playbook emerge you know be interesting Beth white was the CMO at data domain she was the CMO at ServiceNow helped take that company she's an amazing resource she kind of you know and in retirement she's young but she's kind of in retirement doing some advisory roles wonder if slooping will bring her back I wonder if Dan Magee who was ServiceNow is operational you know guru wonder if he'll come out of retirement how about Dave Schneider who runs the sales team at at ServiceNow well he you know be be lord over we'll see the kinds of things that Sluman looks for just in my view of observing his playbook over the years he looks for great product he looks for a big market he looks for disruption and he looks for off-the-chart ROI so his sales teams can go in and really make a strong business case to disrupt the existing legacy players so I one of the things I said that snoopin looks for is a large market so let's look at this market and this is the thing that people missed around ServiceNow and to credit Pat myself and David for in the back you know we saw the Tam potential of ServiceNow is to be many many tens of billions you know Gartner when they when ServiceNow first came out said hey helpdesk it's a small market couple billion dollars we saw the potential to transform not only IT operations but go beyond helpdesk change management at cetera IT Service Management into lines of business and we wrote a piece on wiki Vaughn back then it's showing the potential Tam and we think something similar could happen here so the market today let's call 20 billion growing to 30 Billy big first of all but a lot of players in here what if so one of the things that we see snowflake potentially being able to do with its architecture and its vision is able to bring enterprise search you know to the marketplace 80% of the data that's out there today sits behind firewalls it's not searchable by Google what if you could unlock that data and access it in query at anytime anywhere put the power in the hands of the line of business users to do that maybe think Google search for enterprises but with provenance and security and governance and compliance and the ability to run analytics for a line of business users it's think of it as citizens data analytics we think that tam could be 70 plus billion dollars so just think about that in terms of how this company might this company snowflake might go to market you by the time they do their IPO you know it could be they could be you know three four five hundred billion dollar company so we'll see we'll keep an eye on that now because the markets so big this is not like the ITSM the the market that ServiceNow was going after they crushed BMC HP was there but really not paying attention to it IBM had a product it had all these products that were old legacy products they weren't designed for the cloud and so you know ServiceNow was able to really crush that market and caught everybody by surprise and just really blew it out there's a similar dynamic here in that these guys are disrupting the legacy players with a cloud like model but at the same time so the Amazon with redshift so is Microsoft with its analytics platform you know teradata is trying to figure it out they you know they've got an inertia of a large install base but it's a big on-prem install base I think they struggle a little bit but their their advantages they've got customers locked in or go with exudate is very interesting Oracle has burned the boats and in gone to cloud first in Oracle mark my words is is reacting everything for the cloud now you can say Oh Oracle they're old school they're old guard that's fine but one of the things about Oracle and Larry Ellison they spend money on R&D they're very very heavy investor in Rd and and I think that you know you can see the exadata as it's actually been a very successful product they will react attacked exadata believe you me to to bring compute to the data they understand you can't just move all this the InfiniBand is not gonna solve their problem in terms of moving data around their architecture so you know watch Oracle you've got other competitors like Google who shows up well in the ETR survey so they got bigquery and BigTable and you got a you know a lot of other players here you know guys like data stacks are in there and you've got you've got Amazon with dynamo DB you've got couch base you've got all kinds of database players that are sort of blurring the lines as I said between sequel no sequel but the real takeaway here from the ETR data is you've got cloud again is winning it's driving the discussion and the spending discussion with an IT watch this company snowflake they're gonna do an IPO I guarantee it hopefully they will see if they'll get in before the booth before the market turns down but we've seen this play by Frank Sluman before and his team and and and the spending data shows that this company is hot you see them all over Silicon Valley you're seeing them show up in the in the spending data so we'll keep an eye on this it's an exciting market database market used to be kind of boring now it's red-hot so there you have it folks thanks for listening is a Dave Volante cube insights we'll see you next time

(techy music) >> Announcer: Live from Las Vegas, it's theCUBE, covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome back, everyone, to theCUBE's live coverage of ServiceNow Knowledge 18 here in Las Vegas, Nevada. I'm your host, Rebecca Knight, along with my cohost, Dave Vellante. We're joined by CJ Desai. He is the Chief Product Officer for ServiceNow. Thanks so much for coming on theCUBE again, CJ. >> Thank you, it's great to be here. First time I came was last Knowledge, which was my first Knowledge, so I'm a lot more educated and equipped this time as compared to firing round of questions from Dave last time. >> We will pick your brain, exactly. So you were up on the stage this morning, a great keynote, and you said, "Welcome to the era of great experiences." Unpack that a little bit. What do you mean by that? >> First of all, thank you for remembering that. That was supposed to be the idea. But on a serious note, we feel, if you think about even our company name is ServiceNow, so you provide service, and when you provide service, that's not a technology you provide, you provide an experience, whether it's IT service, customer service, employee, whatever the case might be. And, if you are not delivering experiences, then you are not that relevant. So we are trying to truly, and we are in the beginning of this journey, truly internalize that, that if people are using us, they call themselves service desk, insider organization, IT service desk, customer service desk, whatever the terms you want to use, there is about experiences. Rather than focusing on bits and bytes, we want to focus on experiences, deliver those experiences via our platform. It's not software as a service, it's software as an experience. It's software as an experience, that's the idea, correct. Thank you for-- >> You also talked about the eras. You know, we went back to the industrial era and then went through the ages of computing. Yeah, I was not sure if that was going to work or not, but the point I was trying to make, Dave, was just around the quality of work and how work has evolved. That's it, that was the idea. >> But I think my takeaway was even more than that, because we are entering, in my view, anyway, a new era, and I'd love to get your comments. We're moving from what is real tailwind for you, which is the Cloud era, and obviously, Cloud is an important part of the new era where you have a remote set of services to one where you have this ubiquitous set of digital services that do things like sense, hear, read, act, respond. That's a different world, and it's all about the experience, and I don't know how to define that yet. Digital, I guess, is how we define it. But what are your thoughts? >> The one thing, even simple things, and these are not simple things to understand. When I look at things like even genomic sequencing, that's so different. They are using technology to figure out how to sequence the human genome so that it can help you with your health, live longer, even things like knowing that somebody rings a doorbell at my home and I can see on my phone. Everything is connected, humans are connected, when mobile came and computer came and internet came. But things being connected is pretty exciting for me. That just transforms our lives and how we work, and I really like that it is all about us, and other than us being focusing on the technology itself. So that's the point. It's that we're humans, and let's focus on humans and experience, rather than worry about, oh, this runs two times faster than the other thing, or this thing is smaller than other thing. That's interesting, but not that interesting. >> At this conference, this is really the message that you're getting across. It's the new tag line, we are making the world of work work better for people. How does the Now platform really deliver on that promise? How does it make the employees life easier? I would say we have a bunch of use cases, but as you know, we started out early on with IT service management, and the whole idea was can we provide, as long as computers are there, as long as software is there, password reset is going to be there for a very, very long time. So, my point is that that's when it started. Okay, I need to do password reset, I want to upgrade my laptop. Every year there is a new laptop, every year there is a new phone, and that cycle will continue, and as long as we are using technology for our knowledge workers, IT help desk will be there, right? And where we are evolving is enterprise service management, because you don't, as an employee, you may deal with IT, you may deal with HR, you may have a contractual issue with legal, you may need something related to your payroll from finance. People think payroll is HR, but payroll is finance. And as you try to go across in a day in a life of an employee, you need to make it as easy as possible. So that's what we are focused on, deliver better experiences. You know, artificial intelligence that listen today, I believe, is more about optimization, rather than intelligence. Yeah, we want to use your data to be able to predict, like if you see in Gmail, I don't know if you use Gmail, but if you have Gmail, you get an email, it'll suggest auto-responses. Those auto-responses are almost positive. Have you noticed that? They are never negative. >> Yeah. >> Oh, of course. >> They're like, no, I don't want to come to your meeting. (laughing) It's kind of like trying to predict most likely what you would want to say, and I think if we can use intelligence to make people more productive, that's what we want. >> I mean, I use that function. I actually like it. >> CJ: Yeah, exactly. >> You know, it gives you three choices, and one of 'em is pretty close to what I would normally, and if I'm busy, I'm done. >> Yeah, right, exactly. >> I like that. This is the other thing we've talked about. We've talked about this with Farrel this morning. Try to anticipate my needs, right? So that means you've got to infuse AI into the application and identify specific use cases. You guys have done some M&A there, you talked to the financial analysts meeting, obviously, not disclosing anything, but watch for us to do some more M&A. You got to believe that that machine intelligence space is really ripe for innovation. >> And what we believe is if I look at the big Cloud providers, like Google, are investing a lot in deep learning and many, many other technologies, so whenever they expose it, and some of them do a really good job, we will just leverage their libraries. But there are things specific to enterprise, because there are things specific to enterprise, like if you use the word network at a hardware company, that's always in context of compute network and storage. If you use the word network at a healthcare company, that's a network of physicians, networks of hospitals, networks of whatever. And if you use the word network at a Telco company, that is a whole different network. My point is we want to understand those pieces, and if we can make it easier based on your data, so if all your cases, which are, Oh, part of your network is down. Ah, that's what you mean from the context end point, so we want to use wherever folks like Google are investing, we will leverage that, but if we need to leverage, we'll do that too. >> It's interesting, we were talking to a customer today, it might have been Worldpay, and they took the CMDV language and transformed it into the language of the business. What a rare and powerful concept for somebody from IT to do that, because if the lingua franca is business, then the adoption's going to go through the roof. >> So does that make sense? >> Yeah, it makes a lot of sense. Well, I appreciate you talking about the value and the customer experience versus the technology. Certainly, it speeds and feeds you right. Boring. But the platform is important. Many products, one platform, that's unique for an enterprise software company, and you guys aspire to be the next great enterprise software company. Talk about how the platform enables you to get there. >> So I will tell you simple. You know our founder, Fred Luddy, started with the platform in 2004, so that was 14 years ago now, and his idea was you should be able to route work through the enterprise using our platform, and then we started with the IT service management and use case. The biggest advantage we have is that we are a very customer-driven organization. Many companies say that, but you see it here. Dave, you have been coming to Knowledge for a long time, I don't know about you. >> This is my first rodeo, but it's cool. >> It's the first thing you see. >> These are 80-plus person sessions, are customer sessions. They're not our sessions, where they are sharing best practices with them. So we get all these requests, CJ, we have built emergency response system using ServiceNow, CJ, we have built financial close using ServiceNow. Can you productize it? And we say, okay, thank you for the idea, which is great, thank you for the idea. How do I prioritize all of that? And, Dave, where platform comes in, because all the services I talked about today, service intelligence, service experience, user experience, they're all built in the platform, and I'm trying to be cautious, but if I want to create a brand new product on our platform, a brand new product on our platform, 40-use case, a 1.0 product where I feel comfortable the customers can use it, I would say 12 to 18 engineers. That's it. >> Rebecca: Wow. >> If I want to create one product, it's 12 to 18 engineers. So the R&D leverage, and that's the point I was trying to get across, that whether it's my own team creating product or whether our customer building apps on our product, because on platform, because we provide all the common services integration, the incremental cost to create something, now sales marketing, with my close friend, Dave Schneider, is much harder, because he has to scale it, build specialty in it and all that, but to create the product is not an issue for us on the platform. >> But this is where Cloud economics are so important, because at volume, your marginal costs go to practically zero. >> CJ: That's exactly right. >> But people may say, oh, 12 to 18, that sounds like a lot, but we're talking about an enterprise class software product here, and Fred Luddy, in the 2004 time frame, I mean, the state of enterprise software then, frankly, and now, was terrible. The guys at 37signals, I don't know if you know Jason, they made valid attempts, but it wasn't enterprise class software, it wasn't a platform. I've said, a number of times this week, the reference model for enterprise software is painfully mediocre, so you guys have done a great job, and now you've really got to take the next step and stay ahead on innovation. >> Correct on innovation card, that's what I said, innovation should be my top priority. You heard me at the Financial Analysts Day. Customer Service Management, brand new product, we actually launched it at Knowledge 16. Okay, that's when we launched it. It was engineers and teens who created that product, so many teens, the 1.0, now we have evolved quite a bit, 500 customers two weeks ago, 500 enterprise customers. You guys know that we don't go to the small line of the business. 500 in two years, eight quarters. >> And I found out last night, I think it was 75, or it might even be higher, reference customers. >> CJ: Yeah, already, using CSM. >> That's the difference. I do, we do, a lot of these shows. >> That's the platform impact. >> And you're talking about the customer focus. You do a lot of these shows. The customers talk about the impact on their business. They don't talk about how they installed some box, or like you say, runs faster. It's the business impact that really makes a difference, and that's why we're excited to be here. >> You saw today when I talked about Flow Designer and Integration Hub. IT wants to provide software so that business analysts can model business processes in a Cloud way with whoever you need to integrate with, so we are really keeping that as the north star for our customers, and how can we make their life easier, whatever they want to automate, some manual processes, all of manual processes. I remember speaking to Fred when I joined initially, and I said, "Fred, how did you think about TAM?" He said, "What do you mean, TAM?" You know, he's a funny guy, and he was serious. His point was there are so many manual workflows, how do you put a TAM around it? Every business is unique, their processes are complex, so don't box yourself and say, Oh, this is a $4 billion TAM and I'm going to get 20% of it. Every enterprise, as long as they exist, they will have manual workflows, you go and give it our platform so they can automate however they want. >> Well, I'm going to make you laugh about TAM. I'm a former industry analyst, so when you guys did the IPO way back when, well before your time-- >> CJ: 2012. >> when Frank was here, there was a research company saying this is small market, maybe it's a billion dollars and it's shrinking, so I, with some of my colleagues, developed a TAM analysis, and it was more than 30 billion. I published 30 billion, you can go on our old Wiki and see that, and the guy said to me, "Dave, you can't publish more than 30 billion. You'll look like a fool." The TAM is much, much bigger than 30 billion. You can't even quantify it, it's so large when you start looking at it. >> And now, because people are recognizing that we automate all the manual workflows in a enterprise on a Cloud platform, last week somebody published a report and I just saw the headlines, I didn't go through the details, 126 billion. So from in 2012 to that small number, and we don't know what the number is. >> Could it be bigger? >> I would have no idea. I would be completely disingenuous if I told you I know what my TAM is, but I don't think that way. I say what customer problems can I solve? >> Well, that's what I wanted to ask you. So you're here with so many different customers. Just on the show, we've had ones in payments, in insurance, in health care. What are you hearing from customers, and what are sort of your favorite applications of what you're doing? What makes you the proudest? >> Yeah, so I would say the proudest moments for me are when I'm like, wow, you do that with ServiceNow? I would have never thought that. So when I didn't expect, when I expect something, Oh, I had this routine email, text collaboration, and I switched it to ServiceNow, get it, like not a big aha moment. I had this one customer who said he has a big distribution network, all these partners, and those guys have ServiceNow, he has ServiceNow, and when they have problem with the product, their product, my customer's product, they all communicate via ServiceNow to each other. So they have created a whole ServiceNow network, truly a B2B kind of exchange, kind of, using ServiceNow. One of our median and entertainment customers who owns a bunch of parks, they refill the popcorn machine using ServiceNow. When the popcorn levels dip, they have those people who carry around the cart, Oh! The popcorn level dip, it marks the sensor, it routines the workflow, goes to the corporate, Ah, we need to fill up popcorn on by this particular ride. For me-- >> And even at my house, I love it. >> Yeah, so that's exciting to me. >> We talked to Siemens today. >> Yes, great customer. >> Awesome, and I want to run a line by you. We talk about AI a lot, machine intelligence. I wrote down during, you know, data is the fuel for AI. Well, you know we love data here at theCUBE, and he was describing that, he said, you know, even though CJ was not prescribing taking the data out, we could leave it in so it learns, right now, we take some of the data out. Well, you described that. Well, we put it to SAP HANA, we throw a little Watson in there, we do some Azure, machine learning, we use Tableau for visualization, he's probably got some Hadoop and Kafka in there, a very complicated, big data pipeline. And I said to him, Okay, in two years, do you want to do that inside of ServiceNow? He goes, "Absolutely. That would be my dream come true." So, I guess I'm laying down the gauntlet. Do you see that as a reality? >> So, we are talk to Siemens, great customer, they keep us honest, so I love that and I did actually meet the team who was in charge of their BI and reporting and they did share the same story a few months ago when I met them. And we are trying to figure out, Dave, if I knew the answer, I would have told you, but you know my style. I don't know the answer. We are seriously trying to figure out, Do we become an analytics hub? We are really good with ServiceNow data, we can build connectors with other data, but do I want to be in the BI and reporting market? Absolutely not. Do I want to help customers as their processes span across and provide them more visual credit tools than others, text-based searches, whatever they need, the answer is yes. Performance analytics, as you know, we have been moving along really at a good pace, and now we have what every single product, but this is something that Eric Miller, who runs that business, we talk about it all the time, because currently our analytics is building the platform, and now you know that data has a Cloud issue, so if you have data here, you have data there, you have data there, we are in our own Cloud. Can we build a connector, potentially, to OnPrem? Don't know the answer, but this is something, it's a fair gauntlet having to solve. >> Humbly, I'd like to give you my input, if I may. >> Yes. >> We see innovation, as I said before, it's data, applying machine learning to that data, and then leveraging Cloud economics. The project with big data projects, as you well know, is the complexity has killed them. Now you see the Cloud guys, whether it's Amazon or Microsoft, and that's where the data pipelines are being simplified and built. Now, I don't know if it's the right business decision for you guys, but wow, wouldn't that be powerful if you guys could do that, certainly, for your customers. >> And, truly, that is, as you heard me on Financial Analysts Day, I'm a huge fan of Geoffrey Moore's work, and he defines system of record, ERP CRM, system of action where we fall in, and then he has System of Intelligence, which is all the things around data and how do you harness the power of data. And that's something that I really, in our product teams, we talk about all the time, if I can solve Siemens problem with everything in ServiceNow, that'd be awesome, but is that something I want to prioritize right now, or is there something, we should give them the flexibility. I don't know. >> Well, you're one of the top product guys in our industry. It's why they found you. No, seriously, I put you up there with the greats. >> You're kind, thank you. >> It's true. You've got an incredible future ahead of you. But as a lead product person, you have to make those decisions, and you have to be very circumspect about where you put your resources. You can't just run to every customer requirement, right? >> And I tell, coincidentally, my wife asks me What's your job, by the way? I said, that's a good question. >> I'm married to a product officer, too, I feel the same way. What do you do all day? You do a lot of meetings. >> Yeah, exactly. So I said that I do a lot of meetings, and she said why do you do a lot of meetings? And I said I'm making a some decision or help my team make a decision because they already analyze a bunch of things. And I said, my hope is, as long as I can make more good decisions than bad decisions, specifically about product strategy, because you never know unless you make the chess pieces move and think of two or three steps ahead, and some things could be right and some things could be wrong. I have a simple framework on my whiteboard for every meeting. No jokes, right? So, my framework is very simple. Question number one, What customer problems we are trying to solve. If you cannot articulate that, for any new product idea you have, I don't go past that question, What customer problem we are trying to solve? Second is Why now? Why do we need to solve this problem now? Like you said, there are many problems, which one are you prioritize? And then, third, Why us? Why should we solve that problem? So, if you can articulate the problem, which always is a challenge because you kind of know what problems you have, but unless you really, really understand the customer pain point, you cannot articulate it. Then you say, why now? Like why is the time right now for us to invest in this, say, analytics, as a service? Why right now? And, third, why you, as in why us? Why is ServiceNow should solve it? That, at least, gives me a guiding compass to say because I have many products, as you know, I am very protective of our platform, and all these use cases come in, every product line wants to go deeper, rightfully so, because they are trying to solve for customers, and the new products want to be built on this platform. Sometimes I say maybe a partner should build it, so we made a decision, facilities product, Should our ISB partner build it? And that's the right place because we feel they are more suited, they have the skill set, all of that. But that's it, what problem, why now, why you? >> Rebecca: Really, I love it. >> Well, the Why you? it's a great framework. The why you is unclear for the Siemens problem, and I can understand that. You take the DemOps announcement that Pat stole from you today-- >> I know, that's not cool, man. >> But that's a problem that you guys solved internally, clear problem. >> He did a nice job of articulating it, very nice job. >> Yeah, definitely. >> But we feel that there always is a process when you need a workflow across, because in planning there are a bunch of companies, as the patch, or in build there are a bunch of companies in develop there are a bunch of companies. That's fine. They could be the system of records for those chevrons and we are the workflow that cuts across. So we feel loved. We showed our value to our customers by doing that. >> Rebecca: That's great. >> I know we've got to go, but lastly, it's roadmap. Last year, you talked about how you guys do releases by alphabet, twice a year. You were really transparent today, laid out the room and talked a lot about Madrid, you laid out well into the future what you guys are doing so, as an analyst, I love that. I'm sure you're customers love it, so-- >> A lot of people to picture, so that's nice. And Twitter, a lot of people posted on social media as well, so clearly there was a customer pain point, as we call it, that they needed a roadmap. In speaking to customers last one year, number one thing, if you tell us what you're building, then we don't have to build it. If you tell us when you're shipping, then we can plan around it, and then we will set aside resources to do testing. Any Cloud software company, whether it's us, CRM software or HR software, people still test, because you cannot mess up your employee experience or customer experience, and they just said give us a predictable schedule, please, so that we know. We did say two times a year, but we were not prescriptive which quarter. It could be four months and eight months, it could be six and six, it could be seven and five. I'm currently going with the quarterly-level fidelity, and eventually, I want to get to a month-level fidelity, where I say March and September, once our internal processes are organized. >> So the other subtlety there, and I know we got to go, is the ecosystem, because you're giving visibility, they have to make bets. They're making a bet on service, but then where's the white space? They're betting on white space. If you're exposing that to them, they can say, Oh, not going to solve that problem. ServiceNow's going to solve it in two quarters. >> I agree. >> Huge difference for them. >> You guys are wonderful. Thank you so much for inviting me. >> Rebecca: Thank you for coming on the show. We appreciate it. >> No, that's awesome, thank you, thank you. >> Dave: Great to have you. >> Rebecca: Great to have you. I'm Rebecca Knight, for Dave Vellante. We'll have more from ServiceNow Knowledge 18 just after this. (techy music)

>> Announcer: Live from Las Vegas, it's theCUBE. Covering ServiceNow Knowledge 2018, brought to you by ServiceNow. >> Welcome back to theCUBE live coverage of ServiceNow. We are here at the Venetian in Las Vegas. I'm your host, Rebecca Knight, along with my cohost, Dave Vellante. We're joined by Dave Schneider. He is the Chief Revenue Officer of ServiceNow. Thanks so much for coming on theCUBE. >> Oh, it's my pleasure. >> You're a CUBE veteran, so- >> It's good to be back. >> Not your first rodeo. No, it's really fun to be with you. >> So, I want to talk with you a little bit about the growth of the company, which has been really astonishing. Why has it grown so stupendously? What makes ServiceNow so special in your mind? >> I think the key to any great company is having really strong focus on the client, and the whole notion that the client's at the center of our universe. We build technology and service the people, and we act as one in service of our customers, because we know that in turn, our customers are serving their employees, their partners, and their ecosystems. So, just having that unified view as our true north is really empowered the growth. Great technology helps. Being in the Cloud really helps, but then also linking it back to who we are as an organization, what our purpose is, and what we're all about as a culture and a team. >> So, John Donahoe said, "Customer success is an important priority for us." So, I wonder, how do you define customer success? What are the metrics that you use to measure? >> There are a couple, and I think there's various phases of this. For one, are customers getting the value that they were hoping to achieve from the project, and more importantly, are they establishing that value clearly and in the front of that project, in the first place? Because some people just want to buy new technology for technology's sake, but that's not good enough. They need to really have a business value in mind, and we should be helping them to think about that, and then measuring that along the journey. Because if we achieve it, then they have more ammunition to go fight the next battle, the new automation to solve another problem. >> So, having said that, every customer's different. I mean, I'm sure there are patterns. So, how do you guys discern what matters to the customer? Do you have a process to do that? What is that process? And how much is the go-to-market team involved in that through the life cycle? >> It starts in the selling motion, it starts in the pre-sales motion, trying to understand the priorities of the executive team and the issues that are facing the customer. As we understand that, we're doing what they call a value assessment, and we share that back and forth with the client to make sure that we're onto the important issues that need to be solved. And then as the deal is structured and happening, and then they are going live, either with our PS people or our partners, which are such an incredible resource to our clients. We're then measuring the outcomes. Now, the measuring the outcomes part is a newer part of our motion, and you can see in our Customer Success Center, which was new as well, a value calculator, so customers are actually able to understand what the potential value is for a product with ServiceNow on different aspects of their business. >> I want to actually talk to you a little bit more about the Customer Success Center. It is new, newly launched. What was the impetus for launching it and then how is it being used? >> One of the things our customers had asked us for over the years is give us best practice. Be more prescriptive. You heard John talk about that on stage today. Tell us what other great customers, how do you recommend that we implement ServiceNow along the following domains? So, what we did is we picked 10 to 15 of the highest kind of gain items and focused on those first, being as prescriptive as possible. What's coming next is these little micro-focused burst ideas, so little things around what's good form design or other ideas great customers have done. But we'll be continuously publishing to that Customer Success Center, and then our community is now answering over 5,000 questions a week on what best practice is. >> They're crowd-sourcing these ideas. >> They are. >> Wow. >> And that's one of the secrets to this event to ServiceNow as a community is that the customers are helping other customers on their journey. >> Dave, organizationally, Customer Success management, professional services, training, and a partner ecosystem are all under sales. Talk about that a little bit. What precipitated that and how is that going? >> So, I actually reverse it. Customer Success is the overarching goal of the company. We happen to put sales, pre-sales, PS, Customer Success team, the technical training advisory piece, all within this group, knowing that it's about the journey. So, we didn't want to just focus on the selling motion. We want it to be inclusive of all aspects of what we think a great customer is going to expect of ServiceNow. So that's how we structure it. >> And how's that going? >> I think it's going pretty well. We're learning some motions on this, but I think the customers who are in that high-touch pilot that we have going on right now are experiencing some really good results from additional resources we're putting on it. They're appreciative of the fact that we have been very prescriptive in certain areas, and then we're organizing ourselves to be more unified to the client. I will say on the training and development front, the investments we're making around curriculum-designed, the mechanisms of getting that material out there, the better and more complete training that we have for our partner community is also yielding really great results. >> Frank Sleuben used to talk about IT are our peeps. >> They are. >> But still, the majority of your business from IT, much, much larger proportion outside of IT, but still a core chunk of the business's IT. You guys talk about digital transformation. My question is who's leading the digital transformation within your customer base? >> It's interesting, a lot of times we do have a group of IT professionals that are leaning in and leading the digital transformation, but they're usually partnered with someone else on the line of business, somebody who's got a goal, a desire to changes something, they're leaning in with that. One of the best examples is the Human Resources element around, they're being asked to change the digital experience for employees, to make the place a better place to work, more inclusive and belonging place to work. And they're using technology to help bridge that gap and get efficiency, so HR's been a real strong suit, and then we're seeing customer service re-imagining how they're going to reach out to customers with a service discipline. So this isn't just inside the company, but it's about how service disciplines can help with customer-partner relationships as well. >> Such a huge part of digital is getting digital right, whatever that means, and a lot of that involves, obviously, strategy at the board level, the C-Suite. When we first started doing this show, you didn't see a Deloy, E&Y, etc, certainly not as prominent as they are now. Those companies get heavily involved in that kind of digital transformation work. Where do you guys fit, how do you guys partner at that strategy level, and then where does ServiceNow come in as a platform? >> It's a great question, and I do think that what's happening here is that our customers, some of the early customers, really were just looking for new technologies to replace legacy technologies. The best of the best were taking that opportunity of transforming processes, either on their own or with partner communities, some of which are now here as larger sponsors and partners of ServiceNow. And now what we're seeing is this next generation of customer and/or our legacy customers, people who've been on the platform for a while, are recognizing that to get true value they've got to think about process. So, the bigger the SI, the ones who have process experience are going in with those customers really thinking about the art of the possible. You've heard Extensor talk about a human centric design, the human first with the heart centric design, making sure they're focused on the people and the process, rather than just the technology, and we're seeing that time and time again. >> I want to talk a little bit about not just the digital transformation, but the cultural transformation, and that has been a real talking point here at the conference so far. I want to hear how you, as the Chief Revenue Officer, are thinking about culture, the culture of ServiceNow, and making sure that culture is really pushed down throughout the organization. How do you do it? What are your best practices as a manager? >> Every day you have an opportunity to lead from the front and model the behaviors that you're expecting others to have, and I think one of the things that we're really proud of at ServiceNow is that we not just say that we're customer-focused, but we have evidence of really spending our time as an executive team, focused on the issues and directly with customers, making sure they're being heard and listened to actively. The other thing, inside the company, we have a tendency to describe ourselves as hungry and humble, that we want to keep achieving and keep pushing ourselves to the art of the possible, but we don't have a big ego about it, and I think when you see companies that are truly listening, the ego is pushed down and they're really focused on the outcome of the customer. And then that makes us feel good, and that's what's driving us forward. There are way too many companies with big egos that forget about the customer, and I think that's the beginning of the end for them. >> The fiefdoms, the egos, the the outdated policies and procedures, how do you kind of get rid of those, not just at ServiceNow, but at your customers that you're working with so closely? This is, again, we're practicing what we call the East-West motion at ServiceNow, between the leadership team, so myself and CJ Desai, or Mike Scarpelli, we have problems we're facing every day as we've grown the business. I've been with the company now almost seven plus years. The processes we had a year ago aren't sufficient to meet the needs of where we need to go tomorrow. So we have constant conversations at our levels about where we can use automation, where we can change process, or where we can use our own technology. As we do that, we're practicing that good East-West motion as executive team, and that's being modeled down beneath us in our people. The other thing I'll say is we often find ourselves listening like we're wrong, and I think that's important as a good leader or a good business person is that if you spend the time to understand the other person's perspective as an active listener, and understand their view, don't be so fixated that you're right all the time, and that allows us to really come together and solve tough problems. >> One of the key measures of success is renewal rates, and you guys are off the charts. I oftentimes get into Twitter debates. We were talking about Twitter and LinkedIn before, trying to help people understand the Mike Scarpelli math of how you count renewal rates, it's a dollar-based renewal rate, which is the only way to count for growing SaaS company, folk. You can't count units, do the math, it doesn't work. Check out the 10K and you can get the exact math, but astoundingly high renewal rates, increasing average contract values, to those numbers, it plays out in the financials. I know that's an outcome of the work that you're doing, but it underscores the success that you're having. >> When you start off and deliver great technology to solve a problem, and then you've got passionate customers, the things we have historically and continued replacing aren't things that change very often inside the enterprise, so it's very important to get it right on the way in, and then as you do that, customers do start to think of you as a 10 to 20-year relationship. And we should trust and treat each other as a 10 to 20-year relationship versus a transactional relationship. I think you're seeing that in our renewal rates, you're seeing that in our growth, you're seeing that in the traction of this event, and then that's really what's driving us forward. But as a sales professional, someone who has to go out there working with customers, the worst thing for a sales person is to have a non-renewal, because it's not just the loss of dollars, it's the loss of reputation. We take that really seriously as an organization. >> Well, Dave, thanks so much for coming on theCUBE. It's always a pleasure to have you here. >> Thank you for having me. It's great to see you guys. >> Great to see you, Dave. >> All right, bye-bye. >> I'm Rebecca Knight for Dave Vellante. We will have more from ServiceNow just after this. (techy music)

>> Voiceover: Live from Orlando, Florida, it's theCUBE, covering ServiceNow Knowledge17. Brought to you by ServiceNow. (upbeat electronic music) >> Welcome back to sunny Orlando, everybody. This is ServiceNow Knowledge17 #Know17. I'm Dave Vellante with Jeff Frick. John Donahoe is here as the newly-minted CEO and President of ServiceNow, fresh off the keynote, fresh off 49 days in. John, welcome to theCUBE, thanks for coming on. >> Thank you very much, it's great to be here. >> John: So how'd you feel up there? You had the theater in the round, you were working the audience, I loved how you walked on the stage and really got into it. How's it feel? >> Well, what I love about ServiceNow, is it's a community-based business and a community-based company. And so, we had 15,000 members of our community out there, and that community feeling is, I think, one of the real powers of the movement that's called ServiceNow and of the ethos of this company. So, I loved that, I fed off that energy. >> So, at the risk of some repetition, a little bit of background about yourself, a former Bain, former eBay CEO, you shared that with the audience. What is relevant about your background to the ServiceNow experience that you expect to have? >> Well, you know it's funny Dave, I spent the first 20 years of my career at Bain doing business transformation. And a lot of what I talked about today was digital transformation, that is, every company is trying to transform. And I spent the first 20 years of my career focused on that. And then we talked a lot about great customer experiences. Well, the consumer world and consumer-based applications like eBay, or PayPal, or many other consumer applications, are defining the new standards of what kind of easy, simple, intuitive experiences are possible. And employees are consumers at home and they're increasingly expecting the same kind of great experiences they have at home at work, and as customers of enterprises. And so I think you're going to see the world of consumer and enterprise converging. And so that's why I'm very excited about being a part of ServiceNow. >> So, you talked to the audience, as I say, about your background. You're a family man, you've got Four children. >> John: Yeah >> Jeff: Pictures on stage; which I love. You know, it really kind of goes with the folksy, you know, history of this company and the community base. Not too many people put their family photo up on the keynote. I thought it was great. >> John: Yeah, well, they're my bosses, so... (all laughing) >> Dave: Well, like you said, they make you humble >> John: Yeah. >> Dave: and you learn a lot from them, so... So I appreciated you starting that. I've got Four kids, Jeff's got kids, and so... >> John: That's great. >> Dave: And you're hosting a women in tech breakfast tomorrow, a real passion of ours, so, maybe talk about that a little bit. >> Well, I just think it's really, really important. And, people ask me: "Why do you think that way?" I think it's good business, right? At the end of the day, the ultimate thing we do to succeed in business is we need to attract, develop, and retain the very best people, >> Dave: Right. >> John: and by definition, 50% of the workforce is female. And so, to not be aggressively trying to cultivate that part of our team is to miss an opportunity. And doing it well is hard, but if you do it well, it could be a source of competitive advantage. So, I care deeply about it professionally, and then also personally as a father of a daughter, the question I ask men that have daughters and say: "Do you want your daughter to grow up and be part of a work environment that's even better than the one they would have been if they'd come at your time?" And almost all of us say, "Yes!" >> Jeff: Of course >> John: So, it's a responsibility we all share. >> So, I want to ask about your management philosophy. You know, I've heard the term, of course you have too, "benevolent dictator". You use the term, >> "servant leadership". >> "servant leadership". >> John: Yeah. >> Dave: Which starts at the customer on top. Explain your philosophy there. >> Well, it's a way I learned to lead early in my career; which is: that it's the opposite of a classic pyramid. Right, where the CEO's on top and everything's underneath. No, this is an upside-down triangle, where the reason we're here is to serve our customers, to serve our employees as they serve our customers, to serve the purpose and to the extent you can, to serve the communities in which we are part of. And my experience is that: building that deeply into the culture of a company breeds a level of commitment and a level of long-term orientation that's really important. And ServiceNow's had that from the beginning. Think about Fred Luddy embodied that. He was a brilliant technologist, and he said, "You know what, I'm going to recruit a CEO" "before the company goes public who has those skills." So, he recruited Frank, right? And Fred stayed involved. Frank embodied servant leadership. Frank could've stayed forever. Frank said I was the right CEO to serve this purpose from 75 million to a Billion Four. And then he started to looking for someone that's the right person to serve for the next generation; which is me. So this notion of stewardship, we're all here to serve our customers and try to make our purpose come alive over a long period of time. And I think it's the most enduring motivation and inspiration we can have. And it keeps the customer front and center. >> Well, so one of the first things you did in your first 100 days, you said you wanted to see 100 customers, you actually accomplished that in 45 days. So, first of all congratulations, first of all how'd you do that? (all laughing) >> Well, I went at a roadshow to 10 cities across the U.S. and just packed my days full of meetings with customers. And they were individual meetings, and we had some group meetings, some lunches and dinners. And those are some of the best because you get a conversation going. I had Four or Five, Six customers around a breakfast table or dinner table and we start talking about their issues. And, the dynamic in every situation was they would start sharing with each other. They would say, "Well, how are you addressing this?" And they'd starting saying they have similar issues, similar challenges, similar ideas of how they're going to address it. So, the power, that community power, I was seeing firsthand in smaller settings. And for me, it was just so energizing because our limitation of how quickly we can get better is well we understand our customer's needs, and also understand their feedback about where we can get better. >> Well it's interesting, you said you were a customer when you ran eBay... >> John: Yes. >> Jeff: of ServiceNow, so that's kind of some of your background knowledge of the company. When you went out on your tour, what were some of the things that surprised you that you didn't know even though you had been kind of a ServiceNow customer in the past? >> Well, I think what I hadn't fully understood was the power of the ServiceNow platform, and how it's getting pulled into new areas across the company. So, it's getting pulled to customer-facing applications, customer-facing processes like Ashley at GE is talking about. >> Jeff: Right. >> John: And it makes sense, right? I know at eBay and PayPal, we really worried a lot about how do we handle inbound contacts from our users. And password reset was the #1 inbound contact. (dave laughing) Well, password reset is a perfect process that can be handled in an automated in a self-help way; which is ultimately what the customer wants. >> Jeff: Right. >> John: And ServiceNow can help enable that. And so, as I was sort of surprised and delighted by how this platform is getting pulled into new use cases, that in many ways are back to what Fred Luddy imagined when he founded the company. The interesting thing is, Fred founded the company as a platform to serve all services, businesses, business processes across the enterprise. And then, but platforms don't generate revenue, They don't sell. So, he found an application: ITSM; which was the first application, and it took off. And so ServiceNow began to be known as the IT company. But that was never what Fred envisioned. It was a company that enabled and empowered IT to simplify and automate and transform the entire company. >> It's interesting, password reset. Because it seems like such a simple process. And it doesn't necessarily seem like a high-value process. But in fact, it's hugely high-value for the customer. It's hugely cumbersome in terms of the time it takes. So, to automate something that seems so simple as password reset, has huge implications in terms of efficiency inside and customer satisfaction on the outside. What a great example. >> Well, and here's what's so interesting about that example: Is, it touches multiple parts of the company. Because, people actually, your password is your security. And you could automate changing it in a way that was insecure. But, you've got to do it in a way that it's the convenience that we want to reset our passwords, but we want to know we're safe. And so, that password reset flow has to touch security, it has to touch engineering, it has to touch operations and customer support, it has to touch the customer's record, and so it's a classic multi-function, multi-discipline flow, but you want to make that easy and simple for a user, and yet also have them feel safe. Simple and safe is hard to do. >> John, you mentioned Ashley from GE, I want to talk about digital transformation. It's one of those terms you hear a lot at these conferences, sometimes it's amorphous, it's kind of like A.I. We'll talk about that if we have time. But Jeff, I love your quote. We follow GE quite closely, and Jeffrey Immelt said: "I went to bed an industrial giant," "and I woke up a software company one day." >> John: Yep. >> Dave: And you see this everywhere. So what is digital transformation to you and the customer's that you've been talking to? >> Well, here's, technology and software in particular on one hand is disrupting every company in every industry. I view that as a motivation. I view that as a wake-up call for all of us, including a software company. And, software is an opportunity. An opportunity to make changes and advancements at a pace and a magnitude that's been unparallelled in business history. So every company needs to define how they're going to use technology, how they're going to use software, how they're going to use digital capability to their advantage. To their advantage with their own consumers, their own customers, either industrial customer or a consumer in a consumer business, and how to use it to change the employee's experience and improve it. So, employees are spending time not on manual tasks; which now can be done by technology, but on higher value-added activities, and then how you can operate a global enterprise in an effective and efficient manner. And so, technology is an offensive weapon if you will, an offensive tool, is something that's on the mind of every CEO, and every company. And that's where they're looking for how do they have a few trusted partners. A few trusted technology partners that help them navigate their way through that, help them drive their way through, and that's ultimately what ServiceNow is. >> So these are big ideas, and they involve a lot of different constituencies within your customer base. Obviously, your IT peeps, as we like to say, but the CIO, who's role is changing, and also the line of business folks. So these are big, heavy lifts that you can't do alone. You've got to have an ecosystem to do that. When we did our first Knowledge in 2013, the SIs were a lot of companies frankly that we never even heard of. And now, you're seeing all the big SIs. I don't even want to name them because I'll forget some. But, your partner strategy is critical to achieving that vision that you just laid out, isn't it? >> Absolutely, Absolutely. Because it takes both of us. It takes our software and then their capabilities to help our shared customers, shared clients, implement the software, and do it increasingly in a way that is as configurable as possible; which means as minimum customization as possible, and also as quickly as possible. And our partner ecosystem's an essential partner in doing that. And there's the big SIs, and then also some of the smaller ones. I spent some time with customers in some smaller cities where they're saying having local capabilities, local teams, that were trained and certified on ServiceNow was really important to them. Often they end up being acquired by or joining the bigger SIs over time, but that sort of grass roots opportunity. Because that's also job creation. That's job creation in communities. I got to see how talented, computer-literate, software-literate people in different cities around the world are seeing an opportunity to create a livelihood by helping customers integrate ServiceNow in the most effective way. >> So two years ago, Frank Slootman in his keynote said that the CIO's role is changing and they're becoming business people. >> John: Yes. >> Dave: And kind of challenged CIOs, if you don't speak wallet you better start learning that language, the "lingua franca" of the business. So, you obviously agree with that. But, how is the CIO role changing, and how does it support other roles within the organization, that you're trying to apply ServiceNow to? >> Well, I have a really, Jeff, a really outside-in... Or, Dave, really outside-in...sorry about that. >> Dave: It's alright. >> John: I've had a lot of names this morning. >> Jeff: I'm sure you have. >> Dave: That's pretty good. >> John: Outside-In view of this. Which is through the eyes of the customer, alright? The CEO is thinking about: "Alright, I've got to serve our customers better," "I've got to retain our customers" "and serve our customers better." "And then I've got to tract and retain employees" as we've been talking about. "And I need the digital capability," "I need technology to help us do that." Their going to turn to the most technically-literate person in the C-suite to help do that. That's the CIO, right? And so the CIO by very definition has to play a broader role of partnering with the business unit leaders, with the functional leaders, to drive that end-to-end business transformation or digital transformation. And the CIOs that I met are ready to take on that challenge. They couldn't have done that before the cloud technologies that give them the ability to play offense. But these cloud technologies now cut across, they don't just sit in IT, they cut across all of the enterprise. >> Jeff: Right, right. >> John: And so, I would say there's almost this gigantic sucking sound, if you will, to use an old Ross Perot-ism, that IT and the CIO are being asked to play this role, be change agents, strategic change agents, across the enterprise. And they're ready to do that, but they do need to speak business in business terms, and business value, and business value means: Are we serving our customers better? What's our customer NPS? What's our customer response time? What's our customer retention? They need to speak employee value terms: What's our ability to retain our best employees? What's their satisfaction? And then of course they have to speak the business terms of efficiency, right? Are we being more productive and more efficient as we're serving our customers and as we're serving our employees? And so, the CIOs I met and the IT professionals I met, are asking for help to translate what they do into that business language. And the very best ones are doing it. And I think you'll see that trend continue more and more. >> And they've got to have automation, and they've got to have efficiency because their budgets aren't going up commiserately with their increased responsibility to drive this digital transformation. So they've got to wring that extra value out of the tools and processes and people that they have, and that's where you really help them quite a bit. I think I saw a quote the other day that someone went from 60 days to Two days in a business process, amazing. >> Well, and it's interesting because companies are investing more in technology than they ever have. If you take the broad technology spend, they're investing more in technology. But, they expect to get productivity and efficiency, not just out of IT, but across the entire enterprise. >> Jeff: Across the board. >> John: And that's the opportunity: More investment, greater productivity, greater value for customers and employees. >> You talked yesterday to the financial analyst about the sort of execution machine that you inherited. Personally, I think you have a great CFO, one of the best if not the best in the business. So I presume you're not going to be spending a lot of your time trying to restructure reporting and counting beans, no pejorative intended there. So, what do you bring to the organization? Where are you going to spend your time? And what are your main goals over the next mid-term and long-term? >> Well, as you said, I'm blessed. Mike Scarpelli, I think, is a world-class CFO and the best in the industry and I'm honored and thrilled to work with him. Same with Dave Schneider and Kevin Haverty who run our sales force. And now CJ Desai, our Chief Product Officer, Dan Rogers, we've got a really strong team. My focus is to have us continue our current momentum, continue the current execution that we're focusing on. But then, to begin to sort of chart a course for 2018, 2019, 2020, and beyond as we go from being a billion-dollar company, to a four, to five-billion dollar company, to beyond to a 10-billion dollar company. And the nice news is that it's building on top of this very solid foundation. As we evolve from being what has been an IT-focused platform company to be more of a digital transformation platform and company. And helping our clients, helping our customers, achieve their aims and their goals, and being one of the few trusted technology partners. Every company has a few trusted technology partners and we want ServiceNow to be one of those. And, to do that, you've got to be viewed as mission-critical and adding real value, both of which I think we are. >> Dave: So you could joke, you know, don't mess it up. >> John: Yes. >> Dave: Okay, and take it to another level; which really is kind of what seems to be your expertise. Bringing it into the line of business is talking to the CEO and other C-level executives. And actually, marrying the expertise of the CIO has cross-organizational purview, leveraging that capability and super-powering that. >> Exactly. Exactly. You know, it's interesting. If I were to look back on the last 15 years, the C-suite role that has changed the most in the last 15 years has been that of the CFO. 15 years ago CFOs were being counters. >> Dave: Yeah. >> John: Right? Today, as you said, as Mike Scarpelli and Bob Swan, my previous CFO at eBay and the best CFOs, they drive value across the enterprise. Right? They're almost COOs in their mindset. They work with business units, and they add enormous value. So that job has become significantly more important and powerful. I see the same thing happening with the CIO over the next Five to 10 years where the CIOs role with grow, and expand, and broaden. And that's exciting. >> Well, you know, one of the things, actually, you know, we come to these conferences, and there's obviously a lot of messaging, but we try to understand how that messaging actually fits with what customers are doing. One of the things that you guys are messaging this year is light speed. And so, when you talk about the CFO and the changing role, it brings up, to my mind anyway, light speed requires a new set of metrics, and listening to, like Scarpelli, talk yesterday, he's all over the metrics. And these aren't, you know, your typical, you know, EBITDA metrics, they are just a new set. Do you see that happening within, not only ServiceNow, but within your customer base, where the so-called, I'll call them, "light speed" metrics are emerging? >> Absolutely. I mean, you saw the example of Dave Wright going through the machine learning, and how the machine learning capability, when applied to the ServiceNow platform, applied to specific problems, helps you fix problems before they happen in an automated fashion. Imagine that, right? That's light speed. Dave said it so well on stage. (all laughing) That's even faster than light speed. And so, you begin to see, alright, how do you measure, in delivering a great customer experience, how do you measure the reductions of problems? How do you measure the prevention of problems that provides greater availability, greater reliability, greater consistency, of a customer's experience? Now, ultimately that measure will be in customer NPS or some other customer metrics. But, some of the subordinate metrics I think you will see a growing number of what I would call L2, L3 metrics, that is, a dashboard of how to run a great company around customers, employees, and financials. >> Alright John, I know you're super busy, we've got to leave it there. Thank you so much for coming on theCUBE and congratulations on the role, great keynote, and best of luck. We'll be watching. >> John: Thanks very much Dave, thanks >> You're welcome, alright. >> From me, congratulations. Keep it right there, buddy, we'll be right back with our next guest. This is theCUBE, we're live from ServiceNow, Knowledge17. Be right back. (upbeat electronic music)