>> Live from San Francisco, it's theCUBE covering Google Cloud Next 2018, brought to you by Google Cloud and its ecosystem partners. (techy music) >> Hello everyone, welcome back to theCUBE's live coverage here. We're in San Francisco for Google Cloud's major conference, Next 2018. I'm John Furrier, here for three days. Wall to wall coverage on day one. We've got two great guests from SignalFX, Karthik Rau, founder and CEO, and Rajesh Raman, who's the chief architect. Signal's a hot startup in the area. Way ahead of its time, but now as the world gets more advanced, the solution is front and center as the value proposition if cloud moves into the mainstream, devops going to a world at large scale. Not just networking, monitoring, applications, you've got service meshes booming, great topic. Karthik, great to see you, Rajesh, thanks for joining us. >> Thank you. >> John, great to be on. >> So, first of all let's just get it out of the way, you guys have some fresh funding in May, so just quickly give an update on the company. You guys raised-- >> Yeah >> A series... >> A series D. >> Series D, give us, but how much? >> Yeah, so we raised $45 million from General Catalyst leading the round back in May, been building a ton of momentum as a company, close to a couple hundred people today. We're using a lot of that to expand internationally. We've got a team in Europe now, just opened up a team in Australia. So, things have been going great. >> Congratulations, we've had chats before, always been impressed. You guys have a great stable of awesome engineers and talent in the company doing some great work, but it begs the question, I always like to get into the what ifs. What if I could have large scale application development environments with programmable infrastructure, how does that change things? So, Karthik, what's... How as that what if changes, now that is what's happening you're starting to see the cloud at scale for the common masses of enterprises, where old ways of doing things are kind of moving away. It's like horse and buggy versus having a car for the first time-- >> Yeah. >> Jobs are changing, but the value doesn't necessarily change. You still go from point A to point B, you still got an engine, people who care about fixing cars, so people just want to drive the cloud, some people want to get under the hood, whole new architecture. >> Yeah. >> What's the what if of if I could have all these resources, what's the challenges and what do you guys solve. >> Well, I think there are a couple of challenges in this new environment. One is the number of components are just orders of magnitude more than they used to be in a cloud environment, right? We went from having physical machines that live for three years in a data center, divide it up into VMs 10 years ago, now divided up into containers for every process. Not only that, but these containers get spun up and spun down every few minutes or every few hours, and so it's just the number of components in the churn is just massive. So, that in and of itself requires a far more analytics-based approach to understand patterns rather than what's happening on an individual component. The second thing that's changed is the operating model's fundamentally different, because now you're building and running web services, and when you're running web services the people who build the software are the ones who technically are responsible for operating it. And so, you know, you have more updates, you've got more people involved, you've got lots of different components that all need to interact with one another, and so having a communication framework across all of these disparate teams become really, really, really critical. So, those are the two fundamental changes as you move from, you know, for operating these modern, massively distributed-- >> Yes. >> Applications. >> And I'll just add just some observation data that we've seeing in theCUBE is those same folks building aren't necessarily operators, so they want to be in and out fast, right? (laughs) >> They don't want to be running and operating all the time, they want to push some code. Melody Meckfessel here at Google ran a survey with developers and said, you know, "What makes you happy," and it was two things that bothered developers: technical debt and speed for deployments, commits, and the commit number was around minutes. If you can't get something done in minutes then they're onto something else, so the mind share attention of developers and technicos. So, this is a challenge at scale when you have technical debt, which we've seen companies come out of the woodwork, "Oh, yeah, "I'm going to automate something, "I'm going to throw some compute at it with the cloud "with the best monitoring package on the planet "and look how great it is," but all they did was just code some instrumentation and that's it. >> Mm-hmm. >> They weren't dealing with a lot of moving parts. Now as more things come in this is a challenge that a lot of companies face. You guys kind of solved this problem... >> Yeah, absolutely, so maybe Rajesh was a part of the team at Facebook that built the Facebook monitoring system, and that's actually what gave us a lot of the vision to start SignalFX five-and-a-half years ago, so maybe-- >> Tell about the protection, the vision-- >> Yeah. >> And what you guys are doing. >> Yeah, so CICD, you know, it kind of, like, underlies a lot of this vision of, like, moving fast. You mentioned that people wanted, like, you know, push their code in a few minutes... The thing that makes that possible is for you to have observability into what's happening while that push happens, because it's one thing to push very fast, it's another thing to recognize that you might have pushed something bad and to be able to revert it very quickly, too. And so, you'd only need, like, you know, good observability into all the things that matter that characterize the health of your system to be able to quickly recognize patterns, to be able to quickly recognize anomalies, and to be able to maybe push forward or even roll back very quickly. So, I think, like, observability is like a very key aspect of this entire CICD story. >> That's great, and that's great to know that you were over at Facebook because obviously Facebook built, at scale from the ground up, a lot of opensource. Obviously they contributed a lot to opensource, but it's interesting, as they matured and you start to see their philosophy change. It used to be move fast, break stuff. >> Yeah. >> To move fast, be reliable. >> Yeah. >> This is now the norm that's the table stakes in cloud. You have to move fast, you got to push code, but you got to maintain an operational integrity. This is, like, not like an option. This is, like, standard. >> Absolutely. >> How do you guys help solve that problem? >> So, I think there are a few different aspects to it. So, the first is to, you know, people need to ensure that they have observability into their application, so this is ensuring that you have the right kind of instrumentation in place. Thankfully this is kind of becoming commoditized right now and getting metrics from your system. The second part, and the more key part, is then being able to process this data in a real time way. You know, have high resolution, very low latency, and then to be able to do real time streaming analytics on this data. In highly elastic environments when things come and go very quickly, the identity of any individual, like, component is less important than the aggregate system behavior, and so you really need the analytics capability to kind of, like, go across this data, do various kinds of aggregations, compare it against past data, do predictive analytics, that sort of thing. So, analytics becomes the very key concept of, you know, how you operate these environments. >> It sounds so easy. >> Yeah, well one thing I'll add to that, so you know, to your point a lot of big companies sometimes are scared by this. You know, "How do we," you know... "We can't move quickly and break things," and everything that they've designed is around having process and structure to check and make sure everything is clean before they push changes out, and now we're in this world where, you know, an intern or a developer can push directly on a production, how do you manage that? The key thing in this modern world when you're trying to release software quickly, Rajesh hit on this earlier, you need the magic undo button. >> Yeah. >> That is the key to this entire process. You need to design your software, you need to design your process, and you need to design your tools so that if you introduce something bad you catch it immediately and you can roll it back. So, lots of devops practices are oriented around this, right? The idea of a canary release, I'm going to roll out an update to one percent of my systems and users, test it out, observe all the metrics, make sure everything is clean before I roll it out to everyone else, and the ability to roll back quickly is also important. But in order to do all of this you need the visibility, you need the metrics, and you need to be able to do analytics on it quickly to identify the patterns as they emerge. >> That's a great point and I'd love to just double down on that and get your thoughts because some of the Google Cloud people who are operating at this scale, I put them on this whole service-centric architecture, because they're services. We're talking about services, managing sets of services, having analytics, observation space, the reverting back and the undo button, the magic button do-over, whatever you want to call it, but the interesting thing is clean. Having a clean service whether it's an API, message queue, or an event, this stuff's happening all over the place in the new services world. How do you guys help there, is that where you guys get involved? Do you see up in that layer, how far up are you guys looking at some of the instrumentation and the insights? >> Yeah, you want to take that? >> Yeah, sure, so you know, the one thing that we really like about SignalFX and we were very keen on when we built the platform is that we are very agnostic about metrics. We're happy to accept metrics from anywhere, we'll take instrumentation-- >> (chuckles) You don't discriminate against metrics. >> We'll take instrumentation from cloud environment, we'll take, you know, metrics from opensource systems and premier applications, so you know, some of these systems are already kind of built in to get metrics from. You know, we talk to the Kafkas and Cassandras of the world, for example. We can also talk to GCP and AWS and grab metrics from their system. I think the interesting question is like when people really are taking the devops philosophy of, like, so how do you instrument your own application, what questions do you want to ask from your environment that answer the critical questions that you kind of have, and so you know, that's the one, that's the next step in the hierarchy of needs is for people to ask the right kinds of questions, and you know, instrument their applications properly. But like having done that, we can go up and down the stack in terms of, like, insight into whether all the way from your cloud environment through opensource systems, all the way up-- >> So, you guys'll take data from anyone, just stream it in-- >> Yeah. >> Normal mechanisms there, what's the value added, where's the secret sauce on SignalFX? >> So, I think value, it's all about analytics. We are all about analytics, so we are able to look at patterns of the data, we can go up and down the stack and correlate across different layers of software, look at interactions across components in your microservice, for example. You know, one really interesting thing that's happening, as you might be aware, like the whole service mesh aspect of it, which lets us, gives us insight into interactions between components-- >> Yeah. >> In a microservices architecture, so you know, we are able to get all that data and give you insight into how your whole system is working. >> So, you guys, you can see in the microservices layer? >> Absolutely. >> Yeah. >> That's powerful. >> And the key point is monitoring really has become an analytics problem, that's what we keep saying, right, because what's happening on an individual component is no longer as interesting as what's happening across the entire service, so you have to aggregate the information and look at the trend across the entire service, but the second thing that's really important is you need to be able to do it quickly, and this is where our streaming real time system really mattes. And people might ask, "Why does it "matter to do something real time." Like, "Seconds versus minutes, can a human actually "process something in seconds versus minutes?" Perhaps not, but everyone's moving towards automation, right? >> Yeah. >> So, if you want to move to a system where you have a closed loop, you have automation, and guess what, all of these modern systems, all the stuff that Google's talking here is all about automation. >> Yeah. >> And in that world seconds versus minutes, it means a tremendous amount of difference, right, where if you can find signals that will tell you there's an emerging problem within seconds and then you can revert a bad code push or you can auto-scale a cluster or you can, you know, change your load balancing algorithms all within seconds, that is what enables you to deliver, you know, 4.9s, 5.9s type of availability. >> And the consequences of not having that is outages-- >> Yeah, outages. >> Performance. >> Performance degradations, unhappy customers. I mean the cost to a brand now of having any kind of a performance issue is enormous, right? People are on Twitter before your team knows about it. (chuckles) >> Actually, you guys have a lot of the things you're solving, what is the core problem that you solve, what's the value proposition if you narrow it down that's high order bit for SignalFX? What's the corporate problem you solve? >> Well, we're solving the monitoring and observation problem for people operating cloud applications, so what happens is when you use SignalFX you have the confidence to move quickly, right? It gives you the safety net to be able to deploy changes on a daily basis, to have the shared context across a distributed team, so if you've got hundreds of two pizza box teams working together we give you that framework, the communication framework and the proactive intelligence to find issues as they emerge and proactively address them. And bottom line what that means is you can move as quickly as a Google or a Facebook or a Netflix even if you're a traditional Fortune 500 company that's regulated, and you know, you think you may not be able to do it but you really can. >> You give them the turbo charge, basically, for the analytics. All right, here's a question for you, what are the core guiding principles for the company? You guys obviously have a lot going on so you've got a core tech team, I mentioned it earlier. >> Mm-hmm. >> What are some of the guiding principles as you guys hire, build product, talk to customers, what's the key DNA of SignalFX? >> Yeah, I would say we are a very impact-driven company, so I'm, you know, very, very proud of all the people that we have on the team. We've got a lot of entrepreneurs who are focused on solving big problems, solving problems that customers may not necessarily know they need at the time, but as the market evolves we're there to solve it for them. So, we're a very customer-centric company. We have fantastic, we invest aggressively in technology, so it's not just about wrapping a pretty UI around, you know, Bolton Tech. We have real differentiated technology that solves real problems for people, and you know, I think we've in general just tried to skate to where the puck is and understand where the market's headed as a company. >> What are some of the customer feedback that you're getting? For folks that don't know SignalFX, what are some of the things that you're hearing from customers, why are you winning, what are some of the examples, can you share some color commentary? >> Yeah, I'll give one example, a Fortune 500 company that has been very aggressively investing in cloud the past, you know, four or five years, built an entire digital team, and their entire initiative is, like a lot of people in the Fortune 500 now, is to have a direct-to-consumer type of a relationship, and one of the things that they struggled with early was how do they move quickly, support product launches that might have massive load, and have the visibility to know that they can do that and catch issues as they emerge, and they didn't have a solution that could give that visibility to them until they leveraged SignalFX. And so now, if you talk to people there they'll say that they've essentially gone from defense every time they did one of these product launches to being on offense and really understanding what it takes to successfully launch a product and they're doing way more of these, so-- >> Moving the needle on time to market. >> Moving their business forward, you know, and digital transformation just by-- >> Yeah. >> Having SignalFX as a core enabler. >> It's the cloud version of putting out fires, so to speak, when you do product launches, right? >> Yeah. >> I got to ask you guys a question. You guys are both industry veterans, obviously Facebook has a storied history. We know all the great things that happen on the infrastructure side. Karthik, you've been in VM where you've seen the movie before where VM, where it made the market, changed IT for the better, still talk about the VMwares now. Now as we see cloud taking that next transformational push, describe the wave we're on right now, because it's kind of an interesting time in tech history where the talent that's coming in is pretty amazing. The young guns coming in with opensource the way it's flourishing is pretty phenomenal. Some of the smartest computer science and/or engineering talent is really solving what was old school B2B problems that really no one really wanted to solve. I mean, it was people were buying IT. Now you're talking about building operating systems, so the computer science kind of mojo in the enterprise has upped a bit. >> Mm-hmm. >> What's this wave about, how would you describe the wave of this time in history of the tech industry? >> Do you want to... (laughs) I'll add my take but why don't you go first. >> I think the thing that I find striking is just like, you know, when people used to talk about big data, you know, a few years ago, and now that is like, that's just normal. >> Yeah. >> And like, the amount of compute and the amount of storage that people are able to, you know, bring to command at-- >> Yeah. >> On any problem, it's just incredible, and that's just going to, I think, like continue to grow, right? That's going to be an amazing thing to watch. I think, you know, what this means... It also has interesting implications for, you know, companies like SignalFX who are trying to be in the monitoring space because the mojo used to be you had to have all this complicated software to do the instrumentation. Well, the instrumentations part is easy, but now all the value that's going to come about monitoring is in what you do with all that data, how you analyze it and look for, like, you know, so the whole AI ops and all that is going to be the key of the whole monitoring problem going forward, you know, five, 10 years from now, but we already see that analytics is such a key aspect of the whole thing, so... >> Yeah, I'm very, I think we're at the beginning, still at the beginning of a massive 30 to 40 year cycle, and this hasn't happened since the PC revolution in the 1970s, right, so the smartphone comes out 2007, massively opens up the market for software-based services to several billion people who are connected all the time now, drives a massive refresh of the backend infrastructure, drives the adoption of opensource, and so we're at this magical point now where the market for software-based services is just exploding, and every enterprise, you know, is becoming a software company, and you know, I think the volume of data that we're accumulating is just growing exponentially and what you can do with AI at this point, it's just... We're just beginning to see the benefit of it, so I think this is a really, really exciting time and I think we're just at the beginning. Most of the enterprises, and even the tech companies, are just beginning to capitalize on what is in store for us in the industry. >> I find it to be intoxicating, fun, and just great people coming in. To your point about the beginning of a 40 year run, also the nature of software development is being modernized at an extremely accelerated pace, so as people in the enterprise start re-imagining how they do software, because if they're a software company they've never had product managers. I mean, so the notion of what is a product, how do you launch a product, is all kind of first generation problems and opportunities, so I think to me it's really the enablement... And this is really what I think people are looking for is who can take the burden off my shoulders, help me move faster, more gas, less brake. >> Mm-hmm. >> Go faster, drive value, and then ultimately compete, because competitive advantage with technology... What does that mean to you guys, because how do you react to that because what you essentially are doing is creating instrumentation for enabling companies to create new value faster with technology and software, in some cases at a level that they've never seen before. What do you, how do you react to that? >> Well, I think that's exactly what we do, right, I mean, every company, I think most companies realized that they had to invest in software and focus on all these new opportunities at the early part of this decade. First thing they had to do was figure out who's going to build all this software, so most of them had to go hire engineers or build digital teams. They had to decide where are they going to run, the cloud wars of, you know, the early part of this decade. Do we build a private cloud, do we use a public cloud, I think both of those things have happened and people are now comfortable with those decisions. The third leg, which is squarely in the space that we're in, which is how do you operationalize this new model, and I think people are working through that now. As they get through that in the next few years, the companies like SignalFX helping every company, operationalize it very quickly, I think that's when the true promise of this new digital era will be realized where you'll start to see all of these fantastic applications, mobile apps, web service apps, direct-to-consumer streamlined supply chains. We're just beginning to see the benefit of that, and we'll see when that happens then the volume of data that they're collecting will increase exponentially and then the promise of machine learning and AI will take an altogether nother step. >> You got to know how to automate it before you can automate it, basically. What's next, final question for you guys, what's going on with SignalFX, what are you guys going to conquer, what's the next major milestones for you guys, what are you looking to do? >> Yeah, well we're continuing to focus on driving value for our customers, so we're expanding our geographic presence, so we're doing a lot of international expansion at this point. We're hiring a lot of engineers, so if anyone is interested in a development job, reach out to us. >> What kind of engineers are you looking to hire? >> Rajesh, you want to take that, sorry. (chuckles) What kind of engineers... >> What kind of engineers you looking to hire? >> Everything. (chuckles) >> I mean, all kinds of engineers, especially distributed systems engineers, front end engineers, full stack engineers, like real tech, all the good engineers we can get. >> (chuckles) Awesome. >> A lot of product development, there's a lot of interesting things happening in this space, and so we're, you know, continuing to invest very aggressively. >> Large scale distributed systems. >> Yep. >> You've got decentralized right around the corner, so you've got a lot of stuff happening. >> Yeah. >> Yeah. >> Great job to have you coming on, thanks for coming on, Karthik. >> Great, great to be on. >> Rajesh, thank you so much. >> My pleasure. >> SignalFX here in the cloud of Google here at Next, it's theCUBE, theCUBE cloud, CUBE data, we're bringing it all to you. I'm John Furrier, thanks for watching. More coverage, stay with us, we'll be back after this short break. (techy music)

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

>>law from Las Vegas. It's the Q covering a ws re invent 2019. Brought to you by Amazon Web service is and in along with its ecosystem partners. >>Welcome back to Las Vegas. Lisa Martin with John Ferrier, The Cube at AWS Reinvent 19 Lots of buzz. You can probably hear a little bit of it behind us here. There's about 65,000 people projected to be at a W s reinvent this week. Wow, we're very excited to welcome a distinguished guest and a distinguished architect from Splunk. Back to the Q r didn't murder, do you? Welcome back. >>Thank you very much. Thanks for having me back. >>Great to have you here. So let's kind of talk about here. We are re invent lots of news, lots of stuff. Lots of buzz going on. What kind of the latest with Splunk and a del us. >>All right, so the latest Splunk is obviously acquired us significance. The deal closed in trouble, So we're very excited about that. Um on we really feel that it's a it's a manager off complementary technologies, which is what I want some of the things we probably we can discuss later We're also very excited because we got acquired. Then we were able to go to dot com where we, you know, introduce the combined companies together. But then, at a cubicle on recently, we made a couple of very interesting product announcement that we're excited about, which is way discussing lots of reinvent conference. The 1st 1 is we have a brand new kubernetes experience called the community's Navigator, which we feel is a far, far better way Thio understand and make sense of the community environment. As you know, it's taking getting a lot of traction as a technology. So we're very excited about that because it not only gives you the infrastructure of you, but it also gives it the operators view, which I think operas. We really appreciate it. Three other thing that we're also focusing on. Obviously, if Splunk acquired US logs is an important part of this equation way are doubling down on the ability to ingest logs and make metrics out of them. You know, one of the things we've always discussed is how metrics every lightweight and actionable think that you can put on dashboard. You could put a lot son on the ability. Doing just logs and make them into metrics gives you that capability on the log data. We had a very interesting announcement around AWS. Fire lands on so on where you would be able to take love data from Splunk or other sources, and they bring them in as metrics to the system. The 13 has to do with the growing traction off open source standards. So we were actually very excited to make some contributions in the open telemetry project that we can discuss also later. But the idea is we want to promote open standards on open source, especially in instrumentation in the monitoring. Really? So that's kind of what's new >>question that's here at Amazon this week in this points to your success is observe ability, jazz he's laying out. This is distributed cloud Senator Gravity public Cloud Edge Outpost, Native AWS, Outpost five G with Verizon Wavelength All points to a lot of things. Move around, move compute to the edge where the data is so it speaks of large scale people having a hard time of doing it themselves on observe abilities. Harder and harder to roll your own are managed multiple tools. What are you guys doing to solve that problem? And how do you shape that going forward? >>That's a great question. Like the thing that blows my mind every time I come to reinvent is just the sheer variety of new things that comes across on. People are adopting them. All of these, he mentioned a bunch of different service is that I've got a lot of traction, got a lot of users, so that's happening across the user base. And then the question on D A. Y is because it's no longer about just building a database or, you know, things that you can sort some data and make some credit. It's about building the solution. A good solution. Need to support all the system. The service is that the customer the engineers are using right, so just keeping up with the sheer pace of innovation. Keeping that system up today is extremely, extremely hard. And so I feel that in generous making, less and less sense for most companies to try to roll their own observe ability, they would rather choose good tools that can sort of empower them that can able to move faster and invest in the people and process is part of it, which is also very, very key because >>the downside of rolling your own doing it yourself sure, what are some of the consequences that might happen? >>So in general, the people, the reason people want to build a couple of reasons, right? So one is they might undervalue, like the capabilities that good of the ruling might provide you, they might be afraid of the cost, like observe ability was cheap or free. Most people probably wouldn't build it. Some of them still vote because they might be afraid of vendor locking. Vendor lock in is a problem, and you don't want to be locked into vendors. Right? And what I feel in the terms of the risks is like if you consider observe ability as a cost center and not as an enabler, then you probably gonna try to do D i Y. But I think the view to the right view to have is think of it is something that accelerates your innovation and some of the risks of the advice. If you don't build something that's really capable that can that can do all the border or something that a system. Should you're gonna get slowed down, your innovation is gonna get slowed down. Another very thing, common pattern that we see a lot is maintaining, maintaining that it is a lot of resource is and people to build and maintain such a system. It's easy to prototype something and get it going, But are you going to be able to maintain the head count higher and grow the team on a long term basis? Because it's not something you can suddenly decide? Oops. I made a mistake. Time for a change. >>But change is difficult in any aspect of life. Changed management is something that we talk about office. It's way easier said than done. One of the things Andy Jassy talked about this morning and alluded to this and John's exclusive interview with him the other day was that the transformation needs to start at the top. It needs to be an executive level, a senior level and an aggressive tops down push in your experience in the last couple of years, what are some of the things that you're seeing companies in terms of the senior leadership embracing a understanding where D I y is useful where it's not, but also pushing that I want Oh my God, guys pushing it down from the top. So folks understand why this type of change is fundamental to a business to be competitive, >>right? So in general lighting, the focus is all on, like innovating, faster moving faster, keeping customers happy. Fundamentally, that's what we're doing. You know, our CMO Tom Bueller likes to say that you know the business. The Internet moves at the speed of life, a speed of life, Israel time, right? And so outages, Any kind of issues. They really affect your brand. And that's something that we need to avoid, like the plague, right? And that's gonna wear again. Observe. Ability comes in because this is the thing that's gonna allow you to find out renting There are. But more importantly, even when you don't have outages, the confidence that teams get in making changes, whether it be configuration changes or coat, which is a setup because they have a good system backing them up, is very, very critical. Right now. You can go D i y. You can go with a vendor solution, potentially terrifying, especially you can build one, but I think from top down. The important thing is like you have to be very clear about what you want out of it. And what are those things that you want to accelerate or make better in your organization? If your goal is, I want faster innovation, more code pushes, more changes, less deception like I feel that message needs to be done so that engineers understand that from management perspective, there's full support for this on their empowering you again. Where the two comes from is less important. But I think having those goals very clear and having that culture set from the top is very critical. >>A lot of open source discussions were hearing it here, laying out multiple databases you got pie towards you got tensorflow in machine, learning side on more and more kubernetes again, that's all speaks to where the service measures air going in. Micro Service's There's a lot of talk around open instrumentation open telemetry. What's your take on this? What is what's going on there? Can you share your commentary on those two things? >>Yes, so injured, as you know, like from the beginning, where since in Olympics started, we always believed that instrumentation should be open standards based. There should not be propriety instrumentation. They should be vendor lock in. It was a little bit perhaps ahead of the time, and we started off, but you can see that trend really accelerating now. But at this point, because of the sheer variety of service is and so on, it's very, very hard to build proprietary everything that supports all the all the things out there. What we're seeing is more bottoms up, open source, open standards efforts. Right, And that is great because A for the guys who are doing d i y. Because they don't want vendor lock in open standards is great because you're not really locked into a vendor in your environment. What you're doing is using a different back end, whether it be you know, your own or would it be a vendor's? Some of the things that we're doing is we're actually very happy to see this acceleration, and we're actually helping make that more so. Way just contributed pretty significant open telemetry project, which, as you know, is a way to instrument your environment for traces and metrics and logs eventually and so we actually donated the signal if Ickes smart Asian, which is pretty wonderful because it's a survey that's an agent that's running on your instances on your host, discovers as nuisances pop up. So, you know, speaking of community is the perfect fit for that, and it will start monitoring them and sending you did up on by making it by donating it to open telemetry. Were hoping to sort of accelerate out of the goodness and so that you know, all customers all use it. Whether they're significant customers or not should be able to benefit from that. >>Is an open source the source code? Or is it open as >>it's open source? There's two aspects to it is open standards as well as open. Both of them are happening because through the Amish in acquisition, we're now actually a pretty cool part of the open telemetry effort. So we're not really helping find finalize the standards, but also donating actual source code and components. >>Take a minute to explain. Signal FX is evolution now that you're in Splunk, right? What's changed? What's still the same? What's how is it? Evolve, how a signal effects evolved because you guys were really early ahead of it. A lot of people, but a lot of market power, great customer base and tech. What's the impact of Splunk and signal FX? >>Yes. So you know there's this cliche which is one plus one equals three. It kinda almost feels true here because, like I really, every time I think about this acquisition, it just feels how complimentary these two companies were because we have metrics and traces. Blanc has the best loss platform. But one of the things that we lot of times don't understand is he also a bunch of other technology which is highly relevant to the observe ability, space. For example, the acquired A company called Phantom, which is into automation, which is right up our alley because I feel like after all this mess has died down a little bit on communities, automation is gonna be the next frontier. They're fantastic. Automation platform built the security automation tool called Mission Control based on that, and now we're looking at how we can bring that into observe ability. Another example is incident management, Broncos Victor Ups, which is again exactly right up our alley. So we feel that we can really build a portfolio of solutions that work really, really well, that's one aspect. The other aspect, as you mentioned, is just the market power. And the resource is that's behind us, which is wonderful. For example. They're quite our mission, which is a fantastic complimentary technology to us, and we're working very quickly to sort of integrate the two together. Similarly, is getting the introductions. Having the financial benefit of a Splunk behind us is wonderful to have. So I think it'll only accelerate our >>congratulations on a great venture. I know you guys stayed the course and rightfully so great payday. But great outcome with Splunk Win is a win win. Yes, I gotta ask you the entrepreneurial question because a lot of people are saying, Oh my God, Amazon sucking up all the auction out of the room, Large scale. Got red shifts taking over this. That's taking over that someone's eating someone. Okay, I don't believe that. I believe that there's still a lot of opportunity for entrepreneurs because of this Born in the cloud and reborn in the cloud a new next gen architectures are developing with EJ. What's your opinion on this? As a cloud of alls What's the dynamics? And entrepreneurs and people thinking about innovating and either pivoting or reimagine their business? How should they be thinking about how to win in the new model? What are some of the architectural things that could bet on? What's your expert opinion on that? >>That's a good question. So I have some thoughts on it. Everybody might area once, right? So I feel like move to cloud is just happening. It's happened. Everything is going to move to the cloud. So I think the fundamental technologies like the databases, etcetera, that cloud provided they're always gonna have an advantage because they're going to be able to run it in a more performance way. But the thing that they're doing us a great favour are entrepreneurs is they're making a lot of different service is available to us now. They're not always necessarily all working well together to solve a specific use case. So I feel that they're giving us a tool set, among other things, to combined together to provide solutions for the problems that users organizations are facing. Not necessarily the platform but but the solution, the vertical on top of it. I think there's a lot of opportunity there, as well as sort of just new types of technology you can. As an entrepreneur, you can still build technology that the cloud provider might find as valuable, and they might want to buy you there right when I use you. So there's always opportunity there. But I think they're so busy building that the substrate, this enormous amount of opportunities for further up north. That's kind of my opinion. >>That's great opinion. >>Last question for you on the parlay of opportunity and the career that you've had as cloud is evolving the next gen of the cloud to Toto that John's calling it, and data becomes the critical element that can fine business differentiation and competitive advantages. What are some of the next industries you really think our prime to completely transform? If they get it right, >>I think we're still stop. It is a whole lot of talk of machine learning. I think we're just scratching the surface. I think what's happened is at this point it has become accessible enough on viable enough to be applied to different places. So every day we see a new headline where basically similar techniques were applied to this use case or that this case, and it's amazing being health care, transportation, you name it like digital business. It's happening all the way on our side, on our side of the fence. I feel a Splunk or a signal effects. We want to see a lot of that happening on our side of the fence, because again, because of the complexity, wonder thing that we have discussed with John earlier is how we feel machine learning and artificial intelligence gonna help us operate more efficiently because humans are going to be able to not really rock the entire complexity of what's out there. So I feel there's a lot of assistance that it can provide. That's one area which I think is interesting, And I feel also that one of the things we discussed within Signal FX is his move towards automation automated everything because complex systems, they just need to run themselves At some point. Humans cannot really go and make all the decisions like my my mainframe, itjust kind offer it to tell you we're not really in the middle of it, right to some extent. Similarly, I feel there's not a lot of action gonna happen on Automated Cloud and automated opposite really automated everything. So I think that's another sort of big area that I see happening on one thing that I also like to say that I don't want to make predictions because, like the world is so different from 10 years ago to now, it just blows my mind. I don't know whether I would have been able to sort of think what's gonna happen. So I only wonder what the next five years they're gonna >>bring. Love that opponent. You're >>right. Even a few years ago today, mine are just thank you for joining John A B on today. We appreciate your time. >>Thank you very much >>for John Ferrier. I'm Lisa Martin. You're watching the Cube from Reinvent 19 and Vegas will be right back.

>>live from Las Vegas. It's the Cube covering Splunk dot com. 19. Brought to You by spunk. >>Hey, welcome back. Everyone's live Cube coverage in Las Vegas. That's plunks dot com. 2019 thistles their annual customer conference, where they unleash all the new technologies, announce all the new things. Everyone's here. It's the 10th anniversary of Splunk dot com cubes. Seventh year we've been covering slung been quite the journey from scrappy, startup going public growth phase. Now market leader on Outside has to come to success from the products and the engineering. And, of course, the people in the field that that served customers. And we're here with Susan St Leger, who's the president of worldwide field operations. Thanks for coming back to see you. >>Thank you, John. It's exciting to be here. >>So in the keynote, bringing data to every outcome is really the theme. Um, you seem to got a spring to your step here. You excited this year? What an amazing successful show because you got a platform. But the proof is out there. You got that ecosystem. You got people building APS on top of it. It's kind of all coming together this year, >>It sure is experience. It's it's it's just it's a huge leap forward, and I think so. Much of it is a vision of data to everything. And if you think about it, we talk about. We want to bring data to every question, every problem in every action. And the biggest thing you're going to see that you did see in the show is it's no longer just about the Splunk index. We're going to help you get you get value out of data wherever it lives. >>You had some big news on acquisition front Signal FX. Big chunk of change for that company. Private hot category. Observe ability, which really taste is out. That next 20 mile stare in the marketplace, which is cloud native. >>That's a >>cloud Service is, which comes together in the platform with logging coming together. >>Yeah, so exciting Way looked hard at that entire market, and signal FX was definitely the right answer. They operated a scale similar to us. They know how to how to operate it that scale, and so they're gonna be able to serve our customers well. And our view of the world is it's going to be hybrid for a very long time. But they serve that new cloud native world better than anybody else. It's It's when you do monitoring the cloud native world. It's really interesting to think about it. It's all made up of Micro service is right. So thousands of Micro Service's hundreds, thousands of Micro Service's and so in traditional monitoring, it's always you're tryingto monitor things you know could go wrong. In a microt service landscape, you don't know everything that could possibly go wrong. And so it's a level of complexity that's just very different. And so it's all about instrument ing, so that when something does go wrong, you can solve it. >>You guys have a very loyal based customer base, and that's again testament success. But the product has changed, and the value problems is emerging even further with data. That's a big theme. Data to everywhere, everything and security has come up on the radar a few years ago, here, the show. But this almost is a full blown security show at this point, because security center of everything you can't ignore it's become a centerpiece of everything data, the access to the diversity, How is that impacting the field because you're not. I mean, I guess you're a security company enabler and solve security problems. Date is a big part of it. Sure, I was at shaping your operations, >>So I think the thing to understand is correct. We're not just a security company, but we are number one in the security Magic quadrant. We're number one in both I. D. C and Gardner, and so that's important. But what happens is all the data the equal act for security can also be used for all these other use cases. So, generally speaking, whatever you're collecting for security is also valuable for I t operations, and it's also valuable for many other use cases. So I'll give you an example. Dominoes, which is a great customer of ours. They're gone 65% of their orders now come in digitally, okay? And so they monitor the entire intend customer experience. But they monitor it not only from a nightie operations perspective. That same data that they used righty operations also tells them you know what's being ordered, what special orders are being made and they use that data for promotions based upon volume and traffic and timing. they actually create promotion. So now you're talking about the same data that he collected for security night operations you can actually use for promotions, which is marketing is >>not a lot of operating leverage in data. You're getting out this. The old model was is a database. Make a queer. You get a report. Little time problem there. But now you have. Well, that other date is over there in another database. Who runs that data? So the world has certainly changes now, data needs to be addressable. This seems to be a big theme here on undercurrent. I know data to everywhere is kind of global theme, but don't diverse data feeds a I cracked and address ability allows for application access. >>Correct. So we look at the entire data landscape and say, we want to help you get data value out of your data wherever it lives. And it's right now, we've changed to the point where we are operating on data in motion, which is with data stream processor, which is hugely beneficial. You mentioned you know, a I m l way actually do something so unique from an ML perspective because we're actually doing the ml on the live streaming so, so much more valuable than doing it in batch mode. And so the ability to create those ML models by working on live data is super powerful. >>Good announcement. So you guys had the data processor. You have the search fabric, >>data fabric search, >>real time and acceleration our themes there. I want to get your thoughts on your new pricing options. Yes. Why now? What's that mean for customers? >>So if we want to bring data to everything, we have to allow them to actually get all the data right? So we needed to give them more flexible models and more alternative models. So for some people and just motto is very comfortable. But what they want it was more flexibility. So if you look at our new traunch pricing are predictable pricing, there's a couple of things that we've done with it. Number one is from 125 gig all the way up to unlimited. We'll show your predictable pricing so you don't have to guess. Well, if I move from 20 terabytes 2 50 what's that gonna cost me? We're gonna tell you, and you're gonna know and so That's one. The second thing is you don't have to land on the exact ingest. So before, if you bought a terabyte, you got a terabyte. Right now there's a traunch from 1 to 2 terabytes. There's a trunk from 2 to 5 terabytes. And so it gives the customers flexibility so that they don't have to worry about it coming back to buy more right away. >>So that's kind of cloud by as you go variable pricing. Exactly. I want your thoughts on some of the sales motions and position and you guys have out in the field. Visa VI. The industry has seen a lot of success and say Observe ability. For instance, Southern to Rick and Kartik About this. Yes, you guys are an enterprise software cloud and on premises provider you Enterprise sales motion. >>Yes, >>there's a lot of other competition up there that sells for the SNB. They're like tools. What's the difference between an offering that might look like Splunk but may be targeting the SNB? Small means business and one that needs to be full blown enterprise. >>Yeah, so I think the first and foremost most of the offerings that we see land in S and B. They have scale issues over time, I and so what we look at it and say is and they're mostly point products, right? So you can you can clutter up your environment with a bunch of point products, doing all these different things and try and stitch them together. Or you can go with this fun clock for him. So which allows you thio perform all of the same operations, whether B I t Security or Data Analytics in general. But it really isn't. It's about having the platform. >>You guys, what reduced the steps it takes to implement our What's the value? I guess. Here's Here's the thing. What's the pitch? So I'm on Enterprise. I'm like, Okay, I kept Dad. I got a lot of potential things going on platform. I need to make my data work for me any day to be everywhere. I au g Enterprise Cloud. What's the Splunk pitch? >>So our pitches were bringing dated everything, and first and foremost it's important. Understand why? Because we believe at the heart of every problem is a data problem. And we're not just talking t and security. As you know, you saw so many examples. I think you talk to his own haven earlier this week. Right? Wildfires is a data problem New York Presbyterian is using using us for opioid crisis. Right? That's a data problem. So everything's a data problem. What you want is a platform that can operate against that data and remove the barriers between data and action. And that's really what we're focused on. >>He mentions own haven that was part of Splunk Ventures Fund. You have a social impact fund? Yes, what's the motivation line that is just for social good? Is there a business reason behind it or both? >>What's this? So we actually have to social focuses. One is long for good, and that is non profit. What we announced this, what we announced a couple weeks ago that we reiterated yesterday was the spunk, social impact funds, a splint venture social impact fund, and this is to invest in for profit companies using data for social good. And the whole reason is that we look at it and so we say we're a platform. If you're a platform, you want to build out the ecosystem, right? And so the Splunk Innovation Fund splint Ventures Innovation Fund is to invest in new technology focused on that that brings value out of data. And on the other side, it's the spunk. Social impact. Thio get data companies that are taking data and creating such a >>Splunk for good as Splunk employees or a separate nonprofit. And >>it's not a separate nonprofit entity, but it is what we what we invest in. Okay. >>Oh, investing in >>investing in non for profit. Exactly like when we talked about the Global Emancipation Network right, which uses Splunk to fight human trafficking. That's on the nonprofit side. >>So take me through. This is a really hot area we've been covering for good because all roads I want now is for bad. Mark Zuckerberg's testifying from the Congress this morning kind of weird to watch that, actually, but there's a lot of good use cases. Tech tech can be shaped for good. A lot of companies are starting and getting off the ground for good things, but they're kind of like SMB, but they want the Splunk benefit. How do they engage with spunk if I'm gonna do ah social impact thing say cube for good? I got all this Tech. How do I engage punk? I wanted, but I don't know what to do. Have access to tools? How do I buy or engage with Splunk? >>Yes, start parties. Fund managers is making sure it's not just money, right? It's money, its access to talent. It's access to our product. And it's, you know, help with actually thinking through what they're trying to achieve, so it really is the entire focus. It's not just about the tech, Thea. Other thing I would say is you saw that we put out a Splunk investigate, and you also saw us talking about spunk, business slow and mission control. Those air now all built on a native SAS platform. And so the ability for our ecosystem now to go build on a native son platform is going to be incredibly powerful. >>So you expect more accelerated opportunities that all right, what's your favorite customer success stories? I know it's hard to pick your favorites, like picking a favorite child may be filled with the categories. Most ambitious class clown class favorite me. What's the ones you would call a really strong, >>so hit on a couple of my lover Domino story and the other one that I love, that I touched on. But I want to expand on because I think it's an amazing story. Is New York Presbyterian on using the Yes See you sprung for traditional security for private patient privacy. They also use it for medical devices. But here's the thing they use it for to help the opioid crisis. And you're like, How is opioid crisis a data problem? What they do is they actually correlate all the data that so doctors are prescribing the opioids who they're prescribing them to a number of prescriptions being building their pharmacy and then the inventory of opioids. Because they actually have sensors on all the cabinets where they get the opioids, they correlate all the data, and they make sure that if they understand if opioids being stolen from the hospital, because what people don't understand is that the opioid a lot of big part of the opioid crisis starts with hospitals to say of such a big volume of opioids. And so that, to me, is just I guess I love it because it's a great customer success story. But it's also again, it's so much fun doing good problem. >>A lot of deaths. I gotta ask you around your favorite moments here dot com, and you're a lot of conversations in your customer conversations this year. Let's do a little Splunk of the Cube right now can take the patterns, all the data, your meetings. What's the top patterns that are emerging? What are some of the top conversation themes that just keep popping up with customer? Specifically, >>I think the biggest thing is that they have seen more innovation unleash this year than they have ever seen in one year from Splunk. The other thing is that we've gone far outside of our traditional spunk index right and that the portfolio has grown so much and that we're allowing them to operate and get value out of the data wherever it lives. So data in motion and then you saw in data fabric search. We'll let you query not only the Splunk indices, but also H D. F s and s three buckets and more buckets to come. So more sinks if you will. So, really, what we're trying to do is say, we're just going to be your date a platform to help you get value >>Susan, you're a great leader and slung. Congratulations on your success again. They continue to grow every year. Splunk defies the critics. Now you're a market leader. Culture is a big part of this. What is your plans this year To take it to the next level? You're president of field worldwide, field operations, global business landscape. What are some of your goals and objectives on culture >>and the culture? So thank you, Jon. First of all, for your comments and were so committed to our culture, I think you know, as you grow so quickly, it takes a real effort to stay focused on culture way, have an incredible diversity and inclusion program. Onda We do way. It's a business imperative for us. Every single leader has diversity, diversity, inclusion, focuses and targets. And so I think that's a huge part of our culture. And the reason I say that, John, I don't know if you've ever heard about a 1,000,000 data points. Did anybody ever way Always talk about, you know in different different settings will share a couple of our 1,000,000 data points. What we want to make sure is a culture is that way. >>We >>have our employees showing up with their authentic self and because you do your best work when you can show up is your authentic self. And so we have people share a handful of their 1,000,000 data points at all different times throughout the year to get to know each other as individuals, as human beings and really understand what matters to each other. And I love that 1,000,000 data points culture, and I got that. We truly live it. And again it's It's about authenticity. And so I think that's what makes us incredibly special. >>And inclusion helps that trust >>fund elaboration, yes, and also just add to that. We're very proud of the fact that we made the fortune list this year for best places to work for women. So it shows that our focus, you know, we started. We started revealing our metrics just about two years ago, and we've had significant improvement way. Believe that what you focus on what you measure is what you improve. So we started measuring and improving it, and this year we made the list for a fortune that's called walking. It is Congratulations. Thank you. We're very excited about >>awesome on global expansion. I'm assuming is on the radar. Well, >>always, especially at this point. We're ready to double down and some of the tier one mark. It's a lovely for sure >>wasn't saying. Legend. President of worldwide field operations here inside the Cube. Where day to slung dot com 10th anniversary of their customer conference Our seventh year covering Splunk Amazing Ride They continue to ride the big wave. Thats a Q bring you all the data on insights here. I'm John Ferrier. Thanks for watching.

(upbeat music) >> Narrator: Live from Las Vegas, it's theCUBE, covering Splunk .Conf19. Brought to you by Splunk. >> Welcome to theCUBE everybody, we're here in Las Vegas for Splunk's .Conf, I'm John Furrier, host of theCUBE, here with Lisa Martin for the next three days. Lisa will be here tomorrow and the next day. I'm going to be carrying it solo, this is our seventh year .Conf, Splunk's conference celebrating their 10th year. Our first guest is Melissa Zicopula, vice president of managed services of Herjavec Group. Robert's been on before, welcome to theCUBE. >> Thank you. >> I always get that, Herjavec? >> Herjavec Group. >> Herjavec Group. >> Happy to be here. >> Well known for the Shark Tank, but what's really interesting about Robert and your company is that we had multiple conversations and the Shark Tanks is what he's known for in the celebrity world. >> Melissa: Yes. >> But he's a nerd, he's a geek, he's one of us! (laughing) >> He's absolutely a cyber-security expert in the field, yes. >> So tell us what's going on this year at .Conf obviously security continues to be focus you guys have a booth here, what's the message you guys are sharing, what's the story from your standpoint? >> Yeah, so we do, Herjavec we're focusing on managed security services, where information security is all we do, focusing on 24/7 threat detection, security operations and also threat management. So, we want to be able to demo a lot of our capabilities, we're powered by Splunk, our HG analytics platform uses, heavily uses Splunk on the back end. So we want to be able to showcase for our customers, our clients, our prospects different types of use cases, different types of ways to detect malicious activity, while leveraging the tool itself. >> And data we're been covering since 2013, Splunk's .Conf, it's always been a data problem, but the data problem gets bigger and bigger, there's more volume than ever before which shifts the terms to the adversaries because ransomware is at an all time high. >> Melissa: Sure. >> Data is where the value is, but that's also where the attack vectors are coming from. This isn't going away. >> Absolutely, yeah, we want to focus on not just what type of data you're ingesting into your instance but to also understand what types of log sources you're feeding into your sim today. So we have experts actually focus on evaluating the type of log sources we're bringing in. Everything from IPS, to AV, to firewall you know, solutions into the sim so that way we can build use cases those, to be able to detect different types of activity. We leverage different types of methodologies, one of them is Mitre framework, CIS top 20. And being able to couple those two together it's able to give you a better detection mechanism in place. >> I want to some kind of, clarification questions because we talked to a lot of CSOs and CIOs and and CXOs in general. >> Melissa: Sure. >> The roles are changing, but the acronyms of the providers out in the market place are specializing, some have unique focuses, some have breadth, some have depth, you guys are an MSSPP. So, MSSPP, not to be confused with an MSP. Or ISV, there's different acronyms, what is the difference between an MSSPP versus an MSP? >> Melissa: Correct, so it's, we are a MSSP, which is a Managed Security Service Provider. And what we do is just, we're focused on we're very security-centric. So information, security is all we do everything from threat detection, we even have a consulting advisory role where we're actually doing penetration exams. We're PCI compliant, obviously SOC operations are the bread and butter of our service. Whereas, other MSPs, Managed Services Providers, they can do anything from architecture, network operations in that purview. So, we're focused on more of SIM solutions, endpoint, being able to manage any of your security technologies. And also, monitor them to take a fact into the SOC. >> So you guys are very focused? >> Melissa: Very focused on security. >> Then what's the key decision point for a customer to go with you guys, and what's the supplier relationship to the buyer because they're buying everything these days! >> Melissa: Sure. >> But they want to try and get it narrowed down so the right people are in the right place. >> Melissa: Yeah, so one of the great things about Herjavec Group is we are, you know, we're vendor agnostic, we have tons of experts in, you know, expertise resources that monitor, manage different types of technologies. Whether it's Splunk and other technologies out there, we have a team of people, that are very, very, you know, centric to actually monitor and manage them. >> How big is Splunk, in relative with your services? How involved are they with the scope? >> Melissa: Over 60% of our managed clients today, utilize Splunk, they're heavy Splunk users, they also utilize Splunk ES, Splunk Core, and from a management side, they're implementing them into their service. All of the CSOs and CROs or CIOs are leveraging and using it, not just for monitoring and security but they're also using it in development environments, as well as their network operations. >> So, one of the things I've been, I won't say preaching, because I do tend to preach a lot, but I've been saying and amplifying, is that tools that have come a long in the business and there's platforms and Splunk has always kind of been that, a platform provider, but also a good tool for folks. But, they've been enabling value, you guys have built an app on Splunk, the proprietary solutions. >> Absolutely. >> Could you tell me about that because this is really where the value starts to shift, where domain expertise focused practices and services, like you guys are doing, are building on someone else's platform with data, talk about your proprietary app. >> Absolutely, so we discovered, a few years ago, was that customers needed help getting to the data faster. So we were able to build in built-in queries, you know literally one click, say if you wanted to get to a statistical side of how many data sources are logging your SIM, is the data, you know, modeling complete, you know, is there anything missing in the environment or are there any gaps that we need to fill? You're able to do it by just clicking on a couple of different, you know, buttons within the tool itself. It gives you a holistic view of not just the alerts that are firing in your environment but all the data log sources that are coming into your SIM instance. It's a one stop shop. And also, what's great about it, is that it also powers Splunk ES, so Splunk ES also has similar tools and they are, literally, I mean that tool is so great you can go in, you can look at all the alerts, you can do an audit trail, you can actually do drill-down analysis, you can actually see the type of data like PCAP analysis, to get to the, you know, the type of activity you want to get to on a granular level. So, both tools do it really well. >> So you have hooks into ES, Splunk ES? >> Yes, we can actually see, depending on the instance that it's deployed on, 'cause our app is deployed on top of Splunk for every customer's instance. They're ale to leverage and correlate the two together. >> What are some of the trends in the marketplace that you're seeing with your customers? Obviously, again, volumes are increasing, the surface area of attacks is coming in it's more than log files now, it's, you got traces, you got other metrics >> Melissa: Sure. >> Other things to measure, it's almost It's almost too many alerts, what do you-- >> Yeah, a lot of KPI's. The most important thing that any company, any entity wants to measure is the MTTD, the Mean Time To Detection, and also mean time to resolve, right? You want to be able to ensure that your teams are have everything at their fingertips to get to the answer fast. And even if there's an attack or some type of breach in their environment, to at least detect it and understand where it is so they can quarantine it from spreading. >> What's the biggest surprise that you've seen in the past two years? I mean, 'cause I look back at our interviews with you guys in 2013, no 2015. I mean, the narrative really hasn't changed global security, I mean, all the core, top line stories are there, but it just seems to be bigger. What's the big surprise for you in terms of the marketplace? >> The big surprise for me is that companies are now focusing more on cyber-hygiene. Really ensuring that their infrastructure is you know, up to par, right? Because you can apply the best tools in-house but if you're not cleaning up you know, your backyard (laughing) it's going to get tough. So now we have a lot of entities really focusing and using tools like Splunk you know, to actually analyze what's happening in their environment, to clean up their back of house, I would say and to put those tools in place so they could be effective. >> You know, that's a classic story clean up your own house before you can go clean up others, right? >> Right. >> And what a trend we've been seeing in the marketplace on theCUBE and talking to a lot of practitioners is, and channel partners and suppliers is that, they tend to serve their customers, but they don't clean up their own house and data's moving around so now with the diversity of data, they've got the fabric search, they got all kind of new tools within Splunk's portfolio. >> It's a challenge, and it could be you know, lack of resources, it just means that we have you know, they don't have the right expertise in-house so they used managed security providers to help them get there. For example, if a network, if we identify the network being flat, we can identify you know, how to help them how to be able to kind of, look at the actual security landscape and what we need to do to have good visibility in their environment from places they didn't know existed. >> What's the one, one or two things that you see customers that need to do that, they aren't doing yet? You mentioned hygiene is a trend, what are some other things that that need to be addressed, that are almost, well that could be critical and bad, but are super important and valuable? >> I think now a lot of, actually to be quite honest a lot of our clients today or anyone who's building programs, security programs are getting you know, very mature. They're adopting methodologies, like Mitre Framework, CIS Top 20, and they're actually deploying and they're actually using specific use cases to identify the attacks happening in their environment. Not just from a security-centric standpoint but also from an operations side you know, you could identify misconfigurations in your environment, you can identify things that are you know, just cleaning up the environment as well. >> So, Splunk has this thing called SOAR, Security-- >> Automation. >> Orchestration Automation Recovery, resilience whatever R, I think R stands for that. How does that fit in to your market, your app and what you guys are doing? >> So it definitely fits in basically, being able to automate the redundant, mundane types of tasks that anyone can do, right? So if you think about it, if you have a security operations center with five or 10 analysts, it might take one analyst to do a task, it might take them two or three hours, where you can leverage a tool like Phantom, any type of SOAR platform to actually create a playbook to do that task within 30 seconds. So, not only are you minimizing the amount of you know, head count to do that, you're also you know, using your consistent tool to make that function make that function you know, more, I want to say enhanced. So you can build play books around it, you can basically use that on a daily basis whether it's for security monitoring or network operations, reporting, all that becomes more streamlined. >> And the impact to the organization is those mundane tasks can be demotivating. Or, there's a lot more problems to solve so for productivity, creativity, can you give some examples of where you've seen that shift into the personnel, HR side the human resource side of it? >> Yeah, absolutely so you know, you want to be able to have something consistent in your environment, right? So you don't want others to get kind of, get bored or you know, when you're looking at a platform day in and day out and you're doing the same task everyday, you might miss something. Whereas, if you build an automation tool that takes care of the low hanging fruit, so to speak, you're able to use a human component to put your muscles somewhere else, to find some you know, the human element to actually look for any types of malicious anomalies in the environment. >> How much has teamwork become a big part of how successful companies manage a security threat landscape? >> Very, very important. I mean, you're talking about leveraging different teams on the engineering side, on the operations side, even you know, coupling that with business stakeholders. You absolutely need to get the business involved so they have an understanding of what's critical to their environment, what's critical to their business, and making sure that we're taking security, obviously seriously, which a lot of companies know already, but not impeding on the operation. So doing it safely without having to minimize impact. >> Well let's just, I got to ask you this question around kind of, doing the cutting edge but not getting bled out, bleeding edge, bleeding out and failing. Companies are trying to balance you know, being cutting edge and balancing hardcore security Signal FX is a company that Splunk bought, we've been following them from the beginning. Strong tracing, great in that cloud native environment. So cloud native with micro services is super hot in areas you know, people see with Kubernetes and so on happening, kind of cutting edge though! >> Melissa: Right. >> You don't want to be bleeding edge 'cause there's some risks there too so, how do you guys advise your clients to think about cloud native with Splunk and some of the things that they're there but as the expression goes "there's a pony in there somewhere" but it's risky still, but certainly it's got a lot of promise. >> Yeah, you know, it's all about you know, everyone's different, every environment's different. It's really about explaining those options to them what they have available, whether they go on the cloud, whether they stay on-prem, explaining them from a cost perspective, how they can implement that solution, and what the risks are involved if they had and how long that will take for them to implement it in their environment. >> Do you see a lot of clients kicking the tires in cloud native? >> A lot of customers are migrating to cloud. One, because they don't have to keep it in a data warehouse, they don't have to have somebody manage it, they don't have to worry about hardware or licenses, renewals, all that. So, it's really easy to spin up a you know, a cloud instance where they can just keep a copy of it somewhere and then configure it and manage it and monitor it. >> Melissa, great insight, and love to have you on theCUBE, I got to ask you one final question >> Melissa: Sure. >> As a, on a personal note well, personal being you're in the industry you know, I hear a lot of patterns out there, see a lot of conversations on theCUBE. One consistent theme is the word scale. Cloud brings scale to the table, data scaling, so data at scale, cloud at scale, is becoming a reality for customers, and they got to deal with it. And this also impacts the security piece of it. What are some of the things that you guys and customers are doing to kind of one, take advantage of that wave but not get buried into it? >> Absolutely, so you just want to incorporate into the management life cycle, you know you don't want to just configure then it's one and done, it's over. You want to be able to continually monitor what's happening quarter over quarter you know, making sure that you're doing some asset inventory, you're managing your log sources, you have a full team that's monitoring, keeping up with the processes and procedures, and making sure that you know, you're also partnering with a company that can can follow you you know, year over year and build that road map to actually see what you're building your program, you know. >> So here's the personal question now, so, you're on this wave, security wave. >> Melissa: Sure. >> It's pretty exciting, can be intoxicating but at the same time, it's pretty dynamic. What are you excited about these days in the industry? What's really cool that you're getting jazzed about? What's exciting you in the industry these days? >> Automation, absolutely. Automation, being able to build as many playbooks and coupling that with different types of technologies, and you know, like Splunk, right? You can ingest and you can actually, automate your tier one and maybe even a half of a tier two, right, a level two. And that to me is exciting because a lot of what we're seeing in the industry now is automating as much as possible. >> And compare that to like, five years ago in terms of-- >> Oh absolutely, you know, SOAR wasn't a big thing five years ago, right? So, you had to literally sit there and train individuals to do a certain task, their certain function. And then you had to rely on them to be consistent across the board where now, automation is just taken that to the next level. >> Yeah it's super exciting, I agree with you. I think automation, I think machine learning and AI data feeds, machine learning. >> Michelle: Right. >> Machine learning is AI, AI is business value. >> Being able to get to the data faster, right? >> Awesome, speed, productivity, creativity, scale. This is the new formula inside the security practice I'm John Furrier with theCUBE. More live coverage here for the 10th anniversary of Splunk .Conf, our seventh year covering Splunk from a start-up, to going public, to now. One of the leaders in the industry. I'm John Furrier, we'll be right back. (techno music)

>> Narrator: From Sand Hill Road, in the heart of Silicon Valley, it's theCUBE, presenting the People First Network, insights from entrepreneurs and tech leaders. >> Hello and welcome to a special Cube conversation, I'm John Furrier with theCUBE. We're here at Mayfield Fund on Sand Hill Road, Venture Cap for investing here for the People First co-created production by theCube and Mayfield. Next to us, Phil Finucane who's the former CTO of Express Scripts as well as a variety of other roles. Went to Stanford, Stanford alum. >> Mm hmm. >> Good to see you, thanks for joining me for this interview. >> Thank you, thank you for having me. >> So, before we get into some of the specifics, talk about your career, you're a former CTO of Express Scripts >> Yep. >> What are some of the other journeys that you've had? Talk about your roles. >> Yeah, I've had sort of a varied career. I started off as just a computer coder for a contract coder in the mid-90s. I sort of stumbled into it, not because I had a computer science background, but because when you start coding, sort of for fun in Silicon Valley in the mid-90s, there are just lots of jobs and I was lucky to have great mentors along the way. In 2003, I joined Yahoo and came in as the lead engineer, sort of the ops guy and the build and release guy for the log in and registration team at Yahoo, so I learned how to, went from being just a coder to being somebody who know how to run and build big systems and manage them all around the world. That was in the day when everything was bare metal and I could go to a data center and actually look at my machine and say, "Wow, that one's mine," right? And you know, sort of progressed from there to being the architect by the time that I left for some of the big social initiatives at Yahoo. On my way out, the YOS, the initiative to try to build Facebook in I think 2007, 2008 to try to take them on. That didn't work out too well, but it was definitely a formative experience in my career. From there I went to Zynga, where I was the CTO for Farmville. Was really, really good at getting middle-aged women in the Midwest to come play our game, and you know, was there for >> And it was highly, >> About three years >> high growth, Farmville >> Huge growth >> Took off like a rocket ship. >> Yeah, you know, over the 10 quarters I worked on the game we had over a billion dollars in revenue and that was, you know, the Zynga IPO'd on the back of that, right? And we weren't the only game, but we were certainly >> That was one of the big games >> The big whale, us and poker were the two that really drove the value in Zynga at that point. After that, I went to American Express, where I worked in a division that sort of sat off on the side of American Express focusing on stored value products. I was the chief architect for that division. Stored value products and international currency exchange. So, you know, at one point, I was in charge of both a pre-paid platform and American Express's traveler's checks platform, believe it or not, a thing that still exists. Although it's not heavily used any more. And you know, finally, I went to Express Scripts, where I spent the last three years as the CTO for that org. >> It's interesting, you've got a very unique background, because you know, you've seen the web scale, talk about bare metal Yahoo days, I mean, I remember those days vividly, you know, dealing with database schemas, I mean certainly the scale of Yahoo front page, never mind the different services that they had, which by the way, silo-like, they had databases >> Very, oh totally >> So building a registration and identity system must've been like, really stitching together a core part of Yahoo, I mean, what a Herculean task that must've been. >> Yeah, it was a lot of fun. I learned a lot, you know, we, it was my first experience in figuring out how to deal with security around the web. You know, we had, at the beginning, some vulnerabilities here and there, as time went on, our standards around interacting around the web got better and better. Obviously, Yahoo has run into trouble around that in subsequent years, but it was definitely a big learning experience, being involved in you know, the development of the OAuth 2.0 spec and all of that, I was sort of sitting there advising the folks who were, you know, in the middle of that, doing all the work. >> And that became such a standard as we know, tokens, dealing with tokens and SAS. Really drove a lot of the SAS mobile generation that did cloud, which becomes kind of that next generation so you had, you know Web 1.0, Web 2.0, then you had the cloud era, cloud 2.0, now they're goin' DevOps and apps. I want to get your thought, and you throw crypto in there just for fun, of dealing with blockchain and then token economics and new kinds of paradigms are coming online >> It's amazing how far we've come in those years, right? I mean I look at the database that was built inside of Yahoo and this predated me, you know, this was back to circa 1996, I think, but you know, big massively scalable databases that were needed just because the traditional relational database just wouldn't work at that scale, and Yahoo was one of the first to sort of discover that. And now you look at the database technologies that are out there today that take some of those core concepts and just extend them so much further and they're so much easier to access, to use, to run, operate, all of those things than back in the days of Yahoozle, UDB, and it's amazing just to see how far we've come. >> Phil, I want to get your thoughts, because you know, talking about Yahoo and just your experiences and even today, at that time it was like changing the airplane's engine at 35,000 feet, it's really difficult. A lot of corporate enterprises right nhow are having that same kind of feeling with digital, and digital transformation, I'd say it's a cliche, but it is true this impact, the role of data that's playing and the just for value creation but also cybersecurity could put a company out of business, so there's all kinds of looming things that are opportunities and challenges, that are sizable, huge tasks that was once regulated to the full stack developers and the full web scalers, now the lonely CIO with the anemic enterprise staff has to turn around on a dime. Staff up, build a stack, build commodity, scale out, this is pretty massive, and not a lot of people are talking about this. What's your view on this? Because this is super important. >> Yeah it is, and you know, so I had kind of a shock, moving from working my whole career here on Silicon Valley and then going to American Express, which you know, is very similar in a lot of ways to Express Scripts, and the sort of corporate mindset around, "What is technology?" There is this notion that everything is IT and here in the valley, IT is you know, internal networks and laptops and those sorts of things, the stuff that's required to make your enterprise run internally. Their IT is all of your infrastructure, right? And IT is a service organization, it's not the competitive advantage in your industry, right? And so both of the places that I've gone have had really forward-thinking leaders that have wanted to change the way that their enterprise operates around technology, and move away from IT but, to technology, to thinking about engineering as a core competency. And that's a huge change, not only for the CIO >> You're saying they did have that vision >> They had the vision, but they didn't know how to get there, so my charter coming in and you know, others who were on the teams around me, our charter was to come in and help build a real engineering organization as opposed to an IT org that's very vendor-oriented, you know, that's dependent on third parties to tell you the right thing or the wrong thing, you know that hires consultants to come in and help set up architecture standards, because we couldn't do that on our own, we're not the experts on this side. You know, that's sort of the mindset in many old school companies, right? That needs, that I think needs to change. This notion that software is eating the world is still not something that people have gotten their heads around in many companies, right? >> And data's washing out old business models, so if software's eating the world, data's the tsunami that's coming in and going to take out the beach and the people there. >> Right. And so it's like, all of these things, it's one thing for, you know, a forward-thinking CEO like Tim Wentworth at Express Scripts, who was responsible for bringing me and the group in, you know, those kinds of folks, it's one thing to know that you have to make that transition it's another thing to have a sense of what that means for an engineering team, and all the more for the rest of the organization to be able to get behind it. I mean, people you know, I don't know any number of business partners who've been used to, just sort of taking a spec, throwing it over the wall, and saying, "Come back to me in two years when you're done." That's not how effective organizations work around technology. >> Let's drill into that, because one of the things that's cultural, I mean I do some of the interviews of theCUBE, I talk to leaders all the time like yourself, the theme keeps coming back, it's culture, it's process, technology, all those things you talk about, but culture is the number one issue people point to, saying, "That's the reason why "something did or didn't happen." >> Correct. >> So, you talk about throwing it over the fence, that's waterfall, so you think about the old waterfall methodology, agile, well documented, but the mindset of product thinking is a really novel concept to corporate America Not to Silicon Valley, and entrepreneurs, they got to launch a product, not roll out SAP over two years, right, or something they used to be doing. So that's a cultural mindset shift. >> It's difficult for folks, even if they want to get on board to come along some of the time. One of the real big successes we had early on at Express Scripts was, you know, transitioning our teams to Agile wasn't difficult, what was difficult was getting business partners to sort of come along and be actively engaged in that product development mindset and lifecycle and all those sorts of things. And you know, we had one partner in particular, we were migrating from a really old, really clunky customer care application that you know had taken years and years to build, took on average, a new agent took six weeks to get trained on it because it was so complex and it's Oracle Forms and you know, every field in the database was a field on this thing, and there were green screens to do the stuff that you couldn't do in Oracle Forms, so and we wanted to rebuild the application. We tried to get them to come along and say, "Okay, we're going to do it in really small chunks," but business partners were like, "No, we can't afford "to have our agents swiveling between two applications." And so finally after we got our first sort of full-feature complete, we begged to go into a call center, you know with our business partners, and sit down with a few agents and just have them use it and see if it looked like it worked, if it did the right thing, and it was amazing seeing the business partner go, over the course of an hour, from "I can't be engaged in this, "I don't want an agent swiveling, "I don't want to be, you know, delivering partial applications "I want the whole thing." to, "Oh my god, it works way better, "the design is much nicer, the agents seem to like it," you know, "Here are the next things we should work on, "These are the things we got wrong." They immediately pivoted, and it wasn't, it was because they're the experts, they know how to run their business, they know what's important in their call centers, they know what their agents need, and they had just never seen the movie before, they just had no concept you could work that way. >> So this is actually interesting, 'cause what you're saying is, a new thing, foreign to the business partners, the tech team's on board, being Agile, building product, they have to, they can't just hear the feature benefits, they got to feel it. >> Yeah, they have to see it >> This seems to be the experience of success before they can move. Is that a success you think culturally, something that people have to be mindful of? >> It's absolutely something you have to be mindful of. And that was just the first step down the path. I mean, that team made a number of mistakes that folks here I think in the valley wouldn't normally make, you know. Over-committing and getting themselves into deep water by trying to get too much done and actually getting less accomplished in the process because of it and you know, the engagement around using data to actually figure out what's the next feature that we build. When you've got this enormous application to migrate, you should probably have some insight as to you know, feature by feature, what are you going to work on next? And that was a real challenge, 'cause there's a culture of expertise-driven, you know being subject-matter driven, expertise driven as opposed to being data driven about how do you >> Let's talk about data-driven. We had an interview earlier this morning with another luminary here at the Mayfield 50th conference celebration that they're having, and he said, "Data is the new feedback mechanism." and his point was, is that if you treat the Agile as an R&D exercise from a data standpoint. Not from a product but get it out there, get the data circulating in, it's critical in formulation of the next >> It is, yeah, it's absolutely critical. That was the eye opener for me going to Zynga. Zynga had an incredible, probably still does have, an incredible product culture that every single thing gets rolled out behind an experiment. And so you know, that's great from an operational perspective, because it allows you to, you know, move quickly and roll things out in small increments and when it doesn't work, you can just shut it off but it's not some huge catastrophe. But it's also critical because it allows you to see what's working and what's not and the flip side of that is, some humility of the people developing the products that their ideas are not going to work sometimes just because you know this domain well doesn't mean that you're necessarily going to be the expert on exactly how everything is going to play out. And so you have to have this ability to go out, try stuff, let it fail, use that, hopefully you fail quickly, you learn what's not working and use that to inform what's the next step down the path that you take, right? And Agile plays into it, but that's for me, that's the big transition that corporations really have to struggle with, and it's hard. >> You know you're, been there done that, seen multiple waves of innovation, want to bring up something to kind of get you going here. You see this classically in the old school 90s, 80s day. Product management, product people and sales people. They're always buttin' heads, you know? Product marketing, marketing people want this sales and marketing want this, product people buttin' heads, but now with Agile, the engineering focus has been the front lines. People are building engineering teams in house. They're building custom stacks for whatever reasons, the apps are getting smarter. The engineers are getting closer to the edge, the customer if you will. How do you help companies, or how do you advise companies to think about the relationship between a product-centric culture and a sales-centric culture? Because sometimes you have companies that are all about the customer-centric, customer-centric customer-centric, product-centric and sometimes if you try to put 'em together there's always going to be an alpha-beta kind of thing there and that's the balance in this. What's your take on this? Seems to be a cutting edge topic >> Yeah, well, so you know, one of the last big initiatives that I worked on at Express Scripts. Express Scripts has the, to my knowledge, the largest automated home delivery pharmacy in the world. It's amazing if you walk into one of our pharmacies where automation is packaging and filling prescriptions and packaging and shipping and doing all of that stuff. And we've built so much efficiency into the process that we've started getting slack in the system. Every year, you're trying to figure out how to make something work better and you know, have better automation around it. And so, you know, what do you do with all of that slack? The sales team can't sign up enough new customers for Express Scripts to actually fill that capacity. And so they create a division of commoditizing this, basically white labeling your pharmacy. We called it Pharmacy as a Platform, exposing APIs to third parties who might want to come along and hey, Phil's pharmacy can now fill branded prescriptions to get sent to you in your home, right? And so that's a fantastic vision, but there's a real struggle between engineering who had all these legacy stacks that we needed to figure out how to move to be able to really live up to this, you know the core of Express Scripts was our members and not somebody else's members. And so there's a lot of rewiring at the core that needs to be done. An operations team, a product team that's, you know, running these home delivery pharmacies, and a sales team that wants to go off and sell all over the place, right? And so, you know, early on, we started off and the sales team tried to sell, like six different deals that all required different parts of the vision, but you know, they weren't really, there was no real roadmap to figure out how do you get from where we're at to the end, and we could've done any of those things, but trying to do them all at once was going to be a trainwreck. And so, you know, we stubbed our toes a couple of times along the way, but I think it just came down to having a conversation and trying to be as transparent as possible on all sides, in all sides. To you know, try to get to a place where we could be effective in delivering on the vision. The vision was right. Everybody was doing all of the right things. But if you haven't actually, with so much of this stuff, if you haven't seen the movie, if you haven't worked this way before, there's nothing I can tell you that's going to make it work magically for you tomorrow. You have to just get this together and work in small increments to figure out how to get there. >> You got to go through spring training, you got to do the reps. >> Yep, absolutely. >> All right, so on your career, as you look at what you've done in your career, and what people outside are looking at right now, you got startups trying to compete and get a market position. You have other existing suppliers who could be the old guard, retooling and replatforming, refactoring, whatever the buzz word you want to use. And then the ultimate customer who wants to consume and have the ability of having custom personalization, data analytics, unlimited elastic capability with resources for their solution. How, what advice would you give to the startup, to the supplier, and to the customer to survive this next transition of cloud 2.0, you know and data tsunami, and all the opportunities that are coming? Because if they don't, they'll be challenged a startup goes out of business, a supplier gets displaced. >> Right, I mean, well, so the startup, I don't know if I have good advice for the startup. Startups in general have to find a market that actually works for them. And so, you know, I don't know that I've got some secret key that allows startups to be effective other than don't run out of money, try to figure out how to build effectively to get you to the point where you're, you know, where you're going to win. One of my earliest, one of the earliest jobs I had in my career, I came into a startup, and I tried, one of the founders had written the initial version of the code base. I, as a headstrong engineer, was convinced that he had done horrible work, and so I sort of holed up for like, six to eight weeks doing a hundred hours a week trying to rewrite the entire code base while getting nothing done for the startup. You know, in the end, that was the one job I've ever been fired from, and I should've been fired, because, you know, honestly as a startup, you shouldn't worry about perfection from an engineering perspective. You should figure out how to try to find your marketplace. Everybody has tech debt, you can fix that as time goes on, the startup needs to figure out how to be viable more than anything else. As far as suppliers go, you know, I don't know it's interesting the, you know, I sort of look at corporate America and there are many many companies that really rely heavily on their vendors to tell them how to do things. They don't trust in their own internal engineering ability. And then there are the ones, like the teams I have built at AmEx and Express Scripts that really do want to learn it all and be independent. I would say, identify when you walk into somebody's shop which they are and sell to them appropriately. You know, I've been a Splunk customer for a long time, I love Splunk. But the Splunk sales team early on at Express Scripts tried to come in and sell me on a whole bunch of stuff that Splunk was just not good at, right? >> And you knew that. >> And I knew that, because I've been a hands-on customer every since Zynga, right? I know what it's good at, and I love it as a tool, but you know, it's not the Swiss Army knife. It can't do everything. >> Well now you got Signal FX, so now you can get the observability you need. >> Exactly, right? So yeah, I, you know, I would say, you know, for those kinds of companies, it's important to go in and understand what your customer is, you know, what your customer is asking for and respond to them appropriately. And in some cases, they're going to need your expertise, either because they're building towards it or they haven't gotten there yet, and some cases, one of the things that I have done with teams of mine in the past, was it with AppDynamics at Express Scripts, excuse me at AmEx, five or six years ago, they were sold on, you know, bringing in AppDynamics as a monitoring tool, I actually made them not bring it in, because they didn't know what they didn't know. I made them go build some basic monitoring, you know, using some open source tools, just to get some background, and then, you know, once they did, we ended up bringing AppDynamics in, but doing it in a way that they were accretive to what we were trying to accomplish and not just this thing that was going to solve all of our problems. >> And so that brings up the whole off-the-shelf general purpose software model that you were referring to. The old model was lean on your vendors. They're supplying you, and because you don't have the staff to do it yourself. That's changing, do you think that's changing? >> It is, it's changing, but again, I think there's a lot of places where people nominally want to go there, but don't know how to get there, and so, you know, people are stubbing their toes left and right. If you're doing it with this mindset of, we're constantly getting better and we're learning and it's okay to make mistakes as long as we move forward, >> It's okay to stub your toe as long as you don't cut an artery open. >> Yeah, that's true, yeah exactly >> You don't want to bleed out, that's a cybersecurity hack >> That's true, that's true. But for me a lot of the time that just comes down to how long are you waiting before you stub your toe? If you're, you know, if you wait two years before you actually try to launch something, the odds of you cutting your leg off are much higher than >> Well I want to get into the failure thing, so I think stubbing your toe brings up this notion of risk management, learning what to try, what not to do, take experiments to try to your, which is a great example. Before you get there, you mentioned suppliers. One of the things we hear and I want to get your thoughts on, is that, a lot of CIOs and C-sos, and CBOs, or whatever title is the acronym, they're trying to reduce the number of suppliers. They don't want more tools, right? They don't necessarily want another tool for the tool's sake or they might want to replatform, what does that even mean? So, we're hearing in our interviews and our discussions with partitioners, "Hey, I want to get my suppliers down, "and by the way, I want to be API driven, "so I want to start getting to a mode "where I'm dictating the relationship to suppliers." How do you respond to that? Do you see that as aspirational, real dynamic, or fiction? >> It's a good goal to give motivation, I believe it. For me, I approach the problem a little differently. I'm a big believer, well, so, because I've seen this pattern of this next tool is going to be the one that consolidates three things and it's going to be the right answer and instead of eliminating three and getting down to one, you have four, because you're, you need to unwire this new thing, there's a lot of time and effort required to get rid of, you know, your old technology stack, and move to the new one, right? I've seen that especially coming from the C-Sec for Express Scripts is an amazing guy, and you know, was definitely trying to head down that path but we stubbed our toes, we ran into problems in trying to figure out, you know, how do you move from one set of networking gear to the next set? How do you deal with, you know, all of the virus protection and all the other, there's a huge variety of tools. >> So it's not just technical debt, it's disruption >> It's disruption to the existing stack, and you've got to move from old to new, so my philosophy has always been, with technical debt, when you're in debt, and I think technical debt really does operate in a lot of ways like real debt, right? Probably good to have some of it. If you're completely debt-free, that's I've never been in that place before. >> You're comfortable. You might not be moving, >> Exactly, right? But with that technical debt, you know, there's two ways to pay down your debt. You can scrimp and save and put more money into debt principal payments as opposed to spending on other new things, or, well and/or, build productive capacity. So a huge focus for me for the engineering teams that we've built, and this is not anything new to the folks in this area, but, you know, always think about an arms race, where you're getting 1% better every day. The aggregation of marginal gains and investing in internal improvements so that your team is doubling productivity every year, which is something that's really possible for, you know, some of these engineering organizations, is the way that you deal with that, right? If you get to the point where your team is really, really productive, they can go through and eliminate all the old legacy technology. >> That's actually great advice, and it's interesting, because a lot of people just get hung up on one thing. Operating something, and then growing something, and you can have different management styles and different techniques for both, the growth team, the operating team. You're kind of bringing in and saying, we can do both. Operate with growth in mind, to 1% better approach. >> Right, you know, and for me, it's been an interesting journey, you know. I started off as the engineer and then the architect, who was always focused on just the technology, the design of the system in production. Sort of learned from there that you had to be good at the you know, all the systems that get code from a developer's desktop into production, that's a whole interrelated system that's not isolated from your production system. And then from there, it has to be the engineering team that you build has to be effective as well. And so, I've moved from being very technology-centric to somebody who says, "Okay, I have to start "with getting the team right "and getting the culture right if we're ever going to "be able to get the technology to a good place." Mind you, I still love the technology. I'm still an architect at my core, but I've come to this realization that good technology and bad teams will get crushed by bad technologies and good teams. Because now I've seen that a couple of places, where you have old but evolving technology stacks that have gone from low availability and poor performance and low ability to get new features into production to a place where you're fixing all of that at a high rate. It starts with the team. >> You're bringing us some core Silicon Valley ethos to the IT conversation, because what you're talking about is "I'll fund an A team with a B plan any day "over a B team with an A plan." >> Right. >> And where this makes sense, I think is true, is that to your point about debt, A teams know how to manage it. >> Yeah. >> So this is kind of what you're getting at here. >> Right. >> You can take that same ethos, so it's the Agile enterprise. >> Yeah, it is >> That's what we're talking about. Okay, so hypothetical final point I want to chat with you about. Let's just say you and I were startin' a company. We're chief architects, you're the chief architect, I'm a coder, what are we doing? Do I code from horizontally scalable cloud, certainly cloud native, how would you think about building, we have an app in mind, all of our requirements defined, it's going to be data-centric, it's going to be game change and have community, it might have some crypto in there, who knows, but it's going to be fun. How do we scale this out to be really fast? How would you architect this? >> Yeah, well, you know, I do start in the cloud. I go to AWS or Azure or any of the offerings that are out there, and you know, leverage everything that they have that's already wired up already for you. I mean the thing that we've seen in the evolution of software and production systems over the last, well, forever, is you get more and more leverage every day, every year, right? And so, if you and I are startin' a new company, let's go use the tools that are there to do the things that we shouldn't be wasting our time on. Let's focus on the value for our company as much as we can. Don't over-architect. I think premature optimization is a thing that you know, I learned early on is a real problem. You should, you know >> Give an example, what that would look like. >> I've seen >> Database scale decisions done with no scale >> Correct, yeah, you know? You go off >> Let's pick this! It's the most scalable database, well we have no users yet. >> Right, you know you build the super complicated caching architecture or you know, you go design the most critical part of the system out of the gate, you know, using Assembly. You use C++ or, you use a low level language when a high level language with your three users would be just fine, right? You can get the work done in a fraction of the time. >> And get the business logic down, the IP, >> Solve the problem when it becomes a problem. Like, it's, you know, I've, any number of times, I've run into systems, I've built systems where you have some issue that you run into, and you have to go back and redesign some chunk of the system. In my experience, I'm really bad at predicting, and I think engineers are really bad at predicting what are going to be the problem areas until you run into them, so just go as simple as you can out of the gate, you know. Use as many tools as you can to solve problems that, you know, maybe as an engineer, I want to go rebuild every thing from scratch every time. I get the inclination. But it's >> It's a knee-jerk reaction to do that but you stay your course. Don't over-provision, overthink it, thus start taking steps toward the destination, the vision you want to go to, and get better, operate >> Solve the problem you have when it shows up. >> So growth mindset, execute, solve the problems when they're there. >> Right, and initially the problem that you have is finding a market, you know, not building the greatest platform in the world, right? >> Find a market, exactly. >> Right? >> Phil, thanks for taking the time >> Thank you very much, appreciate it. >> Appreciate the insights. Hey, we're here for the People First, Mayfield's 50th celebration, 50 years in business. It's a CUBE co-production, I'm John Furrier, thanks for watching >> Thanks John. (outro music)

>> from our studios in the heart of Silicon Valley, Palo Alto, California It is a cute conversation. >> Hello and welcome to the Special Cube conversation with remote gas. Steve, harried managing director of General Catalyst, is he's a venture capitalist. >> Former >> CTO of the M. Where? Cube alumni. Steve, welcome to this special cube conversation coming in remote from Palo Alto. You're right across town, but still grab you big news happening. And also get your thoughts on the emerald 2019. Welcome to our remote conversation. >> Yeah, we were close. And yet this makes it even more convenient. We >> love the new format. Bring people into no matter where they are, no matter. Whatever it takes to get the stories we want to do that. And two important ones having. We know the emeralds coming next week. But congratulations. In order to you and your portfolio companies signal FX, another cube alumni from we've been covering since the beginning of their funding acquisition. Bye, Splunk today for over a billion dollars. 60% in cash and 40%. And stop. Congratulations. You've been on the board. You've known these guys from VM. We're quite a team. Quite an exit It's a win win for those guys. Congratulations. >> Yeah, Great group of guys. Several, which were at being where, as you as you mentioned, and as you've had on your show, that's great. They were doing a really good job of monitoring and getting metrics about applications and how they're doing it. And they're marrying it with spunk, stability to ingest logs and really understand operational >> data. And I think that combination will be very powerful. >> It brings kind of what we've been monitored. Calling Cloud 2.0, Suzie, monitoring 2.0, is really observe ability As the world starts moving into the kinds of service is we're seeing with Cloud on premises operations more than ever, that game has changed much more dynamic, and the security impact is significant. And certainly as as applications connect with its coyote or any I p device having that day, that scales really critical part of that. And I know signal left fax was one of those companies where you invested early, and I remember interviewing a couple of years ago in saying, Damn, these guys might be too early. I mean, they're so smart, they're so on it. But this is an example of skating to where the puck is As we increase, Key would say, These guys were just hitting their stride. Steve, can you Can you share any color commentary on on the deal and or you know why this is so important? >> Well, they've been at this for a long time, and they're a great team. I've been involved. Is investor less time? Obviously. But it was the really original team out of Facebook monitoring really at scale applications and then trying to take that technology that Facebook could use and applied it to our world. And, you know, as you discovered, we're in a world of micro service's and containers, and that is definitely hitting its stride right now. And so they were in the right place knowing how >> to monitor this very fast moving >> information and make some sense out of it. So you're a really good job on their part, and it was a pleasure to be >> along for part of the ride with him. >> It's great to me, great founders that have a vision and stay the course because, you know it's always it's always tricky when you're early to see the future especially around their top micro surfaces and containers way back before became the rage and now more relevant operationally for enterprises, it's easy to get distracted and man that fashion. We'll just jump on this trend of this way. They stayed the course. They stayed the nose to the grindstone and now observe ability. Which, to me is code word for monitoring. 2.0 is probably one of the hottest segments you saw Cummings going public companies filing the pager Duty dynatrace. Now you guys with your acquisition with Signal FX, This is an important sector this would normally be viewed in. I t. Rule is kind of list of white space, but it seems to be a much bigger landscape. Can you comment on your view on this and why it's so important? Why is observe ability so hot? Steve? >> Well, it's been this actually had a great market to be in for quite a while. They've been a large number of companies, continue to be both built up, and it's pretty simple. That amount of e commerce, or the amount of customer interactions you're having over applications and over the Web has gone up, and so anything that's not performing well or as downtime literally cost you a lot of money as a company. And so as these applications get more complex and they're being relied on >> Maur for revenue and for custom directions, >> you simply have to have better tools. And that's gonna be something that continues to evolve, that we got more complex, absent, more commerce is going >> to go through them. >> Complexity is actually something that people, a lot of people are talking about. I want to ask you something around today's marketplace, but I want you to compare and contrast it, similar to what your experience wasn't v m Where were you? The CTO virtual ization of all very, very quickly on ended up becoming a really critical component of the infrastructure, and a lot of people were pooh poohing that initially at first, then all sudden became. We've got to kill the M where you know so the resiliency of the M, where was such that they continue to innovate on virtualization, and so that's been a part of the legacy of V M wear, and the embers will cover next next week. But when you look at what's happening now with cloud computing and now some of the hybrid cloud up opportunities with Micro Service's and other other cool things. The role of the application is being is important part of the equation. It used to be the standup infrastructure, and that would enable the application to do things virtualization kind of change that game. Now you don't need to stand up. Any infrastructure could just deploy an application, and the infrastructure can be code and be self form, so you can have unique requirements. As infrastructure driven by the application, the whole world seemed to have flipped around. Do you see it that way? Is that accurate assessment? What's your thoughts on that? >> I think you're right on a bunch of fronts. People have been calling a different things, but the beauty of the, um where and you know this is a while ago now, but the reason it was successful is that you didn't have to change any of your software to use. It sort of slid him underneath an added value. But at the same time applications evolved. And so the that path of looking like hardware was something that was great for not changing applications. You have to think about a little differently when people are taking advantage of new application patterns or new service. Is that air in the cloud? And as you build up these as they're called cloud Native applications, it really is about the infrastructure. You know. It's job in life is to run applications. It sort of felt like the other way around. It used to be you wrote an application for what your infrastructure was. It shouldn't be like that anymore. It's about what you need to do to get the job done. And so we see the evolution of the clouds and their service. Is that air there? Certainly the notion of containers and a lot of the stuff that being where is now doing has been focused on those new applications and making sure Veum, where adds value to them, whatever type >> of application they are. >> It's interesting one of the exciting things in this way that we're on this year around multi cloud hybrid cloud in Public Cloud Now that we've kind of crossed over to the reality that public cloud has been there, done that succeeded I call that cloud 1.0, you saw the emergence of hybrid cloud. Even early on, around 2012 2013 we were talking about that of'em world instantly pad Kelsey here, but now you're seeing hybrid cloud validated. You got Outpost, you've got Azure stack, among other things. The reality is, if you are cloud native, you might not need to have anything on premise. Like companies like ours with 50 plus people. We don't have an I T department, but most enterprises have stuff on premise, so the nuance these days is around. You know, what's the architecture of of I T. These days, we add security into It's complicated. So these debates can there be a soul cloud for a workload? Certainly that's been something that we've been covering with the Amazon Jet I contract, where it's not necessarily a soul cloud for the entire Department of Defense. It's a soul cloud for the workload, the military application workload or app. The military. It's $10 million application, and it's okay to have one cloud, as we would say, But yet they're going to use Microsoft's cloud for other things. So the ODS having a multiple cloud approach, multiple environments, multiple vendors, if you will, but you don't have to split the cloud up. Her say This is kind of one of those conversations really evolving quickly because there's no real school of thought around this other than the old way, which was have a multi vendor environment split the things. What's your thoughts on the the workload relationship to the cloud? Is it okay to have a workload, have a single cloud for that workload and coexist with other clouds? >> It's funny. I've been thinking about this more lately. Where if you went back earlier in time, forgetting cloud, there used to be a lot of different type of servers that you >> can run on, whether it >> be a mainframe or a mini mainframe or Unix system or Olynyk system. And to some extent, people are choosing what would run where, based on the demands of the application, sometimes on price, sometimes on certifications or even what's been poured into the right one. So this is a beating myself, you know, that's that's a while ago. It's not too different to kind of think about the different kind of cloud service is there out there, whether you're running your own on your own data center or whether you're leveraging one from the other partners. I really do think in the ideal world you get your choice of the best possible platform for the application across a variety of characteristics. And it's kind of up to the vendors of management software and monitoring software at security software to give you more flexibility to choose where to run. And so for getting D'Amore exactly. But think of a virtualization layer that really tries to abstract out and let you more fluidly run things on different clouds. Do you think that's where a lot of the the core software is head of these days really >> enable that toe work better >> as a >> 1,000,000 other use cases, but with storage being moved around >> for disaster recovery or for whatever it else might >> be? But that quarter flexibility reminds me a lot of choosing what application >> would want. Run would run where within your own company >> and the kubernetes trend in containers certainly really makes that so much more flexible because you can still run VM. Where's viens beams under the covers over Put stuff on bare metal a lot of great opportunities that's exciting >> and you slap in a P I in front of them and micro service is sort of works in tandem with that so that you could really have your application composed >> across multiple environments. >> And I think the ob surveilling observe ability is so hot because it takes what network management was doing in the old way, which is monitoring. Make sure things are operating effectively and combining with data. And so when I heard about the acquisition of signal effects into Splunk, I'm like, There it is. We're back to data. So observe ability is really a data challenge and opportunity for using what would be a white space monitoring. But it's more than monitoring because it's about the data and the efficacy of that data and how it's being used, whether it's for security or whatever your thoughts >> s. So there's more data than ever, for sure, and so being able to stream that in being able to capture it at cost, all that is a big part of our environment still working. The key thing is turning that into some actionable insight, and whether you're using no interesting calculations for that or different forms of machine learning like that's where this really has to go is with all this data coming in. How do >> I avoid false false >> positives? How do I only alert people when needed, then that allows you to do what everyone's talked about for 30 years, which is automatic remediation. But for now, let's talk about it. Is how do I process all of this rich data and give me the right information to take action? >> Do you want to thank you for coming on this promote cube conversation? You've been with us at the Cube since 2010. I think our first cube event was A M C. World 2010. That show doesn't existing longer because that folded into Del Technologies world. So VM world next week is the last show standing that has been around since the Cube. You've been around? Of course, you guys had VM worlds had their 10th anniversary was 2013 as a show. But this is our 10th year. Well, thank you for being part of our community and being a contributor with your commentary and your friendship and referral. Appreciate all that. So I gotta ask you looking back over the 10 years since you been with Doug, you've vm world. What's the most exciting moments? What are moments that you can say? Hey, that was an amazing time. That was a grind, but we got through it. Funny moments. Your thoughts. >> Boy, that's a tough question. I've enjoyed working with you, John and the Cube. There's been somebody really interesting things for me. The sum of the big acquisitions that we went through a V Um, where? Where? I think the NSX exposition. When we get a syrah, I think that really pushed us an interesting spots. But we have gone through, uh, I pose an acquisition ourself by the emcee begun Theo. It's a pretty vicious competition from Be Citrix Airs in or Microsoft. Yeah, that's just the joy of being a These companies is lots of ups and downs along the way that they almost kind of fit together to make an exciting life. >> What was some moments for you? I know you had left was the 2015 or 26 boys with your last day of >> the world. You go now, you know about six years. >> What do you miss about the end? Where >> the team is what everyone kind of cliche says. But it's totally true. The chance to kind of work with all those people at the executive staff all the way down to like these awesome engineers with Koi is so I definitely missed that Miss Shipping products. You don't get to do that as much directly as a venture capitalist. But on the flip side, this is a great world to be, and I get to see enthusiastic. You're very optimistic founders all day long, pushing the envelope. And while that was existing at the end where, uh, it's it's what I see every single day here. >> You've been on The Cube 10 times at the M World. That's the all time spot you're tied for. First congratulates on the leaderboard. It's been a great 10 years. Going forward. We've seen are so good. Looking back, I would say that you know Palmer, it's taking over from Diane Greene. Really set the table. He actually laid out. Essentially, what I think now is a clearly a cloud SAS architecture. I think he got that pretty much right again. Or maybe early in certain spots of what he proposed at that time. There's some things that didn't materialize is fast, but ultimately from core perspective. You guys got that right, Um, and then went in Try to do the cloud. But then and this year it comes in for suffered to find, you know, line with Amazon. And since that time, the stock has been really kind of it on the right. So, you know, some key moments there for Of'em. Where from Self >> Somali. More stuff. It's fun to see Pivotal now possibly coming back into after after getting started there. But I think you know, there's there's a hugely talented team of execs there. Pat L Singers come >> in and done a great job. I think, Greg, >> you and all these folks that Aaron, >> there are good thinkers. And so I >> think you'll consider just continue to see it evolved. Quite event and probably some cool announcements next week. >> Talk aboutthe roll Ragu and the team play because he doesn't really get a lot of the spotlight. He avoids it. I know he did talk to him privately that he won't come on the Q. I don't know what the other guys go on other guys in jail, so he's been instrumental. He was really critical in multiple deals. Could you share some insight into his role at bm bm were and why it's been so important. >> I'll push him to get on, especially now that you have remote. You can probably grab him now. He and Rajiv and Rayo Funeral Just all the guys air. I think he and Reggie basically split up half and half of the products. But Roger is very, very seminal in the whole cloud strategy that has clearly been working Well, he's a good friend in a very smart guy. >> Well, I want you to give me a personal word that you're gonna get me in a headlock and tell him to come on the Cube this year. We want him on. He's a great, great great guest. He's certainly knowledgeable going forward. Steve, 10 years out, we still got 10 more years of great change coming. If you look at the wee that's coming, you're out investing in companies again. You had one big exit today with the $1,000,000,000 acquisition that was happen by Splunk and signal effects. Ah, lot more action. You've been investing in security. What's your outlook? As you look at the next 10 years is a lot more action to happen. We seem to be early days in this new modern era. Historic time in the computer industry as applications without dictating infrastructure capabilities is still a lot more to do. What do you excited about? >> There's a million things I get to see every day, which are clearly where the world is headed. But I think at the end of the day there's there's infrastructure, which the job in life of infrastructure is to run applications. And so then you look at applications. How are they changing and what is the underlying fabric gonna need to do to support them? And if you look at the future of applications, it's clearly some amazing things around artificial intelligence and machine learning to actually make them smarter. It's all different factors form factors that they're running on and being displayed on. I think we clearly have a world where with the next generation of networking, you could do even more at the edge and communicate in a very different way with the back end. I kind of look at all these application patterns and really trying to think about what is the change to the underlying clouds and fabrics and compute that's gonna be needed to run them. I think we have plenty of head room of interesting ideas ahead. >> Stew, Dave and I were talks to Dave. Stupid Valenti student and I were talking about, you know, as infrastructure and cloud get automate as automation comes in, new waves are gonna be formed from it. What new waves do you see? Is it like R P ay, ay, ay, ay. Because as those things get sucked in and the ships and two new waves What? Oh, that's some of the key ways people should pay attention to. I'm not saying the industries is going away, but as it becomes automated, and as the shift happens, the value still is there. Where is those new waves? >> Well, then, today it looks like most applications they're gonna be composed of a lot of service is, um and I think they're gonna be able. They're going to need to be displaying on everything from big screens to small screens to purely as a headless 80. I front ends, and so again, I think at the end of the day, this this infrastructure is gonna have to have a lot of computation capability after crunch do tons of data but also have to stitch together these connections between components and provide really good experiences and predictability in the network and all those air very hard problems that we've been working on for a while. I think we'll keep working on them and new forms for the next 10 years at least. >> Awesome. Steve. Thanks for being a friend with us in the queue, but you're funny. Favorite moment of the Q. Can you share any observations about the cube and your experiences? Your observations over the 10 years we've come a long way, >> you go ugly, actually enjoyed it. I mean, it's a microcosm of all the other stuff going on, but I saw your first little box that you built and used for the Cube like that was that was really cool. But now the fact that I'm on my laptop, you doing this over the network and it's showing up is pretty awesome. So think you're following the same patterns of the other, have the other applications moving the cloud and having good user experiences. >> Cube native here software native Steve. Thank you so much for stating the time commenting on the acquisition. I know it's fresh on the press. Ah, lot more analysis and cut to come next week. It's certainly I'll be co hosting at Splunk dot com later in the year. So I'm looking forward to connect with a team there and again. Thanks for all your contribution into the cube community. We really appreciate one. Thank you for your time. >> Thanks. You guys are awesome. Thanks for chatting. >> Okay. Steve Herod, managing director at general counsel, Top tier VC From here in Silicon Valley and offices around the world, I'm John for breaking down the news as well as a V Emerald preview with the former CTO of'em. Were Steve hair now a big time venture capitalists. I'm John Ferrier. Thanks for watching.

>> live from London, England. It's the queue covering a ws summat. London twenty nineteen Brought to you by Amazon Web services >> Welcome back to London Summit Everybody, this is David Lamont and you watching the Cube, the leader in live tech coverage. We loved to go out to the events. We extract the signal from the noise. This is our one day coverage of a WS summit London, and it's packed house twelve thousand people here. The twenty six thousand people registered, which is just outstanding. Chris Bunches. Here's the general manager of a MIA for cloud reach, and he's joined by Mark Randy, whose CEO of signal FX. Gentlemen, welcome to the Cube. >> Thank you. >> Okay, let's start with signal effects. What's going on at the show? What's the buzz like? >> Very busy. Dozens deep. A lot of demonstrations feature in our massively scalable metrics platform and distributed tracing platform. So we've had a very good show. Good showing in London. >> Good. We're going to get into some of that. Chris, tell us about cloud reach. What you guys do? >> Sure. So Cloud Reach was founded in two thousand and nine. So quite a long time ago in the history of cloud confusing, at least >> was right after the Cloud City with >> quite a pure vision around helping complex organizations to adults public cloud computing technologies to doom or faster and better. That's all we've ever done. It's all we ever intend to do way work these days with enterprise organizations across the cloud lifecycle starting with adoption, helping them to understand White Cloud. How am I going to do this? How am I going to move my data center's into the cloud? How am I gonna build new services moving on through the life cycle? We help them with that. At that migration, we helped them to shut down their data centers on rebuild them in a WS. We helped build New Cloud native Services. Using the latest offerings from from Amazon and other cloud providers, we worked with him on Data analytics, helping them to generate insights from their data. Data flows in an ever faster pace from across the across the world into their organization. On all of that is wraps with an MSP manage service twenty four hours a day, seven days a week. >> So, Mark, I gotta ask you so back back in the day, the narrative was that the public law was going to kill every man, his service provider out there. It's been nothing but a tailwind for your business. Business is booming. What's what actually happened to give you that? Left >> on the signal effects side I look, the big trends are the move to the cloud number one. The second piece is just a change in the architecture's you know, the move to communities, the introduction for elastic burst e type use cases of things like Lambda and and that even more importantly, just the process of developing software movement from, you know, waterfall, Dad, agile and the Whole Dev ops movement in introduction of micro services. So that's it's It's just a lot of a lot of these ways been going on for quite some time, but they're really starting to hit the shore to shore right now, and I think it's been a great great opportunity for companies like Cloud Reach Tio to take advantage of were very excited by the partnership. >> Well, it has. It has ripple effects on the rest of the business, doesn't it? I was saying earlier in a segment that it used to be the business of No, we can't do that because and now you look around this audience, it's all doers and builders, and, you know, it's it's actually great marketing because it works, doesn't it? So clouded has been a fundamental component of >> Yeah, I mean, our whole businesses around making t v enabler helping businesses to innovate. Once upon a time, the message was all around. Cost saving is the reason to move to the cloud, and there's still an element of that. Nobody wants to pay Mohr, but actually, increasingly, what we're seeing is organizations moving to Amazon because they want the agility, they want to move faster. And they don't want to be the the culture of no and have a process that takes six months to deliver a new service to the business. They want to be out of deliver things in hours or minutes in the some cases, and they want to do so quickly on they want to innovate, a pace that they've never been able to before, partly from a competitive threat perspective and partly from a market opportunity. There's so much, but we can deliver to customers if we put our minds to it and use the primitives, the Amazon providers, as building blocks to enable new >> services. You know where you live in the Bay Area. I spent a lot of time out there, were based in Palo Alto and use a vortex that unique that sometimes I think way think that that's where all the action is. You come to London and you see all these startups. Every business is becoming a software company. And you know, we don't in Silicon Valley in America have a monopoly on innovation anymore, >> not even close. So there's a lot of great innovation all over Europe. Uh, here in the U K. All the way to Northern Europe, Doc, uh, Paris Way we see it across the board. So >> So what are people doing? They building new cloud native APS in the public loud. Are they doing a lifted shift and trying to get more agility out of those traditional APs? What's the landscape? Looks like? >> It's ah, combination of the two. The startup organizations, of course, is starting with no legacy. There's nothing to my great and they are building cloud native and they're doing so far, >> we have no I d >> no. Yeah, technically, before nine years, four hundred on eBay test migrations. But that's the only hardware for the museum. Exactly the larger organizations. They have huge volumes of legacy infrastructure, some of it dating back to the seventies. In the case of financial institutions or public sector, then all of that is an opportunity to modernize, and not just for the agility and innovation but in some cases just to reduce risk. There is huge business risk in these old, untouched, dusty, cobweb ridden servers that nobody understands anymore. And there's a really opportunity to move that to the public cloud, reduce and remove that risk. And while you're there, take advantage of the new technologies and innovative deliver a better service to you or in consumer whoever that may be >> so prik uber, Netease and micro services, even though containers have been around for a while. But the modern doctors ascendancy. You know why? To K was the year of the decade of modernization. It was like four or five years leading up to y two K at some I T shop said, Okay, we're going to modernize, but but none of these micro services existed, so it really was. It was about dates, maybe some application portfolio rationalization. What's different today that I could take those apse that were written in the seventies with a lot of custom code? How am I able to modernize, though >> I think it's the maturity of the services. You look at something a platform like Amazon. There's one hundred twenty hundred thirty, or Mohr. It grows almost every week. Building blocks primitives, the Amazon are providing, and its a rating on it. At an incredible rate on DH, there's almost a service for everything. And when you think they've run out of services to introduce, a new services is created. And, you know, we talked about micro services. They introduced Lambda back in two thousand fourteen, which was there. Serve Elice environment driving event based micro services architectures, and it's ahead of the game. It's ahead of the curve. It's causing people to think very differently about what's even possible from a night perspective. And there's no way. In most organizations, you, Khun, build that kind of infrastructure on that kind of platform that is build and costs you on a Microsoft microsecond basis. I mean, it's it's >> incredible. It was amazing. I remember the first virtual machine. It would be anywhere that I saw spun up like, Wow, this is going to change the world. And then the cloud comes along like a while. This is going to change the world. And now survivalists. I don't even have to deploy servers anymore. It's side by Amazon >> way. See this? Even even in some of the more traditional organizations we we worked with in the UK and in Germany and France and elsewhere, you don't even need to be looking at service. Just the ability toe programmatically spin up a virtual machine without a human touching anything. That's incredible to some organizations, right? They're used to it, taking six months to provision of infrastructure to deploy an application. Now they can click a button, and by the time they've made a cup of coffee, it's it's up and running, and it's It changes the way people >> think So much Talk about Cloud Region signal effects. What's the partnership like between you two and what's your partnership like with eight of us? >> Um, on the cloud reach side, we went through an extensive evaluation by cloud reach, and over several months they evaluated all the alternatives on the market and ended up selecting us to be their standard for their many service provider business. It's We're super excited about that. On the go for it, we're rolling that out with them there. Current customer based on DH. We were hoping that, uh, using signal effects, that cloud reach that will help them be the point of spear on all cloud native. You know, in their marketplaces, they go pursue other customers, so it's pretty excited about. >> So it's not a pressure release deal, not a Barney deal. Like we like to say that >> they're up there, They're a paying customer. And, you know, I made a big bet on signal effects going forward. >> So why the choice to go with manage service provider? You have You could have built it yourself and take us through that. >> Yeah. I mean, the nature of the business we're in is very much predicated on the fact that you don't build it yourself. You know, you look at the market and if somebody is already doing it well and provides excellent service as a commodity, you use it. We've been in the MSP space since round about twenty ten very soon after the the company was was founded, and we know it pretty well. We have a large customer base. We are one of the top tier MSP for along the major cloud vendors in the world, lots of large organizations. However, as we look to refresh our tooling with a view on Maura, an application centric approach, which is what all of our customers want and expect a CZ we look to micro services and the very latest platforms and technologies he's being released by the hyper scale cloud vendors. We recognize the need for a newer, more modern tooling on DH. After a thorough evaluation, a CZ mark says signal effects came out on top. Why is that? Partly it's the cloud native element. You know, some of that sounds a little bit like a marketing buzzword, but in reality, what it means is the company was founded relatively recently and as a result, was geared towards modern technology. So out of the box they support doctor, they support containers, they understand, and they're orchestrated around micro services. It deals with scale on volume, and we we want to low test things in a big way. We only serve large scale and surprise customers. And they are going to throw tens of thousands of containers on micro services at their tooling, and it has to be able to track tto handle that massive volume of transactions. >> It's a complicated picture, actually. You know, sometimes micro services aren't so micro. Yes, and you've got to secure all these containers. Got spinning up of'Em is easy. >> Well, >> you see multiples. So how do you guys deal with that? I mean, you're obviously experts at it, but But give us the sales pitch >> on. Yeah. So I think you kind of you covered it earlier with, You know, all these great new technology with introduction of micro services. I mean, developers in our writing it the running it, they're pushing code directly into production environment. You know, you went from releasing code once or twice a year, a few years back now toe several releases and you know your people lifting shift. They're starting with a few micro services. Someone we're getting up into the hundreds, even thousands in our most advanced deployments. It it it ends up being worth a situation Where Alright, all this innovation is great, but it also introduces a ton of complexity. And based on the way we've architect of our system, really time streaming like within seconds, you're going to need to see it, to react to it, whatever the use cases. And that's what differentiates signal FX is this massively scalable streaming architect we built for from a Metrix platform standpoint and then from an Eastern West standpoint for your from your custom code are Micro Services, a PM solution on top of that to go help measure what those transactions air how they're performing across the entire complex environment. So we feel like we're just purpose built for today to help in the lift and shift crowd and or for the more advanced customers, they're intothe point dozens, if not hundreds of micro services. >> Tell me more about this metrics platform you mentioned a couple times. What is that all about? >> Well, we start with essentially, you know, the three big pillars are logs, metrics and eight p. M. And you know, our company was found it. We have deep roots. Back in the two thousand seven ranges, our founders were you know, they built the monitoring stack at Facebook and so had several years, you know, kind of earning and learning that secret. You know, in the early days, they didn't call it Dev Ops. Back then they called it move fast, break things, didn't call >> it. They didn't call it >> a micro services. I mean, and then twenty, twenty, thirteen, early, two thousand fourteen. That's when the founders got together and started. The company is also the same time frame. Doctor came out. Were just purpose built for this for this environment. >> Final thoughts. Yeah. Thie event where you guys were headed. Maybe little road map, if you could. >> The event has been incredible. Every year it gets a little bit bigger. It gets a little bit more exciting. There's, ah, bigger range of organizations, different industries. And it changes a little bit over time. This year, financial services has been particularly of interest for us, but this event is a lot of large large banks, investment houses, those kind of companies here on DH. That's been really exciting for us. I think trend I'm most excited about is really around machine learning. Amazon talked about it in the keynote this morning and democratization of very, very complex technology bring it to the masses is a as a manage service that can be provisioned in minutes and seconds. And to me that something that's that's really exciting and using the signal FX platform, we're now in a position to provide manage service wrappers around the machine learning based solutions that we build for our >> customers. Yeah, the financial services. Interesting. Back in two thousand nine when you started, a lot of the banks in New York thought they could scale and compete essentially with KWS >> world. The world changes very quickly. Absolutely >> final thoughts for you. >> Yeah, I think they think we're moving past that point. You know, even the later adopters. I think we're moving past that point and look at that name there getting pressure from the startup community, whether it's intact or or any industry's gonna have that type of pressure. You talked about that y two k moment. I think in any vertical out there, it's that you know those cloud native type companies the companies are becoming software companies were going toe transform yourself or you're going to have some pressure from the start up going forward. We're >> guys. I'm thrilled that you could make time to come in the queue. Thank you. Thank you. Thanks for having us. All right. Keep it right there. But it is. Dave Alonso will be back with our next guests right after this short break. You watching the Cube from London? Eight of US Summit right back.

>> From Union Square in downtown San Francisco, it's theCUBE covering PagerDuty Summit '18. Now here's Jeff Frick. >> Hey welcome back everybody. Jeff Frick here with theCUBe. We're at PagerDuty Summit at the Westin St. Francis in Union Square, historic venue. Our second time to this show, there's about 900 people here talking about kind of the future of dev ops, but going a lot further than dev ops. And we're excited to have a couple of CUBE alumni here at the conference from SignalFX. We've got Arjit Mukarji. >> Mukarji, yeah. >> Thank you. And Karthik Rao, co-founder and CEO of Signal FX. Gentlemen, welcome. >> Thank you very much. >> So what do you do at PagerDuty Summit? >> Well we've been partners with PagerDuty for a long time now, we've known them since the very early days, we share a common investor. But we both operate very squarely in the same space, which is companies moving towards dev ops development and deployment methodologies, leveraging cloud and native architectures. We solve a different part of the problem around monitoring and observation and we partner with them very closely around incident management Once a problem is detected, we typically integrate in with PagerDuty and trigger whatever incident management paths that our customers are orchestrating by PagerDuty. So, it's been really an integral part of our entire work flow since we started the company. So we're very close partners with them. >> Yeah, it's interesting 'cause Jen announced they have 300 integrations or 300+ integrations, whatever the number is, and to the outside looking in, it might look like a lot of those are competitive, like there's a lot of work flow and notification types of partners in that ecosystem, but in fact, lots of different people with lots of different slices of the pie. >> That is good. >> Yeah, absolutely. It's a really big problem space that everyone is trying to solve in this day and age. Some of our competitors are in that list, but you know we partner very closely with PagerDuty. As I mentioned earlier, our focus really is around problem detection and leveraging the most intelligent algorithms, statistical models in real time to detect patterns that are occurring in a production environment and triggering an alert, and typically we're integrating in with PagerDuty and PagerDuty deals with the human elements of once something has been detected, how do you manage that incident? How do you router to the appropriate people? One of the things that's really interesting as this world is changing towards these dev ops models is the number of people that have to get involved is substantially greater than it was before. In the old days, you would have an alert go into a knock and you have a specialist group of people with very specific runbooks because your software wasn't changing very often. In today's world, your software is changing sometimes on a daily basis, and it could be changing across dozens of teams, hundreds of teams in larger organizations. And so, there's a problem on the detection side because companies like SignalFX have to do a really great job of detecting problems as they emerge across these disparate teams, across a much, much, much, larger environment with much larger volumes of data and then companies like PagerDuty really have to deal with a far more complex set of requirements around making sure the right people get notified at the right time. And so they're two very different problems and we're very happy to- and have been partnering with them for a number of years now. >> And again, the complexity around the APIs where the app is running, there's so many levels now of new complexity compared to when it was just one app, running on one system, probably in your own data center, probably that you wrote, compared to this kind of API centric multi-cloud world that we live in today. >> That is exactly right because what's happening is our application architectures are changing 'cause we used to have these monoliths, we used to have three tiers and whatnot, and we're replacing that with the micro-services, loosely cabled systems, and whatnot. At the same time, the substrate on which we are running those services, those are also changing. Right, so instead of servers, now we have virtual machines, we have cloud distances and containers and pods and what-have-you. So in a way, we are sort of growing below too in some sense and so that's why sort of monitoring this kind of complex, more numerous environment is becoming a harder challenge. We're doing this for a good cause, because we want to move faster, we want to innovate faster, but at the same time, it's also making the established problems harder, which is sort of what requires newer tools, which sort of brings companies like us into the picture. >> Right, yep. And then just the shear scale, volume, number of data that's flowing through the pipes now on all these different applications is growing exponentially, right? We see time and time again, so it really begs for a smarter approach. >> Absolutely, I mean on two levels right? The number of minutes of software consumption is up exponentially, right? Since the smartphone came out in 2007, you've got billions of people connected to software now, connected all the time, so the load is up order sum magnitude which is driving, even if you didn't change the architectures, you would have to build out substantially more back-end systems, but now the architectures are changing as well, where every physical server is now parceled up into VMs which are parceled up into containers. And so the number of systems are also up by order sum magnitude. And so there's no possible way for a human to respond to individual alerts happening on individual systems, you're just going to drown in noise. So the requirements of this new world really are, you have to have an analytic spaced approach to monitoring and more automation, more intelligence around detecting the patterns that really matter. >> Right. Which is such a great opportunity for artificial intelligence, right, a machine learning. And we talk about it all the time, everyone wants to talk about those, kind of as a vendor-led something that you buy. Yeah, that's kind of okay, but really where the huge benefit is, companies like you guys and PagerDuty using that technology, integrated in with what you deliver on your core to do a much better job in this crazy increasing scale of volume that's run with these machines. >> Yes, because the systems are becoming so complex that even if you asked a human to go and set up the perfect monitoring or perfect alerting, et cetera, it might be quite a hard challenge, right? So, as a result sort of automation, computer intelligence, et cetera needs to be brought in to bear, because again, it's a more complex system, we need higher order systems that have dealed with them. >> Right. >> You are very, very right, yes. And that's a trend we are starting to see within the product, we are actually focusing a lot on sort of data science capabilities which too are sort of making them more and more sort of machine running and automation. In the future, we have capabilities in the product that can look at populations and identify outliers, look at cyclical problems and identify outliers again. So the idea is to make it easy for users to monitor a complex system without having to get into the guts, so to speak. >> Right. >> And to do it on various sorts of data, right? I think you have an interesting use case that we've been experimenting with recently. >> That's right. >> If you want to talk about that. >> Yeah, so I actually have a talk tomorrow, it's called "Interesting One." It's about monitoring social signals, monitoring humans. So we have these systems, we have these metrics platforms and they are quite generic, the tools that we have nowadays and are sort of available to us are quite powerful, and the set of inputs need not be isolated to what the computers are telling me. Why not look at other things, why not look at business signals? In my case, I'm going to talk about monitoring what the humans are doing on Slack as a way for me to know whether there's something of interest that's going on in my infrastructure, in my service that I need to be aware of, right? And you'll be shocked how surprisingly accurate it tends to be. It's just an interesting thing, and it makes one wonder what else is out there for us to sort of look at? Why confine ourselves, right? >> Right. It's funny because we hear about sentiment analysis in social media all the time, but more in the context of Pepsi or a big consumer brand that's trying to figure out how people feel. But to do it inside your own company on your own internal tool, like a Slack, that's a whole different level of insight. >> You'd be surprised at the number of companies that monitor Twitter to understand whether they have an adage. >> That's right. >> Yeah, because in this day and age, users are on Twitter within seconds if something is perceived to be slow, or something is perceived to be down, they're on Twitter. So there are all sorts of other interesting signals to potentially pull from. >> Right, right. Well and guess what, we were just at AT&T Spark yesterday and the 5G's coming and it's 100x more data'll be flowing through the mobiles, so the problem's not going to get any smaller any time soon. >> No. >> Absolutely. >> So what else have you guys been up to since we last spoke? Continuing to grow, making some interesting moves. >> Absolutely- >> Crossing oceans. >> We've been very, very busy, one of the big areas of investment for us has been international growth, so we've been investing quite a bit in Europe. We have just introduced an instance of our service that's based in a European data center. For a lot of our European-based clients, they prefer to have data locality, data residency within the European Union, so that's something new that we just introduced last month, continue to have a ton of momentum, outed AMIA, they're very much on the cloud journey, and embracing cloud and embracing dev ops, so it's really great to see that momentum out there. >> Right, and clearly with GDPR and those types of things, you have to have a presence for certain types of customers, certain types of data. Anything surprising in that move that you didn't expect or? >> No, I don't know, I'll let you. >> Not in that move, but it's just interesting to see how quickly some of these modern technologies are getting adopted and how- one of the things sort of we talk about a lot in our trade is ephemeral, right? So how things are short-lived nowadays, and you used to lease these servers that used to stay in your data center for three years, then you went to Amazon and you leased your instances, which probably lived for a few months or a few days, then they became containers, and the containers sometimes only for a few hours or for- you know. And then, if you think about serverless and whatnot, it's in a whole different level, and the amount of ephemeral that's going on, especially in the more cloud native companies, was a little bit of a surprise in the sense that, it actually poses a very interesting challenge in how do you monitor something that's changing so fast? And we had to have a lot of engineering put in to sort of make that problem more tractable for us. And it continues to be an area of investment. That to me, was something that was a little bit of a surprise when we started off. Much of this doctorization and coordinating was not yet in place, and so that was an interesting technical challenge as well as a surprise. >> Well I'm curious too as instances, right so there's the core instances that are running core businesses that don't change that much, but it's a promotion, it's a this or that, right? It's a spin up app and a spin down app. Are those even going up on the same infrastructure from the first time they do it to the second time they do it. I mean, how much are you learning that you can leverage as people are doing things differently over and over again as their objectives change, their applications change, they're going to go to market around that specific application. That's changing all the time as well. >> Yeah, so I think the challenge there is to sort of build, at least from a technical point of view, from SignalFX point of view, is build something that is versatile enough to handle these different use cases. We've got new use cases, new ways of doing things are going to continue to happen, probably going to keep on accelerating. So the challenge for us is good and bad, is how do we make a platform that is generic, that can be used for anything that may come down the pike, not only just now. At the second time, how do we innovate to continue to be up to speed with the latest of that's what's going on in terms of infrastructure trends, software delivery trends, and whatnot. Because if we're not able to do that, then that puts us sort of behind. >> Right, right. >> So it's a sort of lot of phonetic innovation, but it's also exciting at the same time. >> Right, right, right. And just the whole concept too, where I think what's best practice quickly becomes expected baseline really, really fast. I mean, what's cutting edge, innovative now unfortunately or fortunately, that become the benchmark by which everything else is measured overnight. That's the thing that just amazes me, what was magical yesterday is just expected, boring behavior today. Alright good, so as we get to the end of the year a lot of exciting stuff, you guys said you're going to be at Reinvent, we will see you there. Anything else that you're looking forward to over the next couple months? >> Just, we're really excited about Reinvent's big show for us, and we'll have some good announcements around the show. And yeah, looking forward to just continuing to do what we've been doing and deliver more rally to our customers. >> Love it, just keep working hard. >> Yep. >> Alright. Arjit, hope your throat gets better before your big talk tomorrow. >> Yeah, that's right. >> Alright, thanks for stopping by Karthik, it was great to see you. >> Great to see you. >> I'm Jeff, you're watching theCUBE, we're at PagerDuty Summit at the Westin St. Francis in San Francisco. Thanks for watching, see you next time.