 And welcome back. We're here live at the Cosmopolitan Hotel in rainy Las Vegas. Doesn't rain often, but here it is. When we show up it starts to rain. I don't know what that's all about. We're here at .com 2012, Splunk's annual user conference. I'm Jeff Kelly from Wikibon. I'm joined by Jeff Brick, SiliconANGLE, my co-host. Hey Jeff, we're really excited to be here. The day's going fantastic. It's not only raining, it's huge thunder lightning, so we must be touching on some interesting topics or getting into some great places. But we're really excited to have our next guest, David Caruso with us. As he said, he's the third employee of Splunk. I know a lot of you out there have been at startups. I know a lot of you have been the third employee or the fifth employee or the startup guy. And it's not often that you get a company that's successful and makes it all the way out. Builds a successful product, has as many happy customers as we've talked to already, and then even gets the IPO, which is kind of another process on the journey. It's not an endpoint as all my venture capital friends are happy to remind me. But not only that, but David literally wrote the book on Splunk. And there just aren't that many guys that have written the book on a subject. So we're really excited to have you, David. Thank you very much. And welcome to theCUBE. Hopefully we'll get you back to theCUBE as a frequent visitor. Thank you very much. So, I mean, why don't we just jump out or jump back to the beginning? Seven years ago, seven and a half years ago? Yeah, yeah. You know, what was it? Where did you come from? Who are these crazy guys that you decided to join? Why did you think maybe this might be the one? So when I interviewed, it was just a few guys in essentially a cubby of the venture capitalist office. So we didn't even have our own office. And when I started in February 2005, we had a very small space. We were actually renting a part of Six Apart's office space. And it was just six of us. And we were building a product and we were having a lot of fun doing it. And it was a small team, but a very good team. It had a lot of interesting qualities. The founders are very much a part of the success of the company in the sense that one was very concerned about the appearance and the coolness of the factor. One was very open and honest, and one was very brilliant technically in the sense that there was this combo, this perfect storm that made things really come together nicely. What inspired them? Were they working in a job and there was a challenge that they couldn't overcome because there was no tool? Yeah, so they struggled. They spent two years basically unemployed intentionally looking around for what problems there were in the IT space. And they interviewed company after company and basically found a niche that was glaringly untapped and they went after it. And that's why having the right niche is critical obviously to the success of your company. And they found a very good niche that was just completely untapped. When you talk to system administrators years ago, there really was no good tool for this kind of analytics. You have thousands of machines or even hundreds of machines and you have a problem on any one of them. There were no tools to diagnose things. You would have to connect into that box, look around on the logs. You could ref, which basically just do a tech search. And it was very primitive and people would spend hours doing these things. And there was just this real untapped need that Splunk filled. And with a lot of creativity and hard work, we made it faster and faster and better and better. And it's a really good scalable tool that is useful to people outside of the IT department now. Yeah, and when I first interviewed, by the way, it's interesting to say that I didn't want to take the call because logs sound boring. But once they described the problem, it was anything but boring because there's so many easy problems are not interesting, but hard problems are interesting. And these were all these hard problems that you have to deal with from AI, artificial intelligence to just good engineering and scalability and understanding your data. There's just a lot of really hard, interesting problems here. And that's what drew me to it. Tell us a little bit about your role. We've seen your title sometimes as principal scientist. I've heard Chief Mind. So I want to fill this in a little bit about what the Chief Mind does. Sure. Right now I'm in the office of the CTO. So Eric Swan is the CTO. And we have a team that basically does special projects. And that's a relatively new department. Previous to that, I was in engineering and basically building a lot of the core part of the data coming in. I wrote the search language and just sort of a lead engineer working on things. And in the office of the CTO, I'm working on special projects like the book. And different things. Building apps to make Splunk more useful. So there's a whole team of brilliant people building the product, but on top of the product, you can build apps that just make it more useful. And there's a whole world of things that you can do. Just like a database is a great thing, but there's a world of other things you can put on top of it to make it more useful. Let's dig into that. Kind of the apps. We've been covering the big data space for a while at Wikibon. And one of the things we're not seeing is a proliferation of big data applications at this point. A lot of work and the plumbing layer, you might say. The infrastructure. But really kind of that last mile is the application to bring it to the end user. So tell us about some of the applications you guys are working on. What are you excited to do? What interests me personally are things like predictive analytics and sentiment analysis. So predicting values in your data, understanding how users feel about your data, cleaning your data. There's anything to do to automate things. Finding anomalies automatically. So our core product has a search language, but out of the box, finding anomalies is a little bit of an artwork. But to build an app to help you find anomalies and things like that are great. I think part of the problem with apps and big data is monetizing it and making it the right place for modernization and just the right marketplace. And it's not quite there. We're working on it. But it's growing. It's definitely growing. We're building apps. Outside companies are building apps. It's growing. You'd love this massive exponential growth and I'd love to tell you that there are ten times more next year. They are growing. And not everybody, people build apps for their own corporation. They don't necessarily have an interest in, if I work in a corporation, what's my motivation to make it public and to help other companies? In the big data world, there's some of that community, but there's also some of that, you know, part of what we're using these tools and technologies for, for competitive advantage. So you don't necessarily have to share some of that on paper. Big data is a big advantage. A few percent between you and your competitor, a couple years you're out gunning them by far. These big data can add, these small percentages really add up and it's just critical to companies to use it. You've got gold in your data and it's being ignored. I'd like to say that if it's plugged in and it's not a coffee pot, it's spitting out data. And maybe even coffee pots nowadays. Coffee is the second most traded commodity in the world after oil. Actually, I think you need to start tapping in more coffee pots. There you go. And, you know, if you look around this room or anywhere, there's just data that's being created and you're ignoring it. You know, key card data and data from your phones and data from every computer, server, cloud, just all over the place. And they're being ignored and there's really useful stuff in them. My kids were late. They had a school trip flying, believe it or not. My kids flew from Vegas back to the Bay Area. They had a trip. It was actually to Zion National Park. But they were late. And you know what I did? I splunked all the FAA data of every flight in the last 30 years. I just stuck it into splunk. Every little flight, how it was delayed, where it went, everything. I go, you know what? You should have known that flight's going to be delayed. That flight from LA to San Francisco is historically really, really late. How funny. And I knew it. You know, and it was just, there's so much interesting stuff out there. So I'm sure whoever the competitive airlines would have liked to have known that when they put their ticket on Expedia. Yeah, and you can see like over winter which airports slow down because of the snow and just amazing, amazing stuff in there. So I want to ship gears a lot. There's so many places we could go and again, I hope we get you back on the queue. But we talked before we started a little bit about the culture. We talked about, from a startup perspective, so many startups in the valley and so many of them unfortunately just don't make it for a whole host of reasons. But you guys did. And you mentioned very specifically about the culture of the company and the leadership of the company. And we've heard from some other people about tremendous things about the leaders, Godfrey and his leadership style. And of course he came in halfway through this journey from the beginning. So if you could expound on that a little bit, what makes those guys special? How do they lead and how has that really contributed to the success of the company and what you guys have going on? We can see it all in the little preview videos of the camera walking through the offices and it's like they're having a good time. So I guess I like to say that just like your product and your niche is critical and not an afterthought to your company and your patents and your strategy are not afterthoughts, the culture of your company shouldn't be an afterthought. You should engineer the culture to be a place where you want to work, where you want to be there every day. It shouldn't be a place you go to work and then afterwards you go hang out with your friends. Your friends should be at work. You should want to be there. You'll be more productive. You'll have more fun. You'll be more open. You can criticize your friends. You can't criticize people that you're sort of cold and professional with. And so constructive criticism is really how you evolve. It's how your product gets better. It's how features get better. That constructive criticism allows things to improve. And if you have this cold professional environment, you don't. So Splunk is a very funny environment. Humor is just a good metric for intelligence as any job interview test. So I really encourage companies to have a good time while they're making money. They're not exclusive. It's not a coincidence. They go hand in hand. So human, they're pretty much from the beginning. Developing that kind of culture when you're a really small six person organization is one thing. But how do you scale that? It's an excellent question. We've actually, believe it or not, paid attention to it from almost day one. Every year we have a company meeting and we've had quarterly meetings and sales kickoffs and things like that. And we actually have a session about how do we keep the culture alive. We love working here. How do we keep it like this? And so we've actively been saying, okay, you know what? We like the beer. We like the ping-pong tables. We like this. We like that. How do we keep it fun? How do we not hire people that will take away our toys? And we've been pretty successful. I wouldn't say 100% successful. But we've been pretty good about maintaining that culture because we've been aware of it. And we've known that this is a precious commodity that we wanted to hold on to. So I think you have to spend some time thinking about the culture you want. And not from a top-down thing. It's a bottom-up. Where do you want to spend your working hours? It's an interesting twist. Intel is famous for their constructive criticism. In fact, they teach classes on constructive criticism so you can get in somebody's grill in the meeting and nobody takes offense because we all took the class last week in HR. You don't need a class if they're your friends. Yeah. But you've got disruptive as one of your core company values. But it's disruptive with fun. As he said, it's a different way to look at it when you can be disruptive with a real friend because you can tell them what you want to tell them because you're not worried about whether they're going to take it the wrong way if they're not going to take it really as a constructive when you're both working together to get to a better place. Absolutely. That's a great testament on the company. But of course there was the IPO and that can change things for some companies and not always for the better in terms of culturally. There was an IPO? I believe there was an IPO. Okay. Sorry. I missed that. Sometime in the spring. So has that put any, you know, when you're dealing with investors on a quarterly basis, can you put some pressure on the type of culture your company has built? Right, right. Have you found that to be the case and how have you guys dealt with that? A little bit. Not much. A little bit. There's a little bit of a tightening about what you can say, what you should, you know, what you can publicly say and what you, just being a little more careful in terms of your public face. So I wouldn't put on Facebook, you know, necessarily a really glowing spin on certain things. I would be a little more cautious on certain, but within the company I think we're all good. Yeah. Yeah. So I don't think it's put a damper on the fund. That's good to hear. The brew is still flowing. Very nice. So looking forward, what are some of the exciting things you plan to do in the next six, 12 months? What's your priority list look like? You know, next year at this conference, when you come join us at theCUBE, what will we be talking about? Sure. Well, I'm really excited by a lot of the improvements that engineering is doing. Not necessarily me. I'll be doing good stuff, but they're going to be doing great stuff. The speed and the improvements to the product are really, really amazing. I've been cautioned not to talk too much about the future, but it will be impressive. Yeah. And, you know, for my part, I'm going to be building out some more interesting apps and we'll be extending the book. The nice thing about this new world of print-on-demand is that you can basically send a new PDF and do a version two of the book. So the book is available on Amazon.com right now. But I also mentioned that it's actually free online. Oh, okay. The PDF, Kindle, and iPad version are free. Okay. We sell software. That's how we make our money. We don't make money on books. So we have no interest in having, you know, we want people to be educated about Splunk. So this is not how we make our money. So the book is free online. It costs money to buy it at Amazon purely because of the paper and the transport. Right. But if you go to splunkbook.com. Splunkbook.com. Yeah. You can find it. And so the book is divided half into basically an introduction to Splunk, how to see the world through the Splunk way of thinking. Great. And the second half is a cookbook, sort of recipes are the most common sort of problems and solutions and how to do them. So it should appeal to the very beginner as well as the intermediate person. Yeah. And hopefully over the year I'll be expanding the cookbook. Great. We look forward to that. Yeah, the predictive analytics is interesting because we just had Marquis on before you came on. Right. And he talked about the amazing event of typing in some search and key phrases and coming back with stuff that he wasn't anticipating. Right. It was far more interesting than that which he was looking for in the first place and going off down a whole other track of value. Right, right. So it looks like the pixie dust is right there. You just got to have it kick out in the first place without him having to put it into the search algorithm. I have a talk tomorrow on data mining in Splunk. Okay. And one of the things I emphasize is that people tend to look at Splunk or as any of these products is you build a dashboard of things you know you want to see, you know, the events per time or how many web pages I serve per time. But I would encourage people not to limit themselves to that, to really explore your data. Use Splunk as an exploratory engine to go and go, well, what about, you know, language versus IPs versus time versus, how does that compare to last week? There's a whole host of dimensions that you're ignoring because you sort of have this a priori belief in what's important. Right. But you know what? You're missing these outages. So we were once spending an interesting amount of our advertising budget on countries that didn't speak English. And data saved us some money. The people who weren't speaking English weren't buying the products surprisingly because our website was in English. And so there's a lot of gold in that data. Sure. And you got to pay attention to it. And you need to explore. Yeah, you need some kind of, I feel lucky button. And just, you know, keep hitting the button and it keeps spinning the dials here we are in Vegas. We don't have the other. It comes back, oh, here's the relationship I had. Absolutely no clue that these four factors correlated in some interesting way. Yeah, yeah, yeah. We don't have it to that level yet, but that would be very nice. Fantastic. Well, we're here live at .conf, Splunk's annual user conference in Las Vegas. We've been speaking with David Caruso, principal scientist, chief mind, just all around good guy. That's black. Thanks so much for joining us. Thank you very much. Thanks again. We really do appreciate it. And we'll be right back with our next guest.