 Live from Las Vegas, it's theCUBE, covering Knowledge 16, brought to you by ServiceNow. Here are your hosts, Dave Vellante and Jeff Frick. We're back to wrap up Knowledge 16. The CUBE has been here, wall-to-wall coverage for three days. Jeff Frick and I have really been a pleasure. This is our fourth year at ServiceNow Knowledge, and it just keeps growing and growing. Jeff, we're seeing the continued steady march of ServiceNow. I think my summary on this week, the financial analyst meeting on Monday, the three days of keynotes, and all the conferences within the conferences, the CIO decisions event, the CreatorCon, et cetera. I break it down into four areas. So the business, product innovation, ecosystem, and the developer community. And so let me start with some thoughts on the business. As I said, we're seeing, we're witnessing the steady consistent execution ethos emerging in ServiceNow. The expansion of the TAM, growing from what was initially $8 billion TAM, it grew a little bit further from there. And then I had pegged it at two years ago with $30 billion, now it's up $60 billion plus. So they've done a fantastic job of taking this platform and just pointing it at different markets. This is one of the CEO's toughest jobs in a growth company, is how do you continue to expand the TAM so you can keep fueling the beast? And ServiceNow looks like it's got a long runway ahead of it. Still basically 50% penetration in IT within the US just for its core market. Many more opportunities outside of IT just getting started overseas in a meaningful way. So a lot more growth going there. So you're seeing an execution ethos. Now at the same time, ServiceNow is entering uncharted territory, certainly for this management team, but they seem quite capable, but they're bringing in new capabilities we talked to the new CIO, focused on scale, sort of the next phase of growth for this company. And what we saw as part of that whole TAM expansion was Frank Slupin laying out the three great estates in software. Like I said, he skipped a couple early on, the mainframe stuff, we don't have to worry about that, but the ERP estate popularized by Oracle and SAP, the CRM estate, initially popularized by Siebel and then just dominated by Salesforce. And then service management being the umbrella that's going to encompass all these systems of record and systems of engagement to really try to bring a single view of your operation. And that's really the opportunity that ServiceNow is putting forth, which seemed to resonate very well with the customers. Your thoughts on the business vector? Well again, I think the ITSM angle is a specific one, but if you look at it in the context of a shared service, all companies have a number of shared services. And if you can continue to approach, excuse me, if from the shared services angle, especially as we had a number of conversations, talking about enabling people to actually start to break down the shared services and the cost of the shared services and map it back to business functions and business applications so people can make more informed decisions. Obviously we know they're doing stuff in HR, we know they're doing stuff in finance, we know they're doing stuff in facilities management. So these are kind of these necessary processes that happen in all companies, especially large companies at scale, that they see just everything X as a service and have demonstrated that they can start to execute that way. So I think the TAM is large. I mean, the one that we talked about that we don't see as much kind of talk about is on the small side, right, the SMB side. And maybe it's just because they don't need to go there yet, they got enough big fish to fry on the big companies, but we've heard consistently in a number of the guests we had on over the last three days, came at it from the HR angle, came at it from a facilities angle, came at it from a different angle than kind of the classic customer. So it seems like shared services is a bigger category than the IT management. It's a big opportunity. Well, I think I've been thinking about this issue of the express that they announced, well, I guess last year or a year before I can remember now, but for smaller customers. But I think the reason why we didn't hear so much about that is because their main core is still IT, you know, SMB, they don't have IT. Right, that's true. All the cloud. You're right. And so I think my expectation would be as service now matures into the business lines it's going to cycle back and take a page out of the CRM playbook, the Salesforce playbook. And so I'm hopeful, you know, as a potential consumer of this platform. On the product innovation side, you know, it's one thing to have a big team. You've got to get product out of R&D. This company spends about 15% of its revenue on R&D. You got to get it out of R&D into a product pipeline and you have to be agile and able to do that. And I think we saw that with ITOM. Service now enhanced its ITOM portfolio with some acquisitions of Nebula, ITAP, which got it into the orchestration and automation business going after things like OpenStack now and orchestrating, Chef and Puppet, et cetera, cloud management. So that's a big growth area. The other piece is service management across the enterprise beyond just IT. We've heard about that for some years, but we heard, for instance, from Jen Straub. I know we're going to talk about guests in a minute, but HR obviously is a big area. Facilities is a big area. And you're seeing that continue with expansion. And then I say customer service now really extending across the enterprise. So those are some really big areas. The other one is security. I'm very personally very excited about the security initiatives that we heard. We made that a big theme, certainly of day two and parts of day three. And I think huge problem. And I think service now has nailed it because everybody's still focused on the technologies to either detect or keep the bad guys out. What service now is focused on is the response. And I think you're increasingly over the next five years going to see a massive shift toward that response. How do we respond to the inevitable threat which we know is happening? We know there are intrusions. It takes hundreds of days to detect intrusions. How do we now respond? How do we manage all that data, all those incidents? How do we determine which response we should, which attacks we should prioritize a response toward? And that's the problem that service now is attacking. So huge opportunities there. And then of course the extension of the platform. And that's really, we heard a lot about that today. The UX, the UI. So again, thoughts on the product pace, pace of innovation there? Again, I would just point people to Sean's interview from earlier today, Alan's interview from earlier today. There's been a number of them as you've been kind of pounding the security angle. And it does seem to be a very clear shift to security is basically risk management, treated as risk management, make your investment decisions around risk management, really define what you're trying to secure, the value you're trying to secure, prioritize. And then as I said, everything you ever needed to know, you learned in kindergarten, right? You need to practice a fire drill. You need to practice the response. You need to put the processes in place. I think, so from the day from Oshkosh said, establish your relationships and smooth seas so when things get rough, you're ready to go. And so it's really kind of a discipline of being kind of security ready and security focused as an action plan as opposed to a binary we are or are not secure because Sean made a great line, you need to work under the assumption that people are constantly trying to penetrate your borders. The third area I want to talk about is ecosystem. When we first sort of bumped into the ecosystem of service now four years ago, we said, wow, there's a couple of things that we noted. One is, other than KPMG, the big SIs weren't here with a big presence. We saw a lot of innovation. We saw a lot of opportunities for M&A, which I'll talk about in a minute. We started to see some moves last year in the ecosystem. Cloud Sherpa's being acquired by Accenture, CSE acquiring fruition. Very interesting that the way in which Accenture's aggressively integrating Cloud Sherpa's where CSE's saying, no, we're gonna not mess with it. We're gonna keep fruition separate and sort of make that a separate opportunity and let management go do its thing. I think they can both work. That's a cultural decision that they make there. But also, KPMG continuing its big presence here, sort of skated to the puck on this one. You know, usually these big SIs, they like to, as they say, eat from the trough and they wait until the big money is there and then they dive in. KPMG made some good bets there and I think they're paying off. And then a lot of new applications emerging in the ecosystem, some industry specificity. So still some things to watch there, the evolution of that ecosystem. I like to see the ecosystem be able to do more pulling of ServiceNow in. I think right now, ServiceNow is doing most of the selling and bringing the ecosystem in. I think that's gonna change, especially with the Accenture acquisition of Cloud Sherpa. I think Accenture can really start to drive some big business for ServiceNow, as can KPMG and CSE. The other thing to watch in the ecosystem is, I learned this from Todd Nielsen of VMware Days when he was president of VMware. He used to come up with a stat that every dollar spent on VMware, there's N dollars spent on the ecosystem products and that number was very large. It was one to 13 and then it went to one to 15 and one to 17 and then VMware changed its pricing and people stopped talking about that. But that's a signal. If the ecosystem can make money, think about the great ecosystems. Microsoft's ecosystem as an example, that massive ecosystem where the partners made money, that's what it's all about. And so that's something to watch that I think we're gonna start to see here as this company breaks through, it's broken through a billion in revenue. Thoughts on that. And EY was here as well. Yeah, yeah, I left out EMI. So we had them all and as you said, they don't come into a marketplace unless they think there's a lot of money to be made and they see demand from their customers that they can start to establish basically practices around these. So I think that's a huge signal, exterior signal that there's a lot of uptake interest and opportunity in delivering these applications to large customers. The other part I thought was interesting, I think it was from CSC, really looking at the opportunity that, yes, we've historically done infrastructure implementations and management, et cetera, but we too see that there's higher value activities within our world beyond managing other people's infrastructure around solutions like ServiceNow that we can do process change and management change and transformation change and have less of our total bill and go into infrastructure build and infrastructure management. Again, I think a continuing path down this journey of non-differentiated, heavy lifting, go with a specialist and really focus your own energies on places that you can differentiate. That's not in putting racks of servers together. Yeah, what did Alan call them? The server huggers, right? Server huggers. So the fourth vector I want to talk about is developers and that was kind of a big theme toward the end of the day today. We've heard some great research from John a Forrester. This notion of low code, slash no code, citizen developer, it's emerging, as John said, it's not really well-defined, but you kind of know it when you see it and you see it here. And as I said a number of times today, companies like ServiceNow, IBM, HP, EMC, certainly Microsoft, et cetera, they covet the developer community. Now, many are doing a great job you see AWS just sort of lives off the developer community but others, it's like pushing a rock uphill. Just really amazing to me at ServiceNow, I said, okay, we're gonna do this and see what happens and then developers came out of the woodworks, maybe not traditional full stack developers, but guys that are writing apps and that's huge for a leverage because that's where so much innovation is gonna come and because the platform company can't do it all and so cultivating developers, meeting the needs of that developer community is something that any software company needs to do and I think ServiceNow is doing it in a unique and differentiated way and one that's clearly gaining traction. I talked to a few of the ServiceNow folks before the keynote kicked off this morning in the general session like, yeah, now we start our CreatorCon, a 3,000-person developer conference which it's a conference within a conference for a lot of people, 3,000 people is a big show, we go to a lot of shows, it's not an insignificant show so to have that kind of attraction inside of this conference is pretty meaningful. I think what's more interesting is kind of this high def code, low code and no code deployment options within the platform because as we spoke to John and Forster to get enough developers we have to kind of change the way we think about development and it's not just what's traditionally been the hardcore developers but it's people that don't either do development full-time or don't look at full stack development and I thought it was interesting what Jonathan talked about. Jonathan Sparks talked about one of the customers they work with who just uses web development coders and then they learn up on ServiceNow because they've now been unencumbered from being attached to either building out infrastructure and or kind of the classic back end coders who were really a gate to their ability to deliver. So that's an interesting twist on it as well where you don't necessarily have to have the back end that's now kind of wrapped up in a platform and you could focus on the front end and delivering new applications. So I go back to the whole chauffeur problem these cars are never gonna work because there aren't enough chauffeurs. We have to change the definition of what developers are and I think the low code and no code is a big piece of that puzzle. Yeah and then I think the other comment I wanted to make is just the whole messaging of the event. When we go to these events we always test the keynote messaging, does it resonate? Is it actually happening in the field with customers? Do customers buy into it or is it just more sort of good messaging? CloudMeetsBigData as an example was great messaging. It's like okay, where's the beef? But so what you see with ServiceNow is they lay out the problem. We have stovepipe processes. They describe the way in which the state of work today, they provide research on that state of work. The crowd nods and says yes, we've been there. Frank Slutman going back to his days of saying, desk is a four letter word and getting some booze but now everybody sort of agrees with that. So really good job of laying out that messaging and then connecting that to the ServiceNow value proposition in a way that's not gratuitous. It's just well done. So props to the folks that are crafting those messages and I think actually the reason why it's so good is because they live it, they breathe it, it's organic and then they shape it obviously in a way that's very professional. They spend a lot of time on the keynotes. We saw that the keynotes were very well done, very well rehearsed and it showed but and the jokes worked. So that's all good. Guests, not a big highlight. So two of the best guests we've ever had on theCUBE, John Cleese, which was just like no guest we've ever seen. Really it wasn't much of an interview but he just did his thing and it was a lot of fun and it was quite unique. And then this year Dr. Robert Gates, the 22nd US Secretary of Defense and the head of the CIA under eight presidents he served which was really an honor to be able to interview him. I thought he was great, not as fun as John Cleese but heck of a lot of substance. But again too he went through at the beginning of the interview and again I encouraged people to go watch it and went through and you talked about it, leaders born or they made and he went through eight character traits that he said you can't learn in college but these are the traits that great leaders have. I got this kindergarten theme in my mind because these are simple things that you learn but it's curiosity and it's integrity and it's empathy and it's really fundamental stuff. So that was a terrific interview. Obviously Fred is fantastic and I just wanna go back to the word delightful. There's a bunch of cultural things at this company that are very atypical to kind of the tech world and tech shows we cover. To focus on a delightful experience I think is a pretty special thing that he just flat out brought right to the front. This is what we want to do. I think it's reflected in the cakes which we make a lot of jokes about but culture matters and actually Mr. Gates talked about culture matters and that's part of the culture here and it kind of goes back to the fun and kind of the energy you felt with the hackathon winners. The fact that Fred is still the leader and still coding and is so passionate and stood up and said this is the most rewarding thing I've ever done in 40 years of programming in front of 11,000 customers, employees and analysts and that's pretty meaningful and it's very fortunate for a company of this size, a show of this size to have the personality that everybody can get behind believes in and stands up there and shows code and of course he broke his own code and broke his own demo which I thought was pretty funny too. You're like I shouldn't have been hacking on that stuff. So he's a special person and as we've said time and time again, founder led companies that have that original vision and energy have a distinct advantage over kind of hired guns I think. So there's also a very subtle sometimes not so subtle positioning or depositioning of CRM and I thought that was interesting. ServiceNow hasn't done that in the past so some of the things I'm gonna be watching, obviously ITOM adoption, that's gonna be big and of course business line adoption that started sort of maybe last year or the year before and in HR and facilities and so forth and it's legal we'll see how that continues. I expect it'll continue to grow and fill that large TAM. The whole notion of service management across the enterprise, that's something that we'll be watching. Customer service, this is a big bold initiative. Ken, ServiceNow changed the way in which organizations work. There are a lot of entrenched processes out there that are really hard to break. We all want them to be broken but change is sometimes very, very difficult so we'll be watching for that and I think a key to that is going to be the ecosystem contribution to that change. I don't think one company can do it alone. Obviously we watch growth because they're a public company it's easy to sort of track that and also the continued innovation that R&D pipeline turning into product at speed. It seems to be accelerating, we'll obviously be watching that. Your last thoughts, I'll give you the last word. Same thing, work is difficult. There's a lot of processes we deal with. The amount of email is a universal pain in everyone's backside as it continues to grow and grow and grow. So I think we really need methods to make work life easier, aggressively automate where we can so that we can do higher value activities. Everybody's too busy, there's not enough developers. So there's a number of really big issues that ServiceNow is trying to address and they've got traction, they've got a dedicated following and as we say time and time again it's a great show, it's a great energy, it feels like a small new show but it's 11,000 people, 12,000 people and I'm sure they'll be just as enthusiastic next year in Orlando. All right, well I think that's a wrap guys, great job Patrick. Well done, appreciate your lead leadership. This is Seth and Jay and Brendan. Really appreciate it Bert, as always Bert, thank you for documenting the Cube on the crowd chats and Kristen and your team. That's a wrap everybody, this is the Cube, signing out from Knowledge 16, thanks for watching. This is a tale of two businesses. Like most businesses, their employees are key to their success. Sometimes they need to bring more people on board, fast and this is where these two businesses do things very differently. 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