 Live from Las Vegas, Nevada, it's The Cube. Covering Knowledge 15, brought to you by ServiceNow. Okay, welcome back everyone. You are watching The Cube here live in Las Vegas for ServiceNow Knowledge 15. Hashtag no 15. This is The Cube, our flagship program. We go out to the events in the district of Sinclair Noise. I'm John Furrier, the founder of Silicon Angle. Join my co-founder of Wikibon.com. Our next guest, we're excited to have as a founder, Chief Product Officer of ServiceNow, Fred Luddy. Welcome back to The Cube. Great to see you. So great to be here again. Thanks. So you all jacked up from the keynote, great keynote. Story of the beginning of ServiceNow and the next 10 years. How do you feel? I feel ready for the next 10 years. You know, we spent 10 years building something that I think has established a really great foundation. And now, you know, people just want to work differently. They have different expectations based on what they do in their real life that I should be able to work in real time. I should be able to communicate very quickly. I should know at a glance, looking at my wrist or looking at the thing I pulled out of my pocket, whether I've got something to do or not. And I just want to go on about my day. And I think this is our first step into that whole real time system. It's exciting for me as an entrepreneur, Dave, as well as an entrepreneur, to look at what you guys have done really as an entrepreneur. Congratulations, you know. Having the ability to build something from scratch, grow it, realize you want to write code every day, hire Frank Saluteman, build a great company. Now you have developers, 1600 plus developers coming in for CreatorCon. Great traction, happy customers. What's the next vision? I mean, keeping people happy, where do you go from here? What's the path from the product? Is it cloud native? Is it enterprise grade? How are you dealing with all this now internally? Now that you're leading the charge on the product side, what's the path? Well, I think we've pretty much set the stage today for what's going to play out over the next five to 10 years. But for me, this whole game has never been about money. It's always been about popularity, right? I always wanted my art on your refrigerator kind of thing. And so what we would love to do is we would love for everybody in all walks of life to think about service now as a place where they would go to get work done. So rather than using yellow sticky notes or rather than using texting, everybody at work would be using for whatever kind of tasking they're doing, they would be using service now to say, here's my list of to-dos. I'm going to give this to that person, this to that person. I'm going to communicate that this is going to be late. All of that stuff should be done with a beautiful touch interface, all handled in real time. And for it to work, it has to be easier than not using it, right? And so I think that's the big trick with technology. With systems of record, things like SAP, management can say, you must do this because you have to adhere to our policy. You have to adhere to our process. You have to stay within the boundaries of the policies been established. But when you start to move out beyond that ring to where people are doing personal things during their day, then it really has to become simple. And I think you saw with the interface that we had on mobile and on the watch that it is really becoming easier, make a note, I got to do this, I got to do this thing very quickly. You can do that right in your watch with Siri now. So Fred, I learned a lot in your keynote today. I knew you were a chief product officer. I didn't know you were a booth babe. Did not know that. I didn't know, I knew you were a former CEO. I didn't know you were a pretending CEO. I didn't know you're sitting in a cubicle. That was news to me. And then you also made Frank Slubin blush, which I thought was very good. Well, that's always a, you know, to get a Dutch person to blush, that's no small challenge. I think that was probably the most interesting thing. It was great. So I want to ask you, so you showed this beautiful software today. You took us down memory lane and you showed us some of the previous instantiations of ServiceNow and other software. We use software in our business and we use, you know, HR portals and things like that. And it feels old, but your software that you showed today is not looking old. It's looking modern. So how is it that you're able to sort of put that modern look, feel, and then all that real timeness into your platform, but other software just doesn't feel that way. I don't, or that's maybe putting lipstick and a pig in the other software example. How are you able to do that? And how real is that? Well, it's very real. There's a few things in this journey. First of all, we have been justly accused of putting lipstick on a pig with a couple of our releases, you know, the UI stuff that we thought was super cool. In fact, it just looked mildly better. But we started a transformation just about two and a half years ago that led up to what everything you saw today. And we also, we had to fundamentally invert our architecture and create a new way of getting information to the user rather than having the user constantly look for information. And I think if you read the innovator's dilemma or if you study large software companies, they almost never have the spine to actually go and do something new. And so they tend to just improve one or 2% every couple of years. But unfortunately, the market's expectations are moving 10 to 20% a year. So their one to 2% just means it looks worse every year. So this year's software looks a little less worse than last year's. So I think if you look at companies like Google, when I met with Ben Fried, who's the CIO at Google, he asked me, how many lines of code from the original release of service now do you still have? And I said, you know, probably 30, 40%. He said, you know what it is at Google? We know exactly. It's zero. We have rewritten every line of code that is the Google search engine. And Apple, you know, when they switched from the Motorola chip to the Intel chip, they switched out operating systems. When jobs came back, right? And they switched out the BSD operating system for the next based operating system and they switched chip sets. They have had, and I think Tim Cook said this in an interview recently, they have had the guts to walk away from what was a good idea but now is a bad idea. And I think few technology companies have those guts. So we've talked about HTML5 and previous knowledge. Is it, was HTML5 a stepping stone or was that sort of part of the evolution, throw away and redo? No, that HTML5 is absolutely core to the platform success. What was really holding us back and probably holding back a lot of other vendors is that in a lot of corporations, they're still using IE7 and in some places even IE6. Now thankfully, Microsoft has finally shut that off because the only thing that gets the corporations to move is to declare that you have a security bug that will not be fixed, right? And then they move overnight. Other than that, they take several years to move. But HTML5 is absolutely fundamental to us on the desktop, right? We can do things in HTML5 and Angular and Bootstrap that years ago people never dreamt could be done on a desktop. And on the mobile platform though, there, you know, we have a hybrid app but it's largely, largely native. You know, the largest percentage of it is native. But the opening scenario where I brought the mobile app up, we were actually running our new service portal which is an HTML5 app, Angular Bootstrap, inside our native app. And the native app gave us a layer to get back to the camera, gave it barcode, gave us geo, those sorts of things. So we're using it to get device capabilities but we have to remember that a large percentage of our customer base will never install our app because they don't use it that frequently. You know, it's just like when you go to, you know, you go to Denny's once, right? And they want you to install the Denny's app. I don't really think I need the Denny's app. You know, I'm pretty good the way I am. Guys, there are certain things you're going to continue to do on the website. Or do you still have it? No, I just get the eggs in the bacon. Yeah. I got to ask you about the cloud because one of the things that you mentioned about having the spine to do something new kind of has a mindset of the old days because you could be wrong and be in a cul-de-sac of writing code and then not have any good software or use cases. But with the cloud, you can do things much faster. Iteration, we hear that here all the time in the service now. Iteration, fast, agile, that's a cloud theme. So Amazon has shown that you can do a lot of releases. As the product person, do you have that same mindset in your organization and is that part of the plan as to continue to push out new stuff in that kind of cloud agile way? Yeah, we've throttled back on the number of releases that we come out with every year. And we've gone to a new methodology for even developing our software so that we can move more things more quickly. Now we have a large number of developers now who are working on a large number of offerings. And so somehow we have to figure out how they can all work together without stepping on each other. And we've put together an iteration for that. So agile is part and parcel to who we are. I think we have a huge positive step that we could make and that we're going to make, but we haven't made it yet. So everything is a service. I mean, we were just at the Amazon Summit in San Francisco. They told them machine learning is a service. First time we've seen that kind of trend, which is awesome. They got some can machine learning, but that's the kind of trend we're seeing. Everything is a service going on. So what do you have now that's, what is everything today and what's going to be everything in the future? What do you see coming around the corner? And also you said, you know, this microservice is a hot buzzword in Silicon Valley right now. That's more app specific, but you got a set of services today. Everything means a little more, right? And everything will be a service. What is coming around the corner that's going to be added onto service now that you can envision that you could share with us? Well, I think one of my big drives is, I really hate email. And there's an MIT study that shows people spend 36% of their workday in their inbox, which means that's 36%. And most of that is probably deleting emails. Only 22% of emails that get sent actually get read in their entirety. And what I'm trying to do, what we're trying to do, what our thrust is, is to try to change the communication medium for asking someone to do something so that we can have all these services that you can discover easily in a catalog. So this everything as a service is a big deal to us. What happens though, is now that everything is a service, that's going to build a huge database. So I'm going to want to have things like machine learning coming in to analyze what I do inside my business. Also, the internet of things is still not yet a big player for us. But imagine if the things inside the corporation all start to communicate with each other and they all funnel back to a system like service now. When we do things, right now we have SNMP agents on servers that tell us when the server's overheating. Well, if you work at Kroger, it's more important that you know that the deli case is not refrigerating, right? Because you are losing stock right then. And so the whole notion that you have an internet of things where point of sale terminals where deli cases are reporting back to you and then you're handling that in real time, that becomes very interesting. These are new workflows. These are new workflows. They're brand new workflows and they're really, I mean, it's a very exciting time. So I wonder if we can talk about, keep on that innovation team. We were just at MIT, or in London with MIT professors, Eric Brynjolfsson and Andy McAfee. They live a good life. They wrote the book. Yeah, we travel a lot, but we work hard. And we talk to a lot of smart people. So we're hanging out with those guys, they make us feel smarter. They told us that we made them feel cool. But anyway, I guess that was the compliment. So, but the whole concept was, we've lived off of Moore's law exponential growth for the last, whatever, many decades. And the future of exponential growth is going to come from combining technologies. And the one piece of their research that showed us, we used to replace humans with labor. Machines would replace human labor. Now it's cognitive. And you guys are doing a lot of that. Cutting out a lot of the waste. So, but the premise is that innovation will come from combinations of technologies, that the constraint to growth is going to be the ability to envision these combinations and apply them in a business. So what are the combinations of tech, first of all, if you buy that premise, you may not, but what are the combinations that you see in the future? I think that premise is correct. And so, if you think about the internet of things, I'm going to answer the question. But if you think about the internet of things, people think, oh, I need to put an IP address on my light bulb so I can turn it off. That's not what's really going to drive everything. What's going to drive everything is rethinking how we've done things because we've been constrained where things couldn't communicate. So let me give you an example. Nest, right? Completely rethought the thermostat, right? We've had programmable thermostats now for a quarter century and nobody's ever programmed one. Because they're impossible. And I don't know when I'm going to be here. Nest rethought that whole notion. So I think the combination of things, we have a number of different things in that Nest device. They're figuring out when people are in the room, when they're out of the room, when the temperature should go up and temperature should go down. Those sorts of things are going to happen a lot. And so, a lot of rethinking is going to have to occur and combining different technologies is what's going to bring it all together. But fundamentally, and then to get to involve things like Watson, then it all has to come back to a central source. And this goes all the way from the most mundane thing, like adjusting the temperature in your room, all the way to cancer treatment, right? So cancer treatment is another thing that there's a lot of, I think there's more progress being made in cancer treatment right now than has been made in the last 150 years we've been fighting the disease. Because the combination of these things, the Illumina X-10 machine being able to sequence, being able to share that data around the world, and then to have big enough machines that we can actually analyze molecular structure and environmental molecular structure is actually leading people to discover how cancer really works. And if we can figure out how cancer works, now we can do something else really cool. We can take T cells out of our body. We can instruct them how to kill those cancer cells and then we can re-inject them. And all of a sudden our body is killing our cancer rather than chemo, radio, or surgery. Humans to figure a lot of that stuff out, but Dr. Watson might be there to help us diagnose cancer more quickly or maybe twice in a minute. But the humans have to tell them what to look for, right? I think that's, you know, we flew back and forth over Cuba during the Bay of Pigs to try to figure what was going on. And it was finally one intelligence guy said, the Russians are there. How do you know? Because there's soccer fields in Cuba. Well, yeah, Cubans, they play baseball. Russians play soccer. They couldn't find a military equipment where they found soccer fields. It doesn't make any difference. You know, you can have very intelligent machines, but human cognitive ability is never going to be approached. And playing Jeopardy is very different than noticing a soccer field being an anomalous thing. So expand on that concept of the innovation piece of the enabler. What is the disruptive enabler or ERS in that model? Is it analytics? Is it the real time? Because you got to kind of see it. You got to understand it. And if you could have supplemental, you know, prescriptive or predictive analytics. Yeah. So this whole notion of bioinformatics and data science is probably going to be a frontier that's going to play out for the next, I'm going to guess, 10 to 20 years, right? Because right now you've got this, you know, you get all these genome sequences and you've got these people at the top that they've been studying cancer now for 150 years by injecting bacteria into little Petri dishes and seeing if it turns yellow or green. Somehow those two have to meet in the middle and that's where the bioinformaticians are. You also have people who are very good, you know, a mind like Jack Welch is or Elon Musk's. Very good at analyzing patterns, et cetera. But somebody has to mine all this data down here to bring the pattern up. And those are the data scientists. So it's going to be, I think, a great era of discovery, a combination of machine learning plus, you know, direction and the ability to play with that data. You know, it's a very minority of report kind of thing. You know, you do have to kind of know what you're looking for and when you see something anomalous in one area, you want to look for something anomalous in another area and then try to bring those things together. Okay, so if you were an entrepreneur today, forget that you work at ServiceNow, that you were, say, unemployed back where you were and you wanted to work on a startup. There's a lot of innovation. You highlighted things are upside down now, new capabilities are enabling, new use cases, new workflows, new opportunities. What would you do? What would you advice be for folks out there, whether they're entrepreneurs or folks inside businesses who now have shoulders to stand on with things like ServiceNow platform, open source. There's a lot of cool things that can be done fast. What would you work on and what advice would you give folks out there who are creating, and you've got just 1,600 developers here and that's going to grow and it. Well, that's a kind of hard question to ask, answer. I think for me, the opportunity in healthcare is absolutely enormous. I mean, we have one sixth of our economy, our entire economy trying to keep people healthy and the number of inefficiencies in the healthcare system are absolutely staggering. So there's a front end, let's drive out the inefficiencies in healthcare and things like open source or the ServiceNow platform could definitely help in that area and then there's a whole other area of healthcare which is really about disease discovery and treatment. And that's a big data, data science, bioinformatics area that's going to be again growing for the next, for the foreseeable future. So healthcare is a big deal for me. I really think that there's great opportunity there to really make a difference, to not only just make a great business and save money, but you also could then really help the economy or you could build Tinder. Yeah, so back on that point, you wrote that memo, I love your comment about countering the the VC Sequoia memo, the end is near a memo. I remember that very clearly. You guys countered, I looked at it as an opportunity. What's your take on the current craze of valuations? I mean, I just saw Docker got another 95 million, Illumino got 100 million, they've been out for two years. Is that toxic? Is that a way to build a company? You've built a successful company, I think the right way. I mean, you've built a product, sold it, built, got financing, grew it. Is that a sustainable? Is that just more consumer category? And is that kind of toxic in the enterprise? Is that viable? Or is this a new capability we haven't seen? Thoughts on that? I do look at some of the valuations with just general bewilderment, because especially in the business to consumer side where the valuations get so high, so fast, because you wonder if any of this stuff is going to last. I mean, what would be the valuation of Friendster right now or MySpace if there was no Facebook and yet who remembers those properties today? So it's quite a race that goes on and whether or not they become sustaining like Facebook has or like Google has, is a pretty big bet. So do I think the valuations are pretty high? Time will tell. But in general, I think, yes. I think what you see though with valuations that's a five to 10-year game. We've only been public now for just about three years, right? And our business has continued. It's up into the right march. And we've also then expanded and opened other markets. So whether other companies can do that, I have no idea. The whole notion of docker, it seems like a great notion for me until something comes along that replaces it. I mean, at some point, there were people that were manufacturing DVDs that were laughing at the guys that had floppy disks, right? And now they're both sitting somewhere in a bar wondering what happened. What's your take on developers? I mean, inside the company, what's the coolest thing you've seen inside one of your customer innovation examples that you've seen? And two, what are you excited about as from a technology standpoint? What's getting you jazzed up right now and motivated every day? And so talk about those things. Customers, accessories that are sexy and cool and some stuff that gets you jazzed up. I think the most innovative thing I've seen on ServiceNow, maybe in the history of ServiceNow is definitely the KPMG onboarding app. I mean, and it's a great model. They took a very, very complex process, which many CIOs have told me is their number one challenge, getting people to work quickly, right? They're on the payroll starting Monday morning, eight o'clock, when are they productive? That clock is ticking and the registers and the meter's running. So they did something, they took a very complex process and really made it simple for all parties concerned and all on mobile devices, right? So one thing that's great about that is when the employee starts, they think, I work for a cool place, right? Look at this awesome app they gave me a week before to track what I'm gonna do and go and et cetera, et cetera. Right now our big challenge, and I think the thing that we are most excited and intrigued about, because we don't yet have an answer for this, is what are the things that we're gonna be able to do on the phone and on the tablet and on the watch that we can't even do on the desktop, right? So when you first got the phone and you were able to be, you know, move maps and take a look at pictures and rearrange things, you thought, I can't even do this on desktop at all, right? And so we're looking for ways that are relevant to our customers, not cool for the sake of being cool, but what do our customers' management and day-to-day workers want to do on a phone that they can't do on a desktop because they don't have that tactile capability. So where are you getting inspiration these days? We've talked on theCUBE before about Amazon. You've let Amazon-like experience, we've heard Uber a lot at this event, OpenTable is another example we've heard, newer examples. Where are you getting as a software developer your inspiration these days? Well, we get it from pretty much everywhere. You know, it doesn't even have to be technology, right? You might see something that's not technology that's pretty cool and you think, wow, I could make that work for my product too. But it's really on two fronts. We do watch the business to consumer front a lot because a lot of cool innovations are happening there. We watch the pure technology stack. You know, what's going on with Angular? What's going on with Ember? What's going on with Backbone? We know, what's going on with Twitter Bootstrap? That sort of thing, if there's going to be a four. And then we really listen to our customers and our customers sometimes give us great ideas and sometimes express great pain points that they just wish could be eliminated. And that's really been the backbone of product management at our company is listening to the customers. We put out a couple of applications that probably weren't written to customer expectations and man did we get good feedback. How fast is that feedback coming? As Bill Gates said, you learn the most from your most disappointed customer. So you know, I think the customer base will always be able to tell us, I think you could do this better. This is a little confusing. Oh, you're having a lot of fun. Did you name the company Glidesoft? I did. Did you name? I saw your wife like belly laughing at that. If I can get my wife to laugh, I'm a happy guy. Well, it seems like you're having a lot of fun, Fred. It is a great time to share the folks who are watching or will watch on demand after. What's the vibe of the show? Share your perspective as the founder. I'm proud. Great success you guys have done. What's the vibe? What's going on in the hallways? What's some of the conversations you've had over dinner? What's the focus? What surprised you? Maybe some highlights share with us. You're taking on the show. Okay, so here's what surprised me. I was going to do a great stunt at first. I was going to knock the laptop off the podium accidentally. They figured it out in about four picoseconds. I thought everybody was going to be shocked and stunned. That's the one thing that surprised me. But the reason that we all come together here is number one, people that work in this technology area, they work a lot. And I think the chance to get together and co-miserate to try to find different solutions to different problems, find out what other people are doing, find out I'm not the only person that has this issue, that's a wonderful thing. And then lots and lots of ideas are just flowing constantly here. And I had meeting after meeting after meeting where people said, what's new in the UI? What's new in the UI? What's new in the UI? So I was happy that I finally got to present what's new in the UI this morning. Awesome. And you guys are so successful and you make great software. I was very impressed with the trend to Angular, and all the stuff you've got at Bootstrap. You're enabling a lot of developers. You've got the sell out with the developers. Oh, I hope they figured that out because we have created oceans of opportunity now for people that have, they'll have industry standard, de facto standard backgrounds in these technologies, but also they can go to places like Bootstrip and just grab some CSS in about 10 minutes and create a new looking UI for tagging or something, whatever they need to be doing. And all the directives that have been written in Angular that they can now pick up on and just import, we have created an ocean of opportunity for people at all levels. We'll take that to the next step. Share it to the developers directly right now. What's, why ServiceNow? Why you guys are so excited? And they look to you. You've been there, done that. You've built a company now. You're a cheap product. We'll share with them why they should be developing on ServiceNow and joining CreatorCon. And I'm sure you're going to have a very successful developer program and we'll be having conferences just on developers. Right, well I think because with all technologies, when you choose something to build in, you should choose the most appropriate technology for the task at hand. So if somebody's doing drug discovery, you wouldn't choose ServiceNow. But for so many things in so many businesses that want to be automated, that want to be streamlined, where you want to cut corners, you want to get to the outcome quicker, ServiceNow is a perfect platform. And I think for six or seven years, we didn't even talk about the platform never came out of our mouths, even though that was the initial idea for the company. And now we're out of the closet. We're a platform player, right? We've got platform development at several different levels. And I think what was done this year to create the store where you can make money building things, you can get real feedback. When people give you feedback and they haven't paid you anything, it has one set of values. If they've paid you something and they give you feedback, it has a much higher value. So we've got the store, we've got the new developer studio, we've built the portal based on de facto standards. I think that the opportunity ahead is going to be an order of magnitude higher than it has been over the last eight or nine years. Creating value is the new happiness, and that's getting home early or creating property for the company, building heroes. They won't go home earlier, they'll get more done in the same period of time. Faster times of beer, as we always say in the developer community. Well, this is theCUBE. We are watching live here in Las Vegas with Service Now's Knowledge 15. We write back on the next guest after this short break.