 Live from Las Vegas, Nevada, it's theCUBE. Covering Knowledge 15, brought to you by ServiceNow. Hi everybody, we're back. This is Dave Vellante. We're here at Knowledge 15 a year after Knowledge 2014. I kind of spaced on that a little bit before, but we are here live at the Mandalay Bay. Robert Young is here. He's with IDC and analyst with IDC covering the ITSM space. Robert, welcome to theCUBE. It's good to see you. Thank you. So tell us a little bit more about your coverage area at IDC. Sure, so I'm covering endpoint device in IT service management. So I do all things service desk related, IT asset management, software distribution, and I also cover client virtualization software. So I cover all things kind of VDI, desktop virtualization, application virtualization. So I look at a lot around how cloud, mobile, social, big data, those types of technologies are impacting how IT is delivering their systems and services, and probably more importantly, how that is changing, how the end user is consuming those services. So when I think about things like, IT service management, project portfolio management, kind of the old line business, sort of the legacy businesses and how they've now evolved, service now is anti-opposite of that. Here's a company comes in, everybody thinks, okay, they're just a small little niche ITSM vendor and then they explode. You have to do something. So what's happening in the marketplace? How would you characterize it? It's kind of an apples and oranges comparison really to compare service now with some other, the traditional project management guys, for example, but how do you look at the market? How do you sort of characterize service now? Sure, well, I think one of the things that's changing, I mentioned some of those technologies up front that I think are changing the landscape around cloud and mobile and these. I think it's important for IT now to have a better understanding of the services that are actually running on their back end infrastructure. So being service aware, I think is how IT organizations have a stronger value proposition going forward. I mean, in the past, we've always just kind of understood that what systems were there, keep them running, we get alerts when they're down, hopefully maybe not. So having a real deep understanding of what business services are relying on the back end infrastructure is huge. So I think the ties to ITOM are becoming more and more important as the infrastructure gets more complex, more cloud, more hybrid in nature. So that's an element, I think of why service now is starting to show up outside of just the kind of traditional IT service desk software. And then this extending out into line of business, right? Understanding that, okay, IT has spent a lot, many years developing processes, workflows, these things like ITIL and COVID on how to really manage processes to ensure productivity and taking those out from IT and actually getting those into the lines of business, I think are the ways that service now is starting to attract a bigger audience than perhaps what you're referring to when you're just strictly going at IT with a service desk solution. So how should we look at the market? I mean, should we look at it as a service management market which is kind of an umbrella or is it sort of this collection of other tool sets? How do you guys sort of, what's the taxonomy look like? So the taxonomy right now is that until it's material, the amount of revenue that's being generated from those offerings that are outside of IT, then we typically will put them into what was my problem management market. Once it becomes material and or a separately skewed product, then we will generally look at, okay, well maybe these need to go in some markets that are outside of just the problem management that's specific for IT and go into some other areas like human resource management and customer service. There are some other markets inside of IT that we can allocate some of that revenue to as it grows. But this is something that we're growing for us at IDC. These are conversations that we need to have as the technology landscape changes. And we'll continue to kind of look at this and as it evolves and keep a focus on it. And we'll do what makes sense as the market evolves. ServiceNow certainly has a big presence in this particular area of extending out to line of business and having packaged products and offerings around that. It's been mentioned here before where from some in the keynote I think it was mentioned this morning that this goes beyond just taking a IT service desk solution and forcing it into a line of business. These are actually offerings that have capabilities that are separate. They have workflows. There's just more maturity around the offering than some of the competitors that you may be speaking about that, they maybe have some language around why that they can have capabilities to go into HR but are they actually mature products that are designed for those? Well, you and I were in the analyst meeting yesterday. Jen Stroud came in, she's an HR pro. She's not an IT person. And so that's an example of somebody's running that business she speaks HR language, not necessarily IT language. But if we look at that sort of core ITSM business, is it growing? It is growing. It is, okay. So ServiceNow is not only growing and they're obviously gaining share, they're growing at 50% a year. So ServiceNow is gaining share but the market is still growing. It is still growing. Okay, and you expect it to continue to grow. I do expect it to continue to grow. More and more of these services. I think there was a misconception when cloud was really starting to take off that, oh, well we don't need to worry about ITIL or ITSM anymore because everything's just going to be out in the cloud and we won't have to worry about it. And I think as organizations are maturing and bringing in more cloud, the savvy IT leaders are realizing that, wait a minute, I do care where those workloads run. I do care about the incidents that are happening inside of that infrastructure, whether or not I own it or not. It's important for me to be able to show the business why I have that workload running in the cloud versus running on-prem. We talk a lot about IT as a service and running IT as a service. And what that means to us really is about being a service broker, understanding that why certain workloads make sense to be on-prem, why certain workloads make sense to be in the cloud and actually being able to pull metrics from those services and show it back to the line of business in a way that's easy for them to consume and say, here's how your workloads have been running. Here's the performance issues that we had. We had some SLA breaches. Here's what we did to resolve them. Here's how we went back and corrected this with the vendor. They want more insight into what's going on in those workloads, whether they're running in their cloud or not. And a lot of that is funneled, being funneled through a service desk type solution. Even the procurement of some of those resources through a self-service catalog is now being done through us. So the service desk service management solution has got far more broad than what it was in the past. This is really becoming more of a central hub for all of the IT resources that a company wants to consume. This is kind of the entry point to get to those. So independent of where the code lives, the technology of cloud or on-premises or whatever, the process, the business process, the people issues are still inside the company. Absolutely. And that's really what you're saying service now is dealing with. Right. So you talked about the areas you cover, cloud, mobile, social, data. You guys call it third platform. Absolutely. Is service now third platform? What makes them third platform? Yeah, I would absolutely say they're third platform. I mean, they have the vast majority of their instances are cloud hosted. So to have this type of a robust solution running virtually 100% in the cloud. I mean, there are some on-premise instance of service now, but essentially all in the cloud and have this level of growth, I think speaks volumes to third platform. You know, these service now is traditional buyer up until this point has been largely IT, right? And who has been probably the most reluctant business unit inside of an organization to go cloud? Probably IT, right? They have a lot of concerns around it. And then, but look at this growth, right? Look at how service now has been able to capture a lot of market share in this domain with essentially a cloud first product. So, and then their mobile capabilities, their support for cloud orchestration to be able to provision resources in the cloud from service now to have this access on mobile devices and be able to execute these types of commands or as an end user be able to provision resources from a mobile device. These are all third platform stories and the collaboration and the social that's embedded into these solutions. These are all third platform principles and we're seeing them play out. And the vendors that are getting on board with these types of technologies, third platform technologies, if you look across our markets at IDC, you see them growing. The folks that are laggers in this, you're seeing the impacts of that as well. So, service now is this sort of interesting unicorn and particularly as an analyst, you're the service now analyst I presume at IDC, right? If I said, who's the service now analyst? You'd be it? Is that right? Yeah, I think that's a fair question. Okay, so you're the expert on service now. Yet, service now is now edging into this app creator market. That's a platform as a service. Right. Are you the PAS guy? No. So that's kind of an interesting dynamic. It is. Market shifts, you guys deal with this all the time. Sure. I'm sure service now talks to you about this. Hey, we're different than everybody else. Create a category for us, but we can't just create a category for us. No, but there are categories that exist currently that we will, you know, we already, yes, absolutely. You will see service now showing up in additional markets and other than just the problem management space that I hold on to. So does that drag you into those markets or do you stop and say, okay, hand off to your colleagues? And I mean, isn't it kind of natural if you're the service now analyst that you sort of follow where they go? I think so for quite a while. I mean, you know, I know the technology very well. I've been following service now for a few years now. And so I think for the time being that will probably be the model. But again, you know, we'll see where this takes us just like service now is moving into new markets that forces us to look at where we place them in our taxonomy and into our markets. And we work closely with service now to identify that. And you know, we have conversations internally of how that will happen. But I will say this anecdotally. I wouldn't be surprised to start seeing more, you know, IDC analysts at these types of events other than just myself. I think that's certainly in the realm of possibility as this evolution continues on. So you got Republicans, you got Democrats, you got independents. As analysts, we try to be independent. And so, but I got to ask you this whole multi-tenant versus multi-instance discussion that's going on. Pat Casey put it forth today in the keynotes. Service now used to pretty much not talk about that inside plumbing. And now they're being more forceful about it. What do you make of that? Yeah, I found it interesting. You know, you're right. It's an argument that was kind of like drum up a few years back, and I haven't heard it kind of resurface in quite a while. They brought up some great points on why one may be better over another. But I've also heard those arguments on the other side. You know, it's not really something that, you know, I hear a lot from my customers, you know, the clients that I speak to asking a whole lot about. But to the points that were made this afternoon are certainly interesting. And I think that it may have, you know, may increase some of those phone calls that I'm getting. The premise that Pat was putting forth is that many of the SMB clouds are not suited for the enterprise. Number one, definitely by implication and even explicitly, essentially said multi-instance is going to be, you know, better, more reliable, et cetera. What's the trade off? Is it cost? Is it efficiency? Is it scale? You know, I question that. I mean, because there are quite a few vendors out there that are, and they've showed them up on the screen today, right, that are running multi-tenant. And they're highly entrenched in enterprise organizations and they're able to scale. And have I heard any kind of big concerns around some of the issues that were brought up today? I haven't. So, you know, in my- So some religion to it, maybe. I think so. Design, philosophy. I think so. So I was a good thing if, in some cases, and maybe this is one of those cases, right? Again, it's not something that I'm hearing a lot about from the customers that I'm talking to as a big differentiator on why they should go with one solution over another on that, yeah. I remember when I first started learning about service now, I said, wow, this would be awesome for mid-sized companies. Not small guys like us. Companies like IDC, you know, you start to get into the point of, were you big enough? You know? Right. So what do you make of Express? How does that affect the market, the size of the TAM? What do you make of all that? Yeah, you know, I'm happy to see a product like that come to market. I think that it's great to evolve the product, the service now, just like any other product, right? Folks are asking for these things to be added and it's important that vendors get them out there. But there's also that mid-market that is looking to grow, but they're just not quite there yet. And more and more, they don't want to pay for features and functions that they're not using. You know, back to things that I am hearing about from clients on concerns, is why am I paying up front for features and functions that I'm not road mapping out for another three to five years, you know? I get the evolution, but we're not there yet, but now I have to pay for these. Mid-market is looking at that hard, they don't want to pay for the extra features and functions they want to evolve. So I like the story of having this type of solution for folks that fall into that category that still want to get into this, but they're not quite as mature yet and they're able to grow into this platform, I think is neat. How about mobile? It was probably a couple of years ago, Fred Lutty started talking about mobile, iPad apps, et cetera. We thought HTML5 would sort of be the cure-all. It looks like integration with cameras and other mobile, capabilities is becoming more and more important. What's your take on mobile in this space generally and specifically ServiceNow's approach to mobile? You know, they need to go in that way. I mean, service management in general is about being mobile, right? It's about making processes more efficient. We talk a lot about HR throughout this conference, right? A lot about onboarding. More and more employees that are going to be onboarded are not going to be patient with waiting long periods of time to get their equipment to get onboarded, right? So what does that mean? And they may not even work within the four walls of the corporate office, right? They may be remote, they may be telecommuters. I mean, millennials nowadays are more and more wanting that kind of fluid work environment, right? They want to be able to work from anywhere, anytime on any device. And that will mean accessing these types of resources that we've been talking about here. Being able to request something from HR, being able to request something from IT and get it in a way that's efficient and consumer-like experience. And if you want top level, if you're going out and you're trying to recruit top minds in your industry, more and more of the folks that are coming on the university that are the top minds that you're going to want to recruit are going to be looking for that. And if they go into an organization and it's, oh, sit down here. You know, oh, we don't have your laptop ready. You know, you're going to sit idle for a few days. Oh, you're going to be at this mandatory training so you're going to have to travel back in next week. These types of things, you know, a person that's coming onto a modern organization that they're going to view as being, you know, up to date in a company that they want to work for to have those types of processes and not have them mobile, that's not going to fly as well as it has in the past. So Robin, let's say you're consulting with a CIO or an organization that's struggling with service management generally. Forget about the products, forget about the companies, forget all that. Let's assume they're going to pick the best, whatever, for them, as horses for courses. But they're struggling, they're inefficient, their productivity is hurting, as Frank talked about this morning. They want to transform their organization. They come to you and say, help us. What should we be doing? Where should we start? Where do we want to go over the next? Where should we be going over the next five to seven years? What would you tell them? I'm sorry, the CIO is saying this? I like the messaging around understanding service consumption. I think that going forward, IT is going to have to have a real razor focus on the services that it's delivering and when, where and how they're being consumed. Measuring that, because if IT is spending the business's dollars on procuring the resources, maintaining the resources, managing the resources to deliver a service, it better be being consumed by the business and that will be, I think, the measure of IT's value going forward. Adoption. Adoption, because if they're not being adopted, IT needs to be aware of that and pull the plug on them quick. It's just like if you were in a store and you were stocking shelves, you're going to stock those shelves with things that are going to sell and you're going to take the things off that aren't and you're going to make those items that are selling on the center shelf where the eyes are on them, right? IT needs to think that way. They need to think more as a service provider, more as a seller of goods that the business user is going to consume and they need to be thinking about that even in the world of ITOM, understanding well why do we need certain types of infrastructure on-prem when we could be hosting this somewhere else? Understanding what they need to run those services and it may not mean always having something, having those resources in the cloud, it may not always mean having them on-prem, it may be a hybrid mix of both but they need to have visibility into those. All right, running against the clock, Robert. Last question is maybe some of the research that you're working on, some of the things that you want to highlight, some of the things that you're doing with your research agenda, maybe talk about that a little bit. Sure, so I published a market scape on the service desk area just about six months ago, late last summer. So I encourage folks to look at that that are in the IT service management space. I highlight some of the, what I think is important to look at from a product feature function and also roadmap. Think about where you're going to be four or five years out. It is important. I get the point that you probably don't want to buy the features and functions up front but at least be thinking about it because you will need to evolve and so I would point folks to that research and again, I'm happy to have these conversations with IT buyers and vendors alike on where I see the market going. How do people get in touch with you, Twitter handle? Twitter, I'm on Twitter, our young 78 so you can reach out to me that way. My email is ouryoungatidc.com so feel free to drop me a line anytime and welcome the conversation. All right, Robert Young, thanks very much for coming to theCUBE. You're welcome, thank you for having me. I appreciate it. Keep right there, everybody, we'll be back to Knowledge 15 right after this word. This is theCUBE, we're live from Las Vegas. Right back.