 Live from Las Vegas. It's theCUBE, covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. Welcome back to theCUBE's live coverage of ServiceNow Knowledge 18. We are here in Las Vegas, Nevada. I'm your host, Rebecca Knight, along with my co-host, Dave Vellante. We are joined by John Donahoe, who is the president and CEO of ServiceNow. Thanks so much for coming on theCUBE. It's great to be here, Rebecca. So I want to talk with you a little bit about what you said on the main stage this morning. You said this is your first year, your anniversary of joining ServiceNow. You said when you got here, you could barely spell IT. But when you reflect back on this year, what has been sort of the biggest surprise challenges and surprises about leading this company? Well, I would say a couple of things. One, I've sort of fallen in love with our customers. And the challenges and opportunities they have. And what I spoke about this morning, this digital transformation thing, even a year ago, it was a bit of a buzzword. It's a reality for CEOs, for companies, and therefore for CIOs. And then the second thing that is, as I talked about it, I think very exciting is the role of the CIO. The role of IT is transforming before our very eyes out of necessity because technology is here to stay. Technology is driving strategic change at every company. You can call it a digital transformation, you can call it a tech transformation. And CEOs need the most technically savvy leader in the C-suite to help with that. And that's often the CIO. And so I think that's an enormously exciting opportunity for the people that are our traditional customer base. And then the last thing I'm thrilled about is how many companies are saying that ServiceNow is a strategic platform of choice going forward, far beyond just IT. And so that's something to roll build upon. I was struck yesterday in the financial analyst session, you shared with us your meeting with the board. And you said to them, look, if you want to clean this thing up, flip it, whatever, don't hire me. I'm here to build a sustainable company, a enduring company, I think is what you said. And the attributes of an enduring company that are purpose-driven, they both innovate and execute, they invest in talent, and they have a will to win, they got to fight in them. A lot of good sports analogies there. So okay, so you've set that framework. Where do you see this thing going in the next near-term, mid-term, and long-term? Well, we've set, I think it's really important to set the aspiration of what it is you're shooting toward. I have been surprised how many customers have responded well to the statement that we aspire to create a built-to-last company. It starts with the purpose, I defined our purpose, and that purpose is a long-term investment and our employees are already deeply resonating with the purpose. And then comes the hard work. The hard work of how you bring the purpose to life. And our purpose and our product and the work we do with our customers all fit together. You talked about automation. And many executives that we talk to kind of run away from that. We don't want to talk about automation because it implies we're going to replace humans. You said, hey, we're at the center of automation. We have to take that issue head-on. What's the conversation like with the executives and customers that you talk to? Well, the first thing is I think you have to look at the data, which is what I've spent time doing. And two things jump out. One, if you look at where automation is really going to have the biggest impact, it's not in any given job. It's actually the third of all of our jobs that are repetitive, administrative, redundant. So we need to automate the low-value added parts of all of our jobs, and then that will free our time up to leverage our more creative capabilities to add more value. And so if you look at both at a micro and a macro standpoint, where automation is going to impact jobs, it's not a given category. It's more of a horizontal cut of all jobs. And then secondly, looking at aggregate job creation, I've done a fair amount of work with James Manica at the McKinsey Institute, who's the global student. He's got to think the best objective macro study about job creation. And there are going to be some jobs there'll be fewer of, and other jobs there'll be more of. And how do we migrate the skills migration so that people have the skills for the jobs of the future? One of which by the ways, things like being a ServiceNow administrator. You do not have to be a computer science major or an engineer to be a ServiceNow administrator. You have to like technology. You have to embrace technology. But you can do it as a mere mortal. And so we're looking at ways of how do we help retrain people to have the skills to create one of the jobs that we're creating through ServiceNow administrators. John, you talked to a lot of people, I think five or 600 customers in the last, since I met you a year ago at ServiceNow headquarters. We obviously talked to a lot of people on theCUBE. And no question, every CEO that you talked to was trying to get digital right. They understand it. But there's somewhat of a dissonance. And I wonder if you sense it, and I wonder if you could talk about how ServiceNow can help. Where the C-Suite gets it and they're driving for that. But when you go below the line, there's a lot of sometimes complacency. Not in our industry, not in my lifetime. I'll be retired by then. Do you hear a lot of that? And how can ServiceNow help increase the urgency? Well, I'd say a couple of things, Dave. One is the C-Suite gets it, but not every C-Suite's role modeling what's necessary. Without the cross-functional leadership, the partnership of IT and HR and the business units. Then what happens, by the time it goes two, three levels down, people have functional identities. And so people role model, behave in the way they see their leadership team role modeling. And so if that C-Suite is embracing technology and understanding technology demands cross-functional engagement to deliver great customer experiences and employee experiences, then it makes it a lot easier to three steps down. The second thing I think C-Suite people need to do is be able to say, we take if off the table. We set, I talked about top-down goals. Most people are scared of a top-down goal. The problem is if there's not a top-down goal, then people can debate if we need to make this change and how. But if the CEO, the C-Suite says, we are going to improve the employee experience and I'm setting this goal, then it's when you go a level, two levels down, it's not if. No, no, they said if. Now our job is how. And so I think leadership has to do its role. And I think the C-Suite and leadership's learning how you lead in a technology-enabled environment. So leadership's the key and the CEO is really leading that digital charge. And C-Suite, I think the whole C-Suite set of leaders and partnering and reaching out to one another. So I mean, as you said on the main stage, in many ways the technology is the easy part. But what you're talking about is the hard stuff. Yes. Because this is the real change management and it's human led. So what are you hearing, what are you seeing and do you have any ideas for best practices? I mean, as you said, the C-Suite needs to embrace it. And then push that down. But how do you, what are some of the things you've seen at that work? Well, here's some of the things that we're trying to you to contribute toward that. Because obviously we're a software platform. But one is to do what I did this morning, which is be more articulate about what best practice looks like. What is best in class? So that anyone in any organization can go to their boss and say, oh, this is best practice. This is best in class. We need to emulate this. And here are the returns we can get if we emulate it. So one is just hold out the successes, successful examples and illustrate what's required. That's why I kept saying over and over this morning, employee experience is not just an HR issue. Employee experience is not just an IT issue. You need a powerful team of CIO, CHRO, other functional leaders. And then the second thing I think is getting people in IT to see themselves a little bit differently. We have a CIO track going on upstairs with 100 top CIOs. And the whole day is around driving culture change and CIO is leader. And I think good leaders, they don't just allow a label to be attached to them. They invest in themselves. They build their skills. They build change management skills, communication skills. And I think whether it's a CIO or IT, if they're going to have the kind of transformative impact they can across the company, they need to build their technical expertise along with other skill sets. You heard Andrew Wilson talk about that. And they need to learn to speak business and not just IT. John, I want to push on something that I'm discerning from you guys and get your reaction. So obviously cloud, you guys are born in the cloud. Cloud is a tailwind for you. We've seen the classification of business. But we seem to be entering a new era. Moving from a cloud of remote services to one of its fabric, the ubiquitous fabric of digital services. So my question is around innovation. You talked about that as one of the key attributes of an enduring company. What's the innovation equation going forward? You know, it's not Moore's law anymore. It's not cloud, mobile, social, big data. At least it doesn't feel that way anymore. Is it machine intelligence combined with cloud? What do you see? I think it gets down to actually to what I talked about this morning, user experience. I think machine learning, I think AI is going to be a commodity functionality. We're going to get it from AWS or Azure or Google, the cloud infrastructure providers, whether it's natural language processing, whether it's the kind of machine learning capabilities. That's going to be sort of available widely. Then it's our job as a software platform to build that into our platform. So we built machine learning capability into our platform. We built chatbot functionality into our platform. We built leading edge mobile capability into our platform. And again, I'll call that, I don't know if it's the easy part, but that's our job in this equation. The hard job then is how you apply that to real world use cases. Whether you're applying using real world data sets, specific customer data sets, and real world workflows and use cases. So let me give a small example. We bought a machine learning company a year ago called DX Continuum, great machine learning team, great machine learning technology. We rebuilt it inside the ServiceNow platform, okay? And I don't believe AI is a horizontal platform. Is I don't, you know, we call it a name and after a dead scientist, that's not what we're going to do and I'm not casting judgment on it, but it's not a solution looking for a problem. We built machine learning into our platform and then said we want to be the first user, we want to use it on a specific challenge. So the case we used it on our own inbound customer support. We have about 800 customer support agents that serve our customers. About 11% of their time is spent on something we call incident categorization and incident routing. Sounds kind of grunty terms, but when a customer calls with a problem, we have to be able to identify what that problem is and then route it to the right person to fix the problem. So 11% of our people's time was doing that. That's not a fun task. So we turned on machine learning and within two weeks, the machine was categorizing the issue and routing it more accurately than a human can. So now what happens is our customer's problems are getting solved faster and the 11% of those resources, those customer support resources who are engineers in our case are focused on solving customer problems, not doing what felt like an administrative task to them. And so I think the actual application of machine learning, the actual application of many of these technologies, it's the application that's going to matter, not the invention. So a lot of what you said makes sense to me because you're saying that your customers are going to be buying essentially that machine learning capability in relative and applying it in very narrow use cases to solve their business problems rather than trying to build it. And you do see some companies trying to maybe get out over their skis and over rotate to try to build some of that stuff. That's going to come from the technology supplier is what you're saying. If we're doing our job, the infrastructure providers, the software platforms like us, we're doing our job, we're making it easy. Another small example will be mobile. I talked this morning about companies everywhere need to build mobile experiences. And so they're wondering, do I need to build a mobile design team, a mobile coding team? If you're a bank or a utility or an oil and gas company or a retailer or platforms like ours, make building mobile experiences really easy for them. So we're trying to build that mobile capability, that design capability, that design thinking, the mobile capability into the platform so they can just get out of the box functionality and they don't have to have their own mobile designers. They don't have their own mobile engineers. They can just be saying, how do I want to use mobile inside my company? And then they're taking our mobile platform, if you will and creating mobile applications and mobile experiences that are relevant for them. So your brand identity is now making work better for people. When you are doing your blue sky thinking about the pain points that employees feel and that job candidates feel because they're another important part of companies trying to keep their people happy, what do you see? I mean, as you said, the next three to five years are going to be, the revolution is going to be in the workplace. What do you see as sort of the biggest challenges that you want to help solve? Well, let me just take a simple use case that comes to mind as you mentioned that. Let's take from the time you start being recruited for a company, let's say you get hired and get started. So the recruiting process, you're sending a resume and you don't know if it got in, didn't get in, if anyone, someone may or may not contact you. You may get an interview, you got to find out where you're going, if you're going, did you get called back? Maybe you get an offer letter, it comes, you get it all set. All kind of, I would call an unstructured workflow. Let's say you get hired, then the onboarding process. Onboarding is a classic unstructured workflow. You got to go to security to get your badge. You got to go to facilities to get your desk. You got to go to IT to get your laptop or mobile phone. You got to get to another part of IT to get your email credentials put on. You got to enter your information into the payroll system. You got to re-enter your same information and pick a healthcare provider. You got to re-enter the same information and get in the T&E system. You got to do all this compliance training. You're painting an accurate, onerous picture of what it's like. And that's why, this is your first impression of the company you're joining. Now there was no reason, they took my mobile phone away from me so I'm twitching. There's no reason why there shouldn't be an app that says, a recruit says, I want to interview the company, they download the app. They submit their resume based on the app. We give a response in the app. They say, oh, my resume was accepted and they want me to do an interview and they want me to be in Santa Clara next Wednesday at 8 a.m. And here's who I'm going to be meeting with. And here's their background in the app. Then they do the interview, let's say they get invited back. Who they're interviewing with, where? Inside the app, okay? Let's say then they get an offer. Well then the app has more permission and the offer comes through the app. You can print it or you can read it. Then onboarding starts. Onboarding can be a seamless experience. It still can connect but you enter your data in once. It pre-fills all those systems. And then in one mobile experience, you're picking what's your laptop, what's your healthcare system, what's the bank you want your payroll and T&E to go into. And all the complexity is hidden underneath it. That's what we have in the consumer world, our lives at home. When you buy something on eBay, all the complexity is hidden. When you pay with PayPal, all the complexity is hidden. There's no reason why all the complexity can't be hidden in the recruiting and onboarding process. And so the technology's there to do it, but it's managing all the workflows, managing all the processes underneath so you can pull that together into a seamless experience. And that's the kind of experience that's funny. I have four grown kids. My daughter, she started working, I won't say where, but a major technology company. And she's like, dad, what's up with this onboarding process? Why isn't it a mobile app? And the millennials will start demanding this. And so I just think there's so much opportunity to make our lives at work feel more like our lives at home. And you just described the capability that allow you to reach your aspirations of the next great enterprise software company. When we think of great enterprise software companies, we think of Oracle and SAP, you're nothing like Oracle and SAP in my opinion. And then of course you think of Salesforce, different. You're not an SMB. How should we be thinking about the next great enterprise software company? So this, I think this is a really important question, Dave. And I look at it through the eyes of what I heard from the 500 customers. And here's what I heard. They're embracing digital transformation. They're embracing cloud. They're embracing cloud at the infrastructure level, figuring out their data center strategy and how much they embrace public cloud. And then at the software platform level, they're saying we want to have four to six strategic platforms. And often it's the born in the cloud platforms. Often it's Salesforce and Workday and ServiceNow and maybe Office 365 or Google for email or communications. Maybe if they have a supply chain, SAP. And they're saying I want those platforms to work well together. So no one platform should be claiming they can do everything. Each of us needs to figure out what's our role and how do we work with one another. And our role, ServiceNow, I'm proud to say is one of those strategic platforms. As I said earlier, people see our capabilities as being connected tissues, helping to pull those platforms together. You know, in the onboarding example, we pull all the data sets and platforms together. By the way, we don't slap our brand on top because actually employees want to see their own brand. They want to see their own company's brand. They don't want to know what the enterprise is all for a brand underneath it is. They just want to have a great experience. And so I don't view it. I think the winning enterprise software, I see a chance for Salesforce and Workday and ServiceNow and Microsoft to all be winners and delivering this feature for companies. Where you are the platform of platforms though, correct? But it's not, and I'm being very careful the way I say it. I'm not saying we're the top dog. Sure. I'm saying what we're good at is cross-functional workflow. Actually, it's probably the gruntiest of all those things. And you're the best at it. And we're the best at it. You are. And our brand, we're not forcing our brand everywhere. That we're doing it in service to our customers. And so I just want to always be listening to what our customers want. That's going to be our North Star. They're going to guide us. It always has been. Fred Letty started that from the beginning and that's what we're going to continue to do. Well, John, it's always a pleasure having you on theCUBE. So thanks so much for coming on our show. Great, thank you very much, Becca. Thank you, Dave. Great to be here. Thank you, John. I'm Rebecca Knight for Dave Vellante. We will have more from ServiceNow Knowledge 18 in just a little bit.