 Hey, guys and girls, welcome back to Las Vegas, baby. It's theCUBE live covering ClipWorld 2023. This has been a great event so far. We've been talking all things. Click customers, partners, the data evolution of data management, good stuff. Lisa Martin, Dave Vellante here. Couple guests next. We're going to be talking about capacity pricing and enabling SaaS adoption. Please welcome Josh Good, the VP of Global Product Marketing at Clip. Thank you. And Brian Clark is here. What up, Dave's old buddies from IDC Group. VP Sourcing Advisory and Pricing Evaluation Practices. Guys, great to have you. Thank you for joining us. It's a pleasure to be here. Excited to be here. So Josh, let's dig in with you. Click is taking its first steps. Toes in the water with capacity pricing. Talk to us a little bit about more about what you're doing here and why. Yeah, toes in the water, it seems like we're really committed to this approach. We've done a huge amount of studies. We've talked to customers, prospects, experts and I've gotten a whole lot of advice around this. And what we're doing is we've looked at historic pricing both where client management sort of moved into SaaS and then, you know, sort of SaaS practices and we see a lot of flaws in what's happening there. You know, pricing analytics based on users just restricts who dots. Pricing data integration on like source targets and cores just restricts which data you can move where and like who doesn't get a new source or target all the time. And so, and then the other is consumption based pricing is problematic. We can get into that in a moment. So what we're doing is we're introducing capacity based pricing across our portfolio for SaaS and that will enable it so customers buy the amount they need and then they can use that and they don't have to worry. You have a lot of predictability in your pricing. And then, but how do you actually price that? What capacity, right? And we did a lot of studies on this and really the thing that we ultimately do is we bring value to data. The thing that the customers ultimately value is the data. So we're going to do data capacity. So it would be the amount of data that you're moving with the amount of data that you're analyzing will be what we will be pricing on. And that enables us to open it up so you can have any sources and targets you want and in the, as you move up the tiers, unlimited users as well. So moving and analyzing? Yeah, so the two, for data integration is based on movement, capacity to move data and move and transform. And then analytics is, yeah, is analyzing. Do you have a compression engine? Yeah, so you got a really good question. So yes, we do compress. We have all sorts of efficiencies. But again, in the interest of simplicity, what we focus back on is, is the size of the data in the database. Because then we can have a really simple conversation. How much data do you have? I got this much data. How much of it do you think you want to do analytics on? I don't know, half of it. That's how much you need to buy. Brian, sorry, sorry, sorry. So Brian, capacity pricing, an interesting kind of next step for click. So much evolution in this company. Mike Epome was just talking this morning about the 30th anniversary. All of the change that's happened, even since he's been at the helm, what does this say to you about click's future? Well, it certainly innovates. It's, because a little bit about my background. I work with end user technology buyers and they're confused. Vendors are throwing new fangled metrics, synthetic metrics that are a mix of multiple little points together. And I think they want simplicity and they want flexibility, which are two different things. But if you nail down capacity, that's a nice, simple metric to work with, right? There's no perfect metric, but there's better metrics. And I think this is the right direction for any company to go down capacity. It's more of the future, what I'm seeing with the number of the vendors, what they're doing right now to blend in within the SaaS environment. But you are seeing a lot of consumption-based pricing, right? I mean, that was kind of the big trend for the cloud. You know, I'm not even sure if it's true consumption-based pricing. I don't follow this stuff like you do, but I think snowflake, we do consumption pricing. But then when you really dig into it, it's like, well, but the customers are locked in, basically, for three years and they have an area under the curve that they have to spend. My words, not yours, but I think it's kind of true. In other words, there's a contracted amount of spend that has to occur over that three-year period. So is it really consumption-based? In the cloud, okay, I could do consumption-based, but then it's like, oh, my bill's too high. How do I moderate that? So it's like, you were saying, Josh, there's no perfect way, right? There's no perfect way. What we found when we were talking with our customers and prospects and the other analysis we did is, people love the idea of consumption-based pricing when they start using a product and when they're not using a product. Right. So if they're getting no value out of it, they love it, right? As soon as they start using it and they start getting value out of it, they just like it. And because the bill gets high, right? You get that power bill shock, you know, like when you had to use a lot of heat-type scenario, we've all had that. And ultimately what happens is, is the vendor or the customer, they get together and say, can we just give you a certain amount of money every month or every year, and then I'll just like not use any more than this? And so with CLIC, we said, let's just skip to the answer. And that's, I don't know if you have anything you want to add to what you're seeing on the wider industry. So I think you're right. Like when it comes down to consumption base, it's going to be tokens. You're pre-buying the little per-use units, the little utils of usage, right? And we know with cell phone data plans or what have you, unlimited data plans are better. Not that you're exactly unlimited, but you can be in some cases, right? With what you're doing, but at least you have a kind of a top threshold and you can use all the way up to that. Whereas when you're dealing with tokens and pure consumption, I think users get frustrated by the fact that it's not predictable. And users want predictability. And again, no perfect scenario, but certainly when you pre-buy the top level usage, you're better off in most cases. Okay, so there's an ELA version, which is unlimited. Let's talk about the unlimited. Yeah, so the interesting thing about unlimited is we went and talked to our customers and they're like, we want unlimited. And unlimited, unlimited, unlimited, unlimited, unlimited, is really expensive. $3 billion, there it is. No walls. But as we talked to them, they said, you know what they really want in analytics? Unlimited users, where the value really is is getting more people using analytics. And in data integration, the value is being able to connect to all the sources and hit all the targets. So we offer unlimited in those directions and then we just say, well, how much data it is. And most of our customers, the feedback is like, I'm going to solve this problem. It's going to be for my entire sales team, for example. And so we're like, great, don't care how big your sales team is, how big is your sales data? My sales data is this big. So we'll charge you for the size of the sales data, unlimited users. And the beauty of that is when analytics is really successful, the marketing team will come by and say, can I see the sales data? And there's no impediment now to that adoption. And that's where that unlimited comes in. And we're really excited about that. We're actually already have pressure on our old models to do those type of deals. Versus, can I see the data? It's like, well, you know. Yeah, yeah, you know, you should really be using more data, but I won't give it to you. Josh, can you talk about, you know, with the data explosion, the evolution? I want to get your opinion on this, Brian, as well. With all the changes in data management, how will capacity pricing help customers manage that? And how does it kind of dial up the value prop of click? Yeah, so with all the changes, one thing is, is like with SaaS, you know, there's always new capabilities. We release every week. You know, some weeks it's a small thing. Some weeks it's a really big thing, but we're releasing every week. So there's always new things to use and new things to get value out of. With this capacity-based pricing, you just can start using those right away. We include AutoML up to a certain amount. You can add more of it if you want. We include application automation so you can bring together your cloud softwares in an automated format. And then all the capabilities and AI that's built right into the software. And the same in data integration. We're including all the transformation and so forth. So as all this evolution happens, you're able to just take advantage of it right away. There's no impediment to that. And yeah, I guess that's really the key thing. Did I answer that well? I lost track a little bit there because I got excited, you know? No, your excitement is definitely obvious. But Brian, as you look at trends in data analytics, integration, data management, what's your advice to companies like click in terms of pricing so that the customer has the ability to unlock value from data, which can be a marketing term, but obviously they need to. Well certainly companies like click are putting a lot of effort into the data integration, but so are the users. And the data scientists that are working with the data, and they want their efforts also to be valued. So when click is charging per user or any company, that devalues because then there's a limiter to how the data can be used. So I think both sides win by only charging on the data side versus by on the user side as well. So okay, but so unlimited there's less limits, let's call it. But so if I understood it correctly, say okay this is how much data I want to move or analyze. Right? And I'm committed to that over what a term, right? A year? Yeah. What is it, one, two or three? Or one or three? Yeah, one, two, three years, yeah. Okay. If I use less, I got to pay for it. Yeah. Again, and then I can renegotiate at the end of that term. And if I use more, can I go up at the same rate? Do I get a better rate? Does it depend? Yeah, I mean we're getting into commercial terms here, so like we're not going to talk too much about that. But yeah, the idea is- Conceptually. Yeah, the idea conceptually is- If I buy more, do I get a better rate? Yeah, well, yeah. I mean, if you're going to buy further, if you're going to buy further in advance, then typically that's a good negotiating position to be in, I'll say it that way. But there's like two opportunities here, right? On the customer side. One is they can say, hey, I'm going to pay as I go. I'm going to buy in increments and continue. So, or I'm going to make a three-year plan and I'm going to purchase that way. We're happy to do either way, because we want customers to say, hey, I'm getting really good value out of here. The other interesting thing with capacity, right, is let's say you say, well, I'll buy for my first year. And then we come up to like seven months in and you start to get, you're starting to push against that capacity. There's a natural pressure on the customer to evaluate are they using that capacity wisely? And, you know, well, as a vendor, you're like, hey, great, buy more. Actually, it's not really in our long-term interest to have you buy capacity you don't need. So that natural pressure do you evaluate are you using your capacity well? Gives you opportunity to make mistakes and be, you know, not be always 100% efficient, but then you'll push that down. And then when the time truly comes and you need more capacity, you will know you've maximized that value and it becomes an easy decision to expand. Really, really compelling business case too. Who's driving the pricing bus and has it changed, Brian? How has it changed? Is it procurement? Is it finance? Is it the line of business? Yeah, you're right, Dave, because there's not one single user, one single buyer. There's the data scientists wherever it's doing the data integration, but there's the IT department, there's the financial people, CFO people, but then they're sourcing procurement, right? And they're looking at deals every single day. They want simplicity. They have no, you know, they just need to do a negotiation, their job is to save some money. So I think this is where this comes in to play and it's going to be helpful. However, as you point out, Dave, you know, this may be something more for green spaces because they're already buying click, they're probably maybe even buying perpetual, they're buying on-prem. So then you're talking about a conversion over to this newfangled method, which all vendors are doing right now, right? Conversion to perpetual subscription, conversion to cloud-based, providing cloud rights to their offerings and also it gets all very confusing. And I think this will be for the future. You're laying the stakes for the future as you move over more to the SaaS platform. It's going to be very helpful to have a very consistent metric they can stick to. Because we've all been in the companies with a, some, I'll just be pejorative. The MBA comes in with the spreadsheet, says, oh, look at all, look at this, cut that expense with no like understanding how it's going to affect revenue. Great decision on spreadsheets. Right, we're going to save all this money. It's going to drop right to the bottom line. Well, you forgot that the revenue is going to drop with that as well. And you see that with the cloud, right? I mean, I get chirped from my control. It's like, oh, the cloud bill is so big. Well, because we ran like eight more events during COVID. So the cloud bill went up, but there was revenue associated with each of those. So the business person sort of understands that. The finance might not, as you say, the procurement, their job is to. If only there was a quality analytics solution that could help you figure that out. Yeah, maybe that's right for you to platform. I know a guy. Brian, do you think that this is going to be a best practice model going forward in terms of becoming a standard way of business for SaaS organizations, capacity pricing? I think it already has, certainly, and Dave, you probably know from your background, and the storage side and backup side, per terabyte metric is a way to sell that type of software. And I think in this space, because we're talking data as well, that that's the right metric. It's a storage-based metric. That is what you're going to use to sell. So there's other vendors that are doing it, but in many cases they're combining it with other compute metrics, and that's more synthetic, in my opinion. But I like the fact that this one is singular. It's strictly per terabyte, I assume. Yeah, and we were very intentional about this because we really wanted to simplify it. I mean, when we were getting ready, we said, you know, the only thing you know about your pricing, for sure, is it's not quite right. And we intend to evolve over time. We're getting feedback from our customers, our partners, from industry experts, and we'll adjust as needed. That's the best practice. This is not, technology doesn't stand still, right? So we expect that to happen as well. So IDC, every year you come up with a forecast of how many exabytes are going to grow, whatever, 30% a year. So what do customers do? They typically say, all right, I'm going to forecast my capacity growth and then build that in, is that sort of a... Yeah, that's exactly what we would expect them to do. And that's what we're seeing our early adopter customers do. They're looking at their capacity growth and then they'll grow by that. The thing that they're most excited about though is their data utilization growth will be exponentially larger than that because they have this ability to really use it in everywhere they need to use it. And so we think it's really the way. It neutralizes all the corner cases and the what ifs. It's like value is really the... Yeah, that's the idea. That's what it does. It turns your sales motion into a value discussion versus a cost, there's always a cost discussion. That's what I was going to say. Next is from a value perspective, what's the feedback been so far from sales, from partners? I imagine there's a lot of simplification of the sales process that direct wraps and partners can benefit from. Yeah, it is. It's been really positive feedback. Part of this was inspired by the way our sales teams were starting to sell anyway, like as they were putting together more complex deals. So we just hopped on the trend in some way. So that's been really positive feedback. The idea of like, oh, I have to figure out the amount of data up front, of course is something that people are like, oh, how am I going to do that? And we have tools to help do that and so forth. But we already were doing things like this in the past. When I started to click, we were selling perpetual license software that was on-premises. We had to go figure out how big the servers needed to be. And you learn how to do that and as you get more information and then you get to the point in not too much time where you say, oh, you're this type of use case? Well, I have 10 other use cases that look similar to you and this is what they did. And so it ends up being a pretty easy thing to do over time and as you learn. What's the rollout plan? Like what can customers expect starting with data integration? And I imagine as the talent and acquisition closes, what are some of the things customers can expect as this capacity planning becomes mature? So the first thing I want to put out there is, this is not something we're going to drive our customers over to. Existing customers can stay on what they're on. If they're happy, we're happy, that's wonderful. If they're looking for something new, we'd love to talk and we have mechanisms to do conversion. For newer new customers, we'll see data integration first, click cloud data integration. Our client manager's not changing and that actually is available now and we were telling it now. And then later this year, it will be analytics and we'll be rolling that out. It's going to have a standard premium enterprise tiering and you get different levels of capabilities and move up those tiers and then each of them are all bought on a capacity level. Very strategic, very well thought out. Guys, thank you so much for joining us on the program, talking about the impact and the value that capacity pricing is probably already delivering to click in its customer ecosystem. We really appreciate your insights. Thank you very much. Our pleasure. For our guests and for Dave Vellante, this is Lisa Martin coming to you live from Las Vegas, click world 2023. Dave has a great panel come up next, so don't go anywhere.