 Live from Las Vegas, Nevada. It's theCUBE, covering Knowledge 15. Brought to you by ServiceNow. Okay, welcome back, everyone. We are here live in Las Vegas for ServiceNow. No 15, this is theCUBE, our flagship program. We go out to the event and extract a signal from the noise. I'm John Furrier, my co-host Dave Vellante, and our next guest is Matt Strimmer, VP, General Manager of ServiceNow. Welcome back to theCUBE. Nice, it's great to see you. It's great to be here as always. General Manager of ServiceNow Express. Tell us what's going on with you guys. We had a chat back at theCUBE office two years ago about platforms. It's happening now. Platforming implies big enterprise, but you guys are doing a lot more. So just the update of what's going on, what do you guys announce this morning? We'll get into it. Yeah, time flies since the last time we talked. It's amazing. So what we talked about with Express today was really a coming out party for how we're addressing small to mid-sized enterprises and really right-sizing the experience on the platform for a whole new community of customers that previously weren't being very well-addressed, we believe, in the market by us or by anyone else, for that matter. I always talk about the small, medium-sized and mid-market customers as basically moving off Outlook, moving off Exchange servers, that whole Microsoft DNA, and having kind of outsourced IT to kind of sell servers. You see things like Gmail, for instance, is great. Yeah, it's a chaos model. When you talk to these customers in there and what they're doing, it's SharePoint, it's a lot of email. It's a lot of email, and it's a lot, you'd be surprised how many post-it notes there are. There's a lot of just tribal knowledge, it's written in somebody's cubicle, or somebody hopefully wrote a PDF and shared it somewhere, but it's really a lot of just fire drill management. Talk about the fire drill after something happens. Let's just take the examples that I hear every day from businesses. Oh, small businesses, medium-sized businesses, hack. Lost my data, emails down, back up and recovery. These are like little boring things that happen that cause huge nightmares and disruptions. What's going on, and what's the new state of the art to help solve these problems? Well, what you see is that this usually happens where they leave the hero mentality, where you've got, there's one guy, right? They'll go to John because John knows, this is what you do when you get hacked. This is how I wipe your system. This is how I rebuild your laptop. It's the one person. Is John in yet? Yeah, if John's not in, I guess I'll just go grab coffee, right? That's what it was. Now they're getting the point where they need documented process. They don't want a heavy, it's not a large organization needs a lot of in-depth workflow and in-depth ITIL. It's really about, let's just define the steps that need to happen, and so that if John's not in, Mac can do it for him. So how did the product come about? Talk about that a little bit. Express, maybe some of the unique differences between when you touched on it, the large and the mid-guys. I mean, this product is shrink-wrapped. It's the same code base. I wonder if you could talk about sort of what led you to Express and get into it from there. Yeah, you know, it started, it was about 18 months ago when we started researching the market and looking at what adjacencies we wanted to move into. And that's when we discovered this small to mid-sized space that we didn't think was being addressed very well. You know, these were customers that were looking for much more of an out-of-the-box-like experience. They were much more into rapid time to value, and it was typically because the people that worked in these organizations, they had so many other jobs that you didn't have time to dedicate to administration. They really had, you know, they had, this had to be a part-time or quarter-time role for them to manage their service management deployment. And that's where we saw the opportunity to really design, express, and introduce into the market for it. Do you see the same, I'll steal a tableau term, land and expand strategy where you get into the IT management side of the business, problem, change management, et cetera, incident management, and then expand into other parts of the mid-sized businesses? The opportunity similar in that regard or is it different in the mid-sized? Oh, it's absolutely right on. Actually, so for the existing express customer base, about 15% of them have written an HR application already. It tracks very similar to what we saw when we looked at this years ago before we introduced HR in the enterprise segment. And actually, the product direction that we're driving is to do the same thing, to talk about service management, not IT service management entirely. So what's this easy button I've heard? Sorry, on Twitter, there's a big buzz out there on Twitter about this easy button that speaks to the migration. What is it? Is it like upgrade? Is it like, I mean? Yeah, the easy button, it's, I wish I came up with the original name, easy button. I need an easy button. But it's really, it's not overselling it at all. We actually have a button we click. It's actually more of a link, we click. And it changes, it converts your instance in place from Express to an enterprise instance. So the nice thing about being built on a common platform, you can think of Express as just a reconfiguration of the applications to meet a target audience. We hit the button and we changed the configuration and now it's in an enterprise configuration. So that's for growth and our expansion? Yeah, you know, what most commonly you see is that a customer, they start with Express and maybe they've either grown into something else, some other requirement, or maybe they've gotten to a process maturity level where they're willing, they want to take the next step and enterprises that next step for them. So what don't I get with Express? I don't get like high levels of customization or integration. It's configuration instead of customization is the best way to look at it. So you know, you're not going to write JavaScript in here. You're not going to write in a sandbox development. Bonus. Yeah, it's meant for people like you or I to be able to configure the process and the workflow correctly. That's really, that's the biggest difference. So the question out there that's coming in through the crowd is, is it a scaled down version of the enterprise or is it just a robust feature set? Because some people say, I don't want a scaled down version. I just want, I still want robust, but I just. Yeah, it's not scaled down. I use the term right size and maybe that's not the right term. We looked at the target audience and then we redesigned the applications for that audience. So it's not like some kind of, you know, we just hit a few features and that's what it is now. No, it's designed specifically for this audience. A lot of the old business models, they would do that. They would basically strip out features, reposition and charge a lower price. That's not the case. Yeah, and you know what they used to do when you see a lot of vendors what they used to say is we have product X for if you're up to 1,000 employees in size. And then if you go beyond that, there's product Y. There's no choice. It's like a hard line, which is frankly ridiculous and that's why that model's failed time and again, right? So that's what we have customers that are actually much larger than the 100 to 1,000 in size. It depends on the use case, what type of users you have and what type of requirements you have and you use the right product. Because you've got overlapping dimensions of the number of customers so a smaller customer could drive the thing way up over, let's say 1,000 employees and others. Yeah, you start two, three, four, 5,000 employees. If that's the right product, that's what you start with. So for the customers out there looking at this who haven't been on the service now program yet, is this the cloud consumption model basically from your platform? Because that sounds like cloud. Pay as you go. Oh, it's all subscription based model. It's the same exact model. It's the same enterprise infrastructure. You're using our data centers. You're using our instances. There is absolutely no difference from an architectural and application platform perspective. So Frank mentioned Amazon. Well, I brought up the Amazon question. He was agreeing that he thinks that the competitive advantage, and he agreed that our statement and the competitive advantage is like an Amazon-like model where you're constantly pushing new features. That's kind of a DevOps mindset. What is your view on that? What are you guys doing? How are you guys? And what's your plans? You know, Deliverability Secrets, your public company. I know you probably won't anyway, but what is that plan for competitive strategy? How do you stay competitive and relevant to customers? From a product standpoint, is it more features? Is it constantly iterating? Yeah, no, it's a good question. So one of the things we do in Express that's different than what we do on the enterprise product, for example, is we auto-upgrade for every version. So all features, as soon as they're ready, we upgrade all the instances so they're available to all of our customer base. That's one of the things we do. We're rolling out internationally later this year. So starting next month, we're going to roll out into Europe and Asia. We're going to localize it to extend our reach to the second half of this year as well. The nice thing about being built on a common platform is a lot of the features you're going to see Fred talk about tomorrow are immediately available for all of our Express customers as well. Plus we're building additional Express only functionality that's specific to our audience. So I got to ask you two questions, two part question. One is, what does enterprise grade mean to you? And two, since you guys, what I love about service now is you have a lot of happy customers, right? So talk about what you've heard from customers. What are they saying? So enterprise grade, what is it? And just give some anecdotal customers, use case feedback, like they've changed the game, you've done X, some through points. It's funny, the enterprise grade thing, it really, it resonates to me because when you first, I've dealt with a lot of enterprise customers in my time and when we talked in the years past, and it was all about service availability, right? What kind of SLA, how many nines can you deliver to me? It's the same exact conversation with an SMB. Like they hate when you start talking down to them to say, well, I'm willing to trade off availability for price, for example, that's not the common case. They are more price sensitive in that market, but if they're down, IT is viewed on so negatively by the business, they have the same dependency to be up. So that's why when I talk about enterprise grade, can we deliver the same type of experience for those customers that we do? The other part of your question was? With some proof points from, you have some customers anecdotally, situations they've been in, proof points. Oh, it's so funny. I've been to other conferences in my past life and it's a lot of, we'll try harder. I'll do better. I had the Bill Clinton thing, we'll do better. And it's not that way. People are genuinely happy. We had a meeting yesterday with express customers that came to the event, our first summit together. And I had a number of thank yous and they talk about how much an improvement this system has been for them as they've deployed it. But how much more reliable and just how much happier their customers are, their employees are about the consistency of information, how easy it is to interact with IT. So talk about what a customer, so the customer bringing in, a large customer bringing in service now, that's a big organizational decision. Especially if you're going to go to a single CMDB. I mean, there's a lot of discussion that has to take place. What does a smaller customer have to do to get ready? What would you advise them? Yeah, you know, it's funny, what to advise them. So one of the things that's interesting about express, there's no services involved. So it's something you deploy yourself. So my first advice to them is, you've got to admit, you've got to get buy-in from whoever's writing the checks that you have a problem. That I was talking to one customer, they had all their information in filing cabinets in the hallway. And that was a healthcare provider. You're like, holy cow. You know, that's just what you realize and you identify how big of a risk these are, how much benefit you get from a single system of record and running all this process through that system. Get that buy-in first and then the deployment's very trivial. And so what's the minimum threshold? I mean, you got to have some number of, let's say I'm starting with IT, got to have some number of IT people run around. Is it five, 10, 15, 20, 100? You know, it's usually 10 to 15 seats, 10 to 15 people in IT. You go below that, then you're not at that point. Then you can call John to go fix that laptop, right? It's beyond, you got to get above that number. 15 seats is usually kind of a threshold where you see where they're not scaling anymore in that kind of manual process they always follow. And how can you help us quantify the opportunity for service now? I mean, how many potential customers are out there or size of the market or you have any data on that? Yeah, yeah, oh yeah. So I looked at the eight largest geographies, eight largest countries we serve. There are over a million enterprises between a hundred and a thousand employees in size. The addressable market there represents about four billion dollars. Okay, and that's all- That's our primary market. Talk about the business model for the cloud. Dave and I were riffing last night, and we talked on theCUBE, that there's a flywheel effect with what SaaS companies can offer, especially if you have a platform and an integrated application, a set of applications which you guys have. The customer acquisition costs are low, hence now you guys can go up to the lower end of the market from the big, large enterprises, seamlessly with easy to add button, one click upgrade kind of things, instance migrations, these are toolings that you guys have built. What does that do for the business model, for the customers? So like, will SaaS business models go to customers? So can a small business be like an Amazon? Can they be Apple-like? Oh, absolutely, what do you see? I think small and mid-sized businesses are actually early adopters and moving to cloud. They are the first ones to question, why do we own this stuff internally? They're aggressive into Office 365, for example. They're aggressive into recruiting tools like JobVite and others. They are all about getting out of the infrastructure. If you go to a startup, for example, they have almost nothing installed locally. It's all SaaS-based models they work for. They're all in on the Kool-Aid. We moved to our new office in Palo Alto and getting the tour of the landlord, they're like, here's the telephone clause that we can put in your service. Can you like move those two huge racks? Like, what are you going to put in your service? We don't have any. You don't have any? I want to put my coat there. We're going to have a conference room in here. No, we're going to put the bikes. Yeah, so the lady was floored, old school real estate, she's like, wait a minute, you don't have any email servers? Like no, it's all in the cloud. So that's what you're saying, right? That's the trend. That infrastructure is going away. And it's going away, you're seeing it, I think, accelerating the small and mid-size enterprise. And then you'll see the enterprise fall soon. It's going away in the enterprise as well. It's just a little bit longer tail to get through that. What should we be watching format? And you talk about international expansion, what are the sort of milestones you have for you and your team in the next six, nine, 12 months? Yeah, so we're rolling out internationally later this quarter, next month, as I mentioned. In the following quarter, we're rolling out a partner program to add for distribution and delivery through third-party partners. And then our Geneva release will come at the end of the year, as well as localization to be able to hit other countries that require a non-English experience. As well as, that'll be the first time you'll see non-IT applications within Express by that timeframe. What have you learned over the past year and a half that you could share with folks out there as people are navigating? I asked Frank Sloobins, didn't have enough time to go into it. I was kind of teasing out the whole sailing analogy. Navigating the transformation is a great key. I was just, this is some cost pressures, but there's also pressure for hiring developers, not having that one guy. So I got to build an app. I want to be lean and mean and agile. I want some full flexibility, enterprise grade. What have you learned for the folks out there trying to figure this out? What's your advice? Well, I'll tell you, I built an app in Express in an hour. When I first came on and took the role of GM, I wanted to go and kick the tires and figure out what I could stretch the limits of. I built an HR app in an hour, codeless. I haven't developed in so long, it's not relevant any longer, right? So I just went in there and it's amazing how fast you can build a powerful application without having to resort to code. So you don't need no Sembler language or any kind? I couldn't, there was no room for me to enter in my cobalt skills. I couldn't do it anymore. Portraying comes handy with the Python. No, so you know, it's very easy to get involved and the thing is like whenever I have a question, we have a really strong community and that's our education program is basically our online community where customers answer each other's problems. That's been a powerful tool. What does that mean to customers? Because Dave and I talked about the new workforce coming out, the new labor force, young kids who may not have computer science degrees. I mean, first of all, the computer science guys that are coming out never loaded Linux. Actually never loaded stuff on a server. You know, if they want to learn something, they go to Khan Academy, right? You learn something that's everything is as a service now, right? Those education is as a service. We have customers that are an enterprise product like Bridgepoint that are delivering education as a service. That's, you know, like what I did when I wanted to figure out something, I was stuck on one thing. I went to the community to try to figure out a specific business role I was configuring and there were three different people that had already solved it. So do you see more innovation coming from non-technical people? Could be someone, you did an HR app in an hour, you know, could be an entry-level employee working their way up the organization. So there's the money ball effect where, you know, innovation could come from anywhere, money ball being, you know, the one guy creates innovation. It's really the Googleization of the world, right? Everything is a search click away to finding your answer. That's, and it's incredibly social. IT people are incredibly social in terms of how they're willing to share and that's been a key design criteria for us is making sure we had a way and a conduit for express customers. Well, look at how much that's changed in the last five years, right? It used to be, I don't have time for Twitter, I don't have time for this, I don't have time for that, but the younger IT people are all over social media. I mean, they live in... Well, there's no email. You've got to find other ways for people to collaborate, right? That's why in the product we do things like live feed and chat. That's why, you know, you have to be using text. That's why we use things like task boards to visualize work and communicate online because they're not in email. And so we've got to change generationally, keep up with that. What are people going to do with all this freed up productivity that they get? Are organizations going to not hire as many people or are they going to find new things for them to do? I mean, they're going to get much smarter, right? With how they deploy their resources. And suddenly I was talking to a gentleman I had dinner with CIO last night and he was talking, I asked him that same question. I'm like, are you using this to be able to trip down? He's like, good God, no, I'm using this because I'm showing the business how IT can help them generate revenue now. I can deploy my people on things that are strategically important as opposed to being, you know, a cost item for them. So give some more examples of that because that's what we're hearing too. We were talking to some comms folks yesterday a year and some other customers are saying, I can actually demonstrate what my job is in terms of revenue value because of the data monitoring, the real time aspect of using data. How can you, how does that translate to the small business? Because everyone's doing more in a small business, I see, but like, can you give some examples? You know what, one of the things that was consistent from talking to the customers yesterday was that they've traditionally had no visibility into the work getting done. They could not report and articulate to anyone what the heck IT does for a living. So just the reporting and dashboarding, the visibility we provide through the system is like awe inspiring for them. And the fact that, you know, we show them how you configure and say X is what's important metric for me to track about a certain process. We show them how they track, how they add X to a process and report on it instantly. That is like, that's like, you know, bringing water, you know, bringing the mountain to Mohammed, I guess. Well, five final questions. I'm going to butcher that analogy, but you know what I mean. Yeah, yeah, totally. I mean, that any innovation can come from anywhere in the organization. Yes. Innovation and insight into that innovation. Yeah, which can be, has to iterate. And this is the whole DevOps cloud model. Moving fast, iterating quickly. That's exactly right. Actually, I was going to get to my final question, but I have one more you made me think of it, developers. That's an easy, pretty easy, not easy, but relatively straightforward for an enterprise. They got to develop stuff. What does a small, medium-sized business do? Usually they deal with consultants or end or elsewhere, or maybe you want to hire someone. So what do you see relative to the developer equation on top of ServiceNow for the small, medium-sized businesses? So it's something we're looking at down the road. Right now we're all about configuration, not customization. We look at most of our customers, they don't have dedicated development teams. They're looking, usually, a lot of times they're getting off a system that somebody custom built for them, and it's not maintainable. So what a big, important point for these folks are they want something that's out of the box that they don't have to have specialized skills in order to maintain. So maintainable, in what factors? Costs or relevance or both? Relevance, it's really about cost becomes a factor, but it's really about who has the IP knowledge to maintain the system. And no one's static, right? As the business changes, all of a sudden I have this monolithic thing that I can't change that was designed five years ago that's no longer even supported by whoever I built, bought, front, and customized the heck out of back then. And the employee might leave, or employees leave, right? Yeah. And no documentation, job security, as they say. The hit-by-bust syndrome. If he gets hit by a bus, what do we do? All right, final question, what's next? What are you guys working on? Give us a taste of what's coming on the corner on the roadmap. What are you guys talking about publicly around this product? What's the new? Yeah, there's some, the big areas of focus. I already talked about localization. We're adding discovery in our next release so that these, so our customers can automate the inventory network and manage devices. We're adding bi-directional integration. Right now, we're a one-way integration. We're adding HR. Those are some of the big areas, as well as some of the innovations that I won't take away from Fred during his keynote tomorrow. But we got a lot of great features for him coming up in the second half of the year. Okay, Matt, thanks for coming on. Really appreciate it. GM of the Service Now Express product. This is theCUBE, extracting the signal from the noise. We are live in Las Vegas here at Service Now's No 15. Join the conversation, go to crowdchat.net slash no 15. And we'll be watching. If you have any questions, post them there. We'll be right back with our next guest after this short break.