 Welcome back everybody, this is Dave Vellante of wikibon.org, thanks everyone for watching. Those of you who are at the Sapphire Now channel, we've switching over now to Silicon Angle 2 where you can continue to watch with us. We're at the Knowledge Conference here in Las Vegas. My co-host Jeff Frick and I were here all day yesterday. We'll be here all day today and part of the day on Thursday. And of course my colleagues, John Furrier and Jeff Kelly and David Floyer are covering the Sapphire Now show end to end. They are in the communication center right next to where the press conferences are going down. So we've seen Bill McDermott, we've seen all the key executives, some executives from the San Francisco 49ers, Under Armour, a lot of talk about Hanna, in memory databases and mobile and the transformation of organizations and of course SAP itself. And of course we're here at Service Now talking a lot about transformation as well. Service Now is a really interesting company that'll do about $400 million this year. And like Salesforce.com, like Workday, they provide software as a service in the cloud of course. Unlike those two companies, however, they provide services to IT. And Jeff Frick, we have been hearing just amazing stories in the last day and a half about these IT practitioners and how excited they are about actually having a product and a platform delivered for them to help them run the business of IT. Yeah, it was fun yesterday having Carolyn on from Linux and talking about not a real senior person seeing this tool that's out there that she really thought could change her world, change her life and help her become really a kind of a theme. The business partner and not just a button pusher and the fact that she was able to get that through and finally got the budget and it has been transformative and now other departments are sneaking in and asking her and her team if they can help them out with some of their processes as they have in the IT. That was great. And then today, we just got out of the second keynote, day two keynote by Fred Luddy, the founder and chief product officer and really a fun talk, a great history lesson. The guy opens every introduction. He did with us yesterday and he did his keynote that I'm happy to celebrate being a developer for 40 years. So this revolution of power getting back to the developer and all these enabling tools for the developer that they're not hindered in developing stuff is a theme we've seen time and time again in our summer tour, everything from OpenStack to AWS and now here and Frank is the founder of this company and really you can feel it with the folks. The heart and soul of this company really takes that forward and drives a lot of the excitement. Yeah, Fred, we have Fred Luddy coming on at 10 o'clock Pacific time. So just in about 20 minutes and yesterday we talked a lot about the iPad app that they announced and the iPad support. Today we're going to talk about the company, its history, get Fred's perspectives on what's hot in the industry, what the big mega technology trends are, we'll review his keynote. He's a really interesting fellow and I really would encourage you all to hang on for that one. Fred is a true alpha geek and I mean that in a really complimentary way. He's a guy that is a real visionary. I mean, I'm reminded of, Jeff, when we go to the O'Reilly media conferences, I mean one of the things that Tim O'Reilly is really good at is spotting trends and what Tim has said to us on theCUBE is look, I got the greatest job in the world because I can just, he's good at trend spotting but he says that his methodology is to just hang out with alpha geeks, hang out with guys like Fred Luddy. What do you see? And we heard from Doug Leone yesterday, you had asked him, well what about ServiceNow attracted you way back then when you started to, when you invested in them and what about Fred Luddy? And he had said, well, he really had a clear vision and it was really easy to understand and we bought into it and invested early and often and boy, did it ever pay off. Yeah, and it's consistent again with this keynote today where Fred talked about all these great technological leaps are really done by people. There are people that are trying to solve problems and they're using tools often technology and the space that we cover to solve them and so it is something that is unique and we're glad to hear with us in the queue because we get the people here and talk to the people and kind of get the story behind the story of how they come up with these ideas. What's their motivation to drive forward to build these great companies, to develop the technology to support their vision and as Douglas said, Fred had a really clear vision because he thought it through. He really believed, he saw the future and sure enough, six years later, seven years later here we are and he's got a great company, a huge conference and they're off to the races. Yeah, and they don't talk a ton about cloud, salesforce.com, they have the no software sign and that's great marketing. You don't hear that so much from service now. Cloud is sort of an afterthought. I mean it's certainly there and they talk about it, they talk about security and of course their customers are concerned about that but they talk more about transforming IT. They talk about how essentially IT is, in the way in which IT is managed is like the cobbler's kids have no shoes. And it's true, if you think about, I mean I've been around IT shops all my life and it's a compilation of spreadsheets and various tool sets and asset management systems and what's inside of Joe's head that essentially runs the business of IT. And then of course you've got IT finance and you've got operations and it's just all these really bespoke systems and business processes and what ServiceNow has done and it sounds so simple as they've essentially consolidated all those under a single record of management and a change management database they use today, MySQL although I understand that they're migrating to MongoDB which is I'm sure an open source and scaling kind of issue. And I think that they're trying to keep up with those cloud trends, obviously they're a service provider and there really are three distinct classes if you will, at least three of cloud service providers and they're evolving. So the infrastructure is a service folks and of course the poster child for that is Amazon and then you've got the platform as a service crowd which Salesforce is becoming and certainly Google and Microsoft with Azure and many many others VMware with Cloud Foundry and then you've got the software as a service which of course Salesforce started, you would certainly put ServiceNow in that category and many many many other companies but you're starting Jeff to see those lines blur. I mean even for instance Amazon which is infrastructure as a service announcing something like Redshift which is a data warehouse for the cloud. Now that's infrastructure but it starts to move up the stack. You see companies like Salesforce.com started as a pure Salesforce automation CRM platform is now sort of becoming a platform as a service with Heroku and obviously appealing to application developers and even ServiceNow which you would consider pretty much a pure place SaaS vendor actually and we're going to talk about this more today with some of the executives actually starts to bleed into the past domain with things like app creator. Of course it's not Python, it's not Heroku, it's obviously a program in Java but it's really designed for non-technical people that want to build apps so they in a sense are a platform as a service provider. And the other trend I think that is just continues to get hammered every time we go to one of these shows is people using consumer technology companies as a kind of a platform for how they're building these new modern enterprise companies. What I mean by that is first off is the UI and the way the apps work. What's the expected behavior of an application that people interface with based on their experience with the other apps they're throwing at home? The next piece that I think is interesting is to develop an ecosystem there's a really active ecosystem downstairs not only do they have the app creator tool for really the internal people to build things on but you've got a whole ecosystem of folks downstairs that are building extensions and applications on top of the ServiceNow platform. So again kind of that app store concept and we talked a little bit about that yesterday and we didn't get a, we got a very firm, I will neither confirm or deny the rumors of an app store coming down the pike. So I think that's interesting and the third piece that I don't think comes up as often as it should is really thinking about the next generation of employees and who these people are trying to appeal to because if you looked at the LinkedIn page for every executive that we've had on for the last two days from ServiceNow, their lead item is we're hiring, we're hiring, we're hiring. So when you think of the kids, their behaviors, what they've grown up now, this new class of kids coming up, you know again their expectations of what's available, how to access it, when it's available, how it's available, very different than old guys like you and me days that didn't grow up in this era. Well, let me tell you something Jeff, I've been watching Frank Slubin now since the mid 2000s when he was CEO of Data Domain, also a public company blockbuster acquisition by EMC. But that was an interesting deal because NetApp actually made an offer for Data Domain and then EMC matched it and then NetApp tried to, EMC beat it and NetApp tried to match EMC and then EMC just plunked down a bunch of cash and said, you're ours. And then the whole Data Domain team of course went over to EMC and Frank stayed there for about a year and then left to go do some VC at Greylock and then of course it's now at ServiceNow. But I will tell you something about Frank Slubin, if you work for Frank Slubin, chances are you're hiring because his philosophy in speaking to him and observing him is you got to get the product or the service right, figure that out. And clearly he stepped into a situation with ServiceNow where it was very strong value proposition, the product was right. And then so once you get it right, it's all about scale, global scale, customer penetration, distribution channels, finding new markets, finding new applications and that's exactly what you're seeing with ServiceNow at the moment. You're seeing Frank Slubin and his team throwing serious gasoline on the fire and this thing is in a meteoric rise. We're talking about 80% growth last quarter year on year. They're projecting 60 to 70% for year end. I think that's probably conservative based on the conversations that we've been having with customers. 30% of the attendees at this event are prospective customers and how could you come to this event and not go back to your IT organizations and say, look, our peers are driving transformation. They're cutting costs, they're improving efficiencies, they're running their IT operation, which is critical like a business. Why aren't we doing that? How can you not do that? And so this, I think the opportunity for these guys is just enormous. So they're near-term goal, near to mid-term is let's get to a billion. Now, once they get to a billion that starts to get interesting when a software company gets to a billion, that starts to get really interesting in terms of, okay, how do they expand their total available market? But right now, TAM expansion is not their problem. It's penetration of their serve market is their challenge. And I'm very impressed, again, by the variety and spread of the customers that we're seeing here. All the way from little mom-and-pop shops to a whole bunch of retailers, big retailers, to again, you don't think of as kind of a classic IT, big sale, all the way up to large enterprises, many of whom they had on the stage the other day with my favorite line of the Coca-Cola that's in every country. We learned every country in the world except for five. We don't know how many countries there are in the world, but Coke's in everyone except for five. So big companies using this, small companies using this. So clearly, they've got great opportunity. We're going to have the CFO on later today. We can talk a little bit about that. And again, the other metric that we discussed, and again, their public company can read it in the prospectuses, not the prospectus, but the quarterly is their customer retention rate and their gross margin are both really high and position them to give him the ammunition to grow this thing. Yeah, so let's talk about who we're going to talk to today. So we've got Fred Lottie coming on at around 10 a.m. Pacific time. That's about 12 minutes, so stay tuned for that. And then we've got a number of executives from ServiceNow, guys who are running their platforms. And then, but the really exciting thing today is the customers. We're going to hear from Moritz, CareWorks, FICO, we're going to hear from Yale University, numerous customers coming on today and tomorrow. We're also going to have on Beth White. Now, Beth White was Frank Slutman's CMO at Data Domain and helped build that company to its successful exit. This is a larger company, and I think it's a more valuable company, and I think it's got much more potential market size. But Beth is really a very strong CMO, somebody that, again, I've watched for a number of years. She, really, everybody back in the 2000s, mid-2000s was doing this thing called data duplication in the storage world, and Data Domain was able to differentiate with very, very strong product, but also very strong marketing. You're seeing also very strong marketing from ServiceNow. We were talking to Beth White last night at the reception, the customer reception, and she basically told us that it's so easy. I get my marketing from my clients. The end users are really telling us what to say. Now, she's being very humble. I think she's very savvy and sharp marketeer, but we're going to talk to her about their philosophy of marketing, their strategy, making marketing a source of value, but also this event and how it's grown. And we're also going to talk to Mike Scarpelli, who's the CFO of ServiceNow. Very interesting, again, from an economic standpoint, as a company went public. They were the first company to go public in tech after Facebook. Frank Slutman called it the face plant IPO. And I remember, Jeff, at the time, I was looking for the next Google. I mean, you see, you remember the big IPOs, big tech IPOs that have lifted the market dramatically. There was Netscape in mid-90s, 96, I think it was, and then you had Google, I believe it was 2003. It gave a big lift, a halo effect, to other technology companies. I was expecting the same out of Facebook, but what happened, as many of you recall, is essentially the bankers in Facebook got a little greedy. And they went out, and I think $38 a share, and the market went, you've got to be kidding me, they've squeezed all the juice from the lemon. I'm not investing in this thing, and it just went south, and I think it's still struggling to sort of hang out to where it was at IPO day. So that created this cloud, no pun intended, over a lot of the companies that were doing IPOs, and the market sort of soured on that. And so, because good quality IPOs are hard to find, and here's this great quality IPO, and they sort of overpriced it. And so, Slutman was saying yesterday, they were very nervous about going public. Now, subsequent to that, we've seen just an extremely successful IPO out of service. Now, and we saw one from Workday last year. So these guys are like, you called it, Jeff, the three horsemen of SaaS. It's Salesforce, it's Workday, and it's ServiceNow. Three companies, very strong, of course, Salesforce much larger, and much more established. Workday and ServiceNow are on a trajectory that's very similar, about the same size companies, very strong leaders, steeped in the technology industry. Of course, in the case of Workday, Anil Bushri, and Dave Duffield, and in the case of ServiceNow, you're talking about Fred Lutty, who's a rock star amongst his peers, and of course Frank Slutman. Yeah, it should be a good day. It should be a good day. So, stay with us. We'll be back with Fred to get the day started. We're theCUBE. We're at ServiceNow Knowledge 13. We go out to the events. We extract the signal from the noise. We talk to the people you wish you could talk to. We ask them the questions that you wish you could ask them. We'll be right back after the short break.