 Live from the MGM Grand Hotel in Las Vegas, extracting the signal from the noise. It's theCUBE covering splunk.com 2015, brought to you by Splunk. Now, here are your hosts, John Furrier and Jeff Rick. Okay, welcome back everyone. We are here live. This is theCUBE SiliconANGLE's flagship program. We go out to the events, extract the single noise I'm John Furrier, the founder of SiliconANGLE, the founder of my co-host is segment Jeff Rick, general manager of theCUBE operations. We are here live in Las Vegas for Splunk.com for 2015. Hashtag Splunk.com. Our next guest to help us break it all down is IT analyst, research director, Alice Woodward. Welcome to theCUBE. Hi, Tony, what's up? Thanks for coming down. So IDC, I was the International Data Corp, I was all the numbers, and I know we talk, we're fried, numbers are all over the place. It's hard to size this market, but IDC, I was the research firm, one of the best in the world to have all the data. What's going on? What's your analysis of Splunk? I mean, obviously, can they make it? I mean, obviously, global footprint now, global reach, you're on the international side, but you cover predictive analytics globally. So you got your view of the analytics landscape. What does their announcement today, mainly ITSI, mean for them in the market? Is it just a, hey, we're here, are they entering new markets? What's your take? How do you break it down? I think Splunk have done a phenomenal job in the way they built the company and expanded. They did this great kind of cautious expansion. They've got free trials and downloads and kind of viral spread very much sortage. So the expansion was driven internationally by downloads from the cloud, free trials, people downloading the software. Then they followed where their customers were in terms of international expansion. So they were able to kind of optimize that and do that very efficiently. So yeah, they have this great international footprint. Now, as a business analytics analyst, I was really interested to hear the business analytics announcement and there kind of was one. Like Snehal said, business analytics, here are some use cases. We've identified business process operations, customer experience, digital marketing. But it seems the stage that they're at is they're being currently led by their customers. Customers take Splunk, as you know, because you've been talking to them all day. They take Splunk and they do various different things with it. And then Splunk's job is to kind of take the most popular things and productize those. They're still a product company. They're still doing, I mean, they're not just a solutions cobble together solutions. They are actually still a lot more work to do on the product front. Yeah, yeah, absolutely. And they have said they're not a services company. They're not a consulting firm. They're going to build the product and let partners take it in terms of consulting. So yeah, I guess the actual analytics, the business analytics piece that they have is all, to date it was more of a statement of intent, really. It wasn't really something that they have. But what I found was interesting is in a range of the other announcements, they have analytics underpinning each of those. So in security, they talked about the user behavior analytics based on the procedure position, which is really exciting. There's more analytics in the security side. And then of course, there's the ITSI as well, which is, so not only the advanced and predictive in terms of the user behavior analytics and the machine learning app, but also a lot more kind of general BI and visualization, a focus on putting visualization into the user experience and making it something that's nice to look at for, so you've got your traditional IT Splunk users that have contested with the queries and all this sort of thing. They're getting down and dirty in the boiler room. Exactly, they're hacking and putting it on t-shirts and all this kind of good stuff. But you've also got new users to Splunk, and perhaps when it made a little bit easy. And I think what they're going to start to do is start to look at the business user and start to be able to present Splunk to business users and say, well, look, here's the value that this stuff provides. And you know, IT log data is disgusting to look at. It's just horrible. It just kind of sends a chill down the back to look at the raw data. So to look at- They've won the data exhaust market. Absolutely, absolutely. And getting the data in is something they're really good at. But now, of course, it's about what can you get out of it? Yeah, I mean, Splunking is a verb down. People say, hey, that's Splunking your data. Well, let's talk about a couple of things I want to get your take on as an analyst. Let's analyze and criticize and give them credit and look at their business. Ecosystem, I want to get your comments on their ecosystem, on a global basis, you can comment on that. And two, they're in every market, they have tentacles, as you said, they're customer-driven. So that means they're getting pulled into all these different IoT. They're in IT, going up in terms of market, in terms of analytics, you have the little Tableau bumping into all these different companies. So is there a focus problem? Is this just a natural or are they undervalued? I mean, all this stuff is interesting. I think because they've done such a great job of marketing, you can see them as kind of omnipresent. But don't forget, this is because they're kind of drawn there by their customers. And, you know, having a couple of customers doing IoT analytics with Splunk is not being the IoT analytics market leader. Although, actually, that's in quite an early stage, so you could probably argue that a little bit. They could build on it. They could get a nice position. Exactly. But for example, digital marketing analytics. There are a lot of big, heavy hitters in there, because all of the, you know, you've got Marketo, you've got Adobe, you've got all those folks that provide the platform, also providing the analytics on top. And they own the underlying data, so they're in a kind of great position to put the analytics on top. So some of the- Like, given that market, they can just bolt in, but they're not going to compete head to head, because there's a, but in other markets, there's a green field for them. So it's interesting. I think the green fields, they've got a really good chance, but I also think they don't address the business user yet in the very successful way that they address the IT user. And there was a panel today, Splunk currently put on a panel with some of the management and the executives for the analysts to kind of quiz them a little bit. And there's a bit of a joke about, or for the business users, we'll have different t-shirts. You know, it's just, you know, it's- Yeah, IT, you know, geeky crowd. They've done a fabulous job with this market, but the business user is kind of a different beast. Apart from anything, it's very fragmented communities. You know, you've got marketing people, you've got some people who are very metric and data driven. You've got people who are kind of more creative and you've got all the different industries have different kind of legacies. And, you know, retailers pride themselves very much on gut feel, for example. So you have to kind of blow them in. So you have your work cut out for your sizing the market. What market are we sizing? You're slicing this market, you're blowing up this market. And it's there in a lot of places. So the question that we were talking about earlier on our kickoff segment, kind of on our editorial conversation was, how tall can Splunk be? Meaning they're the grown-ups. They're one of the grown-ups at the table and they're kind of acting like a startup there. They're one of the big hitters. So how big can their TMB? I mean, obviously they're looking at IT. I think they could be explosive. So there's a lot of speculation that they could be big, but yet 70% of their business is from recurring IT guys and 20%, 30% roughly is coming from new business. So they really got to get those new products on the market. What's your take on that? I think, as you mentioned the green field and I think that's a great point. I think the green field is where these guys are really going to do well. We've been looking in my European work at big data for IoT and we reached out to a few of the vendors. It's very early stage piece of research and we asked them, can we talk to you about big data and IoT? And it was really interesting. Some of them said, yet sure it's one guy who covers both. And others said, sorry, do you want big data or do you want IoT? Which you want, and they don't have a data-focused approach at all. They have a very operational approach. They're talking about sensors and connections, but they're not really talking about physics. Exactly, but they're not talking about analytics, whereas some companies say, well, data is where it is. And okay, I'm biased. I've been in business analytics a long time. It's really great to be in it now. It's cool, by the way, because I was in it for a long time when it wasn't very cool. Yeah, we're cool. We kind of sat in the corner wearing a quarantine shirt. Now you're on the cube. Exactly, oh, I know. Now you're on the cube. I seem to start talking about making. But yeah, I think perhaps IoT analytics is somewhere where they could really shine, because organizations have got these new projects coming in, and it's the IT guys where they'll go to say, how can we deal with all this data? We've heard that. The marketing side and the customer experience side, they have more challenges there because they have a lot more competition. There's a lot of noise and competition, and the solutions are always moving and changing. Yet, there's an easy button need on the IoT side. There's no easy button. No, no, absolutely, it's a complex thing, and that's why I think Splunk's strategy of letting the customers take it and run with it, which is such a BI thing, you know, to put the platform out there, to let the customers do what they need, to always have this constant kind of trial and error process, and then to follow the customers and say, okay, we see what you're trying to do, let's support it and productize. That's a very BI thing, but that's what Splunk does. And I think as far as I know, it's the only kind of IT user-focused company that really works in that way. So that key strength of theirs, I think, which is what will really bring them into these new news cases. Alex, you raised an interesting point talking about the old BI way, which is all the big data. Have a sip of coffee, you've been going nonstop. It was the big BI guys, it was the PhDs, it was the data models, but now we've seen kind of half of the step of the democratization of the data, and now with the IT guys, you can do big queries, and now that's why it's getting cool. But to your point, to take it to the next level to the business unit is a whole nother step. The other thing you just said is if the application owns the data, then you've got a one-up, because you've got the application and the data, as opposed to bringing an analytics tool in on top of that. So it really sets up an interesting scenario for IoT because there isn't really an established player that either owns the applications that those sensors are going to kick off, or that data flow, because it's really kind of a new data flow. So how do you think that's going to shake out? Is it going to be an incumbent that owns the application that's going to own within that specific space, or like GE that's already heavy into power or whatever, or is it going to be some of these other tools that have the ability to sit on not only a data flow, but also now to bring in disparate data so you're going to get stuff that you wouldn't get if you were just so singularly focused? It's a really, really great question, and I don't really have an answer, but it's a great, it's really a great one to consider. I guess it depends how this market plays out, and also because it's going to be vertically, as we mentioned, it's going to be vertically fragmented as well, because all the use cases are separate, so you'll get the connected car behaving in one way and the kind of plant manufacturing behaving in another way. I guess in some of those verticals, you probably have an application provider that will step up and get the IoT and the analytics sorted, whereas in other places it will be a little bit more open, but yeah, I guess it really, it depends, it very much depends on those particular application providers. As you said, now then the question is, and I really cannot, I don't have a view on this at all, it's a question, is there's always this kind of dichotomy between the application focus and the BI focus. Splunk's great success is to bring in data from disparate sources and show it all in one, and as soon as you have multiple suppliers, that's what you need to do. But in many, not in a whole organization, but certainly in many departments, you may have all your data in SAP pretty much, so you can do all your analytics directly out of SAP and you don't need to worry about bringing sources together, and almost it depends how mature you are in terms of going enterprise-wide and bringing every single thing in. So then the question will be, at what stage do organizations want to do other stuff with the IoT analytics? And it may be that because the scale of IoT is so great that they don't want to, that everything around that data has to be done in that place, but that also will dictate which suppliers will win out, because if you need to bring data in from other sources, generally application providers, in my view, have a bit of a blind spot to that. They say, oh, well, of course they run on this and we own the data and everything's wonderful, which it is until you've got different applications and then you need to bring them into a separate layer, so it very much depends how the applications lay out. It's kind of the age old application platform battle, and as we know, all successful platforms start as an application, because nobody's buying new platforms for anything, but at some point they start to look more like a platform, build out an ecosystem and start to be able to draw from disparate applications, disparate data sources. Yeah, absolutely, and that isn't changing. If anything with big data, it's getting even more, the battle is almost kind of accelerating, because the pressure for value, particularly in Europe where I focus, the pressure to deliver value and to cut costs and to prove what you've done right is really important, but then also in the big data world, we have all these different data management sources, you know, you have NoSQL and Hadoop and Cassandra, all this different stuff, so you have this need to bring things together into a platform even more. Are you following the social cloud, predictive analytics space, because in the US, Oracle, Salesforce, there's a whole sea change of how data's being used for, we call it social sales, but in general, you've seen a lot more marketing cloud-like software. What do you mean like bringing in kind of social activity and some marketing? Yeah, they all seem to be like marketing-oriented, not a lot of technology, but there seems to be a cloud movement where there's a cloud concept, an Amazon kind of product for standing up infrastructure for predictive analytics. Is there, what's your take on that? Because we see a need out there for people just to stand up something fast without buying software. Yeah, yeah. What's your take on that market? I think for a while with traditional BI, when the cloud kind of first hit, and you know, the cloud was this fabulous platform for CRM to get adoption started very easily. For traditional BI, it actually didn't really solve any problems, you know, you still had to integrate data, it didn't particularly help you with end user adoption, but I think now we're in more of a big data world and predictive analytics world, yeah, absolutely, I think it's really important, because you always have this need to try before you buy, prototype it, see if there's any value in there, and the longer you've been in analytics, the more you kind of respect the value that people manage to dig out of data, because unlike what the storage folks would have, you believe, all data does not have value, or some of it has so little value that it's so hard to get at that in effect it has no value, so yeah, absolutely, the need to spin up quickly, try low risk is, yeah, it's really important. Final comment on Splunk, what's your report, you get the file you report here on theCUBE for the folks watching, what's going on, what is this day all about for these guys, is it an inflection point, is it a me too, are they moving the ball down the field, they scoring a goal with this thing, what's the score and the touchdown, what is the deal with Splunk right now, and this announcement, are you happy with it, do you give it a thumbs up, what's your analysis? I'm really glad you made that question long, so I could have a little think. That's what we do here. Very kind, kind interviews. Splunk manages to be kind of geek heaven and also a marketing powerhouse, we've seen some phenomenal marketing today. Every announcement in the keynote was followed by a custom video of an organization using Splunk successfully, so yeah, everything I've seen, it's been- It's data driven. It's data driven for sure, it's doing very well, it's got room to grow in business analytics for sure, there's a lot more potential out there, but as they go beyond their core user, perhaps they will grow a little more slowly, but in general. They've got to push the envelope, get into some new territory, take some adjacent markets down. Absolutely, but then, it's a great time for technology, there's more out there, there's more opportunity and more challenge than we can really handle with technology. How tall can they grow? Exactly, and the challenge is just, it's almost limitless what's possible, so best of luck to you. Thanks for sharing your insight in the data, here on theCUBE with the audience. This is theCUBE, how tall can Splunk be? That's the question, looking good off the tee as they say in golf, look Splunk is continuing to surprise the analysts with better and better performance, and certainly the products are out there. This is theCUBE, we'll be right back here, live in Vegas after this short break.