 ServiceNow Knowledge 4T is sponsored by ServiceNow. Here are your hosts, Dave Vellante and Jeff Frick. Okay, we're back. We're here live at Moscone South. Come and see us, walk in Moscone South, look to the right, we've got this great setup here. Fred Lutty is here, he's the founder of ServiceNow, Chief Product Officer. Frank Slutman yesterday joked that he was the warm-up band for Fred, so Fred, welcome back to theCUBE, it's great to see you. It's good to be back. Hot off the keynote, awesome keynote. The title of Fred's keynote was the time is effing now. So we love it, and you look good, you feel good. Thank you, it was actually the dawn of innovation, new era in innovation, but effing now is not bad either. Not bad, right? Yeah, we're going to talk about that, but I was joking, sort of semi-joking, I tweeted out this morning that Fred Lutty got a near-standing O for showing tabs. Yeah, well, you know. Well, you said, I imagine that's what customers were telling you, you said it's kind of easy, the customer tells you what you want, you listen to them, and they deliver it, and then they clap. That's been true throughout my whole career. You know, I've always been somebody who listens to the customer and cares about what they say, cares about their problems, then you find technology to solve the problem, not the other way around, which so many people try to build a technology and then try, you know, it's a solution looking for a problem, we kind of go the other way. So last year, we talked about the story of Service Now, and you took us back, and you guys should check out that video from last year's Knowledge 13, it was just fantastic, you know, you had said, this morning's keynote, you've never had more fun, you've never worked harder in your life, which is kind of interesting, right? You've been more productive. You've been more productive, you thanked your wife, you thanked Frank for taking all those meetings for you. Uh-huh. Yes, but you focused on a new cycle of innovation in your keynote, and you talked about two things, the UI, and you talked about sort of the Apple ripoff, right, which is great, and this notion of disruptive innovation. I wonder if we could talk about that a little bit, let's start with the UI, you were constrained in your UI somewhat, by the paradigm of the laptop writing to the laptop, and that thinking has changed, hasn't it? Well, it's changed quite a bit. The big constraint was that people were using older versions of Internet Explorer. So IE7, IE6 really held us back, because two years ago, the bulk of our customer base, probably 70% of them were on those platforms. Thankfully, Microsoft has now essentially terminated Windows XP, IE7, IE6 has gone away, and so now the newer browsers that adhere to the HTML5 standard are something that we can really take advantage of all these capabilities and move our customers forward in a lot more rapid pace. So are you going to bake Microsoft a cake? I'm going to bake somebody a cake, I'm not sure who's fault that was. Thank them for the circular, you know, for stopping support of XP, right? Well, that was a brilliant move by them. It could do, it's for a lot of people, so. It's an interesting challenge, and I don't think most people think through this and what a gait that was to moving, you know, web-based applications forward. Yeah, and the social sites actually just stopped supporting it years ago, right? Which is okay for them, because everybody's in charge of their own computer. In the enterprise environment, you're not necessarily in charge of what's on your computer, so Facebook can come up and say, I'm sorry, we just don't support this, but that's what our company gave us, so we've got to use what they gave us, and that's why we had to adhere to IE7, IE6, which is good that we don't have to do that anymore. All right, okay, you're right. Yes. So you talked about sort of borrowing some of the designs from the great design that Johnny Ives just talked about, and you talked about the world now is flat, designs are flat, can you unpack that a little bit? Sure. You talked about how things are changing, beveled around, give us some insight as to what you meant there. Well, if you just, if you look at the history of graphical computing, starting with, say, the Macintosh, or even back to the Xerox Star, throwing in a little bit, Windows, things started off being square, then they got little rounded edges, and then they got, when people learned to do gradients, they all got round, right, there's all that little bubble look, and now if you look at your screen, everything is flat and square, and there's a minimalist amount of information on it, and it, there really is, there's social science and physics involved here, that actually that screen is far more approachable than what we had before with the very dense information, and when it's more approachable, then more people can leverage it. Yeah, so you said in the past, you had to make everything really small to sort of fit on that laptop screen, and now you also talked about this notion of systems of engagement, we'll talk more about that, but the second piece of your innovation cycle was this disruptive innovation, now sometimes disruption scares people, but you, you're embracing it, and your audience seems to be embracing it, why is that? Well, again I think the, where everything is being led right now is really in sites like Facebook and Google where people come to set their expectations about how technology should work, so if you look at a Google Hangout, or if you take a look at Facebook and how it interoperates, it's very, very simple, and it's very lightweight, and people really expect that when they get to work, they're gonna have that same experience, so in the kind of applications that we have, Workday has, SAP has, people are forced into this form metaphor where they're constantly filling things out in a form, and what we wanted to do is say, yes, all this process is wonderful, and yes, these things are necessary, but there's gotta be a better way of working, there's gotta be a better way, similar to the way that I can see that you've both reconfigured your screens here with multiple columns of information that's flowing constantly, you can react to it immediately, so a tweet comes in, you tweet back, we're just trying to bring that paradigm into our platform so that people can work and collaborate in a much more agile, lightweight fashion, and I would go as far as saying, having used this myself for the last six months, I find it fun, and that's a new word for our users. So thinking about this notion of systems of record versus systems of engagement, is it, I mean, you guys are kind of both, right? Yes, you can't have a system of engagement without having a back end system of record. So do you, in thinking about just the software industry, because we've got an Oracle open world every year, and you see them buying social media companies and sort of jamming in, some Facebook-like stuff, is that going to be the norm of software, is it just going to sort of morph into this sort of social-like, or is there a real difference between what you guys are doing and what the traditional software world is doing? Well I think we would like to be thought of more like Apple and Google compared to Oracle. Oracle, that's a financial model, right? They find a company that's got a good customer base, good maintenance revenue, and they go and get it, and then they let it go on its own path. So you look at PeopleSoft inside Oracle, you look at Siebel, these are not groundbreaking innovative things anymore. So it's more of a financial model than I would say an innovative technical model. But if you look at Google, and you look at Facebook, and you think, okay these guys do either, and Apple, they do either microscopic or major acquisitions, and then they immediately really blend that into the rest of their ecosystem so that the end user gets a far better experience. You know, the music player inside of an Apple iTunes little tiny one, they bought that 10 years ago, right? And they basically haven't reshaped it, but it's still an Apple product. And we would like to follow down that path rather than the companies of the past, whether it's BMC, CA, especially Oracle now, you also see SAP doing this as well. You know, they're buying very large properties, and really that's a way to grow revenue without coming out with innovation. We want to be innovative. You know, innovation is an interesting topic. You guys obviously are innovative. We always talk about, because we do a lot of enterprise tech shows, and the big enterprise whales, they just can't seem to innovate, but big companies can innovate. Certainly Apple innovates. You know, you gave some examples of innovative companies, you know, Kohler, you get P&G as an example, actually. Hey. Developing Pampers, right? Pampers, Crisco, and Pringles. Crisco, Pringles, right. GE, clearly large company innovating. What's the secret sauce to innovation, and why can't enterprise technology companies crack that code? My belief is that most organizations become very myopic on their current product. So let's take a look at Blackberry, right? Blackberry probably thought for the longest time, you know, we have the business market wrapped up. We got 85% saturation. We're not gonna, that's a foo-foo gadget over there. We're not gonna worry about it. So let's make the Blackberry better. We'll copy a couple of ideas, but they didn't, so they were looking at their current strengths. What they weren't looking at is, what are the market expectations going to be? Right, what does the market want? Not what does Blackberry want to bring to the market? And I think that's, I know that's what happened to our competition. You know, their calendars are stuck in 1987, 1997. They still, they don't believe that the turn of the century even happened. Maybe 1987, sometimes you want to. Yeah, and you know, it's very gutsy because you have to then change significantly what you're doing. You know, the Macintosh, if you look at the Macintosh in 1983, the Apple, the File, and the Edit menu are all in the same place that they are in 2014. But they've ripped the guts out of that thing twice, right? Underlying operating system twice. You know, first with the BSD Unix and then the next time they replaced it with the operating system they got from Next. Yet they kept the user experience very consistent. And every time they came out with something new, it was celebrated with great delight versus say Windows XP or Windows Vista, right? Or Windows 7 or now Windows 8, as some people call it. And so I think you got to look at what the market expectations are. And I think that's the big mistake. So we talk a lot about the consumerization of IT and people's expectations adjusting because of the devices. But what was the tipping point that you think that forced the enterprise's hand to no longer be able to say, this is what we have, this is what we will use, versus, wow, look at this application. Like your application that looks kind of like Facebook with activity feeds and being able to customize what I see almost kind of like the old my Yahoo, which was such an innovation when it first came out. Yeah, it was. My news and my stock ticker, not just the generic one. When did that flip or what was the forcing function do you think? I think there's really two things that happened. Number one, there's this whole notion of shadow IT, right? So if you look at, there's phenomenal products that come on the market, things like Dropbox, things like Evernote. And people just start using them, right? Their companies will tell them, you can't use this. You can't do your job this way. And you know what, they do it anyway, right? Because they got a job to do and they figure, you know what, I'm going to proceed until apprehended is basically the attitude. And the other thing is that the CEO brought the stuff in himself, which is how the PC got into corporate America as well, right? He wanted one in his desk because he wanted a spreadsheet. Well, so the CEO brings, it shows up with an iPhone, guess what? The corporate dictate changes significantly. So those two movements, and then I think, again, it's just people's expectations. They go home and I'm always reminded of, I think it was Meet the Falkers or that guy's just trying to change the seat and that lady's typing for like a half an hour, you know? That's the back office systems of today. When you're on a website, you just like, I want to move to that seat, right? And drag and drop into that. You know what was the other really interesting example that I thought you gave was POM. I didn't know this, but you said from its ascendancy, from its ground zero to its peak of ascendancy, it was 31 months. Now, I remember when I first saw the POM, I was blown away. I said, this is life changing. Why didn't I think of this? It was unbelievable. All of a sudden Blackberry came out, all right? Killed POM and then Blackberry tied. So my question to you is, are you paranoid? You know, the Andy Grove piece. I'm always paranoid. And so how do you, talk about that a little bit in terms of how you intend to keep innovating, how do you keep the troops going and what gives you confidence that those patterns won't repeat with service now? Well, first of all, I'm always paranoid. And I will also tell you that I'm always frustrated. So when we complete something, I'm pretty content with it for about 30 seconds. And at that point, I just, I want to move on to improve what we've done or to start a new innovation. And so that's just the way I've been for the last 40 years. I've never ever been happy with anything I produced for more than a few minutes on stage. Because I see flaws, I see opportunities, et cetera. And I think with service now, we just have to have the spine to say, where is the market going and how can we serve them? And you know, if you're inside one of these large organizations, large enterprise organizations, they'll bring up this term revenue cannibalization. Oh, we can't do that because we'll lose this, we'll lose that, we'll lose this customer. You know, when it comes to cannibalization, I would rather eat than be eaten. Right, and so that's the choice. You know the market's going to go that way. So to take Palm, for example. Yeah, Blackberry came out with a secure wireless, it was an email device, right? The Trio missed it. It was a phone that also somewhat did some other things. So Palm, they kind of missed the market expectations. And sometimes you have to have, I think these things are now being called gateway technologies. You know, they're almost, they're short lived, they're kind of like dead on arrival. Maybe there's a little bit of hype and then we move on to something better. I think Google Glass is going to be one of those. I think it's going to be a gateway technology. You know, it's something that is phenomenal opportunity there but it's just creeping everybody out, right? Yeah, it's kind of freaky. Yeah, I mean if you're a nerd and you want to get beat up at recess, I would recommend Google Glass. Okay, so you stay paranoid, you stay innovative. Of course now, the interesting thing about you, I've said this before, you're the founder. I want to turn to the company, but you're not CEO, you're not chairman. You know, thankfully we have fun with the Wall Street guys but it doesn't seem like you're all paranoid about that piece of the business, right? So that's key, right? So you're not so much worried about the ebbs and flows of the daily stock market piece. I mean that's key to have a leader I think in that position. I wanted to switch gears and talk about App Creator which you guys announced last year. You know, we do again a lot of enterprise shows, there's a land grab going on for pass and I have to say, I look at pass and you guys don't use that term really. I mean maybe you do, but you don't market it. I get really confused sometimes. Is it infrastructure as a service plus? Is it SaaS minus? Or Heroku and I see Pivotal and the platform for new big data and Python and open source and I go, I don't get it, what's going on here? You guys speak in a completely different language. We're going to make applications easy to develop. Talk about App Creator and the results in the past 12 months. Well, we look at the market very differently. Instead of taking a technology focus and bringing it out to solve a problem, we think about the problem to be solved and then try to build appropriate technology for that. And like I said, we don't want to make it easier to program. We want to really eliminate the need to do a lot of programming. So we want people to be able to do programming without thinking they're doing programming. A good example of that, take a look at Scratch. I don't know if you've seen Scratch as the kids' programming environment. These kids are building video games by drag and drop and just putting little variables in, right? They have no idea they're programming. They're just having a great time but they're doing as much logic as anybody else. So I do think that the way we look at the marketplace with service creators is a very simple way of creating online data entry forms that go to a set of fulfillers and then app creator is a very simple way of making a set of database tables that interoperate with each other to create an application. So there's really, there's two problems we're trying to solve. One is, let's get rid of all these e-paper forms that are out there and put those into a system of engagement and let's then say, make it easier to write some applications. So are there things that Heroku can do that we can't do, Python? Absolutely. That's a more appropriate technology but we think we have a very appropriate set of technologies for solving tens of thousands of customer challenges and you see that all around here at Knowledge, right? You walk around, look at all the placards of the different things people have built. It's pretty staggering. So it's kind of some support of your citizen developer idea which we talked a lot about last year and the fact that people are developing, they just don't know they're developing because it's really assembling as much as it is developing. It is and my first observation about that happened way back in the 90s when I watched people use Excel and I thought they don't know it but they're creating a relational database table, right? They open up Excel, they have name, address, telephone number, something, zip code. Those are, that's a structured set of data. So they didn't know they were building a relational table and we just, you know, we took it from there thinking these people have skills to manipulate things on a computer but the technology that they would have to use to do that in Oracle was so arcane, it would give up. Yeah, and the other piece that, like Dave said, we go to a lot of shows and the other big race that's on is for the developer, right? For the development community. How can we get third-party development community passionate about our platform and building stuff and extending stuff? And I think we've got 108 sponsors at this show within your partner development community, tremendous, like I said, applications, showed some great ones on the keynote today. How's that working out to your vision, getting these people and where they're going with your platform? Well, I think it's working out very well. The partners that we have and the customers that we have have built some phenomenal applications. You saw them in innovation of the year awards, things that they just, they wouldn't have had the resource to do because it's the opportunity cost. I'm gonna save a lot of money doing this but it's gonna cost me a lot more to build it. I'm just not gonna do it, right? That's what happens. So these, the technologies that we bring really make it a lot easier. So our partner ecosystem has built a lot of applications and to me, they've been pretty inspiring and I think that'll build on. If you take a look at, you know, compare us with force.com. For the longest time, you know, I think Mark, who I have a mountain of respect for, is promoting force.com without any real wood behind it. You know, there really wasn't a lot of traction. There was a lot of stuff in there but, you know, there was no measurable or no material revenue from it. We've come at it kind of a more of an aw-shucks attitude. You know, we let people discover that there is a platform, we let them build the applications and now we're kind of fulfilling that vision. So that's a playbook that's worked really well for us. Fred, I know you're super busy but I have a question, I'm not a technologist but I've been around a long time. Play with it on TV. Yeah, exactly. Old guy knows a lot of buzzwords but I was talking to David Flores, our CTO. So what's the one question you'd ask Fred Lutty from an architectural standpoint? He said, well, the one thing that I'm not, I don't really understand and I'd like to ask your view of this. You've got the single system of records, single CMDB and you're developing now all these apps that can take advantage of that. And in database land, when somebody's got that record, you know, it's locked, right? So you've got now all this locking, you know, and queuing stuff going on. So, and it's a computer science problem that's well understood. At what point does that become a challenge for you and how do you solve that as you start to get to massive scale, massive numbers of applications hitting that? One customer has 55,000 applications I think you said. Hitting that single, you know, system of record. How do you solve for that architecturally or have you already? The answer is yes. People often ask, well, what if two people are working on an incident at the same time? I said, I'd throw a parade. Well, you've got two people actually trying to solve a problem. That's awesome. I could barely get zero to work on it. But the other thing is, yes, you can lock when you're changing different fields in the record. But if you look at how tasks work, how people get work done, mostly there's something that's open. Like I'd like to take a vacation and there's a running commentary that happens. So the running commentary doesn't lock when the record locks. Because if you think about that, that's just chatter that's coming in from left and right. It has to be tied back to the document. So in a large part, we've solved scalability issues and locking issues, frustration issues by putting in these streams of data, streams of information similar to a Facebook stream and things that you're Twitter stream. People interacting with each other. So I think we've largely solved that. For our largest customers, we've installed huge databases with MongoDB on the side. And I think we have a lot of headroom left. Okay, so I think if I understood it. So this is the nature of the application that allows for all this other interaction without requiring locking and then essentially the architecture itself that you've developed. Correct, yeah. Cool. All right Fred, I know you're super busy and really. Actually I got nothing to do. I can see you're another hour. Can you? Is that okay? Can we keep going? Yeah? We'll look over in the shade over there. All right, so I'm doing a little house remodeling and your analogy really stuck through. So I wonder if we could talk about that a little bit. No, I can slam 16. So you thought about that when you're developing your product, right? Give us that example. You remodeled your house. Everything's, you got the project plan. You got the architect. Everything's going to go day by day. What happens? Yeah, well I think, you know, process people tend to think of things as just being perfect, right? That everything's going to flow as usual. And I think it was Eisenhower that said, you know, a battle plan is worth all the money it takes to plan it. And then it's not worth a plug nickel once the first bullet is fired. Because that's when the chaos breaks out, right? And all the unexpected situations happen. And it turns out human beings, for the most part, are very, very good at handling chaos. And the point I was trying to make is, if we keep people within the confines of process, that they feel like they're working with a straight jacket on, it's just going to be very difficult for them to actually get tasks done at a reasonable cost. And the house remodel is just an example that things never go the way you plan. You know, you pull the drywall off and you find something you didn't expect. And that's when the plan goes to hell in a hand basket, right? But fundamentally, human beings fear at how to solve the problem and they get those done. There's a lot of examples that we're football guys, right? So you remember, when we played football, we had every play scripted out for 30 plays. The X's and O's ever go where they want to go. Within two or three plays, done. You're like, all in a lot of balls. Johnny football's never fallen one, right? No, exactly. And it's just powered up innovation. Where'd he come from? Since you've got time. You also announced share, well, you didn't announce it, but the last stuff that's not announced that the worst kept secrets within the service now community. So this idea of share, what's that all about? You seem to be very excited about it. Well, people create applications. They create, and they can be large or they can be small. They create business rules. They create workflow. And they want to share those with people. You know, if you look at, you know, there's a video called why we, what really motivates us. And it talks about people wanting a sense of purpose, a sense of belonging, a sense of contribution. And it's what explains the open source phenomenon. If you think about open source, you have people that are paid to be programmers 40 hours a week and they go home and they do their best work at night for free without ever thinking that they're gonna get any remuneration for it. Why do they do that? They want that sense of being. They want to feel like they've made a difference. And so share allows people to not only solve problems within their company, but they can share that information about how they approach the problem and what perhaps they did that was very innovative that other people might want to take advantage of. And you get people contributing and they get them talking to each other. So we might have five guys at one customer that are interacting with each other, but they'd really like to meet those folks we just had up from Holland that built that phenomenal reservation system. Why? Because these guys built a bi-directional exchange interface to calendar. And maybe they need that for something else. So the whole notion, if you think about GitHub, you think about open source, you think about open stack, all of these things are just people voluntarily sharing information, sharing technology for the greater good to get that sense of purpose. Wikibon. Yeah. So you mentioned you alluded to the innovation of the year award. Yeah. You had, was it 50 submissions this year? Is that right? 50 plus, yes. And you review like many of them? I went through every one of them. All of them, okay. And they were all, you know, very cool. There was a lot of those like, ah, we should have done that. Shoot, we should have done that. Barclay's major incident management thing. I know exactly the person that did that. It's brilliant. And, you know, service now needs to be inspired by these people as well as anybody else. And the customers vote, right? The audience votes, right? The audience did vote. That's how it happened. Yeah, I think those people brought their family from Holland. Yeah, they were dressed like they knew they were going to win. Yes. But we're going to have them on tomorrow. And the concept to actually embrace the input, embrace the innovation, embrace the applications from the community, not only within your own company, but really leveraging off the open source, which is there's a lot of passionate people that have great contributions and will gladly share it just really for the recognition and the feel good of knowing it helped other people. That's absolutely right. I mean, that's the reason that I build technologies. I want people to be happy that, you know, made a little bit of change in their life. And these people, you know, some of these innovations are phenomenal. Like I said, and the platformation stuff that we saw, I wouldn't know how to do what they did. So I want to see what did you do underlying here to make this all work because I'm going to be fascinated by it. So, you know, we have this shared enthusiasm and shared innovation. It's just wonderful to be part of that community, to know that you're not the only person. Right, absolutely. All right, well, our next guest is here. We would keep going, but I see Shane's here. But so I got like a hundred more questions for you, Frank. Okay, it's always a pleasure. Great to see you. Thank you very much for coming on. Thanks for having us. It's a pleasure to be here. Fred Lottie, great visionary. Really appreciate you coming on. Keep it right there, everybody. We'll be back with our next guest. We're live from Moscone Service Now Knowledge. Right back.