 Live from Las Vegas. It's theCUBE, covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. Welcome back everyone to theCUBE's live coverage of ServiceNow Knowledge 18 here in Las Vegas, Nevada. I'm your host, Rebecca Knight, along with my co-host, Dave Vellante. We're joined by CJ Desai. He is the Chief Product Officer for ServiceNow. Thanks so much for coming on theCUBE again, CJ. Thank you, it's great to be here. The first time I came was last knowledge, which was my first knowledge, so I'm a lot more educated and equipped this time as compared to firing round of questions from Dave last time. Pick your brain. Exactly, exactly. So you were up on the main stage this morning, a great keynote, and you said welcome to the era of great experiences. Unpack that a little bit. What do you mean by that for a brief moment? First of all, thank you for remembering that. There's supposed to be the idea, but on a serious note, we feel if you think about even our company name is ServiceNow, so you provide service. And when you provide service, that's not a technology you provide, you provide an experience, whether it's for IT service, customer service, partner service, employee, whatever the case might be. And if you are not delivering experiences, then you are not that relevant. So we are trying to truly, and we are in the beginning of this journey, truly internalize that, that if people are using us, they call themselves service desk in certain organization, IT service desk, customer service desk, whatever terms you want to use, that is about experiences. And rather than focusing on bits and bytes, we want to focus on experiences, deliver those experiences via our platform. It's not software as a service, it's software as an experience. It's software as an experience, that's the idea, correct. Thank you for asking. You also talked about the errors. We went back to the industrial era and then went through the ages of computing. I was not sure if that was going to work or not, but the point I was trying to make there was just around the quality of work and how work has evolved, that's it, that was the idea. But I think my takeaway was even more than that because we are entering, in my view anyway, a new era and I'd love to get your comments. We're moving from what has been a real tailwind for you, which is the cloud era, and obviously cloud is an important part of the new era, but where you have a remote set of services to one where you have this ubiquitous set of digital services that do things like sense, hear, read, act, respond, that's a different world. It's all about the experience. And I don't know how to define that yet. Digital, I guess, is how we define it, but what are your thoughts? The one thing that I, even simple things, right? And these are not simple things, simple things to understand, but when I look at things like even genomic sequencing, I mean, that's so different. I mean, they are using technology to figure out how they sequence the human genome so that it can help you with your health, live longer. Even things like knowing that somebody rings a doorbell at my home, and I can see on my phone, everything is connected. Humans were connected when mobile came and computer came and internet came, but things being connected is pretty exciting for me. So that just transforms our lives and how we work, and I really like that it is all about us, and rather than us being focusing on the technology itself. So that's the point. It's about humans, and let's focus on humans and experience rather than worry about, oh, this runs two times faster than the other thing or this thing is smaller than other thing. Okay, that's interesting, but not that interesting. At this conference, and this is really the message that you're getting across, it's the new tagline. We are making the world of work work better for people. How does the Now platform really deliver on that promise? How does it make the employees' life easier? So I would say, you know, we have a bunch of use cases, but as you know, we started out early on with IT service management, and the whole idea was can we provide, as long as computers are there, as long as software is there, password reset is going to be there for a very, very long time. So my point is that that's where it started, right? Okay, I need to do password reset. I want to upgrade my laptop. Every year there is a new laptop. Every year there is a new phone, and that cycle will continue, and as long as we are using technology for our knowledge workers, IT help desk will be there, right? And where we are evolving is enterprise service management, because you don't, as an employee, you may deal with IT. You may deal with HR. You may have a contractual issue with legal. You may need something related to your payroll from finance. People think payroll is HR, but payroll is finance. And as you try to go across in a day in a life of an employee, you need to make it as easy as possible. So that's what we are focused on. Deliver better experiences. You know, artificial intelligence, at least in today, I believe is more about optimization rather than intelligence. So when I mean by optimal, yeah, we want to use your data to be able to predict. Like if you see in Gmail, I don't know if you use Gmail, but if you have Gmail, you get an email, it'll suggest auto responses. Those auto responses are almost positive. Have you noticed that? They're negative. They're like, no, I don't want to come to your meeting. And so it's kind of like trying to predict most likely what you would want to say. And I think if we can use intelligence to make people more productive, that's what we want. I mean, I use that function. I actually like it. Yeah, exactly. I just, you know, it gives you three choices and one of them is pretty close to what I would normally do. That's correct. And I'm busy, I'm done. Yeah, exactly. I like that. So this is the other thing we've talked about. We talked about this with Farrell this morning. Try to anticipate my needs, right? So that means you've got to infuse AI into the application and identify specific use cases. You guys have done some M&A there. You talked to the financial analyst meeting, obviously not disclosing anything, but watch for us to do some more M&A. You got to believe that machine intelligence space is really ripe for innovation. And what we believe, Dave, is if I look at, you know, the big cloud providers like Google are investing a lot in deep learning and many, many other technologies. So wherever they expose it, and some of them do a really good job, we will just leverage their libraries. But there are things specific to enterprise, because there are things specific to enterprise. Like if you use the word network at a hardware company, that's always in context of compute network and storage. If you use the word network at a healthcare company, that's a network of physicians, networks of hospitals, network of water. And if you use the word network at a telco company, that is a whole different network. So my point is we want to understand those pieces, and if we can make it easier based on your data. So if I, all your cases which are, oh, partner network is down. Ah, that's what you mean from the context standpoint. So we want to use wherever folks like Google are investing, we will leverage that, and wherever we need to leverage, we'll do that too. Yeah, that's interesting. We were talking to a customer today, I don't know, it might have been WorldPay, and they took the CMDB language and transformed it into the language of the business. I was like, what a rare and powerful concept for somebody from IT to do that, because if the lingua franca is a business, then the adoption's going to go through the roof. So does that make sense? Yeah, it makes a lot of sense. Well, I appreciate you talking about the value and the customer experience versus the technology. Certainly, it speeds and feeds you, right? Boring. But the platform is important. Many products, one platform. That's unique for an enterprise software company. And you guys aspire to be the next great enterprise software company. Talk about how the platform enables you to get there. So I'll tell you simple. I mean, as you know, our founder, Fred Ladi, started with the platform in 2004. So that was 14 years ago now. And his idea was you should be able to route work through the enterprise using our platform. And then we started with the IT service management use case. The biggest advantage we have is that we get, we are very customer-driven organization. Many companies say that, but you see it here. Dave, you have been coming to knowledge for a long time. I don't know about you. It's audio, but it's the first thing you see. It's cool, it's cool. This are 80 plus percent sessions, are customer sessions. They are not our sessions where they are sharing best practices with them. So we get all these requests. CJ, we have built emergency response system using ServiceNow. CJ, we have built financial closed using ServiceNow. We have built, can you productize it? And we say, okay, thank you for the idea. No, which is great. Thank you for the idea. How do I prioritize all of that? And Dave, where platform comes in, because all the services I talked about today, service intelligence, service experience, user experience, they're all built in the platform. And I'm not, I'm trying to be cautious, but if I want to create a brand new product on our platform, a brand new product on our platform, for a use case, a 1.0 product where I feel comfortable that customers can use it, I would say 12 to 18 engineers. That's it. Wow. If I want to create one product, it's 12 to 18 engineers. So the R and D leverage with all the, and that's what's the point I was trying to get across, that whether it's my own team creating product or whether our customers building apps on our product, because on platform, because we provide all the common services integration, the incremental cost to create something. Now sales marketing with my close friend Dave Schneider is much harder because he has to scale it, build specialty in it and all that. But to create the product is not an issue for us on the platform. And this is where cloud economics are so important. Yeah. Because at volume, your marginal costs go to practically zero. That's exactly right. And people may say, well 12 to 18, that sounds like a lot, but we're talking about an enterprise class software product here. And Fred Lutty, in the 2004 timeframe, I mean the state of enterprise software then frankly and now was terrible. I mean, the guys at 37 signals, I don't know if you know Jason, they made valid attempts, but it wasn't enterprise class software, it wasn't a platform. I've said a number of times this week, the competition, not the competition, the reference model for enterprise software is painfully mediocre. So you guys have done a great job and now you've got to take the next step and stay ahead on innovation. Correct, on the innovation curve. That's why I said innovation will be my top priority and you know, you heard me at the financial analyst day, customer service management, brand new product. We actually launched it at Knowledge 16. Okay, that's when we launched it. It was engineers in teens who created that product, somewhere in teens, the 1-0. Now we have evolved quite a bit. 500 customers two weeks ago. 500 enterprise customers. You guys know that we don't go to the small end of the business. 500 in two years, in quarters. And I found out last night, I think it was 75 or it might even be higher, reference customers. Yeah, already using CSM. I mean, that's the difference. So we do a lot of these shows. So that's the platform impact. And you talk about the customer focus, you do a lot of these shows. The customers talk about the impact on their business. They don't talk about how they installed some box. You know, like you say, it runs faster. It's the business impact that really makes a difference. And that's why we're excited to be here. You saw today, when I talked about Flow Designer and Integration Hub, IT wants to provide software so that business analysts can model business processes in a cloud way with whoever you need to integrate with. So we are really keeping that as the north star for our customers. And how can we make their life easier, whatever they want to automate, some manual processes, all of manual processes. And I remember speaking to Fred when I joined initially and I said, Fred, how did you think about TAM? He said, what do you mean TAM? And you know, he's a funny guy. And he was serious. And his point was, there are so many manual workflows. How do you put a TAM around it? Every business is unique. Their processes are complex. So don't box yourself and say, oh, this is a $4 billion TAM and I'm going to get 20% of it. Every enterprise, as long as they exist, they will have manual workflows. You go and give it our platform so they can automate however they want. Well, I got to make you laugh about TAM. I was a former industry analyst. And so when you guys did the IPO, way back when, well before your time. 2012. And Frank was here. You know, there was a research company say this is a small market. Maybe it's a billion dollars and it's shrinking. So I, with some of my colleagues, developed a TAM analysis. And I had it, it was more than 30 billion. I published 30 billion. You can go on our old Wiki and see that. And the guy said to me, Dave, you can't publish more than 30 billion. You'll look like a fool. The TAM is much, much bigger than 30 billion. I mean, you can't even quantify it. It's so large. And now, because people are recognizing that we automate all the manual workflows in enterprise on a cloud platform. Last week, somebody published a report and I just saw the headlines. I didn't go through the details. 126 billion. So from in 2012 to that small number. And we don't know what the number is. We know. We have no idea. I would be completely disingenuous if I told you I know what my TAM is. But I don't think that way. I said, what customer problems can I solve? Well, that's what I wanted to ask you. So you're here with so many different customers. Just on the show, we've had once in payments and insurance and healthcare. What are you hearing from customers and what are you sort of your favorite applications of what you're doing? What makes you the proudest? Yeah, so I would say the proudest moments for me are when I'm like, wow, you do that with service now. I would have never thought that. So when I didn't expect, when I expect like something, oh, I had this routine email, text collaboration and I switched it to service now. Get it? I'm like, not a big aha moment. I had this one customer who said, he has a big distribution network, all these partners and those guys have service now. He has service now. And when they have problem with the product, their product, my customer's product, they all communicate via service now to each other. So they have created like a whole service now network, truly a B2B exchange kind of using service now. One of our media and entertainment customers who owns bunch of parks, they refill the popcorn machine using service now. When the popcorn levels dip, they have those, you know, people who carry around the cart, oh, the popcorn level dip, it marks the sensor, it routines the workflow, goes to the corporate, we need to fill up popcorn on by this particular ride, for me. I need that in my house, I love it. Yeah, so that's exciting to me. We talked to Siemens today. Great customer. Awesome, and I want to line by you, talk about it, we talk about AI a lot, machine intelligence. I wrote down during, you know, data is the fuel for AI. You know, we love data here at theCUBE. And he was describing that, he said, you know, even though your CJ was not prescribing taking the data out, because leave it in so it learns, right now we take some of the data out. And I go describe that. Well, we put it at the SAP HANA, we throw a little Watson in there, we do some Azure machine learning. We use Tableau for visualization. He's probably got some Hadoop and Kafka in there, very complicated big data pipeline. And I said to him, okay, in two years, do you want to do that inside of service now? He goes, absolutely, that would be my dream come true. So I guess I'm laying down the gauntlet. Do you see that as a reality? So we have talked to Siemens, great customer. They keep us honest, so I love that. And I did actually meet the team who was in charge of their BI and reporting and they did share the same story few months ago when I met them. And we are trying to figure out, Dave, if I knew the answer, I would have told you, but you know my style, I don't know the answer. We are seriously trying to figure out, do we become an analytics hub, right? So we are really good with service now data. We can build connectors with other data, but do I want to be in the BI and reporting market? Absolutely not. But do I want to help customers as their processes span across and provide them more visual query tools and others, text-based searches, whatever they need, the answer is yes. So performance analytics, as you know, we have been moving along really at a good pace. Now we have for every single product, but this is something that Eric Miller who runs that business, we talk about it all the time because currently our analytics is built in the platform and now you know that data has a gravity issue. So if you have data here, you have data there, you have data there, we are in our own cloud. Can we build a connector potentially to on-prem? Don't know the answer, but this is something, it's a fair gauntlet that we need to solve. Well, humbly, I'd like to give you my input, if I may. We see innovation, as I said before, data applying machine learning to that data and then leveraging cloud economics. The problem with big data projects, as you well know, is the complexity has killed them. Now you see the cloud guys, whether it's Amazon or Microsoft, and that's where the data pipelines are being simplified and built. Now, I don't know if it's the right business decision for you guys, but wow, wouldn't that be powerful if you guys could do that, certainly for your customers. And truly that is, you know, as you heard me on financial analytics, the huge fan of Jeffrey Moore's work and he defines system of record, ERPCRM, system of action where we fall in, and then he has system of intelligence, which is all the things around data and how do you harness the power of data. And that's something that I really, in our product teams, we talk about all the time, how can, if I can solve Siemens problem with everything in service, that would be awesome. But is that something I want to prioritize right now, or is that something we should give them that flexibility? I don't know. Well, you were one of the top product guys in our industry. It's why they found you. I mean, no, seriously, I put you up there with the greats, you know. You're kind, but thank you. It's true. I mean, you've got an incredible future ahead of you. But as a lead product person, you have to make those decisions and you have to be very circumspect about where you put your resources. You can't just run to every customer requirement, right? And I tell, you know, coincidentally, my wife asked me, what's your job, by the way? So I said, that's a good question. I'm married to a product officer too. I feel the same way. What do you do all day? You do a lot of meetings. Yeah, exactly. So I say I do a lot of meetings and she's like, why do you do a lot of meetings? And I say I'm making some decision or help my team make a decision because they've already analyzed a bunch of things. And I said, my hope is as long as I can make more good decisions than bad decisions, specifically about product strategy. Because you never know unless you make the chess move, chess pieces move and think of two or three steps ahead. And some things could be right and some things could be wrong. I have a simple framework on my whiteboard for every meeting, no jokes, right? So my framework is very simple. Question number one, what customer problems we are trying to solve? If you cannot articulate that for any new product idea you have, I don't go past that question. What customer problem we are trying to solve? Second is, why now? Like why do we need to solve this problem now? Like you said, there are many problems. Which one you prioritize, why? And then third, why us? Why should we solve that problem? So if you can articulate the problem, which always is a challenge, because you kind of know what problems you have, but unless you really, really understand the customer pain point, you cannot articulate it. Then you say, why now? Like why is the time right now for us to invest in this, say analytics as a service? Why right now? And third, why you? As in why us? Why is service now should solve it? That at least gives me a guiding compass to say, because I have many products as you know, I'm very protective of our platform, and all these use cases come in, every product line wants to go deeper, rightfully so, because they are trying to solve for customers, and the new products want to be built on this platform. And sometimes I say, maybe a partner should build it. So we made a decision, facilities product, should our ISV partner build it, and that's the right place, because we feel they are more suited, they have the skill set, all of that, but that's it, like what problem, why now, why you? Well the why you, that's great framework, the why you is unclear for the Siemens problem, and I can understand it. Take the DevOps announcement that Pat stole from you today. I know, that's not cool man. But that's a problem that you guys solved internally. Clear problem. He did a nice job articulating it, really nice job. Definitely, so. But that we feel that DevOps is a process when you need a workflow across, because in planning, there are a bunch of companies, as Pat showed, in build, there are a bunch of companies, in develop, there are a bunch of companies, that's fine. They could be the system of record for those Chevrons, and we have the workflow that cuts across. So we feel that we should add value to our customers by doing that. I know we got to go, but last thing is roadmap. Last year you talked about how you guys do releases by alphabet, twice a year, you really transparent today, laid out, the roadmap talked a lot about Madrid, you laid out well into the future, what you guys are doing. So as an analyst, I love that, I'm sure your customers love it. A lot of people took pictures, so that was nice, and Twitter, a lot of people posted on social media as well. So that was clearly, there was a customer pain point, as we call it, that they needed roadmap. In speaking to customers last one year, number one thing, if you tell us what you are building, then we don't have to build it. If you tell us when you are shipping, then we can plan around it, and then we will set aside resources to do testing. Any cloud software company, whether it's us, CRM software, or HR software, people still test, because you cannot mess up your employee experience or customer experience, and they just give us a predictable schedule, please, so that we know. We did say two times a year, but we were not prescriptive, which quarter, it could be four months and eight months, it could be six and six, it could be seven and five, so I'm currently going with the quarter level fidelity, and eventually I want to get to a month level fidelity, where I say, March and September, once our internal processes are organized. You know, the other subtlety there, and I know we got to go, is the ecosystem, because you're giving visibility on them, they have to make bets, they're making a bet on service now, but then where's the white space, they're betting on white space, if you're exposing that to them, they can say, oh, not going to solve that problem, service now is going to solve it in two quarters. I agree. Huge difference for them. You guys are wonderful, thank you so much for inviting me. Thank you for coming on the show, we appreciate it. No, that's awesome, thank you, thank you. Great to have you, it was great to have you. I'm Rebecca Knight, for Dave Vellante, we'll have more from Service Now, Knowledge 18, just after this.