 Okay, we're back everybody, this is Dave Vellante, wikibond.org, I'm here with Jeff Frick. This is the CUBE Silicon Angles product. As we say, we bring you to the events around the world. We extract the signal from the noise. Fred Lutty is back, fresh off the keynote. It was fire-martial-full, the room was packed. Fred, congratulations, you had the room in tears, just laughing, I talked to a number of practitioners afterwards, they absolutely loved it, so well done. Thank you, it was a lot of fun. You seem to really enjoy these moments, and it's just really gratifying, I think, to see the audience respond the way they did. You know, the audience is deeply inspirational to us, and we like to try to return the favor by showing them some new things in advance of things that are under development, some innovations that they've been asking for for some time, and they're also very supportive, a great group of people. So let's break down the highlights of the keynote. Livestream Frank's, yesterday, we didn't Livestream yours, I wish we did. Oh no, no, people are always afraid of what I'm going to say. Yeah, okay. I don't know, but I have a lot in common with Vice President Joe Biden, and I really don't know what's going to come out of my mouth. So let's break it down, so you, talk about some of the technology trends that you talked about in the keynote, and some of the things that you see, you got your big four or five there, share with our audience. The smack, I think, was a big one, because you hit the big six there. Yeah, there's no doubt that, you know, smack or scam, as I've called it. I've never heard of smack. Or scam. Yeah, social, mobile, analytics, and cloud, you know, which are, of course, complimented by big data and virtualization, they're here to stay, right there. They've already climbed through that hype cycle, and the next thing that's going to add to all of that is, of course, the internet of things. And I think this is a fairly new term, but it's talking about the tens of millions, probably the predictions are 50 to 60 million interconnected things on the planet by the year, by the year 2014, 2015. And little tiny cameras, little tiny sensors that are going to provide all sorts of different capabilities. Yeah, June is internet of things month, by the way, at siliconet.com. Yeah, we're going to cover this like a blanket. We've got a bunch of research that we've done on the industrial internet. Yeah, and so that's really June's editorial theme, and we're very excited about this, and also our partners at O'Reilly Media have done a lot of work in this, I don't know if you know Tim, and they've done a great job at their conferences, so we're kind of collaborating with them on some of this as well. So we're very excited. That's awesome, I mean, it's going to be staggering when pretty much everything is connected, and it has severe ramifications, doesn't it? Yeah, I mean, I think it's- Privacy versus freedom. You know, the whole analytics theme, making Hadoop Enterprise ready, that's all nice, but the internet of things, given the numbers that you just cited, it has just ridiculous potential, and it's interesting, you see the IBM Smarter Planet, and now you see GE with all the commercials, it's like you've got two big players going after it. You know, this is the old saying, one lawyer in town, nobody makes any money, two lawyers, they both get rich, so let's see what happens there. It also falls up on the movie theme, Fred, and all the good movies, scenes back to the future, and all these great movies that predict the future, and all these internet things are going to be like E.T., right, they're all going to phone home, they're all reporting back their condition. They all are going to be phoning home. Absolutely, and the other thing that came up in another conference is really how transformative to business that will be in terms of changing their business, for instance, should GE sell jet engines, or should GE sell jet propulsion, where they manage the engine, and they manage everything about the engine. Correct. Or data. They're not going to mention the data about the engine. Yeah, and you see that, you know, they're running even a television ad right now that talks about their locomotives feeding all that data right back to them so that they can maintain them and keep them better operational efficiency. Yeah. GE, they a customer? They're a wonderful customer. So Fred, you started our conversation yesterday and your keynote today talking about how proud you are that you've been a programmer for 40 years. So talk about that a little bit. Yeah, I think when people are able to find a passion, a deep passion that they're reasonably good at and they can make some money at, I mean, what? It's almost unfair. Yeah, it's almost unfair. And you know, every day I've woken up since I've been 17 years old, I've wanted to write some code. And pretty much I fulfilled that dream. And I really enjoy being a programmer. I, you know, I told you yesterday, I love technology and I hate it simultaneously. I love it when it's liberating and enabling. And I hate it when it makes me feel stupid or it makes somebody else feel stupid. And I think that has been why I've been so focused on simplicity all these years as well. I think we can all relate with that and frustrations that we've had in our lives with technology. So take it, we started to talk a little bit yesterday about the journey that is service now. And I went back to sort of 2003 and you had this sort of idea to build this platform. And you took us back even before that. So let's review some of that for those not familiar with the service now story. How did it all start? Well, I was working for an enterprise software company at the time. And I noticed all these things happening on the internet. You know, you had my Yahoo come out and 88,000 people customized a homepage on day one with no training, no instructions, no help desk. And I thought, wow, to do that in my class of software, you'd have to take a course, you'd have to go through a one week exercise and then it would be something you didn't want and you'd have to repeat. And you saw things, I have a brother who sells insurance and we were walking down the street in Chicago and he was phone beeped. And I said, what's going on? He said, somebody just spent, my wife just spent $700 at wherever it was. And I thought, how did you get that? He said, oh, Citibank lets me send SMSs when certain things hit my account. And I thought, my God, what's happening in the consumer space is absolutely stunning. And remember, this is around the turn of the century, what's happening in the enterprise space is more of the boring old same, right? It's just, it's horrible. So there has to be a better way, a simpler way for enterprise software. That was really the catalyst. Okay, and so then how did you get started? I mean, you didn't start, if I understand it correctly, with, okay, I'm going to go solve the problem of IT service management, right? In fact, that was the last thing I was going to do when I left my previous employer, I thought, there's a business segment I will never, ever, ever get back into. My definition of never is apparently nine months. But it really started off with what Gartner, in 2011 Gartner coined the term citizen developer. And my vision, my view was to be able to, and this is in 2003, October, November, 2003, be able to enable real people, real business people, to create meaningful workflow applications. And what that meant was for, to get any sort of work done, typically people fill out a form, right? Whether it's a prescription that you're taking to the pharmacy, or whether it's a request for travel, or a purchase order request, you're filling something out. And there's a very simple cycle that happens in business called request, respond, fulfill. And I thought, you know, before we had email, which has become like a de facto workflow engine, unfortunately, clerical people used to create forms, and those forms were in the copy room, and you'd go and grab the pink form if you wanted to go somewhere, and you'd grab the yellow form if you wanted to buy something. I thought, well, if clerical workers were doing that 15 years ago, why can't those same skilled people build something today using modern technologies? So the notion of the citizen developer is somebody who is not technical, who doesn't know what a database necessarily is, who definitely doesn't know what JavH, TML, Javascript, CSS is. They take a platform like ours, or even forest.com to some extent, and they can create a meaningful application for their business. And that was the whole notion, was solve this problem of having to have extremely highly skilled programmers create simple applications. Yeah, and of course at the time, dot-com had imploded, and it was a test of terrible time for technology. Silicon Valley buildings were empty, and the state of tech was, does IT matter, and everybody was cutting budgets, and so you had this vision of, okay, just make it easier for people to develop, so you developed this platform. That's correct. Heads down, you started coding. That's correct. On November 5th, 2003, it was me, a laptop, and I spent about 25 pounds of Starbucks French roast. And so you just programmed for how long? I mean, you were just... I did it about six or nine months by myself, just to try to prove out the platform concept, and then I took it to a couple of friends of mine and showed them the platform capabilities, and we got into this funny discussion. They would say, well, what can this platform do? And I would say, well, it can do anything you want. Well, name one thing. Well, name one thing you want it to do. And so this was not very productive, so plan B, which is still to make plan A work, was that we would build a set of apps that solved a business problem on top of this application to prove its value. And that's when I went back into this ITSM, ITOM, the asset management market that I swore I was never going to go back into again. Because you knew it. It was something in your head. It was an old market. It was yet, it was very much a growing market. It was an influential market that is and has been growing into something much bigger than it was. And it was tremendously underserved and expensive by very, very old technologies built in the early 90s and the early 80s. Yeah, so now talk a little bit about this notion of a single system of record and why was that important architecturally? I presume it was part of the fundamental architecture, but can you talk about that a little bit? Well, you know, an ERP department has a life cycle of things that they go through and IT department, excuse me, an IT department has a life cycle of things that they go through. And they typically would manage individual pockets of this life cycle in individual spreadsheets. So for example, they might manage the server spend for a trading floor, which could be up to, in one case, a quarter billion dollars a year in a single Excel spreadsheet with no visibility to upper management. They might be managing their project and portfolio, you know, in essence what they're rolling out, the new stuff, again, in another spreadsheet. So I talked to the CIO of Verizon and he said systems, processes Fred, I got about 2,500 systems that I use to run Verizon. Says 2,400 of those are individual Excel spreadsheets on people's desktops. And so this whole notion that you have an idea that somebody gets funded, that someone goes and procures or buys some technology to solve the problem that the idea is trying to solve, to getting it into production, to maintaining it while, during its life cycle of production, to eventually retiring and replacing it something else, that's the full IT life cycle that we're trying to manage as a single system of record. The reason that the single system of record is so important is that now you can roll up the data to the CIO level. These CIOs, we have CIOs with multiple billion dollar budgets. They care about really about three things. Number one, where did the money go? Number two, where is it going to go? And number three, am I putting my company at risk by investing in these areas? And so by rolling up all of this information and putting some financial data around it, this upper management now has a far better understanding of what's going on in the IT environment. Okay, but so others have had databases, right? I mean, Kintana had a database, ProSight had a database. What was so special about your single system of record? Your CMDB, why is it so flexible? Why is it so powerful? Well, I think there's two things. Number one, you mentioned Kintana, which is a great product. But it was purpose-built to solve only a sliver of that ERP for IT problem. And there were many other great databases that were built to solve a sliver of the problem. And so the way that large software companies typically try to solve a big problem is they buy lots of stuff and then claim that it's integrated. And it's not, it's integrated on the PowerPoint and it's integrated on the invoice and there's no part in between. And so what we decided was simply- And maybe the UI, maybe. Maybe. It's funny, they use the term seamless, right? And as any tailor will tell you, what's wrong with the scene? It seems to work pretty well, it looks good on your jacket. But in any case, what we decided was all of this needed to be in one place because it's all interrelated. And you know, when you have an incident, when you have, say, a major trading system that's having a challenge, you want to know, number one, what are all the different parts? What are all the different parts of the IT infrastructure? Be it databases, servers, storage, networking capability, et cetera, that are part of that trading system. And then you want to know what possibly is having an outage. And then you want to go into almost the asset management portion because if I'm having problem with a piece of storage, I got to contact that vendor, I have to know who that person is that I'm supposed to get to. And I have to do this in a very timely fashion. So the notion that these can be individual systems is not a good notion. It'd be like, you know, keeping track of your cash in one spreadsheet and your bank account in another spreadsheet. You would never know what kind of money you had, right? So the notion that all of these parts are interrelated and you get the most value out of them when you can see the relationship. So one follow up on that and then Jeff's got some questions for you. So databases are today are relatively small. You know, you try to limit their size and there's a lot of them. And David Floyer and I, our CTO, when we met with Arne, your CTO, the light bulb went off and we said, okay, so all these small databases have business processes built up around them that are sort of hardwired to the database, if you will. What ServiceNow has enabled is I've got this single system of record. I can take whatever business process I want to draw on the board and I can apply it to the system. Yes. Or apply the system to it as opposed to having to hardwire my processes to some module. Is that the right premise? That we can continue to just build on and keep adding to the system? That the power of that central database, that single system of record, is that I can now, it gives me freedom in my business process. It does, so the biggest issue with creating any workflow system is knowing the people, places and things that are going to be involved in that workflow. So that's the heart of our system, not only the CMDB, but also all the locations, all the people that work there, the organizational hierarchy, all that's loaded into this class of system. And now I can build additional HR onboarding when you saw some of it today with the things that customers have done. Great applications that draw on that data. When Rob Phillips stood up there and created a conference room reservation system that drew on the location data and the contact data already in the system, you get to, it's not just a specialized, insular database, it's taking advantage of a lot of data that we already have. Seeing your vision through of what it is, Jeff. What's interesting is a lot of people when they do a startup, either you come at it from a platform perspective, which doesn't usually work because nobody wants to buy a platform, no one's got line item in a budget, someplace for, I need a new platform. Or they come at it from an app point of view. But then as you said, what often happened is, you have a purpose-built app, now you try to expand it and you're kind of gated by that, which you set up for that purpose-built app. What's unique about your story, you just described it, is you really, you say it was a platform, you designed it as a platform at first, but you did kind of have the app structure, which is basically a workflow app in mind. So you did build the platform before then building the go-to-market app, but since you started as a platform, it seems like then it's been easier to expand it and morph it into different kind of sub-applications. Well that's very true. And the app, it is a purpose-built platform. It does workflow, lots of workflow very well. Forms-based workflow, and it just so happens that IT service management and service relationship management in general just tends to be a form-based workflow as so many things are in an organization. But I have to give you another little clue. I was visited by Paul Moritz, who was at the time the CEO of VMware. And he really liked this system as well. And he said, Fred, how did you get so many things so right? And I said, Paul, this is the fourth time I've done it. So, you know, I did it in several generations of technologies over several generations of computing devices. And this time I think I might have gotten more right than the other three combined. Well the other thing you talked about in the keynote was Moore's Law. And obviously Moore's Law was specifically talking about microprocessors, but as we've seen with time and as the infrastructure, and I was at some really ASPs in terms of networking and computational horsepower on our devices, these crazy things that we all carry around which probably have more horsepower in them than most of the Apollo missions, I'm sure. Oh yeah. And how that enablement and kind of this perfect storm of infrastructure coming together has enabled cloud apps. And why now suddenly we have the big three cloud apps or before everyone was leery and it wasn't quite there. Yeah, you're absolutely right. And there were great things that happened during the dot com or dot bomb area, however you want to refer to it. We built out massive amounts of networking technology. Tremendous amount, we had tremendous oversubscription or actually we had tremendously overbuilt the amount of fiber optics we needed. And we're now finally taking advantage and finally hitting the ceilings on that. The other thing is that the advent of 4G networks or whatever is going to come after that, which are slowly becoming a reality, is really making things like our phone interface far more realistic to do than they were even a year and a half or two years ago. So yeah, Moore's Law as it applies to almost every part of the technology stack has benefited us. And you're right about these devices. If you saw our iPhone demo with the interactive graphics and the way things were sliding back and forth. You know, if there wasn't a massively powerful GPU in here, we couldn't pull any of that off. I mean, it just, number one, even if we didn't have that GPU, that thing would be too hot to hold and the battery would be dead in 10 minutes. And if we didn't have the great bandwidth, we wouldn't ever get any information. We just didn't watch the spinny thing. So it's a wonderful time, wonderful time. So we're getting the hook, but I just wanted to circle back to sort of the original vision, this platform. What do you want to do with it? And so you've developed an application focused on the IT problem, which is, it's an enormous tam. I mean, the IT business is, you're talking about a trillion dollar business. You've got 14% penetration of a global 2000. So a long way to go there and you're not just limited to the global 2000. We had one customer on yesterday, he said, well, we started with five seats. Right. And we've been talking, we need service now for all this queue back that we have and all our schedule is, we'll be kicking the tires. But so, and you know, people talk about how you got a path to a billion and all the other cool stuff doing great. But your, your tam, you know, is limit list based on what you just described. If I can do anything with that platform, where do you see taking this thing, you know, longer term? Well, I can't tell you specifically what kind of apps that we're going to build because I simply don't know. But I can tell you that it, it's my desire and it's a company's desire to become relevant to, to every employee that carries some kind of electronic device. In other words, whether you're being onboarded, whether you're being trained, whether you're interacting with HR, facilities, any sort of interactions where you're requesting work or trying to find information. It could be as mundane as, you know, what's our, what's our healthcare policy? What's my vision policy to, you know, do how much PTO time do I have? How does our 401k work, et cetera, et cetera? We want to be relevant to everybody in the business from that perspective. And we will be both enabling the platform application development capabilities and building new applications to reach further and further. Because these, these processes that you see throughout IT, these processes are repeatable throughout our lives. If you think about what is incident management? Incident's something which is broken and not working. So here's a classic incident. Honey, the toilet's running. That's an incident. Resolution of that incident is simply jiggling the handle, right? That's incident resolution in the ITIL terms. I mean, this happens every day. Well, if the toilet runs a lot, then you want to do some problem. You want to go into problem, you want to figure out what's the problem. You know, chain broken is a, you know, is the valve thing dirty? And then you go into change management, right? I got to replace a part. So your car doesn't start in the morning. So you jump it, right? That's the resolution of the incident. Why did I have to jump it? Did I leave the lights on last night or simply the battery reached the end of life and it's never going to recharge, right? So again, that's just problem management. So we see these, these things not only happen throughout all sorts of things in our business life, but it's also directly applicable to a lot of personal life. And right now I think it's dreadfully unfortunate that the major workflow engine for most of this ad hoc stuff is, in fact, email. You know, I just think it's a horrible workflow engine. Yeah, or in many cases nothing. And so we're talking about the internet of things before. I mean, that. Yes, the toilet will send you the signal, right? Right, well, all that data, you know, the opportunity to sort of put those pieces together is limitless. All right. Because the kids don't use email anymore. So all the next generation of employees don't use email. So it's all about, it's all about the smack. Well, Fred Lutty, real visionary, Paul Moritz, absolute, you know, wonderful visionary as well. And that's quite a compliment coming from Paul. So we've tracked him now for many, many years. Fred, thanks for spending so much time in theCUBE. Congratulations on a great event and building a great company. We really appreciate your time. Thank you for having me. It's been a pleasure. All right, keep watching everybody right back with our next guest right after this.