 Hi everybody, we're back in Boston, atop of 60 State Street in Boston, Massachusetts. Beautiful view here at BMC Day. Bill Baroudi's here, he's the President of Performance and Availability at Data Center Automation and Cloud Management at BMC. Boston native, Bill, Patriots fan. Welcome to the queue. Thanks for the Patriots shout out there by the way. We're pretty excited that they clinched the AFC East. We got, yeah that's right. We're all good, we're all feeling good now. We were a little nervous about 48 hours ago, it's all good here in Boston. So Bill, so tell us about this event. So you got a customer gathering here today, beautiful day in Boston, lot of discussion around digital transformation. What's the purpose of the event? Who's here? Yeah, thanks Dave, great to be here. You know, we're here because what's happening in the marketplace is so exciting. This move towards digital services and the fundamental transformation of the competitive advantage of our customers being based on digital services, that imperative is why we're here. And it's really exciting to be at an event like this and see 250 people show up to have that discussion. And the level of energy in the room is just outrageous. It's awesome. And again, it's because every single one of our clients here today is transforming their business and they want to talk about it. They want to talk to each other about it. They want to talk to us about it. So you talked about, you asked three questions of the audience up front. You said, you know, essentially, you know, is the digitalness of your business increasing, have I said, uh-huh? And then is the speed, the expectation around application delivery speed increasing and was, uh-huh? And there's your budget increasing and was, uh-huh, no. Okay, so those are common themes that you hear throughout the industry. How is BMC specifically addressing those three trends? Yeah, great. So, you know, I think historically for IT in general, and then for BMC in particular, you know, the focus had been on how do we industrialize IT? How do we make it bulletproof? How do we root out performance problems? How do we root out security problems? How do we make sure that we do it efficiently? And that was a really good agenda. And by the way, it doesn't go away. But the new reality is we got to move at light speed. And you know, to some of the stories that were told earlier today, I can be out of business in a year or two if I'm not moving at a fast pace. And so we've got to do both. We've got to bring speed and agility to bringing new digital applications and services to market and do it securely at a high rate of quality and at the right cost. And that's what we're working on. And we've always been good at the right side of that equation, the industrial side. We have brought so many new applications to market that we're talking about here today that allow our customers to innovate faster, to bring development and operations together so that they can move at a much higher velocity, get into production securely, confidently and at the right cost really fast. Yeah, so I asked you in the Q&A session about being a private company. I want to sort of set that up. BMC went private a couple of years ago, a little over $2 billion. You've grown since then is something that I learned today. Bain Capital injected its presence and has transformed things. You're not on the 90-day shot clock anymore. Start with how that's changed your lives, how many days a week that's given you back. And then how have you applied that time for your own digital transformation? You mentioned Remedy, you mentioned some R&D investments of $100 million plus. Add some color to that discussion. Yeah, it's a really important point Dave because we've seen, all of us have probably seen public companies that have had to deal with a big opportunity that also probably is some kind of disruption in their market. A new set of requirements are necessary to be successful. And you want to move as quickly as you can to address those. And that's the opportunity for BMC to be the partner to help our customers address this new digital imperative. The problem is, if you operate on a 90-day window and every 90 days you have to deliver a certain earnings per share and you have to grow that every single quarter and you'd have to do it perfectly predictably or you're going to get punished, it's really hard. And we've all seen companies that have struggled. They've either not succeeded or it's taken them many years to do what could have been done more quickly. That's the benefit. So we've been private now for two years. As we've talked about, our board and our owners have allowed us to invest a tremendous amount of money in the business. While revenue is growing, our profits are actually down and that's because we're investing back into the business in a huge way. And then the second point is we're able to do so consistently. We don't have blips every 90 days that cause us to say, okay guys, sorry, that was a good idea. We're now going to have to change the strategy, change the spending levels and push it out a year. No, we haven't blinked once in two years. So Bill, you know, talked about how customers are moving really fast. Can you talk to, you know, some of the tools that they're using kind of outside of that you're doing. I think about kind of the public cloud, the hybrid cloud discussions that are going on and how that transformation is affecting your interaction with your users. Yeah, you know, it's really interesting and some of the other speakers today, both Herb and Evelyn talked about how as things move faster, some of the IT buying power and the IT influence is moving around in the company too. It's not essentially located maybe as it used to be within IT operations and the CIO. Maybe it's moving out into the business. And it's in those areas too where we're seeing all kinds of new tools be adopted. It might be open source tools. It might be the new approach to use containers in the development process. It might be to go after a public cloud opportunity to stand up capacity very quickly. Well, that's all good because that buys us velocity, buys us speed. But the problem is at the end of the day, all that has to come back together and be put in operation safely, securely, and at the right cost. And that's where we come in. All the work we're doing is to bridge that divide, to allow operations and development to work together to leverage all of those new technologies and new ways of thinking about how to bring applications to market and make sure that you can do so in a way that secures the business. Yeah, maybe can you give us a little bit of color as to the relationship you have with inside your customers? Because you mentioned you've got some services where you don't even need a sales rep. I just try it for free. You talked about centralized IT versus the business user. So boy, you must have a lot of different touch points. How's that changing? Yeah, we do. And quite honestly, that's a growth opportunity and a challenge for us. I would say that without a question, our core customer really still is the CIO and the IT operations organization because at the end of the day, that's where everything becomes real. But what we've had the opportunity to do is to begin to develop relationships with the people, for instance, in development. For people that might consider themselves a part of that DevOps process. And that's been a great opportunity. But it's also caused us to have to think about how we do things differently. And to your point, Stu, sometimes those people that are using modern technology and moving really fast, they don't want to deal with a big company and a salesperson and the rigor of doing a transaction. They want to try something. And so we have a bunch of new technology that now allows you, as a user, to go online, download in 30, 60, 90 seconds a trial application, see how it performs in your environment, and then make the decision as to whether or not you want to move forward. So those kinds of transformations in the way we do business with customers and who we do business with are also a part of the benefit of the innovation and private nature of our business. So I don't want to get to the end by talking a little bit about the market and the opportunity you mentioned. A couple of really interesting things. EBITDA is down because we took that money and we're investing it in R&D. It's not often you hear the executives say, hey, guess what, good news. EBITDA is down, but we're investing it. I'm sure that's going to change over time. You mentioned some of the competitive landscape, HP, IBM, CA, you didn't branch the service now, but I wanted to pose a narrative and help us understand sort of what happened. I mean, incident problem change was sort of the backbone, right? The staple service now satisfied that. And that, as a public company, that was causing problems for you guys. You guys have re-architected remedy, sort of, you know, shored that up, but the real opportunity is elsewhere. And I wanted to talk about that and where the growth is, where you're going to drive EBITDA and growth in the future. Yeah, you know, and it's a good point. I mean, we absolutely had a competitive threat from a number of different places, and the benefit of the last two years has been the catch up, and now really the moving ahead of the competitors that we've been able to accomplish. But to your point, the problem that we're trying to solve is bigger. So, you know, if we take just that service support area and take service now as an example, the real problem customers want to solve is the entire process. They don't want to just solve, you know, what happens in the call center or at the help desk. They want to understand how performance relates to service, how service relates to the automation of their hybrid cloud environment, and how all these things work together to allow them to be agile and to adapt very, very quickly. And then they want to extend that upstream so as they're building new applications, they're ready to take advantage of all the operations and integration that happens downstream. And that's the bigger problem that we're off to solve, and that's really where we're making our big investments. Excellent, all right, Bill, we're out of time. So thanks very much for coming on theCUBE. We appreciate you guys having us here and this awesome venue, so good to see you. Thank you both, good to see you. All right, keep right there, everybody. We'll be back with our next guest. This is theCUBE, we're live from Boston at BMC Day. Right back.