 Live from Las Vegas, it's theCUBE, covering Knowledge 16, brought to you by ServiceNow. Here are your hosts, Dave Vellante and Jeff Frick. We're back, this is Knowledge 16. This is theCUBE, we go out to the events, we extract the signal from the noise. Matthias Egelhoff is here, he's the program director at Siemens AG, Worldwide Conglomerate, Matthias, welcome to theCUBE. Thank you for inviting me. I'm the star of the keynote this morning. We had that little snippet, but again, welcome, tell us what you do at Siemens. Exactly, so let me start, I joined Siemens in the crazy e-business world in 2000, but the journey I'm on currently is started in 2002, when we had the easy question of how many money is spending Siemens on IT? And this is an easy question, but out in those days, it was not easy to answer, so we created a lot of transparency. What is Siemens spending in IT? And we keep on driving that transparency, based on the transparency, we initiated different measure. One was that we are focusing on service management in the infrastructure area. For example, in application, we did a lot of consolidation, and then we did several steps in the optimization, based on the transparency we made. We made some outsourcing deals. We did a global IT organization, and we managed our providers now since 12 years in service management, but we thought, what is the next step? What is the big shot that is coming ahead of us? And then we thought this is about service integration, getting rid of the silos like network, application, data center, voice, and having really an integration layer about the different topics, as well as ensuring that we have end-to-end responsibility from the customer side. And that was the challenge of answering that question. It was just so many stovepipes and so many systems, and so many different systems of record, and is service now that integration layer, or is that? Exactly. So service now is our single service integration platform, and it spans the world from the demand to the supply side, demand, of course, our Siemens internal employees. They were confronted in the old days with several portals. My favorite example is always ordering an iPhone in Siemens was quite a difficult task. You had to order in one portal the hardware, in the other one the SIM card, and in the third, the messaging service. Now we have the one-stop-shop portal called MyIT in Siemens, and there we have a bundle where the customer has not to know which portal, which provider. We have our portal, and the user can just concentrate what he needs, and in that portal he can order and manage his IT and products, as well as place incidents. So that's the demand side. And then for the IT organization, as you said, we had a zoo of products and tools and processes, and now with service management, we have implemented a typical incident problem change, service request, config, demand, contract management, so all the nice IT service management processes, and rolled that out on a global scale. So we have now one process, one organization, able to get the full transparency and the knowledge where is the status of IT and what is the health status. So leading up to 2000, Y2K was spend, spend, spend, spend, spend, and then after Y2K was cut, cut, cut, cut, cut, so now fast forward you've got visibility on the spend, transparency, what's the climate like? Frank showed a chart today cost coming down, but people are investing in IT because it's such an important part of the business. Are you able now to have much better line of sight on how those investments are producing for the business and has that affected your strategy? Totally, and of course to a certain degree, we have to go that path, but we were able to cut the cost dramatically because we could shut down existing tool sets, we could be faster in deploying new services. So before we had the service now, we had basically 15 tool sets that we had to enable to roll out a global service to Europe, North America, Latin, and Asia, 15 tool sets. Now we have one. That is of course dramatically faster in the deployment time in the time to customer, in just enabling one tool set instead of 15. And you retired those other tool sets? Absolutely. And people were screaming and kicking, or was it okay? Absolutely. They were all complaining about the tools, but as soon as you tell them, hey, we are going shut down those tools, they said, hey, that's the best tool we ever had. Don't take my tool, I'll take my tools. Exactly. But convincing them is quite easy with the service now product because it is from a usability standpoint, modern, integrated, so you can catch them easily that they really can shut down the tools. We even helped our providers also to shut down tools because they have basically the same environment, they have not one CMDB one tool set, they also have a fragmented environment. And that's why we told all our providers in saying you can either work directly in our tool or you have to be connected to our tool. But it's no longer that you have your own ecosystem. So we have really generated the ecosystem from the employee that can order something in the MyIT portal, then it's going through our IT service management processes directly to our providers, fully automated. And that's where the providers also had to buy in, in saying, yeah, we also see the benefits of consolidating our tool landscape of getting better quality in our CMDB. That is the win-win situation. What they don't like currently is that we have a much more transparency on how they perform. We don't have to wait until months end, until we get a nice paper of green amber something. We have now in our system real-time data anytime. We can really much more efficiently manage our provider, can really dig into all the details that are available in our tool set. And that's of course a big advantage, but unfortunately the provider has to get used to that the customer is telling them how they provide. That's a little bit, a game changer. And was that, did you tie it back to SLAs or it's just new knowledge, new information that you just didn't have before to help you manage that relationship? No, I mean, of course SLAs are an important topic, but SLA on a monthly basis, big one language, but the experience on a daily basis tells another story. So when we got the SLAs on a month's end, you always get an average okay level, but if you then dig down into this SSA in that country for this customer, you saw some issues, but that is now available in our service now instance. And this is of course a great opportunity for us to manage the results of the providers. And of course also, as we have now our own tool set, our own service integration architecture, we can plug in and out more easily the providers. They don't like that as well, but that is the advantage because I don't see, and that is also a market trend that we get away from the 10 years, 15 year outsourcing contracts, this will be duration times of one year, two year, more cloud based. And to be really that or to support that velocity and speed that we can integrate much more easily the providers, we have to have our own framework, we have to have our own interfaces to the providers to really ensure we can plug in and out very easily. One of the new acronyms that we are hearing at Knowledge this year is Siam, service integration and management. It's been described as sort of son of ITIL, ITIL 2.0, what is from your perspective, Mateus, service Siam? So for me, the big difference is, I mean, when we start with ITIL, I think ITIL was a great achievement in defining the processes, get a better maturity on incident problem and change and how this is done and also to generate the same wording so that you get a better understanding between the providers and the customers. But what we missed in ITIL is the integration. So that we really, if there's an incident and we allocate this incident to a provider and he doesn't feel responsible for it, then we can transfer this incident to the next provider and hopefully he's then responsible and in charge. So really the integration layer is for us very important because the market trend, the competition in the different silos like end user computing, data center application is pretty high. So the value add for the customer is for me really in the integration layer, getting the transparency across all your providers and of course the customers. Can you talk more about sort of how that has helped your business and your provider's business? For example, for the business, I mean, everybody talks about cloud services and all is fancy about cloud, but to really manage cloud services is not that easy because what happened in the old days? The Siemens employees managed their cloud services with the credit card, meaning if they wanted to have a server, they look to Amazon or any other provider, gave in their credit card and then this server was out of the IT. But now with the platform we have ensured that we can manage also the cloud services. Not only the ordering is done via our my IT portal, we are getting also the reports not on a monthly basis but really on daily basis, what is the usage of the cloud services? And then we can either upscale, downscale or even decommission those servers that are no longer needed because if they are managed by a credit card, this is good to manage. And that's why it was a key criteria for this platform to also manage the cloud services. And do you have a module for people to spin up just little dev instances of Amazon? So you've actually brought shadow IT underneath the service now platform? Absolutely, and we have to expand that. So we are at the beginning of the journey but as cloud is picking up and Siemens is also more addicted to cloud services, we made sure that we have two examples of providers that are really working with that platform and that we can manage the whole life cycle of a cloud service. So how would you describe sort of your strategy with respect to service now? We're hearing a lot about obviously, starting in IT service management, we're hearing a lot about other parts of the organization. Where are you guys in that whole journey? I mean, I could also start with talking about the fences stuff outside of IT. But I think two topics are really important. One is there are still a lot of IT service management processes within Siemens, we have to shut down. That means migration of existing tool sets is still a key activity for us because then we can fully leverage our investment we made into our service now platform in bringing in additional tools. So this is one key component that we have to follow. The second one is as we have a high degree of automation we really have to make sure that the system is mature. For example, we are exchanging data with our own application, provider application for incident problem and change 13 million data sets per month, that's quite a big number. And if that data is not right, if we have mixed up data, the whole chain breaks, the whole automation doesn't work. So we spent also a lot of effort in hardening the system, spending a lot of time in cleaning up the data that we are really sure we can also achieve the high degree of automation. Because it's always nice saying high degree of automation, digitalization, but getting there is an awful work because this is painful getting the right data, cleaning the data and having the right data. And as you do one, then you just find your next point of failure, right? As you optimize to one, then you move, it's a classic production line kind of a problem. And that's why I say migration, maturing the system is one key. Then the third topic is of course we will bring in more providers, more services, more processes. We just downloaded from the ServiceNow App Store an application called Mobicord to manage our telecom expense management that we have also there more transparency over the world. And then of course we are in discussions to expand that platform also to facility management or HR. But this will take some time because we still have in the HR facility area let's say best of pre-applications. And there it's hard to compete against the integration layer in saying, okay, but if it's integrated, we have all the incidents in and all the data. So that balance is not there, but I heavily believe that this will come as ServiceNow is more maturing in the HR facility area or whatnot. And then I think the ratio looks different and it's more promising also for Siemens to go beyond IT. So as you build out this integration architecture I have to ask you about security. And my question is not one of a technical nature, it's one of sort of a philosophical nature. How is the conversation shifting? For decades we've spent money on the perimeter and protecting and we'll keep the bad guys out. Now we all realize they can't keep the bad guys out. It's how you respond to the bad guys. And it seems as though ServiceNow could potentially is in some cases solving that problem. How has the security conversation changed within your organization? Yeah, I mean security is high on the agenda with all the vulnerabilities you hear in the news and also the day-to-day cases. So security is a top agenda point. And we had also some hard discussions within Siemens because the first reaction of Siemens was we have to have ServiceNow on-premise. We have to have our own nice server below the table. And then we had some good discussions with ServiceNow. We had discussions with other customers where they said no, we trust in the SAS solution. Then we did some penetration tests. We did some assessment on-site. And that's where we said, OK, we will go with the SAS solution also for Siemens. And I'm pretty happy that we made the decision because now we don't have to focus on the operational topics. We can really focus on the content, bringing in new services, bringing in new providers in rather discussing upgrading servers that you need to have the performance, et cetera. So that is also the next step we have on the agenda to bring in the vulnerability, infosec topic, also to our platform. And is that the responsibility of one group, a group of gurus, or is it a shared responsibility across the business? What should it be? It is a shared responsibility because we are carefully watching how the ServiceNow CMDB is growing because we are collecting a lot of data. We see exactly what is going on the demand side, so what are the customers ordering? What kind of incidents are they opening up? We see exactly how our IT is doing and, of course, the provider data. We have all the CIs in our database. And as we grow, we grow the data that is in our system. And that is, of course, a huge value, but also security-wise, also a balance you have to make. All right, my last question, I'll give you the last word because we've got to wrap, just knowledge, your experience here, things you've learned, anything that surprised you, or delighted you, share your experience. No, I think the knowledge is really a great opportunity to meet other customers, to see what they have on the agenda, what they're working against, and also it's a good opportunity to see what are the hot topics for ServiceNow, how does that match with our agenda that we have, with our pipeline. So we have a lot of discussions in the knowledge, and that is a great value. Great, Mattias, I think I'll have thanks very much for coming to theCUBE, appreciate your time. Thank you. It's good to have you. All right, keep it right there, everybody. This is theCUBE, we're right back. We're live at Knowledge 16.