 Live from the MGM Grand Hotel in Las Vegas. Extracting the signal from the noise. It's theCUBE, covering Splunk.com 2015. Brought to you by Splunk. Now, here are your hosts, John Furrier and Jeff Rick. Okay, welcome back everyone. We are here live in Las Vegas at the MGM Hotel in Las Vegas for Splunks.com. It's the Silicon Angles flagship program theCUBE where we go out to the events and extract the signal from the noise. It's day two of, two days of live coverage. I'm John Furrier, my co-host, Jeff Rick. Our next guest is Gito Schroeder, SVP of products. Always love to talk to the product guys, as we always get the scoop. Splunk is still a product company. Gito, great to see you again. Thanks for coming on theCUBE. Good morning, John. Good morning, Jeff. I love you guys. It's always fun to be here. First time. This is like waiting for this interview all day. Can't wait for Gito, yeah. It's one of the best times, you know, of my stay in Las Vegas every time. I'm sure you say it to all the Q-Posts. That's us. Four years running. Seriously, we love talking to you because you're the highlight of the show for us because the products was what makes Splunk great. Great customers who use the product. You're great product centric, customer centric. And this is where all the action is. And you guys have grown significantly. So give us the quick product update. What's changed from last year to this year real quick? Well, you know, first of all, I have to say I'm super happy with all the show went and it's kind of amazing. I mean, every year when I'm leaving, I'm asking myself, wow, you know, we set the bar pretty high and how can you ever top it in the next year when you're coming back? And so, you know, despite the fact that I'm building that stuff with my team and I should know it, I'm myself also, you know, kind of blown away by the lineup of new stuff that we had. And, you know, I think we made really a lot of progress in all of the areas that are important for us. You saw the announcement of the new enterprise release, 6.3, I think that's a really super strong story. So the performance improvements that we had. You know, Cisco tried it already out and benchmarked it and, you know, we were also blown away really by the improvements that they have seen. You saw in the demo that Nate did then also the, you know, event collector which is I think really nice for IoT type of scenarios, for DevOps type of scenarios. So I think that's a big improvement. How do you get data into Splunk without our forwarder? So I think that's a really good story. And then, you know, the things we just did around making the product more enterprise ready. So what do you need for high availability? How do you manage larger Splunk deployments? So the DMC story, this distributed management console that we have and the alerts. How can you integrate Splunk, the enterprise platform, you know, in a better way with other systems that our customers have. So, you know, open automatically a service ticket and service now or, you know, send an email right into your, you know, chat environment or things like that. So that was, you know, our big 6.3 story. Then you saw what we are doing in security. Also, I think big release enterprise security 4.0. I mean, we did a couple of things around workflow there which I think are important. So this, you know, timeline and investigator journal which I think makes it really a lot easier for our customers in their security practice to share insights internally with their, you know, people who are involved in these type of activities. And the other big story was of course our Caspita acquisition which kind of brings us really to a completely new level in terms of, you know, intelligence, how are we analyzing customer data, large amounts of customer data in an intelligent way. So with this machine learning capability so that we got from Caspita. And then the last, you know, big story to top it off and that was, you know, kind of the final in the fireworks we unleashed that was really our IT service intelligence story which, you know, I think allows our customers to do things that they might have done in the past much, much easier. So I was sitting actually this morning in a panel with some of the customers who were, you know, our pilots and early adopters of it. And, you know, I think it was just spot on what, you know, they gave us as feedback. So, you know, kind of, I mean, one of the customers, you know, was actually implementing something themselves and it took them, you know, probably two or three months and he said, hey, you know what? The great thing is, this all works much, much faster now. The only downside is, you know, we kind of spent these two or three months before in our own project but, you know, that's fine. We have now a much, much easier way to get there. Well, I want to ask you, congratulations. First of all, it's amazing. It just took up three minutes of the awesomeness that you guys just launched and it's great. But no, that's great success and hats off. And congratulations to you and the team on the product side engineering. I got to ask you quick stats. What's the size of the team now? What's the growth? I mean, you were last year, you started out with my first interview, you had 100 people. Yeah, right. So, including, you know, the Caspita team, we have an engineering, almost 500 people now. So, you know, over the three and a half years, I'm with the company and three years between the interviews, you know, we kind of grew it five times and, you know, it kind of shows you the momentum that we have and also, you know, our capabilities evolve. But, you know, I think it's quite fascinating. I mean, when I came in, the company was eight years old. And I think, you know, right now with the 500 people we can execute in a year, probably as much as the company, you know, could do in work amount over the first seven or eight years of the company. And that's just fantastic, you know, to point the machine now at the next target and we're just rolling. So, how do you do that? As a senior vice president, you're the leader of the troops. Product group is really important. And the big discussion in Silicon Valley, certainly that we're hearing as the bubble starts to kind of slowly burst a little bit on the private companies, is managers who can scale organizations. We had the Facebook scale conference. The scale is a large-scale problem, Splunk solves technology-wise. Now, the people equation is interesting. How do you do it and how do you keep the talent? So, I mean, things are certainly getting a little tougher in the day. And I definitely see this every day that there's quite a bit of competition around talent. And, you know, my boss or CEO, Godfrey Sullivan, I mean, he's in the region much, much longer than I am. And he told me, you know, a couple of months ago, hey, you know, what if I think back about the years I've been in the Silicon Valley? I've never, you know, have seen a period where we had so many really big successes going on at the same time. I mean, in the past year, maybe one or two companies that were kind of rolling, but now you have, you know, you have Apple, and Google, and Facebook, and LinkedIn. Uber, Airbnb, all these companies. It's all over the place. And so that creates a little bit of strain on the system. And we are competing with everyone. And, you know, I think what has made us so far successful in competing with others that are sometimes at a larger scale than us is that I think we have interesting work to offer for people. And, you know, I think the new generation, that's definitely part of, you know, I would say their life plan. You know, what is the attraction at Splunk? And I think we have some, you know, compelling projects. And we also have a compelling culture that, you know, still attracts people. And then the other thing that we did relatively early at Splunk was really diversifying a little bit to talent pools in which we are tapping. So when I came in, we had already a small, you know, team up in Seattle. I had a lot of Microsoft people there with the Caspidic position. We got now also, you know, some feet on the ground in Vancouver. And, you know, if you read my bio, I had actually a large team there in the past during my SAP times and know some talent there. So I think that's good. And then we also went offshore, you know, two and a half years ago, starting a team in Shanghai that has meanwhile grown to 60, 70 people. And that helps too, you know, kind of have some feet on the ground and other talent. So these beehives, these are clustered, but they're working for you. You're okay with that? Yeah, I mean, you know, we want, if we go to a location, I want to have some critical mass there. I don't want to have just, you know, 10 or 15 people. And we have made some really strategic decisions. And then you might have seen that we actually signed the lease for, you know, a bigger facility down in San Jose on Santana Road. And I think that also allows us to diversify a little bit better in the day area where we have been more focused on San Francisco and the North Bay so far. And then you've had a pretty steady cadence of acquisitions too within your product development cycle. And it seems to be that the integration is working pretty well. Those things are not being sucked in and they go away. But you're really turning those acquisitions into products going forward. So how are you kind of evaluating when to buy, when to develop? You know, and we've certainly do this in a strategic way. I mean, we have a backlog for, you know, I would say M&A activities. Like we have backlog for our development activities. And you know, I mean, there are multiple angles. So we look at, I mean, we look at talent in some cases. So, you know, if you look at the metaphor acquisition up in Vancouver, you know, that was, I think a little bit more focused on getting the right talent into the company. Whereas I think the Caspita acquisition was clearly, you know, giving us a new product and a new SKU that is ready to be sold. And the other thing, if you look at our M&A activities, I believe you will also see that we are kind of ramping it up there. You know, we learned, I mean, first two acquisitions, BucSense and CloudMeter were relatively small, tuck-in acquisitions. And I think, you know, with the Caspita acquisition, we definitely upped it quite a bit. Those tuck-ins are good product-oriented acquisitions. Oh yeah, yeah. It's still a white space. So what are some of those white spaces? I mean, you're transitioning to the cloud. You have some areas you have to move fast on, organically and inorganically. Well, what do you look at there? What's the opportunity? Where does Guido say and Godfrey say, we need to fill some of these holes? You know, I'm not quite sure if we want to, you know, roll it out in all detail in the public. What are our next target is? Ah, come on. We almost got you on that one. Okay, you almost got me. But you know, one of the gaps we definitely felt is machine learning. So we kind of, you know, hit two targets in one go. And I think, you know, that is really spot on with what we needed. And you know, I think visualizations remain important. Data acquisition remain important. You know, maybe we need also better, you know, I would say collaboration capabilities and capabilities to actually disseminate information. I mean, in the moment, I would say people, the product is not as sticky as I would like it to be in terms of people doing work beyond just executing the search and looking at some of the metrics that they're working on. And we did already a little bit of that. You know, if you look at enterprise security that we built around our analytics, some, you know, workflow capabilities that people can actually do more work inside the product. The other piece is the application product piece versus the platform piece. Because as we look around the room here, you got a really vibrant ecosystem and the logos on the booths are not small startups. A lot of big companies here. So as you're looking at your product strategy, you know, where you're either going to build a solution or an app or, you know, you're really more providing a platform letting partners plug in the pieces. How do you do some of those evaluations? Well, I mean, if you look at what we have been communicating now about our portfolio, and I think this is really pretty consistent now for the second year in the row, you see our platform and platform-like products which are enterprise-hung, Splunk Lite, and Cloud, of course, which provides the same capabilities, but just as a SaaS delivery. And then we have these different market segments where Godfrey, you know, hired additional leaders like Haiyan Song and Rick Fitz and Mark Orson to drive those. And you know, I think they're still in that map here that we communicated publicly. I think there are still areas where, you know, we are not as far down the road as we are with security and IT operations. And even with IT and security, you know, if you break those markets down, they are also, I would say, much more diverse where we have covered maybe, you know, 30, 40% of what that market constitutes. So in security, you know, I think it's our seem story and, you know, now we do a little bit of the behavior analytics, cybersecurity, but how about, you know, fraud and compliance, which are other, you know, I would say areas and applications and security. And you will find the same, I would say, additional, you know, verticals in the IT market, where we have APM, for example. And I can't say that, you know, we are fully covering this today. We have some footprint in those markets, but we, you know, don't have in all of those areas, I would say yet a dedicated solution. And I mean, that's definitely the other thing that is going on, that we started now to build really, you know, I would say serious and fairly complete end-to-end solutions for each of those markets. So how about a transition to the cloud? Yeah. And I want to get a product perspective because now you have the cloud out there. So first share your views of Splunk's transition to the cloud. Obviously, cloud is key. People are moving to the cloud in droves. You have private and public. Are you guys cloud agnostic, hybrid, public, private? Do you care? I mean, Splunk is a unique platform, but what does the transition to the cloud look like? What does that mean from a product standpoint? So, you know, just to maybe repeat what the product does and how it fits in the architecture. So, you know, we position ourselves really as the only hybrid play in this market. So we have an on-premise product that has been very successful for many, many years, and cloud is gaining for many reasons, a lot of traction. We have meanwhile also multiple 100 customers that are adopting the product with the same range of, I would say, sizes in deployments that we see in on-premise as well. So we have meanwhile, there are also, you know, a couple of terabyte sized customers. So that's kind of our story and cloud and on-prem deployments actually integrate pretty well. So that's our hybrid story. Well, and you know, I mean for us clearly what we see is there are benefits for both our customers and us as a software vendor as well for our customers. It's clearly the faster adoption story. Don't worry about the hardware. Don't worry about the expertise and you heard this multiple times from some of the customers that we had taped there in the keynote, let us focus really on our business that what we are good at, but you are much, much better Splunk in doing this for us. And I would also assume that over the years, at some point we get to economies of scale where there isn't just anyone else out there in the industry or also our customers themselves that have more expertise than we have they are deploying our software. And you know, I think we will also have some economies of scale in terms of, you know, efficiencies on what type of hardware we are deploying it and managing it at scale. So that's I think from a customer perspective from a software vendor perspective, our story is really that we believe and we see this already that we have much, much better insight what customers are actually doing where they are sometimes struggling with the product and need changes or more help from us. And you know, last but not least, I think it allows us also to innovate at a different pace. So one of the things and I don't know if we, you know, I have communicated this that broadly yet but after the 6.3 enterprise release, we are actually switching to a quarterly release cadence which is a big, big difference. So in the past, you know, if you look at our release history, you know, we used to deliver more on a yearly cadence and one of the things we have done in addition to the development on 6.3 was really retooling the whole engineering shop in a pretty massive way. So we changed our code repository, we changed our continuous integration system. We did a lot more test automation and all these things to, you know, kind of deliver in a much more continuous way what other, you know, I would say native cloud companies like the Facebooks and LinkedIn are doing for us. That's pretty significant. So we had a strategic initiative to get to that cadence and I'm sure over time you're going to crunch it down from quarterly to monthly to whatever. And I have to tell you, I love this, to deliver software this way because it just creates a lot more transparency. I mean, if you have a, and I had, you know, in my past life with SAP, we had some projects that were really, you know, very lengthy piece, two and a half years, three years. And, you know, it creates a lot of difficulties. So if you have very large, you know, kind of pieces you want to move through your development pipeline, they become a lot more unpredictable and there is a lot more risk involved to, you know, kind of integrate in the end everything. And with smaller pieces, smaller chunks of work to move them through the pipeline, everything becomes a lot more predictable and it's also a lot, lot easier to change your agenda if you get actually feedback from your customers and say, hey, you know what, we are maybe on the wrong path there. Yeah, and let's change this. That's not that easy to do if you commit to a three year development cycle. Yeah, that's good news. And I think it allows us to move faster and also not have that much software and things that, you know, are basically ready and work that's being done sitting on the shelf. Right. So I mean, if you develop for a year, there's a lot of stuff accumulating for some time that the customers don't see. And I think it's just a much healthier process and the end game I think would be what other software companies are certainly doing already to have continuous delivery and, you know, more like, especially in the cloud, call it a perpetual beta where we just chip, you know, in a very, I would say controlled way, small pieces of software and, you know, kind of get them into production very quickly. How do you keep, I asked you this last year, I want to ask you again, is how do you keep the focus? Because one of the things that's actually your strength is the customer's focus and the customers bring you into directions. On paper, it looks like you're defocus, why? Hey, you got to focus, you know, focus, focus. But in reality, you're building a product based on customer demands and you've got a universal use case. It's not like, it seems to be a lot of different use cases and you're moving up the food chain, you're in business analytics now, you're at security. These aren't, these are like top line, board room conversations. So how do you manage the focus? Well, one thing, you know, I believe we did right is that we evolved our operational practices and I think we have a pretty good, you know, early warning system and visibility on what's actually going on on the ground in terms of work that's being done and when it's coming. And then the other thing, you know, in terms of what happens in the board room or in the, in the E-staff, on the E-staff level, is to some extent, I think some friction in the system is probably intended by setting up these market groups which I think makes my life a little bit more complicated on the platform side that I have so many different stakeholders now. So I have, you know, I am song as a stakeholder, I have Rick with the IT markets as a stakeholder and that's a little bit of a, you know, I would say tricky dance that I have to manage. They are to, you know, kind of keep my stakeholder satisfied but, you know, I believe it's the right way to do and the friction is actually somewhat healthy and we just have an awesome management team. We have an awesome CEO who is just super experienced and, you know, with all that discussion and friction that happens, I still believe that we are always able to do the right thing. Yeah. All right, and so what's the big guiding principle? So when you have your vision, when you do your product and engineering team meetings, what's the guiding principle that you share with the troops to that audience? What's the talking points? What are the three things you say to them? You know, we have also internal events at the company which is our SK or sales kickoff, which is more a company event. It's not just sales, but it's also, you know, for the engineering teams and just, you know, happens always in February where we have the big kickoff and I would say the one thing that you hear me consistently talk about and screaming there on stage is delivery. So one of the things I learned from, you know, one of my bosses and role models in the past, the one thing that a product organization is about is delivering product. And so if you're asking, what is your big principle and guiding thing? Deliver, share. You know, I would say, yeah, delivery, delivery. You know, there's this Steve Barmer scene where, you know, he was running quite on stage, developer, developer, and you hear me, you know, doing the same, but just was delivery, delivery, delivery. So I think what our shop is about. And it needs to be. Well, yeah, you got to ship code. So thanks for sharing. Final soundbite for you to share with the folks. What's the vibe this year? Now, people who didn't make it here or watching this video live or on demand, what's the vibe this year in the show? How would you categorize this years.com? Well, first of all, you know, I think everybody's amazed how big this has gotten so quickly. I mean, you really see the increments in the show. Also here on the partner floor, how many new, you know, partners and logos out there. So that's definitely something I see quite consistently. Well, and I don't know. I mean, the good thing is, I think the crowd hasn't changed. I mean, if you attended the party yet, you know, Splunk customers have been always very passionate. Yeah, they run around here with their shirts. We have a pretty casual way, you know, of interacting with our customers. And I think, you know, that's a good thing that I don't think that this has changed. The customer involvement is just spectacular. So Godfrey mentions this, you know, that we do these local events as Splunk lives and to some extent, you know, we kind of did the best of best, bring the best customer presentations also, you know, globally, here to Las Vegas. And that just continues to be really an awesome recipe to hear what customers are doing and, you know, our customers are learning from their peers. I think that's just awesome. Guido Schroeder, SVP of Products. Thanks for taking the time, sharing your insight and your data on theCUBE. We're ingesting a lot of data here on theCUBE. I hope you have one next year again, too. Oh, absolutely. Yeah, wait, we're Splunking all the data here on theCUBE. We'll be back with more after this short break. Okay, thanks for having me.