 From the Walt Disney World Swan and Dolphin Resort in Orlando, Florida, it's theCUBE. Covering Splunk.com 2016, brought to you by Splunk. Now here are your hosts, John Furrier and John Walls. And welcome back here on theCUBE, the flagship broadcast of SiliconANGLE TV where we extract the signal from the noise. We're live at COM 2016 here in Orlando, Florida on the show floor, a lot of activity, a lot of excitement, a lot of buzz and a really good segment coming up for you here. Along with John Furrier, I'm John Walls and we're joined by two gentlemen from the Herchivet Group. Robert Herchivet, good to see you, sir. Greetings, thank you for having us. Adif Gari, a senior VP at the Herchivet. Good to see you, sir. Yes. First off, Robert, congratulations. Newly married, your defense was down for a change and congratulations on it. Oh, thank you, it was wonderful. It was a great wedding, lots of fun, but, you know, casual and a lot of, just a big party. Yeah, it was. It looked like pictures were great. The pictures were great. People obviously know you from Shark Tank, but the Herchivet Group has been really laser focused on cybersecurity for more than a decade now. Tell us a little bit about, if you would, maybe just paint the broad picture of the group, your focus and why you've drilled down on cyber. Yeah, I've been in the security business for about 30 years. I actually helped to bring a product called Checkpoint to Canada, firewalls, URL filtering, that kind of stuff. And we started this company 12 years ago and our vision was to do managed services. That was our vision. No other customer's vision, but our vision. And we thought we'd do five million in sales in our first year and we did 400,000. The market just wasn't there, sim technology, log aggregation, isn't what it is today. I mean, I think at the time it was in vision. What was it called? Yeah, it was RSA vision. In vision, and then RSA bought them. That was really the first go-to-market sim. Then you had ArcSight and Q1. So our initial business became around log aggregation, security, writing parsers, and then over time it grew. It took us five years to get to six million in sales and we'll do about 170 million this year. We went from a Canadian company to really a global entity. We do a lot of business in the States, UK, Australia, everywhere. But you're certainly a celebrity. We love having you on theCUBE, our little shark tank in and of itself. But you're also an entrepreneur, right? And you know the business. You've been in software, you're in the tech business. So you're a tech athlete, as we say. This world's changing right now. And I'm striking you get a lot of pitches as entertainment meets business. But the fact that the entrepreneur activity, certainly in the Bay Area and Silicon Valley where I live and all around the world, is really active, whether you call it the programmer or culture, or just the fact that the cloud is allowing people to start companies. You're seeing a surge in entrepreneurship in the enterprise, which is like, was boring in the past, you know? You mentioned checkpoint, you're old days. But now it's surging. What are your thoughts on the entrepreneurial climate? I don't know if the enterprise entrepreneurship element is surging. By the way, I'm going to say intrapreneur, just the way I say it. Cuban always makes fun of me. We don't say it like that in America. I'm like, screw up. That's how you say it. I was like, I want to say it the way I want to say it. Well, internal entrepreneurs, right? Other, what do you mean by intrapreneurship? Well, no, I'm just, it's just the way I say it. It's a Canadian thing. Yeah. But business to business enterprise, we've always been in the enterprise business. So we're seeing a lot of growth in that area. A lot of VC money's going into that area because it's more, you know, you can measure that level of return and you can go and get those customers. But on our show, we're a bubble. We don't do a lot of tech deals like we're talking because it's boring TV. Tech people love tech. Consumers love the benefit of tech. You know, no consumer opens up their iPhone and says, oh my gosh, I love the technology behind my iPhone. They just love their iPhone. And our show is really a consumer platform that is- It's on cable TV, so it's got a big audience. So you got to get the wide spot. Well, we're one of the highest rated shows in that we're television, eight years, three Emmys. You know, it's a big show now. And what we've all learned, because Mark Cuban and our tech guys, when we used to look for stuff we know, we don't invest the stuff we know anymore. We invest in slippers, ugly Christmas sweaters, food problem. Because if you can tap into that consumer base, you're good to go. So bottom line, has it been fun for you? I mean, the show has been great. It's been, obviously the awards are great. Has it been fun for you? What's it been like? What's the personal feeling on being on the Shark Tank? You know, filming is fun and hanging out is fun. And it's fun to be a celebrity at first. Your head gets really big and you get only good tables at restaurants and, you know, there's no sport- Recognize you. You can just be on the cube. I get to be on the cube every day. You get to go everywhere. But after a while, it gets pretty dry. But it really helps our brand. We compete typically against IBM, Verizon, and you know, the CEO of IBM, you're not going to see them selling you security. Well, I know they're spending a lot of cash on Watson trying to get that to work, but that's a whole other story. But let's get down and dirty on Splunk. You're here because you're doing a talk. Give a quick take on what you're talking about. Why are you here at dot-com for Splunk? Yeah, we're doing a talk on data transformation. And you know, the world today is about data and the amount of data points and access points and the internet of things, it's just exponential growth. You know, the stat I always love, and it tips her at a thousand times, is there's roughly 3 billion people on the internet today and there's roughly 6 billion or 7 billion IP addresses. By 2020, according to the IPV committee, there'll be 5, 6 billion people connected and hundreds of trillions of IP addresses. And the IoT is going to add more surface area to security attacks. I mean, it used to be the old days. I mean, in Checkpoint, the moat, the firewall. Yeah, well, the idea of the perimeter is gone now. There is no such thing as a perimeter anymore because everything you can access. And so a lot of work in that area, and all of that comes to data and log aggregation. And what we've seen for years is that the SIM vendors wanted to provide more analytics. But if you really think about it, the ultimate analytics engine is Splunk. And Splunk now with their ESM module is moving more into the security world and really taking away market share. So we're very excited by, we have a great relationship with the Splunk guys. We see nothing about future. And you guys are using Splunk and working with it, with your customers? We do. We've been using Splunk for a while. We have a private cloud, tell us a little bit about it. Yeah, so yeah, we eat our own dog food. So not only do we sell Splunk, but we also use it in-house. We've been using it for over five years. It powers our analytics platform, which is a fancy way to say, reduces the noise from all the different clutter, from all the IOT, from all the different type of alerts that are coming in. Companies need a way to filter to all that noise. We use Splunk to solve that problem for us internally. And then of course we sell it and we manage it for global 2000 customers, Fortune 100 companies all over the world. Tell us about the role of data. Because data transformation has been a big buzz where it's a holistic message around businesses digitizing getting digital assets in front of their customers. We have a big research division that does all this stuff. But at the end of the day, the digitization of business means you're going to have to go digital all the way. And the role of data is not the old data warehousing days. You fence the way, pull it in. Now you need data moving around. You need organic sharing of data. Data is driving policies and new pattern recognition for security. How do you guys see that of on? How do you talk to your customers? Because in a way the old stuff can work if you use the data differently. You're seeing a pattern like, hey that's an algorithm I used 10 years ago. But now with new data, that might be workable. What are some of the things that you're seeing now that customers are doing that you talk to that are leveraging data like Splunk in a new way? Well that's really where Splunk has so much value because a friend of mine is the Dean of USC and he has a great saying. More data is not necessarily more information. And so the mistake that we see customers making a lot is they're collecting the data but they're not doing the right things with it. And that's really where Splunk and that level of granularity can add tremendous value. Not just from logging but from analytics and going upstream with it. Yeah and also to that point, it's just automation. There's too much data. Great point. And it's only going to get bigger, right? Based on the rest that route, Robbie ratted off. Now we need some machine learning analytics to move it further. And you know all points aside, machine learning isn't where it needs to be right now. Today in the market it still has a long way to go. I would call it a work in progress. But however, it's the promise, right? Because there's too much data and to secure it, to automate behavior is really what- And it's as simple as sore. The innovation strategy is coming to take in and growing with mobility, growing the cloud, increasing the surface area, IOT. But the supervised areas of the enterprise were the doors, right? You know, locked the doors and the perimeter is now dead. So now you have an unsupervised environment in the enterprise at risk once the hackers get in. They're having their way. The internet is like a kindergarten playground where there are no rules and the teacher went home at lunch. You know, that is the internet. And high school. I think we have to go to high school. You can go to high school. And you have different age kids in there. It's chaos. Edmund. Very well said. The internet is chaos, but by nature that's what we want the internet to be. We don't want to control the chaos because we limit our ability to communicate and that's really the promise of the internet. It's not the responsibility of the internet to police itself. It's the responsibility of each enterprise. So what new things are happening? We're seeing successes. We're certainly, we're reporting on companies that are being successful. The ones that are doing the reverse of what was once done or said differently, new ways of doing things. Throwing out, kind of trying to do a hybrid legacy approach to security, seeing the new ways, new things, new better cat and mouse games, better honeypots, intelligent fabrics. What do you guys recommend to your customer and what do you see in your top? This digital transformation is definitely a real trend and security is the catastrophic time bomb that's ticking for all customers. So that's, it dwarfs compliance, risk management, current. Well, I don't know if that's necessarily true that it's a time bomb. You know, the number one driver for security still is compliance. We sell stuff, people don't really want to buy. Nobody wakes up in the morning and says, gee, I want to go spend another $5 million in security. They do it, frankly, because they have to. If none of their competitors were spending money on security, I don't think most enterprises would. I mean, it's whenever you have to do something because it's good to do, you have a limited upcycle. When you do something because there's a compliance reason to do it or bad things happen to you, you're really going to do it. You don't think there's consumer pressure then to have to do this, otherwise it's amazing? Interesting stat, the Wall Street Journal did a study and asked 1,000 people on the street corner in New York if for a hamburger, they would give away their social insurance number, their home number, and their name. 72% of people gave out that information freely. That'd be a good hamburger. Back to your point though, I want to go. So I think consumers have an expectation of security and how they police that is they simply go to somebody else. So if you're my retailer and you get breached, you know what I'm going to do? I'm going to go next door. But I think that the average consumer's expectation is security's your responsibility, not mine. So on the B2B side, I wanted to push you on something that I kind of disagree with. If compliance, I agree, compliance has been a big part of data governance and data management. PCI has been the biggest driver in security in the last five years. No doubt. However, companies are now sharing data more with other companies. Financial institutions are sharing core data with other financial institutions, which kind of teases out the trend of, I'll give you some of my data to get to fight the fraud detection market because it's a trillion dollar problem. So you start to see points of growth where, okay, you start to see people go outside their comfort zone on compliance to share data. So we're trying to rationalize that. Your thoughts, I mean, is that an indicator? Do you see that as a trend? Or I mean, obviously locking down the data would be the deal with it. I think it's challenging. I mean, we were at the president's council on security last year at Stanford. And, you know, President Obama got up there and made us some passionate speech about sharing data, that for the goodness of all of us, we need to share more data and be more secure. I got to tell you, you heard that speech and you're like, yeah, baby, I am going to share my data. We're all going to work together. Right after him, Tim Cook got up there and said, I will never share my data with anybody in the government. And you heard him and you're like, I am never sharing my data with anybody. There's a tension there, right? This is a natural tension between government and enterprise. I think there's also a natural tension between enterprises. There's competitive issues, there's competitive pressures. Apple certainly is a great case. They are like, bored their data. Well, this is the dilemma, right? You want to have good policy, but innovation comes from experimentation, right? So like, it's a balancing act between, what do you kind of do? How do you balance it? Yeah, you know, it's a great time to be in our space. I mean, look at this floor. How many companies are here? Splunk is growing by 30%, the show itself. 30% per year. They're going to outgrow this venue next year, and they're going to have to go probably Vegas or somebody. I think that's exciting, but these are all point products. The fastest growing segment in the computer business is managed services, because the complexity in that world is overwhelming, and it's extremely fragmented. I was talking about your business right now. What are you guys currently selling? How many employees do you have? What's the revenues like? What's the product mix? Yeah, so we're a global company, so we have 10 offices worldwide, close to 300 employees. We're one of the fastest growing companies in North America. We sell, our focus is managed security services. We do consulting as well as, it's in a response remediation, but the day to day, we want your logs. We want to do monitoring. We want to help. So you guys come in and do deployments and integration, and then actually manage security for customers? We do the sexy of getting it in, and then we all do the unsexy of managing it. I do not think sexy. It's all sexy. That's why the kids are all sexy. It's a household name. We have celebrities coming on now. Soon we'll be on cable. That's right. This will be a primetime show. It's funny, I got approached by a network. I can't tell you who. Big network with a big producer to do a cybersecurity show. And so they approached me and said, oh, we think it's going to be so hot and such a topical thing. So they spent the day with me and our team to watch what we do. Pain drive. Pain drive. Pain drive. Pain drive. So you guys do anything besides sit on the computer? You have a meeting, you look at a monitor. It's not much of a show. Oh my God. It's not a big network TV yet. Someone has to die in the end. That's a big network TV. But I mean, there's a problem. There's 1.4 million cyber jobs open right now. And that's not even including any data science statistics. So we're reporting that. I'm sure it's the same thing in data science. It's the same problem. How do you take a high skill that there's not enough talent for, hopefully computer science, educational, that stuff happens, and automate it. So your point of automation. This is the number one problem. How do you guys advise clients? What the hell do they do? You know, automation's tough. We just had this meeting before we got on here because in our mandate service, it's people driven. We want to automate it. But there's only a certain amount of automation you can do. You still need that human element. If you could automate, somebody could buy a product and they're secure. Machine learning isn't where it's supposed to be, right? Every vendor aside. Machine learning is not where it needs to be. But we're getting there. But having succinct automation helps solve the cybersecurity labor shortage problem because the skill level that you hire at can go lower. So you reduce the learning curve of who you need to hire. That's a great point. I think the unsupervised machine learning algorithms are going to become so much smarter with the Splunk data because that's a tough nut to crack because you need to have some sort of knowledge around how to make that algorithm work. The data coming in from Splunk is so awesome that that turns that into an asset. So this is a moving train, right? This is a big time. Okay, go step back first. I want to change gears, Robert. I want to get your thoughts because, you know, since you're here and you do a lot of picking the stocks, if you will, on Shark Tank, in the tech world, our boring tech world, that's we love, by the way, so. We love too. How do you, as someone who's got a lot of experience in the cycles of innovation, look at the changing digital transformation vendor landscape. Splunk. Somebody's like Oracle trying to transform. Dell bought EMC, IBM's pivoting. Amazon is booming. How do you look at the new digital enterprise? And how do you look at that from a, if you're a customer or an investor, where's the growth stocks? Where's the growth companies? What's the growth parameters? What's your thoughts? One of the reasons I love our industry, why I got into tech was I had no money. My dad worked in a factory. My mom was a receptionist. You know, in the old adages, to make money, you need money. To get ahead, it's not what you know, it's who you know. I didn't know anybody. And the value of tech is tech transforms every three years. We follow these cycles where we eat our own young and we throw away stuff that doesn't add value. Tech is the great equalizer, because if you don't add value, nobody cares. You're out. And you know, when I'm starting out as a guy with a small company, I love that. We're going to kick ass, we're going to add value. Now that we're a little bigger. Well, when you're a young company, you can eat someone's lunch, because if they're not paying attention, you can come in. For sure. It gets harder as you get bigger, because now we're the big guys that somebody in their basement is trying to take out. But you know, we see tremendous innovation in security. If you look back three years, who are the leaders in the SIM space? ArcSight, Q1, Nitro to a lesser degree, and Envision. Envision, right? Right, I say. Today, does our say have a strategy around a SIM? They have Net Witness, you know, Security Analytics, which is kind of a SIM. Q1 is in the throws of the IBM machine somewhere in their gut, nobody knows. ArcSight, who buys ArcSight anymore? It's so complicated. Who's the leader? It's one. So back to the old classic team, obviously have good people on the management team. Product matters now in tech, doesn't it? Absolutely. More than ever. Obviously balance sheet. Okay, just get back to data transformation. So, you know, data is so critical now. And again, it's more from that data warehouse, which still is around, to real-time data, having value, moving it into different applications. Question is, how do you value data? I mean, you can't put it on the balance sheet. I mean, people value factories. I mean, GE said, you know, we have all this investment in machines and assets. They worry about someone getting their data and doing a Judo move on them. So data is truly an asset that's flying out of their network. How does companies value data? Can it ever be on the balance sheet? How do you look at that? I don't think data in and of itself has any value. It's the effect of the data that has the value. And it's a very singular. It's what somebody does to it. Whatever the data is worth to you from a business perspective, it's worth fundamentally more to an outside bad party. Because they can package that data and sell it to a competitor, a foreign government, all those kind of places. So it's the collection of raw data and applying it to something that has meaning to a third party. So it's like thermodynamics really, till it's in motion, it's really not worth anything. I mean, that's what you're saying. Data is data. Until it's put to work. I don't think you're ever going to see on the balance sheet as a hardcore value because it has to have a transformative value. You have to do something with it. It's the something. So pretend you're in a shark tank and you're a data guy and you say, boss, I need more budget to do security. I need more budget to expand our presence. And the guy says, sorry, I need to see some ROI on that data. Well, I just have a gut feeling that if we move the data around, it's going to be worth something. Oh, I passed. You can't justify the investment. So a lot of that coming over simplifying that, but that's kind of like a dialogue that we hear in customers. How do you get that? When I always tell CIOs and CISOs, it's challenging to get budget to do a good thing or the right thing. It's easier to get budget to do the necessary thing. And so necessary is defined by the nature of your business. So if you make widgets and you want to get more budget to protect the widgets, no one cares. No one's sitting around all on my widgets safe. They are to a certain degree and they'll have limited budget for that. But if you go to them and say, you know what, we have a risk that if somebody can attack our widgets, we're going to be down for three days. And being down for three days or three hours has a dollar cost of $5 million. I need an extra two and a half to protect that from happening. As a business guy and a CEO, I understand that. That's great advice. And that's the biggest challenge still with security people is we're technical people. We're not used to talking to business guys. It's like house insurance in a way, or insurance, right? You invest this to recover that. It's great analogy. I used to race cars and I had a life insurance premium for key man insurance. And my insurance agent comes along and says you should buy a bigger policy. I'm like, I don't need a bigger policy. So much money, we're okay. And then he says to me, you know, if you die in a race car, I'm not sure you're covered. But if you pay me another 10 grand a year in coverage, you're covered. Did I buy it? Absolutely. That's very necessary, great advice. Personal question for you. So if your dad said a factory, you mentioned that earlier. If you had a factory today in a modern era of IoT and you were going to give them the digital transformation consulting project, how would you advise them? Because a lot of people are taking their analog business and digitizing it. Some already have sensors in there. So you seem to manufacturing and certainly the industrial aspect of IoT has been a big deal. How would you advise your dad building a factory today? Yeah, so I think there's two aspects to it. One is just, you know, everything we've been talking about, data transformation, data analytics, making things better. None of those things are possible unless you're actually collecting the data. It's like customers come to us and say, you know what, we don't want you to just manage our logs and tell us what's going on. We want higher level value. And I'm like, no, I get that. But unless you're actually aggregating the logs, none of the upstream stuff matters. So the first thing is you have to collect the data. Whether that's sensors, old devices, mechanical devices and so on. The second part of it is the minute you open up your factory and open up the mechanical devices and attach them to a PC or anything that's network based, you're open for risk. And so we're seeing that now in utilities. We're seeing that with gas companies, oil companies. You know, up until a few years ago, you couldn't physically change the flow of a pipeline unless there was a physical connection, a mechanical on off. It was very binary. Today, all those systems are connected to the internet. And it saves companies a lot of money because they can test them and stuff. But they're also open to hackers. Gentlemen, we appreciate the time. And who says tech has got a little pizzazz? I mean, that's a lot of pizzazz. It's been great. You guys are exciting. We are. No. Using the stars, of course. Thank you very much. Well, thanks for being in the Cube Tech. We appreciate that. Don't call us, we'll call you. Gentlemen, thank you very much. We're booked. Maybe we can get you on next time. Okay, we're out. .com, 2016. Cube coverage continues live from Orlando.