 from the MGM Grand Hotel in Las Vegas. Extracting the signal from the noise. I am Craig Nunes. Hi, I'm Ed Walsh. I'm Benny Schneider. I'm Eric Herzog. I'm Calvin Zito. I'm Kevin Deerling. And I'm a Cube alumni. And I'm a Cube alumni. And I'm the Cube alumni. And I'm a Cube alumni. And I'm a Cube alumni. And I'm a Cube alumni. I'm a Cube alumni. 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 live here in Las Vegas for Splunk.com 2015. This is theCUBE's SiliconANGLE's flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, founder of SiliconANGLE. I'm John McChose. Jeff Rick, general manager of our CUBE business. Our next guest is Mark Olson, SVP, general manager of Cloud Solutions. Welcome back to theCUBE. Good to see you. Great, thanks a lot, John. So one of the things we heard from your customers is that the Splunk executives are accessible. They're walking around at the party last night. The CEOs out there. I mean, you guys are out there pounding the pavement. We love it. Our customers have taken the time to be here and to, you know, interact with us and learn what we're doing and where we're heading. So it's great to be spending as much time with them as possible. So we talked with Guido earlier, SVP, a product, and he said that, you know, the goal of a product is to ship product. Your job is to kind of take that to the cloud. So one of the things that he mentioned in his guiding principles to his team was this transition to the cloud is a big deal. So give us the update. What's going on with Splunk Cloud? Obviously, success. We see Amazon out there. We see on-premise. Hybrid cloud's hot. What's the update? Yeah, we couldn't be more excited with the demand we're seeing and the growth we're seeing. We tripled our orders in the last nine months and it's taking off. Hybrid is really a key differentiator for us. You know, I've talked a lot about the journey to the cloud. It doesn't happen overnight. Customers have workloads on-premise, workloads in the cloud. A true seamless hybrid offering is core to that. What is the definition of hybrid cloud as your customer standpoint? Yeah, yeah. Well, it can mean different things to customers but ultimately the seamless experience is that a customer can have data indexed and Splunk on-premise, data indexed and Splunk in the cloud and the user searching for the data doesn't need to know which data is where. That's true seamless experience. We have some customers that do have a siloed environment on-prem and cloud and they don't want the two to mix for data sensitivity reasons, data privacy reasons. That's okay too. So talk about the impact in terms of customer consumption. We said orders tripled in nine months. Why is that? Consumption, cost? What's the drivers of that? Two big drivers, John, that we're seeing. One is, again, does a customer want core competency in running, operating, maintaining, updating Splunk? Or do they want core competency in using Splunk, analyzing Splunk? That's sophisticated analytics. And often customers are saying, yeah, I don't need to run an operating. I want to use Splunk. The other big driver is the source of the data. Where is the data originating? So is the data originating in the cloud? The log data, machine data from the workload, is it already in the cloud? Why back call that on-premise? And those are two big drivers, rain two big drivers for our business. What are the key industries that are adopting your cloud first? Is there a kind of trend you're seeing? We're not seeing a trend. In fact, the trend we're seeing is that it spans multiple industries. We have financial services. We have public sector. We have technology. We have online services. Retail, manufacturing, we're seeing it. It's very horizontal. And the other thing we're seeing is also size of customer doesn't matter. We have customers choosing Splunk Cloud for small deployments. We've got customers sending us multiple terabytes per day. Very large Fortune 50 customers. So what are you hearing here at the event from customers? Obviously, you're accessible. What are they sharing with you besides you guys are awesome. We hear that a lot. But what are the specific things that you're hearing from customers? We're hearing from customers that they want solutions. We've got a platform and it's incredibly powerful. And we've obviously got premium solutions around security. Premium solutions now around IT service intelligence. Those are going to continue to expand and improve. We've also got customers doing very, very interesting things. Very interesting use cases that don't fall into that classic security or IT ops bucket. For instance, Gatwick Airport using Splunk to minimize plane time on the tarmac. Using Splunk to optimize as they would say their curb-to-gate experience for a traveler. Very unique use cases. And customers are saying help us get there. What are these use cases that fall out of the two main buckets right now? And what are the prescriptive solutions you can provide to help us get there? And that's the whole chatter, right? Splunk it. What can we splunk? Splunk as a verb for all kinds of things. Research and every morning at breakfast is a really interesting thing to hear what people are talking about. One of our customers is Orion Early Stage Startup in the IoT space. They've got voice communication devices. They're using Splunk to measure the voice latency through their communication devices. What's the role of partners? Yesterday we had a lot of partner focus in cloud. Maybe different dynamic people. Maybe you see clouds with different vehicles for how partners go to market, how technology sharing. Is there any difference and what's the role of partners? So we are embracing partners in a big way and we're rolling out a global unified partner program which you may be familiar with or partners are. And one of the key elements of that from a Splunk cloud perspective is that Splunk cloud is available to partners to sell just like any other Splunk product. So it doesn't matter what the Splunk product is partners have the same construct to sell our solutions. So give an example of a customer. Walk us through a deal that you sell and where the cloud piece now fits in share with us what that looks like. How they buy it, what reasons, how much what kind of things they're doing. So why they're buying really comes down to that where they want their core competency or where the data is. They've chosen that and it is a delivery option for customers. So we want to sell the value of Splunk. Customers can choose clouds as a delivery option for those particular reasons and there's time to value. We're spinning customers up immediately after the PO is processed and we're getting them out of the gate with a great experience. So it's self-service. They just push a button. It's on Amazon. So if you want 20 gigabytes or less per day it is full self-service. No touch. They go to the website. They can do the trial. They can convert that trial to production and they're off and running. Completely no touch. If they want over 20 gigabytes we introduce a touch for all the right reasons to get them up and going but the provisioning of the back end is all fully automated. And that scale on your end too you guys have that scale. And do you see really one of the great things about cloud is bursting. Being able to burst capability when you need it capacity when you need it and turn it off when you don't. And that was actually one of the conversations over breakfast. Someone I think from Indiana University said they're in. They want to expand the use of Splunk. They've got a certain license but how do we do it? And really they're looking at the cloud option to be able to do kind of spot Splunk applications within different groups not really impact their core license but to be able to add and shrink capacity based on kind of the opportunity. That's what the cloud is all about. We've got a bunch of our cloud customers are obviously net new customers to Splunk but also we have a significant number that are current on-premise customers and they're looking for that scale and that elasticity. They may have tapped out their on-prem capacity for a variety of reasons hardware or resource capacity and so then Splunk cloud is a way to extend Splunk capacity. Yeah and it was clear in your keynote too that the two products like you said it's really just a delivery methodology. The two products are in parallel paths in terms of development features etc. And one of our core products from the get-go. Yeah yeah. Alright so I got to ask you about the privacy security question. Yeah. Always comes up in the cloud. How do you guys address that obviously security is a big topic here for in your use case of Splunk but for security in and of itself of Splunk the data obviously people get fearful of okay multi-tenancy cloud I got to have this and some encryption what's the overall story there and what's your story? Story is three-fold really one still it's choice. Customers can choose where they want to deploy Splunk compliance your privacy requirements that they're operating under. We also have a dedicated environment. So customers get dedicated environments again really a core pillar to our overall security posture and third is our security certifications we're SOC2 type 2 certified very transparent there we provide those certifications to our customers. As part of the choice of the deployment customers can also choose to encrypt the data at rest. That's an option they can select or deselect and again empowering them to decide what they need or what meets their needs we're processing the data we're not controlling the data the data is the customers data Tell us about Amazon you guys had a good presence there success in working how's that? We love our relationship with AWS we feel it's very strategic we're obviously operating out of all of their data centers around the world we've got lots of go-to-market synergy and go-to-market activities that we're doing on a joint path we'll be at re-invent in a couple of weeks back here in Las Vegas so we're excited about the partnership We'll have theCUBE at re-invent October 9th check out theCUBE but things are going well with Amazon customers are cool with it everything's going great Absolutely I mean the quote that I offer and provide is the one from Gartner where Gartner's AWS is 10x the size of their next 14 competitors combined so they're a dominant player they're a great partner they're a great strategic partner Other new cloud platforms you guys are talking to? We're continuing to take advantage of everything that Amazon introduces to the market IBM Blue Mix Softlayer Amazon I mean Microsoft What's important there for us and we're hearing this from our customers is we're physically running Splunk Cloud in AWS that's very strategic It's really the most robust infrastructure as a service play for us So not on Azure But what is important is any data from any workload in the cloud can be ingested into Splunk into Splunk Cloud So we're agnostic in terms of where the data's coming from and that's really customers want to know that they want to know that if they do have a workload running in some other platform other than AWS Splunk Cloud can ingest it aggregate it provide the analytics around it Got it So what else is new? Headcount give us the update on the business staff hiring what's some of the things going on, what are your goals? Well with the tripling of the business over the last nine months we're obviously ramping up all of the capabilities to support that again we're really excited it's about solutions Godfrey will talk about our mile eight initiatives enterprise partner solutions cloud, we're cloud first everything that gets released from Splunk will be available in the cloud and on-prem that's a driving force and the solutions that are running on top of Splunk are going to be cloud first So we were talking earlier on our kickoff that I'll see the performance of Splunk it's better and better but you guys are still a product company and that is a very key thing because you've got a lot of green fields new opportunities solutions get enabled by good software, good products companies can fall into a kind of a trap if you will if they become too solution oriented so how do you guys deal with that friction that balance of we need packet solutions for our customers yet you have a product roadmap product strategy with the technology and the software how do you guys talk about that internally amongst the E team? Yeah, I mean for us it's fairly straightforward we want a platform that is incredibly flexible that customers can go in and do what they want with it and find those really interesting use cases and those corner use cases but for the ones that want a more prescriptive, straightforward you know prescriptive solution we want to obviously be there for them as well and it's striking that balance but it's not doing one to compromise the other So acquisitions have been really good this year you see a couple of nice white spaces being filled in on the product side with machine learning on the product side in your neck of the woods acquisition, organic growth how are you balancing the inorganic, organic I mean are there white spaces that you're looking at right now that you could share? You know we're always looking at all of the options we always are Right? That's you know we're always going to be doing that I think there's lots of opportunity and lots to come on both the organic and inorganic front the key part there is where does the cloud fit in that we're able to offer something that's unique right to the cloud and cloud centric and to me you look at where we're aggregating data the machine learning the correlation that we're doing to community data or industry data or anonymized data is all very unique to the cloud and you know we're giving a lot of thought around that So in Silicon Valley we always talk about the disruption Splunk is obviously was a start-up now public now a big company you guys are one of the big guys now but you're acting like a start-up but I got to ask you about this idea of re-platforming the term that we kick around oh yeah we're re-platforming this now it's a disruption term meaning that technology is changing the platform configuration of industries markets or verticals Do you guys see Splunk as one of those new guys I mean you hear the stories Airbnb, Uber these companies are the sharing economy where in the consumer side there's a little bit of bubble going on but enterprise is growing are you guys one of those new school companies or is it just old school blocking and tackling What I would say is that the addressable market for machine data and log data has largely been untapped and you know we're thrilled to go tap it and there's those internet of things machines adding to them Right, I mean there is so much untapped machine data out there Thanks for helping validate our thesis at the beginning of yesterday's opening day and that's a good point the time is huge it's in the billions the question is how tall can Splunk grow that was one of our comments because you guys are growing keep growing up but where's the end I mean you got people you got wearables internet of things I mean it seems like you guys can continue this pace All of that data is optimally ingested with schema on the fly without having to do all that mapping so you're going to ingest it and then you want to be able to ask it whatever you want you don't have to try to you don't have to figure out all those questions beforehand Final question I know you got to go tight deadline get a hard stop what's different from last year this year for Splunk.com 2015 Visa V 2014 what's the big change in your mind's eye what are you observing what notable anecdotal things can you share for the folks that aren't here that are probably seeing stuff online still got the 20 blog posts out there already a lot of buzz but what's different this year than last year big differences to me are just the progress that we're making on all fronts technology front people front customer front solutions we're making progress by leaps and bounds and we're thrilled to be on the journey with our customers on that got to get that budget up for the more headcount tripling your numbers congratulations Mark great to see you thanks very much we are sharing the insight here on theCUBE we're ingesting the data from the Splunk executives sharing it with you here on theCUBE we'll be right back after this short break