 Live from the MGM Grand Convention Center in Las Vegas, Nevada, it's theCUBE at splunk.conf 2014. Brought to you by headline sponsor, Splunk. Here are your hosts, Jeff Kelly and Jeff Frick. Hi, welcome back everyone. Jeff Frick here with theCUBE. We are at the splunk.conf 2014, the fifth annual Splunk user conference at the MGM Grand in Las Vegas, Nevada. We've gone two days of wall-to-wall coverage. John Furrier was here yesterday. Jeff Kelly's been here for the duration. I got to step in today with, you know, what is really one of our favorite shows? We'll cover about 50 events on theCUBE this year. And I got to say, Splunk show is one of our favorites because we get so many practitioners on. We get people that are actually, actually we had a couple people today that are still kind of kicking the tires a little bit, getting their toe in the water, the people that have implemented stuff, to people that have really started down the journey and really progressed down the journey a little ways to people that have been coming for years. So another great day, ton of great interviews. We'll all be online, obviously, you can watch them if you miss them live. So, Jeff, what do you think? I know you're about Splunk that we need to Splunk Jeff here because I think he's running out of steam. No, it's a rarer to go. I'm upset we don't have more segments to do today. I know. I could go for another five hours. I think it's three days next year. We're gonna go for three days. Absolutely packing another day. There's no question about it. Look, my take on the show is, what I came in here wanting to see was, number one was kind of the enthusiasm of the attendees. Was it gonna match the level last year because last year was pretty incredible? And I'd say it matched and then some. Just the number of attendees increased significantly. Obviously we're in a new venue this year. They had to go to a venue that could accommodate more people. But the energy is still there. And again, one of the best ways to judge the traction of any software company, any technology company really is, can they produce customers that are willing to talk about how they're using the tools, using the solutions for delivering business value? And they did that. And they do that every year and they're consistent in that. And I think that speaks a lot to why they're so successful. They've built not just an application, but a platform that people are driving real business value with. And then in this big data space that I cover every day, one of the challenges we've seen is, well, where are all the applications? Because ultimately that's where the value's gonna be delivered. There's a lot of innovation going on in the infrastructure and the plumbing level. And that's critical. It's a critical enabler. Things around Hadoop and no SQL databases and SQL on Hadoop, et cetera, et cetera. And that stuff is all very important. In fact, you couldn't have a lot of the, you wouldn't see the application certainly without that foundational level layer. But the question is always, where is the business value being driven? And it's up to stack at the application level. And Splunk's one of the very few companies that can say, we're doing this for real in production with real customers across a number of vertical industries. We had on healthcare, transportation, retail. So you name it and they're covering it. So yeah, I mean, there's not much negative you could say about Splunk. They're doing a great job. I think the biggest challenge for them going forward, we touched on it a little bit in the previous segment. One of the things that Sanjay from Cisco brought up is they're going to have to shift from that IT buyer to the business buyer. They're really going to expand and go, put this into overdrive. There's a much bigger potential customer base if you can open up the line of business buyer. And I'd say they're in a position to do that because of the outcomes that they can talk about in business terms, not technical terms, but they still have to execute. And they still have to make that shift. So that's one of their challenges. And then of course, when you scale, when you're scaling as fast as Splunk is doing, this is similar challenge that company Tableau has, a company who showed we did fairly recently about a month ago. For a company like Splunk and like Tableau, they're very well known for their customer service and their fanatical focus on the customer. As you scale, there's always that risk that you're going to lose that focus. So they've got to maintain that focus as well. I think they clearly have it now. It'll be interesting to see over the next 12 months how that holds up. But really great show, love doing this show because you just get such great content. I hope the audience enjoyed it. A lot of good stuff. Yeah, and they really touch on so many trends that we cover at all the shows that we go to. And I'm curious to get your insight because they play with Hadoop, they play with AWS, they play in the cloud, they play on-prem with Mint. Now they're increasing their mobile activity. So, and they're doing analytics, right? And big data, and really hardcore big data with unstructured data, structured data, mainframe data, machine-to-machine data. We see and you cover a lot of little parts of that puzzle, but I don't know that there's someone who kind of embraces all of those things so universally. I would tend to agree with that. I mean, I think as I mentioned, look, the foundational layer, the infrastructure layer is critical which this thing scales out and to be clear, Splunk is not positioned as a kind of a storage layer. They're not for large-scale storage. They're not for bringing in, dumping in all your data from 10 years worth of log data and customer data. That's not their role. Their role is to provide operational analytics on fairly, quote-unquote, hot data, data that's relatively new. So there's a lot of other parts that are important to this ecosystem. But again, as you move up the stack you get closer and closer to the business value. And it gets much easier to tell the story as you get higher up the stack. It's very difficult to translate how MapReduce is going to create business value. That's a tough story to tell. Not that it doesn't happen, but that's a marketing challenge for sure. But it's much easier to say, well, we have an application that's going to allow you to increase efficiency by X percent on your trains and that's going to save you millions of dollars on fuel costs. This person gets that. Under the covers, whether it's Splunk or someone else, there's all these enabling technologies. And there's Hadoop and MapReduce that might be doing its thing. But it's much easier once you get to the top of that stack to explain the business value. And that's one of the things that... It's interesting that Splunk has picked this space. I think the founders are very astute and realize that it's going to be the application that's going to be critical. And then of course, modeling their search functionality around Google can't lose there. So again, it's hard to find faults. Splunk's doing a great job and we're looking forward to being back next year and seeing what their customers are up to by then. Yeah, some of the other potential gotchas that came up on the analysts call that we listened to a little earlier is it takes a long time to get their salespeople up to speed. I think it's about a year before they figure their salespeople are what they call tenured and really producing revenue at a good rate because it's not an easy sale and there's so many solutions. Clearly they had a great quarter last quarter, $100 million quarter for the first time which was a breakthrough quarter for them but their net income at the bottom is not much. If any are slightly negative but everyone talks about the fact they've got terrific growth margins at the top line but they're investing heavily, they're growing. And I think one of the guests said, when's Amazon going to make a profit too? So huge opportunity just in terms of investing in the market opportunity that they see as being so big and so vast and you see that in their R&D efforts having all these applications across all these different platforms. Well, look, when you're a growing company like Splunk you want to take advantage of this. This opportunity doesn't come around every day. When you're in this growth phase you've got to take advantage of it. So while they're on track to do $420 million plus in revenue this year I'm quite confident that their goal is not to be a $500 million company. They want to be a multi-billion dollar company and in order to do that you've got to gain massive adoption. So they're in that mode right now they're doing things like lowering prices for their cloud solution. They're increasing the amount of data you can bring into entry level environments. They're trying to make it easier for people to get started with Splunk expand that footprint. And as this company matures then they can ratchet up the revenue and excuse me ratchet up the profit by maybe scaling back a little bit on what they're funneling back into the business for R&D. Now of course this is a delicate balance because they've got to continue to innovate. There's plenty of companies out there that are going to be nipping at their heels. Startups that are seeing what Splunk is doing and saying, well we can do that and we can do it better. So we're going to go after that market and then you're going to have on the other side the big players, IPMs of the world they're not going to just sit back and let Splunk take this market. So it's going to be extremely competitive. I mean we've sized this big data market. It's going to be $50 billion plus market by 2017. That means there's a lot of companies that want their piece of that. So they're going to have plenty of competition. So they have to be careful how they balance the responding to investor pressure to deliver profit and pumping revenue back into the company to continue the innovation. So it's not easy. And that's one of the tricks of growing a company is when do you take your foot off the gas pedal a little bit? I don't have an answer. Yeah, that's not happening here. I would say this, I would say at the very least it's not now, they've got to continue to scale this thing. So the question is when and we'll see. And a lot of it will be based on, I think to some degree they probably won't want to say this because they want to, it'll Splunk like any good solid company is going to say we respond to our customers first and foremost. That's true, but it'll be interesting if the pressure starts ratcheting up from Wall Street and from investors to return more of a profit and return more of that money to the shareholders. We'll see how they respond. But right now, I think shareholders understand or getting better understanding of Splunk. We've talked of course of the last two days how it is a bit of a challenging story for Wall Street to kind of get their arms around Splunk and what they do because they're are they apps company, are they a platform company? But I think they're starting to get it. And smart investors will, who are in this for the long term understand that now is the time to invest in growth, not the scale back. Yeah, and Jeff Bezos has been doing that for decades now, right? Kind of basically running the company as he wants to run it. So I just wanted to capture a couple of quotes. I think we did, I don't know how many interviews we did over the last couple of days, 25, 30 interviews. But there's some, I think there's some interesting quotes that kind of sum up some of the big themes. One of them was from Godfrey, sold in the CEO during the keynote. They're really talking about security as an analytics challenge, not a monitoring challenge. Really a different way in baking security into everything you do. Guido had a great quote about, you know, store first, schema on read, flexible analytics at top, at scale. Which I thought was really a powerful statement as opposed to figure out your schema, then load the data, then run the analytics. So really flipping everything kind of on its head. Shani Antani from GE, phenomenal in the keynote. I think the best part of his talk was really about defined outcomes. What are you doing things for? Are you doing it so that you can deliver more value to your customers? And if you're not, don't do it. And really being iterative in what you do as a company and how you deliver, thinking customer first as opposed to product first or feature first. Lina, Josie, great guest. One of our women in tech featured gals really had the great bumper sticker, I think. Always start with the data. And she was very clear she's managing a huge portfolio of products along a number of delivery methodologies, but always start with the data. Devani Lamas, we see more and more focus on front end UI design and making it easier for customers to deal with your applications. And really her great quote I thought was combining human insight and intuition and powerful computing power. Really leveraging what computers can do and what computers can do well. And really that's some of that automated pattern recognition that they put into the 6.2 release. Mark Raff, the security keynote, you gotta watch it. Again, he had a really great quote at the end, especially if you have anyone in your family that was in World War II, it will speak to you directly and I'll just leave it at that. And then finally, I think a theme that we've heard. Well, let me go back one more. Jim Nichols, I think was terrific when he told us that his biggest Splunk user is a customer service agent with the liberal arts background. I mean, that's gotta be music to Splunks ears in terms of that person learning the tool, recognizing the opportunity, applying their knowledge and their objectives to really create a new dashboard and a new way to use Splunk that no one had else designed in the company. I thought that was pretty powerful. And then finally, Aaron Fulkerson in three words, really this evolution of data and going from reactive to proactive to predictive. And really that being kind of the holy grail is to get out to that predictive and in an SLA business as he described being able to solve problems before the customer even knows they exist and leveraging that predictive. So those are just some of my highlights. All that's embedded in the videos. We'll have all the videos in the interviews tagged up shortly, but those are some of my great takeaways. I'll leave it to you to close this out, Jeff. Well, you know, a great show. Really enjoyed it. It's always fun coming to .conf. Looking forward to being back again next year. I wonder if we'll be here or if we'll have to expand even further. I think MGN is almost as big as it gets, right? Well, there's Moscone and what goes on there. So there's always a Las Vegas convention center where they're consumer electronics show. You can still get a little bit bigger. So that's it. We are out. We're wrapping up two days a day today, two days of wall to wall coverage. Here it's blunt.conf. We're the last guys here. They're cleaning up in the corner. We're closing down the place like we like to do. Thanks for watching. Stay tuned. We'll be, check the SiliconANGLE.tv for our upcoming events where we're going. Busy season, busy year. Also, you can find all of the interviews there. Go to wikibon.org for the wikibon analysis research. We're tired. Jeff's got some great stuff up there on big data that you definitely got to see. And of course, siliconangle.com for the latest tech news. I'm Jeff Ricks, signing off with Jeff Kelly from spunk.conf. You're watching theCUBE. Keep it tuned in. Thanks for watching. We'll see you next time.