 ServiceNow Knowledge 14 is sponsored by ServiceNow. Here are your hosts, Dave Vellante and Jeff Frick. Everybody, this is theCUBE and we're here at ServiceNow Knowledge 14, we're at Moscone. Come see us, we're in Moscone South. Come into the hallway, the main hall, take a right. We're right there in front of the elevators, right upstairs. Jason Wohan is back, he's the president of the Cloud Sherpa's ServiceNow business unit. We talked to Jason earlier today and yesterday with a couple customers, but we asked him to come back on. We're going to talk a little bit about just cloud in general. When you think about cloud, I guess Salesforce got it all started back in 1999 and ServiceNow was sort of unknown when it came out and obviously we've seen its ascendancy and then you had Amazon with Infrastructure as a service in the 2006 timeframe really started to explode. And then when the economy turned down, a lot of CFOs said, hey, let's cut CapEx, let's outsource to the cloud. Now, the big whales in IT at that timeframe all started to talk about private cloud. Almost like, hey, we're cloud too. We have cloud and private cloud, a lot of people rolled their eyes, it's just better IT. But now as we exited the downturn, kind of around 2010, we sort of had a bounce back. You set a lot of shadow IT and now in 2014 you're seeing CIOs really embracing the cloud, making it sort of another arrow in the quiver. The challenge of course is, okay, what do I do with all these clouds? I got my Salesforce cloud, I got my ServiceNow cloud, I got my Amazon cloud. How do I manage all this stuff? Jason, one of the things that you guys do is you advise clients on how to essentially be cloud brokers, what should your cloud strategy be? What should you put in the cloud? What should you keep on premise? What about security? How do you bring the corporate edicts of governance and policy to all these disparate platforms? So that's the conversation that we'd like to have with you. So thanks for coming back. Absolutely, thank you. So with that sort of long diatribe of an intro, how are you seeing clients deal with this and how are you helping? I think it really starts with our evolution as a cloud provider of services. Last year I got the opportunity to speak to you. We spoke about us being very aligned to what Gartner calls a cloud services brokerage and we still are very much a cloud services brokerage but what we've found is we've matured in our own services offerings is really a layer above that that's quite important and that's this notion of a cloud advisory services and what we find is that we've really got customers that are kind of two ends of the spectrum. One of the spectrum is they may have adopted several clouds or some clouds and they're trying to determine how do they rationalize that. Of course, we can help support that in the Salesforce arena, the Google arena and the service now arena. At the other end of the spectrum you have customers that have yet to embark on cloud and they're not sure where to start or why they would start there and what we're trying to do is really bring that to the middle and say not only can we help you understand and better rationalize your decisions in the cloud, why you might put an application or a particular service or workflow in one cloud versus the other but also help you really establish your journey from the beginning, the middle, the end. If you play this all the way through customers having 35, 40 different cloud environments really isn't any more efficient than having all of that on premise across many distributed hardware environments and so what we're really focusing on is trying to really rationalize that in a way that focuses on the business that helps educate the customers on how they can approach these problems and then bring those to the cloud. I mean, you're right. I mean, we run the risk of having a bunch of cloud silos. Exactly. So, but it's a complicated situation for a lot of customers. Like I said, you've got your private cloud, you've got your infrastructure as a service cloud, you've got a bunch of different SASSs. I mean, we were at one of the IBM events recently. They told us that they purchased, you know, acquired I think a hundred SASS companies. It's just IBM. So obviously they're solving a lot of problems in a lot of different industries but those are all different platforms and now I've got platform as a service. That's the new thing, right? I got, you know, past, the artist formerly known as Middleware but and it's all going to be in the cloud and I'm doing my big data cloud that cloud gives something, big data gives the cloud something to do and so it's very confusing. So how should people approach this? Obviously you got to step back. Where do you start? I think you step back by stepping forward and really taking the technology out of the discussion for a minute. You start with what's the business situation that you're trying to address. I mean, there are very intact business maturity organizational process capability models across every industry, across every aspect of managing a company and you really start from there and begin asking yourselves why the cloud and which cloud and why would you do that? Well, as you step back from that and let's take service now as an example, this notion of a single source of record is really powerful. Well, why is it really powerful? It's powerful because you can generate workflows. You can utilize automation. You can get to single sources of information in a more efficient way and the reason you want to do that is because that's where the benefit of the cloud comes. That's where the benefit of an agile technology solution or platform comes to play. But you have to get the critical mass of data in your single source of record in the first place to be able to get the real full power of that automation. So if you're not looking to consolidate your information behind the cloud, you're never really going to be able to step through the cloud in a way that's going to maximize that efficiency. So Jason, what are the kind of classic knocks on the cloud? I guess how you answer it to the objection is it's easy to get started and a lot of times renting is better than owning but at some point in time as the application grows and my use of the application grows and my data flow and et cetera, is it more economical to bring it back in-house? And I'm afraid of putting it out there because at some point I'm just going to have to bring it back in-house anyway. And I think that probably discounts other values of being in a cloud application versus just the pure cost of infrastructure and nothing about managing infrastructure. So how do you address that with people to let them know that's not necessarily true and there is value as you grow and your bill starts to get larger? So you've got the cost of the infrastructure the scale of the infrastructure and the quality of the infrastructure that it's managed within or the confines that it's managed within. Those are all very important and they're very straightforward in creating the business case of moving to the cloud but you also have the speed of rationalization. So think about once you've done your initial implementation of the cloud you've now moved, regardless of what cloud we'll talk about service now because we're at a service now conference and of course that's what I'm most focused on but you're now through your security requirements, right? You're now through your scalability of infrastructure requirements. You're in an agile framework where you don't have to go back and do those things. So you're now starting your projects from a more advanced state than you would be if you were backing it up to your data center. So you're not starting from zero. You're already well down the field before you even start to implement the first line. Okay, but a lot of these initiatives are started we call them shadow IT, whatever but my Salesforce cloud started with the line of business. Now even though, and that's true what Frank says, that he says in Neil Bushery workday says that virtually every implementation they do they get involved with the CIO, I would say at least 95% but still it's being driven by a line of business so these clouds are popping up all over the place. Oftentimes unbeknownst to IT, I talk to a lot of IT practitioners and I say, who's here putting data in Amazon with your organizations and no hands go up and I know that this bank and that insurance company and that manufacturer, I know they have data in Amazon because they're actually on Amazon's logo list. They don't even know it. So now as I say, a lot of CIOs are I think embracing this notion of cloud as opposed to sort of running from it or crying chicken little, oh don't put it in the cloud because it's not secure but I'm inheriting a lot of stovepipes already. So what are you advising in that situation? So we advise getting to a critical mass and platforms like ServiceNow are a really important place to do that, that single source of record again. You need a critical mass of information in your cloud to allow you to do things that automate workflow that bring value in applications. Your example with Amazon is really just an infrastructure view of the world, right? And what we're advocating is through the use of tools like ServiceNow is more of a workflow driven application driven view of the world based on top of single source of record, right? Well, but yes and no, right? Because yes, Amazon infrastructure is a service. I'm probably going to do a lot of development on there but you know every time I blink, Amazon's got a new service, right? They got Redshift, they got Kinesis, they got new databases coming out and I can run open source databases in there so they're moving up the stack and I can now bring my own applications. I can run Oracle in the Amazon cloud. So now I'm getting sucked in there. The ServiceNow's of the world, the work days, the SaaS, the true SaaS providers. It's cleaner but it's also easier to just sort of bring those in-house. I think it's harder for the infrastructure as a service piece in some regards. My question is, do you see those two worlds coming together, in other words, Amazon getting further and further, further up the AWS stack, sort of bumping into a lot of the SaaS players because in effect, the SaaS guys, yes and no, I mean I was going to say the SaaS guys are competitors to Amazon but of course then Workday announces a new big data service and where do they host it, in Amazon. But are these two worlds going to come together? We are actually seeing a solid case for integration. At the net of it is you really follow the workflows, right? You follow the workflows, the workflows add the business value. So in the case of Amazon, well, let's think about a workflow. At the ServiceNow event, Knowledge 14, there are 23,000 ServiceNow instances that have been spun up to help administer training, breakout sessions, labs, et cetera. How do they do that? Well, guess where that happened? It happened in the Amazon layer and so you're actually utilizing ServiceNow, you're utilizing orchestration, you're spinning up the servers, you're spinning up the ServiceNow instance, the SaaS on SaaS if you will, the SaaS on IAAS versus SaaS if you will and then you're taking that process back to its natural conclusion, you're actually taking those instances back down, you're decommissioning those servers and it's all within the context of that workflow automation within ServiceNow. So if you look at it, I think the workflows really drive the value. Ultimately, they always will. You utilize tools that help you leverage the greatest value, utilize single sources of data and record to help you leverage more automation capabilities, what if more than types of scenarios in the tool and then you follow the integrations. Jason, two weeks ago we were here at Red Hat Summit and we had Jim Whitehurst on the CEO of Red Hat and he had an interesting story. He said, in the early days with open source Linux, people would always say, is it enterprise ready and is it secure? They said, that just doesn't come up anymore and clearly that was always an early knock on cloud. Is it enterprise ready and is it secure? Are we kind of past that? Where are we on that kind of fading into the rear view mirror in terms of a key issue as to whether people do or do not implement one of these kind of enterprise cloud companies or solutions? I think you've got a couple things there. One is you'd have a really hard time finding a G2000 in the world that doesn't have cloud in their infrastructure today. I'm sure there may be one or two, but you're going to have a hard time finding it. So one is just the maturity of it alone has gotten through some of those obstacles. Two is the people that are selling and delivering the clouds have gotten much more mature and precise around the requirements for security whether they be requirements in industry or whether they be requirements in regulation or otherwise. And I think you're seeing the community of cloud addressing those obstacles and those barriers a little bit better. And then you also see the early adopter phase. I mean, we're well past the early adopter phase in service now, we're well past that. We're at the mature client phase if you will. We're watching our projects expand in complexity because these aren't the folks that are just interested in doing incident problem and change. Most of those folks have already gotten there. These are folks that have made, in some cases, decade long investments in their previous tool and they have very complex systems and they actually need to move those over. So you see the whole of service now expanding in context of that customer base. The fact that there are others before them, I think I saw a number somewhere in the neighborhood of 2,400 clients on service now today. So there's very few places where there's not a use case or there's not a previous instance of somebody like you that was trying to do something similar in the cloud and here's how they handled it. What we find time and time again is it's the stories that really make all the difference. The stories of the customers that came before you. We talked about Einstein and Noah yesterday actually in the interview here at theCUBE. And again, that's a very powerful story of relevance that is not only an ITSM story of relevance but it's actually into their stores version of relevance. They've automated many of their manual paper processes in their stores today utilizing the service now platform. It's going to be interesting to see where this goes. I mean, obviously cloud's very disruptive. It's certainly easier, more agile, all those other wonderful things. You don't have to install things on premise. Very, very attractive for people. I actually think it is. I mean, we ask the question a lot. Isn't it more expensive to rent than it is to own? And I'm actually not sure because Amazon's out to take the Amazon example and they're selling for, you know, one 10th. Maybe it's one third, but one 10th are the big box players. So, you know, they're really compressing margins and you're not in theory anyway. You're not wasting, right? You can burst. You know, that said, you see guys like Zynga move back in house, although, you know, where it is, the grass isn't greener. You see an Uber now move in house. They took the Zynga team and brought him into Uber. So you know where that's going. You know, and I'm sure there's another angle on that. He brought those guys in. They probably have a lot of success, you know, stories as well, but at the end of the day, the economics of cloud look very, very attractive. And here's why. Maybe it is more expensive in some cases to rent, but the marginal economics of services, as you know, you're in the services business, you have a diseconomies of scale. It's at volume, you know, you need more people, but the cloud model says that online services actually have economies like software where your marginal economics go down to zero. So that means that your professional services business has to transform, which it is, you know, cloud advisory, you know, IT service management, driving business value, driving into the business line. So you're moving up the value chain. So you're commoditizing, Sam Palmisano at IBM said, no matter what business you're in, you're going to get commoditized, even services. So you're commoditizing a lot of the stuff that we were spending money on 10 years ago, big margin. So I actually think the cloud is less expensive and it's going to catalyze more spending. Do you buy that theory? I'd buy that theory and having spent 14 years at IBM, I saw the services division commoditize, it still is, right? But the reality is that you've got to be very careful about how you determine the value, right? Again, it goes back to where one of the sweet spots of the advisory is really making sure that we're not addressing just the very tangible business case of CAPEX or OPEX. Those things are important. I'm not discounting that. But there's also opportunity costs. That's often something left on the floor in business cases. There's workflow automation and incremental efficiencies and the cost associated with that. And again, that's the value of getting to a critical mass in your cloud because you can then develop more efficiencies and incremental efficiencies from there. You know, your ROI of automation today is an opportunity cost tomorrow and you've got to make sure that you're keeping that relevant through your own understanding of what your business value and business case is around. You know, I've done a lot of business cases in my day and I will tell you the business value side of the equation which a lot of IT people say, oh, that's soft dollars. They're telephone numbers compared to the hardware and software TCO. And I think the mindset is changing now, finally. It's shifting and the cloud sort of has catalyzed that. But for years, particularly in downturns and even coming out of the dot com bubble, there was a lot of resistance to that message. Now, if you're selling at the board level, that's really what it comes down to is who you're making the business case to. If you're making it to an infrastructure pro, you're going to have a hard time selling those softer dollars, but if you're selling at the board level and you're driving top line revenue and savings that dropped to the bottom line, oftentimes the non-IT piece of it is huge. It dwarfs it. It's not even worth talking about the IT stuff. Put it in the cloud and don't worry about it. Well, and the buyers may not always be the same. In fact, they often aren't, right? Salesforce for the service now buyer may not be as likely not the same buyer. A Google, for example, buyer and a service now buyer are going to be very closely related. So, you know, it requires you to really get across the organization and not just be thinking IT centric. All right, we're getting the hook, but you got one last question. Yeah, so again, I want to. We're keeping Jason here. We didn't know what we were going to talk about. This is one of the best secondary we're talking about. I want you to just kind of another couple of Egyptians that come up all the time, right? One is, and we got a little bit of a hint that we're going to see some stuff tomorrow about uptime. So, you know, uptime was another thing that used to raise a lot of heckles and SLAs, especially whenever there's some kind of public outage of Netflix or something, right? It's back to the top of the news. So where, again, kind of on the evolution of the buying process of cloud are SLAs and uptime conversations when you're talking about a mature solution like a service. Are they even in the conversation or is it just kind of presumed to be there? Where does that fit? I think you have a case of both, right? They're presumed to be there. And then they are in service now. I mean, they're absolutely overachieving their uptime SLAs and commitments. There's no question about that. They've got empirical data to prove it. I do see one hole and it's not a service now hole. It's not a cloud hole. It's a customer centric hole. And in my opinion, the hole is that most customers have some balance of cloud and on-premise in their data centers. They likely have hundreds of thousands, if not millions of dollars wrapped into monitoring event alarming correlation analytics in their data center, but they don't have it in the cloud, right? They're taking, they're using something that's actually kind of backward facing and not forward facing. So I see that emerging over time as something of real significance, particularly for those customers that are adopting mini-clouds. I also see it as a strong case to not adopt mini, to try to adopt as few as possible, but to get the biggest leverage out of those platforms that have the most broad applicability. Where is that on the conversation? Is it high? Is it low? Because you talk about the stories. The stories are, I presume, now elevating past the- They absolutely are. The SLA conversation or the uptime conversation. What I see when I speak to our customers and prospects is that that's really not quite on the radar yet. And I see that as something that's coming in time. There are certainly a lot of solutions out there to do that. But it's really more focused on the adoption cycle of that from my perspective. All right, we have to leave it there. Jason, excellent conversation. Thanks very much for coming back. Appreciate it. All right, keep it right there. Everybody, Jeff Frick and I will be back to wrap up in just a minute. This is day two, Service Now Knowledge 14. This is theCUBE.