 Live from Las Vegas, Nevada, it's theCUBE. Covering Knowledge 15, brought to you by ServiceNow. Okay, welcome back everyone. You're watching theCUBE here live in Las Vegas for ServiceNow, Knowledge 15, hashtag No15. Join the conversation, go to crowdchat.net slash no15. That's our application engagement application. Join the conversation, leave a question. This is SiliconANGLE, we keep on the theCUBE, our flagship program. We go out to the events, thanks for having me. I'm John Furrier, my co-host Dave Vellante for the day two wrap up. Dave, great guests. Fred Luddy was my favorite, as you predicted, would be the best. But also the CIO was awesome too. They're all in that data domain, Frank Slutman, DNA. Fred is the entrepreneur who made it. Just great story. And you know what? He's not afraid to speak his mind either. I love how he just lays it out there, candid. He's got media training, so he's not going to spill the beans on confidential information, but he's laying out the nerd discussion. Yeah, FN now was his thing last year, you remember that? And you know, you mentioned the tweet chat, the tweet chat, the crowd chat. Unfortunately, I haven't been able to be active today because I have no return key. I have no M. It got fried yesterday when John Cleese baptized my laptop. A lot of people, Dave, were talking yesterday about the John Cleese water throwing. And we just want to say to you guys out there, try to figure out if he was mad or not, because that's keeping more virality. And we love it. So we were super happy with the bit we did. We wanted to bring a little bit more of a vibe to theCUBE, more tonight show. And he's a master, and of course we got schooled, Dave. Yeah, he was good. That was a lot of fun, I had to say. He left in a great, great moment, a Monty Python moment, the foot coming down, water being thrown. It was definitely something completely different for theCUBE. So John, I want to talk about today, Fred Lutty's keynote. The thing about service now, you go to these events and they spend a lot of time, these large vendors, on messaging. It seems to me like the messaging here is so consistent across the company, and it's because it's organic. It's what they're seeing, it's what they're, J Anderson, it's what they're dog-fooding internally. The consistency across the customer base is really there. And it's not like a product company, like we talked to a lot of great, companies that have great products and you hear the same thing, yeah, it's a great product, it's a great product, it's a great product, but this is a platform play and it's transforming organizations. And we're really seeing this evolve, and today was all about the new UI, new software. You were geeking out with Fred on a lot of the technologies that we use in CrowdChat, which is impressive, right? That they've been able to evolve this platform. And he said today, I loved it, he said, well, we've been accused of putting, and rightly so, of putting lipstick on a pig before. But this ain't that. This is really native, real-time, asynchronous stuff, real-time. Yeah, but their service now, that speaks to, he's honest, but they're not afraid to put stuff out there. To me, what I love about this company, we heard it from their Innovation Award winners, and this translates to their customer base. They got guts, man, they're not afraid to do anything. You know, and it's always hard as the winners will go into the darkness and new markets where there's change going on and it's the guys who pack their own parachute, it opens properly, right? So that's my philosophy, I tell my kids, you know, pack your own parachute, so when you pull the ripcord, it opens up, they're building their own platform that is winning. And they, and KPMG, G-Guy pointed it out as a third-party validation. This is a unique business model. Enterprise, then cloud, right? Do it in a way that's very unique at a platform level. Own a base, NIT, build on the base, expand on the base. This is a competitive strategy use case in action folks. This is Amazon in the enterprise. And, you know, they're trying to hide the ball at the messaging day, but you know, we're putting it out there. This is a bona fide platform. It's the real deal. And if the competitors aren't smart, aren't smart enough, they're going to get burned. I think, I think Frank Slutman, to use his sailing analogy, has built a speedboat. Okay? That actually can deliver value at the pace of these big model with the software companies. And if their developer program kicks in the way we see it getting traction right now, you might see a tsunami of innovation to the levels of Amazon, like, not numbers in terms of revenue, but like impact, disruption. Well, when Jeff Frick and I did the first knowledge that we did, knowledge 13, there were like five or six things that we came up with that were sort of gaps that we felt that the service now had to cloud. Mobile was one. We wanted to see more ecosystem development. We wanted to see products for the small, mid-sized businesses. We wanted to see more customers adopting the philosophy of a single CMDB, even though that was ServiceNow's sort of mantra, many companies were struggling to do that because we felt it was critical if they were going to go beyond IT, they had to have that single CMDB support. And ServiceNow has executed on every single one of those. So that's really impressive. And I kind of tried to ask Fred that. I didn't really ask the question that well, but how is it that you're able to execute so well on those? And I really think the answer is they got good technology, good platform, dedicated people, smart developers, and he's at the heart of it. The other thing today I want to share that I thought was impressive was the keynote. You know, we had Dave Wright come on as well. He was on stage, chief strategy officer, very articulate. I've interviewed multiple times on theCUBE, conversations in Palo Alto. And Fred Luddy's keynote, it really was about the next 10 years. This was the founder, basically in his own way. You know, he's got a huge love affair with his customers. They love him back. And he's got credibility. So that authentic transparency showed on stage, Dave. And here's what I heard. Here's the story of ServiceNow, how we formed. It's one big happy family. It's going to be big, bigger and bigger. This is what we've done in the first 10 years. We're proud of, we told Sequoia to take their memo and we're going to punch back and we're going to play hard, play forward. And they won, they bet on that, on that recession, built their pride around. And then what I heard him say was, this is the beginning of the next 10 years. And that's asynchronous. That's born in the cloud, that's enterprise grade. So their moves are damn good, right there. This is the boat tacking for the next 10 years to use Slutman analogy. It's also, I mean, you know, a few years ago it was all about TAM expansion. Slutman and Scarpelli would communicate to Wall Street about the TAM. Wall Street didn't quite get it. You know, initially, I admit, I didn't get it quite initially. Mike and Mike Scarpelli and I had some conversations about it and he helped me clarify. And then Frank, I started to study it a little bit more than you and I wrote that piece that we put on Forbes. I think we were the first to really quantify the 30 plus billion dollar TAM. Service now saying it's a 40 plus billion dollar TAM. Morgan Stanley's hopping on that bandwagon. Stock shot up, obviously got crushed with it. When I posted that on Forbes, if you have when it was, the next Forbes post that's going to go up, Money Machine, because they're printing, they will print money. If this continues to get traction, they'll own IT. They'll be the knowledge of the connected devices. Basically, the database for the data center, which will be powering retail, all operations. So the stone brewery example will be all businesses. They'll be multiple. So let me continue on my TAM thing, because what's happening is, they're expanding into places that are naturally going to run into other folks, right? It's like, I remember when Paul Merritt said to me, yeah, when he was talking about VMware and the strategic plan and the TAM and the expansion. He goes, yeah, basically we're at war with everybody. Now, ServiceNow is not at war with everybody, but they are bumping into a lot of places, and this app ecosystem is going to explode, and it's going to bring them to places that they don't even know that they could have gone to. And they got to be ready for that. And they are going to compete with the guys that they didn't know. That's the risk. If I was an analyst saying, where's the risk in this? You got to look deeper. Yeah, but see, I don't think that's a risk. I think it's opportunity. I think that the philosophies, don't worry about competing, worry about creating. And I think that's something that's important. No, no, no, I'm talking about something different. I agree with you there. My risk variable is they can't handle as a company. Because of the explosive growth. I can't say that. I'm not going to let me rephrase that. I'm not going to say they can't handle it. If the growth goes massive, then the management team of ServiceNow has to be ready for that. Well, I think that's Jay Anderson's biggest challenge, is how do I keep up with the growth? Because we can't grow as fast as our customers are growing. Our growth can't continue. That's just a management challenge. And I don't think it's that. I have to look for the risk. I mean, I'll have to look deep. I mean, I'm reaching for straws with this one, but I think they handle it. What's the key to that? We'll start with transparency. Leverage, leverage, scale, quality management, passionate people, great tech. Here's what I would do to mitigate this risk. If I was Frank Slutman's right-hand man on this one, I'd say, look, you do what you're doing. Don't change a thing. Take the Developer CreatorCon program they got going now and double down, throw a ton of resources at that program. Understand the developer traction. The developers are the canary in the coal mine. Dave, we talk about this all the time on theCUBE. The developers will tell them directly the feedback. So, and they learn this in their core business. So again, don't change anything, but I would be highly acute to the data coming out of the developer program. 1,200 people at CreatorCon. If this thing goes growing, they can start taking all those .NET developers that are out there looking for a home, looking for some relevance, looking for some modern love. That would be ServiceNow. They could get the open-source community coming in with, he mentioned Bootstrap, he mentioned AngularJS, Node. These are the new modern DevOps developers. These are the new guns. These are the big guys that are going to come in and transform the enterprise. That's the young guys and the old systems guys. So I see this as a very interesting equation. If they got to watch it very, very closely. The good news is the founder's still in the boat. He's still in the company. You know my feeling about founders. Keep the founders around. When they're engaged, good things happen. So I want to get your take on the whole developer thing, because this is your wheelhouse. They use the Gartner terms low code and no code. Let me ask you a question. Who's in a better position to attract the low code and the no code guys? Who's in a good position to do that? ServiceNow, obviously. Salesforce? No, I think Salesforce is antiquated. I think that Salesforce is successful and they have a shell of a developer program in the sense that it's big, but they got some challenges. So they got the boat that has the old sales and the big all, right? So they're beefy, but the thing is they've cobbled together. Chatter is not that great of an app, right? Or this app over here, that app over here. So like- Caroku, you okay with that? It's cloud, it's all integrating. So integration's the key. I mean, if I want to, Amazon, the same as saying, HP storage, IBM storage, other pieces, so like- So Salesforce runs on Oracle. Positive or negative, in your opinion. Putting it on this spot. Very positive. I think it's very positive. I think so, well, because it's reliable, up, right? Stable, I mean, you got a battleship, you got to have a big engine. Oracle's a big engine. It's got a lot of power. You know, not nimble, it's not super fast. I mean, Oracle's a beast. So how come ServiceNow doesn't run on Oracle? Don't know if they do. No, they run on MySQL and Mongo. Well, what I heard, they run on SAP, it's a back end and they're front-ending it. So I think what ServiceNow's doing from what I gather from theCUBE is, they're front-ending- Well, that's their transaction system. I'm talking about the cloud itself. Cloud platform itself runs on MySQL. Well, they're cloud product? Yes. I mean, I think unstructured database is the way to go. I mean, they're going to have- And MongoDB, right? Or maybe it's Cassandra. I might be confusing it. Well, I mean, they might have to build their own database. I mean, I'm not sure if they'll- No, no, no, they use an open source. No, I don't know. Yeah, no, they are. Which database? MySQL, and I'm confusing. Either Cassandra or Mongo. Is there a question? Yeah, why don't they run Oracle? I think they've made, obviously, a good choice, right? Well, I think, I mean, the reason most people don't go to Oracle is they don't want to pay the license, and they got guys in the house who could develop on it. So if I was ServiceNow- So, Benioff can afford to pay the license? Is that the deal? It may be an indicator. You just got audited. They did the biggest deal in Oracle's history, billion dollars. Well, I think Salesforce was a little bigger than SearchNow, but it might be to your point. You know, to the developer- I just think it's really interesting. In Silicon Valley, Andreessen says none of my startups run on Oracle. Yeah, because they're too cheap to pay. Okay, because they can't afford to pay. Well, cost and all people cost. We've heard customers today saying, I use ServiceNow and I eliminated a quarter million dollars out of my operating budget, just on repurchasing modernizing client server. Small system over here, that includes the people cost. So, you know, we left HBase and Hadoop as open source for our application because we went to Amazon because I would have hired two developers over here. So there's people cost, there's time cost, there's focus. So I'm- So who should we be looking at in terms of leverage with the developer community? I mean, obviously, Microsoft, Google, Amazon, Salesforce. Developers are like, they'll go where the action is. ServiceNow. ServiceNow has a lot of potential. I don't, they're not flocking to ServiceNow. They're, the early date is coming in here is that 1,200 people are here and the platform's extensible and it's really easy to build value on. Okay, but so you know a lot about developers. If ServiceNow came in, Frank comes to you and says, hey, John, what should I be doing for developers to attract developers? To compete with the gold standard. Who's the gold standard of attracting developers? Microsoft, Google, Apple? Well, Microsoft has a legendary program that is so successful. So running a developer program the old way was, that's Microsoft. So you're advising Frank Slutman. What do you tell him in terms of attracting developers? I would say, especially given the context of, this is different. I would say, I would take the CreatorCon and I would run that as a full-on conference, 100% and I would throw a lot of dough at building out evangelism and real outreach around education, certification and hands-on stuff and hand out these instances like they're candy and get people coding on ServiceNow. I mean, you made a big deal about that. That's really key. That's a huge deal. The private instances is a monster deal because people want a sandbox. So on Amazon, we do that all the time, right? Got a sandbox over there and we push new codes and everyone does bug reports on them. People collaborating on Teams. That's how you do the QA now. It's all agile, right? So the scrums come in, you hit your sprints, look at it. Great, push a button, push to production. So that's the new environment. So the proof is going to be the degree to which the ecosystem can build powerful apps that can support mission-critical activities without a ton of services, right? The thing that's going to attract developers is, I don't want to deal with a lot of the plumbing questions and do a lot of what's appeared to be, I say grunt work. I don't want to redo a stack that's already been done before. So we've heard from developers here that they can feel incredibly great because then they got to go in to build parts of the stack out. So ServiceNow does that, so that's positive. Two, rapid deployment is a huge deal, right? Fast to deploy something because they get paid more or get more love fast quickly from the part. Adoption, I mean. That's option, yeah. You heard what Fred said, it's all about getting adoption. It's not about the money, it's about the vanity. Well, what do you say I want my art on your fridge? Yeah, the currency could be vanity, it could be art, it could be money, whatever it is. Developers love distribution and value. Value being money and the community around it. So I think what you're seeing here is great. Look, here's a platform, here's how you roll it out, here's a store. So I think they're really doing a good job right now. I would just double down on the creator con. You got 1,200 people signed out. It's another big room. I would put ton of dough behind that and expand that to push it out fast, understand where that's going. Then you'll know right away that developers give instant feedback. Was Friday a buying opportunity in your opinion? Yeah, absolutely. I mean, I think some of the smart answers are saying close to 90 coming back. But when you see a knife cut like that on what they produce, what we know in the platform, it means nobody gets it in Wall Street. Truly understands the downstream potential. And I think there's some arbitrage on some calls. I don't know, yeah, I was going to say, I don't know if that's fair, Wall Street gets it. They've been running the stock up like crazy. I mean, because they get it, I mean. People are going to be floored when they see Amazon's numbers come out. Yeah, some people are saying $7 billion. What was happening on Wall Street is Wall Street was expecting service now to beat and continue to beat. And they kept beating and beating and beating and Wall Street was thinking they're sandbagging. Okay, finally they weren't sandbagging. You got currency headwinds. Okay, fine. But upside for sure, right? I think it's upside, yeah. I mean, not withstanding market risk and all of this stuff, but. No, from a technology standpoint. Yeah, we don't. Their disruption engine is. We're not stock pickers. They're not a one-off. I mean, I think the platform, whether when you have a platform business that has this much extensibility, it's not a one-off win. You're seeing cash flow with Frank talks about that. You're seeing wins. You're seeing developer adoption. All the sentiment around service now from a growth potential is pretty strong. Well, see, that's what I mean. The cash flow piece is to me key. People focus on profitability. I'm focusing on cash flow so they can invest in their business and grow and expand internationally, right? I mean, what's less than a third of their business? 20% of their business is overseas. That's a huge opportunity. All right, so day three tomorrow, Dave. What are you expecting again? Three days of coverage here. We'll be back tomorrow. What's you expecting tomorrow? Yeah, so tomorrow I think we're going to hear more about the service, the platform. I think we're going to hear from McGee about some of the differentiators in service now, which I think they've been more aggressive talking about. So I, and I love that conversation because service now actually is different than a lot of the other cloud providers. They measure up time differently. I mean, most people measure the light on the disk drive or the server. So we're going to hear a lot about that. That's kind of geeky. But I think people care about it because I think people are still scared of the cloud. Oh, by the way, I just had another thing that advice Frank on you mentioned. I would say keep the developers happy. Oh, you got it, right? Because the customers are all happy here. And we're going to see tonight, the big customer party. So I think Delighting Customers is what they've been known for. So I would just take that formula to the developer community, double down on that and just make them happy because if they're not happy, they're going to be complaining. And service now seems to be managing that process of feedback pretty well. I wonder if it's that mindset of ticketing and trouble tickets, you know? Use that same mindset. So big party tonight at the beach club down there being appreciation. So we'll do a fly by eight o'clock. All right, Dave. So wrapping up day two. This is the cube I'm going to sign off here. Stay tuned tomorrow at 10 30s. We're starting the kickoff. Go to crowd chat.net slash no 15. That's our app where the engagement container can record the conversation, join, make a comment, ask questions, we'll take the questions and join the threads, join the conversation. That's the cube. We'll be back tomorrow. Good night.