 Here are your hosts, Dave Vellante and Jeff Frick. We're back, we're live from the Moscone Center. This is Moscone South. As you walk in Moscone South, look to the right. The cube is right there. This is the cube. We go out to the events. We extract the signal from the noise. This is our second year doing the knowledge conference. Service Now is definitely one of the more interesting conferences that we do. You can have a look at it, and you can have a look at it. Now, it's definitely one of the more interesting conferences that we do. You can always judge by when there's a product demo going on in the main hall, and the audience, without prompting, genuinely starts clapping and hooting and hollering. That's when you know you're at a good show. You see that at conferences like Service Now. You see it at Tableau, you see it at Splunk. You've got a little bit of that at Red Hat too, but Service Now, they bake cakes for their customers. It's just an amazing culture and ecosystem that extends from the top of the company all the way through the customer base. And, of course, importantly, the ecosystem, and one of the most important ecosystem partners of Service Now is KPMG. Ross Rexer is here, along with Greg Horvath. They're with KPMG, one of the early partners of Service Now, anchor sponsor here at the show, I think for the third year in a row. Gentlemen, welcome to the cube. Thank you, Dave. It's great to be here. So, Ross, we talked last year at quite some length of Service Now to your business. You guys have been in early, early on. It's nice to be early. Yes. You saw, you've been seeing a huge explosion over the last several years. What brought you into Service Now so early? Many have waited. You guys got in early. Why was that? No, Dave, I think it's... Our first indication was that Service Now's technology and platform as a disruptor to areas that had been relatively stagnant, such as IT service management, which was the first foray. We saw that the ability to quickly enable workflow automation are things that are happening every day out there and it was a faster way to do that. What really got us excited though, Dave, was around being able to take our IT transformational capabilities, our business transformation capabilities, and extend out these kind of efficiencies into the rest of the organization. You guys do, right? You transform businesses. So this is sort of music to yours, although you were taking a little bit of a chance at the time. Service Now, small company. You had some big incumbents, really well-funded, so it was a good call. And you've seen Service Now, you've seen the vision grow, you've seen the TAM, the notion of the TAM grow from help desk to even IT service management. And now, especially at this event, last several quarters, we've been talking about enterprise service management, ESM. You guys talk about that a lot. What is ESM? Why is it so important to your customers? So ESM is a lot of things, right? To us at its core, it's a capability of allowing first IT, but certainly outside of the IT stack, the ability to manage and improve the customer experience, engage with the end users in a different way than you have ever done before around services, all the way through the consistency and the quality and the efficiency of delivering services, be they core IT or human resources, finance, legal, et cetera, throughout the stack. So to us, it's a capability that is extensible from the traditional areas of IT and the service management discipline and legacy there all the way throughout the shared services, business stack and global business services. Greg, you came out of industry. How prevalent is ESM? What's the adoption looking like? What are some of the headwinds? That's a great question, Dave. It's very much emergent. If you look at our booth, we use the term the dawn of enterprise service management. And I think what's happening outside the enterprise is to a large degree influencing how you need to respond in the enterprise. The cloud, the explosion of the internet, the way people are consuming services in general, given the mobility experience, et cetera, is frankly setting an expectation for how they use corporate services inside. And what I think enterprises are realizing is that traditional older shared service operating models just aren't keeping pace. We need new operating models, new frameworks, new capabilities, as Ross described them, to be able to take advantage of that. So to us, as Ross mentioned, ESM is a capability. Capabilities generally mean methodologies. They mean organizational models. But more importantly, they mean technology platforms, right? To drive and instantiate these new models. And that's where ServiceNow is going with their message of enterprise service management. And obviously we show that point of view. So, Ross, I wonder if you could talk a little bit about your role. Are you part-channel, I guess, but also an accelerant to adoption? Where do you fit in the ecosystem? So to us, the sweet spot is around the collection of services that KPMG has, which extends into transformation of human resources and business functions and doing the advisory work that we do in all aspects of business, right? Just operations, it's risk consulting, it's all of our core disciplines that we're out there with, you know, our clients every day. And so our sweet spot is where we have an advisory relationship with a client and we can bring something new and add value and innovation to how they operate in the ServiceNow technology. You know, the go-to-market structure that we have with them just folds right into that very nicely, right? So when we say we're a channel, as we know we're not a reseller of any software, MSP, but certainly the engagement at the field level with ServiceNow's sales executives just enhances the case for the business to make a decision to go with that technology. Right, when you walk into a customer, you'll see, I mean, we've described the problem at length, you know, at this event, the silos, the tool creep, inflexibility, I mean, you see this all the time. So while you're not a reseller, you can say, hey, guys, you know, there's a better way. Exactly. You know, but now, let me ask you, when I talk to practitioners in particular and SIS consultants like yourselves, you always talk about people process and technology. You always tell me that technology is the easy part. That's people in process that are the hard part. But I get a feeling that technology is pretty important in this case, that if you don't have this... Well, let me ask you, how important is that platform, that single system of record, all the things that ServiceNow is espousing? Right. To me, it's critical. It's critical, Dave, because one of the things you find is when you choose to embark on an ESM strategy, that's significant change, right? That's disrupting to a lot of internal service providers. So with that comes operational risk, a good common technology platform that instantiates a method of doing something, instantiates standardization, really helps reduce that operating risk. And when you do that, you can accelerate your business results. You can accelerate time to value. So it's a significant component of that strategy. So, Ross, I want to ask you, ServiceNow talks about how they don't look for shadow IT. They don't end-run IT. They sell through IT. How about you guys? You're doing board-level engagements. Sure. How does that all work? You obviously work with IT. Are you part of an IT practice? Are you sort of more broadly based? We can talk about that. So we do have a mix. We have a technology, IT advisory practice area where our ServiceNow core competency and center of excellence exists. That's the structure that we have. The practitioners that know how to implement the technology do the core process work. Then in each of our other practice areas, such as risk consulting and the business consulting types that I mentioned, we have those functional experts that are driven towards their own methodologies, their own approaches to the market that one can pull in the other. To us, it's not one of the other. It's the technology, plus it's the functional expertise. Together, we have solutions that cross those functional practice lines. So last year at Knowledge, the ServiceNow announces App Creator. I was struck by when I was walking the exhibit hall last night, you guys have a nice booth. It was great. You guys must be happy about that. But I was struck by the booth with all the applications that have been written. We talk a lot about pass and we were talking to Jeffrey Moore about the land grab now and the platform as a service business. Where do you see that whole space going? You guys, obviously you see the amount of money that's spent on application development. You're seeing the whole DevOps culture thing rise up. Great value being created through the application development organization. Where do you see ServiceNow as an application development platform fitting into your customers? So we see the share program as a great marketing, a great evolution in the way that ServiceNow can position the use of the platform beyond IT. So that's full stop. In terms of where we think it's heading we don't actually have us, we don't exactly know when the monetization of applications will and what that will look like on ServiceNow. Our own plans are to take our intellectual property, our repeatable business processes, enable them in the ServiceNow technology, deliver that to customers and potentially in terms of vision and forward thinking, potentially wrapping the resources around that technology. So it's a bundled service where KPMG has not just to implement it and give it to you, we can help stand it up, run it until you're ready and then maybe give it back. But allow that flexibility and agility with our customers. Imagine a lot of your work today is in Java. Everybody's is. Do you see this as being complimentary, focused on service areas? Disruptive, don't know yet? We see a lot of the applications and we call it our asset-based business for now and I guess maybe it's because we've been studying this for a while. It's absolutely complimentary to our internal technology capabilities and our vision and standards around technology. So where it goes I guess as things start to explode, proliferate, there might be times we have to adjust. Right now we see complimentary technologies, skill sets that are easily reusable across the different type of functional areas. You guys have a Service Now Center of Excellence, is that right? I wonder if you could talk about that a little bit and maybe talk about why that's important from a practitioner's perspective. Well from obviously a big part of our Center of Excellence is really to bring value accelerators to our clients who are making an investment in a Service Now capability and our ability to anticipate client needs help them again get their time to value accelerated quicker again reduce implementation risks. Our Center of Excellence is a big part of doing that across a broad number of dimensions Dave. So describe the Center of Excellence in a little bit more detail. Is it Service Now specific or is it a component of a larger? So today we announced our US based Innovation Center in Denver, Colorado. So it is a single physical location that we are consolidating our Service Now core platform technology capabilities is where we're bringing an innovation directly within Service Now. Service Now is one of the platform core technologies. The others that we have in our vision of end to end full IT transformation is what we call the business of IT right now which would include governance risk and compliance for the enterprise beyond IT something we call managed governance is about managing sourcing relationships in a more meaningful way. Each of those technologies we have technology partners for them. It's all cloud based but Service Now is our core anchor as we move into this new kind of How does a customer tap that expertise? Is it through your consultants? Do they tap it directly? Do you fly them into Denver? I wonder if you could talk about that a little bit. So this is stuff that's being built now. We've broken ground. We are assembling our team and starting to do work but our vision and the operating model for this is it will be a customer innovation center where we will use that structure to help in the development delivery cycle with clients so they will be able to access that virtually for example as we're delivering projects but it's also our plans are to have that be a place where we can bring clients in and innovate and define strategies and solutions to solve the next generation of business outcomes so it will be a collaboration center for clients and it's a place where we're going to actually get work done and deliver our capabilities and our technologies to our clients utilizing that center. A big part of your value proposition is your technology agnostic even though you've got expertise even though you I'm sure you know have favorites but nonetheless if the client says hey this is where we're going we want your help you can help them so I wonder if you could describe that dynamic in the IT service management and enterprise service management field particularly ESM is relatively new discipline so it's sort of emerging are you helping sort of define some of the technology direction how do you close that loop back to the technology supplier so you know in some cases we are you know there's a big field out there right so you can't say that we are you know covering all aspects of the future use of the technology of a platform like ServiceNow but there are a couple areas of strength that are priorities with our clients and particularly in the IT GRC space within the platform as well as leading business type solutions and human resources and you know the whole employee onboarding and some of those process areas that touch multiple functional areas where we know we've got the capability to do that so you know at work we are you know we collaborate with ServiceNow we have a great bidirectional partnership there so we are in some cases helping to set direction or give guidance and advice and are you know pulled into help point a direction of a particular application or functionality within it and at the same time there's so much to be done that there's some areas that you know just like other technologies in other spaces where we just we have to go and do it ourselves because there's a specific client need and it's valid for us to do that and we go do it. Last question so where do you want to see this go what are your objectives for your ServiceNow business what should we be watching as observers of you know indicators of progress and success Take a shot and maybe I can Well you know absolutely again you know our focus Dave is really client success and as we have clients who have made investments in ServiceNow they have driven success in the ITSM space they are now seeing opportunities beyond that you know that's a key area where we can help them go beyond ITSM and address you know service delivery service quality service governance within the enterprise and when you scale it and you take that perspective you know there's huge opportunity for our clients right so what we're looking at is clients who have made investments how can they take their existing platform and drive it further and generate more business value at the same time we have clients that have had a shared services model in existence for a while a global business services model they're looking at the element of service management saying how do we get better there and they're evaluating whether a technology choice can help accelerate that and drive that so that's a key area where we see opportunity as well. So I'd say from a business perspective our plans and our trajectory our growth trajectory internally of the ServiceNow alliance is that it will become one of the top three alliances of the entire KPMG global firm and right now we're on that path actually so you know we believe we have kind of a first mover capabilities around this whole entire enterprise service management capability set and together with our functional areas we expect that over the next couple of years there's going to be a lot of growth and a lot of client successes. You're doubling down on service management. Yeah, absolutely. Alright Greg, Ross, thanks very much. Appreciate you guys coming on. Alright keep it right there everybody we'll be back this is theCUBE we're live from Mosconi this is ServiceNow Knowledge we'll be right back