 Live from Orlando, Florida, it's theCUBE. Covering ServiceNow, Knowledge 17, brought to you by ServiceNow. Welcome back to Orlando, everybody. This is theCUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise. My name is Dave Vellante, and I'm here with my co-host, Jeff Afrik. This is theCUBE's fifth year covering knowledge. We started in Las Vegas at a little small event, Jeff, the Aria Hotel, and it's exploded from 3500 all the way up to 15,000 people here in Orlando at the convention center. This is day two of our three-day coverage, and we heard this morning, day one was the introduction of the new CEO, John Donahoe, taking over the reins for Frank Slutman, and actually it was interesting, Jeff, last night, we went around to some of the parties and talked to some of the folks and some of the practitioners. It was interesting to hear how many people were saying how much they missed Fred, and the culture of fun and zaniness and quirkiness that they sort of have, and there's some of that that's maintained here. We saw that in the keynotes this morning. We'll talk about that a little bit, but what are your impressions of sort of that transition from really the third phase now we're into of Service Now leadership? Right, well, as was commented again last night at some of the events, a relatively peaceful transition, right? So the difference between an evolution and a revolution is people die in revolutions. This was more of an evolution. It was an organized handoff, and a lot of the product leaders are relatively new. We just saw CJ Desai, he said he's only 100 days ahead of where John is at 45 days, so it is kind of, I don't know, refreshes the right word, but all new leadership in a lot of the top positions to basically go from, as has been discussed many times, from kind of the $1 billion mark to the $4 billion mark, and then of course onward to the 10. So it sounds like everyone is very reverent to the past, and Fred has a huge following. He's one of our favorite guests. The guy's just a super individual, people love him. That said, it's a very clear and focused move to the next stage in evolution of growth. Well, and I think that, you know, Fred probably, I mean, he may have said something similar to this, either on theCUBE or sort of in back-channel conversations with us is, you know, Service Now when they brought in Frank Slutman that needed adult supervision. Fred doesn't strike me as the kind of person that's going to be doing a lot of the, you know, HR functions and performance reviews and stuff. He wants the code, right? That was his thing. And now we're seeing sort of this next level of ascension for Service Now, and you're seeing the advancement of their product, their platform. So this morning CJ Desai kicked off the keynotes. Now CJ Desai was an executive in the security business. He was an executive at EMC, hardcore product guy. He's a hacker. You heard him this morning saying when he was at a previous company, he didn't mention EMC, but that's what he was talking about, I'm pretty sure. They use Service Now, and when Service Now started recruiting him, he said, I opened up an instance and started playing around with it and see if I could develop an app. And I was amazed at how easy it was. And they started talking to some of the customers and seeing how passionate they were about this platform and it became an easy decision for him to, you know, come and run. He's got a big job here. He run, he's basically, you know, manages all products, essentially taking over for Fred Lutty and, you know, Dan McGee is a chief operating officer, or even though he doesn't use that title, because he's a product guy, but all the GMs report up into him. So he is the man, you know, on top of the platform. So he talked this morning about Jakarta, the announcement and the key thing about, you know, that I'm learning really in talking to Service Now over the years is they put everything in the platform and then the business units have to figure out how to leverage that new capability, you know, whether it's machine learning or AI or some kind of new service catalog or portal, the business units, whether it's, you know, the managers, whether it's Farrell Huff and her team, she does IT service management, Abhijit Mitra, who does customer service management, the IT operations management people, the HR folks, they have to figure out how they can take the capabilities of this platform and then apply it to their specific use cases and industry examples. And that's what we saw a lot of today. But it's still a paper-based workflow, all right? It goes back to Fred's original vision, which I love repeating about the copy room with all the pigeonholes of colored paper that you would grab for. I need a new laptop, I need a vacation request, I need whatever, which nobody remembers anymore. But, you know, at the end of the day, it's put in a request, get it approved, doesn't need to be worked and then execute it. So whether that's asking for a new laptop, for a new employee, whether that's getting a customer service ticket handled, whether it's, we're talking about doing name changes, it's a relatively simple process under the covers and then now they're just wrapping it with the specific vocabulary and integration points to the different systems to support that execution. So it's a pretty straightforward solution. What I really like about ServiceNow is they're applying technology to relatively straightforward problems that have huge impact and inefficiency. And just getting away from email, getting away from so many notification systems that we have, getting away from phone calls, getting away from tech, trying to aggregate that into one spot, like we see in a lot of successful applications, SaaS applications. So now you've got a single system of record for the execution of these relatively straightforward processes. And it really is all about a new way to work and with the millennial workforce becoming younger, obviously they're going to work in a different way. I saw what I tweeted out, it was the best IT demo that I'd ever seen. Didn't involve a laptop, didn't involve a screen, what Chris Pope did, who's kind of an evangelist, he's in the CSO office, he was on the chief strategy office, he was on yesterday. He came up with a soccer ball, but you saw it and he said- Football, makes you say it right, he would correct you. And he said, for those of you who are not from the colonies, this is a football. And then he had somebody in a new employee's t-shirt, he had the HR t-shirt, the IT t-shirt, the facilities t-shirt, and they were passing the ball around and he did a narrative on what it was like to onboard a new employee in the back and forth and the touch points and underscoring the point of how complex it is, how many mistakes can be made, how frustrating it is, how inefficient it is, and then obviously setting up conveniently the morning of how the workflow would serve us now. But it was a very powerful demo, I thought. Well, the thing that I want to get into, Dave, is how do you get people to change behavior? And we talk about it all the time at theCUBE. People process and tech, the tech's the easy part. How do you change people's behavior? When I have to make that request to you, what gets me to take the step to do it inside of ServiceNow versus sending you that email? And it seems to me that that's the biggest challenge and you talk about it all the time as we get kind of tool creep and all these notification systems and there's Slack and there's Atlassian Jira and there's Salesforce and there's Dropbox and there's Google Docs and the good news is we're getting all these kind of SaaS applications that ultimately we're seeing this growth of APIs between them and an integration between them. But on the bad side, we get so many notifications from so many different places. How do you force really a compliance around a particular department to use a solution as we say that that's what's on your desk all the time and not email? And I think that's it. I look forward to hearing kind of what are best practices to dictate that. I know at Atlassian, internally, they don't use email. Everything is on Jira. I would presume that ServiceNow is probably very similar where internally everything is in the ServiceNow platform. But unfortunately there's those pesky people outside the organization who are still communicating with email. So then you get, then now you're running kind of a parallel track as you're getting new information from a customer that's coming in maybe be an email that you need to then populate into those tickets. That's the part I see as kind of a challenge. Well, I think it is a big challenge and of course when you talk to ServiceNow people privately and you say to them, you guys eliminated email, they're all their eyes, I wish. But I would presume their internal communications, as you say, are a lot more efficient and effective. But it's a cloud app. And cloud apps suffer from latency issues. And it's like when you go into a cloud app, you log in, a lot of times it logs you out just for security reasons. So you got to log back in, you get the spinning logo for a while, you finally get in and then you got to find what you want to do and then you do it. And it's a lot slower just from an elapsed time standpoint than actually not from a elapsed time, so from an initiation standpoint of getting something off your desk, it's slower. The elapsed time is much more efficient. And so what I think ends up happening is people default to the simple email system, it's a quick fix and then it starts the cycle of hell. But I think you're making a great point about adoption, how do you improve that adoption? One of the things that ServiceNow announced this morning is that roughly 30% improvement in performance. So people complain about performance like any cloud-based application and it's hard. You know, even when you use, look at LinkedIn. A lot of times you get a LinkedIn request and you go, I'll check it later. You don't want to go through the process of logging in. Everybody's experienced that. It's one of those sort of heavy apps. And so you just say, all right, I'll figure it out later. And Facebook is the same thing. And I have no doubt that ServiceNow certainly sales force similar sort of dynamics because it's a cloud-based app. And so hitting performance hard, as you say, the culture of leaving it on your desk. The folks at Nutanix, D-Roger's telling me they've essentially run their communications in Slack. And so, you know, they'll hit limits there, I'm sure as well. But everybody's trying to find a new way to work. And this is something that I know is a passion of yours because the outcome is so much better if you can eliminate email trails and threads and lost work. And we're stuck now in the middle phase, which is just brutal because you just get so many notifications from so many different applications. How do you prioritize? How do you keep track? Oh my God, did you ping me on Slack? Did you ping me on a text? Did you ping me on an email? I don't even know the notification window went off of my phone. I don't even know which one it came through. It's difficulty. The good news is that we see in SaaS applications and again, it's interesting, maybe just because I was at AWS Summit recently, I just keep thinking AWS. And in terms of the efficiency that they can bring to bear, the resources they can bring to bear around CPU utilization, storage utilization, security execution, all those things that they can do as a multi-bender cloud-based application and apply to their cloud in support of their customers on their application will grow and grow and grow and quickly surpass what most people could do on their own because they just don't have the resources. So that is a huge benefit of these cloud-based applications and again, as the integration points get better, because we keep hearing it, because you got some stuff in Dropbox, you got some stuff in Google Docs, you got some stuff in Salesforce. That's going to be interesting how that plays out and will it boil back down to again, how many actual windows do you have open that you work with on your computer? Is it two, is it three, is it four? Not many more than that and it can't be. Yeah, so today here at Knowledge is a big announcement day. You're hearing from all the sort of heads of the businesses. Jakarta is the big announcement. That's the new release of the platform. Kingston's coming later on this year. ServiceNow generally does two a year, one in the spring, summer, one in the fall, kind of early winter. And Jakarta really comprises a performance improvement, new security capability where, I thought this was very interesting, where you have all these vendors that you're trying to interact with and you trying to figure out, okay, what do I integrate with in terms of my third party vendors and who's safe and do they comply to my corporate edicts? And ServiceNow introducing a module in Jakarta which is going to automate that whole thing and simplify. And then the one, the big one was software asset management. Every time you come to a conference like Knowledge, and you get this at Splunk too, the announcements that they make, they're not golf claps, you'd get hoots and woos and yes, and people standing up. That was the one. Software asset management was the one. What a big star on that one. Let's talk about this a little bit because, and they mentioned Oracle, but this is a pain point of a lot of Oracle customers, is audits, software audits. And certainly Oracle uses software audits as negotiating leverage. And clients, customers don't really know what they have, what the utilization is. Maybe they buy more licenses even though they could repurpose licenses. They just can't keep track of all that stuff. And so ServiceNow is going to do it for you. So that's a pretty big deal. And obviously people love that. As I said, 30% improvement in performance. And yeah, this software asset management thing, we're going to talk to some people about that. See what they're- I got the big cheer. What their expectation is. The other thing that was interesting on the product announcements is using AI. Again, I just love password reset as an example because it's so simple and discreet and it's still impactful. About using AI on relatively, sounds like simple processes that are super high ROI, like auto categorization. Let the machine do auto categorization. And a lot of these little things that make a huge difference in productivity to be able to find and discover and work with this data that you're now removing the people from and making the machine, the better for machine processes handled by the machine. And you see that going all through the application, a lot of the announcements that were made. So it's not just AI for AI, but it's actually they call it intelligent automation and applying it to very specific things that are very fungible and tangible and easy to see and provide direct ROI right out of the game. Well, this auto categorization is something that, I mean, it's been a vexing problem in the industry for years. I mentioned yesterday that in 2006 with the federal rules of civil procedure change and made electronic documents admissible, it meant that you had to be able to find and submit to a court of law all the electronic documents on a legal hold. And there were tons of cases in the sort of mid to late part of the 2000s where companies were fined hundreds of millions of dollars. Morgan Stanley was the sort of poster child of that because they couldn't produce emails. And as part of that, there was a categorization effort that went on to try to say, okay, let's put these emails in buckets. Something as simple as email so that when we have to go find something in a legal hold we can find it, or more importantly, we can defensively delete it. But the problem was, as I said yesterday, the math has been around forever, things like support vector machines and probabilistic latent semantic indexing all these crazy algorithms. But the application of them was flawed and the data quality was poor. So we'll see if now AI, which is the big buzzword now, but it appears that it's got legs in Israel with machine learning and it's kind of the new big data meme, we'll see if in fact it can really solve this problem. We certainly have the computing horsepower. We know the math is there. And I think the industry has learned enough that the application of those algorithms is now going to allow us to have quality categorization and really take the humans out of the equation. Yeah, I made some notes. It was Farrell, her part of the keynote this morning where she really talked about some of these things and again, categorization, prioritization and assignment. Let the machine take the first swag at that and let it learn and based on what happens going forward, let it adjust its algorithms. But again, really simple concepts, really painful to execute as a person, especially at scale. So I think that's a really interesting application that ServiceNow is bringing AI to these relatively straightforward processes that are just painful for people. Yes, squinting through lists and trying to figure out, okay, which one's more important in weighting them? And I'm sure they have some kind of scoring system or weighting system that you can tell the machine, hey, prioritize these things, security incidents or high value assets. First, give me a list. I can then eyeball them and say, okay, now I'm going to do this third one first and the first one second, whatever. And you can make that decision, but it's like a first pass filter, like a vetting system. But like what Google Mail does for you, right? It takes a first pass. So these are the really specific applications of machine learning and AI that will start to have an impact in the very short term on the way that things happen. So the other thing that we're really paying attention here is the growth of the ecosystem. It's something that Jeff and I have been tracking since the early days of ServiceNow, knowledge that in terms of our early days at theCUBE, and the ecosystem is really exploding. You're seeing the big SIs. Last night we were at the Accenture party. It was a typical Accenture, very senior level, a bunch of CIOs there. It reminded me of when you go to the parties at Oracle and the big SIs have these parties. I mean, they're just loaded with senior executives. And that's what this was last night, the VIP room and all the suits were in there and they were schmoozing. These are things that are really going to expand the value of ServiceNow. It's a new channel for them. And these big SIs, they have their relationships at the boardroom level. They have the deep industry expertise. I was talking to Josh Kahn, who's running the industry solutions now, another former EMC-er. And he obviously is very excited to have these relationships with the SIs. So that to me is a big windfall for ServiceNow and something that we're going to be tracking. And especially this whole concept of the SIs building dedicated industry solutions built on SIs. I overheard some of the conversation at the party last night between an SIs executive, it was an Accenture executive and one of the ServiceNow people. And they talked about the power of having the combination of the deep expertise in an industry. Can't remember which one they were going after. It was one big company, their first kind of pilot project combined with the stability and roadmap on the ServiceNow side to have the stable software platform that in the combination of those two, so complimentary to take the market to this particular customer that they were proposing the solution around and then to take that solution as they always do and then harden it and then take it to the next customer, the next customer, the next customer. So as you said, getting these big integrators that own the relationships with a lot of big companies actively involved in our building industry solutions is a huge step forward beyond just consultative services and best practices. Well, they have such deep industry expertise. I mean, we talked yesterday about GDPR and some of the new compliance regulations that are coming to the banking industry, particularly in Europe. The fines are getting much more onerous. These SIs have deep expertise in understanding how to apply something like ServiceNow. ServiceNow, you think of it as a generic platform but it needs brain power to say, okay, we can solve this particular problem by doing A, B, C and D or developing this application or creating this solution. That's really where the SIs are. It's no surprise that a lot of the senior ServiceNow sales reps were at that event last night, hanging with the customers, hanging with their partners and that is just a positive sign of momentum in my opinion. All right, Jeff, so big day today, CJ Decise coming on. We're going to run through a lot of the business units. Tomorrow is sort of product demo day. It's the day usually that Fred Lutty hosted. Pat Casey, I think it's going to be the main host tomorrow and we'll be covering all of this from theCUBE. This is day two, ServiceNow Knowledge. Hashtag No17, check out siliconangle.com for all the news you can watch us live, of course, at theCUBE.net. I'm Dave Vellante, he's Jeff Frick. We'll be right back after this short break.