 From the Bellagio Hotel in Las Vegas, it's theCUBE covering UiPath. Forward 4, brought to you by UiPath. Good morning, welcome to theCUBE's coverage of UiPath Forward 4, day two live from the Bellagio in Las Vegas. I'm Lisa Martin with Dave Vellante. Dave, we had a great action-packed day yesterday. We're going to have another action-packed day today. We've got the CEO coming on. We've got customers coming on. But there's been a lot in the news in the last 24 hours, Facebook. What are your thoughts? What's going on? Yeah, so Wall Street Journal today, headline Facebook hearing, fuel's call for rain in on big tech. All right, everybody's going after big tech. For those of you who missed it, 60 Minutes had an interview with the whistleblower. Her name is Francis Haugen. She's very credible. Just a little background, I'll give you my take. I mean, she was hired to help set Facebook straight and protect privacy of individuals, of children. And I really feel like, and again, she didn't come across as bitter or antagonistic, but I feel as though she feels betrayed. I think she was hired to do a job. They lured her in to say, hey, this is again just my take. To say, hey, we want your help, in earnest, to protect the privacy of our users, our citizens, et cetera. And I think she feels betrayed because she's now saying, listen, this is not cool. You hired us to do a job. We, in earnest, went and tried to solve this problem. And you guys kind of ignored it and you put profit ahead of safety. And I think that is the fundamental crux of this. Now, she made a number of really good points in her hearing yesterday, and I'll try to summarize. I mean, there's a lot of putting advertising revenue ahead of children's safety and others. The examples they're using are, during the 2020 election, they shut down any sort of negative conversations. They would be really proactive about that, but after the election, they turned it back on. And we all know what happened on January 6th. So they're sort of, senators are tying that, not. The second thing is, she talked about Facebook as a walled garden. And she made the point yesterday at the Congressional hearings that Google, actually you can, data scientists, anybody can go download all the data that Google has on you. You and I can do that. There's that website that we've gone to and you look at all the data Google has and you kind of freak out. You can't do that with Facebook. It's all hidden. So it's kind of this big black box. I will say this. It's interesting the calls for breaking up big tech. Bernie Sanders tweeted something out yesterday, said that Mark Zuckerberg was worth, I think nine billion in 2007 or eight or nine, whatever it was. And he's worth 122 billion today, which of course is mostly tied up in Facebook stock, but still he's got incredible wealth. And then Bernie went on his rant. It's time to break up big tech. It's time to get people to pay their fair share, et cetera. Intrigued that the senators don't have as much vigilance around other industries, whether it's big pharma, food companies, addicting children to sugar and the like. But that doesn't let Facebook off the hook. No it doesn't, but you bring up a good point. You and I were chatting about this yesterday. What the whistleblower is identifying is scary. It's dangerous. And the vast majority I think of its users don't understand it, they're not aware of it. And why is big tech being maybe singled out and used as an example here, when to your point the addiction to sugar and other things have very serious implications of why is big tech being singled out here as the poster child for what's going wrong? Well, and they're comparing it to big tobacco, which is the last thing you want to be compared to is big tobacco. But the comparison is valid in that her claim, the whistleblower's claim was that Facebook had data and research that it knew it knows it's hurting young people and so what did it do? It created Instagram for kids or it had 600,000. She had another really interesting comment or maybe one of the senators did. Facebook said, look, we scan our records and kids lie and we kicked 600,000 kids off the network recently who were underaged. And the point was made, if you have 600,000 people on your network that are underage, you got to go kick, that's a problem. Yeah, it is. So now the flip side of this, again, trying to be balanced is Facebook shut down Donald Trump and his nonsense and basically took him off the platform. They kind of thwarted all the Hunter Biden stuff. Right, that was very. So they did do some, it's not like they didn't take any actions and now they're up in front of the senators getting hammered. But I think that Zuckerberg brings a lot of this on himself because he put out on Instagram, he's on his yacht, he's drinking, he's having fun, he's like he doesn't care. And he, who knows, he probably doesn't. But she also made the point that he owns an inordinate percentage and controls an inordinate percentage of the stock, I think 52% or 53%. So he can kind of do what he wants. And I guess, coming back to public policy, there's a lot of narrative about, I get the billionaires and I get that. I'm all four billionaires paying more taxes. But if you look at the tax policies that's coming out of the House of Representatives, it really doesn't hit the billionaires. The way billionaires, we kind of know the way that they protect their wealth is they don't sell. And they take out low interest loans that aren't taxed. And so if you look at the tax policies that are coming out, they're really not going after the billionaires, it's a lot of rhetoric. I like to deal in facts. And so I think there's a lot of disingenuous discourse going on right now. At the same time, Facebook, they got to figure it out. They have to really do a better job and become more transparent. Or they are going to get broken up. And I think that's a big risk to their franchise. And maybe Zuckerberg doesn't care, maybe he just wants to give it to the government, say, hey, you guys run it. And if that happens, what do you think would happen with Amazon, Google, Apple, some of the other big giants? It's a really good question. And I think if you look at the history of the US government in terms of anti-monopolistic practices, it spent decade plus going after IBM. At the end of the day, and at the same thing with Microsoft, at the end of the day, those are pretty big high-profile ones. And then you look at AT&T, the breakup of AT&T. If you take IBM, IBM and Microsoft, they were slowed down by the US government, no question. IBM in particular had its hands shackled. But it was ultimately their own mistakes that caused their problems. IBM misunderstood the PC market. It gave its monopoly to Intel and Microsoft. Microsoft, for its part, was hugging Windows. It tried to do the Windows phone. It tried to jam Windows into everything. And then open source came and the world woke up and said, oh, there's this internet that's built on Linux. That kind of moderated by the AT&T was broken up and then they were the baby bells and then they all got absorbed. And now you have all this big giant telcos and cable companies. So the history of the US government in terms of adjudicating monopolistic behavior has not been great. At the same time, if companies are breaking the law, they have to be held accountable. I think in the case of Amazon and Google and Apple, they have a lot of lawyers and they'll fight it. You look at what China's doing, they just cut right to the chase and they say, they don't litigate. They just say, this is what we're doing. Big tech, you can't do A, B and C. We're going to fund a bunch of small startups to go compete. So that's an interesting model. I was talking to John Chambers about this and he said, he was flat out that the Western way is the right way and I believe in democracy and so forth. But I think if to answer your question, I think they'll slow it down in courts. And I think at some point, somebody's going to figure out a way to disrupt these big companies. They always do. You're right, they always do. I mean, the other thing John Chambers points out is that he used to be at 128 working for Wang. There is no guarantee that the past is prologue, that because you succeeded in the past, you're going to succeed in the future. Absolutely. So that's kind of the Facebook breakup big tech. I'd like to see a little bit more discussion around things like food companies and the like. You bring up a great point about that. They're equally harmful in different ways and yet they're not getting the visibility that a Facebook is getting and maybe that's because of the number of users that it has worldwide and how many people depend on it for communication, especially in the last 18 months when it was one of the few channels we had to connect and engage. Well, and the whistleblowers point, Facebook puts out this marketing narrative that, hey, look at all this good we're doing. In reality, they're all about the advertising profits. But I'm not sure what laws they're breaking. They're a public company, they have a responsibility to share holders, so that's to be continued. The other big news and the headline is banks challenge Apple Pay over fees for transactions. In 2014, when Apple came up with Apple Pay, all the banks lined up, oh, they had FOMO. They didn't want to miss out on this, so they signed up. Now they don't like the fact that they have to pay Apple fees, they don't like the fact that Apple introduced its own credit card. They don't like the fact that they have to pay fees on monthly recurring charges on your iTunes. And so, we talked about this and we talk about it a lot on theCUBE is that in his book, Seeing Digital, David Michela, the author, talked about Silicon Valley broadly defined, so he's including Seattle, Microsoft, but more so Amazon, et cetera, has a dual disruption agenda. They're not only trying to disrupt horizontally the technology industry, but they're also disrupting industry. We talked about this yesterday. Apple and finance is the example here. Amazon, who was a bookseller, got into cloud and is in grocery and is doing content and you're seeing these large companies traverse industry value change, which has historically been very insulated from that type of competition. And it's all because of digital and data, so it's a very pretty fascinating trend going on. From a financial services perspective, we've been seeing the unbundling of the banks for a while. The big guys with B of A's, those folks are clearly concerned about the smaller, well, I'll say the smaller FinTech disruptors for one, but the non-FinTech folks, the apples of the world, for example, who aren't in that industry, who are now to your point disrupting horizontally and now going after individual specific industries. Ultimately, I think as consumers, we want whatever is going to make our lives easier. Do you ever, ever, I always kind of scrunch my nose when somebody doesn't take Apple Pay, I'm like, you don't take Apple Pay? So easy. It's so easy, make this easy for me. Yeah, yeah, so it's going to be really interesting to see how this plays out. I do think, you know, it begs the question, when will banks or will banks lose control of the payment systems? They seem to be doing that already with alternative forms of payment, whether it's PayPal or Stripe or Apple Pay, and then crypto with decentralized finance is a whole nother topic of disruption and innovation. Right, well, these big legacy institutions, these organizations, and we spoke with some of them yesterday, we're going to be speaking with some of them today. They need to be able to be agile to transform. They have to have the right culture in order to do that, that's a big one. They have to be willing, I think, and open to partner with the broader ecosystem to unlock more opportunities if they want to be competitive and retain the trust of the clients that they've had for so long. Yeah, you know, Lisa, I think every industry has a digital disruption scenario. We used to always use the don't get Uberized example. Uber's coming on today. Right, they are. And there isn't an industry, whether it's manufacturing or retail or healthcare or government, that isn't going to get disrupted by digital. And I think the unique piece of this is it's data. Data, putting data at the core, that's what the big internet giants have done. That's what we're hearing all these incumbents try to do is to put data, we heard this from Coca-Cola yesterday, we're putting data at the core of our company, but we're enabling through automation and other activities, a digital company. And so, you know, can these giants, these 100 plus year old giants compete? I think they can because they don't have to invent AI. They can work with companies like UiPath and embed AI into their business and focus on what they do best. Now of course, Google and Amazon and Facebook and Microsoft, they're maybe going to have the best AI in the world. But I think ultimately all these companies are on a giant collision course, but the market is so huge that I think there's a lot of room. There's a tremendous amount of opportunity. I think one of the things that was exciting about talking to one, the female CIO of Coca-Cola yesterday, 100 plus old organization, and she came in with a very transformative, very different mindset. So when you see these, I always appreciate when I say legacy institutions like Coca-Cola or Mark who was on yesterday, Blue Cross, Blue Shield who's on today, embracing change, cultural change going, we can't do things the way we used to do because there are competitors in the review mirror who are smaller, they're more nimble, they're faster, they're going to be able, they're going to take our customers away from us. We have to deliver this exceptional customer and employee experience, and Coca-Cola is a great example of one that really came in with, brought in a disrupter in order to align digital with the CIO's thoughts and processes and organization. These are highly capable companies. We heard from the head of finance at Applied Materials today who's also coming on. I was quite, I mean, this is an, Applied Materials is a really strong company. They're talking about a $20 plus billion company with a $120 billion market cap. They supply semiconductor equipment and they're a critical component of the semiconductor supply chain and we all know what's going on in semiconductors today with a huge shortage. So they're a really important company, but I was impressed with their finance leaders' vision on how they're transforming the company. It was very thorough. And it was not like 10 years out. These were not like aspirational goals. This was like 2019, 2022. Oh yeah. And really taking costs out of the business, driving new innovation, and it's refreshing to me, Lisa, to see CFOs, typically just bottom line finance, focused on these industry transformations. Now of course at the end of the day it's all about the bottom line, but they see technology as a way to get there. In fact, he put technology right in the middle of his stack. I want to ask him about that too. I actually want to challenge him a little bit on it because he had that big, dupe elephant in the middle and as an elephant in the room. The strategy though that applied materials had, it was very well thought out, but it was also to your point designed to create outcomes year upon year upon year. And I was looking at some of the notes I took that in year one alone, 274 automations in production. That's a lot. 150,000 annual work hours automated 124 use cases they tackled in one year. So I want to poke at that a little bit too. And I did yesterday with some guests and I don't feel like, well, let's see. So I believe it was, I forget which guest it was, but she said, we don't put anything forward that doesn't hit the income statement. Do you remember that? Is that Chevron? Yes, it was Chevron. Okay. Because I was pushing her, I'm like, well, you're not firing people. We saw from IDC data today, only 13% of organizations are saying, or the organization said 13% of the value was from reduction in force. And a lot of that was probably in plan anyway, and they just maybe accelerated it. So they're not getting rid of headcount, but they're counting hours saved. So that says to me there's got to be, and normally or often CFOs say, well, that's soft dollars. Okay. Because we're redeploying folks. But she said, no, it hits the income statement. I want to push a little bit and see how they connect the dots. Because if you're going to save hours, you're going to apply people to new work. And so either they're generating revenue or they're cutting costs somewhere. So there's another layer that I want to appeal to understand how that hits the income statement. Let's talk about some of that IDC data. They announced a new white paper this morning sponsored by UiPath. And I want to get your perspectives on some of the stats that they talked about. They were painting a positive picture, an optimistic picture. We can't talk about automation without talking about the fear of job loss. They painted a very optimistic picture for the actual gains over a few year period. What are your thoughts about that, especially when we saw that stat 41% slowed hiring? Yeah, so, well, first of all, it's a sponsored study. So, you know, and of course, conference. So it's going to be positive. But I'll say this about IDC. IDC is a company, I would put, you know, Forrester's similar, they do sponsored research and they're credible. They don't, they have to answer to their audience so they can't just put out garbage. And so it has to be defensible. So I give them credit. They won't just take whatever the vendor wants them to write and then write it. I used to work there and I know the culture and there's a great deal of pride in being able to defend what you do. And if the answer doesn't come out right, sorry, this is the answer. You know, you can pay a kill fee or I don't know how they handle it today. But so my point is, I think, and I know the people who did that study, many of them, and I think they're pretty credible. I thought, by the way, you're to your 41% point. So the stat was 13% are going to reduce headcount. Right. And then there were two in the middle and then 41% are going to reduce or defer hiring in the future. And this to me ties into the Eric Brynjolfson and McAfee work, Andy McAfee work from MIT, who said, look, initially, actually, let me back up. They said, look it, machines have always replaced humans historically. This was in their book, The Second Machine Age. And what they said was, but for the first time in history, machines are replacing humans with cognitive functions. And this is sort of, we've never seen this before. It's okay, that's cool. And their research suggests that near term, there's going to be a negative economic impact, sorry, negative impact on jobs. Right. And salaries, and we've generally seen this, the average salary up until recently has been flat in the United States for years and somewhere in the mid-50s. But long-term, their research shows that, and this is consistent, I think, with IDC, that it's going to help hiring. Right. There's going to be a boost. But. There's a chasm you've got across. Right. Which is education, training, and skill sets, which Brynjolfson and McAfee focused on things that humans can do that machines can't. And they have this long list and they revisit it every year. Like, it used to be robots couldn't walk upstairs. Well, you see robots walking upstairs all the time now. Problem solved. But it's empathy, it's creativity, it's things like that. Contacts. Are much better at than machines. Even negotiations. And so that's, those are skills, I don't know where you get those skills. Do you teach those in, you know, MBA class? Or, you know, so their point is, there needs to be a new thought process around education, public policy, and the like. And look it, you can't protect the past from the future. Right. And this is inevitable. And we've seen this in terms of economic activity around the world, countries that try to protect, you know, a hundred percent employment and don't let competition, they tend to fall behind competitively. You know, the U.S. is not of that category. It's an open market. So I think this is inevitable. But we talked also a lot about upskilling yesterday and the number of, we talked with PWC about, for example, about what they're doing and a big focus on upskilling. And that was part of the IDC data that was shared this morning. For example, I'll share a stat. This was a survey of 518 people. 68% of up-skilled workers had higher salaries than before. They also shared 57% of up-skilled workers had higher roles in their enterprises than before. So again, to a point, it's a sponsored study, so it's going to be positive. But there was a lot of discussion of upskilling yesterday and the importance on that education because to your point, we can't have one without the other. You can't give these people access to these tools and not educate them on how to use it and help them help themselves become more relevant to the organization, get rid of the mundane tasks and be able to start focusing on more strategic business outcome impacting processes. We talked yesterday about, I used the example of SAP. You couldn't have predicted SAP would have won the ERP wars in the early to mid 1990s. But if you could have figured out who was going to apply ERP to their businesses, you know, manufacturing companies and these global firms, you could have made a lot of money in the stock market by identifying those that were going to do that. And we used to say the same thing about big data and the reason I'm bringing all this up is the conversations with PWC, Deloitte, EY and others. This is automation, a huge services opportunity. Now, I think the difference between this and the big data era, which is really driven by Hadoop, is it was, big data was so complicated and you had a lack of data scientists so you had to hire these services firms to come in and fill those gaps. I think this is an enormous services opportunity with automation, but it's not because the software is hard to get to work. It's all around the organizational processes, rethinking those as people process technology, it's about the people and the process. Whereas Hadoop and the big data era, it was all about the tech. And they would celebrate, hey, this stuff works, great. And very few companies really made it through that knothole to dominate, as we've seen with the big internet giants. So you're seeing all these big services companies playing in this market because, as I often say, they like to eat at the trough. I know it's kind of a pejorative, but it's true. So it's huge, huge market, but I'm more optimistic about the outcomes for a broader audience with automation than I was with big data slash Hadoop. Because I think the software is much more adoptable, easier to use, and you've got the cloud and it's just a whole different ball game. That's certainly what we heard yesterday from Chevron about the ease of use and that you should be able to see results and returns very quickly. And that's something too that UiPath talks about in a lot of their marketing materials. They have a 96, 97% retention rate. They've done a great job building their existing customers, land and expand. As we talked about yesterday, a great use case for that. But they've done so by making things easy. But hearing that articulated through the voice of their customers, fantastic validation. So, you know, theCUBE is like a little, it's like an interesting tip of the spirit. It's like a probe. And I will tell you, when we first started doing theCUBE in the early part of the last decade, there were three companies that stood out. It was Splunk, ServiceNow, and Tableau. And the reason they stood out is because they were able to get customers to talk about how great they were. And the light bulb went off for us. We were like, wow, these are three companies to watch. You know, I would tell all my Wall Street friends, hey, watch these companies. And now you see, you know, with Frank Slutman at Snowflake, the cat's out of the bag. Everybody knows it's there and they're expecting, you know, great things. The stock is so priced to perfection. You could argue it's overpriced. The reason I'm bringing this up is in terms of customer loyalty and affinity and customer love, you're getting it here. With this ecosystem. And the reason I bring that up is because there's a lot of questions in the event last night. I was walking around, saw a couple of Wall Street guys who came up to me and said, hey, I read your stuff. It's good, you know, let's chat. And there's a lot of skepticism on Wall Street right now about this company. Right. And to me, that's good news for you investors who want to do some research because the words may be not out. You know, they got to prove themselves here. And to me, the proof is in the customer and the lifetime value of that customer. So, you know, again, we don't give stock advice. We kind of give fundamental, you know, observations. But this stock, I think it's trading just about 50 now. I don't think it's going to go to 30 unless the market just tanks. It could have some, you know, if that happens, okay, everything will go down. But I actually think even though this is a richly priced stock, I think the future of this company is very bright. Obviously, if they continue to execute and we're going to, you know, hear from the CEO, people don't know Daniel Dinez, right? They're like, who is this guy? You know, he started this company and he's from Eastern Europe and we don't, he's never run a public company before. So they're not diving all in, you know? And so that to me is something they'll really pay attention to. It is, and we can unpack that with him later today. And we've got some great customers on the program. You mentioned Ubers here, Spotify's here, Applied Materials. I feel like I'm announcing something on Saturday Night Live. Ubers here, Spotify's here. All right Dave, looking forward to a great action pack today. We're going to dig more into this and let's get going, shall we? All right, let's do it. All right, for Dave Vellante, I'm Lisa Martin. This is theCUBE Live in Las Vegas at the Bellagio. We are coming to you, presenting UY Path Forward 4. Come back right away. Our first guest comes up in just a second.