 ServiceNow Knowledge 4T is sponsored by ServiceNow. Here are your hosts, Dave Vellante and Jeff Frick. Welcome back everybody, we're here wrapping up. This is day two and a half, it's really day the third day that we've been here. And this is really our last segment. Jeff and I are going to break down sort of the week, what we learned this week and talk about some of the stuff that we've got upcoming. So Jeff, as we talked about on Tuesday, we are seeing the ascendancy of this new company that's playing in the cloud space, the software as a service, the cloudification of IT. Everything's moving at the cloud. We always talk about cloud, big data, mobile and social. ServiceNow is at the heart of that. We're talking about a company that's growing at 50 to 60% a year. They are on track to do close to 700 million. I think they'll actually hit 700 million this year, give or take. They are going to be a billion dollar company very shortly. They will be one of the next billion dollar companies probably around 2015. Going hard after the global 2000. They're refining their total available market vision. We've quantified at Wikibon to be a $30 billion market. Could even be bigger. That was really a top-down analysis. So I wouldn't bet the farm on that necessarily. But I think it's within an order of magnitude for sure. And so I think that we are potentially seeing a new wave of companies. The likes of Salesforce, which got it all started in 1999. But companies like Workday and certainly Amazon with infrastructure as a service, a $3 billion company growing at 60 to 70% a year. ServiceNow is unquestionably in that category of cloud players that are disruptive. That I hope, Jeff, can stay independent for a long, long time. I think that when you look at Workday, for example, they didn't want to get bought by Oracle. The day they got bought by Oracle, Dave Duffield and Anil Bushree started Workday. They didn't want to get bought by Oracle. And so I don't see that company getting taken out anytime soon. And they've got so many triggers that won't allow that to happen. They want to be a big, independent company. I hope the same happens for ServiceNow. Very confident that Amazon Web Services isn't going to spin it out and sell AWS. That's something that is a new player in the industry. And I love it because the IT industry has become this sort of oligopoly. And in the mid-2000s, it was kind of boring. You had Microsoft and Intel and IBM and HP and SAP and Oracle and Cisco. And EMC is sort of the small of the big. EMC's got one of the more interesting ones, what they've done with VMware. But you had the five or six big players. And little moves in the chessboard made a difference. But now we're seeing, bubbling up, out of the consumer markets, things like Amazon Emerge and Google and Facebook. And you're seeing a lot of those concepts brought into the enterprise and ServiceNow is an instantiation of that, in a way that I think has long-term like. So I'm hoping that we're going to see many new powerhouses emerge out of this space and the big data space. I think Cloudera and Hortonworks and MapR and Palantir and all these other opportunities that we're seeing with Splunk and Tableau. Very hopeful that one or two or maybe three are going to emerge from that space as multi-billion dollar companies that are going to survive and be independent for a long, long time. So it's very exciting. It'll be interesting because the incumbents, the powers that be have been hoarding lots of cash for a very long time. And as we know, Microsoft and Oracle and a lot of those guys have a lot of cash, you know, dry tender if you will, that probably haven't been investing that at a rate in new technologies that would justify the amount of cash they have. So we'll see and obviously the changes at the top at Microsoft with more of a cloud focus and how that will play out. But a couple of themes that I thought were interesting today. You know, we keep talking about these newer age enterprise SaaS companies in kind of a bucket with Workday and ServiceNow. And it was interesting that the guests were saying, they actually work with Workday. They're doing an integration with Workday. They actually use Amazon. ServiceNow used Amazon to spin up the 24,000 instances for this show. And actually you're putting in a management service for enterprises to manage their AWS instances. So this kind of co-opetition, if you will, and the way to leverage these new service-based SaaS solutions for the enterprise to deliver SaaS services and service automation to the enterprise is pretty interesting. I think it really requires an outsider to come in and shake things up to drive the innovation that we're seeing. And as you said, things got kind of boring. It was always the same kind of stack, the same oligopoly. And I always go back to Clayton Christensen's book. It's hard to eat yourself. It usually has to come from the outside because you've got customers that are giving you money that you invest in continuous improvement versus this disruptive improvement that we're seeing this kind of new age again. So it's a really exciting time to be here. But the pattern we're in right now, I mean right now, the pattern we've been in for the last five or seven years in the enterprise IT space has been one where the big whales really aren't innovating. There's very few examples where the big whales are innovating. You could maybe argue that AWS is, but they're really not a whale yet. They're on their way. But the big giant companies, they really don't innovate. What they do is they buy companies. And then they bring them into their, IBM blue washes them. EMC's quite good at acquisitions. Oracle obviously quite good at acquisitions. They bring these companies in and they put them into their sales channel and then they explode them. And that's how they try to keep on at least some kind of growth trajectory. But their growth is slow. It's single digit growth. Every now and then they might bump up against double digit growth. And so, but what has happened is everybody assumes that these new waves are going to crush the existing players. And they think that because during the PC era, that's what happened. And you saw this, particularly the East Coast mini companies, Prime, Wang, Deck, DG, Apollo, they all disappeared. But a lot of the companies that created that disruption were paranoid to use Andy Grove's line. So you have great companies that emerged from that. And you've got leaders like Joe Tucci and John Chambers and Larry Ellison and now we'll see with Satya Nadella. It seems to be shaking things up a little bit. Their legacy is going to be a function of whether or not they get crushed. And so that's, I'm a little nervous about that, because I think that they've got so much cash and they just, they wait and they wait and they wait and then they jump in and then they acquire and then they're able to manage their customer base in a way that it, and in some ways it supports innovation because it creates new opportunities in white space. But it's less interesting because it doesn't create that competitive environment for customers. It stays very steady state. So I'm feeling like cloud, mobile, social and big data is going to disrupt that steady state and I'm really hopeful of that. Well, the one thing that we've talked about a lot of customers is what's driving the changes now the expected behavior of the applications by the consumers inside the enterprise that's driven by these outside forces. We're no longer, does the internal IT department dictate that here's your PC, here's what it's loaded on, here's the applications you're going to interact with ready set go when I think it was baby Fred that said when the CEO walks in with the iPhone now suddenly, oh my gosh, we have to support the iPhone. So I think that trend will continue and that will be a challenge for the bigger incumbents to address, but clearly they recognize that and they're moving. It's interesting when you talk about the big ones, I think IBM is an interesting example as they jettison large chunks of their business, they jettison the PC business, they jettison their x86 server business. So I think it's a pretty bold move for a large organization to jettison a significant piece of business in the interest of kind of moving forward in a new age. And I think of all the big ones, they're really one who've shown, not only are they willing to buy companies and try to integrate new technologies and do that pretty effectively, but then to discard that and really play the card that this is not the place that we want to be anymore and that's pretty bold. So what's interesting about this event, to me, the knowledge event, is the emphasis on the IT organization, the CIO, the transformation piece, the CIO becoming a business leader and we saw the really clear examples of that, the transformation of IT from cost center into value producer into service provider into the template for service provision. So that's quite interesting. I mean you find CIOs at Oracle Open World, you find them at SAP, Sapphire, you don't always find them at smaller events, but you did here. So that's impressive. The content that appeals to the CIOs was I think very relevant. Of course you had a lot of IT service management, a lot of ITIL people here as well. But you know, service now, they're going after the fat middle of IT and IT is transforming, it's becoming cloud broker. We had a long conversation with Jason Wohan about that from Cloud Sherpers. And you, as Frank said, you are seeing the cloudification of the IT industry and service now is just to say right at the heart of that. Yeah, and we had a lot of, a center KPMG, it reminds me of kind of back in the, you know, kind of supply chain optimization days. They took so much fat out of those processes, you know, 20 years ago, and it sounds like, and it seems to be true that there's that kind of fat now in the IT services processes that are so manual, it still forms base. So if they can have the transformative effect on that process as happened in supply chain, you know, back 20 years ago, huge opportunity. Yeah, and you know, this whole notion of value is one that's always been near and dear to my heart. I think that, you know, backpost.com bubble, we cut into the bone. I think there's no question about that. And I think the, Nick Carr, does IT matter? Summed it up. And the prevailing sentiment back then was, you know what, no, it doesn't matter. And we asked Jeffrey Moore about that this weekend. He said, I think what Nick Carr missed is that he was talking about systems of record and he missed that there's something beyond that, which became the systems of engagement. I also think, I said this, that he missed that what customers do with IT practitioners became more important than what suppliers did. And you had companies like Google and Amazon and Facebook and Twitter emerged, they're essentially IT companies. You know, prior to that, you had the likes of financial services companies that were IT companies. Right, right. But that created an entire, you know, multi-trillion dollar industry. And so that, you know, we always make fun of, you know, does IT matter? Clearly IT matters. It's, you know, it's almost like, you know, the comment of, you know, back in whatever it was, the 1700s of everything that can be invented has been invented. Right, right. You know, we know, we know better. Of course you live in Silicon Valley, so you know better. Well, the other thing, I mean, just look at something as simple as Uber, right? Getting people around on a taxi cab substitute, it's really a technology company. And there's lots of examples. I think people just kind of forget about them. I mean, remember Saber with, you know, spinning out of American Airlines and really starting to identify the value within their own IT infrastructure and the systems that they've built and then taking those to market as an independent company. So I think today with the, you know, kind of Gordon's more crazy rising computing power, distributed computing power of these phenomenal networks and stuff that we take advantage of and GPUs and carrying around these mobile phones that the opportunity for anyone to really be an IT company, a technology company that wraps a different asset class around it is huge. And I think most of the progressive companies recognize that and are going forth in that direction. So I think in, for decades, CIO has been in search of the value equation. I've had literally hundreds, if not thousands of conversations with CIOs over the years. How do you measure value? How do you demonstrate the value of IT to the business? How do you quantify that value? And there really was never a great answer. There were methodologies to do that. David Floor and I actually had a methodology that was quite useful. But at the end of the day, they didn't have the systems to actually demonstrate that value. That's what service now brings. And I think it's going to open up a whole new opportunity for organizations to measure value, to demonstrate the value, to prioritize, to understand and model their business and understand how initiatives are going to impact the income statement and really begin to get a much better handle on that dynamic over time and add new disciplines that will drive corporate value. So the individuals that you talk to at this event and other customers that you talk to within the ServiceNow community are charging down a value path. There's no question about that. They're not struggling to find that amorphous value equation. They're just delivering it. And that, to me, is an extremely powerful concept. And why, again, I think this thing has some serious legs. Well, the one thing that is easy to measure is the value delivered by the individual level inside these departments when people are no longer just moving paper along. They're not moving paper along. It's that gets taken away from them and they have an opportunity to rise up and deliver different types of value and help their business partners execute better. That should be pretty easy to see because the opportunity just to have a job, moving things along and doing very simple low-value tasks, those are just going to go away. So I think that's a really easy thing and what I find just refreshing and clearly the guests do as well is most people really respond to the opportunity to deliver back to the company and to be a more valued asset and to not just be pushing processes along. Well, and the simplest way to measure value is for companies that are profit-based is you increase revenue of your cut costs. I mean, that's really that simple. Now, there's other measures, right? You can increase valuations, you can have customer satisfaction, other things like that, but the other day, it always comes back to the income statement. Now, in healthcare, values measure differently with the value of a life, the value of care, but even there, they're turning people over, they're trying to get people out of the hospital if they have to have repeat visits to the hospital. That's bad, right? That's an increasing cost. So again, it comes down to the buck in government. It's all about the services that you can provide. So my point is, the simplest equation is increase revenue cut costs and what's happening, as I see it with the Service Now initiatives is they're plugging in two initiatives that increase revenue and cut costs and they're being able to measure that directly. They're taking people out of the equation. Frank Slutman addresses this. Yes, it scares some people, but guess what? It's a competitive imperative that's happening and it's allowing higher quality, cycle times to increase, uptime is better, service is better, revenue is higher. I mean, they're seeing that. There's a direct connection now and IT, as these guys say, they're becoming heroes in these organizations. So- Like Dave Schneider too said, do they have the instrumentation to measure it so they know if they're actually moving on one of those metrics? And you know, that's always one of his early conversations that a lot of customers don't have the metrics to even do that within the IT world the Service Now is going after. So even just providing the instrumentation, which again, goes along with people wearing FitBits and all these other things, you can't make a change to something unless you can measure it and then see if there's a delta, whether that's saving more or making more and to provide that level of automation and instrumentation is the first step to improving those things. So we saw some new innovations. We saw Eureka, new UI, talk about the business edition, some other innovations, a lot of talk about IT, operations management, enterprise service management. We see the ecosystem growing. In terms of the things that they showed, Mike Scarpelli told the financial analyst on Monday, they will all ship this year. Now, some of them might ship December 31st, at midnight when you talk to some of the folks, but nonetheless, he's put that stake in the ground. So that's the cadence that they're on. It's good stuff, Jeff, I'll give you last word. Well, looking forward to next year. I mean, it's amazing how far we've come from just knowledge 13. Here we are at 14, as I look across the wall, I'm looking at the sign, what we'll see next year, knowledge 15 at Mandalay Bay in April. It's an exciting company. All the employees, like you said, that we met down on the floor, the salesman, I think I said, he's like a seven-year-old on Christmas morning. They know they have something really special here. They see the bigger opportunity. And so that's great momentum. Next week, we're at- EMC World. Venetian and Palazzo, EMC World. We have a huge cube presence there. We've got multiple cubes going. We've got multiple hosts. We've got a huge team that's going to be there. We will be there in force. It's a great show for us. Always has been EMC's great ecosystem, so we're really excited about that. So check out wikibond.org for all the research. Check out siliconangle.tv. For all these videos, they'll be archived. They'll be VINJID. VINJID is our new data platform that allows us to chapterize all the videos. So check that out. Look for the upcoming events. We're excited. Silicon Angle wikibond is cranking. We're doing a lot of events this year. We really appreciate all your support, all your tweets, all your participation in CrowdChat. So thanks for watching, everybody. That's it from ServiceNow Knowledge 14. We're out from Moscone. This is theCUBE. Thanks for watching.