 Okay, we're back, this is Dave Vellante, Wikibon.org, I'm here with Jeff Frick. SiliconANGLE Wikibon's continuous production. We're here at ServiceNow's Knowledge Conference in Las Vegas, this is day three. We're going to have day today. And we're ending with a very strong guest. Arna Josephson is the CTO of ServiceNow. I think I told folks earlier in the week that David Floyer and I met Arna in Waltham, Massachusetts and he helped us really crystallize in our mind the potential of ServiceNow. I think it's relatively straightforward to understand how ServiceNow drives business value, but when you really start to think about the potential of this platform extending into this whole notion of being able to create apps, you know, simply. And the potential for this platform and this organization to transform not only IT but also businesses, it's actually quite exciting. So Arna, welcome to theCUBE, really excited to have you. All right, thank you very much. It's great to be here. So, well first of all, this is our first Knowledge Conference and we're very impressed with the quality of attendees. We've had a number of guests on theCUBE. A lot of times IT people don't want to come on theCUBE and tell their story, or if they do, frankly, their story's sometimes not that interesting. Your customers really have interesting stories. Yeah, it's been incredible. This is my second knowledge and this one's actually twice as big as the last one. It's pretty amazing to be here. And just being here and I spend most of my time here talking to customers, incredibly invigorating to hear the stories about what they've done with ServiceNow. It's been inspiring. And we also had a lot of prospective customers here who could network with our existing customers, meet with ServiceNow folks and they've really come away with an incredibly positive attitude. So it's been all around incredible experience for us. Yeah, now talk about your role transforming. When you first came into service now, you were sort of heads down, helping get the service to where executive management wanted it to be and where customers needed it to be and now you're transforming more into a strategy role. So talk about those two roles a little bit. Yeah, I came in about 20 months ago at ServiceNow. The company was on an incredible trajectory in terms of growth and Fred, our founder, built some amazing technology. But now we got into a phase where we had some of the largest enterprises in the world on our platform, financial institutions, the largest pharmaceuticals. We started to get governments on the platform. So we had to scale out and mature our infrastructure, our operations dramatically here in the last year and a half. So I spent those first 18 months really focusing on that and we made some really good strides and now my focus is more about where do we go next? What's the strategy for the company? Helping our development and operations organizations thinking about where we take the company next. Yeah, we had Dan McGee on yesterday and we were sort of digging into where you guys are with the platform. It was quite impressive actually, we were asking them all the tough questions, all the ones that, you know, a lot of cloud service providers sort of dodge or avoid and sort of pass the test with flying colors. So talk a little bit about, one of the things we want to discuss here is ServiceNow as SaaS or pass or both and clearly you're evolving, but there seems to be this sort of overlap now. You got infrastructure as a service, platforms as a service and softwares as a service and these lines are blurring. You're seeing Amazon do things like Redshift, which is still infrastructure, but it's moving up the stack and you're seeing, you know, you see what's happening with VMware and it's a very interesting sort of dynamic going on. So first of all, how would you describe what's going on in the industry and then we can talk about what it means for ServiceNow? Yeah, I know in the cloud space, we really see the infrastructure providers such as Amazon and Windows Azure where I spent a couple of years personally, they're certainly growing a lot. Their business is very, very different from what we do because essentially if you're an infrastructure player, you sell, what do you sell? You sell compute, storage and bandwidth. And if you think about it, every CIO in the world understands the cost of compute, storage and bandwidth and they know one thing about it and that is it's going down every year. Race to zero. Yeah. So we're not really in that game. So we have a platform aspect to our platform and a SaaS aspect, but just in terms of the platform, we really sell the power of the platform itself, the richness of the APIs, the forms. When you build an application for ServiceNow, you immediately get all the richness of the underlying platform, forms, workflow, tables. So you spend very little time on the sort of heavy lifting and almost all of your time on what does the business really need? So it's very different than exposing bandwidth, compute and storage. It's actually exposing business value. So developers really focus on business value versus managing CPU cycles and bandwidth. Yeah, that business value discussion is interesting. I've been saying all week that to me, ServiceNow is about enabling business scaling because if you have all these disparate spoke processes, you're going to be able to successfully scale your business. And it's about business value, flowing value from IT through the applications, through the business process and ultimately to the business. And you enable line of sight on that. We had AgriPort on here and essentially, they I think uniquely are really driving that vision and are trying to use ServiceNow to communicate that. So the business value of IT discussion I think can actually come back. And I think finally you're allowing IT people to have credibility in that discussion. Yeah, and you know, even many of the conversations this week with our customers have been really enlightening and we had one very large industrial, global industrial player who adopted ServiceNow and one of their senior leaders were here and he told me about suddenly they have a seat at the table, at the C level, which they never had before. And I think it's really for IT, there's a shift for IT from managing infrastructure to managing the business. And that's what we want to empower IT to do. Because at the end of the day, sales and operations and exec level within enterprises, they don't really care about who runs the servers. You know, that's not the value they look for. They look for business enablement. So through our platform, we kind of allow, we allow the IT organizations to focus on how can I quickly add business value versus how can I manage servers and telecommunications infrastructure. And it's really, really empowering. And you know, it really puts IT at the table to drive strategy for the company. So at the heart of all this business value that you're creating is this service, this capability that Fred started to build back in 2003. So I wonder if you could give us, we don't have to go too much into the plumbing, but I wonder if you could give us kind of a service now, architectural 101. Yeah, yeah, yeah. And the beauty of the architecture, it's very, very simple. And when it comes to large scale cloud operations, the simpler it is, the easier and cheaper it is to scale it out. And you probably heard Fred's story, but it might be worth retelling it. You know, he founded the company in 2004 and his vision was really to build an application development platform that allows the non-programmer to very quickly build a meaningful application, right? But you know, back in 2004, 2005, people didn't buy platforms. The notion of platform as a service didn't exist. So Fred had to build a suite of applications, to showcase the power of this platform. So given his IT type background, what kind of apps should he build? Well, obviously he built a set of IT service management apps. So that's how the company got started. So that's why we're known for ITSM, IT service management, incident problem, change, et cetera. But really the underlying vision was to build that rapid application development platform that allows someone like you or me sit down and write the meaningful application within hours. So it's a very, very powerful message. And in fact, in many ways, ahead of its time. And I think the time is now right for that to be exploited by our customers. Yeah, so Fred shared with us a conversation he had with Paul Moritz. Paul Moritz asked him, how did you get everything so right? And coming from Paul Moritz, that's quite a compliment. So how did he get everything so right? Talk a little bit about the architecture that's there, I mean, I said earlier, everybody has a database, right? I mean, Tatana had a database, and ProSight had a database, and they all have databases. So what's different about service management? I think the real genius of what Fred did is it's a very simple architecture. I wish I had a whiteboard, but you have the application runs in a set of Java virtual machines that can be scaled out horizontally. So for very large companies, we can provision more Java virtual machines. So very, very simple. It's sort of scale architecture that's popularized today, but developed in 2004. So again, the foresight there. Then in the back end, you have a database, and the beauty of what we do is everything is in the database, not only the relational data and attachments, but all your workflows, your business processes, the code, the application code itself, everything related to the suite of applications that a customer uses, is stored in a single unified database. That's truly the power and the genius of the platform. So how important is the choice of that database? I understand Fred talked about, you guys are moving to a new database architecture. Did talk about that a little bit? Yeah, you know, Dave, that I came from Microsoft and spent 25 years at the company. So we're not big fans of open source over there. And then when I joined service now, I really understood the power of open source. So our whole platform is based on open source technology. The back end is MySQL. The platform is built in Java, and our customers build applications in JavaScript, or frankly, they can build applications without writing a single line of code. So it's open source technology. And the beauty of open source is that I found incredibly empowering is you kind of stand on the shoulders of others in this open source community. So we build on innovations that others have contributed to and it's compared to the closed environment, it is incredibly powerful. I gotta tell you, it's huge. So choosing open source, I think was a very, very important decision that sort of opened up the markets for us. And then Fred mentioned now you're going to go to MongoDB to get bigger scale. Yeah, yeah. So we're getting to a point now where, you know, I mentioned we have some of the largest enterprises in the world on our platform, and literally they have hundreds of thousands of users on a single instance of service now. And that's actually working quite well. But to prepare for the future, we're introducing a NoSQL approach to essentially a store non-relational data in a MongoDB database. So we actually don't use it in production for any of our customers today, but it's something we want to be prepared for the future, especially as we go to pass and platform development where many customers could put stuff in the database that we have no idea what they're going to be, because that's the, it's very extensible. So having sort of looking ahead and having an architecture that can scale for many years into the future is kind of how we want to think about the business. Okay, so now let's talk about sort of your new role in strategy and vision. So where do you want to take service now? Let's start with that sort of broad generic question. Yeah, you know, and these are obviously things we're discussing right now. So don't take it as, here's the final strategy. But if you think about the landscape of what we do, we, you know, we got started in IT service management. That alone is a fairly large market, as you know. We're doing quite well in IT service management. But we have these adjacent areas all related to IT that I think we're already in to some extent, but I think they have incredible potential for us. And the closest area is IT operations management. So these are things like orchestration, discovery, automating your processes, not only in IT service management and password resets, but also start automating how servers are provisioned, how servers are configured. So we believe there's tremendous opportunity in IT operations management. And kind of the way we think about that segment is we're not gonna compete with element management system. That we want to be the single system of record. I'm sure you heard Frank and Fred and others talk about that. So we want to create the single pane of glass that IT uses to manage the whole IT environment, from IT service management to IT operations management, and to the third segment that I think is incredibly important, which I call IT business management. And these are the type of systems that, you know, IT leaders use, CIOs, VP of operations. It's the trending metrics, scorecarding, you know, IT cost management, compliance, regulatory type of applications. We actually have applications in that space already, and we're going to build on those and sort of create a bigger presence in IT business management. So that's at the SaaS level. And then of course we have the application development platform itself, which sort of opens up a whole new chapter for us. So I want to talk about the platform as a service element, but I want to go back to, so you said you don't want to do element management. So you don't want to manage disk drives. You want to manage the service that's provisioning the compute and the storage and the network. So for example, it might be AWS that you can help provision, or it might be a private cloud or a hybrid cloud. Exactly, like a great example is this week we introduced our cloud provisioning application. So it gives the developers within an enterprise a very simple interface, a service request interface. It's kind of like going up on Amazon and ordering a book. We want to have that metaphor very consumerized. So you can go up on our service catalog and order a virtual machine either on EC2 or in your own data center with VMware. So we want to make that the experience of managing and ordering and expiring VMs very easy, very consumerized. And it does two things. It helps the developer to get resources very simply and efficiently. But also it helps IT to understand what are all the VMs we have? You heard about VMs wrong. They're managing it. And if I have a developer who had 10 virtual machines and then he left the company and Amazon is still billing us, who's going to keep track of that? So this type of technology helps you in two ways. It makes technology more approachable and it helps IT really managing the end-to-end environment. So the strategy from the cloud ops is to really be cloud agnostic, right? Absolutely, absolutely. Technically, what's required to do that? Do you just have to knock down everybody's API or do you have some kind of abstraction layer that allows a simpler model? Yeah, one of the powers of our platform it's very easy to integrate other platforms. So in this case with our cloud provisioning we call into Amazon's provisioning layer, we call into VMware's provisioning layer and that's why I said we're not going to replace, the nuance is going to be better than VMware at managing their virtual machines. So we're layering our business processes, our single pane of glass on top of these underlying element systems. They're very simple but powerful. Now let's talk about the past a little bit. We don't have a ton of time but we talked about Palmeritz, Bill Gates and the power of their model is always the ability to go attract developers. But your developers aren't the typical developers. They can be, JavaScript guys, that's cool, but there's a wider audience of people. Talk about that a little bit and what does that mean for your strategy? You know, we want to make application development approachable for what you call the citizen developer. You've heard that too. It's people like you and me, right? And the problem with IT development projects historically is they've taken 12 to 18 months and I've been through those projects myself. You gather all the requirements, assemble your team, you write the specs, you're done 12 to 18 months later. By that time, the business has already moved on. So the application is useless. So time to market today is a very important feature of the development process because business today moves so fast. So part of our strategy is enable the business itself to develop applications very, very quickly. So it's about speed to market. It's about its abstraction layers that makes it very, very simple to build these types of applications. Yeah, so I was telling you off camera that we had Mike Scarpelli on yesterday and we talked about the TAM, and of course he's the CFO, he's very conservative, but everything we're talking about here is part of, now maybe that's not why, but I guess it is, the TAM expansion strategy. I mean, there's a large market out there that as you add capabilities on top of this platform, it expands your total available market, but the beauty of it is that the platform itself doesn't have to totally morph to accommodate this, right? I mean, it's there, it can scale in a hyperscale-like fashion, and it can grow as far as you can see or? You know, I don't see any limits to this. And if you think about the classic enterprise that our customers, large enterprises, they have four to 5,000 applications, that's very, very common. Yep. And those applications are dying, and they're built on Lotus Notes or older technologies. Can you imagine each company having thousands of apps across hundreds of thousands of companies, the volume of applications, the mass of applications that are going to need to be replaced over the next several years, over the next decade, the opportunity is tremendous as those applications are replaced with more modern technology. And that, for me, is the biggest opportunity for our company. And the problem for those companies is that the value of those applications is a function of how much they're getting used and the productivity of the users while they're using the apps, and both of those are going to go down over time. Absolutely, yeah. Just to follow up on that, and we talked about, you know, you were at Microsoft for a long time, and you weren't part of open source, and you were sending CDs, and it's a little bit about just being at a smaller company, kind of a new age company, in terms of leveraging open source, leveraging the cloud as a delivery method, and kind of, how's it been? What's kind of your feeling? It's been absolutely fascinating, because when we build things for how we manage our own environment, we don't have to start from scratch, which is a traditional close-end model. We build on other innovations that others have built, and we kind of just add to it. And that's the power of open sources. You just continue to add value, and everyone else can benefit from your ideas. We love the open source. We were at the OpenStack summit a few weeks ago, and it's a good action going on there in the developer community. All right, Anna, well, listen, thanks very much for coming on theCUBE. We're out of time, but always a pleasure, talking to you. You really appreciate it. Thanks, Dave. Thanks for all your insights. All right, everybody, keep it right there. We're right back. Tickets.com is up next. This is theCUBE, SiliconANGLE Wikibon's production. We're here at Service Now Knowledge, and we'll be right back after this word.