 Live from Las Vegas, Nevada, it's theCUBE. Covering Knowledge 15, brought to you by ServiceNow. Everyone, welcome back to day three of theCUBE coverage in Las Vegas for ServiceNow Knowledge 15. Hashtag no 15. You want to join the conversation with us to go to crowdchat.net slash no 15. That's our new CrowdChat engagement application in real time. Lay down some questions in the threads. Ask some questions, comment, participate, join the conversation. I'm John Furrier, the founder of SiliconANGELMIC Coast. Dave Vellante, co-founder of Wikibon.com, research analyst. Dave, day three of wall-to-wall coverage, where we're extracting this input from the noise. A lot of good stuff here at ServiceNow. They're obviously pumping on all cylinders. Frank, Dr. Frank Slutman, Fred Luddy, the founder, and their staff and all the executives, and more importantly, a lot of their customers. And their customers up here are really, really jazzed. They're very happy, successful product, market fit, as they say. The revenues are subscription, recurring, throwing off a lot of cash. Great stuff. What's your take, what do you expect? What's your take so far in two days here? We've been immersed in the data. We've been immersed with the people. We had John Cleese on and threw water on me. I'm going to get him back. I'm going to get back on theCUBE, throw water back on him. Kind of a fun bit, kind of a daily show. You used too bad, you didn't have a drink to throw on him. No, I'm ready for him next time. We've seen his moves before, but you still take this out. He's got four million followers, so I think his mob will attack me. But seriously, Date Chew's gone in the books, day three, we're going to talk to the COO shortly. But what's your take so far? Well, you know, I said to Beth White, the Chief Marketing Officer of Service Now, since she and Frank Slutman were, their company was acquired by EMC. And I said, when I first talked to you guys, when you first came to EMC, EMC world was actually smaller than this show is now. And they're like, wait, really? Then we started thinking about it. I said, yeah, it was like significantly smaller. So now this show is growing at like 50% a year. It's like growing roughly the same pace as its customer base. Actually, I think it's growing even faster. I mean, this thing is exploding then. You saw last night at that event. I mean, that was impressive. Very impressive event, great party. You were periscoping it. But here's the problem with Service Now, I see. They don't have two cubes. EMC has two cubes. So Frank and Beth, if you're watching, you want to one up EMC world, Jeremy Burton, you got to get two cubes. So, but I mean, you know, that's kind of fun, but it underscores the growth of this community and the passion that the customers have. So I'm really excited about today. Dan McGee's coming on. He's the COO. And his COO is operations guy running the cloud, right? So he gave a lot of data this morning and he gave us a glimpse last year at Knowledge 14 about some of that data. And I got really charged up about it because as you know, David Floyer and I have done a lot of availability studies in our day. We worked with many, many CIOs to look at real availability. Service Now is the only company that actually tracks that. I know it's kind of inside baseball and kind of boring. A lot of people's eyes glass over, but we see these numbers, five, nine, six, nine. It's all a bunch of BS, okay? It's what the user sees that matters. And so we, I tell you a story. We had a consulting operation with CIOs and we would go in and we would do these availability studies and we'd find out what their real availability was, what Service Now is now reporting. It was consistently in the 96, 95, 94%. And the CIOs, John, used to look at us and say, that number does not leave this room. So they don't want it to get out there. So anyway, that's going to be an interesting conversation. We kind of geek out a little bit with Dan and cloud inside baseball. But I think it's really worthwhile because a lot of people are concerned about putting their data in the cloud and Service Now has a story around it. So, and I get some other questions too. Some things I'm not clear on that I want to unpack. Yeah, I mean, Service Now, obviously, the investor confidence on Friday got rocked a little bit. So that was an issue. I think Frank Stubman addressed that nicely. And, you know, I think that was a trees don't grow to the moon thing though. I mean, it's just, you know, no stock can just keep going up and up and up. Every quarter they beat, you know, it's like, what do you think about the long-term prospects of Service Now? As an investor? Yeah, absolutely. Well, you know, we talk to investors all the time at Silicon Angle, private investors, VCs. And we also talked to a lot of public analysts who evaluate it. And, you know, I think I personally think that there's not a lot of confidence in the new way that people are doing businesses from the investor community. I think there's a lot of darts being thrown at the board. I think there's a lot of some understanding of the future scenario. I mean, I saw this with Twitter and Facebook when they launched. No one really understands this new world and being bold. And that was the theme we heard from Service Now's customers. And I think if I'm an investor, I look at a couple of things. One, the software is very good, right? So the software is phenomenal, Dave. You have a lot of happy customers using the software in what looks like a niche in IT service management. But that platform feature and the software quality is really the thing I would look at, number one, as a positive. Two, you look at the successful value enablement that they're giving customers. They are allowing customers to do things that they've never done before in the application. That's very cloud native. And what I mean by that is all the things you're hearing at Service Now, and this is an opportunity that investors have to squint through the noise. And that is, it's asynchronous. It's real time. It's mobile. They've done the things on the product side that position itself for the next 10 years. So I think one, the software is really badass. It's really DevOps oriented, but it's not hard to use like a DevOps. It's more friendly for the enterprise. Their software is also enterprise grade. So that is really a big deal. With private instances, this opens up a developer community. They're bringing DevOps, Dave, to the enterprise without all the headaches of DevOps in terms of learning and being a total ninja, if you will, encoding sales. They have a sales machine that's badass and they have a great customer base. They know how to sell. They know how to bring value to customers. They have great SE organization. Now they have the developer community. So the sales action is happening. And finally three, the cloud infrastructure is the new normal. So I think this cloud native enterprise grade confluence is a real strength. So as an investor, I look at that and I say, check, check, check, and then I look at the market. It's going on the market. That's the one thing I would add, right? They're in a flywheel market. There is inside the tornado as Jeffrey Moore would say. So all that cliche is true. They're in a shift and an inflection point and we've heard from Stone Brewery, right? So again, great software, great futuristic capabilities in the DevOps mindset of synchronous, great sales action, great people. And again, the market's hot. So yeah, in the market side, the TAM, when you and I publish on Forbes, the new sheriff in town post that we published on Forbes, I think we were the first to take a stab at the TAM, maybe not the first, but the first that actually quantified it to that size. And we had it over, I think we had a 35 billion service. Now I think pegs it at 45 billion. I can see it with the platform play and the store and the application development angle. I think it could get that large. And they're disrupting and innovating at the same time. The thing that I would have an open question for as an investor would be one to be critical is, what are they doing with the cash? Because are they hiding the ball with the cash? What are they investing? They're not hiding the ball with the cash. They're pouring it back into the company. Well, you mentioned they could be more profitable. Well, they could, but they don't want to be. Well, everybody wants to be, but they would rather put the money in growth, don't you think, than just squirrel it away. Well, I'm just saying, if I was an investor, I think, I think it's a great opportunity. I would buy service now, but as an investor, are they spending or are they investing? Yeah, so investors want to buy stock back, but they don't have to at this point, but that's what kind of investors do. We see pressure put on EMC, we saw what happened to Dell, BMC go private, so. Well, I asked Pat some of the valuation questions on theCUBE about these startups, and what I'm seeing in Silicon Valley and some of these high flyers is, they're spending money, but not really investing. So I think that would be the question. I look at service now, they're investing in growth. They got new office space, they have the cloud, they're building out the technology. We'll ask the COO that question. Well, I think the other interesting thing is the collision course with guys like Salesforce. I think that's real. And we had a very interesting conversation last night offline with some of the people in the development community who were starting to develop applications that are systems of record, as opposed to systems of engagement. And their view is they can take on systems of record on top of service now. That was a really interesting discussion. The systems of engagement, systems of record, these are words we've used at the IBM event, right? So, don't let Salesforce, you got IBM right there. So when you get into that systems of engagement, that's very valuable data. And I think one of the things I like about service now that I think is genius, we asked Dave Wright, the Chief Strategy Officer, the chess board, the competitive strategy of their business model is really solid. They have a great base, great cash flow. And what they're doing is they're now going into adjacent markets in a way that's not threatening and it's not a frontal attack on the competition. They're changing the goalpost to use a football analogy. And that to me puts the competition potentially on its heels and changes the game a little bit. So I think it plays to their advantage. If I'm an investor, I look at that significantly. And again, the cloud is a great leverage, great operating leverage. So to me, we're going to unpack that. Again, the cube is on the ground three days. So we're getting all the data. We're talking to everybody, Dave. So let's get into it. This is the cube, day three coverage, wall to wall. We'll be right back after this short break. I'm John Furrier with Dave Vellante, live in Las Vegas for Knowledge 15. Know 15 is the hashtag. Join the conversation. We'll be right back with our next guest after this short break.