 Live from Silicon Valley, it's theCUBE, covering Google Cloud Next 17. Okay, welcome back everyone. We are live in Palo Alto for two days of coverage of Google Next 2017. I'm John Furrier. We're here with Tom Kemp, CEO of Centrify. No longer a startup, they're scaling up. You guys are doing very well. Tom, great to see you. Welcome to theCUBE. Great to be here. Saw you at RSA. You guys had an exceptional event. One presence at the show, obviously a security show. You're in the security business. But also Mobile World Congress, we try to get you on. Again, security's hot in front of the center at Mobile World Congress. Security's front in the center at Google Cloud Next. Security's front in the center at blank event. It's happening everywhere, right? So give us the update. What is Centrify? Obviously the no breaches is your tagline. What's up with Centrify? Give us a quick update on what you're up to. Yeah, absolutely. So we're a security company focused, as you said, on identity. And we really address the issue of too many passwords and too much privilege. The fundamental issue that's happening within security is like $75 billion is being spent on it. It's one of the fastest growing market segments, but it's failing because the breaches are far outnumbering and growing at a faster rate than the amount of money's being spent on that. And so we're trying to rethink security by looking at where the breaches are coming from. And they're coming in from like in the case of Podesta, stealing usernames and passwords. And Verizon said two thirds of breaches involve stolen credentials. And Forster just recently said that 80% of breaches involved the compromise of privileged accounts, the root accounts for the infrastructure, et cetera. So if two thirds to 80% of breaches involve identity, we fundamentally believe you need to focus a lot more on that and that's what we're all about, focusing on identity. And is this a new revelation or is this something that you guys have felt was happening for a long time or has it just been just the matter of fact that's what's happening? You know, it's, we have some great investors and we have Excel, Mayfield, Index, Sigma and now called Jackson Square Ventures. And one of the board members told me was like, you know, the market's come to you because we've been doing this for over 10 years and focusing on identity and people were like, oh, okay, that's interesting. But now if you look at just the massive number of breaches that are occurring and the focus that identity is the leading attack vector and then you couple it with the whole move to the cloud. I know we're going to be talking about what Google's doing in the cloud, et cetera. It actually makes the problem even worse. And so we feel that we've been plugging along, doing and focusing on identity. And now kind of the market has come to us because of the move to cloud and the hackers are going after identities. Yeah, it's interesting. I saw a friend, a Facebook friend, I won't say his name for privates because I don't have the right to talk about it but he's in Bitcoin. So obviously in that world is underbellied himself. Yeah, but interesting thing is that he had two-factor authentication on his phone and someone hacked his phone and they sent the password back to his phone, all his bank accounts are gone. Oh my goodness. So this is an example of that privileged identity. So even two-factor authentication is not, in this case, didn't work. So you're starting to see this, right? So what's the answer and how does it relate to cloud? There's no perimeter in the cloud. Is it federated identity? Is it some sort of blockchain thing? Is there a new model? What's your view on this and how are you guys attacking it specifically? Yeah, I mean in a world in which we're increasingly moving to the cloud, what can you secure? Like if I'm at a Starbucks and Palo Alto, on my iPad talking to Google Apps, talking to Salesforce, et cetera, I don't have any antivirus. I'm not using a next-gen firewall or VPN, et cetera. So the focus needs to shift to securing the user and you really need to start integrating and leveraging from a multi-factor authentication biometrics as well. Use that phone, use the touch ID to actually ensure that. And then also in the cloud, start analyzing user behavior and actually determine, well, wait a minute, this person normally doesn't log in from China, but now he's accessing the Salesforce or Facebook, et cetera. So it's becoming evolving more to utilizing mobile device as part of your identity. And it's also leveraging machine learning to understand what normal behavior is and then blocking abnormal behavior. And also using big data techniques because your point about China is interesting. I mean, anyone who travels might have had the situation where I'm gonna wheel to Vegas and laugh with a cue, but like I'm in Vegas and I pull out an ATM withdrawal and next I go to use my other credit card and says, well, fraud alert. Yes. Well, wait a minute, I made a cell phone call. I took money out of the bank and yet the credit card didn't know that I'm in Vegas. Now that's interesting, but so conversely, if China is accessing my accounts and I'm making phone calls with Palo Alto, that should be obvious. I mean, is that weird? That just seems like it's just so fragmented data sets. So I mean, historically identity, the definition of identity was a username and a password, but in a cloud world, identity should be redefined in terms of your applications, your device, your location and your activity. So if you are trying to access an app from China, it should ask you for four or five additional bits of information, two factors should be multi-factor and it should include biometrics as well. So machine learning is this gonna become even more critical to reduce fraud and the compromise of credentials. So let's talk about Google next because one of the things that I mean really, we know Google, we're living in Palo Alto, they're all around us, they're in Mountain View, Larry Page lives in the hood here. Google has always been a technology innovator and it's clear that that's the lead for their cloud. But the enterprise, which they're by the way serious about Diane Greene is very serious with enterprise, they're just starting to move down that road. You've been there for a while on mobile and in the enterprise. What are some of the things that people should know about on how hard it is in the enterprise? Specifically with cloud, what are some of the things that you see as table stakes? I mean, it's actually having meat eating sales reps out in the field, right? Not relying on some person who's 20, some bot or some 20 year old calling from Austin or Mountain View, but it's actually having someone there with a technical architect that can hop on a subway or be there within a half hour to spend some quality time. And strategic selling too, right? Exactly, yeah, because they have a challenge, which is they're competing with both Microsoft and Amazon and obviously Microsoft has the enterprise people and Amazon is really ramping up in that area and I think that, so you can throw the technology but enterprise accounts want to be able to have a conversation face to face more so than executive coming out and having a dinner with someone. So take me through a sales motion because this is important, because you and I have talked about this in the past and Dave Lothan and I always talk about on the Cube and it used to be well known in the VC circles that sales forces are expensive because the sales motions are different. What is a typical sales motion for an enterprise like sale because it's not as simple as saying self-service cloud, put your credit card down and get Kubernetes support, terminal access, static IPs, virtual servers. Oh, by the way, I got to support DB2 as well, a non-oracle database or Oracle. Well, look, I mean, it's very easy to have that buy it over the web for when you start in developer for a new application, okay? And Amazon's done a great job at that, Microsoft's getting there as well. So if you really want the existing applications to move to the cloud, you have to sit down and have conversations about a hybrid cloud environment because people will have on-premise active directory, they'll have a set of security policies, et cetera. And so the conversation needs to be had is like how do you bridge on-premise and with the cloud as well and make that heterogeneous environment look and feel and smell like it's homogeneous from authentication, authorization, audit perspective, compliance perspective, et cetera. So you certainly need to first and foremost be able to put architects out there, have that conversation, et cetera. And you just can't rely too much on partners. And then I think from their service level agreements and then also showing that your cloud platform is incredibly secure as well. Yeah, I would agree, I would just say one on the meeting sales, basically what that means is people who understand the domain with an architect technically like an SE. And then you have to really kind of have an understanding that there's a multiple stakeholder role. One's a recommender, one's an influencer, one's a decision maker, and it's a campaign. It's a multi-pronged campaign. I mean, you have to think. Know their problems, give them a solution, value creation. Absolutely. Value selling. Because it's, there's just a level of complexity, right? And again, I'm not saying that Google for new projects with the current sales motion can't bring on an app. And maybe that app leverages the machine learning, which seems to be world-class, right? TensorFlow's getting great, great detraction. Intel's building chips for that as well. Google owns a great developer mind share. I think they've really cracked the code on open source and they have great empathy with the developers we were talking about with Val earlier. But operationally, I just see a disconnect. And Amazon's quietly ramping up too. They're no spring chicken either when it comes to direct selling. But they've been working more years on that. And I think you've seen the word hybrid cloud. And I know you've spent time with the folks at VMware talking about the relationship with Amazon. That's all about the hybrid cloud, which people need, the enterprises need to bridge and on-ramp. And I think from our perspective- VMware is very solid with Gelsinger and their Salesforce. They're very strong with enterprise selling. And that's what we focus, because we initially started on-premise. We tied things into Active Directory, for example, but now we have a cloud platform. And we advertise and promote ourselves as addressing identity for the hybrid environment and providing the bridge between the two. And I think that's critical. Now, do you guys have an enterprise Salesforce, right? Absolutely. So you've invested in that. Over 10 years. Oh yeah, absolutely. So yeah, we have over 60% of the Fortune 50 and 80% of our sales comes from the global 2000. And we've grown, I mean, we're over 100 million in sales. So we're in there having that conversation with enterprises all the time. So Tom, so we know Diane Green lives in the neighborhood. So let's pretend that she calls us up. Hey, Tom, John, come over. I have a cocktail and dinner. I need your advice on how to ramp up my enterprise operational empathy and strategy. What would we, what would we advise her? What would you advise her? I have my own opinion about go to you first. Yeah, I think it's, I really think and focus on, obviously use the machine learning as a key wedge for new applications, but really focus on the concept of hybrid. And she mastered going from physical to virtual, right? Now, everyone's virtualized. And so she needs to figure out how I can get virtual to cloud, VDC, right? And have the people and have the conversation and provide bridging technologies as well. So I think that is going to require not just purely cloud-based stuff, but it's gonna probably provide, she's gonna need either through partnerships or to help herself or M&A, she's gonna have to build connectors, right? To help facilitate the bridging to get the, because she can go after definitely the 20% of the new stuff, but if you wanna attack the 80% of the existing stuff, and she did a masterful job of going physical to virtual. At VMware. At VMware. And now her challenge is to go V to C. Virtual to cloud. I agree, so my advice, Diane, if you're watching is the following. One, don't screw up the Google formula. And I know she's transforming Google and that's a good thing, they need that right now. But I think what I like about what I'm seeing at Google Next right now is that they have great technology chops in kind of the Google pet themselves in the back kind of way, which is they got Mojo. I mean, they've always had great technology Mojo and that comes down from the founders. So the machine learning stuff, the AI, the stuff they're doing in their portfolio has I call the coolness relevant factor on the tech. What I would do is I would specifically nurture that and because she's also got a good knack for doing innovative things and she's a very innovative manager and I've seen that at VMware and other places that she's been advising. So she's got a knack for, oh, that's cool. Like we should do that cool technology that's going to have legs in the future. So she's got a good sage picking out the technology. I would, don't emanate, I'd say, look it. I would just stop expanding the existing Google culture relative to the sales motions and the enterprise-ness and just go buy somebody. Spend the billion dollars or more. Take someone out who's got full global regional sales force, why not? Because then those guys already have the relationships so the buy-build to the sales force to me might take too long. I'm not sure that they could get there. So I mean, what do you think about that? Yeah, I think they've been public about it. I think they have to invest in their own but I do think that M&A, I mean, they're number three, right? And they got to do something and clearly the machine learning AI stuff is going to be huge and we were actually very impressed. So I got emails from the folks at the show about this whole video stuff in terms of their ability to use the machine learning AI to interpret video which is pretty impressive, but again, that's going to be kind of more for a vertical, right? Or a specific type of application. And so I think they're going to need to do a combination. Yeah, but here's the thing that I'm seeing though. I mean, there's the speed of Google and there's the speed of enterprise, right? So they might have to throttle down. I don't want to say dumb down but it's really not the issue. It's more of throttle down the cadence of what enterprises are comfortable with, for a given example, SLAs. They kind of like, their SLAs are a little bit gray area but they're awesome on, hey, it only costs X dollars to import this great data and crunch all this stuff. So they have great pricing. Yeah, they need to master, Diane did a masterful job of like overnight, she had a utility that could go P to V and you flipped it up and everything just magically worked and they need to prove that they can forklift the applications with minimal to no changes and things magically work and that requires a bunch of software partnership technology that it's like flipping a switch to go to the cloud. And if you don't like it, then you can roll it back as well. What's their security position in your mind? Have you done an audit? Have you been keeping track of it or they're secure? Or what's the needs of the enterprise that they should be addressing for security? Assuming you have a relationship with them, you're the booth at the event. Yeah, absolutely. And we integrate at multiple levels as well. So, I mean, I think they're doing a pretty good job. I think that other vendors like Microsoft are really more heavily investing in areas that we're in such as identity. So, you know, Microsoft has basically replicated this playbook with Active Directory and they have something called Azure AD. And so Google doesn't have anything that's equivalent. Now that's good for us. That actually leads to opportunities but they could do more in the areas of identity. I think if you look at what Amazon's doing in terms of web application firewalls and protecting applications that are being spun up in the cloud, I think those are areas that can be improved. Encryption, key management, et cetera. So, you know, if you look at the slide that they have where they say insecurity, I think they list three items. But then if you were to compare it to say Microsoft or Amazon, they've got five, six, seven items right there as well. So, yeah, I think that there's definitely going to be needs and requirements that need to be met and addressed there. And so, you know, it's, so it's good for us. Well, to me, it's just a matter of their evolution. They can only go as fast as they can go. I mean, that's what the people that I tend to talk to don't get. They can be critical of Google but at the end of the day, they can only go so fast. Yeah, and I also, they also have to, another bit of advice is they do have a very good install base with G Suite, formerly Google apps. But they got to do a better job of leveraging that when people try to move to infrastructure as a server. You know, I think that they've taken that advice because what was clear that they're doing it in this event was they're showcasing a lot of the stats on G Suite. They're also talking about the apps. And that's consistent with IBM, Oracle, and Microsoft. They're throwing in their SaaS layer as part of the stack as well. Because that's how they can differentiate from Google. That's what else do they have. Yeah, I mean, really it's almost like a startup company that's been around for a few years. They have their initial product and they come with the second product and the board members will say, well, what's the adoption of cross-selling the new product with the existing? And so it should be interesting to see if they can get people that bought into the G Suite vision to say, oh, okay, now I'm going to start firing up servers on the Google Cloud platform. Well, you bring up a good point about their G Suite. And I mentioned Microsoft using 360, Office 365 as an example, Oracle throws their apps into the blender if you will on the numbers and everything. It's interesting, Wikibon research is showing that the past layer is squeezed and that's a big debate in our own research team. The Gardner research that I just recently looked at from February basically doesn't even talk about SaaS. So if you start including SaaS, then you got to open up the conversation to Salesforce, Adobe, and on and on and on, because there's a cloud service provider model out there. I mean, LinkedIn's a service provider. I mean, so what is SaaS? So I guess that I always look at it like what's the SaaS equation look like? I mean, what does cloud really look like? Yeah, I think if you look at the, I look at the statistics because we address both infrastructure as a service and software as a service as well with our identity solutions. And clearly infrastructure as a service is a much bigger market. SaaS is pretty significant, but if you add up SaaS infrastructure in past, it's about 24 billion-ish right there. But guess what? Amazon already has over 10 of it last year. So Amazon has 40% of the cloud market as well. So, but I do think and they proven that you don't have to have a SaaS capability to be incredibly successful in the cloud. But yeah, it's- Well, they had their one SaaS that was called Amazon.com, but they broke that out. All right, Tom, what's next for you guys at Centrify? What's on your, anything coming up? Things you're working on? Share some quick plug for Centrify and the progress you're making in status. Yeah, no, so it's been, we've been doing this for 10 years and we feel really good about providing basically a platform for identity. And one theme and trend that we're seeing a lot of in the security market is that buyers have security fatigue. They're so sick of dealing with point solutions. And I think that's working to our advantage that people are looking at a vendor such as us that can address not only single sign-up, but multi-factor authentication, privileged account management as well. So we're very much focused these days on providing a set of solutions that are all built on a platform and just kind of filling in the... When you say fatigue, you mean sprawl of application, they're buying just another platform because they do try to try everything, right? Yeah, no, it's just... Is it they're getting tired of that? I mean, in security, you just have a lack of security knowledge. There's a huge skills gap when it comes to security. And if you have to buy a point solution to address every little bit of security, that you just can't hire people, right? And then you find that you have air gaps that actually makes you less secure, right? And so we've, over time, built this platform up and now we're really seeing that people are like, wow, you can actually... I don't have to get a standalone EMM, a standalone SSO, a standalone MFA solution, a standalone password vault solution, et cetera. So we're very much focused on selling our platform to customers. And with this whole mindset of customers wanting to consolidate vendors, historically vendor consolidation was about buyers wanting that, but now IT people want that. And so we're really just focusing on internally articulating how we can actually address a lot of problems that people have with too much privilege and too many passwords. And you guys are spending your sales force and the team? Oh, absolutely, yeah. So yeah, we've definitely hit the critical mass, we're over a hundred million sales, we're growing fast, we're cash flow positive as well. All right, congratulations, the BC's happy. Time to go public. Time to go public. High evaluation, unicorn? Well, I'm not, no comment on that. So rule 40 and all that fun stuff as well. So we got a lot of check boxes right there. So yeah, so we're just... I think your VC partner is right, your investor, the world is spinning towards you because if you look at the identity and you look at everything in the digital world, whether it's cloud, data, or packets, or people, it's going to be a persona-based focus. Not like what company you work for. We had this huge trend of consumerization of IT. So it's really about the user. So focus on securing the user, not focusing on securing the network because the network's gone. Finally, 30 years later, it's coming back to the user. I mean, it's been talked about the passports, the digital wallet kind of thing. All right, Tom Kemp, CEO of Centrify, hot startup growing over a hundred million in sales, heard here on theCUBE, very successful company, really have a nice approach. Worlds spinning towards them, really hopefully a great solution for our security and our liberties so we don't get hacked over and over again. This is theCUBE bringing you all the coverage of Google Next here in the studio. I'm John Furrier, we'll be right back with more after this short break.