 I'm John Furrier with theCUBE. We are here in Palo Alto at our studio here with a special guest, Larry Augustin, who's the CEO, Chief Executive Officer of Sugar CRM, luminary in the business. He's a technical geek, formerly the owner of Slash. And a lot of early web properties that we all know us old guys know. Welcome to theCUBE studios here in Palo Alto. Great to see you. Great to see you, John. Thrilled to be here. I did not know you were just talking before you, we got on camera here about your history and media, besides being one of the best CRM companies out there, Sugar CRM. Great, great history. Yeah, you know, I was the founder and CEO of a company VA Linux, which I took public in 1999, sort of the peak of the bubble. Still have the record for the largest first day gain ever in an IPO, somewhat dubious record, but great record nonetheless. And we had acquired a set of properties, Slash.linux.com, IT manager's journal that we put together. And our goal was to build a whole media segment around open source and Linux. And it was fun to be in that business. Throughout my career, I sort of steadily moved my way up the software stack, if you will, starting out in systems there and now in applications with customer relationship management. And you have multiple computer science degrees. So we know we can talk shop and get down and dirty. But it was interesting though is that looking back and I didn't know that history kind of connects the dots for me, is that those was, that was early day community. I mean, back then that was right at the beat, right at the thrust of the beach head being developed for open source. Yes. You saw a great Earl, I called Gen one. I'm calling it Gen one because that's what I'm saying. But it was probably before that, but that was really when the notion of using free software became really happening. Yes, yes. And that was the early formation of communities. We were probably one of the first companies to have a, what you would call a community marketing function, which has become far more common than in fact, I look at my original community marketing team. Most of them are now running some function of marketing related to community at a lot of existing companies today, right? And sort of building that concept out. And kind of at the early days of open source, and now you look at any company today in the space and they all build on open source. I mean, sugar, a big part of what we do is built on open source. An important part of what we do is community, reaching out to all those developers that build around us. And the company really got its start as a CRM that we reached out to the community and built on open source principles. And let's go back to the, let's connect the dots there. I want to get into the sugar dynamic because at that time, the community wanted an alternative. Yes. Talk about what happened there because you're seeing the notion of communities we just talked about from the early days to being state of the art part of now our marketing functions, our customer service functions, data acquisition functions for product development. Yes. Data and networks driving everything. I think one of the key elements here is if you look at the way people buy, it's changed. We've all bought things. If you buy things, I buy things, everyone out there listening, we're all consumers. We all buy things. But the way we buy has changed over the past two decades. If you go back 10 years, 20 years, the information we got as consumers was all what was given to us by companies. Or it was what companies controlled through reviews or product placement. And our sources of information were limited. And part of that was because of the ability to communicate. The ability of a buyer, a consumer, to find another person like themselves and understand that buying dynamic was limited. So along comes the internet. And one of the great things about the internet is where you can always find another person like yourself. It's easy to complain too about things too. Yes, it's easy to complain. But one of the great things is you can always find other people like yourselves. You can come together and whatever your interest is, now on the internet, the odds are there's somebody in the world who's making their mission to tell everyone else in the world about that space and they're not beholden to a company. They're not beholden to any kind of special interest there. And they do it just because they value it and it's their passion. And what this means is the way people buy has changed. So it's become the now the number one influencer of a buying decision is other people like yourself in particular through the internet. So customer experience has become more important. Honesty and integrity and transparency. In that companies can no longer project a brand image and do that through marketing that is inconsistent with the real behavior with customers because it becomes apparent. And the internet has facilitated that. So it's more important than ever that companies are looking at creating that authentic image. And that is driving a lot of the interest in the market and space today around solutions like ours that help companies create and manage that experience with customers. I want to get into the sugar product in a second but I want to get your thoughts because this is a great thread and thanks for sharing. It's great to have you here. There's all this expertise and historical view. So you look at the old expression what is old is new again? Yes. You know, we talk about communities. You know, we just talking on my morning show this morning on the Silicon Valley Friday show about AI and you know, my guest, Jim Long, friend, Cal guy, systems guy. We're talking about neural networks are now hot but neural networks have been around for a while. So you're seeing things like neural networks. We're talking about communities now morphing at a whole new level have been around but now the notion of scale. You talk about the internet. You bring in a notion of scale. I mean, we can always say what was on IRC 15, 20 years ago IRC chat is basically slack now at scale. Yes. So you now have older concepts at a scale point. Yes. What's your thoughts on that? Certainly neural networks points to AI. It's fascinating. Those of us have been in the tech industry long enough, you know, and, you know, I'm 54. I've been through this for, you know, enough decades now. We will look back and we say, yeah, you know, 20 years ago I heard that when we were talking about just the other day was predictive analytics. I remember, you know, 15 years ago a whole, you know, phase around predictive analytics and now there's a whole discussion happening today as if, oh, it's the new thing, right? You know, well, those things have been around and you look at the many, many of the ways we build technologies. Technology goes through waves. These things go through cycles. What was old comes back around, you know, what was new things created and I think it's important to be in the right place and right time around those waves. You know, you take cloud computing today or you take the way we build technologies. If you go back to the days of client server, I mean, if you're an old Unix person, you remember those days when the exciting thing was removing the client server. So I had a desktop client and a server out in the cloud, right, and of course the internet has let's just takes that server and move it out to a vendor cloud or onto Amazon or IBM or any one of multiple clouds so the company doesn't have to manage it. A great help for business in terms of spinning something up. But what's interesting in the early days of the web, when we built web applications, it was this HTML webpage sort of experience and application. All of those today have moved to what is effectively a client that happens to be written in JavaScript instead of C or whatever the client language was, right? Happens to run in a web browser which is internet explorer or Chrome or Netscape is your operating system, right? And they actually talk to that server side in the same way those old client server ask it. They're looking mobile out there too, a whole nother bulking. Yeah, so getting a little, maybe a little bit technical from our backgrounds here, but the world of client server is effectively what is happening with modern web applications. And it's interesting to see those waves and how they change and sometimes having had that experience, you can look back and say, okay, I get what's happening with this. It's new technologies, it's rebranded a bit, but there's a lot of the similar concepts that come and go. Talk about the sugar CRM business for a minute because that's an interesting position now. You guys have come out from an open source kind of philosophy as an alternative and also that just goes through also the big giant as these Oracle and others. But now there's a lot of shifts happening in what CRM means. Yes. So because you have a change in the landscape. Yes. And certainly cloud is going to impact that on prem data centers moving to the cloud and you get mobile, multiple channels. How is the business changing? I mean, give us the update, spend a minute to update. Yeah, yeah, well I think the real opportunity around CRM is historically CRM, and again, those of us who've been around may remember when CRM was hot and then it went cold. And it's hot again, right? And again, going in waves. It was hot originally as, look, there needs to be information around the customer. You need something we put at the center around the customer. And it originally emerged as what I'll call a system of record. And it's simplest level of customer database and it's more complicated, a whole set of information that brought a view of the customer together. And that was very useful. And many companies, the prime use of that was something we call Salesforce Automation which is help a company manage the sales team. What is my sales person doing? How many meetings did they go to? Who did they talk to today? How many calls? Activity-based management of the sales team. Useful for CEO. I certainly value the information. What's the pipeline look like? What's the pipeline look like? Forecasting, exactly, right? But if you think about it, that doesn't help the end user that individual do their job. Sales person. How does forecasting help them go into a conversation and have a meeting with a customer? It doesn't. And what happened was those systems turned into systems where the sales person would show up once every two weeks. And put their information in. Put their information in and it was reporting up to the boss, right? And a role for that, but all faced with challenges of adoption, usefulness for the sales team. It's like getting pulled in teeth. Yes, and everyone knows the story, right? This is my boss's report, so I'm sandbagging it. Yeah, I had a call this month. I had a call this month, you know, and all I got to go in at the end of the week. So I'll do it later on a Friday afternoon. I'll put enough in to keep my boss happy but the system didn't help them do their job. And I'll call that legacy CRM. Where we are now is the next generation and that's our vision. And we think of CRM as the tool that helps the sales person do their job. So you're about to walk into a meeting as a sales person. How can we help you prepare for that? We want to be the most useful application. Is that the focus now? Yes. So it's more engagement driven. It's much more engagement. And I'll call it moving from a system of record to a system of engagement, right? It's much more engagement driven. It's much more about how you enable that individual. And if you think about selling, whether it's business to business, which is the majority of our customers, business to business, we have a lot of retail too, but business to business and majority, even in the business to business world, you're talking to a person. So it's person to person engagement. It's all SaaS though, right? SaaS products? SaaS, but we'll go on premise as well. So something interesting here, we don't, we determine our business by customer relationship management. That's what we do. Those are the problems we solve. We help a company with relationship management. We help them deliver a better experience to their customers. We help their sales team understand the customer better. We're deployment agnostic. So you can go to our website today, turn it on, instantly start running out of the cloud. You can bring up and we can manage for you a private instance out of the cloud. So if you don't want to be caught up in the multi-tenant, you want a little bit more flexibility around timing of upgrades. You want a little more flexibility around implementation. We can go to multi-tenant or we can put it into your own data center. So we're not defined by deployment. For us though, it's all subscription. So we look completely like a SaaS business when you look at the coverage. It's really the customer choice, what they want, right? It's customer choice. And we have some customers for whom they have to do a lot of integration where they have big, big data sets and they do analytics on those and it's difficult to do that when it's remote in the cloud or they have regulatory or compliance concerns or they just want more control over timing and updates and flexibility. What do you guys do well when you're winning? I mean, everyone has that sweet spot. What's your winning formula? What do you guys do best? What do you win the most? What's the use case scenarios? Great, great, great question. So where do we win the most? It's in cases where the customer is looking for, I'll say a real platform to drive the front office. They're a bit of a maverick. They want to look forward in terms of the next generation of CRM, not the past, not the legacy. They see CRM as a differentiator in their business. They see the customer experience as a differentiator. They want to give their sales team real tools to use. They understand it's about person to person connections with the individual. So they want to enable that. There were some other more technical areas. We have a great platform for workflow and managing the customer lifecycle across the business. As the world moves to SaaS and subscription, we really see sales not just being about transactional business, but about being customer legacy and customer lifetime. So for example, we do service support, case management in there, because a lot of our customers- See all the features people need, but you're really looking at the people saying, hey, I want a forward-looking, modern view. Forward-looking, modern system that's all about engagement with the customer and is not just a customer record. And automate some of the administrative, mundane boss reporting stuff. We'll make it easy for that, right? So we still provide that, but it's a side effect of the fact that the sales team uses us. And going forward, things you're looking at investing in, chatbots and AI, and you got to kind of lick your chops and say, hmm, there's some good stuff coming around the corner. There's some great stuff going there. So we have a service in beta right now, which is very exciting. I said, sales is now about all person to person. So this service takes, effectively starts with an email address and returns what is a person profile based on the email address. So you're about to talk to somebody. Okay, well, tell me a little bit about them. Now, a good sales person, go out to the web, do some searches. Right now they're using LinkedIn and who they connected with. Go to LinkedIn, right? Are they on Twitter? Are they on Facebook? Do they have Instagram? Learn about them, right? You can learn a lot of information. So your trip to Hawaii, how was it? That's a good alignment. That's a good alignment, you know? Or your favorite sports team. You know, did you see that Warriors game, right? Yeah, he's in red socks fans getting together. Do you avoid the topic if that's the case? Yeah, did you suffer that 49ers game last weekend? Right? Yeah, exactly. You know, you learn that about a person. We have a service that goes out. It's faster closure tools. You move the needle on that. I mean, it's just basic common sense that you have that data. You avoid stepping on yourself. If someone's, you know, who knows? It could be a Trump fan or Obama fan. If you're one side or the other, you don't, you want to know that. You want to know that and not to talk about. Well, it used to be that, you know, in selling, you'd go visit someone in the office and you could look around their office and you'd see, you know, a diploma on the wall. Some people would be like, hey, nice thing, you know. You're cubicle. Exactly right. You know, today, the internet is that virtual office, right? What the person says on Facebook, what they say on Twitter, their profile on LinkedIn, any other social media, news articles even, pull all that together. So that we see is kind of the initial next stage. You guys have a customer event that you guys put on anything going on in the market in terms of events that you guys were just being in where can people find more about sugar in the market? Well, yeah, of course always our website, shrewdcrm.com. We put on a great customer event every year, SugarCon. That'll be coming up at the end of next year, actually. Great event for us. Lots of companies come together. There's a lot of information. Practitioner, not an industry, but more of a branded show for you guys. Yes, yes. Practitioners. Branded show for us, practitioners, people that come together around the industry. Great customer reference stories you can put together there. Great things. I mean, we have, we're the system for IBM, largest in the world. In media, New York Times uses us. If you're a New York Times customer and you call in to subscriptions are up, they're aligning with their audiences. Even with the post-election that I saw that John Markov who's retiring, good friend, but he was mentioning that their digital subscriptions are up through the roof since the election. So good software. Everyone wants that information, right? So yeah, lots of places for us. Larry, thanks so much for spending the time here on theCUBE and we have another segment talking about the bigger picture, but congratulations and thanks for coming and sharing your content. Great, thank you very much. This is theCUBE in Palo Alto. I'm John Fourier. Thanks for watching.