 Hey, welcome back everybody. Jeff Frick here with theCUBE. We're at Zoroastro, subscribed in San Francisco. David G is here. Last we saw you, David, I think it was January when this was all building up. Now you said you got 1,500 of people passionate about subscriptions right here in downtown San Francisco. Congratulations. Thank you, it's great to be here and it's great to be on-prem and on-site like last time we talked. We were at your offices, you were getting ready to move. That's right, you have to come see the new space. It's like way bigger. We're looking forward to it, that'd be great. So, great selection of customer stories up here today. We love the customer stories and you think of classic subscriptions like Adobe, Creative Cloud, or you think of Spotify and the things we're used to. You don't think about Caterpillar. You don't necessarily think about Ford. So to see those guys up on stage with you and team this morning was pretty impressive. Yeah, so we're very excited about how the subscription economy has really expanded into the mainstream and large infrastructure companies who are changing the way people interact has really taken hold. I mean, couple of examples you mentioned. So Caterpillar are here today and they're showcasing today. They have all of this machinery out in the field spinning out terabytes and petabytes of telemetry data and they're able to monetize those. They have autonomous vehicles, virtual reality, drones over job sites. All of that is available now as a subscription. We have Ford here today who are talking about the next generation of the company moving from a car an automobile company to a transportation company and meeting their customers where they need to be meeting. Matt, whether it's van services here in San Francisco like chariot and bicycles and knowing their customer from the moment they pick up their vehicle from they call it from bed to bed from waking up in the morning till the last and negative at night and having the whole transportation infrastructure around them enabling them to do things like that. It's all very exciting. I thought it was funny. Todd Buckler who was up on stage from Caterpillar explicitly said, we're not going to be a software company. We like making big iron things. But man, oh man, listen to the description of the services that they're delivering to their customers, the benefit the customers get, the benefit they get as you said with all this telemetry data. It's very different than just building a unit, chipping it to the dealer, the dealer sends it to the farmer, the construction worker and maybe you get some data back when it comes in for maintenance down then. Totally changing. It totally changes. And what it does is it helps predict downtime. It helps predict offline activity which can be in the hundreds of thousands or millions of dollars in the case of aircraft engines with GE we who we have on stage as well today. When those things go down in an unpredictable fashion, that causes enormous impact from a revenue profitability and forecasting standpoint. So that telemetry data can understand the stresses and constraints based on environmental factors. Am I in a desert? I'm in a cold weather or a climate. If I'm a jet engine doing short hops versus long hops, that provides enormous insight and sophistication for a customer to enable them to plan. And it's all based on this data which in turn is delivered as part of the subscription economy. And then take it to the next level, right? This whole theme around democratization of data, democratization of the tools to the data. Yeah, obviously a plane operating in Alaska is going to have different characteristics in one operating in the desert. But what about pilot characteristics? You know, you can leverage the power of all the people in your company to start developing hypothesis, testing those hypothesis and driving innovation around a much broader kind of front, if you will. Absolutely, and what we're seeing is that the sensors are going into everything. So we think about sensors in engines, but the aircraft frames themselves are now increasingly having sensors in them. How many stresses and strains? We know how many takeoffs and landings, but are they short hop, are they long hop? Are they going over the pole? Are they going over the Atlanta? Are they going over the United States? As an example, all of those have different implications for the service and the support and longevity and also the economics. And that data telemetry has intrinsic value that is now being monetized in ways that we've never seen before. So the other interesting thing to me that I don't think it's enough talk, David, is thinking of your customers as either in a club or as a member with this recurring membership as opposed to transactional customer. We had Inspirato on, they have a club. We had Surferon, you're a member. It's a very different way to think about the people that are your customers. And because you have this ongoing repeat revenue process with them, you have to keep delivering value. You have to keep them subscribed, if you will, because it's a very different way to build a relationship and engagement. Yeah, so we see that as this evolution from ownership to being a subscriber, whether it is a second vacation home, is a great example. In the case of Inspirato, they've gone from zero to 15,000 members in just a few short years and they're offering this highly curated, personalized, luxury vacation experience that is very individual and curated. That's a whole new marketplace and it's disrupting high-end hotels, it's disrupting whether you want a second vacation home, which you always have to go back to. Also on the show floor here, we have companies like Eleven James. So if you're a watch fanatic and you have a fancy watch, guess what, when you have one fancy watch, you probably want another one. But instead of owning them and putting those assets in the safe or in the drawer for months at a time, why don't you have a new one sent to you every single month or every quarter and just change them out for variety. So we see that time and time again as we move from ownership to subscription. You see it in cars, you see it in assets. Music is probably the case that most people are familiar with. You've gone from your case full of CDs, your case full of DVDs to your streaming services and you're seeing it with entertainment as well. Right, it's interesting, Tina and the keynote talked about being free of the shackles of time, ownership, obsolescence. So when you do consume these things as a service, it really changes the way you consume it because as we all know, once you get stuff and you get a garage full of stuff, stuff all breaks, it gets out of date. So it's a really interesting way to think of it now. It supports this whole kind of experience-based economy. I wanted to share a funny story with you with Inspirato is that they see your commitment to subscribing to their club as really a demonstrated commitment to your family. That you now have put on the dotted line that you're going to take quality vacation time with your family and if you could afford it, you're probably a pretty busy person. So a really interesting twist on what their value proposition is and why it's important to their members. And actually what they said this morning was really interesting. You think about a vacation club and a luxury curated experience, maybe that's a week or two weeks a year. They're also filling in the gaps for the other 50 weeks a year with all kinds of local events as well and building this lifestyle. So it's a fascinating physical experience of this subscription economy and they're very sophisticated in how they look at the data and look at who their subscribers, their customers are. And their subscribers and customers, by definition, I suspect are very demanding. Right. So you've been doing the MC job. You did a great job this morning. I'm just curious as you're walking around the show now that the keynotes are done and you can kind of walk around the exhibit hall and bump into people. Any surprising stories? What are you hearing? What are the buzz that you're hearing? A lot of hard work for a lot of teams. So first of all, we have an amazing group here and we're so proud of the work that we do to bring the subscription economy to a physical life. You know, we had this vision some months ago and you and I talked about having a showcase and having our customers tell their stories and you can see from the energy that we have on the show floor today, there are hundreds, we have 1,500 people here this week who are experiencing lots and lots of different customers and companies, subscription economy experiences. Tomorrow we'll hear from Andy Mooney who is the CEO of Fender Guitar. So you think about, you walk into a store, you buy a Fender Guitar, they're fabulous, the Stratocasters and you leave, they never hear from you again. They want to turn that into a lifelong music experience and really change the way from learning how to play an instrument to being part of a community and having a long-term relationship versus just walking out the store with a guitar. I love the Fender story, because again, it's easy to think of Spotify and digital assets that you're subscribing to and deliver digitally, but to really redefine your relationship with your customer and then to get the lifetime value, the benefits of that because then they play more, they buy more sheet music, they buy another guitar, you know, they hang out at the store and it becomes a hobby part of a community engagement. What a brilliant, brilliant move. Exactly, and I would say if I leave you with one final closing thought, you know, the other big aha is that there is a looming financial accounting change that's coming where the way subscription economy companies, any company with recurring revenue is going to have to change the way they account for their revenue and their expenses. It's something called ASC606, if you're in the financial community, you're having sleepless nights right now because it's as important as socks, Sarbanes Oxley or Y2K and that's an accounting standard that's coming down the line and will be mandatory in December 17 or December 18, depending on whether you're a private or a public company and we just acquired a company that is the market leader in automated revenue recognition. So we're educating the market in what is a very compelling value proposition and a compelling event that's going to hit almost everybody. Right, all right, we'll leave that there and we'll pick it up next time and we'll have a little bit more accounting talk. Sounds great. All right, David. Thanks for taking a few minutes out of your busy day and again, congratulations on a super event. We appreciate you coming. Thanks for having us. Absolutely, all right, he's David G. I'm Jeff Rick, you're watching theCUBE from Zora Subscribe 2017 in San Francisco. Thanks for watching.