 Live from Las Vegas, it's theCUBE. Covering Splunk.conf 19, brought to you by Splunk. Hey, welcome back everyone. It's theCUBE's live coverage here in Las Vegas for Splunk.conf 2019. It's the 10th year of .conf. I mean, two great guests. Rick Fitz, Senior Vice President General Manager, Groups at Splunk and Kartik Rao Vice President Area, GM of Signal FX. The big story is Signal FX, acquired by Splunk, Rick, you sponsored that. Guys, welcome to theCUBE. Great to see you guys again. Yeah, great to be here, Dan. They just broke a world record. They did. For the bike on intro there. Pretty exciting on what's going on here. A lot of records being broken. Splunk just continues to move the needle on capabilities, product, platform, brand messaging. Signal FX, company we've been reporting on since their founding, really in your wheelhouse. You guys bought them for a good number, big number. Why, what's going on? Why the interest in Signal FX? You know, for a long time we've been watching, I would say perhaps patiently, watching the market and the trends. And we were really waiting for a time where the new application architecture was really going to kind of start to take hold. Where this cloud native trend that we've been seeing where people are building applications, where people are actually delivering applications to market in quite a different way, would finally get some escape velocity. And we've been watching patiently for that to occur. And as we saw that last year start to accelerate really, we went out and surveyed the entire market. And of course, at the end of that survey resulted in the acquisition of Signal FX and also of Omniscient. And so we bought those two companies and have combined them to deliver on our vision of what we're trying to do for DevOps. Rick, you and I had a conversation in 2015 here in theCUBE at the.conf at that time. You were on the IoT, you saw this wave. Again, you've been patient. What about IT operations that's happening now that makes this so critical to Splunk? Is IT operation, we know what automation is doing, machine learning toolkit, getting a lot of rave reviews. People love to automate things, but more apps are coming. What's the motivation now? What was the critical linchpin for you to make this happen? Yeah, exactly. I think what we're seeing is in traditional IT operation is this world where developers build these monolithic applications, hand them off to operations and they operate it. And then in the same conversation, you'll get handed over to somebody running if you will, developer engineering or cloud engineering or they have various different levels for it. But you're really dealing with an engineering organization and they're being tasked with digitization of their enterprise. And very strategic investments are being made there, but they're also being asked to build things at high availability, high scalability, and highly reliable with lots of change. So it's kind of the competitive advantage of the enterprise. And as I was seeing that occur more and more, I just saw the distance between IT operations and development kind of separate. And I said, wow, that's interesting because it's being driven by this new application architecture, a cloud native architecture. And I didn't want to be left behind. I wanted to actually be able to build a bridge for IT operations into this future. And I think this future trend is something that's going to be lasting for the next 10, 15, and 20 years. So I think this is very strategic to Splunk and very important for us to get right for the long term. But I also see my role as a part of Splunk is to make sure that we take IT operations into this new world. Because these new worlds, and if you will, the existing worlds, those operating models are quite different. They operate differently, they think differently. In one, they own their code, they're on call. In another one, they're waiting for something to fix and then they try to, you know, we're waiting for something to break and then they fix it. So we're trying to actually help enterprises across that entire gambit. And certainly with security, the theme here at this event is the security event too, on top of everything, right? So this is what it's turned into. Data is driving a lot of security telemetry and data is important for security. So I mean, that's operations. That's right. And your apps have to be secured in both worlds. So I think Splunk has a role to play in helping in this transformation for all of IT as it becomes much more developer centric. And of course, as I said, that is really one of the strategic reasons why we led the acquisition of SignalFX. Well, we're looking forward to seeing how you handle the acquisition. Of course, we think we were fans of the deal. Kartik, I got to ask you, every single company in observability space is going public, you know? So why, you could have gone public. Why Splunk? Why sell to these guys? What made it a fit for you? Well, ultimately, we looked at a number of things or we looked at a number of things in making the decision. We wouldn't have done this with anyone other than Splunk. Just the strategic fit was just so great on so many levels. You know, when we started the company, our goal was to solve the monitoring and observability challenges for anyone building a cloud-native application. And we knew that was going to be a long road. There are going to be a lot of things we needed to invest in and develop. And so we started on the metric side. We layered on distributed tracing. And we took a philosophy that we wanted to build an enterprise-grade, scalable, robust, feature-rich set of technologies. We weren't in the market to build, you know, a SMB kind of very simple, you know, limited type of a product. We really focused on the larger, more sophisticated customers. And so as we looked at continuing to extend our portfolio, one of the things that we needed to invest in was in the logging space. Because, you know, when you think about the trifecta of monitoring data types that you need, you know, logging is a big part of it. And we knew that, you know, we wouldn't be able to go and build a logging system from the ground up that would be robust enough to support enterprise use cases. And so we started a partnership conversation with Rick and team. And it just became very clear through that process that there was a tremendous amount of product fit, vision fit, culture fit, values fit. Like just everything was just so aligned that we realized that we could do so much more together as one company. So, you know, we rounded out the solution portfolio quite, or the technology portfolio quite substantially overnight by becoming a part of Splunk. And then the other part of it too is, you know, we saw as we were dealing with customers, we were dealing mostly with cloud native, cloud first customers. But a lot of the customers that we were, or prospects that we were talking to were more traditional enterprises who were not 100% of the way there yet. Some of them weren't even 10% of the way there yet. And it was difficult for us to really engage in conversations early with them, to help them understand what does it mean to shift from traditional IT ops to DevOps, because we didn't have a relationship with them on the IT ops side of things. And so the other thing that we were really excited about being a part of Splunk is we can be a part of that conversation from the very beginning when the customer, you know, maybe they're just beginning to think about it. And, you know, they don't have the urgency of doing it today, but we can be there with them from the very beginning and help them get there on their timelines. Yeah, this is an interesting discussion point because when you're highlighting, and I know we've had conversations about your company about being a platform, not just a tool, right? So what you're getting at is as you guys started to get more market share, your platform needs, you needed logging, and meet the market leader right here, right? So you guys need them. So partnering's hard when you're trying to build a platform now. You can have a platform that enables partners to build on top of it, but components of a full-baked platform, it's hard to partner. Rick, what's your thoughts and reactions to that because that's my statement, but do you agree with it? It's hard to partner in the platform. It's a core competency. Look, he struggled with logging because he had to build out a boatload of new investment. You guys are just to catch up. Yeah, that's right. And I think that the thing that needs to be stated here is in your large-scale enterprises, they are truly looking for the best of breed, highly-scale environments, right? That we're talking about here. And they want, you know, they encouraged us to take a step in this direction. It was an obvious, you know, choice. And I think that has been the reaction that we've kind of heard universally. Like, this is a good, this is a great idea. This is a really strategic thing that you Splunk folks have actually done. And so that's really encouraging. So I would agree with you. I'm partnering, and we were talking through it, but it's like this is better not to partner in this case. Better together. One of the things that's really important is that logs, you know, that's who we're all about, we've actually spent a lot of time in trying to invest into the streaming world of dealing with things in-stream. And these guys have perfected it for metrics, which is, you know, that's the strategic aspect of this. And then combining what they had already done with tracing, with omniscient, it just doubles down on this future of this application architecture that I mentioned. So most, some M&As have a couple flavors to them. You buy a company, you throw them under a general manager or an executive. They kind of live there. Boundaries lead, you get the core tech. Some team, you know, the scenario is, full team comes in, hits the ground running, they're building out, they're going to own the build out. It seems to me, based upon the omniscient acquisition, you're giving Cartek and team kind of some reign here to go build this out. Is that how you guys see it? Yeah, that's exactly right. And so both Spiros and Cartek report to me, I'm there on boardings are, as it were. But really what we're going to focus on is customer success and achieving our business case and really capitalizing on the opportunity. These guys were running 100 miles an hour and we got to get them to go to 1,000 miles and we're only going to make adjustments to the business case in order to achieve that. And that's what we're here to do, is to shepherd this organization in its entirety to the greatness that I think we all see out there. And we're going to do that in a very careful and cautious way. Cartek, omniscient is an acquisition stealth company. Kind of a commitment, say, hey, here's some more horsepower, talk about how that happened and what's the purpose behind that acquisition. Well, I can let Rick talk to how it happened. Yeah, well, I'll tell him in the end. And I'll talk about that. Yeah, when we surveyed the market, we actually found that people have certain strengths. These guys had actually started their journey into tracing because their first release was like last December and so they'd made some strides. And we kind of found omniscient through this discussion and we weren't like, oh my gosh. And we were in the process of doing the acquisition, doing due diligence. And we said everything on their roadmap is what these guys have done and vice versa. And that was the, this is another combination that we can't pass up. And when I told him the day we closed, I said, if you had the capital, you would have done this. And he's like, yeah, I would have. One of the things that Rick had asked me during our process was what are the top three things that you would invest in if you had Splunk resources behind you? And I said, microservices, APM, microservices, APM, microservices, APM and so on. And I got a big grin because I obviously couldn't disclose what we were doing. The omniscient team, they were still in stealth so there's not a whole lot out there on the web about them. But it's a phenomenal team. They've got people who are committers on some major open source projects, deeply technical, very, very shared philosophy to what we had at SignalFX in terms of open instrumentation, not having any proprietary locking in how you collect an instrument data. Very similar philosophies around leveraging the power of analytics and monitoring. And we just actually focused on different parts of the problem because we're both relatively early in this effort. So we effectively doubled up the team's capacity overnight and accelerated our roadmap by several quarters. So I'm really excited about what we can do together with them. Well, are they in the Bay Area? Are they from? They're Bay Area, basically, yes. Well, I want to get you guys thoughts on the keynote today. Feedback was authentic, kind of very cool keynote. As you guys bring this together, Rick, Cartigan team, the optics, the messaging, what's the core positioning? As you guys look at the holistic view now that you've invested in and are building out for customers, what's the posture? Take us through the keynote positioning. What's the marketplace customer message around the future here? Yeah, I think it's really clear that what we're trying to do for IT organizations and application development organizations is build solutions that are modern and helpful to their core mission. And by the way, as I mentioned, in the world of new development, it's different. It's a different solution set. It's a different approach, a different operating model than it is in current IT operations. And so one of the key messages we wanted to resonate is that we have the right solutions in both of these worlds for you and that we're trying to develop an operating model of reactive response or quick response or engaging the right person in the problem through our use of VictorOps, for example, and using that as a way to be very intelligent about how we educate the people that are engaging in a resolution process. So we're trying to create a bridge to both worlds so that they can both be successful. And then underpin that, of course, with automation that can be leveraged in both worlds as well. So that's what we were trying to convey. We know it's early days. By the way, these guys have been with the company for three weeks, so it's kind of like, wow. Culture shock. Throw in the deep water. Let's throw you out on stage in front of 11,000 people to see if you can swim. And they did phenomenal, by the way. But that was kind of the key message. And we're so excited because we feel like we're just in the first inning of perhaps a 19 or 20 inning game because I think it's going to be a lot of fun. And it's going to be close out there, but we're real excited to be able to bring this to market. I mean, it's amazing coming in now three weeks and to see the breadth of technology that's available in the Splunk platform. And what struck me today, watching the keynote, was just across, it's such a feature rich and such a broad platform from everything in with the core index and capabilities that everyone's known about a long time. All of the ML, the additional capabilities we're going to bring in on the metric side. And then the use cases just across every persona is just, there's so much that we can do. What do you think of the culture? They've run hard, they're a playful company, they like to work hard, play hard, but they also are focused on real customer value, got a great engaged community. What's your take of the culture? Yeah, absolutely. I mean, culture fit was a really important part for us, right, if we're going to be acquired by a company and be a part of a larger organization. They're kindred spirits, I feel, to the way we ran SignalFX. It's a very customer focused organization, great technology and engineering culture. And it's hard to find both, right? Where it feels like every organization is very important and very well respected. It's not like heavily skewed to, it's just all about engineering, it's all about sales. It's a very balanced culture and it's a very customer focused. Guys, congratulations. Big deal, they don't see these kind of mega deals. They come along once in a while. It's a big bet. Good luck with everything, Rick. Thanks for coming on. Final question for both of you. What's the big takeaway to take back to the office as you leave.com this week? What's going to resonate the most with you guys that you're going to take back as feedback? Yeah, for me, it's, you know, I get my energies from customer conversations. We all do here at Splunk. If you're having a bad gig, go talk to a customer and then they walk you and stop you in the hall and say, you know, we really thank you again for doing what you do. And so it just, I take back from this always that what we do matters and is important and just keep chugging along at it because we're doing some really good work out there that's really helping lives. And that's really important. That's good therapy. When you're having a bad day, talk to a customer. Go talk to a customer. I love you guys. What's your takeaway? I'm just, I'm thrilled that the number of customers are coming up to me and saying how excited they are about the acquisition and working with us. And, you know, that's, it's very reaffirming for me. And, you know, it's just, it's super exciting to see what we will have. You guys had a great tech following. A lot of tech leaders who knew you guys, knew you had good stuff. So congratulations. Great validation. Good job. Thanks guys for coming on theCUBE. Great insight. Thanks for sharing all that data. Data to everywhere here in theCUBE. I'm John Furrier, more coverage after this short break.