 in the hopes they won't need to contact the CEO who's sitting down to dinner. Who may need to inform investors who might ask for a sit-down with the CEO. Live from Las Vegas, it's theCUBE. Covering Knowledge 16, brought to you by ServiceNow. Here are your hosts, Dave Vellante and Jeff Frick. Welcome back to Las Vegas, everybody. This is theCUBE. We're here live at the Mandalay Bay Hotel. This is ServiceNow Knowledge. It's actually, I think the third day of the conference, the second day for theCUBE. And we've been going wall-to-wall coverage, full day yesterday, capped off by Secretary Gates, the 22nd Secretary of Defense for the United States, appointed by George W. Bush, and asked by President Obama to continue along. It was quite rare that an outgoing secretary is invited to participate in the following administration. It was really a pleasure to have him on. It's great theCUBE sometimes. Get guests like that. It's a real privilege. We had Reggie Jackson on on the East Coast at SAP Sapphire. And Reggie Jackson actually had been on before, but pretty fun interview, Jeff. And yeah, it's great. You get these opportunities and these big names come in, billionaires like Michael Dell and others, Scott McNeely and then fun folks like Reggie and then real serious dudes like Robert Gates. He was very serious. I know you've read all of his books and you're a big fan and I was struck by kind of just the simple kind of Midwestern values that were really as you know, he laid down as really the key to leadership, stuff that you need to have and it can be reinforced, but it's not something that you're taught in school. Yeah, I mean, you know, he was busy and the gracious was time. So many other areas I would have loved to go into, but so today was keynote, day two keynotes. Dan McGee who's the COO of Service Now would be coming on in just a moment was up sort of hosting the day two keynotes. Lot of discussion about service management across the enterprise, embedding ITOM and ITSM, some demos on security. I think this is one of the least understood but greatest upsides of this company is the whole security play. Really trying to integrate all these bespoke security tools and to give you a single view of how to respond to security incidents. We're going to make that a theme of certainly day two and day three, talking to the practitioners about how they're solving that security problem. Also a lot of talk about systems of engagement. Dan showed a capability called Connected, sorry, which is basically like a Slack like capability but it's integrated inside of Service Now and any of you have used Slack or instant messaging. You got to go outside of your workflow and do it and then go back. Service Now trying to make it easy to subscribe to channels and things like that. And yeah, so that was good. We're going to unpack some of that today. Jeff, I've been talking to some of the investors coming out of the financial analyst meeting just digesting things. They're really obviously very happy about the progress that Service Now has made. As you know, Stock took a hit in January along with everything else. Actually took a hit last year too when they missed their quarter, well not missed, they just didn't beat by as much as people thought they were going to beat by. One of those deals, remember we had Frank on? Well I mean, expectations, right? It's all about expectations. And we were saying to Frank last year, like if you got a $10 billion market cap, stuff like this is going to happen. And he said, I'm not worried about it. We talked to him yesterday about, I used the term 90 day shot clock which I stole from Michael Dell. And as a private company, Dell's not on that anymore but it's a public company that's doing really well. Slutman and Scarpelli and company, I think they have their sights set on the broader vision. So while they obviously have to service Wall Street on a quarterly basis, they don't get too excited when Wall Street gets excited. They don't get too depressed when Wall Street isn't. But some of the feedback I've heard from the investors is things like, they are so micro focused which you understand that's the Wall Street mentality. Focused on like a deceleration in bookings or in billings, right? I mean it's still growing like crazy but growing less robust than bookings. And so they're sort of micro analyzing things like that. I think it's just sort of anomalies in the quarter when people come online. I'm not personally not concerned about that at all there. ServiceNow average contract values continue to go up because they're able to upsell. So that is sort of interesting but I'm not so concerned about it. The other concern I heard which is kind of funny talking to you off air, tongue in cheek, is the investors concerned about how does ServiceNow do in an AWS led world? And I don't get that concern. Do you, does it make any sense to you? No, I don't get it. It's funny you bring up AWS because I think of Bezos in the way he treats the stock market as either jump on my train or not. I really don't care. I'm going to do what I'm going to do and then look what has happened with AWS, right? And the money that they finally kind of opened the kimono that they're making. So I don't know why they would do that. It certainly makes sense to partner with Microsoft. Satya is doing his thing. He was also at SAP Sapphire this week as well. So Microsoft and their cloud vision and Azure is really aggressive. So that part of it makes sense. I don't know if there's a security concern or something inside some of their enterprise clients that they prefer to be on Azure cloud versus AWS cloud. Maybe that's part of the reason you don't want the vulnerability of a single vendor. Some of those kind of basic things, but AWS pretty solid. My inference was they're worried that AWS is going to eat the world, which it is, but it's still a $3 trillion market. But you had mentioned, I think made a really good point. Last year, they were spinning up instances on AWS. What was your point on that? Right, right. And Frank mentioned it on the interview. I think he said they spun up like 50 or 60,000. I'm probably getting the number. Instances of ServiceNow here for the various training, certification, et cetera. And it was 100% AWS. This year is 50-50. Azure and AWS and they just had Microsoft was just on the keynote this morning as well. So I don't know, is it a hedge, is it another partner? I wouldn't read much into that. Well, I mean, to me it's just giving customer choice, right? So AWS is infrastructure. And Amazon does a fantastic job of automating all the processes and procedures. You've heard my rap and my curves on bringing marginal costs down to zero for incremental volume for spinning up servers and compute and network resources and other ancillary infrastructure software. You know, clearly Amazon's moving up the stack into data with things like Kinesis. You're seeing with things like Aurora and Redshift, you know, getting into the database world. But that's still fundamental infrastructure. It's not today anyway in the application business. Microsoft of course is, and we'll talk about them in a second, but I just think if a customer wants to run ServiceNow and AWS, great. But ServiceNow is an application provider, an expert in workflow and understanding how to work and service requests and deep, deep expertise in that area. That's not Amazon's wheelhouse. And now Microsoft is interesting. I mean, Microsoft's into CRM. It's into ERP, so that could be, but I think, excuse me, I think again, in that instance, it's about infrastructure. And yeah, maybe Microsoft will try at some point to try to come up with ways to compete with ServiceNow. But ServiceNow to me has such a lead. If I were ServiceNow, from a competitive standpoint, I'd be more worried about BMC getting its act together and trying to improve remedy or maybe HP with a company with those resources, which I think BMC is probably closer to having a solution that is more competitive than it was five years ago. HP's still playing big time catch up. But as they're catching up, ServiceNow moves on, so I don't think they're even that worried about that. I think they're very much focused on the customer. I don't know, it just feels like this company has great momentum and good vision and getting great feedback from the customers and it's very customer centric. So that way- The thing I keep seeing is kind of the conbomt and kind of this new generation of programming. They don't approach it as programming here. It's really about the citizen programmer here. It's stitched together a workflow using these tools. But I keep seeing on the visualization boards, I go back to like Jira and some of that kind of the classic that came out of from the hardcore developer tools that are making it a little bit different. So I wonder if there's some bump there, are they going to kind of run into that space? Is this defines kind of a new type of programming? What's going to happen with kind of classic programming? I don't know enough to know. But with the shared services beyond ITSM, with HR, with marketing, with legal facilities, there just seems to be so much opportunity to get more business inside their existing accounts as they do grow other accounts as well, that as long as the value exceeds the price and the cost to deliver it, seems like a lot of opportunity to kind of land and expand. And I started telling you, I talked to you in the gym this morning, I've ran into somebody in the financial services world now. Service now does a ton of business in financial services with ITSM and so forth. But what this individual was telling me is that his firm has basically automated the banking workflow. So you know, you got marketing, facilities, HR, the banking workflow. Right, right. Which is a really interesting story. He told me he wants to come to theCUBE next year and tell us about it. So big day today, Dan McGee's coming on. We're going to talk to him, he's the COO of ServiceNow. We got CIOs coming on. We got practitioners, more innovation coming out of ServiceNow knowledge. So keep it right here. The CUBE SiliconANGLE's flagship production. We'll be right back after this short break. Every once in a while.