 Live from Las Vegas, it's theCUBE, covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. Everybody and welcome to theCUBE's live coverage of ServiceNow, we are here in Las Vegas, Nevada at the Venetian, I'm your host, Rebecca Knight, co-hosting with Dave Vellante and Jeff Frick. It's great to be here with you. Hey Rebecca. Doing the show. Busy week. Very busy week. And we are only a- Busy month. Busy month. And it's only day one. So we just heard John Donahoe, who is the new CEO. He's been CEO for a year. He was at eBay for a decade. He got up on stage and he said, when I came to this job, I could barely spell IT. But I want to talk to you first, Dave, and say, how's John doing? How's the company doing? What's your take on this? Well, the company's doing great. It's the fastest growing software company over a billion dollars. It's got consistent growth. I mean, 35 to 40% growth each quarter year over year. It's growing sequentially. It's throwing off. Its free cash flow is actually growing faster than its revenue, which is quite impressive. Company's got a $29 billion market cap. Couple years ago, service now when Frank Slutman was running the company said, we're going to put the stake in the ground and we're going to be a $4 billion company. I think this company's going to do $4 billion in its sleep. I think the next milestone is how they get to $10 billion. And beyond that, how they get to $15 billion. How they take their market value from where it is today in the high 20s, low 30s up to $100 billion. This company wants to be the next great enterprise software company. Basically, automating manual tasks. You wouldn't think there's that many manual tasks, but when you think about whether it's scheduling meetings or scheduling travel or keeping track of medical leave and all these other stuff, this manual, they want to automate that process. Right, exactly. I mean, that's what he talked to his, the tagline this year and really for the brand identity is making work work better for people. He said that people are at the heart of this brand. Jeff, I mean, does this strike you as a new idea? Is this going to work for ServiceNow? It's not really a new idea, but they're kind of changing their shift. It's interesting when we saw Frank Slutman on, he was always, the IT guys are my homies, right? He was very specifically focused on going after IT. And Fred's great kind of early intro was, remember the copier room with all the colored pieces of paper, vacation requests, new laptop requests, et cetera. How does he make that automated and more importantly, how does he let the people responsible for that be able to code and build the workflow? So I think the vision is consistent. They're obviously expanding beyond just the ITR my homies because it's still ultimately workflow. And I think at the end of the day, it's competition for how do you work? What screen is, or what app is on your screen as you go through your day to day workflow? And they're obviously trying to grab more of those processes so that you're doing them inside a service now versus one of the many other applications that you might be trying to do. Just to follow up on that, when Jeff and I first started covering this show was 2013, less than 5% of services now's business was outside of the IT department. Today, it's about 35% is outside the IT department. So they have this strategy of the, you know, the call it land and expand, you know, Kristen Chabot from Tableau, I think was the first I heard use that term. These guys are executing on that. So starting with IT and then moving into HR, moving into maybe facilities, moving into marketing, other parts of the organization, customer service management, security, I don't know if they count that as IT, but cohort businesses. So if you look at their financials, their upselling is, you know, phenomenal. Huge percentage of their business comes from existing customers. If you look at the anatomy of a typical service now customer, they might start with a 50 or $75,000 deal. That quickly jumps to a multi $100,000 deal, then up to a multi million dollar deal, you know, and then up into the, you know, many high eight figures. So it's really a tremendous story. And the reason is, and Jeff, you and I have talked about this a lot, it's because when Fred Lutty started the company, he developed a platform. He took that platform to the venture capital community and they said, well, what do you do with this? He said, you do anything with it. And they said, yeah, get out. So he said, all right, I'm going to write an app. He was worked at Peregrine. So he wrote an IT service management app. And when service now went public, I remember Gartner Group came out and said, that's a tiny little market help desk. It's a dying market, flat billion dollar TAM. Well, this company's TAM, it's almost immeasurable. I mean, the TAM is literally in the half a trillion dollars in my view. I mean, it's enormous. It's workflow, right? So again, it's just that competition for the screen. And as everyone goes from their specialty and tries to expand, right? Salesforce is trying to expand more into marketing. You've got Zendesk and other kind of help desk platforms that are trying to get into more workflow. But what they were smart is they went into IT because IT controls the applications that are in the shop. And so to use that as a basis in IT touches, whether it's an HR process where I need to get the person a new laptop or it's a facilities where I need to open up a new building or it said IT touches it all. So a really interesting way to try to grab that screen and application space via the IT systems. And that's where John Donahoe comes in. So as you said, Jeff Frank Slutman, data domain, EMC, you know, IT guy. And now John Donahoe, not an IT guy, he came from the consumer world. He's trying to take the ServiceNow brand into the C-suite. So we have him on a little later. We're going to talk to him about sort of how he's doing that. But this is a company that's transforming, they're constantly transforming, really trying to become a brand name, the next great enterprise software company. I think another thing that really came out in the keynote and also just on the main stage this morning is this idea of change is not just about the technology. In fact, the technology is the easy part. One of the things he kept saying, and he brought up other people and customers and partners to talk about this too, is that it really is a culture shift. And it really is about a different way of leading, it's a different way of bringing in the right kind of talent who are not just these IT guys, let's be honest, but they are data scientists, they are creative people, they integrate design thinking into the way they do their jobs with this overarching goal of how do I make the employee experience better and how do I make the candidate experience better too? Because that's another part of this. It's not just the people who are already working for you in this period where there is a war for talent. You also have to be thinking about, okay, how do the people that we want to get what's their experience like when we're trying to attract them? So a question for you, Rebecca, because you cover the space a lot, right? And you write for MIT and- HBR. HBR and the new way to work and the good, I'm trying to remember the- It's called Best Practices, yeah. Book that you did that interview. So as it is competition for talent, how did it strike you? Because at the end of the day, that's really what it's all about. How do you get and retain the best people when there just aren't enough people for all the jobs that are out there? It's interesting because I do feel as though obviously you want to be able to enjoy your work day and that's what Andrew Wilson at Accenture was talking about. Really, it's about having fun and it's about having it be a great experience. At the same time, I do think the human part of work is so essential. I mean, as we've talked about before, you don't quit jobs, you quit bosses. And it really is about who is your manager and who is the person who is leading this change and how are they interacting with employees and with you personally? But should it be fun? I mean, they're still paying you to show up, right? And I think sometimes we get confused. Clearly the mundane still takes a ridiculously too high percentage of time to do the routine where there's this automation opportunity. But the other piece is the purpose piece and they brought a purpose early on in the keynote, right? People want to work for purpose-driven organizations and the millennial workers have said they want to be involved in that. It's not just about shareholders and stakeholders and customers. So there is a bigger calling that they need to deliver on to attract and maintain the best people. A couple of words about the show. So we do a lot of shows. This is a legit 18,000 person show at the Sands Convention Center. It's crowded. The line at the Starbucks coffee this morning was about 60 to 65 deep. I mean, that's a lot of people waiting for coffee. The other thing I want to stress is the ecosystem. When Jeff and I first started this show, the ecosystem was very thin, Jeff, as you recall. And that's one of the things we said is watch the ecosystem as an indicator of progress. Well, the ecosystem's exploding. You've seen acquisitions where companies like CXC and Accenture have got into the business big time. You see E&Y, Deloitte coming in as big partners now of service now and as we've often joked, the system integrates like to eat at the trough. So there's a lot of business going on in this ecosystem. Right, now it's part of the keynote too. The software is the easy part. Are you investing in the change management for your people? Are you investing in best practices? And if you're not, then you're probably wasting some of your money. Great. Well, it's going to be a great show. This is just segment one. We've got a lot of great guests, so I'm excited to get going with both of you. All right. All righty. I'm Rebecca Knight for Dave Vellante and Jeff Frick. We will have more from Service Now, Knowledge 18 coming up just after this.