 ServiceNow Knowledge 14 is sponsored by ServiceNow. Here are your hosts, Dave Vellante and Jeff Frick. Welcome back to San Francisco. This is theCUBE and we've been covering Knowledge 14. Wall-to-wall, we started on Tuesday. We packed almost 20 interviews on Tuesday, same on Wednesday. We got a half day today. Just had Dan McGee on, Senior Vice President who is really focused on the cloud infrastructure. Very interesting discussion that we've been having. We're running the gamut, Jeff. We've gone from sort of talking about the business of ServiceNow, their growth rate, their financials, things of that nature, their strategy of really extending beyond IT into the business, into IT operations management. We're going to have a discussion on that this afternoon. Yeah, we're talking about hardcore stuff, configuration management, integration with Puppet and Chef and other sort of orchestration tools, as well as enterprise service management. We've talked to, the interesting thing is we talked to a lot of the system integrators. And when you walk the floor, you get this too, but the guys at KPMG, Accenture, Ernie Young, Cloud Sherpers, fruition, they are taking the concept of service management into the lines of business. This is where they have relationships. You know, these big, let's say the big five or the big six, the new big five, they have relationships at the board level. And what's impressing me is that they're all here. The only ones not here, really, I guess IBM's not here and PWC is in here, but you got guys like Ernie Young giving presentations on the floor, Accenture, we're talking world-class organization, as they say, obviously, IBM, PWC, Deloitte, those are the big guys. And they have massive numbers of employees worldwide, super deep industry expertise, and they're here, why are they here? Because they smell the dough, right? They know where the action is and they know it's a long-term play. They're looking for how do I have a business value impact where we can build long-term, and that's what they're doing. And so they are sniffing this opportunity out, and this is not a flash in the pan, in my view. Yeah, no, and as you said, Accenture and KPMG, they won't go unless they see that there's really an opportunity to build a practice of business around a software solution and being involved in a number of startups over the years that's not easy to do. So for them to see that opportunity and come in full force and know all the things that they can do to support that is impressive. A couple of other things that I found interesting. One is that ServiceNow's ability to kind of execute on the vision of building a platform, delivering an application for their go-to market in the early days, and now really extending back to that platform message. And I've been actually surprised at how well the customers that we've had on have embraced that message. The other thing is that ServiceNow just doesn't mind letting us get under the covers. I think your conversation with Alan about the details in their data center was pretty unprecedented in that he basically answered everything you asked him, really getting under the covers and getting into some of the really fine details. Yeah, what's your networking like? What's your storage? Where are you going in this direction? You're using Flash. Who's Flash are you using? They even said, yeah, we're using Fusion I.O. Are you going to be using atomic rights? No, not today. We're going to be doing that in the future. Right, and then we just had Dan on, and the same thing. You know, he's publishing numbers and again, I think the interesting question that you asked him and he came back, you know, is your security better than mine? He has a prospect and he said, I can't say that. Let's have a conversation. So it's a very mature and open way to really address this. And again, Trent is their friend. It's a great SaaS application. They eat their own dog food. They're only running one application. It's really interesting that they decided to go with a single tendency architecture from the beginning, even though some might argue that ITSM doesn't seem that strategic to start out, but it's certainly put them in a great position to go forward. And then, most importantly, and again, part of this whole theme of letting us get under the covers a little bit, is having a parade of customers. And I think as a percentage, and we'll have to look back at some of the other shows that we do, but as a percentage of guests that we get on that are customers, is significantly higher than we see at most shows, which is one, refreshing to get their perspective. Two, it's been insightful that they are both shifting their focus from a technology point of view to more of a business point of view and running those tracks in parallel. And finally, I think it's because that's what you, our audience, really want to hear. If you're trying to make decisions about your path forward, it's really nice to hear from a peer. It's nice to hear from a customer, somebody in the trenches that's executing it. And we've had people that have been just starting. In fact, somebody said they can't really talk about it. We're just about ready to execute the PO. So someone who's been here for four years, when they were, when ServiceNow was 50 people and the fruition, market fruition took a gamble that this was a company we want to make a bet with. So it's been really interesting to see how they've transitioned from just the ITSM, which really was a lot of the messaging last year to the platform and the extending further and deeper into the enterprise. So a lot going on here. I'm interested in the M&A piece too, Jeff. I think that, I mean, the MIRA 42 acquisition was notable. It's getting ServiceNow into the whole analytic space and a little bit into the sort of being able to visualize some of the data. I think that's one of the other big untapped areas of the TAM, and ServiceNow is not talking about this and certainly not in a big way. They're talking a little bit about the analytics piece, but I think there's a huge opportunity long term for ServiceNow in data. And specifically, they're capturing so much data that their customers have, if they can provide tools and capabilities to extract insight from that data, people will pay for that. I have no doubt about it. Now, it's the customer's data. Now, so in theory, the customer could act on that data themselves, but ServiceNow hasn't even talked to us about this, but if I were those guys, I would be looking, it's not necessarily a 2014 or 15 initiative, but longer term, I would be looking at potentially making acquisitions to be able to gain more insights to that data, maybe visualize that data. Maybe, or maybe they partner up, maybe they partner up with a tableau or a click tech or a summa, or maybe they develop them in-house. I'm not sure what the right play is there, but I am very confident that there's gold in that data. And if they can start providing services to analyze that data, get insights from that data, and act on that data, their customers will pay for it. And that's where that CMDB really comes into play, right? Because then you can put all these other applications based on that data to extract the value in a unified view. The piece I'm looking forward to today is we're going to have Dave Schneider on the VP and Worldwide Head of Sales, and I'm just kind of curious how the sales conversation has shifted in terms of prioritization from a customer point of view. Now that we're kind of well down the path, still early days, but still, we're into the game on the cloud, and what cloud is, an enterprise cloud, is the security conversation, the uptime conversation. Is that kind of moving down the list of priorities from a customer point of view, going through that process, and are other things more rising to the top? Because there's a lot of attributes that people review, but the relative rank order changes, and I'm curious to see if we can get kind of a leading indicator as to, like we talked about with Red Hat a couple weeks ago, where security and infrastructure and enterprise readiness starts to become more of a presumed yes, it's good. Now let's talk about features functionality, where we're going to go from here, the data, the business impacts, and so I'm curious, and looking forward to talking to Dan about that. Yeah, now of course the other little side show that's been going on all week is the BMC photo bombs, essentially, right? I mean, you've had closer visibility to it than I have, but we've seen, you know, driving, I don't know, some kind of buses around, we saw the little, those handouts yesterday that they were doing. They got buses, they got segues with little shields, it looks like a Cecil B DeMille movie. It's funny, right? I mean, what do you make of that? What do you make of that? You know, we see it a lot at shows where competitors have their trucks that drive around and go, but I think what's interesting is kind of the Twitter reaction from the folks that are here saying maybe they should invest more time in their products and less time in the buses out running around in front of the venue. You know, the other great thing I like about ServiceNow that we've talked about numerous times is, you know, is anyone baking them a cake? Is anyone making BMC cakes? I still think that's just the most interesting and actual insightful indicator about how people feel about this, is that they bake a cake, they're so happy after they finish it. I'd really like to unpack this a little bit more. I think from my standpoint, I feel like I got to do more research here. I mean, I've read pretty thoroughly the Gartner Magic Quadrant on IT Service Management. You know, BMC's a leader in that quadrant. What I haven't done is talk to enough, talk to some remedy customers, talk to some. And there's a dissonance to me. When I talk to ServiceNow customers, I've talked to a lot of ServiceNow customers, it's a pretty consistent story. There's challenges, right? We've talked about the UI issues, which they're clearly working on. We talked about the challenges of single CMDB and getting the organization around that, but okay, but the vast majority of the conversation is the excitement, the energy, the transformation, the business value creation. I don't get that when I talk to some of the competitors' customers. What I get is features, they have that too, they have that too, yep, mobile, check. They can rent you the software check and what they can do on-premise, that's something that ServiceNow hasn't chosen to do at this point in time. I'm not sure that's an advantage. Look at guys like Workday and Amazon, they're not doing on-premise either. The future's cloud, folks. But so I would like to understand this better. Give BMC equal time, love to have those guys on, love to have some customers on. And so welcome to do that, that would be great to see. So more work to be done there, but that struck me as kind of odd. To me, it confirms the impact that ServiceNow is having in the marketplace. Right, it's a big validation. I mean, we don't see the HP OpenView guys running around out there. I'm sure there's other competition out there as well, but it does kind of say, hey, look at us, look at us. I don't think it's really effective and, you know, I don't know. I mean, it's EMC and Oracle-like, right? EMC and Oracle are known to do those things, but they're companies that are, I think, strong brands, so look at Oracle, obviously huge leader, Larry Ellison, giant in the industry, EMC with Tucci doing the federation. I mean, they're moving, they're growing, they're perceived as having a real impact in the business. You got BMC going private. I just, I found it a bit strange. I don't know. I wonder what the debrief on that is going to be back at BMC as to whether or not that was worth it. So that was kind of a, again, interesting structure. Whether or not they're doing sponsored tweets on the Twitter stream, so, you know, they're kind of- Well, you know, maybe they know this is where they actually, this is where the customers are, so, okay, we want to, you know, keep our name in there. So, okay, but that's, again, sort of a little side show. So, we've been unpacking these and other trends this whole week. This is a marketplace that is changing. You know, it's going from one that's a sort of boring tools market to one that's transformational. Big message from Frank Slutman on Monday was that CIOs need to be business leaders. And I, you know, I tweeted out, okay, is that reasonable? Is that practical to expect that? And then we have CIO of Symantec on, CIO of Safeway on, CIO of Intuit on, all of them talking business, go to market, channel, M&A, right? That's exactly what Frank Slutman was talking about. So, I love the fact that they're able to back up their marketing messages with actual customer examples. Yeah, which, again, is of all the shows we do, I think we had way more customers at this show as a percentage of our total guests at any other show, which is terrific that they're willing to come on, they're willing to talk about what they're doing, they're excited about what they're doing, and then the synergy with the messaging that you get from the corporate side is almost uncanny. Yeah, I mean, you try to have some critical analysis at these events, obviously, and we've talked about the UI, we've talked about the challenge, the political challenges of single CMDB, we've talked about going beyond IT service management, we've talked about the somewhat fuzziness of the TAM, but each one of those, either service now has an answer, or in the case of the TAM, I get the feeling that this thing is a lot bigger than many people realize. Of course, the stock market earlier this year and last year was validating that, I guess, and it's pulled back, now you see Box pulled its IPO for now. No, I did not see that. Yeah, and Box didn't comment, but people are speculating that it's because the climate for cloud companies has not been great, and they, CMBC this morning cited service now, I think they cited Workday and some others, which is actually kind of interesting. So, you know, they'll buy low sell high, so Box doesn't want to sell its shares low to the public, so they're just waiting for the suckers to buy at a higher price, I guess, too bad. But no, my point is, maybe it's a buying signal for the likes of Workday and ServiceNow, which are cloud, and then even I would throw in their Splunk and Tableau, that these four stocks tend to trade together, with some others, but they're totally different companies, totally different business models, different products. You know, Tableau really doesn't even, I mean, they're really not even a cloud play. They're not a cloud play. You know, they're a big data play and a visualization play, but they seem to trade in lockstep, maybe not complete lockstep, but roughly equivalent to the Workdays and the ServiceNow. So maybe this is a buying opportunity for some. I have said consistently this pullback, in my opinion, is very healthy. I'm quite happy about it, because I thought the market was getting a little bit ahead of its skis. Yeah, the other thing that strikes me is just the age of some of these legacy applications, when you think in terms of the evolution of technology and how fast things are moving, and I think one of the more kind of insightful things that we heard was Fred talking about the XP Windows, or excuse me, Explorer 6 removal as a significant gate to being able to move forward with newer age technologies like HTML5, delivering things via the cloud. So I think for some of the legacy folks, that that's definitely a big encumbrance that they have to overcome. 15 years in the technology cycle is a long time. I mean, I know we don't depreciate our stuff out over that type of a schedule, so I think that's a big factor that enables people like ServiceNow and some of the other companies that you mentioned to kind of get out of the gate using a much more modern architecture, taking advantage of ubiquitous networks and taking advantage of a lot of infrastructure and computing power and GPU power and a lot of things to bring to bear on the business problem and then to this kind of singular focus around a particular area and really trying to knock it out of the park. So it's been a good show and I look forward to wrapping it up with a few more great guests here on theCUBE. Yeah, the other point I want to make is again, we're trying to do some critical analysis. We're independent media, right? We're trying to have our analysts are trying to sort of look at all the angles. The other one is, you know, we talked about this last year was the SMB opportunity and the reason why we came to this conclusion is because what happened was Jeff and I were talking to so many customers and they were so enthusiastic and we were saying, we want this. We want to eliminate email, you know, because we run so much of our business on email and Google Docs and spreadsheets and it's a bloody nightmare. I mean, it's really hard to keep track of you. Let's think about how much productivity you lose just trying to find stuff and so that mid-market opportunity, that SMB piece, they're going to, ServiceNow is going to put their toe in the water there. Frank Slutman's been very clear. We're not going hard. We're not going to, no, you didn't say that. He said, we're not going to lose focus on the global 2000. That was G2K. G2K, G2K. We're doubling down on that. We're going in Italy because there's a few of them there. But they got this little, but we'll throw a few dollars over here and see what happens. And I think that's a big opportunity for them longer term as well. That plus the analytics. All right, we got to leave it there. We'll be right back with our next guest. This is Dave Vellante with Jeff Frickman. This is theCUBE, we're live from San Francisco. We'll be right back.