 at ServiceNow Knowledge 4T is sponsored by ServiceNow. Here are your hosts, Dave Vellante and Jeff Frick. Hi, we're back. This is Dave Vellante with Jeff Frick. We are live here at ServiceNow Knowledge. We're at Moscone. This is day one. The conference kicked off, actually sort of pre-kickoff on Monday. They had the analyst meeting, financial analyst meeting. There's a CIO event going on across the street. Over 100 CIOs, a couple hundred is what we heard. We've had several of them on today. Real theme of the conference is transforming IT, really shifting IT from a cost into a value center. We've heard this a lot from CIOs over the years, but they've had a hard time doing it. ServiceNow seems to be putting forth a recipe, and it's not just ServiceNow. When you walk the exhibit hall, like any strong conference, you see a lot of exhibits. You see people in the ecosystem, companies, partners, spending money to be here. Why are they here? Because there's business being done. Why is there business being done? Because ServiceNow is creating value and creating an ecosystem around it. We see that as vital. You certainly saw it with the VMware ecosystem. I remember back in 2010, Jeff, guys like Todd Nielsen saying, for every dollar spent on the VMware license, 15 or $18 is spent in the ecosystem. That was huge in terms of the value that the partners got out of that. Interesting, we're seeing shifts now and VMware gobbling up some of that value, but that's natural too. That's what software companies do. They either do that or they die. But ServiceNow is in the early days of the development of that ecosystem. Again, I see it as critical. The other really proof point is, talk to customers. Just walking around last night, speaking to customers, asking them what they're doing. Last year, remember, it was really a dominance of problem management and change management. And that's still the starting point, but you're seeing a lot more innovation beyond those core applications. Financially, this company is growing like crazy. One of the hottest companies in the business, I always say, my big companies to watch. Workday, Splunk, Tableau, ServiceNow, Salesforce a little bigger, but those four really crushing it from the software standpoint, the ones to watch. This company's growing 60 plus percent a year. They're on track, I think, to do 700 million this year. They haven't, their guidance is less than 700, but I think they'll do 700. They are expanding overseas, going after the global 2000. So financially, it's just a really interesting case. They're led by Frank Slutman. The dynamic at the top is really interesting. You've got Fred Lutty, who's this like mad genius, really interesting fellow. We're going to have him on tomorrow morning to kick things off. He's a great guest, an absolutely fascinating individual, and quite humble. He's a guy who stepped down as CEO just for the public offering. They bring in Frank Slutman, big personality. They seem to just work great together. Frank's very humble as well. He said he was doing a setup today for Fred tomorrow. We had Frank on. So you've got a really interesting dynamic. You've got Frank Slutman, who is just a hard driving CEO, really loves his people, loves growth, loves to build nations, loves to build companies, loves to compete, really, really aggressive, spending like crazy, really solid executive, and Mike Scarpelli, very, very solid CFO. Just building a great team, Jeff. You know, hey, we saw this last year. We certainly predicted more. This is not surprising at all, and I think it's more to come. Yeah, and it feels more business-y to me. Just feels more serious. Maybe it's the venue. It feels like they're buttoned down. I think Frank said he spent the first couple of years he was there putting the infrastructure in place for them to really scale and grow and doing a lot of inside stuff. And now, you know, they've turned outside. They're hiring like crazy, what do you say? Mike said 150 people in sales and marketing that were hired in the last quarter, 270 people all together at 230. So they're growing really aggressively. I think they're targeting 300 this year. I think that was the number they put out. So it's good, you know, Jeffrey Moore had, you know, we have the great guests as always. We get the super guests on theCUBE. Jeffrey Moore really, you know, Enterprise Enablement Platform, a little different way to look at it. Sheila that we just had on talking about applications as services, which we don't really hear much. And just the fact that there's services that wrap around everything. And we've had a lot of discussion around TAM and how do you define it in their market expansion beyond where they really were focused on yesterday. And there's a lot of upside here. There's a lot of places for them to go. You know, I want to get some analysts on. A lot of times we do these events, we have analysts on. I'd love to get the analysts perspective because I tell you, you talk to the customers, you talk to the partners, obviously you talk to the executives, you get this very strong story. I, here's what I don't understand. You read the Gartner Magic Quadrant on IT service management. And, you know, service now obviously a leader, but there seems to be a dissonance in terms of when you read that, you know, you got BMC, Remedy, they're talking how, you know, BMC has, you know, updated the code and gone mobile, all this stuff. We hear a different story from the service now, customers now. So that's why I'd love to get the analyst perspective. This is not my wheelhouse. So we're going to snoop around, try to find some folks to bring that in. Because that's, I mean, again, I'm looking for, okay, what am I missing here? These guys are smoking. Customers are all behind it. The ecosystem's growing like crazy. But then the positioning and the Gartner Magic Quadrant just doesn't make sense to me. I've talked to some guys about it and they sort of shook their head and said, yeah, I think they're wrong or, but I have a lot of respect for the work that Gartner does there. So I'd like to get their take. Chris Pope had an interesting number. He said that, and I'm probably misquoting, we'll have to go back and check the tape, as all good coaches do, that 80 to 90% of the work, the groups that they serve is formally paper-based workflow. Yeah, that's amazing. That's a giant number. And then the other thing that really struck me is that the systems that they're replacing are generally 10 to 15 years old. So when you think about that, that is a forever in the world that we live in today and the technology and the software and things that have evolved so far. So you would think the opportunity for replacement there is just right. Well, that paper-based comment is interesting. There's an old saying, the paperless bathroom will come before the paperless office. But maybe not. Maybe not. I don't know. I don't know how much paper you print at your house anymore. But the paper thing has slowed down. And again, it's, as we talked about too, about the new, not the millennials, but what do we call them, the entitled, the kids that have grown up that are coming into the workforce that like to work this way. So I think there's some good stuff up there. And really, the other one I love too is the Martha Hiller, trying to transform these businesses because there's a lot of their value proposition and a lot of what everybody's talking about is can CIOs transform their business and the bright, shiny object above the water with big data and cloud and then the really ugly stuff under the water that you can't see that you're beholden to. But it does sound like with some of the guests we've had from Symantec and Safeway that these guys are moving. They're not necessarily letting themselves be encumbered with what was in the past. Yeah, you're seeing the, you know, Jeffrey Moore crossing the chasm, you know, the early adopters, the tip of the spear. You're seeing a lot of those folks. They're leading transformations here at this event. You know, we've been tracking them in crowd chat. The other discussion that's really going on sort of a sideline, but it was really yesterday financial analyst meeting and as well at the industry analyst meeting is the whole notion of TAM. When ServiceNow started, they came out, a lot of people questioned that the TAM, the total available market to be only a billion and a half. They had to do a lot of explaining and I think it was hard because they didn't have the proof points, but essentially they extended that into this notion of IT service management, which was still, you know, whatever, multi-billion dollar market, maybe, you know, four or five billion. And the interesting thing about ServiceNow, they're going after the global 2000. They've got about 18% penetration in that global 2000. What they've done is they've expanded in a couple of directions. One is the IT operations management, actually integrating with Puppet and Chef and validating the changes that have been made, that entire workflow, quantifying that in the CMDB. The other is enterprise service management. In other words, going beyond IT, app creator last year sort of enabled a lot of this and then even business management is something that you're going to hear more and more about, which is the analytics piece. Those are little pieces. They're not competing with the big data guys. They're not competing with Workday and HR, but they're helping to automate that workflow. They're not competing directly with Salesforce, but they sort of bump into them conceptually. So you're seeing ServiceNow just participate in all these little pockets. And the reason is, and Fred Lutty will talk about this tomorrow, is because it's a platform. You could actually do anything with the platform. And that's what we heard last year. I'm sure we're going to ask them about that tomorrow, but it expands the TAM in ways that are hard to predict how big it is. We talked to Frank Slutman about the Salesforce analogy. A lot of people really didn't understand how big Salesforce actually could be. People were thinking about it as a Siebel replacement. It's obviously become much more. And Mike, like I said, the laser focus on the Global 2000, because they know that once they're in there, they're going to continue to expand in more seats even within the initial apartments as well as more functions. So they're very laser focused. It sounds like they're delivering to their customers. So it's exciting times, and everyone also seems to feel pretty good about the recent kind of corrections in the market that those were timely things that run out ahead a little bit. And so that's not all bad. So we got a great lineup today, or today we did. So let's look at some of the guys we have come on tomorrow. And this is all on siliconangle.tv. If you click on the banner for Knowledge 14, we've gotten most of the schedule they're published. So you can figure out when you want to tune in. So we've got Fred Luddy to kick it off. Shane Jackson, VP Marketing. Robert Federeck, an architect from Abbey V. Bill McVicker from Accenture. Bart Murphy from CareWorks. So again, one of the things we love about doing, the service now shows we get a lot of customers on. A lot of the shows that we cover, they don't get us customers, but we love to get the customers, Walker White from BDNA. It's already stopped by a couple of times. I think he's excited about coming on theCUBE. Matt Frinch, VP Strategy from Service Now. Jason Wohan is coming back from Cloud Sherpas, who I think we had on earlier today. So a great cast of characters. A lot of customers. Dan McGee's coming on too. Dan McGee's coming on. Dan McGee's got some interesting data. I hope we can get him to share with us on how Service Now is performing. Maybe we can get him to talk, maybe show a little leg, talk about how they're performing relative to some of the other cloud providers. I'm not sure he's willing to do that. But Service Now, I just, you know, is interesting because they look, the beginning to look anyway at downtime, has not the light on the server, but what the user sees. And that's very unique. Really excited about that. Yeah, it should be a great day. Yeah. It should be a great day. All right, Jeff. As always, working with you. Service Now, awesome show. Maybe see John Furrier tomorrow. He might be doing a drive-by. Hope so. And wall-to-wall coverage here. This is theCUBE. Thanks, everybody, for watching. You can tweet us. I'm at D. Volante at Jeff Frank. And send us questions. Go to crowdchat.net slash no14. That's the crowd chat that we have going on. It'll be going on this entire show. Thanks for watching, everybody. We'll see you tomorrow.