>> Hey, welcome back everybody.
Jeff Frick here with theCUBE.
We're at PagerDuty Summit 2017,
the second year at this event in downtown San Francisco,
downtown Pier 27 out on the water.
Beautiful day outside,
and we're really excited to have the CFO
of this fast growing company.
He's Steven Gatoff, as I said, CFO of PagerDuty.
Steven, nice to see you. >> Right on, thanks.
Good to be here. >> Absolutely.
So you've been with the company since January,
so relatively new and yet you've been here
for a funding round, things are moving.
We've just had Jennifer on,
she's just always full of energy.
So first off, welcome to the company.
And what attracted you to PagerDuty?
>> A lot, particularly the whole disruption,
the whole notion of driving change.
If not even defining a new industry.
The ability, and kind of from a financial standpoint also
of seeing a company and a product evolve from
a very cool software tool to an operations platform.
And that is something that
I was lucky enough to do at my last company, at Rapid7,
where it was a similar journey and value creation exercise
of moving from tool to platform, and disrupting an industry.
And we did it there in the security space,
in cybersecurity, and it was a great run.
And then I got lucky enough to get connected
with Jennifer and the team here,
and realized there was a similar journey,
similar value prop,
albeit in a much larger TAM across all of operations.
>> It's funny the kind of stepping function of:
Is it a feature or is it a tool?
Or is it an application?
And of course everybody wants to get to the platform play,
but nobody's got a line-item that they need
to purchase a new platform in Q4, 2017.
So you really need to have that application focused
to lay the groundwork for the platform play,
but if you can make the transition,
obviously a huge opportunity.
>> So that's a great, we should have you engage
with customers because that is spot on,
particularly here, and I think that's some
of the excitement about the summit,
because it's really the first coming out,
if you will, for us of digital operations management,
where we have been so successful in the past
at the tool level, with the practitioner,
with helping make their lives better,
and all of that value-creation around what they do,
and then a little bit of the context,
it's sometimes better to be a little lucky than smart
with some hard investment and input
that we've done in the product that has evolved
to the platform notion, but as you you've heard
and talked with people, it's starting to come to fruition.
With the whole notion of decentralization of operations,
of the whole disappearance of centralized
command and control across organization.
It's kind of a modern-day digital ops analogy
to software rules the world.
It's really digital and cloud rules the world.
So people need to do their job,
and they need to focus on what creates value,
whether it's marketing or finance, or software development,
and with all of the influx of tools that they use,
whether it's applications or infrastructure,
we have this neat little niche where we're able
to provide people the visibility and the knowledge
to know what's going on and how things are working
so they can focus on what they do, and that's pretty cool.
>> So everybody's a software company now, right?
Everybody's delivering software wrapped
in some type of product or service.
We hear that all the time, but I'm just curious
to get your perspective from a CFO.
Obviously public company CFOs have very specific tasks
that they are given based on regulations,
governments and stuff, but you're not there yet,
in terms of the company, so what are some of the things
that a CFO does in this stage of a company
where you can really impact the growth.
What do you do day-to-day besides just
filing quarterlies and these types of activities.
>> Hopefully someone else is going to be focused on that.
The most fun about the role and the real value-add
is really providing support and insight and visibility
to the rest of the company.
So kind of an Uber service provider
to our stakeholders, to our exec team, to our employees,
to our board and investors, and what we're really trying
to do is provide a CFO, provide visibility to what happened,
how have we done, what has the performance been,
what did we think it was going to be,
and why did that happen, and then visibility going forward.
What is the road ahead look like, financially?
Where are we growing, how are we growing,
how are we investing our funds, what kind of returns
are we getting from a profile of investment of cost
versus what it generates in revenue and yield.
That's the fun part about
bringing people along on that journey.
Whether they're in finance or marketing,
that people understand what we're investing in,
what they're investing in, what the returns are from that,
and how we grow in scale.
>> Growing and scaling is really interesting, right?
Because growing and scaling is a good thing,
but there's also some bad parts of growing and scaling.
There's the joke like B to C guy.
Guess what: you just got to order from Wal-Mart, good news.
Bad news: you just got to order from Wal-Mart.
You better start building stuff.
>> Be careful what you ask for.
>> Managing growth is an interesting dynamic,
because you don't want to get too far over your skis,
and yet, especially here in Silicon Valley,
where it's all about growth.
You're not a big throwing-off-dividends,
cash company, AT&T back in the day.
So when you look at some of the factors,
what are some of the things to think about
that maybe people don't really think about
when you're trying to map out your growth.
You guys are going international,
just put a few extra bucks in the bank.
>> I'll tell ya, one of the most significant things
that is very difficult, very easy and obvious
to say and talk about, is the whole dynamic of
introducing the ability for a company to scale
and do things well in large format at low costs,
low friction, and not become a bureaucracy.
So not to introduce too much process, too much control,
too much front-end prevention, while at the same time,
making sure people are doing smart things,
that you're doing smart business, that people aren't
getting too far out over their skis on committing capital,
or committing the company to do something.
You want to support people by putting in the big three:
people, process, and technology in a way that the company
can grow without hindering growth.
You see that in so many different areas as you grow
and you start building up your finance functions
and you put in ERP systems,
so you don't want it to be too cumbersome.
Similarly, you bring functions like legal in-house.
In some companies I've been at, folks get really nervous.
Like: Oh no, now we're going to have a
no person killing deals.
The nice thing that I've experienced here at PagerDuty
is that the sales folks have really yearned and craved
that input and leadership, saying "hey, when are we getting
"a new head of legal, when are we getting a team
"to come help us craft deals and drive things forward?"
So it's a little bit of an art, less a science
insofar as bringing in resources, putting in processes,
putting in systems to help marketing, sales, engineering--
really those three, do their craft and do it well
with less friction and without more bureaucracy
and too much oversight.
>> One more question.
As you've seen the growth of open source,
and API economy, and a platform versus an application
where you get much more value by opening up the API
to a broader community, and yet at the same time maybe
you're not protecting quite the same level of IP protection
which, before, everything was kept in-house.
We had no open source projects, and it was all of our IP.
But really, the former is proving to be
a much more valuable way to go to market.
As you've seen that evolve, what's your take on it?
Obviously you got a good ecosystem that is developing here.
There's a big expo hall upstairs.
It's a very different way to build value.
>> It is, and in my humble opinion, it's really based on
the user, and for me that's the most significant
metric of value creation.
At the end of the day, how many users
do you have on your platform?
And if you look at it from that perspective,
the driver to getting users to come into the platform
is an open, high integration, user-based focus
on what they can use, not a walled garden approach.
So the value comes in what you're able to do,
not the propriety of your code.
In that regard, having a high integration--
the whole PagerDuty text stack is about
integrating with 200+ different applications
and pieces of infrastructure so that users can, therefore,
get the greatest value
from everything else they're investing in and spending on.
So you've created a valuable company like RedHat
and other folks have, based on the ultimate of open source,
where you provide a valuable service that
is not necessarily the propriety of your code--
to your point, intellectual property,
Albeit, there's a pretty decent amount there,
it's really the competitive advantage, the time to market,
the heavy lifting and steep curve on being able to
integrate everything that's out there,
correlate what's out there, too, which is a difficult task
and takes a lot of time and money to learn and get good at,
and that in and of itself
is a tremendous amount of value to users.
>> Well, Steven, great insights and enjoy your journey.
I'm sure Jennifer will keep you
movin' and hustlin' down the road.
Thanks for taking a few minutes out of your day.
>> Thank you. >> All right, he's Steven,
I'm Jeff, you're watching theCUBE.
We're at PagerDuty Summit 2017 in San Francisco.
Thanks for watching.
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