>> Hey, welcome back everybody.
Jeff Rick here with the Cube.
We are live in downtown San Jose
at the historic Pagoda Lounge, part of Big Data SV,
which is part of Strata + Hadoop Conference,
which is part of Big Data Week because everything big data
is pretty much in San Jose this week.
So we're excited to be here.
We're here with George Gilbert,
our big data analyst from Wikibon,
and a great guest, Gaurav Dhillon,
Chairman and CEO of SnapLogic.
Gaurav, great to see you.
>> Pleasure to be here, Jeff.
Thank you for having me.
George, good to see you.
>> You guys have been very busy
since we last saw you about a year ago.
>> We have. We had a pretty epic year.
>> Yeah, give us an update, funding,
and customers, and you guys have a little momentum.
>> It's a good thing.
It's a good thing, you know.
A friend and a real mentor to us, Dan Wormenhoven,
the Founder and CEO of NetApp for a very long time,
longtime CEO of NetApp, he always likes to joke
that growth cures all startup problems.
And you know what, that's the truth.
>> Jeff: Yes.
>> So we had a scorching year, you know.
2016 was a year of continuing to strengthen our products,
getting a bunch more customers.
We got about 300 new customers.
>> Jeff: 300 new customers?
>> Yes, and as you know, we don't sell to small business.
We sell to the enterprise.
>> Right, right.
>> So, this is the who's who of pharmaceuticals,
continued strength in high-tech,
continued strength in retail.
You know, all the way from Subway Sandwich
to folks like AstraZeneca and Amgen
and Bristol-Myers Squibb.
>> Right.
>> So, some phenomenal growth for the company.
But, you know, we look at it very simply.
We want to double our company every year.
We want to do it in a responsible way.
In other words, we are growing our business
in such a way that we can sail over
to cash flow break-even at anytime.
So responsibly doubling your business
is a wonderful thing.
>> So when you look at it,
obviously, you guys are executing,
you've got good products,
people are buying.
But what are some of the macro-trends
that you're seeing talking to all these customers
that are really helping push you guys along?
>> Right, right.
So what we see is,
and it used to be the majority of our business.
It's now getting to be 50/50.
But still I would say, historically,
the primary driver for 2016 of our business
was a digital transformation
at a boardroom level causing a rethinking of the appscape
and people bringing in cloud applications like Workday.
So, one of the big drivers of our growth
is helping fit Workday into the new fabric
in many enterprises:
Vassar College, into Capital One,
into finance and various other sectors.
Where people bring in Workday,
they want to make that work with what they have
and what they're going to buy in the future,
whether it's more applications
or new types of data strategies.
And that is the primary driver for growth.
In the past, it was probably a secondary driver,
this new world of data warehousing.
We like to think of it as a post-modern era
in the use of data and the use of analytics.
But this year, it's trending to be probably 50/50
between apps and data.
And that is a shift towards people deploying
in the same way that they moved
from on-premise apps to SAS apps,
a move towards looking at data platforms in the cloud
for all the benefits of racking and stacking
and having the capability
rather than being in the air-conditioning,
HVAC, and power consumption business.
And that has been phenomenal.
We've seen great growth with some of the work
from Microsoft Azure with the Insights products,
AWS's Redshift is a fantastic growth area for us.
And these sorts of technologies,
we think are going to be of significant impact
to the everyday, the work clothing types of analytics.
Maybe the more exotic stuff will stay on prem,
but a lot of the regular business-like stuff,
you know, stuff in suits and ties
is moving into the cloud at a rapid pace.
>> And we just came off the Google Next show last week.
And Google really is helping continue
to push kind of ML and AI out front.
And so, maybe it's not the blue suit analytics.
>> Gaurav: Indeed, yes.
>> But it does drive expectations.
And you know, the expectations of what we can get,
what we should get, what we should be moving towards
is rapidly changing.
>> Rapidly changing, for example, we saw
at The New York Times, which as many
of Google's flagship enterprise customers
are media-related.
>> Jeff: Right.
>> No accident, they're so proficient themselves
being in the consumer internet space.
So as we encountered in places like The New York Times,
is there's a shift away from a legacy data warehouse,
which people like me and others in the last century,
back in my time in Informatica,
might have sold them towards a cloud-first strategy
of using, in their case, Google products,
Bigtable, et cetera.
And also, they're doing that because they aspirationally
want to get at consumer prices
without having to have a campus
and the expense of Google's big brain.
They want to benefit from some of those things
like TensorFlow, et cetera,
through the machine learning
and other developer capabilities
that are now coming along with that in the cloud.
And by the way, Microsoft has amazing
machine learning capability
in its Azure for Microsoft Research as well.
>> So Gaurav, it's interesting to hear
sort of the two drivers.
We know PeopleSoft took off
starting with HR first and then would add on
financials and stumble a little bit with manufacturing.
So, when someone wants to bring in Workday,
is it purely an efficiency value prop?
And then, how are you helping them
tie into the existing fabric of applications?
>> Look, I think you have to ask Dave or Aneel
or ask them together more about that dynamic.
What I know, as a friend of the firm
and as somebody we collaborate with,
and, you know, this is an interesting statistic,
20 percent of Workday's financial customers
are using SnapLogic, 20 percent.
Now, it's a nascent business for them
and you and I were around in the last century of ERP.
We saw the evolution of functional winners.
Some made it into suites and some didn't.
Siebel never did.
PeopleSoft at least made a significant impact
on a variety of other things.
Yes, there was Bonn and other things that prevented
their domination of manufacturing and, of course,
the small company in Walldorf did a very good job on it too.
But that said, what we find is it's very typical,
in a sense, how people using TIBCO and Informatica
in the last century are looking at SnapLogic.
And it's no accident because we saw Workdays
go to market motion, and in a sense,
are following, trying to do the same thing
Dave and Aneel have done,
but we're trying to do the same thing,
being a bunch of ex-Informatica guys.
So here's what it is.
When you look at your legacy installation,
and you want to modernize it,
what are your choices?
You can do a big old upgrade
because it's on-premise software.
Or you can say, "You know what?
"For 20% more, I could just get the new thing."
And guess what?
A lot of people want to get the new thing.
And that's what you're going to see all the time.
And that's what's happening with companies
like SnapLogic and Workday is, you know, someone.
Right here locally, Adobe, it's an icon in technology
and certainly in San Jose that logo is very big.
A few years ago, they decided to make the jump
from legacy middleware, TIBCO, Informatica, WebMethods,
and they've replaced everything globally with SnapLogic.
So in that same way, instead of trying
to upgrade this version and that version
and what about what we do in Japan,
what do we do in Sweden,
why don't you just find a platform as a service
that lets you elevate your success
and go towards a better product,
more of a self-service better UX,
millennial-friendly type of product?
So that's what's happening out there.
>> But even that three-letter company from Walldorf
was on-stage last week.
You can now get SAP on the Google Cloud Platform
which I thought was pretty amazing.
And the other piece I just love
but there's still a few doubters out there
on the SAS platform is
now there's a really visual representation.
>> Gaurav: There is. >> Of the dominance
of that style going up in downtown San Francisco.
It's 60 stories high, and it's taken over the landscape.
So if there's ever any a doubt
of enterprise adaptation of SAS,
and if anything, I would wonder
if kind of the proliferation of apps now
within the SAS environment inside the enterprise
starts to become a problem in and of its own self.
Because now you have so many different apps
that you're working on and working.
God help if the internet goes down, right?
>> It's true, and you know, and how do you make
e pluribus unim, out of many one, right?
So it's hilarious.
It is almost at proliferation at this point.
You know, our CFO tapped me the other day.
He said, "Hey, you've got to check this out."
"They're using a SAS application which they got
"from a law firm to track stock options
"inside the company."
I'm like, "Wow, that is a job title and a vertical."
So only high growth private venture backed companies
need this, and typically it's high tech.
And you have very capable SAS,
even in the small grid squares in the enterprise.
>> Jeff: Right, right.
>> So, a sign, and I think that's probably
another way to think about the work
that we do at SnapLogic and others.
>> Jeff: Right, right.
>> Other people in the marketplace like us.
What we do essentially is we give you the ERP of one.
Because if you could choose things
that make sense for you and they could work together
in a very good way to give you very good fabric
for your purposes, you've essentially bought
a bespoke suit at rack prices.
Right?
Without that nine times multiplier of the last century
of having to have just consultants without end,
darkened the sky with consultants to make that happen.
You know?
So that, yes, SAS proliferation is happening.
That is the opportunity, also the problem.
For us, it's an opportunity where that glass is half-full
we come in with SnapLogic and knit it together for you
to give you fabric back.
And people love that because the businesses
can buy what they want,
and the enterprise gets a comprehensive solution.
>> Jeff: Right, right.
>> Well, at the risk of taking a very short tangent,
that comment about darkening the skies, if I recall,
was the battle of the Persians
threatening the 300 Greeks at the battle of Thermopylae.
>> Gaurav: Yes.
>> And they said, "We'll darken the skies with our arrows."
And so the Greek.
>> Gaurav: Come and get 'em.
>> No, no.
>> The famous line was, he said, "Give us your weapons."
And the guy says, "Come and get 'em."
(laughs)
>> We got to that point, the Greek general says,
"Well, we'll fight in the shade."
(all laughing)
But I wanted to ask you.
>> This is the movie 300 as well, right?
>> Yes.
>> The famous line is, "Give us your weapons."
He said, "Come and get 'em."
(all laughing)
>> But I'm thinking also of the use case
where a customer brings in Workday
and you help essentially instrument it
so it can be a good citizen.
So what does that make, or connect it
so it can be a good citizen.
How much easier does that mean or does that make
fitting in other SAS apps or any other app
into the fabric, application fabric?
>> Right, right.
Look, George.
As you and I know, we both had some wonderful runs
in the last century, and here we are doing version 2.0
in many ways, again, very similar
to the Workday management.
The enterprise is hip to the fact
that there is a Switzerland nature
to making things work together.
So they want amazing products like Workday.
They want amazing products like the SAP Cloud Suite,
now with Concur, SuccessFactors in there.
Some very cool things happening in the analytics world
which you'll see at Sapphire and so on.
So some very, very capable products coming from,
I mean, Oracle's bought 80 SAS companies
or 87 SAS companies.
And so, what you're seeing is the enterprise understands
that there's going to be red versus blue
and a couple other stripes and colors
and that they want their businesspeople
to buy whatever works for them.
But they want to make them work together.
All right?
So there is a natural sort of geographic
or structural nature to this business
where there is a need for Switzerland
and there is a need for amazing technology,
some of which can only come from large companies
with big balance sheets and vertical understanding
and a legacy of success.
But if a customer like an AstraZeneca
where you have a CIO like Dave Smoley
who transformed Flextronics,
is now doing the same thing at AstraZeneca
bringing cloud apps,
is able to use companies like SnapLogic
and then deploy Workday appropriately,
SAP appropriately, have his own custom development,
some domestic, some overseas, all over the world,
then you've got the ability again
to get something very custom,
and you can do that at a fraction of the cost
of overconsulting or darkening the skies
in the way that things were done in the last century.
>> So, then tell us about maybe the convergence
of the new age data warehousing,
the data science pipeline,
and then this bespoke collection of applications,
not bespoke the way Oracle tried it 20 years ago
where you had to upgrade every app
tied into every other app on prem,
but perhaps the integration,
more from many to one because they're in the cloud.
There's only one version of each.
How do you tie those two worlds together?
>> You know, it's like that old bromide,
"Know when to hold 'em.
"Know when to fold them."
There is a tendency when programming
becomes more approachable, you have more millennials
who are able to pick up technology in a way.
I mean, it's astounding what my children can do.
So what you want to do is as a enterprise,
you want to very carefully build those things
that you want to build, make sure you don't overbuild.
Or, say, if you have a development capability,
then every problem looks like a development nail
and you have a hammer called development.
"Let's hire more Java programmers."
That's not the answer.
Conversely, you don't want to lose sight
of the fact that to really be successful
in this millennium, you have to have
a core competence around technology.
So you want to carefully assemble
and build your capability.
Now, nobody should ever outsource management.
That's a bad idea. (chuckles)
But what you want to do is you want to think
about those things that you want to buy as a package.
Is that a core competence?
So, there are excellent products for finance,
for human capital management,
for travel expense management.
Coupa just announced today their
for managing your spend.
Some of the work at Ariba, now the Ariba Cloud at SAP,
are excellent products to help you
do certain job titles really well.
So you really shouldn't be building those things.
But what you should be doing is doing
the right element of build and buy.
So now, what does that mean for the world of analytics?
In my view, people building data platforms
or using a lot of open source
and a lot of DevOps labor and virtualization engineering
and all that stuff may be less valuable over time
because where the puck is going
is where a lot of people should skate to
is there is a nature of developing certain machine language
and certain kind of AI capabilities
that I think are going to be transformational
for almost every industry.
It is hard to imagine anything
in a more mechanized back office, moving paper,
manufacturing, that cannot go through a quantum
of improvement through AI.
There are obviously moral and certain humanity
dystopia issues around that to be dealt with.
But what people should be doing is
I think building out the AI capabilities
because those are very custom to that business.
Those have to do with the business's core competence,
its milieu of markets and competitors.
But there should be, in a sense, stroking
a purchase order in the direction of a SAS provider,
a cloud data provider like Microsoft Azure or Redshift,
and shrinking down their lift-and-shift bill
and their data center bill by doing that.
>> It's fascinating how long it took enterprises
to figure out that.
Just like they've been leveraging ADP
for God knows how many years,
you know, there's a lot of other SAS applications
you can use to do your non-differentiated
heavy lifting, but they're clearly all in now.
So Gaurav, we're running low on time.
I just want to say, when we get you here next year,
what's top of your plate?
What's top of priorities for 2017?
Cause obviously you guys are knocking down things
left and right.
>> Thank you, Jeff.
Look, priority for us is growth.
We're a growth company.
We grow responsibly.
We've seen a return to quality on the part of investors,
on the part of public and private investors.
And you know, you'll see us continue
to sort of go at that growth opportunity
in a manner consistent with our core values
of building product with incredible success.
99% of our customers are new to our products last quarter.
>> Jeff: Ninety-nine percent?
>> Yes sir. >> That says it all.
>> And in the world of enterprise software
where there's a lot of snake oil,
I'm proud to say that we are building new product
with old-fashioned values,
and that's what you see from us.
>> Well 99% customer retention, you can't beat that.
>> Gaurav: Hard to beat!
There's no way but down from there, right? (laughing)
>> Exactly.
Alright Gaurav, well, thanks.
>> Pleasure.
>> For taking a few minutes out of your busy day.
>> Thank you, Jeff.
>> And I really appreciate the time.
>> Thank you, Jeff, thank you, George.
>> Alright, he's George Gilbert.
I'm Jeff Rick.
You're watching the Cube from the historic Pagoda Lounge
in downtown San Jose.
Thanks for watching.