Average reading time: 36 minutes
Date published: 2/18/2019
Follow Tom on Twitter: @TomKemp00
Steve: Tom, it’s great to have this opportunity to sit down for a conversation and talk about entrepreneurship, leadership and non-conformist innovation. By the way, congrats on your recent sell to Thoma Bravo, and your semi-retirement (and departure) from Centrify. Those in themselves are incredible achievements in the life of an entrepreneur.
So, selfishly I wanted to interview you on the podcast because your background and track record is remarkable. For starters, you were a co-founder of NetIQ, an enterprise systems and security management company in 1995. You had a dream job as Entrepreneur in-residence at Mayfield. You were a co-founder of Centrify in 2004. At that time, you were just getting started.
2018 was a pretty incredible year for you as well. You kicked of the Zero Trust movement for Centrify in March of 2018, and the industry followed. You were named a Top 100 Influencer in Identity as well as Entrepreneur of the year by EY. To top that off, you spun out a new identity management company (Idaptive) and still find the time for your family and also to be head coach of a girls’ softball team.
So, Tom, let me pause, and say that the pleasure is mine today. Thank you for being on the podcast.
Tom: Hey Steve, great to be here. Thanks for letting me on the show.
Steve: In the past we have always talked about cybersecurity, trends in the identity and access management space. You have never declined my invitation to meet up for coffee for a chat, and that has been on numerous occasions over the past couple years. (Thank you by the way) But today, if I may, I would like to take the conversation to a personal level, and talk a bit about entrepreneurship, leadership and non-conformist innovation. So, if that’s okay with you… can you talk a bit about your beginnings in the IAM space… being part of a team that started an enterprise software company in 1995 and taking it public in 1999 is awesome. How did that opportunity come about, and maybe before that if its important, and how did that start get you to where you are today?
Tom: Okay, sure. I started my career at Oracle and then after a few years was recruited to a start-up that frankly was not as successful. Now, in the end we were able to sell it for about $18M; maybe you can call that successful, but obviously down in Silicon Valley here we think of much bigger exits. And frankly, most of the learning that I got from that start-up experience was what not to do. So that somewhat failed start-up actually morphed into what became known as NetIQ and that the founders of that company, we had left to form NetIQ. This was in the mid-1990s and the new platform from an operating system perspective that was emerging was this thing called Windows NT Server. NetIQ was the first to build systems management platform that was optimized for the Windows Server environment and we were fortune enough to take that public in 1999.
A little bit more about NetIQ and some of the lessons learned was that NetIQ focused on building monitoring tools, and systems management products, optimized for Windows. In some sense, we were reinventing what people had done for the mainframe and Unix. Systems management, security management, identity management… these are old concepts that have been around 20-30+ years. You take a look at a company like Salesforce for example, you know, it’s CRM but it’s optimized for the cloud environment. Obviously, companies like Siebel existed before then as well. So, tying it back to identity, a lot of the stuff that’s being done in identity management are the same ideas from 10, 20, 30 years ago but now for the cloud.
So, I think just from an innovation perspective, the things just off the top of my head the things I learned most from my days at NetIQ are the following: 1.) Sometimes going through failure is a better lesson that getting lucky and have something good happen to you from a career or from a company perspective. 2.) There are not that many original ideas and technologies, and so most of innovation that’s happening is repurposing existing ideas, or pre-existing ideas, but for a new environment, new platforms, etc… 3.) The founders of the prior start-up and myself, we came together, and if you’re going to build an innovative team, platform or company, it does take a team. It’s not about one-person CEO or just one individual. I’ve been very fortunate both at NetIQ and most recently at Centrify to have an excellent team. It’s so important to bring the right pieces together and have something besides yourself or just one other person driving innovation. You really need a core set of people to make that happen.
Steve: Absolutely. Tom, would you say that innovation and creating new technology was a goal in itself? Or were you trying to solve problems in managing identities and access to help scale or to make management easier? What was fueling the change behind your team and the products you were working with?
Tom: I think in the end, with my days at NetIQ, it was really about systems management. We did get involved through an acquisition of a company called Mission Critical Software, that was also a public company, that focused on identity management specifically around Active Directory. It wasn’t until Centrify that it was solely focused on identity management. NetIQ, through acquisition, started systems management, started doing identity and AD stuff. But as it relates to Centrify, I definitely wanted to start a new company so that was the motivation to start building something innovative. I felt that there was an area that with the emergence of new platforms, with Linux, and further down the road, cloud, that there was an opportunity to reinvent what people had been doing vis-a-vis identity for these new platforms. So Centrify initially focused on identity for this new platform called Linux, and then over the last few years focused on building identity for the cloud and in the cloud itself, and we can talk more about that.
Steve: Yeah! That’s interesting. Let’s drill down into that idea for the cloud and in the cloud. But first, after NetIQ you co-founded Centrify in 2004. You raised your first round, a Series A in 2004, you raised $7M for Centrify. How was your experience pitching the idea of identity management to the VCs, which was an extension of Active Directory and for this new platform called Linux? What was your pitch then and who did you convince to fund your Series A?
Tom: If you look at the VCs they always have themes that have been developing. And clearly, in the beginning Centrify was the intersection of two themes. Theme #1 was that Active Directory was going to become a major platform and there could be companies and technologies built around AD. Again, this was the early 2000s and Windows was the first introduction of Active Directory. The other theme was the rise of open source. The best and first example of building a large company was Red Hat with Linux. So we were basically Active Directory meets Linux as the initial version 1 and that was the actual pitch. What I had was something bigger than that in mind, that there was a technology that people were promoting in the 1990s called Directory Enabled Networking, or DEN. The concept behind DEN was in effect one ring to rule them all. I.e. a single directory that could enforce user access policy across multiple heterogenous systems even at the network layer, at routers and at the application layer. If you look at the companies at the time, Sun, Microsoft, Novell, they were all talking about Directory Enabled Networking, but they didn’t deliver it. Microsoft worked with Cisco to port AD over to Linux and that didn’t work. I think in the end, DEN failed then because the platform vendors cared more about their platforms than delivering heterogenous management. So, in 2004, in the back of my mind wanting to implement DEN, we built technology that extended Active Directory to non-Microsoft platforms, be operating systems or applications. Focusing first in the Linux environment led us to do this thing called privileged identity management for IT users, granularly controlling what the IT staff can do and making sure that they don’t abuse the root account, and so forth. And then eventually we expanded this one directory concept to apps and devices, mobile devices and cloud applications to help end users get single sign-on while giving IT centralized IT controls. In some sense, you see a lot of these SaaS, single sign-on and cloud identity vendors talking about their support for thousand of SaaS applications leveraging standards like SAML, OAUTH and all that stuff. It kind of ties back this whole concept of having a directory that can enable access. Back then it was called DEN. Nowadays it’s called identity-ware networking that has eventually morphed into this concept called Zero Trust which is very identity-centric as well.
So that’s kind of the idea. The pitch to VCs was we are kind of a mashup of these two new platforms and we’re reinventing identity management for AD, Linux and so forth. In terms of what I was really thinking and driving towards was actually reimagining Directory Enabled Networking and thankfully the VCs bought into that. In 2004 we were able to raise the money, and our first lead investors were two of the better investors down here in Silicon Valley, Mayfield and Accel.
Steve: You were about a decade early on the idea of having a user-centric view of the IT landscape if you want to look at it that way. And you didn’t give up on that vision. Your customers were providing you with some really good feedback that you were on to something. And so were the VCs, because the very next year you raised $14M in a Series B. Things were picking up. What was happening in your life? With your team? At Centrify? In the world at this point that would create an environment for your eventual success?
Tom: I think that obviously whenever you look at a company that gets the initial tranche of money, a Series A, and then they look to raise another round of financing, they have to show tangible progress. I think the key to any successful start-up, especially one that is focused on the enterprise space selling to enterprises be it small, medium or big, is that you must have a “must-have” product that really represents a pain killer. What I’ve seen, in going back to lessons learned from the past and what to do and what not to do, is that many start-ups fail at least in the enterprise space when customers see their products as a nice-to-have or an aspirin. Luckily what we were doing at Centrify after we raised the $7 million, we went out there and started closing some really nice sized customer deals, closing Fortune 50 accounts and people saw the value in what we did which made our sales process more frictionless. And that appeals to new investors.
The other thing that is important is not only you have a must-have product, you really need to play in a large market. It gives you the opportunity to make mistakes and still be successful. And that’s the other killer of start-ups besides not having a truly must-have product is that the market they are going after is too small. If you have a good idea, you’re going to get competition. If you’re in too small of a market, then you have a couple of competitors and they will all be fighting over the scraps. So, you really need to be honest about figuring out the size of your market. Too many founders overestimate the size of the market.
So once we got going after our Series B, luckily we picked a market and a product offering that customers perceived as must-have, and of course identity management is right now a $7 billion market that we could play in, the focus then shifted to how can we quickly grow without running out of money too soon. Once you get the initial product out the door, you start getting traction. That is the big balancing act that entrepreneurs have, which is how much do you step down on the gas because you may run the risk of getting too far ahead of yourself and putting yourself in the awkward situation of over-expanding and not being able to resolve that problem.
Steve: Were you investing a lot back into the business and were you profitable by this time?
Tom: Well frankly, we started the company in 2004 and did the typical Series A, B, etc. and then the recession hit and that forced us – back then the saying at the time was “flat is the new up” – luckily we were actually growing at that time, but none the less you really didn’t know when this recession would end so that did force us to become profitable because we didn’t know if there was another source of financing that would be available to us.
So yes. We did the typical series A Series, Series B, etc. and then you know just because the free flow of money stopped and that can happen suddenly. And so again you don’t want to be overexposed in terms of burning a lot of money with the assumption that there will always be someone out there to bail you out, so you don’t want to get too far ahead of your skis. The recession in 2008 did force us for a couple of years to actually run it both on a P&L as well as a cash flow profitable basis as well. Within four or five years of starting the company we made it into a profitable business.
Steve: That’s great. So, around this time I’m just thinking back to 2005 or 2006. Oracle acquired Oblix, Ping Identity was starting there their company. And you were no doubt coming into some competition at this point biting at your heels because of your newfound success. You know for me personally as a startup CEO hearing about new competition on almost a weekly basis. So how did you think about competition in those early stages, if you did at all, and what specific ideas did you formulate about them and what actions did you take to ultimately become successful in spite of the competition?
Are you just thinking about your roadmap of just trying to catch up and be focused on making sure that the other guy doesn’t have too many checks against you or are you actually investing in innovation and can you shift the playing field in a new direction?
Tom: Well I think it’s important that you do have competition because people will call into question you know if you don’t have competitors, do you really have a market out there? Because again there’s no such thing as a monopoly on a good idea. And other people completely independent of you will come out with comparable technology to you. It happens all the time. And so, when you find yourself in a fierce competitive battle, it’s again much like I talk about the balancing act of growth versus profitability that once you get the initial product and customer traction that you need to balance. The other thing that you need to balance is that, are you just thinking about your roadmap of just trying to catch up and be focused on making sure that the other guy doesn’t have too many checks against you or are you actually investing in innovation and can you shift the playing field in a new direction? Then, another trap that entrepreneurs fall into is that they sometimes think that oh we do have differentiation, but they don’t think about the differentiation in terms of how easily could be replicated. Some people get so excited that they come out with this great feature and then six months later find out that competitor has basically copied it. So, you really need to think about what it is fundamentally that you can do that is differentiation that would require your competitor to basically rebuild their product – completely rebuild their product – to do that. And that’s why it’s very difficult for these legacy identity management companies to compete with this new wave set of identity providers because for them to embrace the cloud they would actually just have to kind of junk their entire technology stack and that puts them in a really hard bind. So, the legacy identity people are kind of stuck that they have to maintain their product which is on premises and they can’t as easily move to the cloud because it could sabotage their business models as well. So, you need to have differentiation that’s not easily replicated. And then the last thing I’ll say is that often people say differentiation is about the product and product features but sometimes the differentiation is also the go to market as well in terms of how you sell, who you sell to, how you market, and so forth. Often big companies are so used to doing direct enterprise sales with a perpetual model that it may be very difficult for them to compete against someone that’s a subscription that maybe goes through the channel etc. So that’s where there’s both product differentiation and go to market differentiation.
Steve: That’s rich. You mentioned investing in innovation which I’d like to get back to in a minute because I think that’s a real key here in terms of surviving through tough times launching and so forth. But I don’t but I don’t want to lose track of where we’re at with the trajectory of Centrify. So, tell us about your growth path to over $100 million in annual revenue. Getting from zero to $10 million these days can happen on a lucky winning streak. But getting to $100 million seems like it would require some stronger leadership and differentiation as you say. How did that happen for you?
Tom: Well look, to get to $100 million you really need a strong management team. You used the expression “lucky winning streak” to get the $10 million. You could also get to $10 million kind of on the force of personality and perseverance of a CEO or maybe a technical co-founder that’s involved in every sale and who runs their business like a Greek restaurant like a sole proprietor, where they’re in the back making sure the food’s good and all that stuff. But you can’t do that if you want to build a chain. You can have a great Michelin rated restaurant where you’re the owner, you’re doing it all and you’re making sure that the people are getting seated, you’re double checking the food and if someone drops a fork you look over there and you bring it over. That’s to get the $10 million. And hey if that’s the kind of lifestyle business that you want… but I think most people especially in technology given the ability to have a business worth billions of dollars that investors and the employees who have stock options et cetera… they want a company that goes public or has a $7 billion acquisition.
So, you really need to kind of move into a franchise mode from a sole proprietor. And that really takes a management team and sometimes for a CEO, it may be difficult to let go and trust other people to do it. It takes a different skill set than the skill set that someone had before. So, my focus as we started getting bigger was to make sure we had a strong bench. And often CEOs get replaced when they find that they can’t scale that they find out that what worked for a company when it was under $10 million no longer applies when you’re trying to get over $50 million. But the most important thing is that, just like using this franchise analogy, you’ve got to make sure what’s the most important thing for the CEO is not only to get to that initial $10 million and get proof, but to actually build something that would have mass appeal and that again goes to the fact that the most important thing in the early days is have you really built a product that’s must-have; that people absolutely have to have your product. That it’s a pain killer.
And the other thing is to branch out behind from being just a $10 million business and is your technology really in a billion dollar plus market? As I said before sometimes, I think CEOs kind of point to these large markets and they address only a fraction of it. So, you’ve got to be really honest in terms of what is your TAM or total addressable market.
Steve: It sounds all too familiar to me. You know it almost always comes back to earnings. You can innovate and build and automate and play with technology until the cows come home. But if you can’t make a business or a franchise as you go through this important mindset shift, I can see your point, that you’re not going to reach that mark. So, on that path to growth, you know it’s certainly not a straight line. There is what’s called this messy middle as you have heard it called. Lately I’ve been reading a lot since leaving VeriClouds. John Chambers recently wrote a book called Connecting The Dots. I think it’s just a brilliant book that he’s written since leaving Cisco. He recalls a time when a good friend told him that you can’t describe a company or a leader as “great” until they have gone through a near-death experience and come back. (E.g. Steve Jobs and Apple, Jack Welch and GE) These are a side of your journey with Centrify that I haven’t heard much about, but there must have been some. Was John right? Would you like to comment or share a little bit of on near-death experiences in your time at Centrify?
Tom: No, I don’t think we really had like a near-death experience and frankly, I understand that and with all due respect to him. I mean obviously there are a lot of good examples of companies that have had that near-death experience, you know the whole Steve Jobs Apple story. But you know at least what I’ve seen down here is there’s just been some companies that just started and have just grown like gangbusters and it doesn’t seem like they had a near-death experience. For example, Zscaler doesn’t ever seem to me at least from the outside that they had a near-death experience. They went public. Take a company like Slack, they will probably go public soon and they’ve kind of just kept on going and going. There was another company that a board member of mine was on the board of Atlassian. They did great throughout. So, you know everyone would probably say like a Slack or Atlassian is a great company. Maybe they’ll have their near-death experience down the road.
So, I think there’s just some companies that go from zero that are just amazing companies that just perfectly nailed the product perfectly, nailed the market that they’ve been able to grow from zero to $100 million in four years. As opposed to a company like Centrify that took 10 plus years. And probably you know maybe Centrify would have gotten there sooner if there wasn’t the Depression or the recession didn’t hit. We had some tough times like everyone else did in 2008 and probably some of your listeners don’t remember that or hadn’t entered the workforce but you know that was tough. But that was the context of, you know, would anyone else survive? It just wasn’t all about us.
Again, I think if you can nail it right off the bat, the product fit, the size of the market and if you can build a good team then those are the upfront things that you really need to do. Then it really allows you to potentially avoid the likelihood of having a near-death experience and just makes it a lot easier. Not to say that amazing companies like Apple didn’t have near-death experiences. So, at Centrify, I don’t think we really had one of those. Again, there were probably years that we wish we grew faster. But part of it was just the overall economy. I’m just seeing some enterprise companies right now that are just growing like crazy. We saw it with like the Slacks, the Atlassians and so forth, because they have really unique models. It’s they have a great product. They have a great market. But then, it goes to that differentiation by go-to-market, that in the case of Atlassian it’s just the way that people adopt it that they really don’t have to have a large sales force. And that’s when you get things into really special, it’s the model plus the product plus the market. And people can explode and become great companies in four or five six years and that’s just amazing. If they figure all that stuff out, then you really got something.
Steve: It’s great to hear, not that I wish that any company would have a near-death experience. You know I believe that Centrify has been lucky to have customers in the Fortune 50, among them financial institutions, companies that we use every day. And if there were a near-death experience to Centrify, that would represent a considerable risk to your enterprise customers which could reflect poorly on customers and society at large. I was just thinking about what Warren Buffet has said that if your company can’t withstand a little bit of mismanagement you don’t have a company.
So, it sounds to me like you’re doing the right thing in terms of building the strong leadership team and building your bench and the output, as you hit upon earlier, was differentiation. Let’s drill into that a little bit. If differentiation is the result, what are the inputs and how do you get there? Chambers also says in his book that if disruption isn’t at the core of your strategy you’ve got a problem. So, with regards to innovation, disruption, how you face market transitions… mobile wasn’t always a thing and cloud wasn’t always a thing. And, with competitive forces, to not only survive but thrive. This innovation engine that you built at Centrify was so massive that it ultimately had to be split up into two companies, Centrify and now Idaptive is in the world.
How did you harness the collective genius of the strong leadership team that you built and align the team and the resources in such a way that you not only have this remarkable platform that Centrify has but you’ve spun it out and now Idaptive as a part of the equation with regards to identity management?
Tom: We talked about the founding the company and then how we had profitability in the 2008 to 2011/12 timeframe. And you know historically we built on premise software but coming out of the recession we knew that the cloud was going to disrupt everything. So, what we decided to do is we decided to become unprofitable at least for a few years in that timeframe and we decided to build out a parallel engineering organization to go whole hog into the cloud and not only build a cloud platform but integrate the existing on premises software into that cloud as well.
So sometimes you have to break what’s working and make sure you’re the disruptor versus the disruptee as well.
And so that made us unprofitable for a while but our conviction was that we had to lead on the cloud. So sometimes you have to break what’s working and make sure you’re the disruptor versus the disruptee as well. I think that was the big thing that we did was that you know we could have easily just continued being comfortable being an on-premise company, et cetera. Now a CEO looking to form a new company would be like “Duh, yeah of course I would build it in the cloud.” At the time it was like to take something that was working and then build a brand-new team, build a new platform and tie everything together and break the trend of historically being a profitable company and then, going back to not being profitable to fund this new development was a big deal for us at the time, but I just made the decision that, in the end, this is the right thing to do. That was the right thing for the company for the long term and that’s what we did. And everyone got behind that.
Steve: Earlier you mentioned investing in innovation. You had a great team. You had Paul Moore as your co-founder and CTO is also brilliant. What was it? Did you have an innovation think tank? How structured was your approach to innovation or was it more pedestrian?
Tom: In my case, you know, I’m a product guy. And so, it was just constantly having conversations with the product people and talking about what needs to be done, where the market is going and spending careful thought on that. I do think that, especially in technology, that the CEO has to be a strong product person. If you look at some of the best companies and technologies out there, it was a technical founder that was the product visionary. And what made them continue to be CEO was that they were able to make that scale transition from $10 million to $100 million and beyond. So yeah there wasn’t any specific like let’s form a committee. It was more like thinking and talking with people. In the end, you know, it was collectively we made that decision and obviously myself as CEO drove that.
So, I think that’s how we went about it. You know you should be a CEO focused on what bad things could happen to you, how could you become disruptive, where is the market going and being open and willing to break out of your comfort zone to address that and try to think long term.
Steve: What was the role of customer and how did you use the voice of the customer in your calculus for where the market was going and what products you should develop as you thought about innovation and embracing the cloud and then mobile technology?
Tom: Yeah, I mean look if you’re going to ask your existing customers what they want, they’re going to look at things through the lens of the current use of your current product and they’re going to tell you they want faster horse and buggies or whatever. And because you can’t rely on your customers to tell you exactly what to go build. They can tell you a lot of good stuff and they may leave little nuggets but it’s not like collectively you get your top 20 customers and they say we figured out your business and this is where you need to go. They’ll leave a few Easter eggs for you right there. But it’s kind of a puzzle and you’ve got to put it together as well. And then often you just need to spend time asking them like well what other products are you using or technology outside of mine? Tell me more about that and where are you guys going as it relates to adopting Amazon, adopting containers, Kubernetes, micro services? Those are the type of questions that you would be asking now or a few years ago.
At the end of the day you’re the one that owns your business.
I don’t know what the questions will be three or four years from now or whatever. To what extent are you adapting adopting SaaS and mobile were the type of questions that we asked. They may kind of look at you and say oh I’m not in that or I’m not responsible for that or I don’t know. They may want to come back and say you really need your fix your product by adding this little feature or this command line interface and all that stuff. You want to listen to that because you want to improve your existing product and make sure your customers are happy. But sometimes you just need to try to figure out what else they are doing and see if there are any Easter eggs there as well. Sometimes you have to ignore your customers or in other cases you just may have to ask them questions that don’t have anything to do with your current product offering and just may have to do with where they’re going directionally because their priorities are their business not yours. And so, at the end of the day you’re the one that owns your business.
Steve: A really interesting one that stands out to me and it caught me a little bit by surprise to see Centrify decide to spend a spin out Idaptive. Clearly you have a team that’s asking the right questions today and thinking about the future. I presume that the rationale for spinning out was to be able to expand and grow at different speeds, to focus on different parts of the market and be more competitive based on the strength of privileged access management versus cloud identity management. Is that about right, or was there pressure in acquisition by Thoma Bravo to spin out the company? What was the rationale and what is the trajectory of these companies going forward?
Tom: I think you basically got it in terms of that. There’s an opportunity to go deeper in both areas. Luckily Centrify and Idaptive, if you look at Gartner, Forester and Kuppinger Cole for more of the European centric audience that there is a leadership that they have in terms of being in the Magic Quadrant in their respective areas. But there is a great opportunity to do more and I think that the thought process that was had was that by having these be more independent, it allows the respective companies to go deeper and focus on their respective market segments. So that was the thought process.
Steve: You know I’ve always encouraged my team to think about if you’re chasing two rabbits, you’re not going to catch one. And I think there’s a luxury here and spinning out the company, it allows them to focus on a big problem and a big market but also at the same time be focused in the platform and the solution set that they’re bringing to the market. So again, congrats on that decision. I’m a fan of it. I think it’s all good. It’s definitely been set up for success based on the legacy and the DNA in both companies.
So, let’s switch it up a little bit Tom – we’re coming close to the end of our time here – and not focus on the company or the product so much, but let’s spend a few minutes thinking about leadership and the CEO. You’re formerly the CEO of Centrify and I think there’s a lot to learn here as you’re transitioning into a new stage in your life. In your experience in working with entrepreneurs and other startup CEOs, what do you think they’re struggling with today that by making minor adjustments would have the greatest impact on their performance and their results?
Tom: I think this goes back to some of the things I said previously. They need to step back and ask the following: is my product really and truly a must have? Is it really and truly in a large market? Does it really have differentiations that customers care about or is it just more of a me too? Do you have a strong team that’s not one person or two people, but broad? And then I would also, from an individual perspective on a day to day basis, what can they focus on a weekly basis and so forth is, as CEO, you should be asking yourself what are the top priorities? Write them down on a Sunday night. Just kind of read it or just rewrite them down every time. It should be a relatively small list and then honestly ask yourself at the end of the week did you spend about 70 or 80 percent of your day or your week on those items? The main thing is to keep the main thing the main thing and ask yourself at the end of the week was that the case – and it’s OK to say no to meetings or someone else’s pet features of projects. It just gets down to really prioritizing and having a small list and making sure you get to do that punch list. That’s what represents a great week.
Steve: Yeah. Harvard Business Review just did a study on how CEOs spend their time and even though there’s some randomness and variability there, I think to be a CEO like you said you know you have to focus on the main thing. So, you’re setting up your week on Sunday night. Beyond setting your priorities and in terms of how you allocate your time, what would be the perfect ideal week for you in terms of do you spend more time with your product team? With your leadership team? With sales? All of the above?
Tom: Yeah, I think the perfect week is, as I said before, are you focusing on the priorities? Are you making sure that those balls are moving forward? And I do think because given the rapid innovation of technology that there always should be quality time spent on a weekly basis with the product teams making sure that they’re moving forward and then also making sure that go-to-market is executing as well.
But again, it goes back to just prioritizing. If someone were to stop you as you walk down the hallway, you know, what are the top two things or three things that the company needs to focus on? You should be able to rattle those off right off the bat.
Steve: Absolutely. And I think that you set the tone for your company and to some extent the industry. I remember going back to March of last year you were among the first to talk about Zero Trust networking and it was exposed. Even though that idea has been around for a while, it helped the industry begin a new conversation around what does this mean in a post breach world and I think that the market was ready for that now as you can see by the growing popularity of that concept and Zero Trust. So that’s great.
Tom, I really appreciate your time. I think we’re pretty much ready to wrap up here. But one last question as you’re thinking about 2019 and the year ahead. You definitely have some perspective now and maybe some more time to think more broadly than before, or at least from a different perspective. What kind of trends or major shifts do you see happening in the year ahead from technological to political to business that we could watch out for and maybe even outside of the identity and security space?
The biggest shift is that the customers are really starting to rapidly adopt this mindset of as-a-service as you go
Tom: Yeah, you know, I think a lot of people would answer like AI or Blockchain and all that stuff. I mean those are type of things that are constantly just happening and evolving. But if I was a technology vendor, especially one that focuses on delivering infrastructure software – be it identity management, security management, systems management providing a database or operating system – the biggest thing that I would watch out for frankly is Amazon and to a lesser extent Microsoft and Google just continuously adding more and more stuff to their platform because they’re starting to get the multiplier effect. It’s amazing what the folks at Amazon are doing with regards to AWS so I think the biggest shift is that the customers are really starting to rapidly adopt this mindset of as-a-service as you go. I would be really worried that the Amazons could easily come up with a half-baked feature or function or whatever that could really address some of the capabilities that, if I were to start a new company, that they could easily offer as well. It doesn’t have to be good enough as well.
In the past, people were always worried about Microsoft and what would Microsoft and all that stuff. The integration that Amazon has across their entire platform is very impressive, but also would be very scary. Obviously if you’re more of a vertical application vendor that’s not something you have to worry about as much. But if you’re kind of in the stack so to speak, the ability for someone like Amazon to provide that – and that’s been happening – but I would be extra paranoid about that.
The other kind of thing that I would think about if I was more of a customer and end user is that I would worry about being locked into vendors. I mean as is CEO of Centrify, for example, we used Salesforce for example. And boy, there’s no alternative. Once you get on Salesforce it’s what else can you move to, and where else can you go, and you can’t move your data out, et cetera. You become completely locked in. Now you could say well it’s kind of industry standard and so be it. But the premium that Salesforce charges on a per user basis far outstrips the value that you pay for somewhat equivalent pieces of technology in your organization. I don’t have the right answer to how to avoid being locked in, but you’ve got to think about that. That the ability for certain vendors, be it Amazon or something like that, that you start building towards that platform that you know you can’t get off. And then you suddenly find yourself at their mercy, more so than you may have been in the past as well.
So probably nothing original here. But I really see this as, being a CEO of a company and seeing that there was no alternative for us to not pay the bills to someone like a Salesforce and then of course constantly seeing someone like Amazon just each year adding more and more features and capabilities to their platform. You have to be aware of that. You can figure out ways to ride that wave, but you’ve got to be worried about being too close to the proverbial flame as well. But it makes for some exciting times.
Steve: It does you know maybe containerization and Kubernetes is the answer. Or with VMware being available on AWS now, that portability is ultimately found in virtualization. I’m not sure either. It’s definitely going to be something interesting to watch out for. Amazon for many years had a minimum viable product that never seemed to grow up and compete with major players. But I think I would agree, Tom, in the coming years you have a basic identity and access management infrastructure at AWS. There will be privileged access management in AWS. SIEM and CASB as well. It’s all going to be there. I recall a debate some years ago where Marc Andreessen envisioned a future where you could have a data center on silicon in your pocket. So maybe it’s getting to that time and maybe the opportunity today is portability and how to avoid vendor lock-in. That would be interesting.
Well Tom, thanks so much for your time today. This has been an enlightening learning experience, at least for me it has been. Thank you so much for your time. I hope we can do this again soon.
Tom: Yeah this was great. And good luck with your future podcast. This sounds like a great idea that you have here. Thank you so much.