On this episode of The Six Five – Insiders Edition Patrick Moorhead and I are joined by Alan Trefler, Founder and CEO of Pegasystems. Alan has been a guest on the webcast before and we are so excited to welcome him back and talk about what has happened since we last spoke in 2020. Spoiler alert — it’s been a lot.
Our conversation covered several aspects of the current status of the AI and automation as well as how the world has evolved in the last year following the disruption from the pandemic. Alan shared his perspective and what he has seen change across business and technology. We also touched on what’s to come. It was an awesome conversation and one you should definitely check out.
Recapping the Year of Change and Looking at What’s to Come
Our conversation with Alan also revolved around the following:
- An overview of the biggest driver’s of Pega’s success in the last year after reaching the huge feat of the billion dollar revenue mark
- How Pega is continuing to incorporate AI and ML into future plans and solutions
- The ways in which Pega differentiates itself from its competitors and other companies coming into the fray as RPA and automation continue to mature
PegaWorld iNspire 2021
Finally, we wrapped up the conversation with a quick brief preview of the upcoming PegaWorld iNspire virtual event to be held on Tuesday, May 4 from 9-11:30am EDT. This free event will feature multiple tracks, keynotes, and live Q&A sessions with Pega’s leadership team as well as other major companies that are making inroads in the intelligent automation space. Registration is open on their website and this is one event you don’t want to miss.
If you’d like to learn more about Pega and what they are doing in the RPA be sure to check out their website and listen to the full episode below. While you’re at it, don’t forget to subscribe to The Six Five podcast so you never miss an episode.
Watch our interview with Alan here:
Listen on your favorite streaming platform here:
Disclaimer: The Six Five Insiders Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.
Read more analysis from Futurum Research:
Transcript:
Daniel Newman: Welcome, everybody to the Six Five Podcast. I’m your host today Daniel Newman, Principal Analyst and Founding Partner at Futurum Research. Joined by my always esteemed co-host at large, co-hosting crime, co- host brilliant. Mr. Patrick Moorhead, principal analyst, and more insights and strategy Patrick Moorhead good Monday afternoon, how are you?
Patrick Moorhead: Daniel, good to see you. I haven’t heard that introduction like the very end of that. That was a new one. Thank you very much. Like I said, if all I had you was introducing me every time life would be perfect.
Daniel Newman: Hey, we’re 70 some odd episodes of our regular show. And then another 30 or 40 Insider Editions and it’s time to you know, spice it up a little bit.
Patrick Moorhead: It really is.
Daniel Newman: With our guest of honor who will be joining us in just a few minutes. And he had us laughing about the techno king. And I was just thinking we need the techno king introduction. And by the way, that wasn’t it but it wasn’t bad. This, by the way, is a Six Five Insider Edition. And we are very excited to be hosting Pega CEO Alan Trefler, by the way for the second time, Alan’s joined us once before. This is about a year later, some big news at Pega. And we are excited to have him back. But for everyone out there that is tuning in right now, whether you’re listening to us, just after us publishing this four months later, we are excited to have you. Keep hitting that subscribe button, share this with your friends, we promise to keep it interesting, bringing the best and brightest of tech on our show. And of course, analyzing the biggest news in tech each and every week. But without further ado, Pat, you think we should bring Alan on to the show?
Patrick Moorhead: Let’s bring the king of tech in right now.
Daniel Newman: Oh, a new name. See how he likes it?
Alan Trefler: Good evening, I’m not sure I can live up to that introduction Dan and Pat, thanks and it’s always great to be on the show.
Patrick Moorhead: We love to have you for sure. You know, it is incredible. It’s been a year already, but we’re glad to have you on.
Alan Trefler: Well, it’s felt like a lot longer, I think than a year as we all know. But maybe this is a good Harbinger, you sort of have me as the you know pandemic was entering. And perhaps now is it’s departing that might work well.
Patrick Moorhead: Yeah. But it has been great getting a bunch of CEO perspectives on the topic of the past year, and they all had different takes on how they were how they see the business technology or clients, customers, distributors and everything else. You know, I know it’s hard to distill over a year into a couple minutes. But what have you seen over the past year that has really been highlighted for you?
Alan Trefler: Well, obviously, it’s been a year where digital transformation has gotten real. And a lot of organizations I believe, have had to really hustle to make things work, and how to actually do things in days and weeks that they would have thought would have taken years. But at the same time that this has been very exciting for digital transformation, and gotten a lot of people thinking in a way that well, we’ve been encouraging them to think. It’s also been interesting, because I think it’s shown a lot of companies, the gaps that they have, in terms of not just dealing with, you know what’s in front of us, but how they need to really rethink their businesses. How they engage with customers, how they go to market, how they optimize their internal workflows, how they apply AI, all of these things have really, I believe, been tested by the swift introduction of the pandemic.
Daniel Newman: Yeah, it’s been a really crazy year. And I think as we all headed into this, Alan, I think we all pretty much thought that, you know, it was weeks, maybe month or two, there was like that weird moment sometime, when you were like, oh, man, this thing’s not going away anytime soon.
Patrick Moorhead: Daniel, its two weeks of lockdowns. Didn’t you hear?
Daniel Newman: I know, but I’m saying like, I think even at the time when we talked, I think we were still kind of in that mindset, like, how many companies were like, yeah, we’re holding on, we’re not going to cancel our event just stand by, we’ll get back to you. We’re going to get through this. And then all sudden, you’re like, whoa, this thing is going to last the, you know, into summer. And then in the summer, you’re like, okay, we’re getting better. And then the fall and now the spring. And I mean, I got my first invite Alan to a live event late this year, but you’re talking about 18 months for a couple of guys and Pat and I and I’m sure yourself, they spent 50 weeks 49-50 weeks going event to event going nowhere?
Alan Trefler: Well, if you would have told me that for an entire year, I would not have gotten on an airplane, I would have told you that you are just nuts. But, you know, among the changes that this has driven, is, you know, the fact that we’re all recruiting and hiring and thinking differently about our teams. About how we engage with our teams and now often are engaging with their families, as they periodically enter the room during the meetings, how we augment our teams and how we hire you know. In June of last year, I brought on an extremely senior person to basically take over and run all of our go to market, how we engage with our customers, how we sell all of those key elements. And if you had told me at the beginning of the year that I would hire this terrific guy, without ever having met him, I would have said that that would be inconceivable. And yet, when we got to it, you know, the choice was either dawdling or going ahead and doing what so many companies have had to do, which has really challenged some of their perceptions.
Daniel Newman: Well, you clearly took advantage of a year that was pretty horrific on society, but actually quite friendly for technology. The tech industry as a whole had a very good year, and you recently announced a pretty significant milestone breaking that billion-dollar revenue barrier. Exciting. Congratulations, Alan, great to know that we work with you before you hit a billion. Now we expect to work with you more than you have hit a billion. But I wanted to just try to hear from you. I mean, that’s that is a very small club. And despite the fact that we hear about trillion-dollar market caps more often than you would believe hitting a billion dollars in revenue is a really significant accomplishment something you should be very proud of. But let me hear just a little bit, you broke this during the pandemic, you went from less to over, what are you attributing a lot of that to?
Alan Trefler: Well, I think that our staff has shown a tremendous resilience and creativity in terms of figuring out how to do things differently. You know, for the first 48 hours after the pandemic hit, I wasn’t sure how it was going to go. But by the time we hit 72 hours, I realized that we were going to be able to deliver for our customers, we’re going to be able to engage creatively with them, going to be able to really break some barriers and actually do it at a record pace. I’ve told the story of our interactions in the first couple of weeks with the state of Bavaria, which is the second largest state in Germany. And what was interesting is the German government was not a customer. So, what happened is somebody who had worked for a bank and had worked with our software said, we desperately need Pega if we’re going to be in a position to handle and support all these companies that are at risk of going out of business and are applying for loans and applying for forbearance. And what we did would have historically taken us I would say, you know, weeks or a couple of months. We were in there for one day to do the analysis, what we call a catalyst exercise, where we really look at what’s possible. The end of that day, they said go and by that weekend, we were live taking hundreds of 1000s of interactions with their small businesses. And being able to actually deliver a distance without the physicality that historically we would have been in one room, around a whiteboard actually can bring a real efficiency to how you deliver. Because you know the customer and we don’t have to organize the schedules, we just need to reserve the time and you can be there in the moment. It’s a fascinating turn of events.
Patrick Moorhead: Well, and the other thing about your service and product lines is that you are simplifying folks. Right? You’re simplifying operations. And I feel like things did get harder. So, you were an actual solution to their problems. Not some I don’t know esoteric type of thing. And by the way, any type of software or service that requires mandates on Prem interaction? You kind of got a wonder its degree of difficulty. But that’s just my take.
Alan Trefler: Well, a lot of it was just hearing people were used to congregating around a whiteboard. And now the whiteboards are all virtual and look anybody who required it is now dead. Yeah, the reality is the test was pretty extreme. But when I’m thrilled about is not just that I was able to get it done, but how much faster and even better it was. One of the things about our software that I think is core to our value prop is yes, we simplify, we make it really easy to get that first thing done. But the architecture is such that it really lets you model your entire set of business processes in a way that you can bring AI into it, in a way you can update backend systems and in a way that it really helps you create a business architecture that’s suitable for tough times like these, and hopefully the easier ones to come.
Patrick Moorhead: Yeah. So, you’ve long talked about software that writes software, and as an AI and ML continue to have greater influence over technology and software. I’m wondering, how are you going to make this even more prevalent into your solutions?
Alan Trefler: Well, the vision of writing software by typing arcane words into text files, and compiling them, which is the way that nearly all software gets written these days, I think has been antiquated for three decades. What we really need is to be able to model what the objectives of our business are, be able to use AI to optimize and then literally have products, our product be able to implement those outcomes in a multi-cloud fashion. Yeah, that’s particularly apropos now and where I’m going excited about is a lot of people are now talking about no code and low code and lots of buzzwords. We have experienced the now what it really takes to be able to deliver that at scale, not just scale in terms of volumes of transactions, but scale in terms of the sophistication that’s needed. If you’re really going to move your business into the technology, into the cloud.
Patrick Moorhead: Is there any way does your… is the software smart enough today, when you’re looking at a process? Can it even make suggestions of how to streamline a process? Because I’m sure your customers they come in, in two sets, first of all, some of them want to relook at their process and come up with a new process. Some just want to automate the same process good, bad or ugly?
Alan Trefler: Well, you always want to be looking for opportunities to improve your process and to make better decisions. And if you want to think about Pega, those are the two things we do. We empower organizations like I was just on the phone last week with Commonwealth Bank of Australia, one of my not one of my biggest but one of my favorite customers, who has really used what they call their customer engagement engine, which they are very, very public is all built on Pega, to be able to make great decisions and then execute. So, for example, beginning of last year, pre-COVID, Australia was overwhelmed by brushfires. They were able to use this technology to find the people who were at risk of frankly, losing their homes, and tell them, hey, you don’t have to worry about paying your credit card this month, you’ve got some extra balance, you can put some cash out. So, if you’re running for your life, you’re not wondering whether your bank is on your side or not. And then when COVID hit being able to again, just do revolutionary things, in terms of both the decisions they made, and then how the processes were executed. All of these can be recursively, improved, tested and you know, its part of not just the software, writing the software, think of it as software perfecting the software.
Patrick Moorhead: My hunch says that a lot of your service folks, because they’re so engaged in helping customers create new process that your folks are probably pretty good at making suggestions on how to streamline things, because they’ve been there, they’ve done that and not that your consulting organization, you’re not but you have an arm of people who can do that. I think that would be super valuable in times like this.
Alan Trefler: Well, you know, it’s more than just our people because in addition to the about 20% of our team who’s involved in that sort of consultative work, and obviously has a lot of experience in the scene, a lot of things across industries, we’ve got 10s of 1000s of partners who are able to bring that sort of expertise. And yeah, we work terrifically with us, folks, that’s a very important route to market for us, I think together that gives our customers, frankly, the ability to learn some of these best practices, but also to them sales become empowered. Now part of our vision is the customers really want to be owners of their processes, their decisions, and they don’t want to really have to delegate that either to outside teams or to data scientists, business people need to own the business.
Daniel Newman: Absolutely. You guys have been talking about these topics for years, I can still recall I don’t know if it was a couple years back, Alan listening to your CTO Don Sherman always gave really fun keynotes, I still remember kind of quoting a few of his data points about AI and ML, kind of I remember him talking about how many posts we would have to do on different social networks. I think before it was Facebook, how many times we had to post before Facebook knew us better than we knew ourselves was one of his data points. And it effectively clarified in my own mind that my closest friend is my mobile device by far. It’s definitely the most intimate keeper of my life and secrets. But anyways, yeah, it’s just always been something that’s been really focused by your company.
Alan Trefler: I just want to make sure you’re being careful what you post if you’re that integrated with your phone, but …
Daniel Newman: I know, I know. I know. All right, all right. I’m the only one that’s phone knows me better than you know the others in our lives, because I’m sure all of you guys are just sharing everything. But no, in all seriousness, you guys have been ahead about this topic. You’ve been definitely on the front foot. But one of the things that I have noticed overall is that, you know, competition is starting to come from more places over the last couple years. I laughingly walked away from the last CEO keynote from AWS reinvent and I said well, the new Tam for AWS Is IT. Because apparently, they’re going to do everything. You know, you’re seeing Microsoft making big bets on RPA. The term RPA, which is something that you are early and often, along with BPO is now not really RPA and I mean, everybody I think kind of has a consensus. It’s about Intelligent Automation. It’s about bringing processes together, incorporating cloud incorporating AI and ML. Things we’ve been talking about. Pega, this has been your thing for a long time. I’m kind of curious, you’ve reached this billion. So, let’s circle back. How do you go to the next billion? How do you compete against all these new forces, staying relevant growing your current customer base? Big question, Alan, you have 50 ways you can take this. But I really want to know, how do you get to two billion?
Alan Trefler: Well, and the other part of that question is, how do we do that much faster? You know, one of the things that we’ve really invested in in the last 12-18 months is growing a sales and marketing capacity, really working to deepen our relationship with partners, bringing in talent who has grown businesses, at faster rates than we’ve grown. Not that I’m complaining, you know, our recurring revenue, which is how we think about our business, you know, has grown 20% a year over the last couple of years, you know, despite, for example, the pandemic. But we believe there’s a lot of potential to take this vision that we have to take our technology, which we certainly believe is superior, and be able to operationalize that at a much faster pace. So that’s what we’re going to be looking to do over the next couple of years. And, you know, I’m excited the fact that we’re a billion dollars, the fact that we have the financial resources and the 5600 staff who are able to really help drive this business, I think should give our customers comfort that after 30 years plus in business, we’re still going to be here and still promoting these ideas, I think in radically different ways. The one thing I’ll tell you is when I look at the actual technologies that are being promulgated by this competition, I’m really positive because I see big differentiations, between how we’re thinking about this market, and how many other companies are. And I think we have the potential here to really take a lot of the common buzzwords that are being said, which are, frankly indistinguishable, and showing how this can be done for real, for real organizations in a very dynamic build for change world.
Patrick Moorhead: It’s a good question, because you can’t swing a cat with somebody running into somebody that says, hey, yeah, I do that I do this robotic Process Automation stuff too what about you? And the overall health, the industry depends on more nimble companies to come up with the better ideas first. And what I like as well is a lot of the verticals that you’re in are very, how should I said they get audited a lot by regulators, they’re very highly regulated. So, the level of precision that you have to put into your products and services to me have to be a level above let’s say, somebody who, you know, might heavily service retail, which isn’t nearly as regulated as banking, or something like that.
Alan Trefler: I think regulated industries, or governments especially need the sort of things that we offer. But I think all industries have to be subject to being able to have a level of transparency, a level of trust. You know the industries that are using AI, but can’t explain how it’s being used can easily discriminate against customer segments, easily do things that will break trust with the consumers. And regardless of industry I think that’s something that should be top of mind. For all executives.
Patrick Moorhead: Oh, it is? Yeah. What Why did that mortgage not get accepted? We can’t tell you we’re sorry, that doesn’t work with the regulators. So, Alan, we’ve talked about your customers, you talked about your partners, and how in most times, they’re actually the ones doing most of the upfront customer to customer BPO type stuff, you have an event that’s coming up that combines all of those Pega World inspire 2021. Can you talk a little bit about that? What’s new, what are you bringing in there? I don’t know if you can talk about what the key top line message is going to be. Maybe that’s a surprise in a few weeks would be great.
Alan Trefler: Well, we don’t want to destroy the show by announcing it as much as you’d like to.
Patrick Moorhead: But, you could.
Alan Trefler: It starts May 4th at 9am Eastern time. And it’s going to star some amazing companies, some of which have been announced like Wells Fargo, others, which will be announced coming forward telling their stories. So, it’s not just about what we’re going to announce that’s new for our technology. But it’s going to be how customers are going to explain in their own words, frankly, in many cases, things that we wouldn’t be allowed to say, because we do have a lot of customers who compete with each other. But if they get up and want to say it, I think that’s terrific. And I’m always amazed that organizations are so creative in how they’re able to apply better decision making and better Intelligent Automation and process automation, and do it in ways that sometimes even exceed what we would have imagined. And that’s what you’re going to see at Pega World plus some hot new product announcement.
Daniel Newman: Can’t wait.
Patrick Moorhead: I’ll take that as my invite.
Alan Trefler: We’ll be signing you up.
Daniel Newman: Who’s not excited about a digital event? I mean, we’ve done a lot. But in all seriousness, I loved last year that you guys hit the punch lines quickly, Pat and I are not that nice. We have our event; it’s going to be five days long. In June, I’ll bug your PR people because we are hoping to get you there. But we’ll talk about that later. But your event, you did it quick. It was really impactful, high information. And you were very respectful Alan and his two analysts that cover probably some of the broadest east-west swaths of tech, from software to chips, we could not be more appreciative of companies that are thoughtful about how much time they take to get to the point.
Alan Trefler: Well, if we had done it in Las Vegas, or actually, sadly, this year, it had been intended to be done in Boston, when the pandemic struck, we realized we weren’t going to be able to hold an event last June in Boston, which was kind of sad, you know. Instead of having order of magnitude 8000 people at that physical event, you know, we ended up having, I would say TEDx that globally at the event or listening to pieces of it. But we knew we couldn’t do a two-day event. So, we cut it down to two and a half hours, and really worked to make every piece of it as crisp as information fill, and also doing chunks of it live. So, we were taking live Q&A from the audience to reward them for choosing to check in at that time, you know, and that coupled with having the Dropkick Murphy’s play us out at the end that sort of a Boston hometown band. Yeah, we got a lot of I think, positive recognition. And it’s all about the team being able to pivot literally in 60 days from thinking we were, you know, flying out to having an in-person event to realizing that it was going to have to be a whole new way of thinking.
Daniel Newman: Yeah, the team did a really good job, Alan. And by the way, you did a really good job, you’ve earned yourself an opportunity to return to the Six Five Insider, we’ll give you a little time. We’ll give you a little time. But you know, we’ll have you back in a few months or a year when it works out for all of our schedules. Love to hear how things are progressing, love to kind of circle back on some of the theorizing and philosophizing that you did throughout the show, but it’s always super entertaining to have you here.
Alan Trefler: Thanks, take care.
Daniel Newman: Pat, I always love these shows what a great job. Alan is always entertaining. He clearly knows his stuff. He’s got a vision for the future. I think they’re great trajectory to get to that 2 billion if he stays the course.
Patrick Moorhead: Yeah, and I’ll add informative, as well informative and entertaining. But what I really appreciate is the velocity that Pega operates at I mean, that keeps it all going smaller companies, the gear is smaller, and it’s got to go faster, and it’s coming up with more ideas than you know some of these behemoths. So, I love to see it.
Daniel Newman: Absolutely. And we’ll have to check back in with them really soon. But, Pat, I think for this particular episode, it’s time to kind of let the people know that you know, hit that subscribe button, join us on Spotify, on Apple podcasts and of course on YouTube. We’ve got video but if you’re listening to this you know we like it when you do that to you know, definitely subscribe, definitely hit us up on the Twitter at the Six Five Podcast or follow either one of us hit us up. We’re pretty approachable. We respond to most normal type of tweets or interactions online, but overall, just want to say thank you to the community. Thanks for everyone for tuning in. We’ll put some info in the show notes on Pega World Inspire we’ll also put some other updates and highlights that we see fit. But for this episode for Patrick Moorhead for myself, Daniel Newman, we want to thank you for tuning in. And we’ll see you next time on the Six Five. Bye everyone.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
