Please welcome Alex Kurtz. All right. Here we go. Good to see everybody. Welcome to HashiConf and our first Investor Day as a public company. Thanks for coming to L.A. and for those joining us online. Alex Kurtz here, help run the IR program, for HashiCorp. Really excited to see people in person again, and of course, people joining online. Thanks for spending about the next 4 hours with us. Before we go to all the good stuff, Paul has asked me to read the following statement. We will be making forward-looking statements during today's presentation, including relating to our long-term operating model, market size, and growth as future product releases. These statements are subject to risks and uncertainties, which are further detailed in our safe harbor provisions. In addition, we present both GAAP and non-GAAP financial measures. These can be found in the appendix. Non-GAAP and financial measures are presented in addition to and not a substitute for GAAP measures. A reconciliation is in the appendix of the deck that we'll post later today. Quick overview of the agenda. Dave and Armon will be providing kind of market overview, strategy around the company. Obviously, Armon will be talking about the product releases today and how we think about our product roadmap. Then Mark and Brandon will be coming here to be on stage to talk about our GTM motions and how we talk to practitioners and cloud platform teams. We have a great customer panel following Brandon's section. Three great customers will be on stage with us. A lot of Q&A through the rest of the day. We'll finish up with, of course, Navam going over the financial performance of the company. At the end of the day, we'll be doing a full executive Q&A for everybody in the room, but we'll also be taking questions online too. With that, I'm gonna hand it over to Dave. Thanks, Alex. Lots of Q&A time. I'll stand up here just so it's easy to see me. I think the stream requires it. There's a clock timer here for me to make sure I don't go long. Thanks for coming, everybody. I realize actually I haven't met everybody in person, so thank you. It's the weird world we live in. This actually, I think, was three years since we last did a HashiConf event. The same thing's happening outside. In fact, when we asked the question, how many people are here for the first time yesterday, probably 80% of the people said yes. Goes to show what we've all been doing. I want to spend just maybe the first little bit here just teeing up how we think about sort of stepping back and thinking about the company that we're building together here. Hopefully you will be as convinced as I am about the opportunity that we have ahead of us. The company's always been aligned around this very singular idea about enabling the cloud operating model, which I know many of you are familiar with us talking about it. It is. It means a very specific thing, and I talked a bit about it in the keynote today. So I'll double-click a little bit on specifically what we mean there. You all are familiar with the kind of highlights financially of the company. I'll just give the framing of the history of the company for those that are not that familiar with it. I joined HashiCorp about 6.5 years ago, actually a little over 6 years ago. At the time, we had about 25 employees. Today, there are well over 2,000. We've come a huge distance in that time. Today, you know, 3,500 customers. We tend to anchor at the top end of the market. Our point of view has always been our mission is to serve those that have the complexity problem. That is the Global 4000, call it. You know, obviously, we prioritize the top end of that first because we think that's how markets function, is the sort of the top ends of the market tip first, and then we work our way down. We're actually disproportionately represented in the Fortune 500, a little under 200 of the Fortune 500 and about 415 of the Global 2000. The stat that we share then broadly is the customers over $100,000 in ARR, which is a pretty good proxy for the Global 2000 plus the sort of some of the key tech companies in our account base that have this massive compounding growth opportunity as they adopt a portfolio. We've also grown that portfolio. Today, we have 8 distinct products in our portfolio, which, you might say, well, that's an awful lot to take on. I would argue that actually what's happening as the world adopts cloud is it is actually disaggregating a lot of these existing markets, ops, security, and networking, and reconstituting them in a slightly different form under the control of actually one single buying center. That has huge, hugely profound implications. As we've been working with those companies over the last 8 years as a company, you know, they've been asking us to extend ourselves into the other adjacent problem domains that they have because they are a single buying center. Okay. As we talk about sort of the cloud operating model, we like to anchor ourselves on what compounding growth looks like. Back in 2016 when this all began, the aggregate spend across Amazon, Azure, Google Cloud, so excluding Alibaba, which is probably as big as Google, and excluding Oracle, which we also believe is doing pretty well, that market was about a $15 billion a year market. Today, it's going to be a $180 billion worth of spend across those three cloud platforms alone. This is a massive market, the likes of which we've generally never seen before. The underpinnings of our opportunity, therefore, is that, yes, our TAM is extraordinarily large across those existing software categories, but we're basically tethered to this massive market that is in transition, and there's really no debate as to how big it is. I think, you know, when we think about the business building opportunity, you know, there are very few companies that have the opportunity to participate in markets of this size and scale that are so clear. As you talk to folks here, which you undoubtedly will, you'll see some of our customers, you'll get to appreciate just, like, how fundamental our tech is to their cloud programs. I think that underscores for us the scale of the opportunity is both super early, right? This is very, very early. We talk about a lot of companies that we run into that are spending, you know, $hundreds of millions a year on the cloud providers alone. By and large, those are cloud-native companies. There are very few, like, you know, tier one banks that are spending that much money on Amazon or Azure alone, but they will. Because they spend that much money on their private estates. This market is so early in the Global 2000. I think that's a thing we're struck with each and every day. Number two, this is a generational or dislocation of category spend. And point number three, it is very clearly multi. Like, we made that bet that it was gonna be multi-cloud early. Actually, in 2016, there was a lot of debate as to whether Amazon would just be the dominant force. You know, having been in this market long enough, it was pretty clear to us that there was gonna be multi in the end. What you'll hear from us today is actually basically just a slight step back into how we think about what we're building here together, which is, point number one, there is a well-understood cloud operating model. What you heard me say today, if you were in the keynote, was, you know, the cloud operating model equals a Zero Trust model. Like for example, right? The idea of everything being Zero Trust is just implicit in how people run cloud infrastructure. As an example of like, it's a really well-understood problem domain. This is not something new we need to figure out. If you wanna know how to run cloud infrastructure, go talk to Netflix, go talk to, you know, Snowflake, go talk to Slack. That model is really well understood. That model is being adopted now en masse by the Global 2000, Global 4000 as they adopt cloud. Point number two, there is a singular buying center that aggregates this category spend, and this is a really, really important concept. I'll double-click on it in a little bit more detail. Lastly, we have a suite of products that basically match the maturity of those cloud programs as they progress, and I'll talk more about that. You hear us talk about these three themes over the course of the day and happy to answer any questions about it. Also happy to, you know, have you chat with folks that are here in the building that can answer questions about it. Let's just talk about what we mean by the cloud operating model. This is sort of a pithy soundbite that we made up years ago to try and describe what was happening, because what we had is a set of products that were being massively used, and we had to figure out a way to communicate how that was actually being adopted by the market at large. Our singular mission is about enabling consistency in that operating model, right? There is a cloud operating model. We want people to adopt a consistent one, and so you'll see us talk about a consistent way to provision, secure, connect, and run infrastructure. Not surprisingly, that maps to our product categories. Provisioning is about Terraform and Packer. Security, Vault, Boundary. Networking, Consul. And then run applications is Waypoint, Vagrant, and Nomad. That's actually why our product positioning is the way it is, because it's a very practical, pragmatic, true rendering of how our product portfolio and vision fits together. This picture we talk about a lot because this is just the truth of what's happening in the world. Geoffrey Moore coined the phrase of like systems of engagement and systems of record as being the two categories of applications. Systems of engagement are new things people are building to engage their customers, their partners, their employees. Those are gonna be built on cloud. Why? Because every reason we understand around sort of the fact that all the app infrastructure you need to build those applications is already on cloud, point number one. Point number two, given the ephemeral engagement that we have with applications these days, with our mobile phones and with our digital devices, they are highly ephemeral by nature, and that's just really well suited to the cloud model. But the systems of record that those things connect to, like the databases, by and large, are still running in your private data center. Systems of record and engagement are how we think about the world, and all those things are being built not just on Amazon, but on Amazon and Azure and Google. What's wild for us as Armon and I travel around the globe, you actually see those vendors represented differently in different geographies, which is kinda neat just for reaffirming the point. The thing that's really disruptive about this sort of shift to the cloud model is actually the three core paradigms of ops security and networking are just different. You kinda can't do a simple translation of them because there's just a different paradigm completely, and people have figured this out. People that, you know, run cloud infrastructure know this well. The way I provision compute for Zoom, as an example, take that as a good example of a cloud-native application. If that was running on private servers in my private data center, I would have opened up, you know, a portal, provisioned a machine, and then closed the ticket and am on my merry way. Given the scale of what Zoom spins up every morning to support us all, there's no way on Earth that a human could do that. What they do instead, they codify a topology of that infrastructure in the form of an infrastructure as code template. They tell Amazon, "Spin up 100,000 machines, spin down 100,000 machines." The construct is just a different one. That means the category spend of tooling around how you provision compute is gonna transition from an old world to a new world because the old model makes as much sense as the provisioning model on a mainframe. It just doesn't make sense. The first core construct that we anchored around this notion of infrastructure as code. The second one, which we all know a lot about, is around identity, and we talk about this a lot. The perimeter-based model of security that is being used everywhere kinda doesn't translate to the world where everything is outside of your data center on cloud. We use the example of, you know, you can set the configuration of your S3 bucket on Amazon to be public or private, outside, inside. Like, that's a setting. You have to assume that IP addresses make no difference to whether things are secure. We've all realized that identity is the basis of security. Super well understood for the world of people, always has been, but there are far more machines than there are people in your environment. The notion of identity as the basis of security is hugely significant as a paradigm, and obviously everybody now talks about that as the basis of Zero Trust. The third aspect is the way you do networking is just different. No longer do we just update the configuration of Cisco networking gear when we're provisioning things. If Zoom was built that way, we'd still be waiting for our Zoom session to begin. This is predicated on service-to-service rules. I think we all understand these core principles. This has been profoundly obvious for a long time, and we show this picture a lot of times to our customers and go like, "If you don't believe me, just look at the cloud providers themselves. This is how they all work." They all have their own provisioning product for infrastructure as code, but they're all different. They all have their own identity model at the basis of security, but they're all different. They all have their own service networking models as the basis of how things connect to each other, but they're all different. Each of these cloud providers by design is a walled garden caring about their own environment because that's such a massive market opportunity for them. You see how big they've become just by trying to get workloads onto their environments. That is their focus. If you are a Global 2000 entity and whether by accident or by design, you're gonna be multi-cloud, your challenge is then one of operational consistency. This is just your issue. It's literally your issue. Like, hey, I wanna adopt a common way to do security across Amazon and my private data center 'cause operationally, I can't do it two different ways. We set out as a company when we saw those core constructs years ago to say, like, "Hey, how can we help drive standardization for everybody around those core principles?" Because we think it's good for everybody if there's a standard, and so we did it in open source. To me, there's an analog here to like you know, when HTML became the standard in the web generation. It was good for the producers, it was good for the consumers. It turned out if everybody standardized on a common model. What you saw from the cloud providers is massive lean in to this over the last few years. They love the fact that Terraform has basically standardized how people provision compute because it means people provision way more compute, right? Basically the railroad tracks for cloud adoption are lit up by the fact of the standardization. Vault is about brokering identity across those different estates. People sometimes mistakenly talk about Vault as a secrets management product. It's not a secrets management product, first and foremost. It's an identity broker. Can this machine talk to this machine? I don't know. What's your identity? Right. A use case that it supports is certainly for credential management, for secrets management, but fundamentally, it is a broker of identity. We have speakers here talking about how Vault is the basis of their IAM programs for their entire estate because Vault is an identity broker. Our Consul provides a consistent way to do service networking. We fill this really neat space across the different cloud providers, which is in a way really, really good for them because as you can see, we're not trying to prevent people from using cloud-native services at the app layer, which is what the cloud providers want you to do. Amazon wants you to build applications using their message queuing, their runtime technologies, their databases, so that they stay there. They don't care about how the plumbing works to get those things there. Added to that, they know that they're gonna have people trying to connect Kubernetes-based application on Amazon to a database running on their private data center, and they need someone to play that role, and that role player is us. The market needs someone to play that harmonizing role. Our model has always been predicated on this very simple picture that you saw on our S-1 when we first went through the IPO process. This is a model learned candidly from having done multiple open-source companies before. We've learned over the course of time how to build markets around us that function at scale, while at the same time allowing us to build generational software companies. We've always focused on this very simple model of, step one, standardizing the practitioner, win the practitioners. Number two, growing the ecosystems. Number three, enabling the commercial customer to fund that model to work again. This is not about trying to get a business to a certain revenue level. This is about trying to make a market function around us that allows us to build a far larger business. Each of these things, if you think about it, is a very significant moat for us. We got 200 million downloads, 250 million downloads of our products last year. That's a pretty significant moat. Terraform alone has more than 2,000 providers in its ecosystem across provisioning infrastructure, provisioning, SaaS applications, provisioning legacy networking. 2,000 providers in this ecosystem. Vault has hundreds of certified backends. We use open source as a way to let people contribute to the standardization by contributing providers to our ecosystem for the benefit of everybody. That was actually priority number one and priority number two of the company for a long time. What you notice we did, we did not contribute our tech to our foundation because we think good software is designed by small groups of people. While our products are open source, we invite participation from the community, but we're fundamentally driving the direction of it, which means we alone are in the position to enable the customers to adopt them commercially. This is a lesson learned out of being in the open source market for almost 15 years, which is hard to believe, which I have been, and having built multiple businesses, some of which were able to get to real scale and some of which were not. This is a hard lesson learned. Happy to talk more about it. We talk about this pattern of adoption as being the way that we've observed people adopting cloud, and I think this is one of those things that when you travel around enough, just becomes like painfully obvious that there is a very consistent adoption path of cloud that explains why you go out and find, you know, millions of people that are using open source products, but you say, "Hey, they're not using your commercial products. How does that work?" Well, let me describe how our model works. Everybody that wants to build something net new on cloud signs an agreement with Amazon or Azure or Google and then sends their developers off to go build that thing. 6 months later, they've now created, probably using Terraform, you know, 200 Amazon accounts, each of which are way over budget. They're now dropping apps into a low-trust environment, which the security team is like furious about because you realize that's now public, right? That's not private anymore. The networking team just flat out refuse to allow those things to see traffic, right? What you end up with in this tactical stage of cloud adoption is a bunch of ad hoc adoption of cloud. Actually, the cloud providers get really, really frustrated at this too because those cloud projects get shut down. Every single company that we engage with adopts the second model, which is the establishment of some group of people that's assigned to create that cloud platform. They call it different things. They call it a cloud program office. They call it SRE team, right? Some of them are not there yet. Some of them will get there. Every company we see successfully adopting cloud gets there, and so we're very convicted that this is how it goes in the end. They create this common platform team. They go, "Hold on, we're gonna run a central shared service with Terraform, and we're gonna not allow you to have 400 Amazon accounts or 200 Amazon accounts. We're gonna have 20. Before anybody gets to provision anything, we're gonna check to make sure there's budget available in your department. We're gonna check to make sure you're using the approved security, approved templates," et cetera, et cetera. What you basically create is this producer-consumer model for your ops people and your devs that just runs through a common aperture, and our products are used as the basis of that aperture to cloud. By and large, they run a central shared service of Terraform, Vault, and Consul, and then they have lots of different application types on top. That is the blueprint. That is what our platform team looks like, too. Happy to talk more about that. That model of that platform team is what happens in the market. That is our customer. I would argue there's only really one other vendor in the world that targets that customer, and it's probably Datadog, right? Our reps go and find that customer, that cloud program office. They go, "Hey, you're probably way over-provisioning your cloud estate. We can save you money tomorrow by just implementing Terraform Cloud," and off we go, right? That stack that they're running is generally Terraform, Vault, Consul, maybe an application, sort of application things, and then the monitoring of it on the right-hand side. That's how it works. The irony for us is actually there's a stage three where people start applying that to their private estate. Some of the banks we work with, who are more risk-averse, they actually start at stage three, and they apply this model just to their private estate. Evidence of that is the Terraform provider for vSphere has been downloaded 5.1 million times this year which tells you actually there's huge use of our products in our private data center. You know, Palo Alto Networks and F5 and all those other folks are all here as well for the very good reason that people use our products to underpin their tech in the private data center. How that maps to our product portfolio is how it's always been. Our open source products are designed to be propagated by the end user just for the individual. They are not designed to be run as a central shared service. Our commercial products are designed to be run as a central shared service. Hey, you're running Vault. You have 10 applications using Vault. Do you realize it's now foundational to how your company runs? Your platform team will then run that as a shared service. They have different requirements. They need redundancy. They need failover. They need high availability. They need the ability to have, you know, multiple tenants inside a common Vault instance. There's a whole host of things that cause them to have a different set of requirements for commercial products. This is what we were brought into about 6 years ago, candidly. As our products started to proliferate, people said, "Hey, can you build a commercial version to allow us to run this at scale because this is the right model?" What we do not do is go talk to people and say, "Hey, let's do an open source to commercial conversion." That's not how we talk about these things. That is not the motion in our customers. The motion is we drive standardization for everybody. You will find thousands and millions of open source users using individual instances of our products, and then you will find platform teams using our commercial products. If they are not using our commercial products, they probably hacked something together themselves to DIY, right? It's just a matter of time before they go, "You know what? You guys build the products. We'd rather buy them from you." Happy to talk more about that one. How that then manifests is what you see because of that sort of singularity of buying center. You see some of the examples that we shared on our public websites around how some of our customers have progressed. Every platform team has all these concerns. An example here of the company, one of our $10 million customers, and it's really just a cohort question. They started with open source in 2015, 2016. Then they bought some Terraform. Then they realized, "You know, I also have that Vault problem." Same customer, right? Same buying center. Then another group said, "Oh, I also have that Terraform and Vault problem. I also have that Terraform and Vault problem." Then another Terraform and Vault problem after four years. Then they start running into the Consul problem because everybody does. The key here is that this customer got to call it $10 million in ARR with us just on Terraform and Vault, right? This is not to suggest you need every company to adopt every one of our products to make them $10 million customers. These are massive markets. My favorite soundbite was actually from one of our account teams. Oh, I asked a couple months ago, I said, "Hey, how's it going with, you know, customer X?" They're a you know decent sized Vault customer, multiple million, maybe $4-$5 million Vault customer. I said, "How's it going?" They said, "You know what? It's to be honest, it's been hard to get their attention." You go, "Why?" They say, "Because it's really just not that much money relative to their cloud program." Like, it's actually hard to get their attention, which is indicative of the scale of the market category spend in these categories. This is infrastructure. Like, ask your big contacts how much money they spend on infrastructure software in a year, and it starts to speak to how much they spend on these categories. We're certainly super excited about our future products, but hopefully, this demonstrates where we are in the here and now. Here's another customer that got to more than $10 million, exactly the same motion. A bunch of open source users are in their environment early on. That then actually became a Nomad starting point, weirdly. Terraform and Vault, and off you go, and you're a $10 million customer. This is just indicative of the motion, common buying center, everybody adopting a common operating model, which is really, really well understood. What we get to observe, weirdly, is we come across different companies at different stages of maturity of their cloud program. As you can imagine, we work with, like, the most sophisticated folks in the cloud-native ecosystem. They're 7, 8 years into their cloud program. The problems they're running into are very different from the provisioning and security problem, which is where most of the Global 2000 is. What we've done is actually thought about that as a way to describe how we think about our portfolio. In that instance, if you're 7 years into your cloud program, you've run into the Waypoint problem. How do we know that? Because you asked us many years ago to solve that problem for you. You say, "I have this problem too. Can you solve that one? You have this problem too. Can I solve that one for you?" Waypoint is the very sophisticated part of how you take the handoff of an application artifact and drop it consistently onto a runtime platform where you might have lots of different runtime platforms. Most cloud programs we engage with have actually built that themselves because no vendor in the world has served them. They would much rather not do that. We think about Terraform and Vault as sort of the starting point where most people enter their cloud programs are. I think the thing that's really profound and obvious to us is this sort of disaggregation of spend categories across app security, networking, and runtime being reconstituted under a common buying center in cloud. That is just what's happening, right? The networking, the people making the networking decision are that same person. I think Mark will talk a little bit about that here. My gut is that adoption path you see here is roughly how people adopt our stuff. They almost always start with Terraform and Vault. They have been adopting Boundary, Consul. We introduced HCP Boundary today as generally available, which is a big announcement for us because actually that problem domain is one that's been asked of us a ton by security teams within those platform organizations. The Packer image management problem is actually one that most people are already using open source Packer the way that they build images, including the cloud providers themselves. But actually having a managed way to do package management across this distributed estate, so I know what's running everywhere, is a problem that got expressed to us a couple of years ago and is the basis of HCP Packer, right? We almost feel like we sort of have this pre-dredged river of problems that people have aggregated for us over the course of time, and our product development efforts represent exactly that. Armon will touch on them in a bit more. I'm gonna hand over to Armon for a bunch of details, but hopefully, the takeaway here is what we've created is essentially a distribution channel into a single buying center. This is the basis of our compounding growth opportunity. Number two, a product portfolio that's aligned to the needs of that buyer as their programs mature. That common buying center is our customer. Very, very uniquely, and it's very, very clear to us. We think that puts us in a really, really unique position to, you know, partner with the most sophisticated companies on the planet as the basis of their infrastructure partnership, which they're trying to have fewer of, not more. Let me pass things over to Armon. I'm happy to come back and answer some questions on what I shared after Armon's session, but he'll give you the goods. for joining us. Hopefully, got a chance to join us for the keynote. We'll do a quick recap of some of those announcements, but otherwise, gonna go a little bit broader and a bit different than what we covered this morning. Great to see many of you in person. Again, I know many of us have only maybe spoken on Zoom to date, so thanks so much for making the time to come out here. Let's kinda jump in. I think what I wanted to spend some time covering was going a little bit on what's the broader strategy as we think about the overall portfolio, and then we'll go a little bit deeper on some of the specifics, particularly kind of Zero Trust, which we talked a lot about this morning, as well as the cloud strategy. Maybe starting broad, obviously, it's a very wide portfolio, right? There's sort of four different categories that we talk about. Obviously, this morning, we were focused really on security and networking. Overall, in addition to those, we also think about infrastructure, and we think about applications. You know, I think the common question, you know, that we often get is, you know, how can you possibly play in this many categories, right? Aren't these entirely distinct markets? Aren't these entirely distinct users, right? Like, you know, how can you build an efficient business around this? I think the reality, and I think we, you know, we sort of talk about this, is cloud is sort of changing the model in terms of how most organizations deliver these applications so that they're really not any longer these discrete markets, right? What we end up seeing in practice is there's really two teams or two personas worth talking about in an organization. One is what is the core platform infrastructure sort of teams. Their job is to provide the underpinning infrastructure, do the central governance and management of the cloud infrastructure, and then provide that as a service to the many different application teams within an organization, right? So most companies are realizing if I have, you know, 10, 50, 100 application teams, it doesn't make sense to have 100 different strategies for cloud, right? Instead, you have a platform team centrally approach that, whether that's within a business unit, whether that's standardized across the entire organization. Then those teams are responsible for these set of concerns, right? In practice, yes, there are four different categories of concerns, but it's the same platform team that's really standing up and saying, "Hey, how do I have one pathway for provisioning infrastructure for my app teams?" Okay, well, that's a Terraform Packer set of concerns. How do I have a consistent standard for how do I do secret management across my CI and app platforms? Okay, that's Vault. How do I give my development teams access to production environments? Great, that's Boundary. How do I enable the app dev teams to deploy their applications, scale up and down, own their life cycle, but then connect that to the networking layer where I have load balancers, API gateways, you know, it's, firewalls, et cetera, that need to be updated dynamically? Great. I have a networking problem, but it's about a bridge between the app dev team and the underlying network. That's Consul. At the very top layer, what am I providing my developers to simplify their deployment and lifecycle management experience across a complex infrastructure? We have multiple tools there, right? Whether Vagrant, more focused on dev test, Nomad, application orchestration across the environments, Waypoint, providing kind of a consistent platform experience or abstraction for developers in terms of how do they provision and manage infrastructure. They're different products, but all really targeting that same core persona of those platform teams delivering this as sort of a shared service to the application teams. In practice, oftentimes the application teams are the pull, right? They're saying, "Hey, I need these tools because I wanna do, you know, cloud provisioning with Terraform," or, "I wanna do, you know, access management through Boundary." It might be the dev teams that are pulling us in and pulling the open source into these accounts, but it's ultimately the platform teams who are our customers standardizing on this tooling, right? To kinda Dave's sort of earlier point, right? Each of these gives us a different insertion point into the account, but ultimately, we take the customers on a progression towards a broader platform strategy, which incorporates multiple of these technologies, right? It's balancing that big picture vision of the whole portfolio versus the insertion point of multiple different accounts to solve the specific pain point, right? How do we actually bring that to market, right? Obviously, they can't all be a core product at the same time. We think about it as almost a conveyor belt of innovation, right? What are our core products? These are the ones operating at scale. These are where our sales teams are most focused on, and it's where we disproportionately invest from an R&D perspective, right? Great, makes sense. Terraform and Vault are the core products, right? They comprise, you know, 80+% of our revenue. They're the lion's share of our R&D investment as well. Those are sort of operating at scale, tight product market fit, strong market demand, so it makes sense. Behind that is what we consider our emerging set of products, right? Part of that's driven by, you know, is the market actually ready? You know, is there a maturity of the core product, right? Like, where are customers on their maturity journey, and are they ready to digest this, right? I would put then Nomad, Consul, and now Boundary into that category. I think part of the reason some of these, you might say, great, Consul, for example, it's a very old tool. In fact, it predates both Vault and Terraform, right? 2014. The challenge there is it's not a day one problem when you go to cloud. Day one is how do I provision any infrastructure in cloud? How do I manage the keys and credentials and secrets that I have in cloud? Those are my day one problem as I go through a cloud journey. Terraform and Vault are the immediate pain points a customer runs into, right? Once I have a certain critical maturity there, great, I'm operating in cloud. I have, you know, my first 50 applications. Now I'm worried about, okay, I have all these tickets that I have to file to update my network. Now I have a network automation problem. Okay, day two concern is really Consul. It's not a product maturity question. It's really more of a, where are the customers on their journey? Are they ready to have that? There's no point in us talking about network automation if they don't have basic infrastructure automation, right? There's a logical progression here, right? Same thing, if you don't have basic credentialing of your secrets, talking about Boundary to you doesn't make a lot of sense, right? You've got bigger fish to fry. There's the sort of core emerging products that then come right after core and get pulled through. Then beyond that, you know, to Dave's point, we're really investing many years ahead in terms of where do we think these platform teams are gonna be, right? I think what we've seen from our most mature customers is they end up having to think about problems like Waypoint and their custom building solutions today. That makes sense for, you know, the cloud-native folks. If you're a Roblox or a Stripe or a whatever, right, you have that kind of capability. You can go build some of this stuff in-house. If you're that next tranche of enterprise customer, you don't have that kind of capability. You're gonna look to a vendor like HashiCorp to say, "Great, I know I need a thing like Waypoint. I'm not gonna develop that in-house." When I get there, great, our goal is to say, "Hey, we have a solution built for you. Here's what slots in next on your adoption journey." Right? It very much is the sort of graduation conveyor belt, right, where we go from a relatively limited R&D investment and maybe no go-to-market investment and community incubation, stepping up to a larger R&D investment on our emerging products and maybe a specialty sales team that's selling it on the emerging, all the way up to then core product, where it's a much larger R&D investment, and that's our core sales team that's landing that as part of the motion, right? That's how we sort of balance having a wide portfolio with staying focused. Maybe quick recap of some of the key announcements day one today, right? HCP Vault on Azure. This is really looking at, great, we had, you know, HCP Vault on AWS only historically, now expanding to Azure. Between the two of them, we think that's, you know, over 85% of the addressable market, given sort of the general market share of the two clouds. Really looking at how do we bring Vault to sort of a broader set of our customer base who, you know, maybe is on Azure as well as AWS, or they're, you know, Azure primarily. Two is HCP Boundary. Really moving that Boundary product out of pure open source, pure sort of beta into being a commercial generally available product, right? You know, this now introduces pricing and packaging. It's, you know, formally available global to sale. There's a production-grade SLA behind that. Now that's really us shifting Boundary into sort of that next phase out of community incubating and up into being an emerging product, right? Obviously, this is sort of, you know, back half of the year for us, so it's not really gonna kick into gear until we, you know, do our sales kickoff next year, train and enable the field team and really get going. We're gonna start running water through the pipes and then, you know, get at that market a little bit more aggressively going into next year. Consul continuing to invest on enterprise differentiation. I think one of the things we've talked about, and the analogy I like to use is when we think about our investment in open source, it's not a switch, right? It's a dial, is the way I like to think about it, right? With each of our products, we can kind of set that dial to wherever makes most sense, right? You can imagine on one side of the dial, we say it's 100% focused on open source from a feature development perspective. What that's enabling us to do is drive market standardization, drive more practitioner awareness and adoption. On the other end of that dial, we can say it's 100% enterprise, right? We might focus entirely on enterprise features and differentiation. The goal there is to make it easier for us to sell, you know, increase ASP, you know, reduce friction for sales teams, et cetera. With our various products, that dial sits at different points, right? Terraform and Vault have effectively achieved a level of market standardization where we can turn that dial way over to enterprise differentiation, right? Versus a product like Consul, more emerging, much more of a sort of emerging market category, more competition. That dial set closer to the middle. Now what you're seeing is most of these new capabilities that we talked about, things like cluster peering, admin partitions, are really focused on enterprise differentiation. How do we enable these enterprises operating complex at-scale infrastructure? You're seeing us turn that dial a little bit further with Consul and really focus on more of that enterprise set of capability, right, without getting into the weeds of the specifics. As a preview, 'cause I know we're gonna lose many of you for day two, right? What are we talking about with Terraform? Right? The key updates here is one is a no-code provisioning workflow for Terraform. Again, going back to that enterprise differentiation, this is a cloud-only and enterprise-only capability really focused on, great, how do we broaden the audience of Terraform beyond, I'll call sort of the infrastructure as code power user into that broader, less technical maybe developer audience, where they're not a cloud expert, they're not an infrastructure expert, but they still need to be able to provision infrastructure, right? This gives them more of sort of a UI-driven approach. Central platform teams define the modules and blueprints, but then the rest of the organization can come in and say, "Great, I need to deploy a web server or a MongoDB database or a Kafka cluster or whatever." They can do that in sort of a no-code workflow, right? That's a commercial capability really looking at, again, those two personas. Platform team wants to define that standard, but then it's consumed by this broad set of application teams and potentially non-application teams. Could be a, you know, a business analyst who needs to get a, you know, a cluster to do some data, you know, work. They could go through a no-code provisioning workflow, get what they needed for, you know, their data processing. That's a big push for us into really great how do we broaden that audience and really focus that as an enterprise capability. Next is, again, continuing our focus and investment on policy governance and policy as code, which is, again, a commercial capability for us, is the expansion of a policy registry. Moving beyond just a bring your own policy into, great, can we publish a set of foundational policies that you can just import and consume, making it lower friction for the enterprise customers to start getting value out of that capability, and then expanding support just from our policy language Sentinel, which sort of in-house developed into OPA, which is a bit more of a broader industry standard. Again, lowering the bar, making it easier for customers to start using the policy capabilities, but those are, you know, strictly commercial. Then HCP Waypoint, again, moving that from our private beta into public beta. That's still very much an incubating product. This is still really focused on driving standardization, adoption, enabling more integrations. And we're excited just seeing the progress and sort of, you know, continued adoption around Waypoint. I think that's more of a future product, but you know, continuing to invest and seeing the traction around it. Now I want to spend a little bit more time and go deeper on the Zero Trust security side of things. Obviously, spent a lot of time on it this morning, but I think this is a pretty big investment for us. I think we often talk about it through the lens of the specific product, and I think it kind of gets maybe lost in terms of where is the bigger picture of where this is going, right? Yes, there's a networking concern here. Yes, there's sort of a separate set of security concerns. Ultimately, it's about sort of this picture for us, right? All of these organizations are acknowledging that they need to go through the shift towards Zero Trust, right? Actually, it just came from a media event, and the question was, you know, what's the driver to this? What's causing organizations to, you know, sort of wake up, you know, one day and say, "Hey, we should care about this." I think it's really, there's a few different factors, right? One is, you know, you're seeing the breaches, you know, day after day, right? I think it was just a week ago, two weeks ago, you had Uber, right? Every day you're sort of seeing this escalating set of very high-profile breaches. I think every company wakes up and says, you know, "But for the grace of God, that could have been us," right? How do we invest in changing our posture and move to sort of something more modern and Zero Trust? That's one big driver. I think the second piece of it is a shift in the regulatory regime, right? So whether it's sort of the Biden memo, whether you're seeing standards like PCI change, the regulatory standards are shifting and pushing people towards this. I think the third is the cost of cyber insurance, right? You're seeing that sort of detonate, right? Because I think people are realizing, okay, no matter how fast these premiums are growing, our losses are growing faster. So all of those are pushing people into realizing, okay, we actually need to have a holistic shift in towards Zero Trust. The question every enterprise asks us is, "Okay, great, I got to the marketing of Zero Trust, but what does it mean? How do I implement it?" I think that's the question from our enterprise customers, like, what does it actually mean to do Zero Trust? You know, I joked this morning, you know, seven years ago, everyone took whatever product they were selling, and they put the DevOps sticker on top of it. They're like, "Great, you file a ticket, now it's a DevOps ticket," right? You know, I think the same thing's happening in security. Whatever you sold last year, you put the zero trust sticker in front of it's now a zero trust zero security thing. I think helping customers really understand that their shift is actually you have to think about identity and manage identity and then flow that into how you govern your networking workflows, how you govern your human access workflows, and these are all deeply interconnected. Yes, they're independent products, but they form this logical suite. I think it's helping customers understand that, yeah, it's a journey. You might come and start your journey with us on Vault and say, "Great, it's about managing secrets and keys," but that then is our opportunity to explain and educate to the customer, "Okay, great. Well, what's your next stop? How do you expand that into how are you doing human access?" Okay, that's a Boundary conversation. How are you using app identity to govern segmentation in your network, right? That's a Consul conversation. I think it gives us multiple insertion points to solve a very specific pain point, but then our opportunity is to solve this much broader problem. I think as a vendor, we're sort of uniquely situated to solve it kinda end to end, right? As opposed to kind of a piecemeal set of solutions, right? Boundary in specific, right? I think is an interesting opportunity for us. It's a bit of a convergence of a few different spaces, right? I think historically you have traditional PAM, you have software-defined perimeter, you have, you know, a few different takes on this market. Our view is sort of a merger of those three, right? It's saying, "Okay, great. You know, part of this is traditional PAM, where it's like I need to broker access to credentials and let people into environments, do session recording, session management. But at the same time, actually, can I merge in VPN and software-defined perimeter and say, actually, you run Boundary at the edge of your network, and I don't have to overlay multiple different solutions of a VPN plus a firewall plus a PAM solution. It consolidates all three into one layer to say, great, it's an identity-based approach to give you network access, right? Piece one is that session management, so I consolidate the firewall and VPN. Piece two is I can do the credential vault management, the vaulting, the rotation, the session recording. I merge in a bunch of traditional PAM capability into one solution, right? I think the pitch and the value to the customers is, you know, none of them wanna manage three different systems to achieve one logical goal, which is great. My developer needs access to the web server, the DBA needs access to the database, and I'm forced to manage three different systems with three different sets of controls, right? That's kind of a nightmare, especially in cloud, where it's a moving set of targets, right? You're constantly dealing with IP changes, infrastructure changes, and that's a bit challenging, right? To the point of I think most of these organizations kind of throwing their hands up, right? I think it's a bit of a cloud-oriented take on it, which is to say, okay, it should all be dynamic, tied to the identity of the user, tied to the identity of the application, and we wanna merge multiple different management solutions into one. That makes it simpler to administer at scale, but also makes it easier for users to consume, right? Next is sort of the cloud platform piece, right? You know, we launched this, you know, only over the last few years. You know, we feel pretty good about the progress now at sort of 10% of subscription revenue and still feel like it's very early days for us. You know, if I sort of capture, you know, what we're, you know, what we think about the core value for us, right? One is it's obviously fully managed infrastructure, right? If we think about the journey of customers adopting our software, when it's self-managed, great. The first six months might be, how do I deploy it? How do I operationalize it, put monitoring around it, define backups, you know, have a monitoring strategy? That's six months that we lose in an account where we're not driving real adoption, we're just helping them stand it up and operate that. We can move that from six months to zero by basically saying, "You push a button, great, it's our problem," right? We'll do backups, we'll do upgrades, we'll do monitoring. You know, that lets us jump start right into adoption six months faster than otherwise, right? The second piece is it lets us have a bit more of a golden workflow or standardized workflow in terms of how they adopt it, as opposed to, you know, every enterprise inventing their own kind of choose your own adventure, right? Again, that standardization makes it easier for us to kind of take customers on a prescriptive adoption journey. Certainly makes it easier for us to train our SI partners as well, right? Because there's sort of a clear golden path. I think the other side for us is how does it drive an efficiency of our go-to market, right? Where today, if I sell you Vault and you have to stand it up and do all that work, great. And now tomorrow we want to have a Terraform conversation. It's almost the same amount of lift, right? To go and operationalize Terraform Enterprise as it was to do Vault Enterprise. Like, there was no, you know, natural efficiency gain from an operationalization standard. Versus on HCP, great. It's actually a common identity, it's a common billing, it's a common design system. The user can push one button and go from one product to being a two product, you know, customer, and that's much more frictionless, right? From our perspective, it's really looking at how do we enable a bit more of that product-led growth motion where, great, we land you on one product, and then we can sort of have you go on a natural expansion journey across the portfolio in a way that's gonna be lower friction and higher efficiency for us, right? 'Cause our view is, naturally, all these customers will be multi-product, so how do we make that easier for them and for us? In terms of progress and just sort of where are we today, right? As I mentioned, all of these products started life as open source, right? Not surprising, that's kind of the origin story. Kind of early 2016, 2017 is when we started with the self-managed enterprise products. The core four that you see there, you know, Consul, Vault, Nomad, Terraform, are sort of the self-managed enterprise products that by and large we've sold for the last, you know, 5, 6 years. Cloud has been sort of, you know, in sort of turbocharge in terms of our, you know, bringing that to market over the last 2 to 3, right? Terraform Cloud was the first, you know, in 2019, and then it's been sort of rapidly filling in over the last two, three years to bring in the whole portfolio. You know, as of today, with, you know, Waypoint and Boundary there, you know, almost—you can almost put one more for Vagrant, actually, 'cause Vagrant Cloud exists as well. Really bringing almost the entire portfolio to bear, right? Obviously a lot of work to do. You know, many of the products started as only single cloud being expanded to now Azure. It's not just a binary yes or no. There's sort of an expansion area, but you can see major investment from us in terms of bringing that whole portfolio to bear as cloud delivered. With that, I know we're a few minutes early, but we can kind of jump into the Q&A, 'cause I think that's probably where, you know, most of you are here for. Yeah. I think. You guys want to stay here? Cool. Take a seat, and we'll get going here. Sure. Okay. Cool. We're ahead on time, so we'll probably add a little more time to lunch. I don't think we need to do 30 minutes of Q&A right now. Let's start with Mark Murphy. Oh, wait, let's wait for the microphone. Thank you. Mark Murphy with J.P. Morgan. Great event here. Thank you for hosting us, as always. I wanted to ask you have these three customers or roughly three customers that are, they're such extreme outliers in the spending profile. I think you mentioned a couple of them here that are at this $10 million level. I mean, they're spending about 100 times, I believe the average. It is so highly unusual, and I think, you know, we have moments where we look at it, we think if you had a handful more of those, right? You could practically kind of wipe out the operating losses and sort of get to a break even, you know, pretty quickly. I wonder, what was the nature of those customers, right? That they're consuming so much and have such a willingness to kind of pay you at that level. What I don't know is maybe it's the three hyperscalers. There's three, there aren't more to go after, but maybe they're retailers, maybe they're banks. Is there any visibility into securing more relationships like that? What would the timeframe be? Sure. No, yeah, I'm happy to talk about it. Actually, I think we have a little bit more, you know, in Brandon and Mark's section, they're gonna go a little bit deeper on some of those customers. They're not hyperscalers, right? So just to give a sense of color, you know, they're retailers, they're financial services, they're, you know, card processing, right? So they are not. There's not three of them. There's hundreds of folks out there that look exactly like those mega players. You know, in some sense, the journey that all of them took, there's nothing kind of unusual. We'll kind of break down and show some of their journey and talk about the tranche of folks behind them. It's a journey about building trust, helping establish those programs, and then the fact that, you know, in the same way it took many of those same organizations 10+ years to adopt VMware, right? Today, their spends are probably $10 million-$100 million with VMware, but they didn't go from zero to $50 million on VMware spend in 2 years, right? It took them a decade to get there. Some of these customers similarly have been on that journey with us for 2, 3, 4, 5, 6 years, right? It's that building trust, having a single product insertion point, continuing to expand that usage of that one product, then extension into multiple product that then allows us to get to those high spends. I think what's exciting for us is even though they look like anomalies, right? None of those accounts are sold out. You know, I think that's what gets us excited is when we go and talk to those folks, the CIOs of those organizations that are spending, you know, north of $10 million, and it's clear that we're gonna have that same conversation three years from now, and they're gonna be spending quite a bit more than that, right? Because it's just about getting embedded into their kind of core platform strategy as how they think about multi-cloud. Yeah, these guys have multi-billion-dollar spends on infrastructure. $10 million for them, it's a lot in absolute numbers, but as a relative portion of their budgets, it's like, you know, great, you're one of my many, many vendors, right? That I have that kind of- I would 100% agree with that. That's exactly right. Like, they just spend a lot of money on these categories. I mean, you should ask them what their spend is on these categories and what their spend is on cloud. You know, there are very, very large spenders on infrastructure, just what it is. I think that's point number one. Point number two is, obviously we think about VMware a bunch just 'cause they're the last infrastructure company that I can think of. I think the difference is VMware. When VMware got going, it was in dev test, right? It was for virtualizing your dev environments. I forget what the products were called. Brandon would remember. Whereas because of the open source heritage, our stuff is in the runtime path of apps already. By the time the relationship is built and the realization is, yeah, this stuff is foundational to our cloud programs, it's already in the runtime path of really important things. I think that's the difference as to why we've seen it. You know, back to Armon's point, it's a cohort thing more than an anomaly. You know, I mean, on the same token, like actually I had dinner with a bank the other day that I think we're 4 years into the relationship with them, and they're like, you can see it. Like, it took 4 years to get to that point of trust and, you know, as they project forward and they get serious about cloud, it'll go a lot faster. It kind of reinforces how early it is. There was one large financial that we were talking to a couple of years ago that still hadn't signed an Amazon contract because they were still negotiating terms. 'Cause they wouldn't accept Amazon's terms. I think that's not as obvious, it's like they haven't even really dipped their toes in the water in this stuff because they won't accept the terms. It's eventually capitulated, but you know, but when that happens, it can go quickly. Sanjit, and then we'll go to Alex. Let's just wait for the microphone here, then we'll get back to these guys in just a second. Thank you for taking the question. I had one for you, Dave, and one for Armon. Dave, in your presentation, you really laid out the logic of the cloud operating model, the sequencing of it really well, and it made a lot of sense to me. Going back to the monetization model, you talked about your, you know, now decades of experience running open source models and some of the lessons learned, some of the successes, some of the failures. I think what, you know, my investor conversations around why is the monetization model that you've settled on, right? Which is pointing the monetization opportunity at the Global 4000, Global 2000. Yeah. When you have other open source companies, whether it's the MongoDBs of the world who've gone a different approach to kind of monetize their long tail through their cloud platform. Just getting used to this approach to monetizing, why is this the right one? Yeah. Is there a company that's done this before that informs this view? Yeah. I don't know necessarily. I think outside of ServiceNow is probably the one we think of most. You know, I think about the criticality of these decisions and, I mean, I've always been of the view that when there's a market transition, there's an opportunity for some period of time where a standard will emerge. I think we've seen that now across the different layers. At the data layer, you can see, you know, that Oracle database, you know, franchise is being dislocated into Snowflake and Databricks and maybe MongoDB. Like, you can kinda see it, and there's not a lot of debate on that anymore. I think what happens is as those opportunities exist, the opportunity then becomes, okay, well, how do you become that standard? I think ServiceNow is a good example because they said, "Hey, when the world went from, you know, its world of like on-prem management of ticketing processes to this cloud-based model, we have a one-time opportunity." If you step back, 80% of the category spend of any market spent by the biggest companies in the world, they just are. There's a lot of social dynamics around that too. I think for these big sort of binary decisions where you're gonna pick one vendor, they take their cues from the biggest companies in the world. What you've seen us actually deploy around the globe, we did this early, is we actually very much focused on the biggest companies in every country. Like, we like to sit on a patio in these places, and you can pick every one of the things you can see on the buildings as a customer. There's a reason for that. I guess much more driven by the ServiceNow point, which has a good parallel. We target, what? top 7,000 companies in the world. Number two, sort of like it's a bit binary. Like, I can have multiple databases. I can't have multiple provisioning products. I think it's that winner take most aspect of it that works best. Actually, the second thing that informed it, this is kind of a funny story that we did tell before. I actually worked at VMware. Sorry, I worked at Microsoft when virtualization was becoming a thing. What was really obvious to me... At the time, I was actually running some of the server products for Microsoft in Canada, so I had responsibility for a geo. When virtualization became a thing, when the market realized you needed virtualization, they locked up every company in the country with four-year deals. Guess what didn't happen in year five? I think that is actually that's instructive to me that when these transitions happen, where at the infrastructure layer in particular, where it's clear like you're gonna pick one, that it's driven by the biggest companies. That makes a ton of sense. Then Armon, in your presentation, I found it interesting that you highlighted the Zero Trust topic about being involved, but then also Consul got a lot of love today. I guess the simple question is Consul sort of ready for prime time? I guess the backdrop is that you have customers, multiple customers running tens of thousands of nodes, right? On Consul. Yet when we look from the revenue contribution standpoint, hasn't you know really broken out in terms of a major contributor yet. If you could sort of explain why that's the case, and then looking forward, what are sort of the catalysts, you think, for Consul to become more of a mainstream monetization vehicle? You know, it's a great question, and I think maybe it goes back to the point I was making on, you know, there's this sort of dichotomy where it's like Consul, we put it in an emerging product category, but it's actually an older, more mature product than both Terraform and Vault. So it's not, to us, a question of product maturity, right? There's customers running it at, you know, incredible scale, right? You know, 500,000 nodes under management type of scale. So it's not like a, "Hey, it doesn't scale," or, "It doesn't work," or, you know, that's not the problem, right? The product is battle-hardened and operates at that scale. It's much more a question of like, what's the enterprise maturity, and are they ready for it? Yeah, you have these digital native type folks that, yeah, they built, you know, ground zero in cloud, highly automated infrastructure. For them, it was like great Consul and natural. I think much of our early customer base was those set of folks because they were just so far ahead in terms of their cloud maturity and their infrastructure maturity. I think when you talk about, you know, the broader enterprise market, most of those folks are not coming from that point, right? They're coming from a place of very traditional approach to networking, highly hardware-driven, ticket-driven process in terms of how they interact with their network, right? For them, there's sort of this journey you have to take on where it's like, okay, today, if you literally log into your F5 device and point and click in their console, can I have a conversation about using Consul with you? No. Like, you know, it's, they're just too far removed from that. The first level conversation needs to be, "Okay, great. You know, I get that you have your F5, but let's talk about using Terraform to at least manage the F5 as code," right? Now you kind of have an infrastructure as code approach and say, "Hey, great, I have a CI/CD pipeline. I apply a change, and now Terraform touches all 50 of my F5s at the same time, rather than I file a ticket and someone takes six weeks to log in and click the button 500 times," right? I think the step one of that journey is, okay, great, there's that education and process evolution to bring you on from total manual point and click into I'm doing some level of basic infrastructure automation. That's still manual. Someone's making a Terraform change, going through a CI/CD pipeline and then applying it to all 50. Once you've done that foundation, I can say, "Okay, great. Now eliminate the manual change in the CI/CD, put Consul in front of that thing, and now it's a fully closed loop." Your app team does a deployment that re-renders the configuration, and Consul auto renders it down to your firewall or load balancer or whatever. You can see how there's a progression. I can't take a customer. You know, I can't explain spaceflight to a caveman is the analogy I use. Right? Like, I have to first take you through industrialization to kind of get you to a point where it's like, okay, you can even digest this concept. What gives me sort of optimism is we're seeing those green shoots now, right? We talked about on the last earnings call, you know, major U.S. banks are doing a large, you know, $1 million-plus land deal with Consul. I would not consider them a digital native at all, right? You know, I think, they've made great progress on industrialization, you know, and now we're ready to kind of talk about that next phase. I think the broader market to me feels like it's getting there, but it's very geo-specific. Honestly, like, I was in Germany 2 weeks ago. I would say they're easily 2 years behind where the U.S. is, right? Maybe 3, right? Great, we're now having those conversations with major U.S. banks. I don't think I'm gonna have a Consul conversation with a lot of the German banks for another 2 years because I think they have to go on that journey of sort of automation. It may be a long answer, but I think it's a maturity. I just wanna make one comment because I think what you said is exactly right. I think from the networking space, it's almost like a two-step journey required. Step one is let's automate your legacy networking gear using infrastructure as code. Point number two is you move to the next model. I think there, unlike what you're seeing in Terraform Vault, there's actually a two-step that's happening, and people are starting with the networking- Yes. through Terraform. We're gonna go with Alex then on this side. Let's do Kash. Okay? Alex. Great. Thanks. Alex Henderson in Needham. You guys have made unbelievable progress since the September 2019 events- Yeah. up in Seattle, and it's really impressive. I wanted to ask a question about the current environment, because I don't think you've ever gone through a recession as a public company or a private company, you know. No. Clearly, that has an implication for how people think about spend. It would be very easy for us to conclude that an open source Terraform product, extremely robust, capable product would be reluctant in this environment to shift spending to it. On the other side of the coin, we could also make the argument, which I think is a more subtle one, that the spending savings from adopting the commercialized version of it is so large and that bucket is a much more significant bucket that in fact could accelerate spending. Can you address how the macro, you think, is going to impact the adoption rates? Yeah. Particularly for those key products? I think so much of it is driven by that phase one, phase two as, like, you know, a construct. It's very clear to your point. I'll give an example that you can save a ton of money by adopting the commercial stuff. A good example, when you step back and think about the scale of people's cloud programs, I was talking to one company the other day that actually like, they have a data warehouse in, call it, you know, Amazon East. They wanna make sure that anything that gets deployed that's populated in that data warehouse is co-located in Amazon East. Otherwise, they get a huge networking bill from the clouds for everything that's flowing over there. The ability to do that is predicated on the provisioning process. I wanna create a policy that says, "Don't let anything get provisioned that's populated in the data warehouse that isn't in that region," as an example. The cost savings is, like, dead obvious. You don't even have to talk about it, like, it's so obvious. I think it's more a question of where they are in their maturity than anything else. These are long burn, like, strategic transformation, digital transformation projects that are years in the making. I don't think we know is the short answer. I think what we've seen is there are gives and takes on both of it. I think we've tried to be conservative in our outlook. You know, we'll learn more in the next little bit. I think for now, you know, as we described in the last earnings call, there's certainly elevated scrutiny on all these transactions that, you know, the quarter and the years are playing out kind of how we thought, kind of like the pull and take. I know I'm not giving you an answer to the questions. We just don't know beyond the cautious guidance that we've given. Maybe the little bit of color I'd add is actually early COVID. I think obviously it's, you know, maybe not quite the same as sort of a different scenario, but I think gives us a bit of insight, which, all of a sudden, lots of uncertainty around spend, lots of sort of, you know, reductions in force in some, certainly some industries, hospitality, travel, et cetera. I think one of the interesting signs we saw there was two activities. One, a huge surge in uptake in open source downloads, right? 'Cause I think you see that shift towards, hey, we're gonna do more open source. At the same time, actually, despite all expectations, we did a major deal with a cruise line during early COVID because they're like, "Hey, we laid off half of our staff. Managing the same amount of infrastructure. Guess what? The only way we solve that is through automation now. How do we make our existing team more productive in that environment? Well, the answer was we're gonna go buy Terraform Enterprise, right? I think that to us is, you know, maybe an interesting data point as you look at it, which is I think certainly it'll bring, you know, more top of funnel adoption on the open source 'cause people will say, "Great, this thing's free. I can go run with it." I think that creates future opportunity for us. I think it does put a lot of pressure on like how do I actually make my existing staff or even a smaller staff, you know, productive 'cause my existing infrastructure doesn't go away, right? I have to kinda do more with less. Super. Thanks. All right. Thanks, Alex. Up here with Kash. Then we'll go to John, and then Fatima, and then Brad, but we'll try to get us all done. There you go. Thank you so much. Great to be back in person after 2019 in Seattle. The command line interface during your keynote was very consistent. Good to see the highly technical nature of it. Infrastructure software, generally, when you work on the standard, there's a pull effect that happens. One of the things that caught my attention in your first couple of slides, Dave, was cloud-native apps expected to be up 4X by calendar 2025. I just wonder if the cloud trajectory that we've been through as an industry has been more mostly on the infrastructure side, but then when it comes to new platforms, cloud-native platforms, we're just maybe in a different growth path and growth curve. If you agree with that, does that position you differently? Because maybe you have a better opportunity to be embedded in as the standard like VMware was embedded as the standard with server infrastructure. Red Hat was embedded as the standard. Yeah ...with their ecosystem. I think so. This is a fascinating concept, you know, in terms of how does this stuff go to market. Does it go to market more like infrastructure, which is bundled with something, or does it go more like app infrastructure, which is almost project specific? I think we've learned by and large these. You know, like the way you sold VMware, it sold really well through a distribution channel because someone would call up, "I wanna buy a server," and then they'd say, "Well, do you wanna virtualize that?" And they'd attach vSphere and maybe the management stuff to it, and off it would go. So you had the opportunity for bundling. I think in the cloud world, it's actually much more app-oriented infrastructure, so it doesn't. It's a decision that's made at the foundational level, and then all apps drop on top of it as opposed to an application by application decision or an infrastructure environment by environment decision. I think we'll continue to be a direct business, much more tied to like as the Forbes Global 2000 adopts cloud, they standardize on how they do this as opposed to distribution channels. I think what we're seeing Sorry, distribution channels associated with an app. I think what we're seeing more broadly is like just an uptick in digital applications being built. Those are all going on cloud. Like, that's the overwhelming pull. I don't think there's a specific distribution opportunity unless you think there is. No, I think there's, maybe I'd answer the question, actually share a slightly different anecdote, which is, you know, like I said, I was in Germany two weeks ago, spent some time with a major SI partner there, and I think one of the things they shared is, "Hey, the first phase of adoption for a lot of these customers was, 'Come in and help us do a lift and shift. Take what we have on-prem, just don't rewrite anything, don't rearchitect anything, just lift us up to Azure or lift us up to Amazon.'" And I think what they saw is, great, we've been doing that program for the last 3, 4 years with these customers. They're getting to cloud and realizing, "I'm spending more. My process is the same. What business benefit did I realize? I have the same crappy process running the same app, but now I pay Amazon 20% more to do it." Their ask is now they're saying, "Hey, we are actually seeing the decline in demand to just do a lift and shift strategy," because like the outcome was just cloud. Okay, well, that didn't help my business. To now they're actually saying, "I want a cloud-native strategy." That's a totally different motion 'cause it's not just, "Hey, lift this VM here and run that VM there." That was sort of what drove the first phase of, I think, cloud spend for a lot of these enterprises. They get there, and they're like, "Okay, but my app team still takes six months to deliver, so what was the point?" I think in that second phase now, I think that's an opportunity to your point where it's like now they look and say, "Okay, if I'm helping this customer really have a cloud-native practice, okay, what I'm putting in is Terraform as a provisioning standard. I'm putting Vault in as a secret standard. I'm putting in Consul as a networking standard." That's very different than I'm just lifting the VM and putting it there. You know, it's like, okay. Yeah, there's some opportunity for us to be part of that migration, but that's very different than being baked into that standard from a cloud-native design. I think we are seeing a shift in the market as people are just realizing what's the business value of just doing a lift and shift to cloud. Okay. That's a great subtle but very important point. Yeah. Yeah. We're gonna go to Jonathan up here. Then we're gonna try to do one question from online, Ron, and then. Oh. No, right now. Go with John. Hey, guys. Good to see you. So listen, you guys, this is all around the theme of efficiency and go to market. You got relatively big on a limited amount of capital prior to this recent sales and marketing push. I guess I'd love for you to opine on the role of salespeople in this model where you are selling to customers who are largely already using your products. Could you have gotten any of your $10 million customers without the heavy sales push? What role will sales play as HCP grows to go after the long tail? Thank you. Yeah, I'm happy to answer that one, and Brandon can comment more on it when he comes up. The short answer is no, we couldn't have gotten any of those customers, I don't believe, over $10 million without sales. I think we have to respect how people buy infrastructure, despite how we might wanna sell it. These are deeply considered decisions. They know how significant they are and how hard they are to undo, and they want somebody across the table from them, is the short version. The anecdote I always share was just to give you some insight into how the decision process goes, was actually the first million-dollar customer we did years ago, shortly after I joined. Basically, the person said, "Hey, we love your tech. Everybody uses it everywhere. It's on all the clouds. We run it on all the clouds, but we were never gonna do a million-dollar deal with you until you showed up." It wasn't about you specifically. It was the fact that I see a professional salesperson across the table from me. I see a SE across the table from me. I see a professional support organization. Because it was clear to us that HashiCorp as an organization didn't know how to partner with an organization like theirs. I think that's actually how it works, is like this is about fundamental trust. Like, these are massive decisions people are making. I just think that's the way it sells. We have to respect that process. As we go HCP, as our brand evolves, 100%, I think that evolves. That brand of trust gets projected, and people can self-serve to a greater degree. I don't think there's any $10 million contract that gets done without us. Can I ask- Yeah. Just a follow-up question in regards to MongoDB? Yeah. You kind of seem to be doing both, where you're going after the ServiceNow model of the Global 4000. Mongo also has to figure out how to go touch 30,000 Atlas customers, many of whom they've probably never spoken with. Yeah. You kinda are gonna do both. Yes. Actually, I think that MongoDB is a good example. I almost feel like they built a separate business underneath their core business. You can see that on our cloud properties already. You can see, you know, their, the volume of people signing up for the free tier of our cloud properties is very high. You know, and over time, those do convert over the course of time. You gotta keep in mind how new that is for us. Like, we only introduced our Terraform Cloud, the actual business tier, what, like a year and a half ago, something like that? Yeah, 2020. 2020, so 2 years ago. It's still early in there. Yes. Yeah. We're doing both. I think maybe the nuance I would add is I think it's exactly the right point. I think it's almost worth thinking about it again through our segment view, which is like there's a global and enterprise segment for us that's a named 4,000 account model. You know. Taken to the extreme, that'll be 80%+ of our business forever. Then there's the commercial business, and that might be 10,000, 20,000, 30,000 customers at scale, but it's never gonna be more than 20% of the business anyway, right? I think that you're exactly right. It's like both of those things are being executed. The commercial enterprise has been our, you know, our core motions since 2017. That's sort of obviously much further ahead. Cloud and commercial is much newer for us, since effectively 2.5 years. I think going back to Dave's point of why do we focus on it's like 80% of the spend in the market is in those top accounts anyway, right? I think it will be both of those, and they are just two separate motions. All right. Fatima, can we get the microphone down here? Fatima and Brad, then probably go to lunch after that. Yeah. And- We're not short-winded, we decided. Yeah. I'll ask- We're working on it. I'll ask my questions quick. I don't wanna be the person standing in between everybody and lunch. Fatima Boolani from Citi. Thank you for taking my questions. Just with respect to Terraform, we haven't talked about it much, but as one of your defining flagship products and sort of the advancements you're making it to basically have it be used for the masses, how should we think about the adoption S-curve for Terraform here with that no-code, low-code provisioning advancement? And how should that impact monetization? Then as a follow-up, we're seeing, you know, massive onslaught from you guys on taking all of your eight products and sticking them under the HCP. So from an engineering resource standpoint, how are you sort of adjudicating advancements and product development between the self-managed versions and the cloud versions? Yeah. Okay, both very good questions. Maybe I'll start with the second and come back to the first. In terms of kinda the resource allocation, I think it's very clear to us that the future of the business is cloud, and so we're sort of, you know, appropriately over-indexed, I would say, right? Yes, cloud may be 10% of revenue, but it's probably 40, 50% of R&D focus. I think one of the things we've done pretty intentionally is to try and keep the cloud architecture as closely managed, as closely sort of aligned to the self-managed, so that for the most part, the net new capabilities we're delivering on cloud, we can bring those back to our self-managed customers as well. You'll see a lot of that tomorrow. For example, everything we'll announce around Terraform Cloud, we'll say, "Hey, it's coming first to Terraform Cloud, coming shortly to Terraform Enterprise." We're not trying to split the development effort and have them be kinda two parallel efforts so much as they're fairly aligned. It's just things are allowed to land in cloud first, and then we'll sort of back port it, if you will, or graduate it to self-managed. But very heavily invested in cloud, probably 40%-50%. Back to your sort of first question in terms of sort of how is that S-curve for Terraform changing. Yeah, I mean, I think that's a really interesting question. I think where we started was, it was sort of, I'll call it the cloud ultra power users, right? If you look at 2017, we started with, "Hey, you kinda gotta know what you're doing, and you gotta be this tall to ride." I think over time, we've been keep ratcheting that lower, right? The big shift for us was maybe 2018. We introduced the notion of a private registry, where we said, "Hey, actually, there's gonna be a core group of your business that is power expert. They're gonna write the core modules for you of how to do networking, database, web app, whatever. And then guess what? The rest of your dev team, eh, they don't really need to know how it works. They're just gonna come in and be customers of this catalog." The bar moved from here to here. Now, the problem is our customer said, "That was great for the first 20 app teams that knew what they were doing. The next 100 app teams, you know, this is still too high for them." They don't know what infrastructure as code is. They probably barely know what a CI/CD pipeline is. You know, how do we move the bar here? That's what's driven a lot of that investment in things like the no-code to say, "Okay, great. Let's, you know, let's dumb it down even further. Like, you don't even need to learn Terraform. You don't even need to know what CI/CD is. You're gonna point and click some buttons. We're gonna move the bar here." I think you're gonna continue to see us sort of try and invest in pushing that bar lower. That's not just a Terraform thing. I think that same pattern is playing out across all of our products where we said, "You know what? Actually, the Consul work that we previewed today around HTTP Consul, around that management plane. It's like, "Hey, the bar was up here in terms of multi-cluster management. Guess what? All these guys have that problem. How do I lower that bar? Okay, I'm gonna make a point and click through a central management interface rather than sort of fancy CI/CD type automation around it." Vault, same thing. We didn't talk about it on stage today, but you know, you saw it. There was one second in the demo. It's easy to miss, but there's sort of a quick start guide that says, "Okay, you don't configure necessarily Vault as infrastructure as code. That's the power user way to do it." We have sort of a WYSIWYG that lets you point and click and configure a Vault cluster in a UI-driven way. Kind of across all the products, it's about lowering that bar, but then supporting that breadth of, hey, are you a power user? Great. Are you a sort of middle user? Okay. Are you a maybe early on your journey user? And we'll have sort of different pathways for you. Just to your comment on the monetization, to be clear, it's paradoxically that lowering the bar, enabling like blueprints to be available to people is actually an enterprise-oriented need. Yeah. It's like it's those lower capability developers inside of the big companies rather than. I expect it to drive further adoption side of big companies as opposed to, you know, like low-code dev enabling it for everybody. Brad, we're gonna sneak you in here. All right, great. Thanks, guys, so much. Great event. Thanks for hosting this. Brad Sills from BofA Securities. My question is just on the expansion activity that you've seen. I think this is 5 quarters in a row that you've seen NRR expand, albeit gradually, but a nice expansion. What's driving that incremental upsell? Are you just getting you know, to the point where you figured out that right feature set to go from free to paid? Is it just more categories going from, you know, Terraform to Vault to Consul, all of the above? Just any color on what's been driving that incremental landing expansion journey. I'm gonna answer that. And, Navam, you can answer in more detail in your section. I first of all, that number will move around over the course of time, obviously. I think what you shared in the last earnings call, I agree with Navam, is generally speaking, after year one, you get expansion of existing product. In year two, you get next product along. I think really it's more reflective of that. It's just our customer accounts are getting bigger. As a multi-product company, there's an expansion at an opportunity in every account, and we're just getting probably a bit better at cohorting and prosecuting it truthfully. We do encourage our sales teams. We think of it as like sort of card flipping. We look at an account, which of our products are they using? Okay, how do we get next product along? You know, we've grown a lot over the last couple of years in terms of people, and operationally, we're still getting that motion figured, but that's largely what's driving it. Okay. Nothing unusual. I think we're gonna stop there. Thank you. Thanks, Brad. Cool. Thanks so much. Thank you. We'll be back. I think what's the logistics? Yeah. For those online, we're gonna take about a 25-minute break for lunch, and then we'll be back. Thank you. Cool. Thanks. Thanks a bunch. I think we're gonna have people come and take your. All right. Great. Thanks for those online joining us again. We've got our go-to-market team, Marc and Brandon, over the next 30 minutes. With no further ado, Marc, our CMO. Thanks, Alex. Hello, everybody. That is me. I'm in disguise today wearing a shirt, which makes me invisible to our practitioner audience that we're working with this week. It's a busy time for us. I know you're all on a busy schedule, but if you do get the chance, you know, hang out with our audience, ask them some questions. It's pretty fascinating what they talk about. For those who I met at the roadshow over Zoom, it'll be a comfort for you to know that that wasn't a network glitch. I do actually talk this fast, and I am largely incomprehensible. Fortunately, slides are my rate limiter, and we'll work through that issue. My background, I was engineer originally, for about 7 years, leading the engineering teams at the BBC in the U.K. I moved vendor side, worked at Microsoft at the subsidiary level in the U.K. for a couple of years, 5 years, and then to the corporate, doing various different solutions architecture, marketing, comms work. The past decade, I've been sort of exclusively involved in dev tools, open source, startups. For this session, Brandon and I are gonna basically look at the themes for the day, which is, hey, you know, what are we doing to resolve our GTM to a single narrative, a single buying center, and ultimately one product suite or one product platform, depending the way you look at it. We're gonna click into who the audience, what is that narrative? How does this stuff really work inside our field? You know, one of the things that's specific to us, it's not unique to us, is that we have two audiences we talk to. Someone asked a question earlier on about you've got to do both, which is true. We market to both ends of the spectrum. We have a bottoms-up motion, which talks to our practitioners. HashiConf, despite our presence here, is really a practitioner audience. We have a very strong practitioner brand. You'll see that in the room. You'll feel that when people are talking about various different use cases and the jobs to be done. It's detailed, it's technical. We have many things to talk about with them. We also have a more traditional enterprise marketing operation as well, which supports our fields. We have very traditional buyers. Those buyers may be changing over time, but in the end, as Dave says, they make very considered decisions. We have to have a pretty big investment in enterprise marketing. If you look at you know, the legs of the marketing stool, it's developer relations on the one hand, product marketing, field marketing, demand generation. All the sort of classic stuff you would know and love. What do we do with our practitioners? What are these folk really looking for? They're just looking for education. To standardize the market, to really make this market function, we have to teach them new skills. This cloud operating model stuff is real, and it's really hard, and they don't have the skills from their prior job to do these things. These are all pretty new. You know, we get used to it really quick, but actually the vast majority of the market don't understand how to do this yet. Giving them the right environment, giving them the right education, giving them the right experience is paramount to making sure they actually adopt our tools. They like those tools, they prefer those tools, and they got choices. We need to make sure they prefer those things. At the enterprise level, what we try to do is we're a very rational organization, so the word I use is truthiness. I have this word. Years ago, Google had a brand, and it's like, "How do you describe your brand?" They said, "Bespectacled." I always thought that really summarized the sort of Google approach to technology. I'd say truthiness is mine, which is we don't try to move people into a direction that they can't understand yet. We understand their essential aspire to state. They're just trying to get the next piece of their long-term cloud program strategy executed. How can we help them? How can we help them do that? You'll see from all our marketing information, from the way in which we approach the market, we're just trying to provide a prescriptive blueprint to how we can make you achieve these things better. And that's where, you know, the cloud operating model phrase comes from. It's aspirational, but it's aspirational in a very practical sense. The practitioners, of course, ultimately work for these platform teams. We'll talk about platform teams in a little bit. They also want different things because they're different audiences. We standardize the market by trying to standardize the workflow for practitioners. It's important to recognize that practitioners enterprises actually want slightly different things, and we'll click into that in terms of how we see these purchasing patterns. The practitioners are optimized for speed and effect. As an engineer, the only thing you're actually paid to do is get your job done as quick as possible, so you will choose the tools that you'll just get that done. At the enterprises themselves, then obviously all your GRC type concerns kick in. They're looking to minimize risk, they're looking to minimize and maximize efficiency. If you really look at it, what we provide to practitioners is like a golden workflow or actually a piece of that workflow. Those CI/CD elements of these workflows change all the time as generation after generation. The puzzle within that, the actual job to be done, whether that's provisioning instead of configuration, because that's what the cloud's all about, or different types of security, those are the things we're standardizing as this workflow evolves. However, for the enterprises, they want golden record, they want golden image, all of those things. You know, you will deploy infrastructure, but it will be against these standards. We want to know and automate how to control that and what the audit for those things are. Slightly different value propositions. Here's how it comes together. One of the questions is, well, you know, we don't just do OSS to enterprise conversion, as Dave says. What really happens is people move through these gateways. What we see, and I'm from the big data world, so you know, volume, variety, velocity, and veracity, V words, I guess, that I like. What you really see is these moments of truth for practitioners and for enterprises who've started to see adoption of our tools. Either they see percentages of the estate under management, and so they need a relationship with us because they really start to become concerned about the risk profile and the use of those tools. There's a variety issue. Sometimes that's variety of workload. We do multi-cloud, we have, you know, we do private data center. More often than not, the variety here really means multiple teams. As soon as you see a couple of different teams start to use our stuff, they start to think standardization. They start to think about the broader enterprise capability of the tools. We see velocity. Most, you know, if you talk to our CSP partners, they're very, very aware of quite how effective our tools are at helping people onboard onto their products. We, you know, a lot of discussion is really how can we accelerate our cloud program? We know it's, you know, we've got 10 years to do it, but how can we move faster? Ultimately, the veracity. All the enterprise ilities. These folks also need high availability. They need DR, they need the system record capabilities you would expect, especially as they start to spend an awful lot of money with us. That's really what happens. These moments of truth trip over, and that's where our initial land deal turns up. This slide is once you've got a land with the customer, this is a sort of canvas. It's this is the blueprint for the cloud operating model. It's much oversimplified because there's a ton of things to talk about on here. Essentially, we land this blueprint with our pre-sales guys, with our post-sales guys, with the customer, so they can self-identify where they are on this spectrum of use of our products. We can help work them through whatever layer they're at, whether they're at multiple layers, we can work them to the next logical use cases, as Brandon will talk about. Land deal, they're going to basically say, "Well, hey, I'm in a certain position." I've made it simple by just saying they're on one line across here. As Armon says, we invest ahead of that. We understand what the next set of workflows are, and that's where our product investments are a little bit further along the spectrum. As an example, if you land with secrets management on Vault, then, you know, that's a pretty straightforward use case. I'm going to store some passwords. I might do that statically. Actually, the expansion opportunity for inside that account is huge. There's really about eight use cases, just as an example, for Vault. We'll move to dynamic secrets. We'll think about PKI infrastructure for certificate rotation. We'll think about database rotation. Turns out everyone's got databases. There's, you know, everyone's talking about in a Kubernetes strategy. Well, it turns out you're going to have to secure those secrets, too. There's just a ton of expansion opportunity, even off that one simple, "Hey, let's put a Vault cluster in. Let's think about secrets management. For an extension opportunity across this, pretty straightforward. You heard about Zero Trust security this morning. People looking for I talked to a bunch of partners and customers this week, and they all want practical guidance. What does Zero Trust mean? Armon is right, that it's just buzzwords du jour for security. But they really are looking for how do I, you know, solve my machine, my app, my application, my user networking challenges in the cloud. This gives us an opportunity to go talk to them. More specifically, you've got Vault. Okay, now let's go figure out your network security problem. Now let's go figure out your user access problem. This, you know, is. We market this as our story, but it's actually the blueprint from which we go sell as well. It's very, very acceptable to all customers. You're not gonna see anyone pushing back on this stuff because we're not inventing it. This is physically what's happening to them. We can see that happening. They tell us this is what they're doing. They won't call it an operating model. They call it some other thing, but that's the thing. We have this coalescing into a single buying center. We talk about platform teams. Again, that's the simple way of thinking about it. Much the same way as we say practitioners, but we really mean a bunch of different jobs. I was talking to a customer this week, and what you're seeing is the coalescing of responsibilities into single units. They're not always called the platform team. Some literally are. This chap was a head of IAM, so head of Identity Access Management, for a large financial customer. I was talking to everyone the other day about this, and what he's done is he's taken his unit. He calls his unit cyber adjacent, which I liked, meaning he works in the CISO policies, but he's taken the design implementation, the vendor relationships, all into one piece of control where he's now the head of Identity Access Management, and they're building the shared service, the platform for the rest of that business to consume. That's where those folks are. It's super interesting. In our survey this year, I think we did the Forrester this year, so pretty good bit of veracity on that survey. 80% of enterprises in that survey, more than 80% actually, round that number, said that they have some sort of center of excellence inside their organization, so some kind of center of platform team thinking, whatever it's called. Around about 45%, so varied between 44 and 46, depending on the actual layer, have these cloud concerns, whether it's infrastructure, security or whatnot. Anecdotally, that's what we see out there too. We can sort of see this growth over time. We know these platform teams have always been out there. We now know cloud is the number one priority on their agenda. It's happening and they are building out these teams because what we're trying to do is get to a position where from a rep's perspective, they can walk in, "Hey, I wanna sell to the platform team, and I wanna sell cloud infrastructure automation to that platform team. Show me where they are, and we can help them with our blueprint to get to the next spot, to the next spot, to the next spot." As Armon said, we're investing heavily in the cloud. One of the good things about this, the cloud is that right now, one of the complicated parts of our portfolio is I have multiple relationships. This, everyone's downloading our tools. I don't know who they are. I can't connect them together. I do my best to figure that out. Obviously, if we get to a position where those folk all have cloud accounts, I have a single relationship, and then I can guide them without, you know, as automatic as I best can across our various different products. When we have this sort of managed view of the world, then we have, you know, we open the door to a proper PLG. We can sort of see the seeds of this with things like Terraform, where we have a quite a large user base. Got a lot to do. At the one end, you've got to think about product analytics and telemetry. On the other hand, you've got things like, you know, unified identity and building experiences for customers. You can sort of see where we are with the HashiCorp managed relationship. Laterally, that's what happens. We can move into a bit more of a true PLG position rather than just rather than talking about that. The other great thing about having things on one platform is if we're cloud first, which we are with Boundary this morning, is we can actually do some more advanced solutions straightaway. It's pretty interesting that as of this morning, you know, we can start to work with Zero Trust security on the cloud directly. That's different for us. It's been a, you know, it's taken a minute to get us to this position, but that's great news. You want, you can consume this stuff in whichever way you want, but it sort of gets us towards this one platform view of the world. I'll finish with, I mentioned pricing packaging, but I know there's a lot of discussion about P&P, so I don't wanna dodge it. P&P kinda looks complicated in the aggregate because we have eight different products, but I wanna talk about this a little bit. It's actually a pretty straightforward pattern we apply. If you're familiar with the old Microsoft view of monetizing the socket, that's sort of what we have, we think about things too. It's what we wanna do is capture resources under management. The definition of a resource differs depending on the product you use and the layer you're at. If you're using Terraform, we literally mean resources. If you're using Vault, we mean clients that you've attached to that database server. If you think in Consul, it's serviced instances and so on and so forth. Our general view of this is every time you deploy one of those resources, you should trip the meter for us, and that's how the P&P is established. Clearly, that just scales up with direct line of sight from a value perspective with the customer. We factor those things by the package. To monetize a socket, if there's more value in the particular resource because we've done, you know, more enterprise capabilities, you know, we can factor that up a little bit. Actually from a customer perspective and an individual deal perspective, it's really, it's pretty straightforward. It's just we've got eight products and eight different units of value, and it takes a little time to think about in the aggregate. That's lined up for how we go land, expand, extend. With that, I'll hand over to Brandon, who's gonna take us through the rest of it and correct me on how hard sales really is. Thank you, Mark. I love it. Mark, you gave me two minutes back, and so I always appreciate that. I gotta be honest, I've worked with Mark now for about two years, and I've rarely seen him in a collared shirt. Either you're interviewing or you're gonna renew your vows after the conference. Right? I'm not sure which it is, but nice to meet everyone. I met some of you last year in the process. By way of introduction, I've now been here for 11 quarters. Shortly after I got here, I told the team we have an epic opportunity to build an iconic company. I foundationally believe that now almost 3 years in, that the opportunity in front of us is significant. My benchmark for that is, prior to HashiCorp, I spent 16 years at VMware, so I joined at $70 million and left at $10 billion, bunch of different Americas roles and worldwide operating roles. When I just kinda mark-to-market, you know, context is always important when you're building. When I mark to market where VMware was at $400 million and where we are, you know, single product vSphere, narrow set of use cases, test and dev, file and print, workloads, narrower use cases, server consolidation, resale channel that took a little while to kick in with the server manufacturers because of vSphere and how it could ultimately consolidate hardware, and then certainly, deal size. I contrast that to where we are now at, you know, $400 million plus or minus. We'll go through today where you can see that, but very, very bullish about what we can build here in the fullness of time. Three things I wanna make sure I leave you with in these 15 minutes, the Q&A, and then with some customer feedback. One, we are building a very formulaic go-to-market to go capture the G2K, ultimately the G4K, and also the digital natives around the world. We are very fortunate. Our community open source is in every single country in the world, so we can go work with those digital native companies that have built a lot of their infrastructure stack on our open source and convert those to enterprise. Whether it's Grab in Singapore, Booking.com in Amsterdam, Booking.com, Stripe, you know, up north, you name it, we can do some really special things with these companies around the world. Second thing is, given the breadth of our portfolio, 8 products, right? Multiple use cases for each of those 8 products. We have a multidimensional growth opportunity in front of us, so foundationally, it can sustain long-term net dollar expansion, right? When you think about our NDE numbers, they'll move around. I defer to Navam and Dave. Fundamentally, we have a lot to sell. Once we earn that trust and actually land and get that hunting license inside the entity, we have a lot to cross-sell and upsell over time. Then the third one, you know, we are laser focused on this, Mark and I, on how do we get some operating leverage as we continue to build the business, right? We will invest for the opportunity in front of us. There are many things that are accretive to our magic number. There's some other things we wanna work on and become more efficient. But fundamentally, we will continue to grow the business, investing in globals, building operating hubs around the world to lower cost and do some workforce management to get to the point where we need to be as we scale the business. All right, let's talk about sales strategy. Pretty straightforward here, optimizing sales motion. When I think about that, it's all about simplification. We do have a broad portfolio. It is technical. What really matters is what we sell and then who we sell to. What we sell, very straightforward. We wanna sell a land use case, a foundational use case for Terraform, which is usually infrastructure as code around provisioning, or governance, or something around Vault with secrets management. Obviously, Vault is a massive identity platform that has multiple use cases. I was with a customer last night, a big one, and then we went through all the use cases they have for Vault, and they have 10 right now that they're deploying across their firm. Again, we wanna land Terraform, we wanna land Vault. Basic use case. Figure out how to get that customer seeing the value that we've talked about in the pre-sales discovery process. We wanna make sure we focus and we measure this time to onboarding, time to enablement, time to value with a very tight QBR process with our customer success team. Ultimately, we wanna sell additional use cases for that initial product, right, and continue to build that trust. Once we do that, then we move into the extend phase, I'll take you through this in a couple minutes, where we look to then cross-sell additional products. I expect our core teams to be able to sell Terraform and Vault, a core team being a rep and an SE. On top of that, with additional products like Consul, which is relatively technical, and Boundary coming down the pipe based on GA today, we have a small specialty team that backstops our core sellers to help them as we look to move beyond two base products. Who do we sell to? It is that cloud platform office, the COE. You'll hear the customers later today describe what that means to them. That's that common buying center where we get that HCP chassis in over time, and we can do some pretty good things given the breadth of our portfolio. Very simple land, very focused on we go talk to our customers. Large market opportunity. Again, I'll say this a few times, in the fullness of time, because it does take time to adopt our tech, I do believe we can have multi-million-dollar ARR customers in the Fortune 500. I'll show you a slide in a couple minutes which reinforce that. I do believe over time, we can absolutely capture a lot of dollars across the Fortune 2000 and long tail into the Fortune 4000. Then invest and you build capacity. As I said earlier, we are investing heavily in the globals business around the world. We had some great success, and I'll show you again in this next slide some work we've done with top customers here in the US. We'll do the same thing in Europe, very important to me. We have to build out the U.S. Fed business, obviously a big buying center, and then we'll do some globals investment in Asia. Equally, we are investing in inside hubs around the world where we can lower our cost point. It's a great way to onboard talent and prepare that capacity to push out into the enterprise business as we graduate that capacity up into our enterprise and globals business. We continue to invest for the future. Pyramid. Everyone's got a pyramid. This is ours. Pretty straightforward. The enterprise and globals business, those are named accounts. The rest is non-named. When you see accounts, except for the globals whom are all customers today, those are a combination of customers and prospects. You do see 7,000 above the line, if you will, in the namespace. We do a lot of propensity modeling. We're focusing in a prioritized way on the Global 4000, 2,000 first, the next 2,000 after that. That selling motion, and we are a direct-led selling motion with partner assist. I believe deeply in partner, and I'll show you where partner can help us from a off-balance sheet leverage point, but we are very much of a direct-led selling motion given the technology intricacies of our solutions. Land Terraform and Vault, move the customer through the cloud operating model that Dave shared earlier. Very prescriptive motion to help that customer understand where they are and what is the value that they will see, and then we deliver upon that, and we target the platform team. In corporate, below the line, higher velocity business. We actually have some CNC business, create and close in the same quarter. I look forward to more CNC business 'cause it evens out the quarter on linearity. This is where we sell cloud exclusively. Over time, we'll move that. Either the line will come up a little bit, or we'll start to offer cloud in the enterprise segment. Today we sell cloud only in the corporate space, and again, this plugs into the PLG business that we are building across HashiCorp. All right. Sales process, LAER, right? Adopt, land, expand, extend, and renew. Obviously, we have an incredible OSS base and community around the world, every single country. We follow the downloads, if you will, with each of our sales pods or sales teams. Again, land that first use case, base foundational use case, make sure we prove value. Again, we measure onboarding, we measure time to value. Once we've earned that right, because this is a trust game, we then expand to additional use cases. That is one of the magical things about HashiCorp is there are a lot of use cases per product. Once we've done that's the expand phase. Then we'll move into selling next logical product with the multiple use cases we have, and we focus on a tight loop on the renewals business. All right, partners, as I said, I do believe deeply in ecosystem. I think in infrastructure, based on my prior experience, that the ecosystem can help you standardize markets and also provide a lot of off-balance sheet leverage. When I think about some of the gates to expanding with our customers, it comes down to having more services-capable capacity that customers can use and leverage to drive deployments across their businesses, right? That's where partners play a very important role. Just looking at the system integrators and the GSIs in the lower left for you, it does surprise me at our current pace, the level of interest across the entire ecosystem in the HashiCorp stack and how they can build practices around our businesses. The Accenture folks, the GSIs is a good proxy. They have a very focused hybrid cloud and automation practice that, again, continues to think HashiCorp because the OSS is everywhere, they will build a practice around our technology, which will help us with large customers. You look at someone like Effectual, which is a born cloud partner, very closely aligned to AWS. They are building a HashiCorp practice to help us scale out, and they do see tremendous opportunity to scale their business. The strategics and technology partners, what makes Terraform great is, all the integrations that we have across the ecosystem, very, very important. Then we've got some, key narrow partnerships with the ServiceNows of the world, the Intels of the world, the Ciscos, that can help us on customer acquisition. Again, very, very important as signposts to the industry on the ecosystem coalescing around HashiCorp. Then the CSPs, lots of relationship levers there. Certainly private offers through the marketplace are important. Mark and I are pretty fired up. We had a good call with Microsoft last week on how we can try to do some demand gen because they have great visibility into the infrastructure that their customers are using and how we can do some upsell, cross-sell work. Equally, they know because what they ultimately care about is workload migration to spin EC2 faster, as an example at AWS. They know that we can speed that migration, right? They're actually a number of these partners. They're funding resident solution architects, which are $500,000 investments in our customers to help speed the migration of those workloads to the cloud. Tremendous opportunity across the ecosystem. Then where do partners fit within the LAER motion? Again, we can get some off-balance sheet leverage. Certainly, I do expect partners can help us, particularly internationally from an acquisition perspective up front, around the land motion. Clearly, all those integrations really reinforce the adopt motion and the use of our OSS. But where we really can get some leverage is helping, building practices and capability around driving expansion. So we've got a lot of IP that we package up, we give to partners, they put their secret sauce on top. But when I think about the distribution of our NRR across all of our customers, for those that might be lagging, we will actually invest with our partners into those accounts to do Vault acceleration programs, Consul acceleration programs, Terraform acceleration programs. What that really leads to is helping the customer assess where they are and how do we more broadly deploy across the enterprise. Again, a nice way for us to drive and get some off-balance sheet leverage from our partners. All right, this is the money slide. We're talking about durable growth. These are our top 10 customers. Clearly, this is one of the good slides 'cause everyone's taking a picture, right? This is where Mark gave me a quote increase on $10 million deals earlier today. If only it were that simple, right? Let me just orient you. Customer industry, you know, you see financial services, just understand that's money center banks, global banks, it's insurance, it's credit card. Broadly defined, right? Not narrow. Top 10 customers. This is the starting ARR ranging it, right? Then it's the exit ARR for Q2, right? Which would be in July. Then, you can see the length of customer relationships, so it does just take time, right? Frustrating as it might be, it takes time to build those relationships, earn that trust, ultimately drive adoption and expansion across these large complex organizations. It does just take time. Again, tremendous opportunity. They're all Terraform and Vault users, a little bit of Consul, and here comes Boundary in the future. We're pretty darn excited. If you take out that big land deal we did at a consulting firm, which again, we shouldn't do $4 million land deals, you, the multiple between the two, between the first column and the second column, ranges from anywhere from 5x to 50x. Again, we have an opportunity. If we do the right job with that first land foundational use case, we prove time to value, right? We'll see that use case expand across the enterprise. We'll see additional use cases for that same product expand across the enterprise, and then we can upsell and cross-sell additional products. Then again, we haven't sold out these accounts, right? This takes the top two $10 million customers we have there that we've published or announced and just talks about we still have expand opportunity and extend opportunity. This is the retail customer. There's still a bunch of opportunity with Terraform. Now, this isn't saying because we're less than 5% deployed across their estate, that we're gonna get 20x off that $10 million, just so we're crystal clear. The point being is there's more opportunity and there's some Consul opportunity, as well. For the financial services customer, again, actually had a dinner with a bunch of customers, this is one of them, last night. A ton of use cases across Vault, across this entity, but there's a bunch of opportunity on Terraform because they have a very large Terraform estate. With that, I was almost as fast as Mark, right? Trying to get better. Just in summary for all of us, today, and then we'll bring up some great customers to have an open conversation. We are focused on enabling the cloud operating model, very prescriptive to our sales teams, also to our customers to take them on this long journey. We have an incredible portfolio that we know we can monetize over time. We target the platform team. That is the integration point. You'll hear customers talk a little bit about that right now because we get that HCP chassis, right, the vision, we can push a lot of our innovation through that out and across those teams as they drive standardization across their infrastructure. Today, we look forward to some great packaging that Mark's working on, as well as delivering either self-managed or cloud and obviously over time, more and more cloud so we can scale the business. With that, let me flip and bring some customers up. I can see all three of them. Dustin, Ryan and Jeremy, welcome. Come on up, grab a chair, and I will sit here. I can feel the energy. It's good. It's good. I like it. It's gonna be good. All right? Friendly audience. I'm the only one asking questions, so we'll be okay. Thank you all for coming and making the investment to be here in L.A. Why don't we just start with simple introductions, and you can go first, Dustin. Yep. Dustin O'Brien, I'm a senior leader and director in our cloud program, kind of bridging a gap between our CISO organization and our global CIO. Been there three years. Before that, I was in consultants that were a partner of HashiCorp. I've been with HashiCorp products ever since the beginning, open source days, a decade ago when I first started in our industry. Didn't you use Packer, Vagrant? We did, yeah. Packer and Vagrant. Today's favorite product, Packer. At a pharmaceutical in Indianapolis. Packer. Yeah. Vagrant and Packer was the first things I brought in, and it was just transformative for our little team of developers that were just starting out in the cloud. Yeah. I love it. Elevance, formerly Anthem. Yeah. Sorry, I didn't say that. The Fortune 20 company. Elevance Health. Right. Formerly Anthem. Yep. My apologies. Help support half of U.S. citizens, right? Yeah. In some shape or form. Yeah. Thank you for that. Right. Of course, from over the pond, Jeremy. My name is Jeremy Crawford. I head up cloud product at Deutsche Bank. I guess I've been involved in the cloud platform team for a number of years, also at previous organizations. HashiCorp products, even starting with Vagrant now that I think about it. Oh, okay. It was the first one, so you know, it's always been on the radar. Yeah, when we then embarked on our journey, obviously Terraform was our first port of call. Yeah. Yeah. Great. Well, great to have you and appreciate you making the long flight to come spend some time with us. Welcome. this week. Ryan. Yeah. Great to see you. Great to see you. Ryan McColl, Director of Cloud Technology at the Toronto Stock Exchange. Given the nature of the audience today, I don't think I have to talk too much to explain about TSX, but a little bit about myself. I've been with TMX for five years. Started out as a lead engineer there, and a year and a half ago, I was promoted into a position where I'm actually taking over ownership of the cloud program at TMX. We've been enterprise customers with HashiCorp for four years. So a large part of my journey at TMX was with HashiCorp as a partner, which has been fantastic, and I'm happy to share some information on that and some details on that today. Great. I love it. Let's just try to ground people for the audience. Let's just talk a little bit about what products are deployed today, how they are tied to some of your cloud projects, if you will. Let's just talk about how HashiCorp is really tethered to your cloud programs and the adoption of such. Maybe we can start with you, Ryan. Particularly Terraform at the beginning was one of the key sort of things that got us away from what I used to call the Wild West. Our cloud program was a bit of a Wild West. At the very beginning, whenever you wanna promote cloud, I was in a team that wanted to promote cloud, and the way to do that was to get people to stand up infrastructure to say, "Oh, we're in the cloud now." What happened was, over time, there was just so much. It was just quite messy. There was no really strategic pattern to what we were trying to achieve. Everyone was doing their own thing. It was HashiCorp come in as a partner to help us sort of reshape that and bring that operating model into sort of a COE, like a center of excellence, where we can actually template stuff and have the rest of the business units within the org consume at a really high rate to a point where I think we're at 20,000 successful deploys since 2018, and that's production deploys. And they're successful deploys. If I told you about the non-successful ones, we're probably in the 10,000 or the hundred thousands. They've been a real pillar towards. Like, they have been the pillar towards the success that we've had to get to the maturity level that we're at today, particularly with our secrets management and how we're handling that in the cloud and how we're provisioning. The Vault and Terraform are like the drivers behind everything we do today. Love it. Your journey started with Enterprise- All the way- Not OSS, right? Yeah. Like at a previous company, like I've been working with HashiCorp products for quite a long time. Before that, I was at a company where we used a lot of Vagrant and stuff for machine imaging and things like that. We were actually one of the very early users of the original Vault. That was only static assets. Yeah ... before it has all the fancy features that you have today. Yeah, it's been a great journey and yeah. Onward. I love it. Jeremy, you wanna- Yeah. A little context. I mean, similarly, well, as is well known, we Deutsche Bank signed a multi-year partnership with Google. We have a large-scale program to migrate a lot of workload. When I think summer 2020 that was announced, we needed something that was gonna help us accelerate that. Actually, we also went straight to Terraform Enterprise. Thank you. It has had fundamental features with, you know, things like the Sentinel guardrails that were necessary, the private registry, I think. Without that, I don't think we could have achieved what we achieved in the timeframe. You know, within 6 months, we had a minimum viable cloud platform with a team operating that, supporting it, maintaining it. You know, obviously that, the growth over the following subsequent 18 months, you know, the growth has accelerated. We had, I think we reached 200,000 runs, was our Terraform milestone. Yeah, as we adopt this, there is, you know, a tethering in essence to, you know, the consumption. Yeah. I think, you know, in terms of other products, we also have a bit of Packer. Once we've established that trust with the one product, you know, it makes sense for us to look at what the others can do. You know, these are common problems that, you know, predominantly in cloud, but then, you know, as you realize also potentially solving our hybrid challenges as well. You know, common solutions to those problems. Yeah, I think in terms of the other product set, you know, certainly Vault is one that we'll be looking at, you know, and also the others as well. Boundary. I mean, we have obviously there's a status quo, but it would be foolish not to consider. Well, let's do great with TFE first, right? Yeah. Talk a little bit about your private estate and the on-prem with Terraform and some of the things you're thinking about there. Yeah. I mean, we noticed the demand almost as soon as the cloud kind of launched, and you've got your legacy estate as well, and those different worlds that still have to be maintained. You know, we're not walking away from them. There's various reasons for that. There's already a lot of demand, you know, can we extend this out? We have what we call landing zone platform. That's our concept in-house. There is desire to extend that out such that the landing zone can, you know, be distributed across- Across the full estate. Across the estate. Yeah. Cloud- Yeah. on-prem, future state, maybe GCP, G++. Exactly. You know, and that's obviously your infrastructure as code. That begs the question, okay, well, what about some of the other challenges around secrets, identity. Mm-hmm ... and so on? So, you know. Mm-hmm. Yeah, we're starting the journey, right? Exactly. Starting the journey. Yeah. Which is great. Let's talk a little bit about Elevance. Yep. Elevance Health. I think a couple years ago, we started an initiative around digital transformation and themes internally about redefining our member experience. Digital first became digital first and cloud first. Cloud for us became a landing zone. It was a zone to land our transformative efforts to redefine how we were gonna do software and use data. About three years ago, we built a platform team to take the best of what we had done in some incubator and R&D and some enablement that our developers and our data analytics had showed us what was possible, and they had enabled that for themselves, and then we needed to enable and govern. That came through a cloud platform that is, it's our destination for where we're gonna do our transformation, where we are doing our transformation. It wasn't just about, you know, a cloud service provider. It was about a zone of tools to enable and govern what we wanted to do with software and data. It became very clear, you know, we used Packer early on to help with some of our imaging needs and our governance needs on those machine images. Then Terraform came right in behind it, enterprise around instituting patterns. How will we automate everything? How do we provide better resilience for our business, better scalability? Terraform became that model across the enterprise to do that. Vault actually came about because, you know, we were in acquisition mode and some of our subsidiaries came in and they showed us what they were doing. Together we built, we're building a platform that is not just one CSP, but that model has kind of progressed itself to all three major CSPs. It's a landing zone that is the platform, that is Terraform, that is Vault, that is Packer, that is a number of security tools for vulnerability management. Every application that wants to modernize and run in the cloud operating model has this sort of vending process, so it's very prescribed for us. Yeah ... the enabling tools they get. Every app has environments, has corresponding workspaces in Terraform, has a corresponding namespace in Vault. Yeah. With best practices that, you know, other organizations, other business units have shown us what good can look like, and we just try to create repeatable patterns with those. Cloud growth, more Terraform, more Vault, fundamentally. I know we talked about when you're talking about trying to improve the service experience with your members, the integration of data from multiple clouds, not just one, but you know, ultimately the big three plus Oracle plus IBM, that'll become important to you, and Terraform is underpinning that service registry. Yeah, absolutely. You know, decades ago we were given promises about certain patterns of how we could run software and deploy software and use data in the DevOps world. For us, Terraform has become an area where we treat our infrastructure just as we treat our application code and intertwine them. Mm-hmm. What we need from compute and storage and network, our app dev teams know, so let's give them a model to create that in Terraform in a very prescribed and repeatable and secure way. Together, I mean, we really do believe that we can, in a cloud operating model, use tools like Terraform and Vault and the major CSPs to have the most innovative member experience for our members as a whole health partner and be the most secure partners for their data. Mm-hmm. Terraform and Vault gives us that opportunity to bring both together, both innovation and security, and that's our mission, is to do both for our members. Great. I love that massive scale. Right? The massive scale. All right. Let's talk about cloud program office, COE that we just defined. When you think about cloud program office, I know you're kind of rotating in roles, if you will. Yep. Let's talk a little bit about what that means to you, what the function of that is, how that's the integration point for moving out, you know, the guardrails, not the toll booth, but the guardrails for your dev community. Let's talk a little bit about how you think about that. It didn't always look like what it looks like now. I think over these years, we needed to form a team to build it, right? We brought a cross-functional team with sponsorship from our CISO and our global CIO and our business leaders to bring the best and brightest together to build what cloud was gonna mean for Elevance Health. From that, we are figuring out what operating what we just built looks like, and we do call it a cloud platform team. It is a cross-functional organization that is trying to build a community of excellence, a community of innovators and builders. We're sharing best practices. We're an incredibly large organization and lots and lots of developers and lots of efforts in that innovation and business units and subsidiaries, and we see it as a community of bringing the best together so that we can develop one common model that's going to help us transform, you know, our members' experience, not just a single subsidiary or a single business unit. So it is, you know, we've brought together functions like network and compute and security into what people like to call a COE, we just call it a platform team, that helps institute those patterns but also influences good practices in our app dev and learn as well. We learn from our developers every single day about new ways of doing things. Then ultimately, I mean, we can go, Jeremy, to you, the COE is really there to help both enable the community but also govern the community. Maybe talk a little bit about how you do that. Yeah, absolutely. I mean, we took a decision quite early on based on previous experience, actually. There'd already been a little bit of, we dabbled in Azure a little bit, and that was very much a kind of centralized infrastructure model, which is, you know, fairly sort of serial and slow. We knew we had to abandon that from the get-go. A platform team, in essence, was established, Terraform Enterprise at its core, essentially providing that slice of the cloud, and really giving our internal customers, so our app teams and even platform teams as well. I mean, we were creating a marketplace internally to be able to access those native services that the bank wants to consume, but doing that in a way that was secure, guardrailed, you know. Similarly, cross-functional resources were assembled to, you know, author those policies, create the automation behind these constructs that, you know, constitute the landing zone, and then essentially get out of the way. The app teams themselves can then, through infrastructure as code, consume these native services. They can also contribute to, in a federated way, you know, community modules internally, obviously. The concept of reference implementations just naturally, organically happened. You've got standardization, you know, evolving as we mature. That's great. What it's doing is, as I say, really accelerating that adoption. You know, the workspace count, the runs has exploded in that time. Also the number of services that are being made available from the cloud provider. Previously with Azure, as I said, it might have been you get your compute and storage, that's the first two, right? But what the bank is really interested in is actually getting access to some of those innovative offerings in the data analytics and AI ML space, which is really gonna help drive the business. Mm-hmm. It's, I think, it's really only through this platform design with TFE at the core that we. Doing it in a standardized way. Exactly. A secure way. Yeah. Right. Yeah. Great. Do you wanna talk a little bit about what's going on in Toronto? Really, it'd be echoing a lot of what Dustin and Jeremy just mentioned. For us, like we pretty early on realized that we needed to adopt some sort of COE model. Got to the point where we just wanted to get out of developers' way, but ways were essentially we needed to create this framework to allow them to securely consume cloud resources. Mm-hmm. without having to, you know, you know too much about the cloud itself. We're at a point right now where, you know, we've got teams that are really focused on what they wanna do in development. They're not really as focused in on the infrastructure of the cloud piece. We've created this, like, operating model where we can provide them the playground that they need the playground to consume. To the point where the relationship started to change over the last year or two, where they've started to take more of an interest in also developing some of these modules. We actually allow them to contribute, but then it has to go through a whole approval process to pull their module in. Mm-hmm. to be part of that ecosystem. That's created this larger collaboration between different business units and dev teams coming together with the COE to create that bigger community within our organization. It's been very successful to kinda like help drive the sort of maturity levels that we've got to today. We're at a point where we don't even give anyone access to the console anymore, like the cloud console, so they can't just go in and click and build anything. They're completely locked out. They have a read-only view, and they're forced to go through these pipelines. That's some of the guardrails and things we've put in place to kinda keep that consistency and stop things like drift and stuff like that. We couldn't have done that without a platform like TFE and the security and the identity management that we get out of Vault. Helps you drive innovation in a more governed way. Yeah. The key is letting developers do their job and letting them contribute 'cause they need to feel like they're connected to this. Right. 'Cause you don't wanna create the silos that Yeah. Traditional organizations may have created over the years. We're trying to break all that down in a large organization like TSX that's, you know, highly regulated and predominantly on-prem for some of their crown jewels, like their trading assets and things like that, which is starting to shift. We're in a good spot. Yeah. We couldn't have done it without you guys. You wanna make it easy for the devs. It's a tough recruiting world, right? You don't wanna lose a bunch of devs who don't like the tools they're working with. Yeah. Yeah. You wanna make it easy for them to provision quickly, so they can do their work, right? 100%. Yeah. Let's talk about trust. It's clearly very important to us, the community, very important to us, and as we think about long-term relationships. We're relatively new to working closely with the Forbes Global 2000 at elevated levels. Let's just talk about your experiences with HashiCorp, how it's evolved over time and perhaps some of your expectations of us as we continue to be a, and aspire to be a tier one provider of services to you, particularly when we take accountability for some of your most important applications in the IP inside your firm. Why don't we start here? Yeah. I think, again, critical early days, we recognized, taking example in Terraform was, all our developers, all of our great minds at Elevance Health were telling us this is the product we needed. I think we needed to build that trust, and see it really come to fruition of the business value of that innovation, what that promise was. I think over the last three years, you know, we've had really key partners in instituting our digital transformation on the cloud, and HashiCorp is a tier one partner there. We could not have done what we're doing without AWS, without GCP, without Google, without Palo Alto Networks. I mean, those are the types of names, and ServiceNow, that created our cloud destination for our transformation. You know, I think that trust has lent itself to early days, we weren't looking at Vault. Mm-hmm. We were, you know, thinking about being more cloud native in some of our identity and secret management. Once we got into the multi-cloud, we realized that we could use some of the same patterns and achievements that we had with that service catalog concept in Terraform. Mm-hmm. With Vault, and how we were really gonna transform the way we were gonna do secrets and credentials and identity. That trust got established and led to some really key initiatives with Vault. Mm-hmm. I think it's also leading to, you know, being open and seeing HashiCorp as a leader in some of these new emerging markets, like Zero Trust. Mm-hmm. Really interested in new products, and we're, you know, leveraging the success we've had together and the trust we've established to explore some of those new tools, those new avenues, those new innovations. Some of the POCs we're working on. Moving this forward, yep. Right. Exactly. Okay, good. Jeremy? Yeah. I think the partnership is a key aspect of the relationship. It really is genuinely a partnership from the first day when we were faced with this daunting task of how are we gonna. You know, we have hundreds of customers that the announcement's been made, they wanna get their hands on the cloud. I think without that, you know, the UK account team was fantastic. We were up and running with a pilot and, you know, like all good pilots, they turn into production. We started off on Terraform Cloud, and then we decided for Terraform Enterprise and did a migration. All of that was supported all the way with, you know, great technical resources to hold our hands, essentially. Yeah. That really does build trust over time. Not just trust in the relationships, but then trust in the products and the solutions that they deliver. You know, as I mentioned, we're well invested in TFE. We're using Packer for our image manufacturing. Obviously, the HCP Packer announcement was immediately- Mm. Well, maybe we should take a look at that. Because, you know, you see with one product solutions and even enterprise offerings that maybe you didn't think of. You know, solutions to problems you haven't encountered yet, but they're covered. Logically, why not look at some of the other products? Because we're only gonna run into those problems anyway, right? You know, so Packer, absolutely. Maybe with Secrets, we were also thinking we could go down the native route early on. With hindsight, now looks like we maybe perhaps shouldn't have done that. There's a lack of maturity there that Mm-hmm. You know, I mean, the 10 use cases you referred to, I'm absolutely sure we have at least half of those, right? Yeah. Vault is definitely on the radar. You know, the whole approach with Zero Trust. I mean, we do have an opportunity now where we've done our kind of first iteration of this cloud V2. There's still some obviously some gaps. You know, we're at that point, natural evolution in the cycle where we maybe take stock and say, "Well, what does the next iteration look like? Mm-hmm. You know, how many other common solutions can we provide in, you know, to support hybrid? Right. Yeah. I think that's right. I think one of the conversations we had was looking across the estate, given the portfolio we have, as you think about long-term strategic relationships, can we be an aggregator of some of that functionality you'll probably inevitably need at some point based on the patterns we see, and make that, make us much more strategic to you over time? Absolutely, yeah. Yeah. I mean, we also, you know, we have to think about, you know, being regulated and what have you. We We have to think about exit strategies, so we go into one cloud. Yeah. We have to. Yeah. We have to balance that. We're always gonna be exposed to some sort of commitment or risk somewhere. It's just the choice is which partner do you want to- Yeah. You know, decide that with, you know. Yeah, trust is obviously a huge factor in making that decision. Yeah. Great. Thank you. Brian, do you wanna- Yeah. Add? For us, it's really down to the partnership. Like, we've been with HashiCorp now since early 2018. You know, these are complex tools. And they're, you know, the environments that we're sort of deploying this stuff is extremely complex. And the actual help that we've received over the journey of this partnership has been unbelievable to kind of get us to the state where we are today. I think that's one of the key sort of selling points, like, on top of that, like the speed of how much innovation's been done to these tools since we've onboarded them four years ago, like the amount of new features and things that help complement that journey, it's just coming at us at a rapid pace. I can't even keep up with some of these announcements anymore and all the new shiny stuff that is available to us in some of these new releases. It's been a great experience. Yeah. It's great. Maybe, as we start to wrap up, can we just talk about how some of our products are tied to your critical infrastructure products? Maybe you can focus on Vault, Consul and Terraform. Maybe we start with you, Brian. Yeah. Vault's a big. It's tied to some of our, we're gonna say crown jewels. I don't wanna go into too much detail, but or I can't go into too much detail. Vault is sort of that broker between a lot of our core assets, and whether it be core assets being either data or some of the core systems that drive some of the markets today in Canada. It is a key piece. Terraform is also now considered quite critical given some of the nature of some of the clearing and settlement stuff that was actually being provisioned with Terraform. Right now they're like, you know, up there as the top two most critical tools that we use at TMX. Great. Super. I think the primary way in which we're supporting our critical workload is through additional policy with Sentinel. Mm-hmm. Targeting those landing zones, those workspaces in effect, that we designate as, you know, they'll be labeled as such so that they contain critical workload. The types of policies are around, you know, how we deploy those applications, according to. Google will make recommendations for critical workload. You know, as part of our agreement with them is that we need to, if we're gonna deploy critical workload to their infrastructure, then we have to follow certain guidelines. We can use the policy engine to, you know, effectively govern that. Mm-hmm. Great. Yeah. You know, at Elevance Health, we are a digital-first, cloud-first organization now. What a digital transformation means is impacting our most critical business processes for our members and tens of hundreds of millions of members. Cloud is not a side project, it is where that transformation is happening. You know, our most critical business applications are getting reimagined. That zone by which they're finding the value of that transformation is AWS, is GCP for compute and memory. Terraform holds the infrastructure as code components of that. When we get that right, we deliver on the promise of better scalability, zero downtime outages, planned or unplanned, resiliency, amazing disaster recovery. That's what it looks like when we get Terraform right. Mm-hmm. We don't just have to do it for one application, we have to do it for thousands because our cloud adoption programs are a huge investment for us. Mass scale. In Vault, you know, Vault holds our most critical credentials to our most critical databases. I mean, this is tens of millions of members in both our government and commercial division in these databases. These moving to dynamic single-use credentials and Zero Trust principles around singular identity, you know, getting Vault right makes us one of the most secure partners for our members with their health data in the world. Mm-hmm. Those two, it's paramount. When we don't get it right, we fail to deliver on the promise of our cloud operating model. Yep. Amen. We wanna help you. Maybe the final comment with a, you know, 90 seconds, just quickly some of our announcements, Boundary, just give us some feedback or initial impressions or thoughts around Boundary. Maybe we start with you, Jeremy. Yeah. I think it's another one that we have to take a look at. Obviously, as I mentioned, we do have products already in that space, but yeah, as part of that taking stock and natural evolution, I think we need to be. Over time. Take a look, yeah. Over time, right? We get those integrated workflows across all of our products. I mean, most of the products are architected for, you know, unique personas. Yeah. We start to put those, that integration layer. It's the integrations. across golden workflow, right? That's where we can provide great leverage to you. It's the integrations that Yeah Are really adding the value because everything's homegrown, right? Right. That always comes for free, as it were. Yeah. Yeah. Exactly. Boundary real quick. Very interesting. It's something I looked at after the announcement of last HashiConf. Yeah. You know, I think it was pretty early on, and I think it was more or less MVP when it first came out. Some of the announcements that come out there this week and what I'm hearing about the feature sets and even, someone I know that has a customer in Canada that's doing a mass deployment of Boundary, it sounds very promising, and it's something I look forward to hearing more about soon. Awesome. All good. You had the last word. Yeah. I think yep. You know, this digital movement is daunting. Every day there's some new challenge. Boundary for us, you know, we're roles of influencer, right? We need to influence a transformation in our identity and our access management programs. So there's a lot of people at Elevance that we need to start, as a COE, influencing, listening to. Boundary is definitely interesting to us. I think what we know about HashiCorp is they set the mark about what innovation can look like in certain areas or with Terraform and Vault and back in the day, Vagrant and Packer. I think we will leverage that to absolutely look at Boundary as, you know, a new model for human to machine access for us, that a lot of people at Elevance Health, it's gonna take some time for them to really see the value. But what we know is, you know, I think we're gonna leverage the partnership with HashiCorp to help us show what is possible in that new arena. I think in the next year, we do have some big investments in redefining how we do identity and access, and we're gonna have to take a serious look at knowing that HashiCorp leads the way in defining what, you know, a brand new innovative way to access management can look like. Great. I love it. Well, look, a big appreciation for everyone at HashiCorp. We appreciate the commitment, and we take our relationship very important to us and certainly very strategic. Great. Thank you very much, Dustin, Jeremy, and Ryan. Big hand, round of applause. Thanks, guys. I don't know if you guys are up here. Back over to you. Thank you very much, gentlemen. Back to you. Thank you, guys. Appreciate it. Thank you. Alex. All right, off you go, Mark. Just one housekeeping item. The presentation's gonna be on the IR site after the completion of the present day of today's event. We'll get that posted as soon as possible. All right, we're gonna do a Q&A with Mark and Brandon here. I think Derek kinda left you on the. Let's get a microphone to you. We'll look. Just one second here, Derek. You wanna do a little clicker? There you go. Thanks. How about that? Real-time. Real-time automation. AI. Thanks. Derrick Wood at Cowen. Can you just talk about where we are in the direct sales build-out, you know, kinda how that's evolved since COVID, maybe over the last couple of years. You know, maybe give a sense of kind of percentage of the total rep count being fully ramped, how long it takes to ramp to productivity. On the channel side, with respect to hyperscalers, do they get comped on reselling HashiCorp or just give us a sense for what the incentive structure is with the hyperscalers? Great. May I start you off with some comments? We continue to build out aggressively our direct selling motion around the world. My view of the world, there are 15 countries that matter where 85% of IT spend happens, and we want to make sure we build those countries out. They should be segmented models. Candidly, there are, you know, round numbers, 120 true global accounts that you want to actually engage with over the, again, the fullness of time, and to engage appropriately because we are, you know, technical, that requires technical resource, customer success, and the rep. We're building that out in a thoughtful manner to stay within the guardrails that Armon and Navam give us. From a ramp perspective, typical enterprise sales, 12 months plus or minus a little bit longer, international markets for a bunch of language reasons, et cetera. We have doubled down on enablement because, you know, if we can improve productivity, we're in a really, really good spot. Again, enablement being very structured on how we do our selling, how we manage pipeline, how we engage with customers. Again, I continue to be confident in the very programmatic path we've built around onboarding capacity so that we can meet our commitments that we have in front of us. From a channel perspective, the CSPs, different CSPs comp their teams differently, but where they do or can and where we have the right level of relationship, i.e. Running on their infrastructure, they are comped on our tech. There are different levels of compensation and incentive for lean in from the different CSPs, and so we continue to figure out how to move up that stack, to get more comp on us. There's no question, a lot of these CSPs reps, they see Terraform as a path to drive faster workload migration full stop. Right? Hence why we're doing some very unique things with one of the CSPs, where they will programmatically fund some resources, as I shared earlier, to help accelerate that migration at some of the largest companies in the world. Same thing with the GSIs. It's the integration of the CSP and the GSI. They all have enormous practices, AABG, Accenture, AWS business group, you know, times all the CSPs. They wanna move workloads fast. Once they capture the workloads, they can bang all their services against them. Again, that's where we become hyper relevant. Then we had a nice chat with some Microsoft folks as an example of they have perfect insight into what infrastructure is being used by their customers, and they see us as an upsell, cross-sell. When customers move from open source to enterprise product, the Azure compute revenue, and this is from, you know, from Microsoft, goes up 3-5x. Again, these things take time. You gotta activate by country. They're big businesses. They got a lot going on. You know, I look forward to the day when we have much more predictable velocity business to balance out our big deal business. Yep. Thomas. Oh, let's get you a microphone. Get you in the balance here. Hey, I'm Tomas from Gartner. Just looking at Vault, you guys have about 37 million downloads just this year. Oh, sorry, on Terraform. Of course, that's just a proxy for how much people use Vault on Terraform. To think that many downloads come from 3,600 customers just kinda speaks to how big your customers really are. I'm just trying to get a sense of how much. Like when you, when the Investor Day started, and you put up that you have $250 million, how should we read into that as, like, a proxy for customer adoption, as a proxy for how much of that you guys can really monetize and grow? Maybe could you correlate that with the Microsoft Azure release for Vault? Yeah. To the first one, I think that's, you know, it looks like a funnel, and so you can treat it like pure math, which is, hey, it has that convert. As we talked earlier on, it's not really. It's a signal to market standardization. Reasons for downloads are many and various. Like, one, I'm using, two, I'm updating to point releases, three, I'm changing the way I deployed. There's a ton of different reasons you would do that. You can't draw that line of sight through funnel. I mean, if you do, it's kinda like a super leaky funnel in that sense. It's more, like, from my perspective, it's market standardization. Like, we are the de facto way of kinda getting this sort of stuff done. I don't think anyone's really arguing about that. The focus on all that stuff ultimately, when you talk to any rep on the ground, they don't walk into cold accounts, and so that's the real benefit. You know, everyone's already using us. We know that, and so that would kick things off from there. Then the conversion, though, is more like what I said, which is, like, there are moments of truth, there are tipping points on those things, so you don't have this direct math line through those things. I would take it more as an element of market standardization. Yes, of course, we convert, and it does happen, and there is some math to that, but it's not quite as linear, you know, as you might look at the progression there, on that side. The question on Vault Azure, so just, can you just give me a little more on that? Just very simply, like, from what I understand, Vault is a great service that you can use to share secrets across multiple different cloud platforms. For now, most of Vault Enterprise has been only on AWS. Mm-hmm. What really changes when you have Vault on AWS and Vault on Azure? Could customers adopt both of them and share secrets between them? What really changes when you announce this? Yeah. It's establishing the data plane versus the control plane, so it's where actually people want the data to reside effectively. That's the difference there. Yeah. For sure. In the fullness of time, we'd love to have all of our products running on all three clouds. Right. Right. Right? We get into a really good point of abstraction above all the clouds. Yeah. I think, again, from our perspective, it's like you could do this any way you want, but the practicality for customers, they have certain relationships with certain clouds. They want it in certain ways, so it's really that. Okay. Get a question down here from Bill, and then we'll get to Kash here in a second. Couple things. One, you know, one of the pain points I hear fairly regularly is pricing. A, it's been changing a lot, and B, it's somewhat confusing. I see this isn't the first time you've heard that. I think we're laughing together. I think it's the first time today. Well, after lunch. I guess, where are you in the evolution, and is the changes just trying to figure out the right lever? You know, and what's the dynamic there? I have one more after that. Yeah, sure. I think some of it's sort of. There's a bit of hindsight to some of these things. There's certain bits of the pricing model that you would prefer to run as a pricing model, but it's not a thing you could have done. If you skip back a couple of years, you know, you'd kind of gone, "Well, why didn't we do that then?" It's like, well, the market wasn't ready for it. Like, your actual initial forays of trying to make Terraform into a commercial product, there's just a way in which people think about it. You don't have the trust in that organization. They're not ready to think about the scale, elements of the consumption and whatnot. You sit there and say, "Well, actually, that's pretty straightforward 'cause we sure know the way of thinking about this," it just wasn't the context at the time. There's not actually a ton of change. I. The reason I laugh is, like, there's a lot of people sort of say, "Hey, it's complicated." It's like, it's complicated if you dig into the spreadsheets and figure out how pricing and packaging model is put together. That's 'cause we're a multi-product company. There's a ton of math, right? Let's not kid ourselves. From a customer perspective, they're not super confused. Customers understand the idea that I'm putting resources into Terraform. I'm gonna pay for those resources. It's gonna scale out with us. We're gonna negotiate discounts. That's kinda how it works. The same with the other products. I mean, it doesn't make the deal cycle easier. They're gonna come and negotiate about the, about what they can see in the future, but it's not... You know, it's not confusing in that sense. We don't really get a kinda pushback. I would say that when we're onboarding a rep, it looks complicated. I got eight things to sell. How do I go do that? So you get that sort of, you know, they're like, "Oh, you know, help me understand those things." The concepts we're dealing with are quite abstract. Customers understand them extremely well. If you're selling it, you actually might not understand precisely what you're, you know. Like, and that's an issue as we enable folks. Those sorts of things. I kind of push back on the complexity. It's a pretty standard pricing model, really. Yeah. Mark's right. Because we have multiple products, there are multiple units of measure. There's a unit of measure for each product times multiple products. When you think about pricing curves on the scale of some of these deployments, they can get quite significant. There is just some work that has to go into that on what our pricing curve looks like. But once a rep's been through, you know, two or three transactions, they start to get it, if you will. But again, it is. We have a relatively complex business based on just number of products. Yeah. Yeah. The other one I hear is the cloud pricing is very different than on-prem pricing. As you move to allow the cloud up into the enterprise sales, do those need to merge or be more consistent or- Yeah. They merge at a certain level. It's a great question. So if you take something like Vault, they kind of are merged. Actually, there's a slight difference where you think about the premium for managed service or whatnot, so there's a physical difference, but they're actually priced in the same way. Terraform is different right now, and we're resolving on that one to move those over to the correct model. Some of that's driven, again, the hindsight on this is fine, but a lot of it's driven by telemetry of the products and whatnot. So yes, those need to be resolved, but we're working toward that. It's not like a, you know, not a mystery to us where the gaps are there. They just need to be resolved. Yeah, I don't think this is anomalistic relative to my prior experience. Mm-hmm at VMware with cores and all that. Again, just the normal rate and pace of fast-growing self-managed cloud multi-product. I think that's how I'd characterize it. Yep. The selling only cloud to the commercial is. I'm assuming that's just a maturity thing. Is there any sort of timeline to think about when it moves up? I think we're trying to figure out as we plan for LRP, what that looks like. Fundamentally, that to me is let's get the motion right, let's get the infrastructure inside HashiCorp right so we can focus on driving and scaling a consumption-based business, right? That requires a lot of visibility and to get everyone with the right motion on how exactly do we drive consumption for said customer, so we don't find ourselves upside down, candidly. I think it's a rate and pace thing. I look to the guide from Navam on that, so we stick to our LRP. No doubt, we're trying to build the processes at scale so that we can move that up. A bunch of that ultimately will be customer demand. A great customer dinner last night, 25 super customers got to talk to probably 20 of them. Many are like, "Look, we are self-managed for a long time." That's just the way it is for their own regulated industry. Others are like, "Look, I can't wait to get HCP. I believe in the chassis." We have a great customer actually in Singapore who has done 5 deals with us on HCP, a corporate customer, right? They just love it. They're actually procuring education and services through HCP. I think it'll be rate driven by customers. Yeah. Just to agree. There's a difference between obviously consumption selling and cloud selling though, so just draw a line between those things. There's one element is consumption. You can buy our cloud products with entitlements, and really that's Yeah ... just a question of, most simple guidance in the field as you move from segment to segment or opportunity to opportunity as well. Okay. Great. We're gonna hit Brad here, and then we'll come up front. Yep. Just a real quick follow-up on the Terraform HCP pricing convergence. Which way are we gonna go? Is the HCP price gonna go up, or is the- It's like. on-prem, the self-managed gonna come down? I think just from a pricing perspective between the two products, is that what you're asking? Yeah. Yeah, I mean, it can really differ between when you get into these big accounts, and as Brandon talked about, there's negotiations with these large contracts, so it's not an apples to apples all the time, right? Especially in the globals and the enterprise. If we're gonna kind of leave it at that. Yeah. There'll be a bunch of custom work done on those. Yeah customers based on current usage and not getting upside down while also reflecting, we wanna make sure we get the right jump off point for customers as they move to a consumption model, which many of them are used to because of cloud. Yeah. We can't get upside down. Yeah. I understand. Yeah. Sorry, yeah. Not trying to evade that one. We just haven't discussed that pricing model. The answer to it is, yeah, a bunch of math on the volatility, and we'll figure that out for sure, you know. Yeah. Yeah. Got a question up here, and then we'll probably finish on the right side here. Kash. Thank you so much for your perspectives. I'm curious, you had a slide, top 10 customers that had 5 of them financial services, but we all know financial services is the least penetrated in cloud- Yeah. Yeah Yeah I guess in terms of IT. Curious, what is the disconnect? Why are you doing so well in the industry that's least penetrated in cloud? Second thing is, when you look at your successful salespeople, you've run sales organizations and market organizations. What is it that you can model that makes some set of salespeople so good at what they do, selling complicated products to very complicated situations, and make that a more scalable, repeatable process at large scale as you embark your sights upon being a much larger company? Thank you so much. You wanna take the first one? I'll take the second one. I was gonna say, let Brandon talk to this. Yeah. I'll give you a marketing anecdote. I think what makes salespeople great is their ability to sort of translate the customer. A lot of these concepts are complicated. It starts hard. The narrative could be hard. The very best salespeople we work with can understand and translate very, very quickly what the customer's trying to do because they all are trying to advance use case to use case. Very, very simple hooks. If you've got Kubernetes strategy, you're gonna need Vault to secure that, and they'll have that conversation pretty directly. Customer can buy into that, and then we move from there. I see that's the sort of general trend among those folk who get it. I think, if you keep it as simple as that, it works super well. It's because of our portfolio, it just means that, as a rep, it's really just about establishing the simplicity of the message, really. It's just that there's eight different angles to it, you know? Yeah, I would just say, I think the best reps are those who ask the best questions and are just naturally inquisitive. Yep. Candidly, not to be obtuse, but I think we have deep tech. I think, when you face off against some of the folks that our reps have to, versus my prior experience, you know, you go deeply technical fast. I think being able to balance, "Hey, what are the business outcomes you're trying to drive?" with, "Hey, what are the technical problems you have?" That's why use case-driven selling and being very mechanical is very, very important to onboard a rep. That's exactly what we're trying to establish in that. Absolutely. Yeah. Get good at this simple use case, secrets management. It's pretty simple. There's a good value, and then you can go nuts on credential rotation, encryption as a service, wherever you wanna go next. Land quickly. Land as quickly as you can, right? Prove value. I think that's right. The other add to that, as we start to become a line item at our customers, right? We need to make sure we move up and out across organizations. Account planning, factoring where we need to build executive relationships so we're not siloed. Hey, we're doing great with the Terraform team, but that's different than the Vault team, and we better know where they come together at the CISO or CIO. That's also the ability to be bold and move up in an organization. You know, the right rep we need for the push from $500 to $2 billion is probably different than from $0 to $100 or $0 to $500. Just on that slide about the financials, those aren't all banks, right? We use fin services just as a kind of like a macro label. There's other kind of nuances. It's insurance, credit card. It's broad. Yeah. Yeah. It's global. We're gonna do rapid fire with two last questions here because we're over time, but we're gonna go, Miller first, then Mark, and we're gonna do this in about three minutes before we go take a break. Is that coaching? Yeah, it is coaching. Okay. All right. Hey. All right. Thanks for taking the question. Miller Jump, Truist Securities. So we heard a lot today about kinda moving customers from stage one to stage two being the point where they convert to the paid products. I guess the question that I have is just, is there anything that you can do from a go-to-market perspective to actually help accelerate that transition in your customer base? Or is it something that has to naturally occur? I guess if it naturally occurs, how do you then, like, identify it, and then what's the mechanism for reaching out? Yeah. It's a great question. I think you can do a bit of both. You can push and pull. I think with our push on it is education. You know, the reason the practitioners are here this week is they're learning the skill sets. They learn the skill sets, they're gonna adopt faster. They adopt faster, they move to a commercial relationship more quickly. So that's probably. That's the thing we can do. But again, you'll see, customers on the ground today is they understand this message. They have skills shortages. They have skills gaps. It's gonna take them a while to get their own velocity up as well. So yeah, we're you know, to some extent, they have to evolve that direction. But we can push a little, and that's what we do. All right. Mark, last one. Thank you. Mark Murphy with J.P. Morgan. Brandon, it feels to us like you're about 4 or 5 quarters into a bit of a distribution hiring surge, right? I think the way we look at that on the P&L. I think you've commented that it takes about 12 months for most of those ramps to become productive. I'm just wondering, you know, from what you can see, are we on the cusp of, you know, that hiring surge kind of turning into a booking surge, right? Kind of layering in terms of bookings? Or is there something in the. Is the macro challenging enough out there? Or maybe, you know, we know across the industry that, you know, employee attrition rates are a bit elevated, you know, currently. Is there something that would prevent that, or is that fundamental concept or the timing of that somehow kind of off in my mind? I think there are a confluence of events. I mean, fundamentally, we will build a long-term 30% compound growth business, and I feel comfortable with the capacity we have. I think there are offsets to. One, there's a little bit of macro sales cycles getting stretched a little bit as there's more inspection to be expected, right? Two, I think ramping our reps is something we've doubled down on, and we expect them to learn all of our tech, but the tech is complex, so it does take time. It's different as we start to pivot to build out our international business. The ramp time there is a little bit longer than the US business. Then it ultimately is. It's largely the larger deals are gated by customer adoption and the ability for them to consume our tech at rate and pace, right? I was with a customer last night. They use our three major products. They're like, "We need you to give us more best practice direction, and we need some additional incremental capacity to help drive your tech broadly." There is a gate on that. An example would be down in Australia with COVID. We are in every single one of those big banks at some level of scale, but the ability to get talent who can help scale those things out. It just takes time. You know, I'll leave the guidance to Navam, but I believe we're doing the right things to build a very healthy long-term business, and that capacity will come online so we can meet our commitments. Okay. Thanks, guys. Great questions. Thank you. For those online, we're gonna take about a 10-minute break. Thank you. All right. Great. One more presenter, Navam, our CFO. Then after Navam presents, we're gonna have our whole executive team up for Q&A. Navam. All right. Thank you, Alex, and good afternoon, everyone. I think I met a lot of you. Just to reintroduce myself, my name is Navam. I'm the Chief Financial Officer of HashiCorp. Welcome. I think you made it to the final session of our inaugural Financial Analyst Day here as a public company. I hope you found most of the content we had so far as informative. You know, it's always good to hear our customers talk, so Brandon, thanks for bringing that up. That was. I love the GTM team. I love Armon and Dave, but that was my favorite session, so thanks for that. Throughout the day, you heard our team talk a lot about our prescriptive path to a cloud operating model, how we are approaching these platform teams, these new platform teams as the single buying center for our products, and how we're delivering these products one at a time as a product suite to this platform team, right? In my section, you know, the good news is it's easy. I'm gonna talk about the financial outcomes of that model, which is specifically, one, we can build a really big company, and we can do that because we think we can sustain a strong growth rate for a long period of time. Two, we think we can get to that scale using good unit economics and positive unit economics. Three, because of these positive unit economics, we believe we can derive a leverage cycle which can get us to cash flow breakeven in the medium term, and also high free cash flows in the long term. I'll take you through each of these three things in my section. Before I do that, I wanna do a quick recap of some of the strong financial metrics we've been seeing to date, just to give you kind of a ballpark of where we are. I know most of you are familiar with it, but we have a big audience online as well. Our core strategy of enabling the cloud operating model within these platform teams and building this distribution channel to global enterprise is very much on track when measured by our customer activity, right? We are growing our customer base and at the same time growing our cohort of 100K customers, million-dollar customers, and 10-million-dollar customers. When you think about the past or when you look at the past two and a half years, we've grown our total customer base from 1,400 to 3,600, while at the same time our 100K customer cohort grew from 500 to 734. The million-dollar cohort grew from 48 to 85, and we're proud to have 2 customers, I think, Brandon mentioned this as well, 2 customers over the 10-million-dollar-plus mark and more of that to come in the future. Our customers are a leading indicator to our revenue potential, and we've been consistently growing our revenue quarter-over-quarter as well. This past quarter, as you may remember, we delivered $114 million of revenue for the quarter. This is over 50% year-over-year growth rate. We're proud of the momentum we're seeing on the revenue line. Within that total revenue line, Armon talked to you a little bit about our new offering, this cloud offering where we are managing our products for our customers. This cloud offering has been seeing great momentum as well. He detailed why we're super excited about HCP as a cloud offering and the acceleration it has in the adoption of our software. We're proud to have approximately 10% of our subscription revenue come in as cloud in the most recent quarter, even though the product is still very new and also still only delivered to our customers via our inside sales team or those commercial set of sellers that Brandon showed you in his pyramid. Lot more of this growth to come, but it's very new and it's still pacing very strong in terms of quarter-over-quarter growth rate. Net, overall, we're very pleased with the performance we've been seeing to date. 3,600+ customers, very strong net retention rates. We think these are great early indicators, and we are on pace for delivering this big company that we all intend to build over the long period of time, capitalizing on this disruption that we're seeing in cloud. With these early proof points, let's talk about our model for delivering durable growth. Dave mentioned this in his section. Our durable growth model is predicated on building this distribution channel to the global enterprises, finding these platform teams, and then delivering our products one product at a time as their cloud maturity deepens, right? Tied to the cloud programs that they have and the cloud spend that they have. The result of this is expanding and extending revenue opportunities with them as they build more usage with the single products that they first start with, and then expanding to other products that we have in our portfolio and delivering expanding revenue. The result of this from a metrics perspective is a growing base of 100K plus ARR customers, and we will land, expand, extend and renew, to borrow Brandon's vernacular, to increase our set of 100K customers. We think this 100K customer base, and we believe this 100K customer base is the biggest determinant to our revenue and our future revenue. We think so because these are global enterprises and large enterprises. They have massive infrastructure spends, and they're still early in the cloud journey. In the most recent quarter, this group of customers represented 88% of our total revenue. When you think about how we grow our revenue, it disaggregates into two specific variables tied to our 100K customer base, which is how many net new 100K customers can we add in any given year, and how much can we grow the average revenue of that base? It's very simply down to those two variables from an execution standpoint. As you can see from this chart, those execution points are very much on track ever since the IPO. Quarter-over-quarter, every quarter, we've increased the average revenue per 100K customer, growing it to approximately $ half a million per customer on average, while at the same time consistently adding customers. This last quarter, we added 176 net new 100K customers. Extrapolating this forward, we think there's a big enough TAM and a path to building a really large company as we continue to win these customers and start their cloud journey with them, right? Our path to $2 billion plus is almost exactly the same as our path to what we did last quarter, where we reached almost $400 million. It's simply around those two metrics of 100K customers and the revenue per 100K customer. We think that there is a path to continuously adding 100K customers, and there's a big enough market for us to get more than 2,000 plus of the global 4,000 accounts that Brandon is going after. We think that we can continue to deliver value on these large infrastructure spenders and increase the average revenue from $500K to $800K+. The combination of those two things, 80% of the value is going to be generated by those 2,000 customers, will get us to a very large company. Thinking about that 800K+ average, right? If you look at the number of customers we have in Q2, 734, they disaggregate down to large customers and customers who are still starting in the journey. There are 83 customers greater than $1 million and under $10 million, and two customers greater than $10 million. There's no reason. There's many other customers when you think about Brandon's top ten slide that were in that 83, category. A lot of them are going to graduate to the $10 million+ range. A lot of the 649 customers that are between $100K and $1 million, they're gonna start graduating to the $1 million-dollar category. The point is that there is a path from 500 to 800+. When we think about a good mix, healthy mix of customers that are in the hundred to $1 million, the $1 million and above, and the $10 million and above. We think that there's gonna be a good distribution among those 2,000. This is what excites us as a management team of this company, the ability to just execute on this plan, continuing our land expand-extend motion and get to a very large opportunity. Next, let's talk a little bit about how we think about the unit economics as we scale to this very large model. Before I do that, I wanna talk to you a little bit about history and context of where we are today and where we were before. Historically speaking, we've always been a high gross margin company. It's always been above 80% gross margin. More recently, we're a little above the 88% mark. If you look at FY 2021, which is calendar 2020, we drove 20 points of leverage on sales and marketing, driving our non-GAAP operating income close to -9% at the end of that period on a non-GAAP basis. After that time, we were preparing for our IPO, and there was line of sight to additional capital coming into the business. We now have more than $1.2 billion on our balance sheet, and we made the conscious decision to invest ahead in this business, investing in sales and marketing, investing in R&D, and investing in G&A. Driving up that percentage of revenue back up to 64% where it landed last quarter, R&D elevated to 33% and G&A up to 19%. We think this is a good, this was a good decision, mainly because of those customers that Brandon showed you and the size and scale they reached, even though their initial land size was just a couple hundred K of land. We need to be in those conversations. This is about winning that turf, and we think that this is the right trade-off at the time we made to win that turf and increase our sales and marketing coverage against those core 4,000 customers that we were going after. This is the context of where we were. We decided to invest ahead, and that investment cycle concludes in Q3, which is the quarter we're in right now, of investing ahead of our growth. During this investment cycle, we were still very, very mindful of how much dollars we're deploying in sales and marketing. We think about how much dollars we deploy in sales and marketing in the context of magic number, right? Magic number is just simply the raw ACV we get divided by the aggregate complete sales and marketing dollars we deploy in the previous period as a ratio, right? Point seven to point eight, just to kind of benchmark ourselves, is about a year and a half, less than a year and a half, of payback period on those aggregate sales and marketing dollars that you deploy coming back to us as ACV. Historically speaking, we were always in that 1.5-year, sub-1.5-year range. We were in the 0.7-0.8 range in our magic number, and that's how we deployed dollars into sales and marketing. During the investment cycle, we loosened that requirement and gave ourselves less than 2 years to get back our sales and marketing investments. Our magic number decreased from 0.7-0.8 to 0.6, which is roughly sub-2 years of payback period. Now, these dollars start to mature, the reps that Brandon hired start to ramp, the investment dollars start to yield dividends, and there is going to be a reversion back to our historical norms of a year and a half, less than a year and a half of payback period. What we expect post this investment cycle, when we get into this leverage cycle, is a walk back from 0.6 back to 0.75 of magic number, meaning a walk back of sub 2 years of payback period back down to 0.15, 0.15 years of payback period. We think that this decision of acquiring cohorts of customers with reasonable payback periods is a really good investment. It's a really good investment because of this chart. Not only do we expect to recoup the dollars we deploy in sales and marketing within a year and a half, but also every one of the cohorts that we land continue to expand and extend over time. That top line is our 2017 cohort. That's probably the first time we sold enterprise software at scale. Even that oldest cohort is continuing to expand. The 2018 is continuing to expand, and 2019 is more than 2x the ACV since we landed that cohort. We think that every one of our cohorts that we've added, adding now, continue down this trajectory, where we're gonna see continuous land and expand and continuous growth in those cohorts. The result of that, of combining reasonable payback periods and expanding cohorts, is strong contribution margins over time. As you'd expect in the first year, you'd expect to see negative contribution margins in every cohort you add because of the added amount of resources you're putting in to get those customers. After that, there's a walk-up. When you look at our 2019 cohort, and this is the cohort with full cost attribution of gross margin and total sales and marketing in, how does the contribution margin move over time for those cohort of customers? It walked up from -44% to 48%, 50% and 58%. We think 2019 is a good representative cohort of what things look like with a 0.5%, 1.5 magic number. Sorry, a 0.7 magic number, a 1.5-year payback period. Our 2018 cohort, which is a little bit more mature, is showing 70%+ contribution margins. This is our GTM model, which is the stacked cohort after cohort of expanding customers or expanding and extending revenue and positive contribution margins with it, which increase over time. The result of that, we believe, is going to be strong operating leverage in the medium term and long term as these cohorts mature and expand. In this next section, let's take a look at what this operating leverage means in the medium term and long term, and what we'd expect in terms of medium-term and long-term models. We as a company are committed to balancing, investing in the long term, and winning the market and building this really large company with medium-term operating leverage and getting to cash flow break even on a quarterly basis in the second half of 2026. We expect to get there by adding 10 points of operating leverage next year from our current from our current guidance level, and then walking back up from there until we get to 0% quarterly in the second half of 2026. During that time, we expect to see non-GAAP gross margins in the high 70s, and just as a reminder, our non-GAAP gross margins are expected to normalize once the mix in cloud increases over time. We have very strong gross margins in cloud, but we expect a high 70s gross margin at scale. We expect our non-GAAP sales and marketing to be in the high 40s, and non-GAAP R&D to be in the mid-20s, and G&A to be in the low teens. The result is on an annual basis in the end of the 2026 period, our non-GAAP operating income is to be between -10% and 0%. Our free cash flow margins should be ahead slightly of our non-GAAP operating income, ending at 5%+, at the end of this medium-term period. We expect the leverage cycle to continue as we deliver durable growth, and we'll walk our way up from there to 20%+ free cash flow margins on a TTM basis. At the time, we should be at about 78%-80% gross margin with less than 30% in sales and marketing, less than 20% in R&D, and G&A in the high single digits. We continue to remain very, very excited about the potential of this company, and we continue to believe that we're still very, very early in this transition to cloud. With that, let me pause, and I believe we are ready for- Yeah. The next group of folks. Yeah. Thanks, Navam. We're running a little bit ahead, so we'll go to the Q&A session, if that sounds good for people. Yep. Why don't we have the team come on up? I'll just be at the end here pointing at people. Okay. All right. For the folks online, we definitely wanna get some questions from you, so if you can go into the platform and start entering some questions, we'll try to grab those and try to get those into the mix here. We're here to answer any questions. Yep. Kash, kick it off here. We gotta get a microphone first. Congratulations on the first in-person Analyst Day as a public company. I had a fairly simplistic question. If you look at... Thanks for the customer cohort analysis. If you look at your revenue contribution, you got about 760+ customers, $500K. There's a long tail of customers that are doing very little amount of business with you guys. What did that long tail look like a couple of years back, and what has been the conversion of that long tail into substantive customers? Have you done any kind of analysis to separate out the profitability of your very big customers versus how much you might be investing in smaller customers that may really detract from the underlying economics of the business? Thank you so much. We'll start with you. No, you go ahead. Yeah. So, you know, the investment into the business is. It tracks that pyramid that Brandon talked about. It's the G sellers, the E sellers, and the ecosystem around them. That long tail before cloud was largely not very existent. It was, you know, serviced by the open source downloads. We now have a product that actually is relatable to them, which is HCP, and you have the free to paid conversion by swiping credit cards, and you also have the inside sales team that goes and actually converts customers of relatively large size, not the G4K plus, but relatively large size there. It's still a very small portion of our business, so there's not a ton of investment there. Over time, we'd expect that line to go up from the inside sales team covering more customers. Also even at scale, we believe that the largest infrastructure spend comes from those 4,000+ customers, and we'd expect to see an 80/20 split between the two. 20% coming from long tail just by the sheer size of the dollars spent in SMB versus the dollars spent in enterprise. No, we don't think that the dollars we spend in acquiring that long tail is very unprofitable. We think that it's relatively similar to what we spend on the Maybe said another way, just super simple way is, yeah, we actually think about the 4,000 accounts in the world that matter, and we track magic number by segment. Operationally, it's like, what's the magic number contribution of this segment? Yeah, operationally, we're very dialed into it, which is why all of our disproportionate efforts are in the G and E or global and enterprise segment. Lots of room for improvement, no doubt, but that's how we think about it. Go, Alex, then Brad. Yep. Great. I was hoping you could talk a little bit about the economics of the cloud versus your traditional- Yeah business. Clearly, a frictionless model implies better economics, and there's a lot less support required for that. I would think that over time, that business, once it gets to scale, would in fact be a higher margin business than the traditional business. Obviously, large enterprises are gonna buy- Yep Large service contracts and do what they do, but frictionless is a powerful tool. Can you talk about the difference between the mechanics of the two businesses and the profitability of the two businesses, which obviously have quite different ACV timing and what not. I'll talk a little bit about the profitability of the business. You know, we don't intend to tax the move to cloud. We wanna try and maintain at least price parity on the top line of cloud versus non-cloud. On the gross margin side, you know, your self-managed business obviously has no infrastructure hosting costs. Our cloud-managed business has 50% now scaling up, and we think we can scale it up to a high 70s. You know, the mix between your high margin, self-managed and your relatively high margin cloud, we think is gonna normalize at high 70s. We'll see. We'll hopefully beat that, but we think that that's a reasonable point to get. The second thing is that what you give up in gross margin, you gain from lower sales and marketing, lower customer success costs and customer support costs. There is a trade-off between gross margin and sales and marketing when you think about the two distribution channels of cloud versus non-cloud or self-managed. Net, we think, you know, we're very bullish about cloud and the potential it has to our bottom line in the future. I'll make a point again operationally, 'cause maybe it's helpful. That's also why we've constrained selling cloud to our commercial segment today, 'cause we're trying to figure that out truthfully, is what's the right coverage model, 'cause it probably is higher efficiency ultimately. If you track it based on magic number, we can tell, right, what's the efficacy of that coverage model in that market. Yeah, that's also why we're constraining it there. It's just as we get our feet under us. As we get our feet under us to understand exactly what that coverage model looks like, how much slimmer that unit is relative to someone managing self-managed software, and we'll graduate that up over time. As you can see based on our R&D investments, as Armon pointed out, a material proportion is on cloud, so we certainly think that's where the world's gonna go. The market will dictate that, not us. We certainly are excited about it, but it's nothing that we can move past where the enterprises go. Okay. Let's get Brad and then, Fatima afterwards. Oh, great. Thanks, guys, so much. Another question on cloud platform. What is it about cloud deals that make that expansion more frictionless? I mean, I think intuitively we understand self-manage is easier. It's easier to deploy. Curious to get your perspective as to what an account looks like in HashiCorp Cloud. What does that rate of expansion look like? Why is that different from a self-managed deployment? Mark, you may even have a point of view based on some of those things, but some of the Asian accounts that we're seeing. Yeah. I think I don't have the analysis in terms of the numbers for you there, but you know, even against our pay-as-you-go customers who are more oriented towards a single unit of value, you just see the organic expansion of them. Obviously, that gets a little bit tougher as you move up through customer success and making sure people are deployed and whatnot. You can just sort of see it in those accounts. They are just gradually, organically trending in the right direction from an NDE perspective without, you know, through self-guidance. The issue is that doesn't add up to a whole hill of beans yet as we talk about revenue. The revenue actually sits in the other segments. You can sort of see those things that you would imagine a SaaS product would start to provide. You can see the seeds of it inside the system for sure. Yeah. I think what we lack is, we still continue to lack and we need to make progress on full telemetry of those things for sure. Yeah. One more if I may then, please, just on the roadmap there. How far along are you with HashiCorp Cloud across the different projects? Which ones are further along than others, and where's the investment there? Thank you. Sure, yeah. I think each one was sort of at a different stage, and I think. If we talk about the broader strategy, I think we've been sort of clear that first step, what we want to get to sort of, I'll call it cloud parity. Self-managed should have parity with cloud managed, and then eventually it's actually parity plus is the goal. That's sort of our gentle nudge for these customers. Like, the carrot of moving to cloud is, like, you're actually going to get a super set of features. You're going to get them earlier in cloud, right? You know, many of it will graduate back to self-managed, but it should be a parity plus experience. If I kind of rank them across the core products, Terraform Cloud is. I'd put it at parity plus at this point. It's a super set of features, and actually you'll see us talk about a bunch more at the keynote. You'll notice every single one of them was, like, available today on Terraform Cloud, coming soon to Terraform Enterprise, right? That's a very deliberate strategy to kind of incent. Actually, we had a good customer advisory board, you know, 2 days ago, and it was, like, not lost on them. They're like, "Hey, we've got the memo, right? Okay. If we want the latest and greatest, we need to shift from Terraform Enterprise to Terraform Cloud." That's very deliberate strategy there. Terraform makes sense that it's more mature. We started that journey in 2019, so it's just further ahead on its cloud maturity. I'd put Consul and Vault sort of next. I'd say they're both maybe, you know, they're at parity, I'd say, on their core use cases, maybe just below parity on some of their more advanced topologies. For example, both of them are now available on AWS and Azure. You know, some customers that span, you know, Google and Alibaba Cloud and, you know, other niche clouds where, okay, if I'm spanning all of those, I can't quite do it in HCP yet. It's probably just below, and I think you're going to see that steady march for us of bringing the enterprise capabilities there, adding more hyperscalers to the mix to get it to sort of parity of what the self-managed configurations could be. You're also starting to see us move to parity plus on certain dimensions, right? The Consul announcements today around that cloud-based management plane, that's only cloud delivered, right? You can apply that to self-managed, but you're only going to get it if you're an HCP sort of customer and you've connected it up to that, right? Same thing with Vault. You'll actually see some announcements from us in the coming weeks where, you know, similar management type capability only available through cloud hybrid delivery to both self-managed and cloud delivered, right? Very deliberate strategy to kind of move us to that sort of parity plus. Our newer products, you actually see it's flipped. Boundary, first available on cloud. It will be a lagging availability as, you know, Boundary Enterprise self-managed. Waypoint, same thing, only available through HCP Waypoint. You know, probably maybe available self-managed, but maybe not. You can kind of see that shift in strategy where it's really cloud first and then, you know, cloud plus. Great to hear. Thanks so much. Yeah. Great. Marco. Thank you. Fatima Boolani from Citi, back at you. Either for Navam and Brandon, please feel free to share your perspectives on this. One of the things that you shared with us during the IPO process was a very deliberate contract structuring approach. I think, Dave, you alluded to this. Yeah. Yeah. Yeah. Earlier in the session, just around really, taking a three-year view with your customers, really getting them to engage with the solution. I'm curious if there's any changes to that sort of mechanic and motion, especially as the portfolio continues to expand and become available in a multitude of form factors. You know, for Navam, you know, how does that sort of make the accounting and revenue recognition process maybe trickier and maybe some updates or insights you could share on that, just with respect to contract duration and sort of the mix of products maybe changing, you know, over the course of the next couple years. Just for clarity, Brandon, I'd made the comment that, you know, our general bias is we're trying to land and rather than maximize revenue at the upfront from these multi-year contracts. Yeah. I mean, multi-year are very important to us, particularly you heard from the customer base. It just takes time to drive alignment across all the different entities in that broadly defined cloud program office or common buying center. Multi-year makes best sense for them, particularly for the project owners, so they can drive broad deployment over a period of time without worrying about a renew. We are pushing aggressively to fulfill that request effectively from customers. We've done a good job in the Americas, and you can see us doing better and better in the outlying geos. Sometimes with land customers who don't know us that well, they prefer to stay with a one-year contract, so there is some offset there. The general standard contract structure is that three-year multi-year. Philosophically, it is, you know, we're not trying to maximize revenues to win the first bit. Yeah. Like, I think our general view is we're trying to build relationships of trust. What they understand is we've got seven more things that are interesting to them over the course of the time, and that's the most valuable currency. You know, it's a different model than trying to monetize directly up front. Just to add that. Sorry. Deutsche Bank up here, Jeremy was up here, and he made the comment that they really appreciate their sales rep, Caroline, who's a superstar. They were telling me stories, we're getting ready to come up with all of you, that their internal planning has said they should buy 13,000 workspaces for Terraform. You're like, "Well, this will be great." Karen's like, "No, we're not doing that because you'll probably get upside down. You won't be happy with us. Let's just start with 2,500." I would much prefer to get a small land and get them in the NDE machine. I'll take the hit on the top line because over the fullness of time with the portfolio, let's get them happy, and then they start to, again, with the cloud product, just like they're used to with all their overages on the other cloud players, right? It'll start to work. We massively prefer a smaller land to get going. Thanks, Brandon. We're gonna do a question online, then we're gonna hit this side in a second here. Okay? Ron. Question for Dave. Dave, you talked about a once in a generation replatforming where this is a small window to become the standard, and he's also talked about going after the Forbes Global 2000. Is this the best strategy for becoming the standard, or can you elaborate more on why winning the biggest accounts ensures HCP becomes the standard? I think history has taught us that when there are these infrastructure transitions is when it's the opportunity to build companies. I think as I said, you can see it at the other layers of tech, like, you know, Oracle, Snowflake, Databricks, you know. Message queuing, Kafka. Like, that transition's happening. You know, there are two ways you can approach it. You can try and standardize the bottom up, or you can try and standardize the largest companies on the planet. The good news is, through open source, we've largely standardized the bottom up already. I think now our opportunity is to go in the thrust of those biggest companies. That's a little bit of a different journey than some companies that may have had to focus on the low end of the market. I just would point to the open source model as ubiquitous. If you talk to startups in the Bay Area and ask them what their tech stack looks like, I think largely you'd find that there's commonality of tech stack already on our open source tech. Just a slightly different model. It's almost like we use the open source model to get, you know, further down the consideration cycle in all these companies before engaging with them, which is just a slightly different model. Yeah, I continue to believe that the biggest companies in the world drive infrastructure spend. If you want to see the NDE over compounding periods of long periods of time, those are the customers you want. I think that. We're still gagging. The DNPs though, it's the G2K plus because open source like Indonesia, the couple of the largest companies in India, they're used our OSS stack and now they're enterprise customers. We get a little bit of both. The other maybe piece I'd add to it, and we talked about this sort of in the S-1, is there's sort of this core flywheel of the business we talk about, right? Which is when the practitioner standardizes the ecosystem, enable the customer with that focus on the sort of the largest organizations. I think the reason that flywheel is so important is when a J.P. Morgan says, "Hey, we're standardizing on Terraform. All of our vendors, if you want to play with us, go build a Terraform integration." That then has this accelerant effect to that whole thing, which is like great, not only are you going to enable the 10,000 developers at J.P. Morgan to go use Terraform, but you're gonna go push their top 20 vendors to standardize on Terraform as well. That doesn't happen when two guys and a dog decide to use Terraform, right? Like, they can only exert so much pressure on their vendors. It doesn't have that same sort of ecosystem accelerating effect versus locking in those top 4,000 accounts who disproportionately affect their vendors has that impact of accelerating the core flywheel around the business. I'll give you an example, because I think it's maybe more obvious to us than it is from the outside. You know, just take Terraform, but you could use Vault as the same example. Once people recognize that infrastructure as code is the way that this is gonna go, right? If the Fortune 10 tell all of their software vendors, "If you wanna be part of our cloud journey, you need to build a Terraform provider," it happens. That's how the market standardized back in the day. We don't talk about that a lot, but that's how it happened. Same thing for Vault. Once Vault became the standard for identity brokering, all the big companies on the planet standardized on it. They told every vendor, "Hey, you need to build a plugin for Vault so that I can use it with everything in my estate, not just the things that I'm using it for today." That's how the market standardization happens. Longer game. All right. Thank you. We're gonna go to Tomas then Sanji. Let's wait for the mic to come on here. Hey, Armon, I think you spoke about how there's like two different bins of engineers, like infrastructure engineers and application engineers, and how the tools of HashiCorp are, like, mainly consumed by every developer, but like the infrastructure team is the one that really implements it and evangelize and makes everyone else use it. I guess like just like sort of delving into exactly what infrastructure engineers are, though, they're security engineers or DevOps engineers. You know, they're site reliability engineers. They're all these different types of potential budgets that you kind of have to sell into. I'm just curious if there's like a way that you guys try to like traverse from budget to budget and how you're trying to, I guess, unify that. No, it's a really good question. Yeah. I think there's the language around it's still vague because I think it's evolving, and every enterprise kind of uses different terms, different language. Sometimes it's platform team, sometimes it's cloud team, sometimes SRE team. It's hard 'cause there's not a consistent title for it. I think effectively what you see in every organization is that kind of two-tier structure, right? I have my app teams at the edge, they're the customer, right? They're gonna go build whatever the end business application is. I have a set of enabling teams whose customer is internal app teams, right? You might call it platform, cloud, SRE, whatever you wanna call it, but those guys, their customer is the other app teams. You're right that they come in different flavors, right? I think, you know, we had someone, Stefan from Discover Financial Services. He sits on the CISO org yesterday, sharing about how they standardized their approach to Vault and, you know, PAM and all that. He sits within the security org, but as he called it, we're cyber adjacent, right? Like we're not quite cyber and we're not quite infrastructure, but we own the core identity, right? The Vault pieces, the Boundary pieces, et cetera. That's where their ownership sits. They have more of an IAM security type title just by the virtue of where they sit in the org, where another organization, that same responsibility might happen to be in the operations team. It's slightly different by org, but effectively it's always there's that producer team who are caring for all the application teams as their customer. For us, it's really about getting into the account and identifying, okay, where does that platform team sit, right? You know, they call themselves different things, but they're always the same type of people. They're sort of true infrastructure-y type folks solving all those problems. I think cloud has changed. It's been the sort of catalyst to actually bring those distinct buying centers together, right? It used to be great. My networking team, great, they own the Cisco budget and buy that stuff. You know, my ops team, right, maybe they're buying VRA and managing the, you know, the infrastructure. My app dev team, they have their own budget. There are these very discrete budgets, and it was kind of this throw it over the fence silo approach to managing things. Cloud, I think, has inverted all of that, right? Which is okay, well, now it's not this discrete thing. You're not buying a Cisco network separate from your Amazon compute. That doesn't make any sense. It's all been aggregated together. The cloud teams, those platform teams now have a much more horizontal scope of responsibility across the security, infrastructure, networking, app runtime components. It's. You know, it goes back to that same. There's a two-level paradigm. Our end users are the app team. They might be our first buyer. In a lot of accounts, Brandon's team might land with an app team. This is like, the platform team, you know, God knows what they're doing, but I'm gonna use Terraform. Over time, the goal is you get to those platform teams, get them to standardize on it, and that's where you see these very large expansions take place. Yeah. It's the behavioral difference we talked about in one of the slides. I think if you look at the developer side of the house is optimized for speed, and the other side of the house is optimized for safety. In the end, you're selling to the safety side, but it's the speeder side that adopts in the first place. Yeah, that's a good framework. Sanjit. We'll go to Derek next, then we'll come to Bill. Go ahead, Sanjit. All right. Sanjit Singh, Morgan Stanley. I had two questions. One is more of a Dave Armon question, and one's for Brandon. It's sort of a follow-up on Tomas's question. I think you've really been introducing this theme of the platform team or center of excellence today and on the last earnings call. What I want to better understand is- It seems like those guys are responsible for operationalizing the cloud operating model. In terms of the actual purchasing decisions and how those decisions are made. Yep. What's the evolution or is there not an evolution? Is it still the networking guys, and it'd be like, "Okay, these are my set of criteria." On a criteria basis, how do they make their decisions? From a duration basis, how quickly do they get to decisions when they're in a platform model? I have a follow-up for Brandon. Yeah. I'm laughing a little bit because I think, there's always this question of sort of, you know, has the enterprise buy cycle evolved? The answer is no. Because the complexity lies exactly in the heart of your question, right? Which is, in the end, there's sort of this mix of both bottom-up and top-down intersect, right? The budget holder is still potentially the CIO, you know, CISO, whatever. They own the budget. The decisioning is no longer top-down, right? So it's this much more organic pull of the developers or the kingmakers, they're saying, "Hey, I wanna use Terraform. I wanna use Vault." So there's this bottom-up pull into the organization. Then there's the 6-9-month internal enterprise decisioning cycle. There's a reason these sales cycles are long, because it's an alignment of all of these different groups. It's like, yes, okay, you have the underlying app teams that wanna pull in something like a Vault, for example, or a Terraform or whatever. How do you align sort of that top-down budget? You know, that great, okay, maybe we have existing vendors. What's our strategy? Who are all the stakeholders? How do we get those folks aligned? There's a reason these sort of sales cycles still take 6-9 months, is because, you know, that is the nature of these complex enterprise environments. There's a lot of stakeholders, a lot of folks to align. Ultimately, at the end of the day, the check is being signed out of either the CIO's office or CISO's office, sort of depending on, you know, the organization. You know, that tends to be sort of the motion. There's a sort of bottom-up pull into the account. Spend a lot of time aligning enterprise architecture, operations teams, you know, maybe it's the app dev folks that, "Hey, this is the right strategy." Then the check is sort of from the top. You and I see it probably the most. What you see is that, like, that cloud program is our sponsor and entry point. Yeah. They then navigate to the security budget or the networking budget from within. Yeah. They're the sponsor. I think that's the really key bit. Like, we probably spend maybe 40% of our time speaking to CISOs, I would guess. Like, because it turns out they're the one that's the budget holder, but the platform team is the one that's deciding that that's what they're gonna use because they're the ones that need it. It actually is aggregating, to Armon’s point, a bunch of buying centers, a bunch of disparate things into a common buying center, and that is 100% happening. Like, that's why it's so disruptive. It's just, it's like, super disruptive. Yeah. This is super interesting. My follow-up question, it actually dovetails from, you know, one of the answers you gave Dave and some of like, do we think of ServiceNow as a, as an example that sort of rhymes with what we're trying to do here? I look at Navam slides, and I see basically an approach to get. You know, roll up a lot of essentially million-dollar customers, right? If I think about the ServiceNow model, and I'll kinda defer to Kash and Mark on this, but to me, they're one of the best enterprise sales forces in enterprise software, period, along with a great organic. Yep. platform, right? That those two coming together has allowed them to be a multimillion-dollar business on 7,000 customers. The question for Brandon is. What is your confidence in your ability to recruit that level of talent and salesperson to get to a model like that where you can grow and expand a customer's account and reach that scale? Yeah. It's a great question. Dave Schneider is a friend, and you look at the ten-year walk for them. They kept their productivity per rep at $800-$1 million ± and added a bunch more reps and sold the full stack. If you think about the reps who are interested in coming to HashiCorp today, they are the solution sales reps who see, "Hey, I'm used to working with a multi-product portfolio. I'm used to a longer-term sales cycle where I have to go up and out across the account, and I'm looking to ultimately drive standardization across my stack." We are. You know, that transition I mentioned earlier today, that entrepreneurial rep who's trying to just sell a particular use case, we definitely need that. We also need folks who can drive across and talk about business value outcomes that we can drive. Customer value services is a business we're building internally to have those conversations when you're trying to win the architecture across the entire infrastructure business. We are starting to see those types of folks and SEs and professional services folks and CS who would ultimately be used to that type of model or that type of pattern. We're very fortunate we are acquiring some reps who think that way. That's what I want for the run from $500 million to $2 billion. We're gonna go to Derrick here, then we'll come into Bill on this side afterwards. Thanks, Derek Wood. Armon, in your presentation, you mentioned moving the dials right now of commercial feature development in Consul. I wanted to ask what dials you're trying to move in Terraform and Vault. You know, it sounds like the flip from open source to commercial tends to happen based on the life cycle of the customer and platform buyers getting involved and all that. But are there things you can do to kind of build more in the commercial version that creates a little bit more hook to drive that conversion? Yeah, no, it's a great question. I think, you know, like I was mentioning, it is a per product dial that we gotta tune. I think for us, the signals we look at is effectively where is that product on that kinda conveyor belt, right? Then also sort of like, okay, looking outside, where do we sit in the market? To the extent we feel like the product has kinda standardized and effectively we've sort of won the sort of standard du jour. I think that's where we feel like we are with both Terraform and Vault by and large. Like, they are de facto standards in the market. I think there we feel comfortable saying, "Hey, let's turn that dial further over to enterprise differentiation," right? You'll kinda notice today. Most of what I talked about with Vault was not open source, right? It was either HCP-based delivery or it was enterprise core capability. Very little of it was sort of pure open source. I think what you'll notice tomorrow is when I talk about Terraform, it'll be a similar ratio, right? It'll be a tiny bit that's sort of pure open source focus, but the lion's share of where our development work is going is really commercial differentiation, right? Cloud-based enterprise, et cetera. I think those two, we've turned the dials way over to the other side and said, "You know what? You know, we don't need to keep putting points on the board in terms of open source. I think we're there," right? Let's instead make it easier for our reps, make it more compelling, add more capabilities in our higher-end SKUs to drive higher ASPs, and that's really the focus, right? I think if you sort of map that to sort of the P times Q model that sort of Navam talks about, it's like, okay, great. As we add more capabilities, like, how do you drive that Q higher? You're gonna add more things into higher end portions of the packaging and move people from maybe the basic SKUs into the, you know, better SKUs into the, you know, best SKUs over time, as well as then just make it easier to convert sort of more people from open source into commercial. Vault and Terraform I both put in sort of that category. They're pretty far ahead. Consul has more of a middle state, right? It's still an active market. There's a lot of sort of, you know, uncertainty around what will the standards be. I think there's just general chaos in the networking market of is software-defined network the right approach? Is software-defined firewall the right approach? Is it service mesh? Is it, you know, God knows, right? I think there's competing philosophies that the market is sorting out. Then within each philosophy, there's competing vendors. I think we need to feel like we're following sort of a balanced approach between feed the community, making sure people feel like, hey, we're investing heavily in Consul to drive that bottom-up adoption and market standardization around open source, but then arm our field team with enough enterprise capability that these large enterprises that are making a bet on Consul feel like, great. It's at that point where from a commercial standpoint, we should make that lift into enterprise and, you know, there's clear differentiation and value for us to do so. Then the rest of the portfolio, the dial's set really far over to open source. I think the complementary part of that is how we're tuning the packaging to encourage the PLG side from SLG side. We're learning that every day as well. As Armon says, to turn the dials on the R&D side, it will also turn on the package side as well later on. Okay. We go Nabil, then Mark afterwards. We talked a lot today about the kinda synergies in the buying center and might be on go-to-market, but I haven't heard a lot about kind of product synergies where the technology lifts each other up and makes that the default. Maybe Sentinel's one, but that seems more regulated industry. Could you talk about your philosophy there, and then how you prioritize kinda integration features versus standalone best-of-breed features? Yeah, no, great question. I think hopefully some of it came through in the morning keynote on the Zero Trust, which is we think about them as they're. Yes, they're independent products, and yes, they're independent insertion points 'cause we wanna have kinda multiple shots on goal, but there's a very tight cross-product story, right? So if I talk about, for example, let's say Boundary with Vault. Okay, great. The core dynamic secrets should be injected by Vault session management, you know, all of that kind of passwordless feature. You only get that if you're layering Vault on top of Boundary, right? If you wanna statically manage credentials, okay, fine, you can do that just with Boundary on its own. Then on the flip side, if you say, "Hey, how do I manage a dynamic host?" Yeah, you could manually manage that. If you bring Consul in, now you have a dynamic host catalog that gets imported into Boundary, and you don't need to manually keep track of IPs and where the services are running, what cloud they're in. You get that dynamic ability only when Consul is sort of brought in at play. Then similarly, from a management perspective, you could point and click and manually configure Boundary. Or if you wanna do it as an infrastructure as code approach, there's a native Terraform integration. All of them sort of point to, okay, great, yes, you could start with one product on its own, but the moment you start feeling that pain of, hey, I don't wanna manually manage credentials. Great. Let me tell you about the Vault integration. Or, I don't wanna manually deal with, you know, writing scripts to automate this. Great. There's a Terraform provider. Let me talk to you about that. There is a tight better together story. The goal is that it is kind of a one plus one equals three. What we don't want to break is the fact that we have these multiple insertion points. 'Cause I don't want a customer to be like, "Okay, I gotta swallow HashiCorp whole to bring this in, and there's five products I need to bring in at one time to really be able to solve one pain point." We wanna be able to have that insertion point and then sort of organically expand by having that kind of one plus one equals three. If I can use an analogy, 'cause I think about this a lot. I just think about what Salesforce did, the Service Cloud, Marketing Cloud, but they assume Sales Cloud, right? That's how we think about it on the development side, is you assume Terraform and Vault are there. Then everything else is additive to that. Boundary being the example. Oh, if you already have Vault, well, Vault's already the broker of all the identities in the estate. It just plugs in much better than it would to something else. So that's the philosophy. Maybe it didn't come through, but that is the design principle. In fact, it's ironic because 7 years ago or S-1 whatever it was, there was actually only one product. They were all the same thing. It was one common platform, and we've actually disaggregated it. Maybe that's not clear. These products are built to work together. We just split them apart to make them more consumable. Okay. One more. You guys have a, you know, the more mature stuff and then a lot of incubation. God forbid, one of them doesn't succeed. You know, what's the criteria for you to decide this isn't working? Let's reallocate resources. Yeah. Put all of our effort behind these more narrow product set? Yeah. It's actually maybe useful to talk about history 'cause we've done it a few times, right? We're just good at rewriting history, so you don't know about the failures. We've probably killed three different products over the course of it, right? I think, you know, the product Dave was just alluding to is actually we used to have an integrated sort of, I'll call it, you know, end-to-end PaaS called Atlas. I think what we realized is actually the problem with that is it's too hard to swallow a platform whole, right? Better to decompose that into multiple insertion points. We sort of unbundled Atlas, and it became what effectively turned into Vault Enterprise, Terraform Enterprise, et cetera, you know, back in 2016. We had a predecessor to Consul. Similarly, it never quite hit product-market fit called Serf. Had a handful of very large-scale users, but it never quite fit. That sort of went into sustaining engineering mode. It's quietly still there, but we don't really talk about it much. We had a different product called Otto that we ended up realizing, you know what? It's fundamentally misaligned to our enterprise focus, right? We built it in 2015 before we really clarified the enterprise was our goal. 2016-2017 realized it's not really aligned, and so we sort of end of lifed it and sort of shelved the engineering work and, you know, archived it on GitHub effectively. You know, as I think as we look at it, you know, we're not averse to doing that. That's why we have that sort of conveyor belt model. It's like the things that are in community incubating. It's a relatively small R&D investment. The goal is we should be able to look at the demand signals over the course of a few years and really say, "Hey, do we feel like we're seeing that early adopter traction? Are we seeing sort of, you know, the digital signals, whether it's download, website traffic, learn guides, whatever's saying this thing has legs or no," right? If, you know, after enough years, we sort of look at that and say, "You know what? It doesn't seem right," then, you know, great, we should be able to sort of, you know, mothball that investment, and it was never that big of an R&D investment to begin with. I think that's how we sort of de-risk it rather than saying, "Okay, every net new thing, put 100 people on that thing," and then all of a sudden it's a big investment. I think that's the key, right? It's like it turns out two things: distribution channel, product organization. Distribution channel, expensive. Product organization, actually not very expensive to experiment with new products 'cause you can have a 10-person team to build a product, and it's okay if it doesn't hit. So it's actually not a huge investment to unwind. Our bias is to innovate as opposed to not. That's how we keep at it. Yep. Okay. Thank you. Mark Murphy with J.P. Morgan. Sitting in the keynote this morning, Boundary for HCP was the announcement that fired up the audience and really kind of got people clapping. Sitting there taking it in, it sounded like pent-up demand, you know, was what we were kinda hearing there in the audience. Could you speak to that? Why is there that kind of a response for that specific product now becoming available on HCP? You know, does it kinda speak to maybe some frustration out there with companies like CyberArk or others? The other one, I think, the announcement for HCP Vault for Azure, which seem like that's potentially something, you know, pretty key ingredient maybe that's been missing. Is there something pent up? What I'm trying to get at is, do you see these announcements being something that would maybe catalyze your cloud revenue growth there, that $10 million number? Sure, yeah. I think maybe two different questions in there. I think on the first one, sort of why the reaction maybe to Boundary. I think we have to remember, this is a very practitioner conference, right? The people there are the ones, these are the folks in the trenches who have to deal with using these tools and solve these kind of problems day in and day out. For them, what they really care about is like, what is my lived working experience with these tools, right? I think a lot of the existing PAM tools were, shall we say, not built by or for developers, right? You know, they were sold top-down. It was sort of a mandate through security, you must use this. You know, I think for better or worse, these people were, I'd say, subjected to it as opposed to sort of opting into wanting to use some of this tooling. So I think for them, a lot of them getting to experience, hey, this is a tool built by a development company for a development company in an open source model that really understands, like, our North Star is solving for those practitioners. I think for them, a lot of folks get excited about like, okay, this is a tool that, like, lets me do my day-to-day job of I need access to production environments to debug things, deploy code, do things in a way that's much lower friction than what I'm forced to do every day. I think that's where you see that enthusiasm, right? It's like a thing they want to use versus a thing they're being told to use. I think that's the important distinction, right? I think we do see a lot of that, and I think there's certainly a lot of practitioner excitement around it, because they do feel like, "Okay, great. HashiCorp gets us. These are our people. It's also a one-to-one mapping of an existing market in a new world. Like, it's very easy for everybody to go, "Oh, yeah, I see what this is. It's familiar to me." Yeah, that's a problem. Yeah. I think maybe the second half of your question was like, okay, how do we think about this in terms of cloud acceleration? I would actually take that back to, again, the segmented view of how we think about the world, which is today, effectively cloud sold by corporate. You know, great, the quarter-over-quarter incremental you see is effectively reflective of that capacity, right? I think until we open that aperture more broadly to sort of the enterprise segment, I think the constraint is really quota capacity on corporate. All right. We've got time for maybe one or two more questions, then we'll just wrap it up. Yep. Let's get two last questions over here on the, on the right side. Let's go to Jonathan first. I've known you guys for a long, long time. As I've been listening to you chat, I keep coming back, are they a little too nice? You have done a fantastic job of building usage, practitioner engagement with Terraform and Vault. You're trying to do that with the coming products and the like, or the products you're earlier in that curve on. Have you experimented with getting more aggressive about deprecating that which is available or changing the terms on the relationship and how you engage with the practitioners? I mean, arguably, you have won your markets, and you don't fully command the space you occupy. I guess, if Frank Slootman were running this business, right, or Larry Ellison were running this business, like, what would happen? Well, you know, I might say I don't know how many open source fans Larry Ellison has. They probably would fit in a room smaller than this, I would guess. You know, I think the delicate balance is always, you know, that we don't wanna sort of cut the hand that feeds you, right? I think open source communities are notoriously fickle. I think for us, it's certainly they're extremely loss averse, right? The idea you take something away from them is how you end up with sort of a riot on your hands. I think we've sort of navigated down this path of we have total control of our destiny in the sense of none of our projects are foundation-based. Like, we don't have open governance. Like, HashiCorp is the benevolent dictator for life. That lets us sort of steer and guide these projects in the way we want and gives us sort of the ability to monetize it in fairly unique way, versus if it was an Apache project or CNCF project. At the same time, I think what allows us to do that is because we're considered very good stewards of our open source. I think the way we've thought about it is you don't take things away necessarily or sort of try and anything that the community would perceive as sort of a bait and switch, you can end up with sort of a revolt. I think instead it goes back to that notion of the dial, which is okay, you don't take things away, but everything that you're incrementally doing, you wanna push it into the commercial side, right? It's not that you're taking away, it's that you're adding almost exclusively to enterprise. Because we control the upstream and we control the destiny of where this stuff is going, nobody can really push the ship off course, right? I do think there's this delicate balance. I think the flip side of that, and I think what I would point to is with our newer cloud stuff, it's actually a bit of a different approach. If I point to services like HCP Packer, for example, there is no open source equivalent of it. It's only a closed source cloud delivered capability. If I talk about the Consul capabilities we talked about, there is no open source. It's only that management plane capability will only be delivered through cloud. The same stuff's really coming with Vault. I think what you're gonna see from us is actually where before the vast majority of the stuff was an open source, and then there was a smaller subset that was sort of that open core enterprise bit, you're gonna see more and more where it's only closed source, it's only delivered via cloud, right? I think that's a bit of a shifting approach for us, right? I think HCP Boundary Waypoint, again, whole segments of it is only delivered through closed source commercial cloud capability. We are shifting the dial for the existing open source install base of the big projects. I think you have to turn that ship very carefully and deliberately, to make sure you don't end up with sort of a revolt. I think you've seen that in some of these open source peers of ours where maybe they didn't navigate that quite as gracefully. Yeah. I would say it's kindness, not niceness. You know, nobody's ever accused me of being nice before. You have a duty of care to the audience for sure. You know, they need. If we're standardizing the market, if you believe in the model, it's just about, you know, very careful navigation of how you do those things for sure. You know, we're. Yeah. Last question here, and then we'll wrap it up. Thanks, Jonathan. Hey, guys. Sebastian from William Blair. So I think over the years, what's been really interesting with HashiCorp is you guys really listen to your customer, identify their pain points, and then, you know, release new products, release new features that address those. I thought that this Consul announcement of being able to manage, you know, the self-managed and the HCP through a single management plan was very interesting. I was wondering, who was asking for this? Was it the enterprise advanced customers trying to expand to the cloud, but they didn't want to manage two different systems? Was it the cloud guys, you know, scaling and then wanting to move to some self-management and not being able to do that? A little bit of both. Sort of the follow-up is, as it sounds like, you know, more and more of these products are gonna take this format, what do you expect the amount of growth for HCP that's gonna come from supporting these hybrid deployments is gonna be versus just adding more of your incubating products to HCP? Yeah, really, really good question. I think, it's almost that there's three different layers to it. If I go, I'll unpack each of them. One layer is I think, in terms of the deployment architectures we've seen, I think historically you had a stronger, I'll call it central governance approach where you said, "Hey, we're gonna run, let's say, one giant Consul cluster, and then all of our different app teams will be customers of that." I think what we're seeing is most of these organizations wanna actually prioritize more app team agility. They're moving to a model where they say, "Hey, we want to have central governance and controls over it, but I actually want each of my app teams to be able to have their own Consul cluster, for example, or their own Vault cluster or whatever. I'm not gonna run one mega cluster. I'm gonna have 50 different clusters assigned to each line of business or each application team and delegate more authority to them." The challenge that means is when you start proliferating the number of these clusters, you now have a management problem, which I'm not managing one central cluster anymore, I'm managing 50 distributed throughout my company. It creates this need for a higher level management plane that spans all of that, whether it's across Vault, across Consul, et cetera. I think that's what we're seeing in some of these customers where they push more sort of autonomy to their app teams. They say, "Give me the management plane so I can push the policy and rules down, but then give freedom to my app team." That's piece one. Layer two to this is actually what we're seeing is an increasing demand for, I'll call it a hybrid approach, right? I think what our top customers have sort of made clear is like, "Great, we're gonna consume some of your HCP services, HCP Vault, HCP Consul, et cetera, but we're not leaving private data center anytime soon, right? So we're gonna be here for the next decade. So how are you gonna support that?" What you're increasingly seeing from us is actually a hybrid view of that, right? Where it's not gonna be pure self-managed or pure cloud, it's gonna be both, right? With this Consul announcement, for example, great, it's the same management plane, whether it's a cloud delivered or it's a self-managed running in private data center or in a retail store or in a hotel chain or whatever, because that's what these topologies are gonna look like. Our view is Vault is the same problem. People say, "I wanna put Vault in every one of my 10,000 retail stores." Okay, well, that's not gonna be cloud delivered. You're self-managing that in a store, but you need a central management plane that spans all of that. I think the second layer of your sort of question would be our view is that the future is actually increasingly hybrid, right? It's not pure self-managed, it's not pure cloud, it's both. How do we support that through a cloud delivered management plane? That maybe is the tee into the third layer of your question, which is we want the management plane to be cloud delivered, even though it's supporting a control plane that might be self-managed. That is increasingly gonna drive a cloud-based revenue stream because if you want those management capabilities, that is purely delivered through cloud, even though it's controlling a self-managed, you know, deployment potentially at edge or whatever, IoT. We see that as an opportunity to continue to monetize around HCP by providing the sort of management capabilities that are hybrid in essence. Yeah. All right. Thank you. Great question. All right. Well, I think we're gonna wrap it up here and wanna say thank you to everyone who joined online for the last few hours and everyone who came in person to L.A. As always, you can find information about our investor program at ir.hashicorp.com. The deck will be up shortly. We'll get to that. Thanks again. Thank you. Thank you.