The Digital Native Imperative – A CIO Perspective

Announcer: Welcome to The Jump Off Point, an original podcast by Jump Capital. Today, our host Jason Felger and general partner Saurabh Sharma sit down with Palo Alto Networks CIO, Naveen Zutshi to discuss the digital native imperative.

Jason Felger: I'm thrilled to introduce you to our guests today, Naveen Zutshi. Naveen's experience span, software development, IT infrastructure, and leading technology organizations from fortune 500 companies to startups. Currently, Naveen is the Chief Information Officer of Palo Alto Networks. In this role, he is responsible for Palo Alto Networks Solutions to drive growth in SAS security while also building a world- class and global IT organization. Naveen is on the board of advisors for several fast- growing technology companies, including Zoom and Rubrik. But he also advises several early- stage startups. Welcome to Naveen.

Saurabh Sharma: Thank you.

Jason Felger: And of course my colleague Saurabh Sharma. Saurabh is a general partner at Jump, and leads our investments in IT and data infrastructure and application software. He has extensive background in product and operations at high- growth startups and started his career as a high- performance computing researcher. Welcome Saurabh.

Naveen Zutshi: Thank you, Jason. Glad to be here, and welcome Naveen.

Saurabh Sharma: Thanks Saurabh. Looking forward to it.

Jason Felger: Right. So, Naveen let's start with a kind of broad perspective, but also, get into your background a little bit and how you got to where you are today. So it seems the role of IT in the CIO is really dramatically evolved. And presently it's just as much about transforming the organization and not just the technology. Companies are increasingly digital, they're agile, they're software driven. So I'd love to have you take us through your background and your journey to your current position and your current mandate and how that's just evolved over time.

Naveen Zutshi: Yeah. Sure, Jason. Like other first- generation immigrants, I came from a country called India. Kashmir actually, from a State in Kashmir, a really small place. I called myself like when I was growing up, Kuch munduk which is this notion of you're a frog and a small well, and you haven't seen the bigger world outside. And so it has been a huge learning in terms of awareness and outlook. And that has increased throughout both when I went to Bangalore for my studies in computer engineering. And then when I came to us first in Arkansas in the middle of nowhere to Walmart, and then later on for the last 20 years, I've been in Bay Area working for both tech companies like Cisco, as well as startups from an engineering standpoint, and then another retailer, Gap. And then now for the last five years, I have been the CIO at Palo Alto Networks. It's been a fantastic journey. One where I've been privileged to get a lot of opportunities as well. When it comes to the role of the CIO, it's an exciting time. And as CIO, your job is never the same each day. What I find especially interesting is you have to go broad and yet you have to deliver with depth. And then it's amazing to problem solve with your peers and you get to solve either smaller, big problems. And then if you think about, I talked to quite a few CIOs in the valley, also in Midwest or in South. You see a big mind shift, a change in CIOs or the last several years as technology has taken a much more central role in company's strategy. And forward- leaning CIOs are increasingly finding opportunities to say yes, rather than saying no. And that's a big shift that I see. They are not letting the risks be a barrier to innovation. The other thing that I'm seeing is this notion of performing under the same level of intensity and speed of delivery that sales abroad teams are expected to deliver at now. That's one of the things that we try to hold ourselves at very high levels at Palo Alto Networks, is that are we delivering at the same level of intensity as my others peers are?

Saurabh Sharma: Let me just sort of tagging onto that a little bit, taking a little bit of sort of macro view, right? We have heard this narrative obviously for many years now that software is eating the world. And more recently it's kind of obviously transformed into almost every company is becoming a software company. Given that should a shift in mindset at the strategic executive level, it almost seems that there must be a paradigm shift in how the CIO seat is. So I'm curious how your role has evolved personally, between different organizations as you've seen? Or what you're hearing from your counterparts of that whatever the work CIO does is actually the revenue driving engine. Was it just running the rails in some sense?

Naveen Zutshi: Being at Palo Alto Networks, we are a digital first company, right? So it's like an oxymoron to say," what is the digital strategy for our company?" We are a digital company. When I was at Gap before this, it was a different matter, right? We were working with merchants, we were working with creative people who were designing high fashion and the business was of building great brand and great set of products. But there was an acknowledgement and an urgency to building and expanding on the online footprint. There was an urgency tying omni-channel experience and there was an urgency to building innovation in terms of how customers can zoom the products, whether they are in the store, or whether they are online. How inventory can be pulled together, how POS can be managed in a more mature manner, how you can use wifi as an example, to drive traffic patterns and understand better about the customer. So all of those innovations came into being while I was there at a Gap. So Gap went through a lot of transformation, not unlike other retailers have gone through. And I would say sort of my experience is it's not enough. If you look at boards today, I still feel the boards don't have enough technologists on the boards. There's definitely not enough CIOs on the boards, for sure. I would forget CIOs, for example, there are not enough CTOs on the board either. And there was also a time when there was this notion of a Chief Digital Officer. I never thought that term would work because now you set up another leader off on the side, responsible for the digital front- end, all the resources are with the CIO or someone equal to a CIO. That doesn't work. Either you have the wrong CIO and you need to replace that person, or you need to make the CTO, the CIO. So I think you have seen that shift back to a front end, more front facing CIO. So I think you'll get fired as a CIO for not having a stable infrastructure, but you wont win in the business, without having a CIO who can drive business strategy with their peers,

Saurabh Sharma: That's a great way to put it. That makes a lot of sense.

Jason Felger: Naveen the future of the workplace is something that we're all talking about particularly right now as companies are starting to contemplate coming back. And you kind of hear it again and again," Work is something that you do, it's not a place." That's become a little bit more of an actual acceptable terminology and acceptable reality for many of us. How do you think about, are we at a permanent shift? Have we actually gone towards a holistically or predominantly remote workplace for employees? Do you think we're coming back? And if you can kind of layer in your perspective of sitting in the Bay Area, working for a technology company, I think that's kind of one set of expectations. But how does that play out in manufacturing and healthcare and other industries, and obviously, the technologies that we might need to be thinking about to balance this kind of new area that we're in.

Naveen Zutshi: The short answer is yes, hybrid especially, is here to stay. And my thinking has significantly evolved. And my biases has shifted dramatically in face of data shows that those biases weren't correct. For example, I was a big believer of having everyone together at work coming every day, having grades relationships with R& D as an example, we in the same office, same floors, worked very closely together and we firmly believed our speed of innovation was directly correlated to having this intimacy of connections in person, rather than anything else. And for the last, what? 16 months now, that hasn't been there. We have hired, for example, our tech company has probably hired thousands of people and they have never been to an office. They probably have never met any other person from our company in person. And yet pace of innovation, speed of innovation delivery has not slowed down at all. Will give you another example for us personally, we set up in India, COE. Like I've done India CEOs before. We would send people over, we would fly people over from there, we'll fly people from here. We have done none of that, right? It's been all virtual, and what has been interesting is, let's say the engineering managers in my team, they have had more time to train and bring up to speed the COE people, because they have more flexibility and it's not a nine to five job anymore. And that has been a huge win, whereas if they had come to work every day, during regular hours, and then we are asking them to work either evenings or in the early mornings, it's a huge burden on folks. So that flexibility that has come by as a result of being digitally native, wherever you are, has actually delivered a much faster ramp for our folks in India. Ultimately, humans want connection. So, we still want connection, that's why I said hybrid is the place it's going to change too. But at the same time, increasingly whether it's tech related jobs, software related opportunities, even at recruiting, or HR, or legal, or finance, and you look at all these different departments, a lot of the work can be done all remotely. And in fact, you get more focused time and you can be more productive. And we actually measured productivity quite extensively too. And there's a little to no drop- off that we could see.

Saurabh Sharma: That's amazing. It's definitely a new world we're all preparing ourselves both mentally and other resources. One of the things is I think at this point, pretty much everyone is almost comfortable in using Zoom and Slack, right? That's kind of the de facto standards. So maybe just thinking about the kind of technology informed factors, right? That will take shape to kind of what the future workplace and all the technologies that would be embedded into that.

Naveen Zutshi: Yeah. So first let's think about security itself. The tech surface has significantly widened. And there is a need for zero [ inaudible 00:12: 24 ] security that is pervasive across your end points, your cloud infrastructure, as well as your data centers, your campuses, or follow assets wherever they are. And we need to think about, do we have pervasive amount of visibility into that? And then can we take effective remediation actions in very fast manner? It's still scary out there in terms of what you can see from solar storm to even the static code analysis tools being hacked and figuring out a way to have technology that is deployed and can find those issues faster and resolve them is quite important. Second is on the technology side, water cooler conversations, white boarding. Those are the things that you miss. And either it's going to be, you come in for a few days a week and do that or you have technology that enables that more and more. It's still an area that's open for a lot of innovation. I think also managers traditionally were never trained to do a great job with hybrid teams. So when you are a fully distributed team, everyone is on a level playing field. But when you are a hybrid teams, the bad habits can creep in, where those who are digitally remote can be ignored in meetings or in sessions. And so how do you ensure that you continue to pay attention to your entire workforce and make them inclusive, make them feel inclusive and make them feel equally productive? So whether those are e- learning capabilities, whether those are technologies that make it easier for hybrid teams to work in collaborate together, there is a seamless transition between what does online and offline.

Saurabh Sharma: Let's maybe go a little granular on the CIO's day- to- day ecosystem and thinking about when you're talking about digital native imperative of every company, and I'm going to keep Palo Alto out of it, as you said, but I'm just thinking about traditional company that is making those shifts. They're becoming cloud first now. They're moving to cloud at a certain point. So maybe give a high level view of what cloud native or digital native stack for a new age company looks like or should look like.

Naveen Zutshi: Yeah, let me start with the second question first, because the harder one is probably the more urgent one to answer. And that is how do you transform your IT organization or their technology realization to be cloud first, right? If you look at a traditional infrastructure and I've worked in infrastructure for a long time now, there is a massive evolution and people and the way they work and what they'd work on. Increasingly data is like little differentiation between a software engineer in app development and a software engineer in infrastructure teams. This notion of site reliability engineering is taking on a bigger hold, not just in companies like ours, but even in other companies, they want to adopt this methodology because it drives a right level of SLOs or SLA is between business and IT. In terms of application development really having this notion of whether it's two pizza boxes, sized teams or teams that are agile, whether you're a scrum based methodology or whatever the methodology is, teams are moving towards a inaudible based approach development because the speed of which you have to drive change is high. And you don't want to build requirements for nine months in advance and then see all your business shift. That technology stack changes, your whole pipeline of development changes, and then how you secure that pipeline becomes imperative as well. So you're no longer thinking about security in production only, you're thinking of security all the way through the development life cycle. And then how do you train your developers to be security minded? Because there is traditionally a hundred developers to one security engineer. Then if you look at the technology stack itself, you are in more microservices based architecture, and that's not new, right? We ever had services based architecture since 90s and now, inaudible but having this encapsulation of the database with your app with your application logic and having it in microservices makes a lot of sense. But at the same time, it brings with it tremendous amount of complexity of managing those microservices. Now you have hundreds and thousands of microservices. They're connecting and talking to each other, they have risks, they have operational risks in terms of availability, and you don't know your website is down, you don't know what caused the website down. There a hundred other reasons, there can be a hundred reasons for it. And so there are new observability tools that are new monitoring tools that are new ways to manage your applications as a result of a distributed architecture. So it's an interesting, and a very fundamental shift and what I found sort of given the right environment where you allow folks to make mistakes. They embrace this because they want to learn, they want to improve their capabilities on a daily basis. And there may be some resistance, but most of the time it is enthusiasm. There is change. And we need to do a better job as leaders to manage that change for our employees.

Saurabh Sharma: I got into health notice, right? But you mentioned a couple of times kind of this thing that evolved around the developer. So it's almost like the traditional buys and traditional sort of hierarchy always has been top- down, but it seems that there's a lot more decisions driven by the faster the developer productivity, the developer deployment. And then how do you provide the stack that is basically drive to quick adoption from the developer side versus necessarily making a large decision at the enterprise that was then moved down?

Naveen Zutshi: Yeah. Just thinking the way I think about it as ultimately, what is IT responsible for? Right? We have the responsibility of building things, whether that is building through our own development or bringing in a SAS company and integrating that into our fold, providing a set of services through either products or to a service like help desk. And who is providing this service? Is primarily the engineers. Everyone else's like overhead. So I think having that notion and understanding that it's an worded per pyramid and we are ultimately helping them become productive.

Jason Felger: I mean, you've gone into a lot around where your priorities are and where they've shifted. I want to see if we can kind of dive in a bit for everyone, just how you think about the prioritization of the spectrum of responsibilities you've had. You've touched on everything from one end of executing and delivering against a cloud native infrastructure to... You've mentioned just being more customer centric and being with customers. It is a extremely broad set of responsibilities from being kind of customer and outward facing all the way to, as you said," building the things and deploying what needs to be done." I'd be great to give people a sense of how broad is that mandate? And how do you just think about the prioritization of those massive responsibilities, both internally and externally.

Naveen Zutshi: It's various, probably four to five. It's actually four to five different strategies coming together. There's a strategy around customer journey and making the customer journey amazing, beautiful, simple, great experience for our customers. There is the employee journey and making the employees as productive as they can be. There is the data element, using data as a strategic weapon. There's the automation journey, this notion of the company is running all the time on algorithms. And there is a few other things, but if you think of broadly speaking, those are four or five things that every IT organization is focused on. Now, there will be specific strategies for a company that is in retail or manufacturing or others, but these four are fairly interchangeable and probably in some form or shape in a strategy for an IT organization regardless of where they are. So if you think about beyond security, which always continues to be in top one or two priority for CIOs, the two others that I often hear, and most often here is data and what are we doing with data? And how can we turn data into a strategic weapon for the company. And then second is that on automation. That has even accelerated further under this pandemic.

Saurabh Sharma: That's a great segue into something that I've been thinking about. The world of automation, right? I think it's pretty fashionable to talk about automation and digital transformation for every company. Probably every annual report, big narrative is around that. What is your opinion on the transformation and automation, digital transformation phase we are in today?

Naveen Zutshi: Yeah. So while it is true that software systems or SAS companies are, if you're building your own software, that's the core of what your automation is around, I'm incredibly impressed by how little it touches beyond the core functionality. If you look at a day to day, we were doing an analysis of a day- to- day financial analyst in our company, as an example, how much time are they spending on spreadsheets versus in systems? How many decisions are they making using spreadsheets? What does their day- to- day look like? And whether it's a Microsoft productivity tools or Google productivity tools, they're probably using those more than anything else. And so you would say automation hasn't touched them as much as you would think that it has. I'm not deriving a lot of the great applications cant be built on spreadsheets and people have. But if you think beyond that, every time we want to forecast our business, you want to have some level of automation associated with it rather than just having humans do it every time. So I feel like process automation, if I look at it back office automation, there's tremendous amount of opportunities there. So for example, we use our SOAR tools like Dimesto for our IT back office automation. We use RPA for front office automation and talked to many CIOs in different companies. And they're big in this journey because they see immediate value. This has been one of the revelations also, the value curve is much faster in terms of the businesses themselves. And then if you look at automation beyond that, whether it's low or no code that starting to take off, not taking off as much yet, but it will. And then if you think about other ways where we can find ways to reduce the number of manual touches, however there is activation of a product, creating an opportunity by a sales rep, taking an order, and then you go into proactive and predictive business use cases, which are traditionally done by employees can be supplemented or complemented by machine learning.

Jason Felger: Naveen has the pandemic changed the priority of automation initiatives for you? Many technology priorities got shifted over the last year and a half. And automation is one that's done and uniquely centered around people in many respects. Has it accelerated, decelerated, kind of stayed the same as a category in and of itself?

Naveen Zutshi: That significantly accelerated for us. We started the year before with 20, 000 hours of total FTE automation that we've measured. And we are happy and patted ourselves on the back with that. And we said," why not do it five X more?" And we are on target to do 100,000 hours this year. And even then I feel like we have done little, there is so much more we can do. And that just one metric of measurement you can measure in many, many ways. I feel like whether it is, how do you look at virtual Genius Bars? Because, giving you an example of help desk, we would have folks come into Genius Bars and they can get the help in any time they want it. Now, you can't do that. Like what do you compliment? How do you replace it and still maintain a high NPS score? And so having virtual chat bots that deflect some of the used an unused and then compliment that with having multiple channels of communications from a user to help desk, and then having tons of automation on the backend to have like software, if you want to get a new software asset, it's just all automated for you. You drive more persona based profiling of users and drive change in terms of what tools they need as a result of that. So there's ton of innovation, actually really interesting innovation that can be done in this area.

Saurabh Sharma: Yeah. Maybe just, I think expanding on that, I mean, so, in the automation realm, we talked about cloud, which is obviously linked to scale, RPA, which is around process automation, then obviously you got machine learning technologies coming out. I mean, could you share your successes with which of these that you felt that you've kind of tested and have obviously proven it out that these are all there and maybe the efficacy on driving value? I think you already referred to that, but just maybe calling out things that you've personally tested and felt that these are at the maturity level for everyone to kind of try it out.

Naveen Zutshi: Yeah. RPA for sure has been there, SOAR for sure. Both in SOC automation, as well as IT automation. I would say on the NLU front in natural language processing and using that to drag derive, not just context and meaning from data from, I think increasingly better technologies are coming out, both on customer support side, HR support side, as well as IT support side and really using bots that are not annoying, but actually are helpful. I used to find bots incredibly annoying. Vision- based ML is there. And whether it is physical security, and complimenting the gods or whether there's other technology that uses vision, whether manufacturing or IOT or, other traditional companies that require that there is increasingly like construction space, all sorts of interesting examples that I've seen. And while some may be in POC stage, some may be in early development stage. Some are actually in full blown deployment stages. The other areas of ML is still work in progress. For example, a lot of proactive and predictive use cases. You have to prove it to the users that these efforts effective. And I know you have a strong sense on this as well, because we have gone through this example, for example, take next best action for sales. And then that's a common use case, many companies have tried it. Unless you don't show how you came up with that, and even the first example of where at probabilistic model was wrong, folks will use it as a way to say that it doesn't work. Whereas, it's a probabilistic model. The other learning for us has been being probabilistic model, The error rate is, let's say 5% and the other expectation is less than 1%. That's probably not a good use case for it because our However many algorithms we try, we can't get to that trade. And data is a huge issue as well. How clean is your data? How much data do you have? And then finally, the other point that I felt is it takes time. Like it takes significant amount of time, it takes a lot of experimentation to get even one use case, right?

Saurabh Sharma: Yeah, you've touched a really good point. One of the biggest challenge for most companies built around the value proposition of machine learning and setting it in enterprises is getting the trust factors internally. You might have an initial champion, but that for the champion to then get broader adoption is very tough because I think the expectation from the machine is significantly higher than the expectation from a human. How do you think about it? What are the things that companies can do to set the expectations right? And of course we talk about within the AI adoption curve, there are elements that are now coming out, which it's more of a question that would does help? And so do you think, one, are you getting more comfortable, these technologies as you go? And then what is the best way to kind of to build that trust and then get comfortable and drive adoption?

Naveen Zutshi: Yeah, it's less about me being comfortable. It's more about my teams, our employees, our customers being comfortable with this. Explain a bit it helps, right? Explaining a bit of the frameworks help, but it's difficult and it's tricky. So for example, if you take an opportunity, let's say in sales cases, we want to drive new space opportunities, and you want to predict" here's a new space where you should focus. And here's the reason why we have said that." If you look at behind the scenes, the algorithm probably is using 150 different features. You're not going to show all the 150 feature completely, like folks don't understand it. The level of complexity and the level of interaction between an algorithm is so high. And so you're kind of dumbing it down and saying, okay, here are the top three factors that are the reasons why you should expect this opportunity to work. And in many other cases that does work. So for example, there are companies that are coming out that will explain to you, here's the opportunity score, here's your forecast score. And increasingly sales reps are becoming more and more comfortable using that data. And I think that evolution is going to take time. The ML models are all also going to improve and our ability to explain those ML models to our employees is going to improve and evolve as well.

Saurabh Sharma: I think we've talked quite a bit about this, the infrastructure upgrade, the automation technologies, to the extent you can share what is top of mind for you in a way from here on, from both a technology perspective and things that you think are still somewhat unsolved or high priority things that you're thinking about, and to the extent your counterparts that you talk to are thinking about for next three to four years?

Naveen Zutshi: Yeah, the first and foremost is as employees start coming back in, it's interesting to say, how do we bring an amazing experience to those employees who want to come back? I think everything related to real- time access to data to drive decisions continues to be a very heavy high priority for companies including ours. How do we drive better decisions using access to data that is at our fingertips? And I think there is a lot of innovation here that's going to continue to happen. And then finally, I am big believer in the company that never sleeps. So how do we constantly find ways to have algorithms running while employees may be sleeping, or when the employees come up?

Jason Felger: Well, Naveen, we always like to end with the entrepreneur and the founder in mind. And you work with many startups. So we'd love your perspective of one, is we've talked about trends. Are there trends and technologies that you're thinking of that you kind of seek out and would think would be really ripe opportunities for entrepreneurs and founders? And then also, you are a CIO. You have been in this seat for a while, and just your advice of expectations and things to maybe do and not do as entrepreneurs and founders who are thinking about selling into the CIO.

Naveen Zutshi: Let's start with the second one. Founders passion clearly comes out. Their commitment to their company, their commitment to the idea, their commitment to what they are trying to solve. My advice has been it's often you come to large companies and you get swayed by orthogonal use cases, which will take your company in the wrong direction and say no to that, you will gain more credibility. And the founders are effectively the best sales people and the CIOs and the CSOs. And if you use that as a mechanism to open doors, it will. In terms of problem spaces there, I'm sure at least people a lot smarter than me who are working on tremendous model ideas. And I hear ideas all the time where they've taken simple existing problems and transformed them, like from insurance to construction to God knows. Everything else has been transformed, I think anytime you see friction, there's an opportunity to change that and simplify that, streamline it, automate it. And so I think about in a B2B company, there are many areas where we still have friction. I talked about FP& A, how we do planning. Seems like unsexy area, but there are like very traditional companies solving that problem today. And then you get into other use cases which are security related use cases. There's a ton of opportunity there as well.

Saurabh Sharma: Awesome. Well, this has been great Naveen. I mean, just on a lighter note, I like to ask some different questions than our normal thought processes. And thinking about the old school world, as we moving to this digital world, what are the things you think you might miss from your analog era, for a lack of better term? Because I mean, we are so automated, we are moving to hyper automation and things are moving so fast and rapid that obviously the inaudible so I'm curious, things that you think could have stayed the same, but obviously are going to change?

Naveen Zutshi: Well, I love vinyl and they have taken a huge comeback. They made a huge comeback. I think books, I still love holding a book in hand and while they have been transformed and you can read and kindle and the convenience is there, the quality of shuffling paper, I love it. And so I'm sure a lot of folks feel that way as well.

Jason Felger: Naveen, this was an excellent conversation. And Saurabh, thank you both for joining. It's been wonderful to chat with you both.

Saurabh Sharma: Thank you, Naveen.

Naveen Zutshi: Thank you, Saurabh, thank you, Jason.

Announcer: Thank you so much for listening to this month's episode of the Jump Off Point, an original podcast by Jump Capital. If you have an idea for the show or know of someone who would make a great guest, please contact podcast @ jumpcap. com.