When the modern, high-end automobile has more lines of data-generating code than Facebook, it’s time to face a stark reality: Today’s world is awash in a sea of information and the explosion of data will require very robust tools to process it all.

That’s precisely the scenario driving Splunk Inc.’s business. With more than 20 product announcements at its major annual conference last week alone, the company is sending a message to the enterprise world that it intends to be a major player when it comes to searching and analyzing machine-generated big data. And a big part of that role will be sifting through the chaos.

“It’s a very chaotic data landscape, and I don’t think there’s any way to manage it other than to embrace the chaos,” said Doug Merritt (pictured), chief executive officer of Splunk. “Helping the ecosystem come to that realization is a key aspect of what we’re doing.”

Merritt spoke with Dave Vellante and Stu Miniman, co-hosts of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the Splunk .conf18 event in Lake Buena Vista, Florida. They discussed Splunk’s role in processing unstructured data, tools for deriving actionable value, the company’s ongoing partnership with Amazon Web Services Inc. and progress toward a new revenue model. (* Disclosure below.)

This week, theCUBE features Doug Merritt as its Guest of the Week.

Channeling raw data for business

Embracing the chaos means getting a handle on raw, unstructured data. New features announced at the Splunk .conf 2018 gathering included enhancements for Splunk Enterprise 7.2, which added metrics to enable real-time data analysis and workspace visualization tools.

Splunk’s approach is like that of a manufacturer, taking raw materials with different renditions of data and putting them together in actionable outputs so that enterprise customers can drive today’s business. The company also recognizes that “manufacturing” environments can be different, with data operations taking place in the cloud or on-premises.

“We are the manufacturing parts provider that makes it easy for them to go and pick up these different combinations and do what they want to do, which is make things happen with data,” Merritt said. “As we moved to the cloud, we never took a strong stance saying everything should be in the cloud or everything should be on-prem, because data has gravity; there’s physics to data.”

Making things happen

Data may have gravity, but it also has energy, which is defined by the laws of physics as the capacity for doing work. Merritt envisions Splunk’s role as essentially “lowering the bar” to entry so that customers don’t need to be academically credentialed data scientists to obtain actionable insight from the data they have.

One of the announcements made by Splunk was the Machine Learning Toolkit, or MLTK. The new tool enables large-scale data analytics by interactions with open-source artificial intelligence libraries, such as TensorFlow.

“We are moving to a world where data is the product that people care about, so the whole object is to make things happen with data,” Merritt said. “Grab this data; don’t worry about cleansing it; don’t worry about structuring it — just make sure you have access to it, and make sure you have tools like Splunk that allow you to play with the data and try to find patterns and value inside.”

Partnerships and pipeline

A key part of Splunk’s business strategy involves its partnership with AWS. The company joined the AWS Partner Network in 2012 and has developed a powerful relationship with the cloud services provider since then.

Splunk gained approval earlier this year to reference AWS publicly as a “sizable customer,” according to Merritt. In an exclusive interview with SiliconANGLE last year, AWS Chief Executive Officer Andy Jassy pointed out that his company had been voted the “top partner for Splunk” two years in a row. Both companies trumpet a range of cross-platform services, such as Splunk Insights for AWS Cloud Monitoring, on each other’s websites.

“We’re obviously a huge customer of AWS, and they’ve become a huge customer of ours,” Merritt said. “The velocity of invention that AWS is driving allows me to be more agile and effectively drive application development and leading-edge capability.”

Another important element of Splunk’s business strategy involves its carefully executed transition from a model dependent on large, one-time software licensing fees to smaller yet potentially more lucrative recurring subscription revenue. The move is a calculated risk, as Wall Street analysts and investors will often take a dim view of a company when it abandons a profitable model and revenue temporarily drops.

Prior to the move, Splunk’s model incentivized the sale of perpetual licenses for software in addition to an annual maintenance contract. The company has since shifted away from selling perpetual licenses to software as a service deals. Splunk appears to be ahead of its targets for the transition, according to Merritt.

“Five years ago, less than 20 percent of our contracts had any type of subscription orientation,” Merritt explained. “We told the Street that it would be 65 percent term and subscription by the end of this year in updated guidance … and we’ve already hit the 75 percent mark that we were setting for next year. It’s been a pretty rapid progression.”

Splunk is building its business and product strategy for handling enterprise data on a global scale. The company’s big picture view is designed for the kind of world where cars generate more data than social media platforms or airplanes and information is the coin of the realm.

“This next wave is certainly all the data that’s happening within our organizations,” Merritt said. “But, increasingly, it’s all the data that’s available in the world at large. I can’t wait for this slow realization of the impact that our customers are counting on us to provide and that we’ll increasingly be known for across the data landscape.”

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of the Splunk .conf18 event. (* Disclosure: TheCUBE is a paid media partner for Splunk .conf18. Neither Splunk Inc., the event sponsor, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE