Boomi World 2024 | Arlen Shenkman | Boomi

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Arlen Shenkman

President & Chief Financial Officer

Boomi

The future of digital transformation: Industry perspectives from Boomi CFO Arlen Shenkman

Boomi LP has been playing a pivotal role in the future of integration and digital transformation. With its strategic moves and innovative approach, Boomi’s vision for the future of digital innovation has come into sharp focus.During a conversation with theCUBE, Arlen Shenkman (pictured), president and chief financial officer of Boomi, offered a glimpse into the cutting-edge strategies driving Boomi’s growth agenda. He shared the company’s strategic insights, innovative approaches and future visions as Boomi navigates this trajectory amid a landscape of digital disruption and transformation.“I think there are three things that really come to mind,” Shenkman said

play_circle_outline Partnering with companies, acquisitions, and expanding the ecosystem drive Boomi's growth strategy.

play_circle_outline The cloud-based platform offers economic margin opportunities and agility for Boomi.

play_circle_outline Broad portfolio of products, with Boomi platform bringing value to AI investments

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Arlen Shenkman | Boomi

Arlen Shenkman

President & Chief Financial Officer Boomi

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>> Welcome back over to theCube's live coverage here, day three at Boomi World. I'm John Furrier, your host of theCube. We're getting all the action here. We've got a great guest, the CFO and president of Boomi, Arlen Shenkman. Thanks for coming on theCube. The man behind the M&A. Big new keynote announcements. Thanks for coming on theCube.

Arlen Shenkman

>> Great to be here with you.

>> So it's great to see good management teams. I've known Steve for a long time. You've been good pals with him over the years. Boomi already had a good product and a great loyal base. Now you guys are making some big moves. The two big announcements was the two acquisitions and the strategic deals in the ecosystem, really is a big inorganic move and you've got organic growth of the product. Take us through the keynote news around the acquisitions, the motivation, rationale. How are you guys thinking about this?

Arlen Shenkman

>> Yeah, when you think about our business with such a strong, loyal customer base, a really incredible set of products, and frankly, customers want more from us. They want us to help them with other problems they have in their landscape, and building off the platform of products we have just makes us really a natural growth target for other products to be able to pollinate across our customer base, to bring in new customers and to continue to expand our whole portfolio.

>> You guys had a great career with the new management team. You've only been here for about a year. What attracted you to Boomi? What was the big aha for you? You've known Steve, but you're a CFO. You got to look under the covers. You're going to see, "Okay, how's it organized?" Obviously, it passed the test. What was the key for you to join the company?

Arlen Shenkman

>> This is a great business. It's a really good business. It's a well-built product. It's a very happy customer base. It performs financially well. And it's in a space where people have been dealing with this problem forever and it's an intractable problem, and there's really only one independent company at scale solving this problem, and it's us. And that really excites me. I think we have a great opportunity to be the leader in this space to solve problems in front of our customers that they've just had for so long, that not only make their businesses function better, but provide them with incredible ROI and a much more seamless opportunity to drive their company to the right decision.

>> It's interesting. We just came out of the ZIRP era, the zero interest rate thing. When you hear that about startups, okay, over driving growth through either too many professional services, cost of sales are over driving that. Not good economics on a lot that go to market. Boomi's got a good business, you were talking about it before you came on camera. It's like a lot of SaaS, not a lot of services. So a good mix of business here for Boomi.

Arlen Shenkman

>> It is. It is. And look, we have a business model that allows us to grow in a profitable way because we have recurring revenue and because we have a happy customer base. And when you put a great product together with a happy customer base, you get recurring revenue, you're solving problems for them, and it all works very well together.

>> Well, our team at theCUBEResearch are impressed with you guys. One of the things that jumps out is some nuance points. I want to get your reaction. One is we heard here on theCUBE from some of the leaderships, obviously great feedback loops. Really fast cycles getting product feedback. That's going to come in handy. But what's interesting, you have a lot of web services kind of vibe. You get to see a lot of use cases.

Arlen Shenkman

>> Yes.

>> And the old IPaaS market was getting in the sausage making factory and looking at all the plumbing, making that all work. Now that's SaaS basically. That's basically the cloud. You also play well with the hyperscalers as well, as well as you can be anywhere. You guys play with everybody. So you've got great flywheel going. How would you describe the Boomi flywheel? Is it that you can play with everybody or is it that you see things early, you're getting products out faster? What's the core engine look like? Take us through the flywheel.

Arlen Shenkman

>> I think it's a combination of independents because we really are Switzerland. We truly are the only company that wakes up in the morning, rolls out of bed and thinks, "How can I make two competitor solutions work better together and make this a better process for people?" And not a lot of people in bigger companies are doing that. So I think that is absolutely true. Some of the things you saw in the product that Ed had shared on stage, and you've seen from our team, we have 20 years of data from our customers. We know how they do integrations, we know how their processes work because we're a cloud solution and we can leverage that information to help other customers perform their processes in the best ways possible.

>> It's interesting, I was talking to Merv Adrian yesterday on our analyst segment. We were doing all an analyzing. He's former Gartner, he's not there anymore, so I can talk about Gartner a little bit, not a bad way. But you have the Magic Quadrants and IPaaS is a magic quadrant category. If you think about what that is, integrated platform as a service, that's everything now. So in a way, if you think about applications integrating into infrastructure and making that work, whether it's a critical workload or integration, it has all the same things. Observability needs, governance, data is critical, performance, low latency, whatever that app is, that's basically every app now. If you look at the G&A landscape, that's going to be the table stakes. So anyway, IPaaS motion is going to be a motion for all enterprises, especially with gen AI, when the data is going to be the critical factor. And so okay, you believe that?

Arlen Shenkman

>> Yes.

>> Okay. So as you look at that, you see the strategy on stage. What's the financial strategy of Boomi? Because matching the financial strategy with the growth strategy is key. Growth strategy is take the IPaaS sequence to the broader market opportunity. Because the IPaaS isn't going away. Technically it's growing at 35% CAGR. That's just still growing good.

Arlen Shenkman

>> Yep, check.

>> And then the new growth is going to come, the upside potential. So how do you match the financial strategy? What is the financial strategy?

Arlen Shenkman

>> The financial strategy is happy customers. If you have great customers and customers are buying things from you, you'll make money. The operating discipline of the company is absolutely ... it's part of our muscle, there's no doubt about that, but that's an output to me and not an input. The product, the customer satisfaction, the solving problems, the return on investment, the value we deliver will drive the financial return. As you say, we have a very solid core business. Financial results will come as a result of our execution of our roadmap and our product and our customers being happy with it.

>> Talk about the land, adopt, expand concept that everyone talks about. I talked to a customer yesterday here on theCUBE and they said, "Hey, they solved a manual process that was causing a lot of internal problems, and they automated the process completely and everyone's happy." And then it grew to other departments. Word of mouth. So you have inside net contract value increases across the customer base.

Arlen Shenkman

>> Yes.

>> Is that part of the ... and you factor that into the modeling?

Arlen Shenkman

>> Well, when you look at our NRR growth rates, they're obviously factored in, obviously well above 100%. So we are selling to our customers, we're getting new customers. Ultimately this product solves any number of given problems we identified in platform for our customers. And once it's in, they can utilize it to solve other problems. So we'll continue to expand and then we'll continue to expand our portfolio and continue to solve problems for them. We have customers all the time who come to us. I talked to a CIO last week who basically said, "This is my fourth time using Boomi. I love Boomi. I'm using Boomi." That wasn't a sales process, that was a, "I am a user. I like the product and I know what problems I need to solve." That product will expand. And there are other times where we're in and we're trying to show value by bringing together our entire portfolio.

>> As you look at your investment strategy, if you do go on that growth tear that I'm predicting like a ServiceNow level growth, which looks like that's an opportunity with the product, you got to pick your marks. So you got the M&A going on with the API. That's a big move that signals to the market, "Hey, we're serious about this infrastructure on gen AI API." 85% of the traffic runs through API. So that's a good call. Take us through the process of that investment and then the mindset. How's that translate to potentially future deals?

Arlen Shenkman

>> Yeah, so when I think about M&A and I think about our landscape, I really think about it in an inorganic way, which is we can partner with companies, we can buy companies, we're going to have resells and OEMs, and there's a broad set of tools we have in our toolbox to continue to expand our business, and we'll do that smartly. And I think you saw that with the acquisitions around API, where we have a strategy to provide people with visibility and governance of all the APIs they have with APIIDA, and then with more technology to help drive API governance and gateways across the platform that we offer. So that'll be a holistic approach. That will also be embedded with our entire ecosystem. So we continue to drive that value. So to your point about where are we going to invest, we're going to invest in our ecosystem, we're going to invest in our customer base, we're going to invest in digital products so that we continue to add value to our customer base.

>> One of the side effects of success is there's not enough people actually run the Boomi software because the training opportunity. So I've heard from customers that said, "I love Boomi so much. I have so many open positions." They can't fill them fast enough. So it becomes a skill/labor issue. And you got the automation with the agents, okay, that's going to be helpful. Talk about the customer base, because if you continue to grow, you're going to need to have more people using Boomi.

Arlen Shenkman

>> Yeah, and we need more partners. We have a very strong ecosystem, but we can't invest enough in our partners who can then turn that into more value for our customers. And I think that'll be our lever.

>> If I'm a partner, talk to me about my opportunity. Is there specific white spaces that you guys see where you can see, "Hey, if you want to come in and get a patch of grass here and grow with Boomi, here's some areas." Are there areas that you guys have earmarked and identified that could be great opportunities for partners or other new opportunities?

Arlen Shenkman

>> I think there continue to be opportunities, and I think those opportunities fall in all the categories we're talking about, which is, am I solving a specific problem for a customer? Absolutely use Boomi. Do I have a customer who needs to consolidate their landscape onto a platform which will solve many of their connectivity and data needs? Absolutely use Boomi. And now that we're in this conversation about AI, everything I see in the market is, how am I going to solve my AI problem? And there is no AI without data, and we bring data across to whatever that repository is. So that platform conversation is enormous opportunity for our partners to go to their customers and to say, "I have a tool that will help you solve the problems and meet your business needs."

>> Arlen, we were talking before we came on camera about our backgrounds, and we've been through some waves of innovation in the past. I won't say IPaaS. This an overgeneralization, so I'll take a little liberty here. I won't call it the cleaner that's seen in Pulp Fiction. It's like, "I got to clean up all this IT mess." These transitions mainframe to mini-minis to internetworking, all these major technology transformations require a lot of grinding, like putting things together. But now the internet is connected. The fact that you guys are doing the API management and the federated API system is just proof points that the sprawl, the connectedness of the world is a network. It's distributed computing. And so this is now the internet market for companies. So okay, we've been there, done that. What's the disruptive enabler? Because you guys have a platform and I like the vision, but platforms enable things. Mostly it's in value proposition. But in this market it's a disruptive enabler. It's going to disrupt things. Gen AI is going to change the game. Where do you guys see that disruption? And it's not a bad thing, it's what happens in these major waves. Some go away, some people don't make it. Some things change. Observability, we're talking about on the CUBE all the time. That category's not going to change radically because it's a feature of the system.

Arlen Shenkman

>> Absolutely.

>> It's not a company. So okay, you start to see that, that's a feature, not a company. Vector database, that's not a company, that's a feature. So you're going to start to see this in this transition. Can you share your thoughts on how you guys see the disruption opportunity, the enabler of that?

Arlen Shenkman

>> Well, I think there are three things that really come to mind. One is that we are clearly moving from an integration platform to an enterprise platform, which will enhance some of what we're talking about in terms of our overall ability to provide services and help that transformation. The second is that we are really a cloud platform. This company was born in the cloud, is in the cloud and resides in the cloud and always will reside in the cloud. And that gives us that ability through those transitions to modify our technology platform and continue to enhance what we do. And then the third is as you see these processes happening, we're just giving customers flexibility, because to your point, AI in the automotive industry won't be the same as AI in the financial services business or in healthcare. And our platform is horizontal and agnostic and we have that visibility to enhance our customer's processes and provide them the ability to be able to implement the changes they need.

>> You guys have probably great margins. I don't know if you could share them on camera, but being in the cloud gives you a great economic margin opportunity.

Arlen Shenkman

>> Yes.

>> It also gives you great relationship with the hyperscalers because you got more compute going on there. They like that, more storage. And so as you look at the agility of Boomi, there really isn't a player out there that I could point to and say ... in the data world, taking advantage of horizontal scalability of data and the vertical specialism in the app. So the data has always been this vertical thing. I got a data warehouse ... Even Snowflake and Databricks, they got data lakes, you guys got data reservoirs. What's next beyond that is horizontally scalable data. No one's really doing that. This seems to be something that you guys seem to be focused on.

Arlen Shenkman

>> Yes, absolutely. Absolutely. We think we see the convergence of APIs and integration platform and data management all coming together, because ultimately they have to reside in one place so that you can utilize AI to drive whatever the actions you need to happen in your business, which then leads into our point, which is if we can provide you with the ability to have a clean set of data to take action, you should be using an agent to help you take that action. And obviously there's a whole set built into what our solution is, but then we also believe the partners will be able to leverage that clean data to help action be taken so that you can sleep well as a CEO or a CIO or a board member knowing that the actions that are being taken across my company are the right actions.

>> What's interesting about you guys, and I think this probably one of the reasons why you get attracted to the company, one reason I liked the company, is that all the work that they did leading up to the gen AI hype was on purpose by accident, a great thing. In other words, Boomi was already doing the work in a way that prepared the company to actually take advantage of the low-hanging fruit that's real use cases in production for AI. We generate AI specifically because the data's there, and then that transition from iPaaS to enterprise platform is a TAM expansion opportunity. Do you guys talk about that in meetings? Say, "Hey, our TAM is this and now it's this"? What is the total adjustable market? What does it change? Because if it goes to the next level, which it will, you're in the gen AI business.

Arlen Shenkman

>> Yeah, so the gen AI business is obviously being solidified as we speak. I think what you said is 100% correct, which is that this is a business that was built to enable AI, because without data, there is no AI. And we've been in the data connectivity business for 20 years. So I do think that the company's incredibly well-positioned for an innovation that occurred in the marketplace and that we're positioned to take advantage of that. When we talk about TAM, we have a big enough TAM. Our TAM is $10 billion. Our TAM is plenty big. I worry less about our TAM and more about our ability to deliver what the market needs from us because then we'll get more of that TAM. And so we're not in a small TAM in anyway.

>> So you're already in a TAM that's massive. So it's not really a conversation. You're already in the middle of the action?

Arlen Shenkman

>> Yes, that's basically our point.

>> All right, so the question that everybody wants to know that's watching is what's the next check you're going to write for an acquisition? Do you have a shopping list? Is there a bunch of companies you're looking at right now?

Arlen Shenkman

>> I think any good M&A strategy has to align incredibly well with what's available in the market and what you need in your products. And so what you'll see us do is in much the same way as we took action in API, we found targets that made sense for us that fit in our portfolio, that were good cultural fits, we'll make those successful. As we continue to focus on other areas, we'll drive leadership and understanding of those spaces. We may partner in certain spaces, we may OEM in certain spaces, we may resell in certain spaces, we may acquire in certain spaces. But our approach to however we enhance our portfolio will be driven by a holistic approach for what's available.

>> So you're going to bring your M&A playbook to this market, and that's the inorganic growth versus organic growth from the product side. All right, cool. Now the next question is a little bit more ... I'm just curious because you had a great growth story. Congratulations, by the way, on the new teams. Steve's a great CEO and you're seeing new talent come in with the acquisitions and the management team, just take it to the next level. You got to be getting some offers to get bought. And I know you've been through that with the before when you're in a private company. Also, you got financing potential opportunities to get more cash. Is there a discussion of IPO? Is there more discussion for more refresh, more dry powder? Is there a nice cashflow coming in? The financial health of the company? Take us through your mindset there.

Arlen Shenkman

>> So we are not forced to do anything. We are a profitable company, cashflow positive with a reasonable balance sheet. We're owned by two very friendly, large private equity firms that want to see us grow, and we're really focused on growth. And for us, we've done the right things when it comes to our business model and enabling ourselves to make the right investments. We're focused on making the right investments and everything else is an outcome. And we can't determine what happens in the public markets or what happens in the debt markets.

>> You guys feel you're well-capitalized, plenty of capital available to you guys to execute?

Arlen Shenkman

>> Yes.

>> Yeah. it's been interesting, this market as there's been a lot of yard sales, and private equity gets a bad rap because there's a bunch of people who just take care of stuff and some people have a growth mindset. It sounds like your investors are looking for more growth, letting you guys run.

Arlen Shenkman

>> Yes. I think we have a very good balance of operating discipline in this company the way that it grew up. And some of that is from the spin out of Dell, some of that is being owned by private equity, but ultimately this is about growth.

>> What are your key performance metrics that you look at and what's your dashboard look like?

Arlen Shenkman

>> Yeah, we focus a lot on ARR, on renewal rates, on NRR, continuing to add value across the customer base in terms of trying to structure things that make sense with our customer base around consumption and around throughput. So I think we have a lot of flexibility, but mostly it's about are we getting the return we expect when we make an investment in our product and our customers acquire that and then keeping it.

>> Yeah, new customer, new logos, extending business within the customer, all the basics pretty much.

Arlen Shenkman

>> Absolutely.

>> Well, you guys have got a great operational focus. I love that you guys ... with more operationalizing the AI, you got the cloud agility, got a good ecosystem.

Arlen Shenkman

>> Yeah.

>> Feeling good.

Arlen Shenkman

>> It's good. It's a great business with this happy set of customers.

>> To wrap up, last question. Next year when we're at Boomi World 25, what's going to be the conversation?

Arlen Shenkman

>> We have a very broad portfolio of products and I expect that conversation will be how much value the Boomi platform is bringing to the AI investments companies are making this year. And I think if you look back at last year, there was a lot of conversation about, "Well yeah, we see AI but we don't have the money right now. We'll figure it out." This year, we all know there are a lot more CIOs and CEOs and CFOs focused on, "How am I going to leverage AI?" We are a natural launching point for leveraging AI across your business, and our goal will be to get here next year. And for me to be sitting here with a customer or two and saying, "Look, how much value did that Boomi platform provide for you guys in launching your AI initiatives?" Because that will take time and it will be a huge change for companies.

>> Dave Vellante and I always talk baseball analogies or horse analogies given Kentucky Derby's happening. But the baseball analogy we were saying is, in this AI market there's so much hype. If you can deliver just some singles can get on base-

Arlen Shenkman

>> I agree....

>> show value, there's a lot of over driving, "Hey, we're going to boil the ocean over." And all these big marketing infections. Show me the proof.

Arlen Shenkman

>> Yes, I agree with that.

>> It's not so much skeptical, it's more of how are we going to invest? How are you going to double down on it? So I think that seems to be the key focus for you guys. You can deliver value out of the gate for customers.

Arlen Shenkman

>> Yes. We are a platform in place in 20,000 customers to go test and leverage many of the opportunities they see.

>> You guys are modernizing IT in a way that's going to be game changing to think about.

Arlen Shenkman

>> We're excited to pull that off. Yeah, all right.

>> Oh, thanks for coming on theCUBE. We really appreciate it.

Arlen Shenkman

>> All right.

>> Congratulations on your deals.

Arlen Shenkman

>> Thank you.

>> Big moves, and we'll be following the growth. Thanks for coming on theCUBE.

Arlen Shenkman

>> Appreciate the time.

>> Okay, we're getting all the action here at day three. I'm John Furrier with theCUBE. siliconANGLE.com is where all the action is with the news. And we'll be back with more coverage here at Boomi World in Denver after this short break.

Arlen Shenkman | Boomi

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>> Welcome back over to theCube's live coverage here, day three at Boomi World. I'm John Furrier, your host of theCube. We're getting all the action here. We've got a great guest, the CFO and president of Boomi, Arlen Shenkman. Thanks for coming on theCube. The man behind the M&A. Big new keynote announcements. Thanks for coming on theCube.

Arlen Shenkman

>> Great to be here with you.

>> So it's great to see good management teams. I've known Steve for a long time. You've been good pals with him over the years. Boomi already had a good product and a great loyal base. Now you guys are making some big moves. The two big announcements was the two acquisitions and the strategic deals in the ecosystem, really is a big inorganic move and you've got organic growth of the product. Take us through the keynote news around the acquisitions, the motivation, rationale. How are you guys thinking about this?

Arlen Shenkman

>> Yeah, when you think about our business with such a strong, loyal customer base, a really incredible set of products, and frankly, customers want more from us. They want us to help them with other problems they have in their landscape, and building off the platform of products we have just makes us really a natural growth target for other products to be able to pollinate across our customer base, to bring in new customers and to continue to expand our whole portfolio.

>> You guys had a great career with the new management team. You've only been here for about a year. What attracted you to Boomi? What was the big aha for you? You've known Steve, but you're a CFO. You got to look under the covers. You're going to see, "Okay, how's it organized?" Obviously, it passed the test. What was the key for you to join the company?

Arlen Shenkman

>> This is a great business. It's a really good business. It's a well-built product. It's a very happy customer base. It performs financially well. And it's in a space where people have been dealing with this problem forever and it's an intractable problem, and there's really only one independent company at scale solving this problem, and it's us. And that really excites me. I think we have a great opportunity to be the leader in this space to solve problems in front of our customers that they've just had for so long, that not only make their businesses function better, but provide them with incredible ROI and a much more seamless opportunity to drive their company to the right decision.

>> It's interesting. We just came out of the ZIRP era, the zero interest rate thing. When you hear that about startups, okay, over driving growth through either too many professional services, cost of sales are over driving that. Not good economics on a lot that go to market. Boomi's got a good business, you were talking about it before you came on camera. It's like a lot of SaaS, not a lot of services. So a good mix of business here for Boomi.

Arlen Shenkman

>> It is. It is. And look, we have a business model that allows us to grow in a profitable way because we have recurring revenue and because we have a happy customer base. And when you put a great product together with a happy customer base, you get recurring revenue, you're solving problems for them, and it all works very well together.

>> Well, our team at theCUBEResearch are impressed with you guys. One of the things that jumps out is some nuance points. I want to get your reaction. One is we heard here on theCUBE from some of the leaderships, obviously great feedback loops. Really fast cycles getting product feedback. That's going to come in handy. But what's interesting, you have a lot of web services kind of vibe. You get to see a lot of use cases.

Arlen Shenkman

>> Yes.

>> And the old IPaaS market was getting in the sausage making factory and looking at all the plumbing, making that all work. Now that's SaaS basically. That's basically the cloud. You also play well with the hyperscalers as well, as well as you can be anywhere. You guys play with everybody. So you've got great flywheel going. How would you describe the Boomi flywheel? Is it that you can play with everybody or is it that you see things early, you're getting products out faster? What's the core engine look like? Take us through the flywheel.

Arlen Shenkman

>> I think it's a combination of independents because we really are Switzerland. We truly are the only company that wakes up in the morning, rolls out of bed and thinks, "How can I make two competitor solutions work better together and make this a better process for people?" And not a lot of people in bigger companies are doing that. So I think that is absolutely true. Some of the things you saw in the product that Ed had shared on stage, and you've seen from our team, we have 20 years of data from our customers. We know how they do integrations, we know how their processes work because we're a cloud solution and we can leverage that information to help other customers perform their processes in the best ways possible.

>> It's interesting, I was talking to Merv Adrian yesterday on our analyst segment. We were doing all an analyzing. He's former Gartner, he's not there anymore, so I can talk about Gartner a little bit, not a bad way. But you have the Magic Quadrants and IPaaS is a magic quadrant category. If you think about what that is, integrated platform as a service, that's everything now. So in a way, if you think about applications integrating into infrastructure and making that work, whether it's a critical workload or integration, it has all the same things. Observability needs, governance, data is critical, performance, low latency, whatever that app is, that's basically every app now. If you look at the G&A landscape, that's going to be the table stakes. So anyway, IPaaS motion is going to be a motion for all enterprises, especially with gen AI, when the data is going to be the critical factor. And so okay, you believe that?

Arlen Shenkman

>> Yes.

>> Okay. So as you look at that, you see the strategy on stage. What's the financial strategy of Boomi? Because matching the financial strategy with the growth strategy is key. Growth strategy is take the IPaaS sequence to the broader market opportunity. Because the IPaaS isn't going away. Technically it's growing at 35% CAGR. That's just still growing good.

Arlen Shenkman

>> Yep, check.

>> And then the new growth is going to come, the upside potential. So how do you match the financial strategy? What is the financial strategy?

Arlen Shenkman

>> The financial strategy is happy customers. If you have great customers and customers are buying things from you, you'll make money. The operating discipline of the company is absolutely ... it's part of our muscle, there's no doubt about that, but that's an output to me and not an input. The product, the customer satisfaction, the solving problems, the return on investment, the value we deliver will drive the financial return. As you say, we have a very solid core business. Financial results will come as a result of our execution of our roadmap and our product and our customers being happy with it.

>> Talk about the land, adopt, expand concept that everyone talks about. I talked to a customer yesterday here on theCUBE and they said, "Hey, they solved a manual process that was causing a lot of internal problems, and they automated the process completely and everyone's happy." And then it grew to other departments. Word of mouth. So you have inside net contract value increases across the customer base.

Arlen Shenkman

>> Yes.

>> Is that part of the ... and you factor that into the modeling?

Arlen Shenkman

>> Well, when you look at our NRR growth rates, they're obviously factored in, obviously well above 100%. So we are selling to our customers, we're getting new customers. Ultimately this product solves any number of given problems we identified in platform for our customers. And once it's in, they can utilize it to solve other problems. So we'll continue to expand and then we'll continue to expand our portfolio and continue to solve problems for them. We have customers all the time who come to us. I talked to a CIO last week who basically said, "This is my fourth time using Boomi. I love Boomi. I'm using Boomi." That wasn't a sales process, that was a, "I am a user. I like the product and I know what problems I need to solve." That product will expand. And there are other times where we're in and we're trying to show value by bringing together our entire portfolio.

>> As you look at your investment strategy, if you do go on that growth tear that I'm predicting like a ServiceNow level growth, which looks like that's an opportunity with the product, you got to pick your marks. So you got the M&A going on with the API. That's a big move that signals to the market, "Hey, we're serious about this infrastructure on gen AI API." 85% of the traffic runs through API. So that's a good call. Take us through the process of that investment and then the mindset. How's that translate to potentially future deals?

Arlen Shenkman

>> Yeah, so when I think about M&A and I think about our landscape, I really think about it in an inorganic way, which is we can partner with companies, we can buy companies, we're going to have resells and OEMs, and there's a broad set of tools we have in our toolbox to continue to expand our business, and we'll do that smartly. And I think you saw that with the acquisitions around API, where we have a strategy to provide people with visibility and governance of all the APIs they have with APIIDA, and then with more technology to help drive API governance and gateways across the platform that we offer. So that'll be a holistic approach. That will also be embedded with our entire ecosystem. So we continue to drive that value. So to your point about where are we going to invest, we're going to invest in our ecosystem, we're going to invest in our customer base, we're going to invest in digital products so that we continue to add value to our customer base.

>> One of the side effects of success is there's not enough people actually run the Boomi software because the training opportunity. So I've heard from customers that said, "I love Boomi so much. I have so many open positions." They can't fill them fast enough. So it becomes a skill/labor issue. And you got the automation with the agents, okay, that's going to be helpful. Talk about the customer base, because if you continue to grow, you're going to need to have more people using Boomi.

Arlen Shenkman

>> Yeah, and we need more partners. We have a very strong ecosystem, but we can't invest enough in our partners who can then turn that into more value for our customers. And I think that'll be our lever.

>> If I'm a partner, talk to me about my opportunity. Is there specific white spaces that you guys see where you can see, "Hey, if you want to come in and get a patch of grass here and grow with Boomi, here's some areas." Are there areas that you guys have earmarked and identified that could be great opportunities for partners or other new opportunities?

Arlen Shenkman

>> I think there continue to be opportunities, and I think those opportunities fall in all the categories we're talking about, which is, am I solving a specific problem for a customer? Absolutely use Boomi. Do I have a customer who needs to consolidate their landscape onto a platform which will solve many of their connectivity and data needs? Absolutely use Boomi. And now that we're in this conversation about AI, everything I see in the market is, how am I going to solve my AI problem? And there is no AI without data, and we bring data across to whatever that repository is. So that platform conversation is enormous opportunity for our partners to go to their customers and to say, "I have a tool that will help you solve the problems and meet your business needs."

>> Arlen, we were talking before we came on camera about our backgrounds, and we've been through some waves of innovation in the past. I won't say IPaaS. This an overgeneralization, so I'll take a little liberty here. I won't call it the cleaner that's seen in Pulp Fiction. It's like, "I got to clean up all this IT mess." These transitions mainframe to mini-minis to internetworking, all these major technology transformations require a lot of grinding, like putting things together. But now the internet is connected. The fact that you guys are doing the API management and the federated API system is just proof points that the sprawl, the connectedness of the world is a network. It's distributed computing. And so this is now the internet market for companies. So okay, we've been there, done that. What's the disruptive enabler? Because you guys have a platform and I like the vision, but platforms enable things. Mostly it's in value proposition. But in this market it's a disruptive enabler. It's going to disrupt things. Gen AI is going to change the game. Where do you guys see that disruption? And it's not a bad thing, it's what happens in these major waves. Some go away, some people don't make it. Some things change. Observability, we're talking about on the CUBE all the time. That category's not going to change radically because it's a feature of the system.

Arlen Shenkman

>> Absolutely.

>> It's not a company. So okay, you start to see that, that's a feature, not a company. Vector database, that's not a company, that's a feature. So you're going to start to see this in this transition. Can you share your thoughts on how you guys see the disruption opportunity, the enabler of that?

Arlen Shenkman

>> Well, I think there are three things that really come to mind. One is that we are clearly moving from an integration platform to an enterprise platform, which will enhance some of what we're talking about in terms of our overall ability to provide services and help that transformation. The second is that we are really a cloud platform. This company was born in the cloud, is in the cloud and resides in the cloud and always will reside in the cloud. And that gives us that ability through those transitions to modify our technology platform and continue to enhance what we do. And then the third is as you see these processes happening, we're just giving customers flexibility, because to your point, AI in the automotive industry won't be the same as AI in the financial services business or in healthcare. And our platform is horizontal and agnostic and we have that visibility to enhance our customer's processes and provide them the ability to be able to implement the changes they need.

>> You guys have probably great margins. I don't know if you could share them on camera, but being in the cloud gives you a great economic margin opportunity.

Arlen Shenkman

>> Yes.

>> It also gives you great relationship with the hyperscalers because you got more compute going on there. They like that, more storage. And so as you look at the agility of Boomi, there really isn't a player out there that I could point to and say ... in the data world, taking advantage of horizontal scalability of data and the vertical specialism in the app. So the data has always been this vertical thing. I got a data warehouse ... Even Snowflake and Databricks, they got data lakes, you guys got data reservoirs. What's next beyond that is horizontally scalable data. No one's really doing that. This seems to be something that you guys seem to be focused on.

Arlen Shenkman

>> Yes, absolutely. Absolutely. We think we see the convergence of APIs and integration platform and data management all coming together, because ultimately they have to reside in one place so that you can utilize AI to drive whatever the actions you need to happen in your business, which then leads into our point, which is if we can provide you with the ability to have a clean set of data to take action, you should be using an agent to help you take that action. And obviously there's a whole set built into what our solution is, but then we also believe the partners will be able to leverage that clean data to help action be taken so that you can sleep well as a CEO or a CIO or a board member knowing that the actions that are being taken across my company are the right actions.

>> What's interesting about you guys, and I think this probably one of the reasons why you get attracted to the company, one reason I liked the company, is that all the work that they did leading up to the gen AI hype was on purpose by accident, a great thing. In other words, Boomi was already doing the work in a way that prepared the company to actually take advantage of the low-hanging fruit that's real use cases in production for AI. We generate AI specifically because the data's there, and then that transition from iPaaS to enterprise platform is a TAM expansion opportunity. Do you guys talk about that in meetings? Say, "Hey, our TAM is this and now it's this"? What is the total adjustable market? What does it change? Because if it goes to the next level, which it will, you're in the gen AI business.

Arlen Shenkman

>> Yeah, so the gen AI business is obviously being solidified as we speak. I think what you said is 100% correct, which is that this is a business that was built to enable AI, because without data, there is no AI. And we've been in the data connectivity business for 20 years. So I do think that the company's incredibly well-positioned for an innovation that occurred in the marketplace and that we're positioned to take advantage of that. When we talk about TAM, we have a big enough TAM. Our TAM is $10 billion. Our TAM is plenty big. I worry less about our TAM and more about our ability to deliver what the market needs from us because then we'll get more of that TAM. And so we're not in a small TAM in anyway.

>> So you're already in a TAM that's massive. So it's not really a conversation. You're already in the middle of the action?

Arlen Shenkman

>> Yes, that's basically our point.

>> All right, so the question that everybody wants to know that's watching is what's the next check you're going to write for an acquisition? Do you have a shopping list? Is there a bunch of companies you're looking at right now?

Arlen Shenkman

>> I think any good M&A strategy has to align incredibly well with what's available in the market and what you need in your products. And so what you'll see us do is in much the same way as we took action in API, we found targets that made sense for us that fit in our portfolio, that were good cultural fits, we'll make those successful. As we continue to focus on other areas, we'll drive leadership and understanding of those spaces. We may partner in certain spaces, we may OEM in certain spaces, we may resell in certain spaces, we may acquire in certain spaces. But our approach to however we enhance our portfolio will be driven by a holistic approach for what's available.

>> So you're going to bring your M&A playbook to this market, and that's the inorganic growth versus organic growth from the product side. All right, cool. Now the next question is a little bit more ... I'm just curious because you had a great growth story. Congratulations, by the way, on the new teams. Steve's a great CEO and you're seeing new talent come in with the acquisitions and the management team, just take it to the next level. You got to be getting some offers to get bought. And I know you've been through that with the before when you're in a private company. Also, you got financing potential opportunities to get more cash. Is there a discussion of IPO? Is there more discussion for more refresh, more dry powder? Is there a nice cashflow coming in? The financial health of the company? Take us through your mindset there.

Arlen Shenkman

>> So we are not forced to do anything. We are a profitable company, cashflow positive with a reasonable balance sheet. We're owned by two very friendly, large private equity firms that want to see us grow, and we're really focused on growth. And for us, we've done the right things when it comes to our business model and enabling ourselves to make the right investments. We're focused on making the right investments and everything else is an outcome. And we can't determine what happens in the public markets or what happens in the debt markets.

>> You guys feel you're well-capitalized, plenty of capital available to you guys to execute?

Arlen Shenkman

>> Yes.

>> Yeah. it's been interesting, this market as there's been a lot of yard sales, and private equity gets a bad rap because there's a bunch of people who just take care of stuff and some people have a growth mindset. It sounds like your investors are looking for more growth, letting you guys run.

Arlen Shenkman

>> Yes. I think we have a very good balance of operating discipline in this company the way that it grew up. And some of that is from the spin out of Dell, some of that is being owned by private equity, but ultimately this is about growth.

>> What are your key performance metrics that you look at and what's your dashboard look like?

Arlen Shenkman

>> Yeah, we focus a lot on ARR, on renewal rates, on NRR, continuing to add value across the customer base in terms of trying to structure things that make sense with our customer base around consumption and around throughput. So I think we have a lot of flexibility, but mostly it's about are we getting the return we expect when we make an investment in our product and our customers acquire that and then keeping it.

>> Yeah, new customer, new logos, extending business within the customer, all the basics pretty much.

Arlen Shenkman

>> Absolutely.

>> Well, you guys have got a great operational focus. I love that you guys ... with more operationalizing the AI, you got the cloud agility, got a good ecosystem.

Arlen Shenkman

>> Yeah.

>> Feeling good.

Arlen Shenkman

>> It's good. It's a great business with this happy set of customers.

>> To wrap up, last question. Next year when we're at Boomi World 25, what's going to be the conversation?

Arlen Shenkman

>> We have a very broad portfolio of products and I expect that conversation will be how much value the Boomi platform is bringing to the AI investments companies are making this year. And I think if you look back at last year, there was a lot of conversation about, "Well yeah, we see AI but we don't have the money right now. We'll figure it out." This year, we all know there are a lot more CIOs and CEOs and CFOs focused on, "How am I going to leverage AI?" We are a natural launching point for leveraging AI across your business, and our goal will be to get here next year. And for me to be sitting here with a customer or two and saying, "Look, how much value did that Boomi platform provide for you guys in launching your AI initiatives?" Because that will take time and it will be a huge change for companies.

>> Dave Vellante and I always talk baseball analogies or horse analogies given Kentucky Derby's happening. But the baseball analogy we were saying is, in this AI market there's so much hype. If you can deliver just some singles can get on base-

Arlen Shenkman

>> I agree....

>> show value, there's a lot of over driving, "Hey, we're going to boil the ocean over." And all these big marketing infections. Show me the proof.

Arlen Shenkman

>> Yes, I agree with that.

>> It's not so much skeptical, it's more of how are we going to invest? How are you going to double down on it? So I think that seems to be the key focus for you guys. You can deliver value out of the gate for customers.

Arlen Shenkman

>> Yes. We are a platform in place in 20,000 customers to go test and leverage many of the opportunities they see.

>> You guys are modernizing IT in a way that's going to be game changing to think about.

Arlen Shenkman

>> We're excited to pull that off. Yeah, all right.

>> Oh, thanks for coming on theCUBE. We really appreciate it.

Arlen Shenkman

>> All right.

>> Congratulations on your deals.

Arlen Shenkman

>> Thank you.

>> Big moves, and we'll be following the growth. Thanks for coming on theCUBE.

Arlen Shenkman

>> Appreciate the time.

>> Okay, we're getting all the action here at day three. I'm John Furrier with theCUBE. siliconANGLE.com is where all the action is with the news. And we'll be back with more coverage here at Boomi World in Denver after this short break.