♪ taylor: i'm taylor riggs in san francisco. this is "bloomberg technology." coming up in the next hour, tech earnings to start with a spark in a third-period netflix lights wall street while ibm fails to deliver. more on the earnings parade, including next week when tesla and microsoft report. and not the police. mark zuckerberg defends free speech on the internet in a speech at georgetown university on thursday.

we have more on his appearance, plus reaction. and the huawei perspective. we get thoughts from the chinese telecom's carrier business group on 5g, securities concerns and more. but first, our top story. ibm fell as much as 6.5%, the most since october 2015. this comes after the fifth consecutive quarter for posting slower sales. joined by my am guest. let's start with the top line decrying. is there not enough growth from red hat to offset the cost in that core business? >> yes. frankly, this is a question of one word, which is expectations. there are a lot of expectations for red hat that paid a lot for the company going forward. if you look at ibm's core

business, they are managing it for profitability as best they can. but the global services segment has historically been a profit driver and a cash cow. but you have to remember as people build the hyper cloud they moveture, as more of the cloud, there needs to be in the core technology space that change. they will need to drive efficiency in that area, they need to automate where they can, deploy technology that allows them to have less costs in that area so that they can stabilize that part of business. is an stabilize overstatement. it is that the business was not able to grow in revenue terms. taylor: you mentioned how expensive red hat was. at on whatre and point do you need to see it filtered through to the bottom line? >> i think if you look closely,

we are starting to see it now. what that means is you have a red hat product that is put through this vast ibm machine, and if you look at the move to hybrid clouds, in one of our recent surveys, we saw that many large companies have a cloud strategy. they have a best fit cloud strategy. they have a cloud strategy where there will be some in the private cloud and some in the public cloud. what ibm needs to be able to do is enable these hybrid cloud customers, be out there and accelerate growth for that business. we are starting to see that. i think you will see that going into the first half of next year. -- taylor: i want you to take a look at the chart here for our customers, which you show the story. the gap between the two has really expanded. software in white, hardware in yellow. does software look overvalued

given this runoff? >> we don't do recommendations here. what i will tell you is the expectations are really high for software. we have seen software continue to accelerate. we believe software revenue growth in the overall industry for the next couple of years will be between 8% and 10% annual growth, and that is really steady and fairly predictable. what is changing about software that i think people are starting to understand is it is a subscription business. it is becoming incredibly predictable. hardware, while some companies are trying to go to everything is a service and sell hardware as a service, we are at the nascent innings for that. that means predictable revenue and you can see out as a management team very far in terms of what your revenue is going to be in terms of those subscriptions. taylor: does that mean you are focused on the top line or is it

filtering through to an increased focus on the bottom line? >> depending on where the company is in its maturity, you are always focused on the bottom line. but in the early stages, you are less so focused. what you are focused on is bookings. not even revenue, being able to sign new contracts that you know will be a subscription revenue they will be earning over the future year period. that is what we want to focus on. taylor: we have seen good public success stories in the ipo market. now they are at 26 times. why are? -- why do you think those are good stories despite the high valuation? >> what they do is go back to the 2000 timeframe and say it is a bubble, it is crazy. i would argue what is different is these companies are solving really, really hard problems, whether those problems are around collaboration, around

application management in the cloud, whether those those products are incident management. what you find is when technology moved into the cloud, everybody thought, there would be no need for these software products any longer because we will be operating in the cloud. they will capture all that revenue. a lot of the same problems exist in the cloud. i have to be able to manage my data and migrate my data. i have to be able to figure out, do i have the right application for the right workload? how do i respond where the? -- when there is an incident? when i am in the cloud, my entire business will go down if the cloud application goes down. these guys are solving real-world problems. what i believe is that over time, you will see these company's create long-term value. you believe they are unfounded? >> i believe these companies are

solving real problems and will create meaningful value going forward. tactically, i think these companies are creating value long-term. taylor: i want to end broadly looking at the u.s.-china trade more. we thought there was a little bit of a resolution, but we have not gotten a firm line. how does that play out in the market? >> in the tech market, the way it plays out is we saw a relatively small impact in 2018. tariffsto 2019, we saw that have been crafty in terms of how they have been constructed. that as the things that are on the tariff list gets pushed out, we are seeing relatively small impact. however, if we end up enacting that list, you will see smartphones be effected -- be affected. that could cost us from half a point to 1.5 points going into the market. 4% toould take us down to

3% of overall growth. that is the scenario we are working with. however, i think the likely scenario is the tariff deadline gets pushed out even further. taylor: thank you for joining me. paypal is trying to boost income from the popular venmo person-to-person payment app. it will come out with a venmo credit card in the second half of the year. financial was chosen as a partner. coming up, one of the companies that helped power its sales also with data dog, zoom, and more. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg app, bloomberg radio and sirius xm. this is bloomberg. ♪

taylor: juul is suspending the sale of most of its e-cigarette flavors in the u.s. fruit and dessert flavors will no longer be available. juul took action after a review, but the devices had helped a generation of teens and young adults. crowd strike, zoom, and data dog. besides being three companies that went public in 2019, they shared something in common. they all use ai powered software to drive revenue operations. last week, clari announced $60 million in series d funding, bringing the total to

over $100 million. for more, we are bringing in the partner atr guest, a bain capital. let me start with you. congratulations on the funding. are you using the proceeds for? >> across all areas of the business. first of all, we are super excited for the fund raise. in terms of what we are using the funds for, we will be investing in not just marketing and sales to drive topline andyh, but also in our because our customer -- in r&d because our customers are looking for expanded value. taylor: henrique, with so much focus on driving topline revenue growth, there is focus on making sure you can at least see that path to profitability with clari and the other companies. how important is it? seeingink today, you are

public market investors looking for profitability. this is a company that has such a big market opportunity ahead because every business needs to generate revenue. in the short-term, our focus is how do we reach more customers excessively? companies?we help taylor: we talk a lot about companies that come on this program. they are trying to use ai. they are coming out with this latest technology. it is a really caught it is a really crowded -- really crowded space. how do you stand out? >> based on the momentum and the based on the momentum and the value we deliver. when i think about the value we have delivered to companies like zoom, qual tricks, what is interesting is these ceo's and boards are looking at the application of ai across the

revenue process. and how can we use that to help them accelerate their revenue and boost the accuracy and protect ability of their forecast? because they view revenue not just as an outcome, but an actual business process they can streamline and automate. that is leading to remarkable growth and shareholder value. it happens that our platform from clari is underpinning all of this. taylor: we talked about what a volatile environment it has been as of late. what business model is working for you now? >> we are seeing in the marketplace companies really need to move to a recurring revenue model. that is what matters because it has a high level of predictability and it gives you the ability to have lots of visibility in the future and investors are always looking at what generates cash flow. what andy has done from day one, and we have been working with andy for six years since the beginning, and he has always had the vision on what is the right business model for the country -- for the company? taylor: while you are focused on running the business and the day-to-day operations of that, when you look out, what is the

appropriate -- not exit strategy, but i am thinking of an ipo, your end of the line goal? we have learned that not all ipo's are successful right now. >> we are really focused on growing the value within the customer base. i have customers that spent $100,000 with me two years ago and are now spending $1 million with me this year. a ceo in boston of a company, a medical device manufacturer. he was mentioning to me we have reduced their slip rates on deals, increased their conversion rates, we are accelerating their revenue. we are really focused on spending around r&d, and making sure we can help our customers optimize every single revenue moment in what they call the revenue operations process. taylor: what is your ideal exit strategy? >> we are always investing in companies to build a that matter. what andy has done with his team is they are solving a problem that matters to business.

we also talked a lot of the differences between the direct list and an ipo. we know what the difference is, whether you need to raise money or not. do you expect more direct listings continue to take more market share within that ipo market? >> when you look at ipo's, and i sit on the board of four public companies, you want the market to decide, what is the best pricing for the ipo? my expectation is over the next couple of years, you will start seeing more direct listings. not for everybody. high quality names with great brand awareness makes a lot of sense. for other companies that may be need to raise their profile, that might not be as simple a process. taylor: finally in the last six months, what has been the extra focus, the extra attention, not only on profitability, but valuation, corporate governance, all of those things that are in so much attention?

>> i think in our market, we look at the focus has been around certain regular cake -- regulations. all government regulations that are being applied so our customers can have confidence that they can deploy ai and not be worried about privacy or security. what that has done is it has accelerated the adoption of our revenue operations platform in ai across a myriad of industries. taylor: wonderful. andy byrne and enrique salem. chinese tech giant huawei has been a target of the trump administration criticism, most recently as the company pushes for 5g technology in the u.s. in an interview with huawei's chief executive officer, that is next. check us out at sign technology. -- check us out at technology. this is bloomberg. ♪

taylor: let's get a check on today's top tech calls. apple received an upgrade from barclays. the analysts cited slightly better than demand for the .phone 11 following that upgrade, apple supplier cirrus logic was upgraded from underweight at barclays. they are at full benefit from the release of the 5g version of the iphone next year. the price target was raised to 55 dollars, after what had been a low of $40 a share. surged afterworks reporting revenues that beat expectations. analysts who covered the operator of content delivery says that results suggest a growth is underway. those were today's top tech calls. now, the trump administration has made no secret of its

giantity to chinese tech huawei moving into 5g, placing restrictions on sales and equipment into the u.s. and on sales of components to it by u.s. companies. for the perspective from huawei 's side, bloomberg's david westin sat down with the chief technology officer of the huawei carrier business group. >> we work in 172 countries globally. 100 70 of those administrations we talk to. of these administrations we talk to. it would be lovely to have a discussion with the current administration here in the u.s. and understand the rules. how would you like to explain our company and do our business together? if you set the rules and the standards, we follow the law. huawei's technologies in the u.s. is a legal entity. it will not do anything against the law. the ceo and our founders said that. we comply with the law in every country. there is no way we will comply with what cannot be done in china.

that is outside the law, and that is not what huawei does. and we will never do those things. if we can have constructive discussion with the u.s. to explain why we do things, how we do things, how the company is structured. there is nothing secret about huawei. we traveled every country in the world to meet customers. we don't do anything that is secret or different. what we do differently is we invest heavily in r&d because we understood 30 years ago that if you don't have your own products, you are just a reseller. where is your core value? why do we spend so much on r&d? we have learned for u.s. companies to take a snapshot of our product and put it into u.s. companies and let the u.s. grow and develop. we have done it before, in 2003. it is not something new or mysterious. understandsuawei

how to play. reporter: let me just raise this possibility that the problem that the administration has or some people might have is not with huawei. it is not saying huawei is a bad company that does bad things, and certainly not with the success of huawei -- if anything, it might be the reverse. if you are successful, you might become dominant. the concern is with beijing. you cannot control what they do and i think that is the concern. doesn't that make your position somewhat more difficult? >> i don't agree. i have been in the company 11 years and i don't agree. i would not agree with that position at all. our job, our focus, the board, every time i meet any board board is quite clear. he has stated many times you cannot have too much market share. if you take too much market share, what will happen with you? there is no competition,

especially with went -- with western companies. there is no innovation. mucheason 5g holds so promise is the opportunities it can do, especially to industry. that is where it can transform things. could you imagine if everything was connected, all the advances we could make by throwing it into the cloud? fixould think -- we could things like cancer, different types of diseases. he has always said you cannot take too much market share and you must provide a healthy ecosystem. last year, we spent more than $11 billion u.s. with american suppliers of components and software and other parts. we would continue to do that if the u.s. would allow us to be part of a global supply chain. that is what we are. reporter: can i ask you just one last quick question, which is putting it the other way, to what extent is the u.s. at risk of falling behind on 5g? is there a competitive danger?

>> do you know what the u.s. could do? we already build a lot of 4g networks in the rural u.s.. maybe we don't talk enough about this. i am not sure why that is. ruralme of the regions in u.s. i have been to, we can perver 450 megabytes second. those things are available. the u.s. moving down the line was necessary because of the constraints they have in the free band spectrum. but the good thing is companies like at&t and verizon and t-mobile, by trying this 5g technology, you start to learn about where the business opportunities are. we could see by 2025, somewhere around almost 300 billion dollars in gdp improvement globally. at, the u.s. is good pulling the data up and looking at what google and microsoft in

amazon do and applying ai. why not let huawei come in and provide the best technology and work together with the trump administration? and improve society? taylor: that was david westin. he was with paul scanlon, chief technology officer of huawei. coming up, despite the competition up for netflix, wall street is pretty thrilled with its latest earnings report. we talk about the company's subscription growth next. this is bloomberg. ♪ from the couldn't be prouders

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s-curve in terms of growth. do you see the subscription growth for netflix starting to subscribe a little bit, and does it worry you? >> i think michael may be right. i don't want to give him too much credit, but he may be right. there guys are going to add about 2.1 million subscribers this year just in the u.s. last five years, netflix has added about 5 million subscriptions a year, so when growth slows down, it tells you you're are pretty far along the s-curve in terms of penetration. caveat that with one thing. netflix did impose a price increase earlier this year, the biggest they had ever implement it because it took their low in price $7.99 to $8.99. i think that if the issue. i think they overestimated or over thought how much pricing power they had. it would take a couple of quarters to work through that. i think there are still plenty of growth opportunities overseas. taelor: they did talk about how some of that price increase was pressuring them a little bit in terms of new subscribers. does it make sense for them to

adapt a lower-priced ad supported model? >> i don't think they are going to do it, having asked them the question about a dozen times over the last few years. possibly they could introduce a lower price subscription plan, but i don't think they will do that. they have a lot of confidence, and maybe it is arrogance, that the quantity and quality of content they have is enough to justify the 47.99. 99.-- the $7. and i think it is. the base price is one dollar more than disney, but you got a lot more content. i think it is actually justified. would it help them to go to a lower price point? probably, but i don't think they will do it. taylor: would it make sense to buy a hollywood studio? they are one of the few producers not in a big blockbusters studio. would they just buy a studio and be able to get distribution that way? >> possibly. i don't thing so. i thought you were going to go the other way and talk about if they would get more into the production side rather than the

distribution side. i could see them vertically integrating into production, not so much in the distribution. i think they are pretty happy with home distribution. i think that is kind of where the growth is. this revolution we are living in is not going to be televised. it's going to be streamed. everybody is going to be streaming -- disney, apple, time warner, comcast. i think netflix is in the right business. the question is -- do they keep executing well enough to justify the price points they offer? taylor: you have thought up all the competitors. of those competitors, who is best positioned to take on a company like netflix? >> only disney. i don't think apple is, really, unless they want to put a lot of money into content, which i don't know that they do. and they also have to come up with a more compelling service. you cannot just throw money at this problem and assume you get it right. netflix has been doing this long time. they have five times as many subscribers as anyone else. it does give them a scale advantage. i want to make one thing really clear. the battle here is in international markets. next year, netflix is going to roll out 130 new local language series in international markets.

i'm talking the philippines, turkey, nigeria -- everywhere around the world. that's where the sub growth is, and i think netflix is way ahead of the curve. that's their big advantage right now. a lot of problems near-term, but that is their advantage long-term. taylor: you also cover roku. is international growth key to roku's expansion? >> there's two things that are key to roku. one is that is a great play in the streaming wars. they are going to have to advertise somewhere, because roku already has 30 million streaming subscriptions. second, if you start usage -- your subscription on roku, you will have to share some of that with roku going forwards. internationals part of the -- international is part of the growth strategy, but they have barely scratched it, so, yes, if they knock the cover off the ball in international markets as they've done in the u.s., the stock could triple from here. taylor: i want to switch gears a little bit and talk about facebook. there's been a lot of rumors this week and talks about libra, if the cryptocurrency works or if it doesn't.

is facebook doing the right strategy by going out on these ventures or should they stick to the core business? >> i don't know. you are asking a good question. libra -- they have these wonderful assets. facebook messenger and whatsapp. these are the two most popular messaging applications in the world and right now they generate about zero in revenue for the company. could they monetize it through advertising? they are pretty good at doing that, so they should probably try that first. could they create a wallet around it? yes. does it have to be a crypto financed wallet? i don't know. that was always the question in my mind. why do we have to go libra? but i think it's too early to call if that was the right move or not. they think about monetizing it through a wallet, i think it is a good idea. taylor: as you analyze the earnings landscape, what is your topic? >> facebook is the most interesting because i know we just discussed about the libra issue.buness i think is humming.

this company is going to do north of 30% revenue growth this year. i know there's a lot of overhangs on it. i know you are going to ask about regulation, but this stock trades at a discount to its growth rate. you rarely see companies trade at a sustainable discount to growth rate. there is 18 gap learning. there will be an arbitrage there, and that multiple is likely to go up. when it does, it's hard to know. sometimes the next 12 to 18 months, i think there is a material read rating -- material re-rating in the stock. taylor: you are stealing all my good questions. what companies are trading at a big discount -- we talk about the conglomerate discount. let's say there is a regulation discount. you remove that. would you be poised to see it uptrend? >> there's only five big tech companies regulators and politicians are looking for. in the democratic debates, only three were brought up, i think -- amazon, facebook, and google. and probably facebook is probably most of the cross hairs and google, too. they are both paying pretty large fines. my guess is amazon will be fine, too, rightly or wrongly -- my guess is wrongly.

but they probably will be fine, too. all three at some levels have had their multiples taken down by the market over fear of fundamentals. i will make one clear point on this -- we have had major regulation in the market. these companies have already been regulated. there is something called gdpr that came out of europe last year, and it has not impacted facebook or google's fundamentals. no change in the value proposition of those businesses to advertisers or consumers. if that did not do it, i don't know why new regulation would do it. and i really doubt they will be broken up. i think it would be very unfortunate, too, for consumers. i hope they don't get broken up. i think it is unlikely they get broken up, too. in that case, there is this mismatch and you want to buy the strongest assets when they are "on sale." taylor: all tech, all the time. thanks for joining me. and coming up, zuckerberg speaks out. we look at whether he brought new solutions to combating online hate speech or just played back facebook's greatest hits? that's next. this is bloomberg. ♪

taylor: facebook ceo mark zuckerberg gave a speech on the social network's take on online free speech at georgetown university. we heard a lot of facebook's already laid out defenses. >> more people across the spectrum believe that achieving the political outcomes that they think matter is more important than every person having a voice and being heard, and i think that that is dangerous. and i understand the concerns that people have about how tech platforms have centralized power. but i actually believe that a much bigger story is how much these platforms have decentralized power by putting it directly into people's hands. we have actually found that a different strategy works best, and that is focusing on the authenticity of the speaker

rather than trying to judge the content itself. while i certainly worry about an erosion of truth, i don't think most people want to live in a world where you can only post things that tech companies judge to be 100% true. taylor: for more, i want to go to bloomberg's kurt wegner who was at the event in washington. what are your key takeaways? >> you heard a few of them there. you have a ceo dealing with for with four antitrust organizations talking about decentralized power and how his platform is actually good for people. he talked about the power of being able to reach the masses, kind of the power of scale as being the fifth estate, actually, is what he was talking about today. overall, there were a lot of talking points from facebook that we had heard before, but i think some of the keys were, "we are actually doing a good thing here by giving people a voice. we are supporting politicians by

not pulling down their ads and being worried about the accuracy of political ads." he also kind of brought up this threat of china, which is something he has done before, and he said if we don't do this, china might come in and take over and they don't have the same beliefs we do and that is a real threat. taylor: before we get to china, i want to hit on the first point you made about facebook wanting -- not wanting to be in the fact checking business. what is their defense for not wanting to do that? >> you kind of heard him talk about it there. he said no one really wants to have a tech company be deciding what should be true and what should be false and what should be allowed on the internet and what should not and this has been the debate around facebook for a long time -- what is the company's role in dictating what exists online? part of his argument was that if we are the ones who are fact checking political ads or if we get rid of political ads altogether, which is actually something i wrote about this

week i think facebook should consider doing, he said that will benefit the incumbents because suddenly, the people who already have a platform, who already have attention from the media, those are the only people who will get talked about, not the people who are willing to pay to kind of make their way on the scenes. those are a couple of his arguments for why he thinks not only political ads should stay on facebook but why he thinks they should not be meddling with them. taylor: kurt wagner, thanks for joining me. for more on the subject of free speech online, i want to welcome a journalist who has been covering the topic extensively. it is andrew marantz, a staff writer at "the new yorker" and just published "antisocial: online extremist techno-utopias and the hijacking of the conversation." talk to me about the zuckerberg speech today, not wanting to be in the fact checking business. isn't that right, though? we don't want tech companies telling us what is or is not news. >> i think this is a perfect encapsulation of how misleading

a lot of these talking points are when it comes from the people who build these systems. he wants to make it seem like this is just a neutral public square and that he is just someone who wants to let freedom freedom of expression reign and not be a gatekeeper. that's fine, but he is a gatekeeper. facebook makes decisions about how their algorithms work every day. they make decisions about what you see in your feed and what you do not, so it's disingenuous to suggest that this thing he built is not already putting a finger on the scale. it reminds me of someone who built a big highway system and then says, we like freedom of enterprise, we like cars, we don't want to deal with the fact that pollution is killing our environment. sorry, you build the system. it is having consequences. you have to clean it up. taylor: if that is the case, why there have been increasing calls for facebook to be treated like a publisher or even a utility company with more regulation? >> yes, something has to be done. it reminded me of starting a warehouse party. you start a big party, you hope

have fun is going to and just get along. but if you don't building a sprinkler system and people start setting things on fire, you do not have any way of policing things or controlling things when things get out of control. you cannot just hope and pray that progress keep going and there will be some arc of history that will deliver us to a better result. facebook has been used to spark genocide in various countries. it has been used to spread autocracy throughout the world. it's nice to rest on the abstractions of free speech, but abstractions are not going to get us far. it is too late from that. taylor: we heard from marc benioff this week making calls for facebook to be broken up, but does that actually solve the problem? >> no, it does not solve the problem. i think the problem is deeper than that. the reason i wrote a book called "antisocial" is not just because it is antisocial media, but there was this feeling all of the internet would be prosocial and bring us together. that was the first 10 years. there was always an antisocial side. there were always people inciting violence. there was always harassment.

there was always bigotry. we just didn't want to think about that. we didn't want to look at it. we wanted to think about the arab spring and democracy and all the fun stuff about the internet, but if we don't look at the harm that can be caused, we are just kidding ourselves. we are just leaving out half the story. taylor: you brought up the book. you were on the road conducting dozens of interviews. what is the biggest thing you have learned? >> in addition to interviews, i was just a fly on the wall as these trolls, misogynists, as their mask would slip. i was with a guy in california who was just an average married guy in his 40's, not some teenage troll in his mother's basement. a married guy with kids and a dog. he would wake up in the morning and say i want to create a subliminal association between a political candidate i don't like and disease and discussed. -- i don't like and disease and disgust. and even though he did not have

evidence to do that, he would just do it. i would watch him just open periscope, rally a bunch of his followers, get a periscope hash tag, get that trending on twitter, and from there, it would just enter the national discourse to the point i would wake up the next morning and read the newspaper and this guy's fingerprints would be all over the news -- and trust me, this is not a guy we want with our fingerprints all over the national news. taylor: not only did you write a book, but you had an op-ed recently which said one thing they could do is replace sheryl sandberg with a human rights lawyer or someone who can see how speech can lead to violence. why sheryl sandberg? >> from all we heard, she seems to be the person who is most promoting profit at all cost and -- in that company. most of the reporting that has come out of there has as she was the one who set up the advertising model. she's the one who has been really uncompromising about full steam ahead with anything that gets in the way of profit being eliminated, and some things that get in the way of profit are just necessary for our survival, like making sure that these platforms don't spark genocide, making sure they don't spark violence, making sure people don't get killed because of the platforms.

taylor: let me push back a little bit because in their defense, they wanted to create a platform in which there was public discourse, room for us to have these multiple conversations and discussions. why is it then their burden to be able to regulate what is or is not set? >> because they built the room in which we are having this party. if you're hosting a party and you don't card people before they come in and do not decide that any behavior is out of bounds for the first 10 years and things start going haywire, it is your party. you might not be doing everything that everyone is doing, but you are the host. you are responsible for what happens in that room. taylor: what regulation is the right answer? because not all regulation is good. like you said, breaking up these companies would not necessarily solve the underlying problem. what type of regulation wouldn't you see as a good response? regulation would you see as a good response? >> i don't think the government can do it on its own. i think some government things can be useful, analogous to antitrust stuff, but i think a lot of it will have to happen from the companies themselves and from us, the users, to

really create a public movement to push back and say there are boundaries. with any industry, we can talk about freedom of speech. we can talk about freedom of enterprise. but if you are trying to get kids addicted to cigarettes or trying to get people addicted to gambling, we as a society have determined there are limits. taylor: during the democratic debate, a lot of senators said we should delete trump's twitter account. twitter came out and said world leaders are not above their policies. what is the case being made that some accounts should or should not be made to delete the president? >> the case to delete president trump's twitter account is pretty easy -- he violates the terms of agreement. they said there is a newsworthiness exception. but when you threaten nuclear war, that is a threat. taylor: thank you so much for joining me. and still ahead, competition between flack and microsoft heats up. we talked to brian elliott on

its plans to take on the tech giant, next. this is bloomberg. ♪

taylor: it has been a busy few months for slack. this week, the company announced a launch of workflow builder, a new product to help users cut the work out of work. this comes just a few months after direct listing on the new york stock exchange. since then, competition has been heating up with microsoft. to discuss all of this, i bring in brian elliott, slack's vp of platforms. talk to me about workflow builder. it helps us be more productive. how does it do that? >> slack built workflow builder to make people's work more simple, more pleasant, more productive, like everything we do. it's a visual tool that allows any user to automate routine tasks. to give you an example, everybody has the joy of introducing somebody new to their team. you need to get them to talk to the right people, share the right documents, fill out the

right forms. one of our customers, built a workflow that automates the process, takes the work of work out of it, helps people focus on their every day job. that is what we are really about more broadly. we bring alignments and productivity to teams by helping them get work done more easily. taylor: you came out with a blog post last week that highlighted daily active users. 12 million on slack. microsoft is 13 million, but you guys are making advancements. how has that competition been? >> competition is based on the value slack brings to its customers. microsoft itself is a highly successful company. they have done a great job building out the office 365 franchise. it has 100 million users. they are also deprecating skype for business and pushing people into teams. 13 million is a good number, but i'm not sure it is a big success in that context. slack, people pay for it because they see the value in it. 12 million daily active users. people have slack open on their desktop or on their phone for

nine hours a day. they are using it for 90 minutes of that. 5 billion actions a week. 5 billion actions a week taken by people means people are reading messages, writing messages, doing searches, sharing documents, and i run the platform team which integrates all the tools people use. 5 billion actions means people are integrating and using the tools they need every day in slack. that is why we are seeing real value in slack and that's why companies pay for it. taylor: i think the big success story about slack has been those enterprise customers. those are pulling in more than $100,000 in revenue. you want more of those big clients. >> that's right. taylor: how does workflow builder get us to get more of those types of clients? >> that is a great example of how we help companies deliver on what they've asked us for. teams engage deeply on slack. those large enterprise customers are the ones that asked me to help get the workflow builder built. let me give you an example -- there are 500,000 custom applications that get used in slack every week. these are internal jobs somebody has built.

that might be the purchase order approval process or new employee onboarding. up until workflow builder, you had to have a developer to build one of those. workflow builder allows anyone in the company to automate those kind of routine jobs. every large enterprise customer is short on developers. workflow builder addresses a real need to help companies collaborate more efficiently and more productively, including in really large enterprises. taylor: i know you are running the platform side of the business. we have talked about the differences between the direct listing and the ipo. generally speaking since going public, how has it been? has there been more scrutiny on the business? >> we are focused on delivering value to the customer. it has been the focus since when i joined slack a couple years ago. that is one of the things we are most proud of. our focus is on how we are delivering value to customers. that is true before we went public. it will be true after we go public. taylor: thank you for joining me. >> thank you. taylor: that does it for this

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