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Pega Cloud is Pegasystems' preferred platform

In a Q&A, Alan Trefler, Pegasystems CEO and chess master, ruminates about the cloud, the symbiotic relationship between chess and AI, AI inflation, and the pivot to CX.

For Alan Trefler, his company's push toward "cloud choice" has a consistent default: Pega Cloud.

The Pegasystems founder and CEO, 62, a chess master and purveyor of CRM software before Salesforce dominated the CRM, and now, CX, scene, likes to talk about how his customers are free to use any cloud provider they want but can feel better managed under Pega Cloud with Pegasystems administering things.

He also points out that Salesforce, whose marketing approach Trefler has been known to tweak in interviews and keynote speeches, also is sometimes a Pegasystems partner.

With the advent of CX, Trefler sees Pegasystems' brand of business process and digital process automation, together with CRM products, as a form of CX that he prefers to call customer engagement.

With the Cambridge, Mass., vendor's user conference, PegaWorld 2019, coming up in June, Trefler talked in this Q&A about Pega Cloud, his passion for both chess and AI, the uses and misuses of CX, and the value of the term AI, which he argues is inflated.

What is Pegasystems' preferred cloud platform, given that you are allowing customers to basically use any major public cloud or host Pegasystems on their own private clouds? How do you view Pega Cloud in terms of offering your users a choice of a variety of cloud platforms?

Alan Trefler: At the recent [Google Next] conference there was an interesting affirmation about the importance of what we refer to as cloud choice. So we really felt vindicated.

Pegasystems CEO Alan TreflerAlan Trefler

Last year, 50% of the business we sold runs on Pega Cloud, our fully managed service. That, just FYI, happens to run on AWS, but that's not visible to the customer. So we use AWS to provide our Pega Cloud service to a dramatically increasing number of clients.

About 40% more of our sales was to customers who want to, in effect, do what you would call cloud choice. So they can run it on Azure, run it themselves on AWS or run it like Google does -- on the Google Cloud Platform.

So you have cloud choice but you kind of prefer to run it with you managing it?

Trefler: We do. We make a little more money if we provide the service as well. We understand the software. We live with it every day, so we understand the software extremely well, and I think we can do an extraordinary job of managing a cloud for our clients. Having said that, there are some customers who want choices, to, for example, position it adjacent to some of their other cloud installations or to run their own private cloud.

All of those are things we think as a good software vendor we should be providing as options, and I think that puts us in a really good position in terms of some of the other firms like Salesforce.

How much are you pivoting away from what we used to know as CRM, toward CX?

Trefler: We have a long history of being able to automate work. Think of that as work automation, but sometimes people refer to it as digital process automation.

The customer experience is driven both by being able to present the customer the right information and ask the customer the right question. We think we offer a customer experience that can be driven all the way through to fulfillment. We can complement Salesforce, so a lot of our customers use us to execute some of the work and basically sit behind and with Salesforce to drive the end-to-end completion of work. But we also in some cases compete against them.

So you're not calling yourselves CX. You're sidestepping that trendy label.

Trefler: We like to talk about us as being DX, which really is the digital experience. We talk about customer experience, but I've found that people in the markets are just so tired of buzzwords. And there's really a desire to sort of blast through that and understand what's real. There's so much chaos out there in the market. It's numbing.          

Can we talk about AI, and your passion for chess? What does chess have to do with today's AI, and what's your actual definition of AI?

Trefler: The problem you have with real artificial intelligence making its own decisions is that it can actually make decisions that are illegal. AI, if it's a black box, can easily put you in situations where you're violating federal law, discriminating, for example, based on where people live, or race.

The link between chess and AI is just personally very valuable to me because that's how I got really deeply into software.
Alan Trefler CEO, Pegasystems

AI is important to me personally because in college I won a major international chess event and I was recruited by people at Dartmouth, where I went, to teach computers to play chess. The link between chess and AI is just personally very valuable to me because that's how I got really deeply into software.

I think the term AI has lost a lot of value. It's almost become a useless meme. It's being used to refer to such a strange mix of things from even just voice recognition all the way to automating decisions, to all the other stuff, including self-driving cars.

The way we [Pegasystems] think about it is our use of AI is to make the software smart and do things that otherwise would have taken people to do or would be slower. For example, we use AI techniques to really manage interactions and drive next best actions with our customers. We also use it, for instance, to do event correlation and find patterns, so we can make our technology [self-teaching].

This Q&A was edited for brevity and clarity.

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As a Pegasystems customer, what do you see as the advantages and drawbacks of running on the Pega Cloud platform?