>>Ply from Barcelona, Spain. It's the cube covering Cisco live 20 fly from Barcelona, Spain. It's the cube covering Cisco live 2020 brought to you by Cisco and its ecosystem partners >>come back to the live coverage of Q four days here in Barcelona, Spain. I'm John for a stupid cube coverage at Cisco live 2020 in Europe. Our next guest, Michael Beasley CTO of the Cisco service provider business unit. Michael, great to see you. Thanks for coming on. Thank you for having me. It's great to see you guys again. You came on at the Cisco live show last year, 2019 in the U S obviously as a CTO of the service provider group, you're in the middle of all these really big conversations because the service providers, I've been really trying to push the envelope for generations into getting better performance, but the diversity of services that they have to start bolting onto their infrastructure. Now with all the pressure of the cloud providers, everybody's streaming these days, so all these new competition, so service parts still have a huge footprint, huge infrastructure. >>That's the story. What's going on with a service provider. They obviously do, I mean more and more service providers are deploying and running critical infrastructure for their consumer customers, their enterprise customers, and obviously as as the economy, as nations, as industries continued to digitize, that infrastructure's critical for governments, for countries and for whole economic environments. And the reality of course is that the bandwidth keeps growing more and more bandwidth is coming onto the network. We see tremendous innovation and advancements in the access layers, whether it be on the DOCSIS for cable, wifi, six obviously for wifi and for five G with regard to mobility. So the amount of bandwidth that can come on to the network keeps rising, rising exponentially. So the service providers, you know, obviously that poses a set of challenges, but also a set of opportunities as they rethink their architectures and their infrastructure to be able to deliver that bandwidth cost-effectively. >>I know cost is a huge concern for these guys because they do spend a lot of money. Stu and I were just reminiscing about how much we've been following Cisco growing up in the computer industry at our rate and we're there when Cisco was born and watch it progress over the years and now as it's on the next generation or the next gen cloud, next gen, everything. It's interesting you have the service providers say, but the one that you're in, and I would say maybe financial services have always been like the hardcore Cisco customer pushing the envelope on the gear, pushing the envelope on the technology because they have low latency requirements. You move and pack us around. Right now you're starting to add more payload with more bandwidth coming. It really kind of the fit of the bellwether. What are the big trends that they're driving now because again, they have to maintain those table stakes and still pioneer new ground. >>What are some of the things that they're doing that you see or tell signs for the future? >> I think the things that I see is first of all, a drive towards rearchitecting the network such that it's much more simple, easier to operate, more cost effective and more reliable to operate with w with new next generation technology up and down the SAC, the stack from the Silicon through the actual systems, the embedded software, the optical modules, all of the physical ingredients that go into building a next generation software defined transport network. That's really what I see our major customers aim towards. Obviously it takes time. There's an amount of challenges given that some of these customers have been running networks for century. That said the desire and the efforts to partner with us to get to that future state such that the bandwidth can be offered cost-effectively and very reliably as we're building out this, these critical infrastructures. >>I would add. The other aspect is that as these networks are getting more powerful delivering more services, there is more of a consideration for the integrity, the trustworthiness and the security of the actual networks and the actual infrastructure from the hardware through the software in Silicon that actually make the make up these networks in having technologies that can measure the trustworthiness and the fidelity both from a hardware but also from a software perspective and be able to report off of the infrastructure without the station records to verify and to drive analytics with regard to the cleanliness and the trustworthiness of this infrastructure. >>Yeah. Michael, I remember leading up to the announcement that this is gladness. December, it was, Oh here's the next gender issues generation in the internet and in my mind I was like, Oh, sounds like it's time for the next generation of routers. But what I found really interesting is, you know, what are those next generation applications that are going to drive things? You know John talks about from a history lesson, I remember going back, you know, okay, what's going to drive 10 gig? Oh, we're going from a lot of North South to the East. West virtualization wave was really kicking off inside data centers these days. You know, it's multicloud, it's cloud native application 5g of course as a drum beat in the background. Talked a little bit about some of those applications, the business impact that the surface fighters need to be able to enable in this rollout of this new technology. >>Yeah, it's a very interesting area. I've been in the industry for 30 something years, just about 30 years and I think I've never found the industry more exciting than it is today. Obviously there's that set of challenges, but there's an incredible set of opportunities as well. We have all of the applications that we know and love today are continuing to grow at exponential rates and get bigger, you know, further and further adoption. If you think you know the fact that less just slightly less than all humans on the planet are on the internet with more coming in the future at an accelerated rate and bringing more devices with them, we think that the average device per user will go for about two up to about three and a half over the next few years. So you have the current set of applications, whether it be social media, video, video streaming, they continue to grow. >>And then there is a whole new set of applications that we'll see. There's a long list. We will see which ones actually transpire. It's hard to predict, but everything from advances in gaming, artificial intelligence, AR, VR services, telemedicine, the continued digitalization of industry in particular, manufacturing, transportation, oil and gas. All of these industries opened up at the prospect for new applications that will run on top of these infrastructure that will drive exponential growth in bandwidth and also will, will require much, much better latency from the actual network infrastructure. So there are areas that we're focused on and delivering the innovation and the core building blocks to allow our customers to build these networks to offer these services. >>Well, one of the other challenges, and you've talked about these, these transitions in this step function that networking tends to do is the cost involved when you go from one generation to the next. Cisco of course, has a large optics business know major player in the industry. Talk to us a little bit about what 400 gig means today and have people should be thinking about the cost of these types of solutions. >>Yeah, it's interesting. Certainly as we've, as we've seen from each generation as the interface speeds have changed, the actual bomb, the bill of materials for the solution has changed significantly with regard to which piece account for what dollars it used to be. If you go back to the 10 gig generation, the actual networking equipment itself was the majority of the cost. That was the majority of the bomb optic modules that plugged in were a minority. Maybe the optic optic modules were 10 or 15% and the rest was actually the system. As we look to the 400 gig generation that is actually reversed the, we now have network Silicon that is so dense and so fast that eight can power a full 36 ports, a 400 gig on an actual line card. So you're plugging in 36 optical modules to bring that bandwidth to the, to the networking Silicon. >>So as a percentage of the bomb, the optical module is not much higher from a bomb perspective. It also becomes more critical technology with regard to the reliability and the cost of the whole solution. And this is why Cisco is taking a big focus on the optical module space. We've obviously continued our own organic development and we've also been quite active on the M and a front with regard to ensuring that we have the technology and the right R and D programs to be able to deliver very reliable, cost-effective optics at 400 gig and beyond. So you brought up Silicon, so I got to ask the Silicon one question we were covering at the launch in San Francisco, Chuck Robin was there, David Geckler, you had all the top dogs. They're kind of really kind of going off on the future of Silicon, but of course Silicon angle's interested in covering that because that's in our name. >>But the trend is about cloud scale and operational efficiency. And one of the things that's coming out of the cloud trend is an operating model in public cloud and on premise that is proven. That's what people are going through. That's hybrid. How were the SP service providers implementing that? Do you guys see the Silicon one being that opportunity where they can have an end to end software life cycle having operating model? Is that some of the value? So then what's the real story for us writers? So, I mean that's, that's a core aspect of our architecture and our strategy is to have a solution, a full solution that our service provider customers can consume that embodies all of those learnings and all of those operational realities that have built up in the, in the public cloud space. Certainly Silicon one is a key aspect of that with regard to being the fundamental building block from a network processing point of view being the fundamental building block that actually switches traffic that switches pockets and actually routes the traffic through the, through the infrastructure and through the transport network. >>Along with Silicon one we have our embedded software XR seven which is the control plane for that Silicon and it embodies the routing protocols, the management interfaces, analytics, traffic management, QoS services and so forth. But more and more we're augmenting that embedded software with a set of cloud services that are delivered as a SaaS to our customers. That AIDS in operations reduces their deployment efforts, their deployment costs, and also increases reliability of the whole solution. As the SaaS services are augmenting the physical infrastructure, there's less room for human error. There's less room for integration problems with between the layers in the stack. So it's a key aspect of our savagery. Okay. So let me ask you about the user experience or the application experience. So if I'm developing apps on Silicon one, is it multiple stacks? What's the stack look like? What's the, what's the developer environment look like? >>If I'm a telco or I'm a service provider, what's going on? >> So it depends on the, on the use case, what we announced last month was not only the Silicon and our own products, the Cisco 8,000 that uses that Silicon, but we also announced the offerings of Silicon one through a merchant Silicon program where you know, third parties and OEM, a large customer could actually transact with us on the Silicon alone where we're selling them the actual Silicon. In that context, the Silicon comes with a full featured software development kit that sits on top of that Silicon. You can consider that a device driver if you like an abstraction layer that then allows that third party to either use open source or to build their own network services stack on top of that SDK that can then leverage all of the power in the innovation that is in the Silicon one engine. >>Before I get to my video question because I, cause we're doing video, we care about facts but we love more bandwidth. We love more video action. How do you talk to customers that you meet with? Because we hear a lot from the community and our expert network on the cube alumni that in certain there's a lot of pretender products out there, you bolt on a Nick offload. Where is it okay to have kind of like performance enhancements, performance enhancing hardware. That sounds kind of, that didn't sound right, but performance hardware when when the system is more important. So which customer profiles want more of the Silicon one or Cisco 8,000 versus a either an enhancement product and how does the customer determine what's a fit form one may be look good on paper, low price, high performance. How do you go in and say that's pretending that's a player? >>It's interesting. I think that the fundamental root of the answer to that question is you have to look at the application stack that you're trying to deliver. If it's a homogeneous stack where the applications are infrastructure to deliver services to a third party, then what matters simply is that application and all the infrastructure underneath it. How can you deliver that most cost effectively both in terms of capital costs but also operational cost in terms of power and human operational costs with regard to running the infrastructure. If you, if you think about a heterogeneous situation, public cloud is a good example of that where the public cloud provider is responsible and bears the cost of the infrastructure layer and the customer, the customer themselves are bringing the application workloads to run on top of that infrastructure. In that heterogeneous model. Indeed there might be, you know, some valid business security and operational reasons for actually separating the infrastructure out and having a part in the infrastructure dedicated to run the application on a part of the infrastructure dedicated to the overhead of that application, whether it be virtual networking, security functions, analytics and so forth. >>So it's interesting generally with our customers, what they're looking for more than anything else is bottom line. What is the most efficient way to deliver the end result, regardless of how it's architected, regardless of how the processing is separated into different layers of compute and dedicated hardware, what's the most effective way to deliver the outcome, both in terms of capital cost and more and more operational costs. And as everything gets faster, the power draw is more and more a very dominating function with regard to the ongoing operational costs of these networks. I want to get your thoughts on a couple of trends. One is the comeback. A voice. Stu was riffing about his days were going to voice over IP. Now voice, Hey Alexa, you know there's a small, it's not a real deep bandwidth heavy application, so get great voices coming back that fits a service providers. >>But video is growing really fast. So video is putting a lot of pressure on service providers. What's the state of the art there? Can you make a comment on how you see that evolving? What are they doing and what are some best practices and what are people doing? Yeah, I mean you're exactly right. Video in particular over the top video streaming video, but broadly video at all forms continues to grow at exponential levels. Our analysis, if you look at the Cisco VNI study by 2022 we predict that more than 80% of all internet traffic is actually going to be video. And along with its growth, unfortunately the value per bit goes down because especially as you get higher definition videos in particular, the value per bid to the service provider to the, to the entity bearing the transport cost of the video is actually going down. >>So what that drives our customers to do is first of all provision very high bandwidth networks but also optimize the most cost effective way to deliver that video at very high quality to their end users. I would say there's a few things that are top of mind in achieving that. The first is distributing out the network in particular, distributing out, peering into the Metro areas of the network and no longer having Piering dedicated only at the far side of the backbone when peering is done in the Metro. That traffic is literally on the network for less kilometers. So that helps. I would also say the deployment of edge compute caching and CDN services in the Metro really helps in delivering video. We just got a great tutorial on video architecture in the major highways of the pipes Metro appearing. So changing the dynamics of peering relationships, traffic routes, but ultimately making an efficient. >>Exactly. Well Michael, great to have you on. I know you've got mobile world Congress coming up in February. I always a big show, um, spill some of the announcements for us. I'd love to, but I thought I would be not popular with my bosses by now. Just just teasing you. I know you've got some good stuff on. We're waiting to hear them. We haven't heard anything, but we're getting some rumblings as always. Big announcements for you guys. Congratulations. Thanks for coming on. Thank you so much. I look forward to it. Great insights here on the cube, on the service provider market, the needs, what's going on in the network, and really ultimately video's changing and also the architecture is changing and this is putting more pressure. Again, more bandwidth, more things are happening. This is the Cisco powered cube here in Barcelona. I'm Gianforte Stu Miniman. Thanks for watching.

>> Announcer: Live from Barcelona Spain, it's theCUBE. Covering Cisco Live 2020. Brought to you by Cisco and its ecosystem partners. >> Hello everyone, welcome to theCUBE here live in Barcelona Spain for Cisco Live 2020. This is our first CUBE event for the year. Next 10 years of CUBE history, we look back 10 years since we've been around, for 10 years, we have another 10 more we're looking forward to. And this is the first event for 2020 Cisco Live at Barcelona. I'm John Furrier, your host, with Dave Vellante, Stuart Miniman, extracting the signal from the noise. The cloud business is noisy, the networking business is under siege and changing, Dave and Stu we're pre gaming, Cisco Live, kicking off the show, end of the first kind of pre day, Tomorrow's the big keynotes. David Geckler, Verizon exec is preparing to announce rumor has it some insights into what Cisco's position will be vis a vis cloudification, that's going to change their portfolio and probably identify some opportunities, and also some potential gaps in their strategy and what they can do to be competitive. The number one leader in networking, they got a great market position. But cloud is changing the game with networking. >> Yeah, john, it's funny, I heard you talking about, the 10 years and everything. 10 years ago, if I thought about Cisco, I'd be looking at the I pattern of getting the jitter out of the network and trying to tweak everything. And today, what are we talking about with Cisco? We're talking about software, we're talking about cloud. We're talking about developers. Yeah, they're a networking company at its core, but Cisco has been going through a significant transformation, it's been an interesting one to watch. Dave, you wrote a little bit about, Cisco is one of the four horsemen of the internet era, of course the dotcom, they were one of the ones that actually survived and thrived after the dotcom burst, but Cisco is a very different company today far from the $500 billion market cap that they had a few years back, they were at about $200 billion, but still dominant in switching and routing. But there are threats from a number of environments and a lot of changes as to what you need to think about when it comes to Cisco. >> Well, sometimes it's instructive to look back and see how we got here. Cisco made three big bets during its ascendancy, the first one was it bet on IP, I mean, John, you've talked about this a lot, it decimated the mini computer industry by connecting distributed computing and client server, the underlying plumbing there. The second big bet it made was it trained a bunch of engineers, the Cisco certified engineers CCIEs, and they used that as a lever and created a whole army of people that were Cisco advocates, and that was just a brilliant move. And the third was under the leadership of John Chambers, They did about 180 acquisitions, and they were quite good at acquisitions and what that did for them is it continued to fuel growth, it filled in gaps and it kept them relevant with customers. Now, part of that, too, was, Chambers had dozens and dozens of adjacent businesses, remember, he said they were all going to be a billion dollars. Well, most of them, didn't pan out. So they had to cut and burn, and so but now under the leadership of Roberts, they're a much more focused company, kind of getting back to basics, trying to bet on sure things and so let's talk about what some of those sure things are and how Cisco's performing. >> Well it's clear you said lever, they're got to pull a lever at some point and turn the boat that is Cisco, aircraft carrier, what do you want to call it? In the right direction? That's been something that, we've been covering Cisco for decades Stu as you just pointed out, and while we've been close to all the action, I think Cisco knows what's going on. It's clear to me that they kind of understand the landscape. They understand their opportunities in the future, but they're a massive business, Dave, you pointed it out. The combination of all those mergers. The thing that got my attention was as they understood the unification many, many years ago in the compute side, you saw Cisco clearly understands the unification. They know cloud is here, they know that do not make a move, that's cloud friendly, they were going to get swept away and be adrift with the next wave, which is cloud 3.0, whatever we call it. So to me, that's the big story with Cisco. What is the impact of the company when you cloudify business? That's not public cloud, that's hybrid public, economics are changing, the compute capabilities are changing, the network capabilities are changing, got the edge. I think Cisco will be defined by their actions over the next two to three years. What they announce, how they position it, and what they bring value to the customers because you got Silicon One chip, good move, got cloud position, got App D on the on the top of the stack, you got cloud center, they're trying to get to the cloud, but you can't do that until you have the subscription business, until you, can't do pricing by usage unless you have that model. So I think it's a brick by brick, but slowly they're doing it. We have to hear some things next year on Cisco, on how they're going to be true, cloud enabled? >> Well, software is a huge play for them, right? I mean, they've got it, because Cisco's been the dominant player in networking with two thirds of the market, I mean, they've sustained that for a decade plus, and it has allowed them to drive 60 plus percent gross margins for years and years and years, huge operating margin. So how are they going to continue that? Software is the key. And as you say, John, subscriptions is the cloud model that is critical for Cisco. Now they talk about 70% of their software business is subscriptions and annual recurring revenue, it's unclear really how big their software business is, they give hints, I'd peg it at about seven to eight billion last year, maybe growing to 10, 12 billion this year. So pretty sizable, but that's critical in terms of them driving the margins that they need to throw off free cash flow so they can invest in things like stock buybacks and dividends which prop up the stock. >> Well, the problem is you start chasing your tail on the stock price and or product TAMS and product revenue, you might actually miss the boat on the new product. So it's a balance between cannibalizing your own before you can bring in the new, and this is going to be the challenge with Cisco, when do they bite the bullet and say, "Okay, we got to get a position on this piece here "or that piece there, ultimately, "it's going to be about customers." And what do we know, public cloud succeeded with one data, hybrid cloud is a reality and people are executing specific technologies to do an operating model that's cloud And to me, the big wave for Cisco, in my opinion, is multi cloud, because that's not a technology. That's just, that's a value proposition, it's not so much a technology. >> Yeah, Dave, you mentioned a lot of the acquisitions that Cisco has done. In many ways, though, some of the areas where Cisco can be defined is the acquisitions that they didn't do. Cisco did not buy VMware, and were behind in the virtualization wave. And then they created UCS and that actually was a great tailwind for them, created their data center business. They did not end up buying Nicira, and yet, Nicira's done very well. But if you talk to most customers well, even if you're deploying NSX, whose hardware do you tend to have? Well, yes, sure, it might be Arista, might be somebody else's but Cisco still doing good, going well, so they haven't had, there hasn't been a silver bullet to kill Cisco's dominant, but how are they going to do without cloudification? The data center group has gone through a lot of challenges. If you look at they fumbled along with OpenStack, like many other companies did, they went through just as VMware really failed with VCloud Air, the cloud group inside of Cisco had, they had this large Cisco offering that for a couple of years, everybody's looking, I don't know, are you enabling service providers? What are you doing? Now they have management pieces, they're partnering with Google, Amazon, Azure, across the environments, they are heavily involved in Kubernetes and the service meshes. So it remains to be seen where Cisco will find that next Tam expansion to kind of take them to the next wave. >> But Stu, acquisition is a good piece. And what I think they got to do some M&A clearly and organic but the question is would Nicira have been successful at Cisco versus VMware. Look at the timing of that, I think VMware being bought would have been a home run. But Nicira, I don't think that succeeds at Cisco. I think that would be a bunch of knife fights internally. And Nicira would have been shifted up because what it was then and what it is now and VMware are two different things because VMware took it, and shaped it, that I don't think Cisco could have done it at that time, >> The success would have been a defensive move to keep VMware out. That would have been the nature of the success, but I think you're right, the infighting would have been brutal, but VMware wouldn't have Nicira. >> VMware, What they did when they bought Nicira is they spent the first three or four years just making it an extension of VMware. Now it's starting to become their multi Cloud Interconnect. And that's where we need to see Cisco be involved. Cisco's bought many companies that have promised to be multicloud management or that interconnecting fabric and they have not yet panned out. >> Well, security is the linchpin though here, they've made a bunch of acquisitions in security. And I've always said that they've got a position, their networking is the most cost effective, the highest performance and the most secure to connect multiple clouds to hybrid on-prem. And they're in a good position to do that. >> Well, I think I've always said this from day one, you guys know I'm harping on this, Stu and I, we High Five each other all the time when we say this, but back in the days in IT days, the heyday, if you were a network operator, network designer, network architect, you were the king, king or queen. So you had the keys to the kingdom. VMware is a legitimate threat to Cisco. They compete, and they talk about that all the time. But the question is, which community has the keys to the kingdom? Rhetorical question. >> Yeah, well John one point I made earlier, (John laughing) >> Okay, go ahead. >> I remember Pat Gelsinger got on stage and he's like, "Hey, here's the largest collection of network admins" and everybody's looking at him, what are you talking about Pat? When I talk to customers that are deploying NSX, it is mostly not the network team, it is the virtualization team, and they're still often fighting with the network team. But to your point, where I've seen some of the really smart network architects, and people building stuff, Amazon, Azure, Google all have phenomenal people, and they're building environment back Cisco needs to make sure they partner and are embedded there. >> If you, Dave mentioned the leverage. Cisco's got to pull that lever or, turn the boat around and one shift move now, or otherwise, they'll lose that leverage. They have more power than they think in my opinion, they probably do know, but they have the network. And I think the network guys trump the operating guys, because you always swap in operating staff, but you got the network, and the network runs the business. No one could swap out Cisco boxes for a Synopsis years ago, so or Bay, whatever it turned into, so they have that nested position. If they lose that they're done. >> Yeah, and I agree with you, John, there's a lot of, Stu, you pointed out this, people buy NSX and Cisco ACI, but my question is, okay, how long will that redundancy last? I think, to your rhetorical question, Cisco is sitting in the catbird seat and they know networking, they're investing in it. I don't think they're going to lose sight of that. Yeah, wrist is, common Adam and Juniper, but Cisco, they know how to manage that business and maintain its leadership. I guess my question is, have they lost that acquisition formula? Are they as good at acquisitions as they used to be? >> I think their old model's flawed for the modern era. I think the acquisition's got to come in and integrate and I think VMware has proven that they can do acquisitions right. I think that comes from the EMC kind of concept where it's got to fit in beautifully and have synergies right away. I think what Pat Gelsinger is doing I think he's smart and I think that's why VMware is so successful. They got great technical talent, they know the right waves to be on and they execute. So I think Cisco has got to get out of these siloed acquisitions, this business unit mindset and have things come in, if they work, in line with the strategy and the execution. It has to from day one, I've got it. You got to be fitting perfectly in. >> The portfolio is still pretty complicated. You got the core networking. You got things like WebEx, right? I mean, would you want to be going up against Microsoft Teams? But they're in it, Cisco's in it to win it, and they got to they got to talk about-- >> Don't count out Zoom. >> Talking about, no, Zoom's right there too in the mix. And so Cisco's got some work to do, expect some enhancements coming there, in HCI, they've got to walk a fine line Stu, you made this point. On the one hand, they've got, IBM and NetApp with UCS and conversion infrastructure, but then they buy Springpath, which is designed to replace converged infrastructure. So they've got to walk that fine line. >> All right, what are you guys going to hear this week? Let's just wrap this up by going down the line on thoughts and predictions as the keynote kicks off tomorrow, I took some notes, I was doing some, going around the floor trying to get inside people's heads and ask them probing questions. And here's what I got out of it. I think Cisco is going to recognize cloud and absolutely throw the holy water on the fact that it's part of their strategy. I think we'll hear a little bit about Silicon One and how it relates to the portfolio, but I think the big story will be how tying the application environment together with networking, not end to end but really as one seamless solution for customers. I think it's going to be a top story that's been teased out by some of the booths that I saw, connecting things as one holistic thing with application development focus with DevOps. >> Yeah, so John, ACI was application centric infrastructure. And it was critical back in back in the day there is like, well, the application owner really doesn't have much connection there. If you look at what Cisco has been doing the last few years, it is tying together more that application owner, the DevNet group that, we're sitting here in the DevNet zone, that connection between the developer and making enabling them as part of the business absolutely is a wave that Cisco needs to drive. I don't think we're going to see a ton of the Silicon One, 5G and that kind of stuff, if for no other reason then in about a month, they're going to be sitting here with 100,000 people from Mobile World Congress and that's where they keep their dry powder to make sure that they push that piece of it. But that is super important, so and yeah. >> I think, software and security, I mean, I, as you were talking about, Zoom, Teams, so they better focus on collaboration and I want to hear some stuff there, security, IoT and the edge. They've got a very strong position there. Their security, Cisco security business grew 22% last quarter, it's really doing well. So I want to hear more about that. And I think data center, what they're doing in the data center, what they're doing with their switching business, their HCI stuff and converged infrastructure, hyper converged and, three important areas that we'll hear about this week. >> And Dave, I'll emphasise on what you were saying. Edge edge edge, absolutely, if Cisco is going to maintain a dominant player in the network, they need to deliver on that edge. And I've heard a couple of messaging strategies in the past, there was fog computing and all this other stuff, but I think Cisco is in a position today between Meraki that they have between their core product, >> Dave: Devnet. >> To really be able to enable-- >> And those are really-- >> Well, I want to see more progress, I'm looking forward to see, I'm going to drill them on the interviews we do here. They spent millions, billions of dollars satisfying and creating a subscription model with the cloud. We're going to dig into it, we're going to extract the signal from the noise, theCUBE coverage here in Barcelona, Spain. First show of 2020, Cisco Live 2020, I'm John Furrier, Stuart Miniman, Dave Vellante. We'll be right back. (upbeat music)

(funky music) >> Live from Barcelona, Spain, it's theCUBE. Covering CISCO Live Europe. Brought to you by CISCO and it's ecosystem partners. >> Everyone welcome back to theCUBE's live coverage here in Barcelona, Spain for Cisco Live Europe 2019, I'm John Furrier, and my co-host, Stu Miniman. Our next guest Sachin Gupta, senior vice-president of product management in Cisco's enterprise networking business, it's the crown jewels of Cisco, Sachin got the keys to the kingdom. Runs project management, so we get all the info from you, thanks for joining us. Good to see you again, good to see you again, king alumni. >> Yes, thanks. >> Thanks for coming on, I know you've got a keynote at 12 coming up shortly, thanks for spending the time, I'll get right to it. Networking is being reinvented, David Geckler said that onstage yesterday in the keynote. It's not changing, it's just shaping differently for customer needs intent-based networking, we talked briefly last year at Cisco Live in North America moving up the stack, it's here. Intent-based networking, cloud connections, IOT, all kinds of edge con activity, everything's connected, now on to the network. This is real. >> This is real, and John, look, it's been really exciting, right? We've gone through an 18 month journey here, when we first introduced in tent-based networking we talked about moving away from CLI box by box to really solving the problem at an abstracted, intent layer. Specify what user groups and what segments you want, what experience you want to deliver for those applications, and then the network feeding the data back up so you can learn from it, you can manage it, you can troubleshoot it in a much, much simpler way. We're now into this, as I said, 18 months. We have thousands of customers already using intent based networking we talked about software defining access for automated segmentation in the campus, talked about insurance, and then we've been adding capability along the way. And in just this week, David Geckler had people on stage, talked about more innovations with intent-based networking in the data center with ACI anywhere, with innovations on hyper flex. Liz came on and talked about IOT, and how that fits into the framework. And then Gordon talked about what we're doing with SD Ren, really, really exciting stuff going on there. >> Well, why don't you take a minute and quickly explain for the folks watching want to get us on the record so we can get definition. What is intent-based networking? What does it mean, what's the impact for the customers, what is it? >> Intent-based networking means that you can now express your business intent. Here's the outcome I'm looking for from the infrastructure. The system and the architecture will convert that automatically, provision, all the underlying components get the data and the context back out and prove to you that the intent you wanted was delivered. >> And what is changing now, more than ever, because applications are coming on. We see DevNet, we're in the DevNet zone. Seeing a lot of activity, developers. >> Yeah, so now you've got networks that are preventable instead of individual devices that you have to learn from the ground up, all their bells and whistles, you can now live at that intent layer, add an API layer on top of the controllers and move much more quickly. You can now start thinking about multiple domains, and how you cross those domains. >> What is the big product change, if any, especially software, is key to all of this? We've got plenty of hardware. You mentioned Liz in IOT, still runs router, she takes that software, she packages them. We interviewed her yesterday, she was talking about the synergies between code bases in which she customizes for the IOT market, then you've got the intent-based networking. What's the product look like, what's the products as they get more horizontal? >> Yes, so make no mistake, the hardware is still very important. Silicon ASIC's very important, but the magic now is in the software layer. So it starts with the operating system, and Liz talked about how we now have the Cisco IOS EXE operating system, which is modular hot patchable API driven programmable, and now runs across the entire portfolio. It runs on her ruggedized IOT infrastructure, runs on our switches, run on the wireless controller, runs on the routers and the SDWAN nodes, virtual and physical, same operating system. And then the SD controller layer on top of that. So for the campus, you've got DNA centers. So let's code DNA center, and then for the WAN you've got Cisco, the TeleV manage solution that provides a controller layer for automation, for analytics on top of the infrastructure. >> I wonder if we can unpack that SDWAN piece a bit, because WAN's been around a long time. I think back to the 90s, WAN was something that helped us get the internet. In the 2000s there was WAN optimization, I worked on a lot of replication solutions. I'm not sure that people understand the connection between SDWAN and really enabling the multi-cloud world that we need today, and the portfolio that Cisco has to attract that. >> You mentioned the 90s, I joined Cisco in 97, and I actually worked in WAN technical support. (laughing) So I've been with WAN for a very long time. And the customers aren't waking up and saying hey, I need a new WAN. That's not how the conversation starts. What's happening is it's a business transformation question. The companies, the customers are using infrastructure as a service, AWS services. They're using ACER, they're using Google Cloud platform. They're using all the SaaS products. Webex from Cisco, right, they're using Office 365. They're using all of these new applications and their data is not sitting in the data center. I mean, as we've noticed this week, the data center moves to where your data is. Well now, if your data isn't in it's data center that's conveniently connected through a WAN connection and it's all over the place. It's in the cloud, in many clouds. You have to think about, how do you get traffic in and out, how do you deliver security, and in this world where you may be using internet connections and all kinds of connections, how do you deliver the right application experience, and then oh, by the way, how do you manage all of this? That's what SDWAN is about, I need to transfer my business as I move applications or consume cloud services, I need to re-architect my WAN, and SDWAN helps me go do that. >> A big piece of that is what a network person needs to manage today, a lot of what they need to manage, they don't own. They don't control it, and some of that means I can't necessarily put a box that I can dial into and do this, so I need a software piece that I can put there as part of my overall configuration. >> Yes, you need a software piece, and you need something that scales to something that is cloud delivered. You can't be going to hundreds or thousands of sites and manually provisioning these for these services. You need to be able to have virtual services. If you're consuming a cloud service, you need your router or your service presence, your SDWAN presence in the cloud, right? So virtual network functions, virtual services become really critical in this world. >> Just on scale, you know, I've worked with Cisco on a lot of branch solutions over my career, there's lots of different components of scale that these type of solutions play into. >> Okay, people say if everything is in the cloud, does the scale requirement go down? All you think about is do I have 100 sites and I had one or two data centers. Alright, well now I have the same hundred sites, and I have hundreds of services. SaaS applications I'm consuming, and as I said, infrastructure as a service. And I still have some data centers for my legacy applications as well. So the complexity has actually increased, the scale requirement has increased. I need a much better software method, a software define method, to manage all of this. >> This is a key point, a lot of inflection points in the industry always have an abstraction layer to abstract away complexities. So you got two things going on here that are pretty clear, there's more complexity and more scale. So software's the perfect solution to manage that, is that what you're saying? >> Software's the perfect solution to manage this, and that's sort of one more level to that complexity. Because your traffic isn't neatly going from your branch through sort of a lease line or MPLS circuit that you can VPN into a data center, it's a more complicated traffic flow. I might be connecting directly to the internet securely is a huge concern. >> This is a great point, I was going to ask you the flow question, you know the old expression "follow the money and you'll find your answers." In networking, in this business, follow the traffic. Remember, north, south, east, west. That became a paradigm that helped shape a lot of network architecture. Now you have new traffic patterns. Can you give some color around the new traffic patterns and with cloud, comes with Edge, it's not just north, south, east, west, it's everywhere, so give- >> So a new traffic pattern now can be, instead of from the branch through your headquarters to your data center, now the traffic pattern is direct internet access to the SaaS application. Or go to a regional hub that I have in a co-location facility. Well, in the old world you had a security stack in your DMC. So it had your best firewall, your best IPS solution, all layered in there. Now in this new world with your traffic hitting directly, those applications and data in the cloud, you have to rethink security. So what we did in our SDWAN solution, we embed the best Cisco security technology application firewall, URL filtering, IPS solutions natively in our SDWAN software stack. And so you can deploy this across hundreds of branches now, and so you have assurance that the same level of security that you had in your data center can be delivered in a distributed way, in an easy way. And what happens is, customers also want to consume cloud security. You know, maybe I don't want to run in my branch, I actually have a SaaS application, I want to use the Cisco Umbrella service. Alright, so this is a secure internet gateway that processes this traffic, makes sure things are clean, makes sure we are safe, the customers are safe, and we can now integrate with cloud services in our SDWAN solution with just one click. >> How important is this security paradigm you just mentioned? Because there probably will be consequences. We've seen IOT become a talking point around oh, surface area, more surface area for the security breaches. This security paradigm's different. Why is it important and what are the consequences if not followed? >> If you don't follow this paradigm, I think the risk you run into that first of all, you will make a compromise on application experience because you're so worried about security. Let me give you an example, customers may choose, hey, you know what, I'll continue hair pinning all my traffic through my headquarters because I have a rich security stack there, and suffer an application experience because I'm going this way to get to the cloud asset rather than going directly, and so by enabling that rich security stack to be virtually enabled anywhere you want it, anywhere you need it, we can ensure that you can have the maximum level security that you need in your architectural design, and still get the application experience by selecting the best path for your application. >> And it's good business to be in enabling technology. We've seen that, you guys have lived that at Cisco. What is the most important story coming out of Cisco, out of this show, as you guys move forward that customers and the industry should pay attention to in your opinion? What's the most important story? >> I think the most important part of the story is, intent-based networking and the architectural shift, the reinvention that it's created isn't about any single domain, right? This is happening in the WAN to solve application experience problems, SaaS application experience problems, security problems, automations, scale. It's happening in the campus for segmentation, prevent lateral movement of threats. It's happening in the data center with ACI, and the customers want simple outcomes. What they're looking for is users, devices, things connecting to applications and data, doesn't matter where they sit, and ensuring that from a policy based model, they can automate end to end, and they can get the visibility, the telemetry end to end to solve problems and to learn and to improve the network. >> So cross domain traffic, application probability of the network, and the role of data that plays in that seems to be a common thread. >> Beautifully summarized, John, that's exactly right. >> Well, what's coming up in the keynote? What are you going to talk about at noon here in Barcelona? >> Yeah so in the keynote, I'm going to recap why have we done this, why does it matter, and why isn't CLI still going to work for you, and why did we need to reinvent networking? And then talk about the journey so far, all the new things we've announced, and then what I'm really excited about is I have a partner coming on stage with me talking about how we're delivering SDWAN solutions for our customers, how does that conversation work, and what should you really worry about as you select the service, design the architecture you're going to go with. >> Sachin, I want to go back in time, jog your memory, I remember back in the 90s, multi vendor was a big word, multi vendor improbability. Multi vendor meant working with multiple industry standard stuff. I hear multi cloud, I get a similar vibe. This seems to be the trend that people want to pay attention to just as much as hybrid cloud or maybe more on the multi cloud side, some are even saying, multi cloud is hotter than hybrid cloud. Do you agree with that, and how does multi vendor, multi cloud jive to Cisco? You guys thrived in a multi vendor world. What's your thoughts on this multi cloud? >> I think in both of those situations, customers are looking for freedom. It needs to be open, API driven. I should be able to move my traffic from one place to the other, my applications from one place to the other and not feel locked in. And so it's critical to support open protocols, open APIs and to provide customers that freedom. An SDWAN actually helps provide that. We're using open protocols open APIs, but at the same time, if I need to move my service from here to there, and I still need to deliver security, application experience, scale, automation, you can do that. So we provide that freedom to run that application in the multi cloud environment. >> One of the things that comes up all the time when we have conversations with the geeks out there at the conferences, it's microservices in containers on one side, and then on the networking side it's still latency and cost, you've still got latency issues and cost to move traffic around. Still a dynamic, how are you guys still looking there? 'Cause latency is certainly super important, and networking will be moving packets around, moving traffic around, and cost, there's still cost. Is this the concept of data center moving to the applications? How do you guys look at that cost equation and the latency equation, that's still important, can't change the laws of physics. >> The cost of latency equation is still really important, but the problem has changed, now. As your applications now, your data center is sort of moving with the cloud. Think about Office 365, we still need to help you get the best experience for Office 365 as if you were running an on-prem solution. For that we need to do things very different, we need to manage latency, to manage jitter, to manage cost overall. So what we've done is we use an API integration with Office 365 to give you 40% better performance for that fast application, and we're doing this for many applications. So I think you're right, you're solving for similar things, but now everything's changed on here. The applications are in a different place. So you just have to solve them in a fundamentally new way. >> And that's the traffic patterns, really comes down to it, and that's a tell sign of user expectation, user behavior, application behavior, this is the new normal. >> This is the new normal. >> What are you excited for looking forward as you look at your business, you look at Cisco, positioning style, I like the new position, very tight, very good, I like A Bridge to Tomorrow, A Bridge to the Future, kind of makes sense. Bridge, I like the double entendre there. But as you look at the portfolio coming together with multi cloud, what are you excited about? >> Look, and I've heard this from many customers and partners this week as well at Cisco live, we've been on this journey for many years. Building out intent-based networking for each of these domains, and now we've got thousands of customers already using it. But the conversations are going from hey, why did we need to do this? To, hey, help me perfect my design, and I now need to connect two or three domains together, how do we go do that? So we're now having richer, more mature next phase conversations. So it's working with our customers to realize that value across all of the domains from anywhere where there are users and things start anywhere with data and application sessions. >> And the network is foundational with the security architecture, you can build on that, that's where the magic will happen from your perspective, you see that. >> That's where the magic will happen, and you know what, only Cisco can pull this off. Because we have leadership in every one of those domains, and we're following the same architectural principles across all of them. >> So if someone said Sachin, this is not your grandfather's SDWAN, what do you respond to that? How do you update that narrative? What is the SDWAN new message, what's the new picture for SDWAN, what does that mean? >> The new SDWAN is about connecting to your applications and data in any cloud in a multi cloud environment, SaaS, IOS applications, it doesn't matter. Any private data center, still delivering the best security, best application experience in an automated way at the skill that you need. >> Okay, at the center of the value properties, have been saying on theCUBE for nine years, finally it's happening, a lot of stuff coming together meeting the road, congratulations on your success, and thanks for spending the time to come in. Great to see you, good luck on your keynote. This is theCUBE coverage live in Barcelona. I'm John Furrier, Stu Miniman, back with more coverage here from Cisco Live after this short break, stay with us. (funky music)