(upbeat dance music) >> Live from Barcelona, Spain, it's the Cube. Covering Cisco Live! Europe. Brought to you by Cisco and it's ecosystem partners. >> Hello everyone, welcome back to the Cubes live coverage day two of three days of wall to wall coverage here in Europe, in Barcelona, Spain for Cisco Live! 2019. I'm John Ferrier with Dave Vellante, Stu Miniman hosting a great load of interviews this week here for Cisco Live! Guys, kicking off day two. Day one was all the big announcements. Cisco putting in all the announcements really setting it in and the messaging coming together. The product portfolios filling out. Clearly, Cisco is adopting a path to the cloud. Taking their data centered business, securing that, bringing that data center into the cloud, kind of hybrid, Multicloud. Big message around Multicloud and then under the hood, data center. Traffic patterns are changing, it's not a rip and replace, it's an extension to the environment. Cisco's intent based networking plus cloud plus cloud center management. Lot of stuff. We did discuss that yesterday. But I want to get your take. Is Cisco's positioning viable and what does it mean vis a vis the competition because Cisco is a blue chip tech player. Certainly have zillions of customers. Very relevant. This is a huge impact, how they position themselves, Stu. >> So John, you remember a few years ago we were saying "Hyper scale clouds, the public cloud providers are going to take over the world" and boy, Cisco's in trouble because if a third or half of the market all the sudden evaporates from them, those enterprise buyers of switches and routers and everything else like that, Cisco is doomed. Well, you know, we listened to the keynote yesterday and Cisco's talking about all of their solutions anywhere and when you go through the ecosystem of public cloud, hybrid cloud, multicloud. Say does Cisco have a play there? And the answer is absolutely. It's not just the AppD acquisition, which has software and AWS but SD Wan is going to be a critical component to get from my data centers to the public clouds. Cisco has software and solutions and consulting to help customers in all of these environments so we always know that there's partnerships and there's competition. There's a lot of players out there but it was good to see them talking a lot about what they are doing with Kubernetes, with Amazon because you can't talk about cloud, either public cloud or multicloud without first talking about Amazon. Last year, we were a little critical, John, and said "Okay, Google's great but Google's number three or four." So, you got to be there with Amazon, you got to be there with Microsoft, and ServiceField. We've already interviewed a couple of service providers, always been a strength for Cisco to be in there and so good positioning. We talked yesterday a bunch about the bridge to possible and where to go but the more I think about that, anywhere is what Cisco's branded everything and that's when you talk Multicloud. Multicloud really a whole bunch of clouds and a whole bunch of things and therefore, I need a player that's going to help give me coverage in all of these environments and Cisco is making a strong case to be that. >> And Dave so Stu's right. A couple years ago, we were critical of Cisco and I think rightfully so. I think the whole industry looked at them as not in the middle of the fairway and certainly the recovery shot for Cisco is really strong because a lot's changed. Go back a few years. They didn't have a good ecosystem for developers. They didn't have a good open source position. They kind of were, do I go up the stack or not but they had the core networking so a lot of people were saying, "Hey, if Cisco doesn't make a move, they're doomed." We were one of them so a lot's changed. You're seeing the adoption of microservices, containers, APIs, the growth of DevNet that Susie Wee has initiated. It's clear proof, in my opinion. Then you got the data center guys saying, "Hey, we can take networking and take this and enable cloud." So Cisco, making good moves, put themselves in pole position for growth. >> Well I think the first point is, if you roll back 10 years ago, it was not just Cisco we were critical of, it was clear to us that cloud was where all the growth was and if you didn't have a public cloud, you were going to be in trouble unless you developed a cloud strategy. So, certainly Cisco, Dell EMC, now you know Dell MC, Vmware, none of them really owned a public cloud strategy and five years ago, they had to figure it out. Well, they figured out that actually managing Multiclouds is a great opportunity and so Cisco's got a viable strategy. Networks between clouds are going to flatten, they're going to need management. It's specifically, as it relates to Cisco and maybe their competition, they have to position themselves as our Multicloud management system is higher performance, and more secure than the competition. That's what they have to sell their customers on and the second piece of that is they get a transition from selling ports to selling software. And they're making that transition so, I like their strategy by the way, I also like Vmware's strategy. They capitulated to AWS, and now they're tight with AWS. IBM went out and paid two billion dollars for software so they've got a cloud strategy. Oracle's got a cloud strategy, Microsoft's got a great cloud strategy so if you go through and tick off-- >> They have clouds so let's just understand something. There is clouds and then cloud strategies so Amazon. >> The $34 billion that IBM is paying for Red Hat is giving them a Multicloud strategy more than just saying we have a bunch of data centers and bare metal. >> So they play in both, right? And maybe not so much in the public cloud, I would argue that their public cloud has failed to meet their expectations like IBM. And that's why they had to pay $34 billion for Red Hat. I would say just the opposite about Microsoft, their public cloud strategy has been an enormous success and they're very well positioned for Multicloud. >> Okay so let's just put it on the table. So, Cisco looks at the public cloud as partners, not competitors so Amazon, Assure, Google aren't competing with Cisco. Are they or are they partnering? Well, understanding competition is all about understanding who has a cloud so I would say Cisco's strategy to partner just like SAP did, just like everyone else and Dell did, that's the competitive, not cloud so, or maybe. This is the question; are the public clouds competitive to Cisco? >> They're frienemies, John. >> Oh no, the answer is yes, there is no question about it. They're growing at 20, 30, 40% a year. Cisco and IBM, HP they're growing at much lower, single digits. >> So John, we know if Amazon, if there is a profitable space that they can offer, a competitive service, they will. Security, you said, Cisco's got a great position security both what they've had for a long time and they've done acquisitions like Duo more recently and we've seen lots of pieces of the public cloud ecosystem that Cisco's bought over the last few years. Clicker was one that we've spent some time talking about but absolutely, Amazon goes after some of those pieces so they're going to partner. Cisco's got, the last I checked, at least three dozen products on the AWS marketplace but they can live there but there will be competition. >> Cisco's got some huge assets in this game, they got 800,000 plus customers, they are 60% of the networking market so they own the install base. It's really the only market you can think of that's a major market where the dominant player still owns 60% of the market and they've never been able to. >> Cisco for networking and Vmware for the hypervisor are very similar in that case and both have now had a similar strategy as to how their going to multicloud. >> Well, that's the most interesting competitive dynamic, in my view, is Vmware and it's acquisition of Nicira and obviously Cisco. Cisco's not going to take this lying down, they've got ACI and they claim number one. They didn't say whose data that was. I was looking and squinting for that is that IDC that got their four star. >> Well lets talk about growth because you know how I always complain about market researches aren't on the mark in terms of the reality of where the market is. So, you've mentioned growth. So, are we, if we're early in cloud growth, that's where the growth is, what is the cloud adoption going to look like over the next 10 to 20 years? Is it going to look more like public cloud or is it going to look more like on premises evolving to cloud operations and if the growth of cloud operations is all things, wide area network, image and SV wan, then there's more growth coming. So, if that's the case, is Cisco going to be able to capture that growth for the future? >> Well, in terms of growth, I think AWS is on it's way to being a $100 billion revenue company. And that's pretty impressive given where they are today, I mean they're going to triple in revenue so that's where the growth is. Cisco's already participating in a huge tam. What they've got to do is hold on to that business and identify new opportunities where they can manage multicloud instances and compete effectively with Vmware who's coming at it from the hypervisor and now, as I said yesterday, try to do to networks and storage what it did for systems and then IBM, Red Hat coming at it really from the applications perspective and with a services view. Microsoft, with a foot in both camps. You got Oracle in it's little niche. It's just a really interesting. >> Well, you've got an installed base that's moving into the cloud. You got net new companies that are going to be started. Might have on prem gone full cloud, this is the question that everyone's going to ask. I think Cisco can take their existing base with moving packets from point A to B and storing and making data more intelligence. Moving data around is a big networking phenomenon. >> Here's the question; Andy Jassy would say, "We believe there are going to be far fewer data centers in the future," that most data is going to live in the public cloud. The likes of Mike Liddle, Charlie Robbins, et cetera, I think they see the world as a hybrid world. That there's going to be more data that's in a hybrid, on prem plus cloud then is going to be in the public. >> I love Andy Jassy but I'll just say, first of all and I'm saying this biased on his perspective and I think he's right at one level. Why wouldn't Amazon see people moving data centers to the cloud? I get that. I say that it's going to be in the networks. That's where the action will be. Where are the networks, are the networks in the cloud, are the networks on premise, are the networks on a phone, IOT? So, you see IOT and Edge coming together, if it's all one network, then you're going to have the values going to be in the network, not necessarily the clouds per say or in shared value. >> You talk about Edge computing and IOT, Cisco's got Meraki which is going strong. SD Wan is a critical component in this multicloud piece. They're really posed to drive this next generation of 5G, not something we've dug into a lot yet but it is finally coming really soon here and Cisco has a lot of those pieces to be able to hit the next wave. >> It always comes back to the data, in my opinion, and the leverage point for data are sass. If you own the applications business or you're doing well there, you're in a good position. All the data's running over Cisco networks so that puts them in a really good position and as we know the likes of AWS and Microsoft, Alibaba, et cetera. They are trying to get as much data into their cloud as possible. >> And what I loved yesterday in the keynote is data was actually one of the central components that they talked about which the Cisco I know of 10 or 20 years ago, that was just bits that ran over our pipes. So they understand the value of data and their drive into that market. >> Well, we've been saying on the Cube now for nine years. Data's at the center of the value proposition. Data at the center, value proposition, this is actually happening. We see a lot of growth in cloud. Dave, good commentary. Stu, well done. We're going to have Sasha Gupta, all the leaders coming on the Cube here from Cisco. We'll breakdown and we're going to ask them the tough questions. Stay with us for day two coverage here in the Cube. Live in Barcelona, I'm John Ferrier, Stu Miniman, Dave Vellante breaking down all the action. We'll be right back with more after this short break. (light techno music)