(uplifting music) >> Welcome to this CUBE conversation. In this segment, we're going to talk about the future of IoT and the critical role semiconductor technology plays in shaping this exciting space. As we've reported on our Breaking Analysis segments, the fabulous chip company enabled by the ARM ecosystem has permanently changed the semiconductor industry. Intel's fateful decision in the mid-2000s to pass on the chip design for the Apple iPhone was an ironic reminder of IBM's decision to outsource the microprocessor for the original IBM PC to Intel. In both cases, the market leader didn't appreciate the tectonic industry shifts that were possible, and importantly, the impact that volume economics would have on the power structure of the entire industry. Now fast forward today, and we believe ARM wafer volumes are 10X those of the general purpose x86. This means that the ARM ecosystem is on a cost curve that is unmatched in the business. Moreover, as we've reported, the ARM ecosystem is blowing away the historical performance curves that we've seen in the chip industry, AKA Moore's law. Whereas for years, the x86 performance curve grew roughly at 40% per annum has now moderated to the low thirties. Over the past five years, as evidenced by the progression of Apple's A series chip, based on ARM, when you observe the combined performance of the CPU, the GPU, the NPU, the XPU, DSPs, accelerators, et cetera, the alternative processors in combination have driven the average annual performance improvement to over a hundred percent per year. This is an astounding achievement. Why is this so important to IoT? Well, the edge is projected to be the next trillion dollar market. We believe we'll see a world with more than a trillion devices. And as we've reported, IoT use cases are going to require specialized and distributed processing power. And lots of it. AI Inference at the edge will enable real-time action and embedding intelligence in the chips that when the edge will be high performance, low power, inexpensive, and programmable with a much faster time to market profile than historical semiconductor cycles. We're already seeing that with companies like AWS, Apple, Tesla, and peer, and others going from design to tape out and under two years versus the historical norm of let's say four years to be generous. And with me to discuss innovation in IoT and some big news from the 2021 ARM's summit is Mohamed Awad, who is the vice president of IoT and embedded at ARM Mohamed. Good to see you. Thanks for coming on. >> Thank you. Thanks. I really appreciate the opportunity to have you. >> So, You're welcome. So tell us about your, your role at ARM. I know you were responsible for infrastructure previously and now sort of extended to, to IoT and embedded. Tell us more about. >> Yeah, sure. So I've been with ARM for a little over three years now. I started working with the infrastructure team when I was, we worked on a lot of different initiatives and one of the things that we launched was on Neo verse. And we went on to do some interesting things there, as, as I mentioned, we're making some great traction in the infrastructure space, but a year ago I took on the role to you ought to head up arms IOT and embedded business. And, you know, it's, it's interesting because my, my career really started in IOT and embedded. I was in the Boston area working for companies like Lucent Nortel, and then eventually I remembered very early IOT startup. So that was, that was 25 years ago now. But, but I still got roots in the Boston area. So I like your, like your hat in the back now. >> Yeah. Right. Go, go Sox. >> Go Sox. >> So how did we get here, you mean, you've had a lot of experience in embedded IOT, which is relatively new term to most people. It sort of evolved from a period of, you know, you had instrumentation for at least some components of, of the system. And then we focused on conductivity. But as I was saying in my upfront narrative, we're really now embedding AI and it's it's intelligence, but so there's phases. How do you see the progression in terms of how we got to where ARM is today in IOT? >> Yeah, it's really interesting because if you think about, if you think about ARM, then you really just think about IOT, you know, as you said, IOT started off with, Hey, let's, let's stick a microcontroller in everyday devices, you know, stick a micro controller to something like a vending machine, and then we went on and said, well, hey, what if we could remotely control that device for gathering data from that device, and then we, so we entered this phase of, you know, what we like to call interconnectivity, right, And that was all about, you know, connecting these devices with, with things like, you know, low power Bluetooth, or, you know, even now low latency 5G. And what's interesting is that, you know, together the work of the Arm ecosystem has done over the years has really solved the problems of how to add microcontrollers that connects the devices. I mean, that those problems have largely been solved for a lot of the reasons that you described earlier, which is, you know, we focused on lowering the barrier for folks to come in and innovate around sort of a core technology and, and lots of innovation happened as a result of that. We're entering this new phase now, which is really about, you know, you've got all these devices out there which can easily be connected, they've got microcontrollers or, or, or technology in them, which allows them to, to be intelligent. But how do we really extract the level of kind of AI intelligence out of those devices? Ultimately, what we're trying to do is, is, you know, the industry needs to figure out how to derive intelligence from the smallest sensor, all the way up to the largest cloud data center, you know, and, and, and that means local intelligence. It means regional intelligence, and it means global intelligence, you know, the potential is enormous, but the challenge is pretty enormous as well because of all those diversified use cases, all the diversified devices, all the, all of the sort of scale sort of number of platforms that we're talking about, and that that's really what, we're, what we're excited to kind of go work on, work on that. >> It is exciting. I mean, just the it's mind boggling the, the capabilities, the processing capabilities of this distributed world that we're, we're, we're evolving towards. Let's talk about the hard news of why are you announcing what you're announcing, I mean, what are the trends that are sort of informing that maybe you could hit some of the highlights of the announcement and give us a key details? >> Yeah, sure. So, so when we announced his ARM, total solutions for IOT, and that's really made up of three things, my favorite part is on virtual hardware. Our virtual hardware is all about making available a virtual representation of, of devices in the cloud for lots of developers to use. And I'll, I'll get to that in a minute, but I think, you know, in order to understand that you have to kind of understand the broader context of what ARM total solutions are. It starts with pre-integrated pre verified IP package. You talked earlier about how design cycles we're looking to accelerate people were looking to develop a Silicon much faster. Part of what we were doing at ARM is we're actually taking, you know, pre-integrated pre verified IP packages and call those ARM corstone. We're making those available to the market. So we give those to our Silicon partners, and then they can use that. They might include an neuro processing unit, a CPU. They might include the interconnect, all the, kind of the base IP. And then our Silicon partners can use that as a jumping off point so that they can quickly get Silicon to market. That's the first part of the news, which is, you know, we're doubling down on that too. Now, you know, in the last three years, we've had over 150 different designs, which have used our ARM core stone products. So moving forward, we're going to make that foundational to how we deliver IOT technology to the market. But the second part of it, which is, which is super exciting, is that not only are we going to accelerate the time to market for our Silicon partners, we're also making a virtual representation of that underlying core stone design available in the cloud for software developers all around the world to use at the same time that IP is ready. So at the same time, we hand IP to our Silicon partners. We're making a virtual representation in the cloud. So software developers can start. Now, let me just take a step back here and make sure that, you know, everyone kind of understands how, how big of a deal this is, right before the way this used to work, I would hand the IP to a Silicon partner. It would take them, you know, 18 months, maybe two years to get a piece of Silicon in market. And then a board manufacturer would have to go off. And then only maybe three or four years later, could the software developers start five years to get a product to market what we're doing here with ARM total solutions. We cut that five years down to three years, so we can massively accelerate time to market. And then the third part of what ARM total solution is, is something we call projects Centaury Project Centaury is about putting in place a set of standards to it's an ecosystem initiative, which puts in place a set of standards, reference software and, and specifications around things like security and how devices should communicate with, with, you know, the operating system or cloud service providers that allows that allows software developers to get a level of reuse and leverage. So, you know, today in the IOT, every time you develop a piece of software, you're going to develop it over and over again. But what we're talking about here is they can develop it once and, and be able to apply. And we use a lot of that software over and over again, the same way they do in other markets like infrastructure. >> Love it. So, okay. I want to ask you if that, if there's a blueprint there that we can, we can learn from, but before we do that. So if I, if I go back to the three items that you mentioned, so for example, one of your licensees can say, okay, I want to take just the standard components, the CPU, whatever, but I might want to customize the neural processing unit, as you said, and they have the flexibility to do that at the same time when they, when they bring it to the Foundry, because it's a standard platform that, you know, what's going to work, that's kind of a nuance that maybe people maybe don't fully appreciate, but am I getting that right? That standard platform has dramatically changed the industry. >> Yeah, that's right. I mean, the idea is, is that, you know, we take these, these IPS, we integrate them together. We verify them, we designed it as a subsystem. We target specific use cases, and then we make them available. Our partners are certainly free to go off and make modifications to it. They see fit. But when we hand it to them, it's ready to go. And that's the idea. >> Yeah. And then the point about the being able to, to give developers access in the cloud, and we've often said that, you know, the developers are going to shape IOT. And so I think what you're saying is essentially instead of this linear process, where you can get dependent on the previous one being done, you're actually parallelizing. If you will, the innovation. >> Yeah. That's exactly right. And I, and I'd actually take it one step forward. There's a, there's a subtlety there, which I didn't comment on, which I think it's important to call out, which is not only are we parallelize them, but we're enabling what I'll call modern development methodology. Right. You know, the way that development is done in areas like mobile and the cloud data centers, they use agile workflows, things like continuous integration, you know, broad-based testing as they go along. That's very different than the way that embedded development is done today. Embedded development today is done the same way. It was 25 years ago. You get a board on your desk, you mess around with a bunch of jumpers and cables and wires, hope you did it right. And then you write your software and you hope the hardware guy doesn't want to revise the hardware because then you're going to start all over again. Right. You know, the last thing that you'd want to do is set up a hardware form, right? Lots and lots of different hardware to go off and test over and over again. Now with virtual hardware, you can move all of that to the cloud. All that complexity goes away and you've massively reduced the investment required for software developers to get going and allow them to take on these more modern techniques. >> Well, Mohammed, thank you for clarity clarifying that, that nuance, because we're going to see a Renaissance in the way that that embedded development occurs. And I'm curious as to how you think about that in terms of you, because you're going to have a whole new breed of developers come in with, you know, the cloud developers, if you will. They have, they see IOT as a massive opportunity as well. You're going to see the, I would presume the embedded ecosystem. Up-skill a much in the same way you're seeing, you know, ops dev or dev ops or IT people, you know, learn Python to you know, to up-skill. And so you're going to see like a two vectors of innovation in terms of developers coming together. How do you see that? >> Yeah, that's exactly right. And that's exactly what we're driving to. And when we talk about this, we talk about changing the economics of IOT. That's exactly why, because what we, what we're saying is that, Hey, you can have all this massive innovation that can be unleashed from all these developers that didn't have access to these devices before. And you can also take all these embedded devices, embedded developers and make them so much more efficient with these new modern, modern development methodologies. A combination of those two things is going to, you know, not only is it going to lower the cost of development, but it's going to spur a massive amount of new innovation and all, you know, all new products and services, right. We really think can unleash the potential of IoT. >> So step back a little bit, help us understand kind of how you came to this, your strategy. You mean, what were the friction points or what are the friction points that you see in IOT and embedded in terms of being able to, to, to, to scale this capability? >> Yeah. Yeah. It's a good, it's a great question. And I got to tell you, we, we, when so when we, when I came, when I came into this role, you know, the first thing you do is you go off and talk to customers and partners, and you try to understand how people are using. But most of the time, when people think of ARM, they think of us as, Hey, they're the guys that are off talking to the Silicon partners are talking to the hardware guys. And we absolutely do. We have strong relationships with all of the Silicon partners, but because of our place in the ecosystem, you know, as a, as a company, which, you know, we've got shipped over 70 billion cortex spend devices today, you know, we underpinned, you know, the IOT basically runs on us. And so a lot of what we do too, is we talked to the software ecosystem. We talked to OEMs, and we talked to service providers looking to capitalize on all of that, you know, on the, on the depth and breadth of our ecosystem. And when I talked to OEMs, and when I talked to software service providers, two things became really clear. The OEM is wanting to find a faster path to market. They're like, it just takes too long for us to get our products to market. We need to figure out how to streamline it. So that was one. When I talked to the software service providers, they came to us with a little bit of a different problem. What they said is like, Hey, we really want to deploy software and services across this, this IOT edge space, but it's just so diverse. And so massively complex, you know, everybody's got a different view on thing. Can you help us, like, where's the, your, the common denominator, can you help us figure out how to attack this problem? And that's really what drove, what drove us. Right. >> Awesome. Let's talk a little bit more about some of the announcement, details, project Centaury particular, what are some of the things that you want people to really appreciate, and specifically, what does it mean to the ecosystem? I mean, you touched on it a little bit, but I don't know if you have any examples or customers and, and, and maybe also Mohamed, if you could help us understand how it relates to other arm projects like Cassini. >> Yeah, sure. So project, so, so, so two things. So first of all, let me just talk to what, what, what projects Centaury. So project Centaury is really looking to, you know, help enable a level of, of software leverage across that diverse M class devices that are out there in class with our microcontroller devices that are out there. And so it's really made up of 3, 3, 3 parts. One part is, is all about security. So it uses a PSA and our PSA certified framework, including TFM trusted firmware. So this is our security framework that we've put forward. And then our, the PSA standards initiative that's out there in the marketplace, you know, in all of the efforts that we bring to bear on that, the second part of it is, is around open CMSIS, and, and open CDI CMSIS, which is really, which is really about standardizing aspects about how software is delivered to an IOT device packaged and delivered. It's also about things like how any our thoughts. So any real-time operating system or any cloud service provider, you know, can be accessed from the device. So the idea is, is that a, you know, today, if you think about the way that this works, if you're a Silicon provider, you're a fiber manufacturer, you have to go off and support multiple different clubs, service providers. You may want to support multiple different operating systems, depending on you know, which, which, you know, which particular OS you're interested in. And, and what we're trying to do with, with, with, with projects Centaury is to specify key attributes of the services that exist down on your, on your Silicon, so that you can more easily integrate with, you know, whatever OS you want, whatever service provider you want on whatever hardware you want. It's still allowing plenty of differentiation. So it's not like we're saying, Hey, this is how you actually do over the air updates. For example, rather, what it's saying is that, Hey, this device supports over the updates. If you're going to ask for that service, here's how you present yourself. And that allows a level of software portability that you just didn't have in the IOT space previously. >> Right. And then the licensee can tune that to their specific use case and add their own value. Right. And so, again, go back to the thing we talked about before they, they know what's going to work and they can give it to the, Foundry and say, make this according to the spec and the Foundry's ready for it. That's how we've seen such massive volumes. I want to ask you about security. You, you touched on that. Do you leverage realms in this, or is that not in scope? Is that like. >> No, that's more of a, that right now, that's more focused on our A-class and V9 stuff. And you actually asked about project Cassini a little bit earlier. You know, project Cassini is really our initiative, which is focused on our A-class devices. So our A-class devices typically run a, you know, what I'll call a rich OS like a Linux or whatever. And it's really designed for allowing the level of virtualization and allowing a level of, of, of, of, of shared resources between different containers on, on an A-class type system that you can easily deploy and, and leverage the A-class device resources from, by, by different, by different workloads. >> The reason I asked, I'm trying to Mohamed connect the dots between mobile as kind of a blueprint, which can occur for IOT. I think that's maybe, but even some of the stuff that's going on in the data center, it's particularly as it relates to data intensive workloads, some of the work that we've seen that, you know, AWS do, and, you know, offloads, we're seeing, you know, all the new, like all the modern storage and networking and security offloads in the data center are moving to ARM. And it just seems like the use cases for ARM are exploding. And I'm wonder if he can help us connect the dots into IOT, which could, which could do or follow all of these markets. >> Yeah. I mean, what's interesting what we saw happen in mobile and what we saw happen in the infrastructure, what we see happening in both of those markets is that by creating a level of consistency in how software can be deployed on these devices, whether that's with the, you know, with the mobile phone and the ARM ecosystem and a mobile phone, or all the way through to the data center, what you've done is you unleashed a tremendous amount of innovation, you know, in the mobile space. There's something like 3 million apps out there today, right. And thousands of different smartphone models, you know, could you imagine if every one of those app developers had to test their application on every mobile phone in order to be sure that it worked, you know, you'd have a lot less innovation, a lot less, you know, a lot less, a lot less scale and a lot less, a lot less applications. So what we're talking about here is trying to unleash that same amount of value by creating that consistent. So that's a clear lesson we learned from, from both mobile and from, from infrastructure. The other thing that's clear is that a lot of these markets you've got, back to the idea of, of parallelized development flows and, and subsystems, and that's directly kind of what we're seeing in, in what we're putting forth in, with, ARM total solutions. >> Yeah. You know, it's kind of buzz wordy and people who watch my program know I'm a kind of a fan of the R model, but, but you talk about the new IOT economy. In my view, you're actually an underpinning of that economy. I mean, everybody talks about it, this multi-trillion dollar opportunity, but, but how do you think about this, this new economy? And we've obviously touched on it, but IOT, the edge it's really taking, taking shape now and becoming real. >> Yeah. I, I think that the idea here, when we talk about a new IOT economy, very clearly what I'm referring to is this idea that, you know, you've got today, you've got a lot of potential, which is lost because, you know, your you're limited to just the, a vertically integrated solution. Software is vertically integrated on the, on the specific hardware and the, the barriers and the cost to investing in that hardware from a software perspective is just, it's just too high given, given the sort of scale that you get with that software after the fact. So we're addressing that in two vectors or simplifying it, so that lots of different developers, you know, that developer that's sitting at the coffee shop can spin up an AWS instance with our ARM virtual hardware on it and write an app while they're sitting there. And at the same time, they can access a much broader set of devices than they would've been able to otherwise, if it's not, you know, it's not dissimilar, you know, I hate to keep going back to mobile, but it's not dissimilar from the mobile space where if you think about 15 years ago, when all of the applications that were written on your mobile phone were written by the phone manufacturer, you had a limited number of applications, and sure a phones were a great thing, but it was nothing like it is today. It was a mobile phone economy. Today, when you think about mobile, you know, mobile really underpins the financial economy. It underpins, you know, transport, the transportation economy. It underpins how we communicate with everybody, with social networks and it, and it's really taken a sort of life of its own in lots of different ways. It's not really a mobile economy. It is the economy. And we think IOT can be even larger than that. Right? >> Yeah. You know what I mean? Our industry has a tendency to hype a lot of new waves, but they certainly didn't, over-hype mobile. I mean, everybody, you know, migrated toward mobile. That's why I think it's such a relevant conversation. And so adaptable to IOT at the cloud as well, data as well. You know, they, they were probably under hyped. If anything, social, maybe we can put over here in a bucket, there's a lot, a lot of Friction. But those other three in terms of sort of enterprise and the edge. And I think, you know, from, from what we can see ARM has really in the ecosystem has, has completely and permanently altered the shape of the industry. It's a very exciting time. And I think the best is yet to come Mohamed. I really appreciate you coming to the cube. Thanks so much. >> No, I, I really, I really appreciate, I think thanks for taking the time. All right. >> Thank you for watching this CUBE conversation. This is Dave Vellante. We'll see you next time. (casual uplifting music)

>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE in ETR. This is "Breaking Analysis" with Dave Vellante. >> Cisco is a company at the crossroads. It's transitioning from a high margin hardware business to a software subscription-based model, which also should be high margin through both organic moves and targeted acquisitions. It's doing so in the context of massive macro shifts to digital in the cloud. We believe Cisco's dominant position in networking combined with a large market opportunity and a strong track record of earning customer trust, put the company in a good position to capitalize on cloud momentum. However, there are clear challenges ahead for Cisco, not the least of which is the growing complexity of its portfolio, a large legacy business, and the mandate to maintain its higher profitability profile as it transitions into a new business model. Hello and welcome to this week's Wiki-bond cube insights powered by ETR. In this breaking analysis, we welcome in Zeus Kerravala, who's the founder and principal analyst at ZK Research, long time Cisco watcher who together with me crafted the premise of today's session. Zeus, great to see you welcome to the program. >> Thanks Dave. It's always a pleasure to be with you guys. >> Okay, here's what we're going to talk about today, set the agenda. The catalyst for this session, Zeus and I attended Cisco's financial analyst day. We received a day and a half of firehose presentations, drill downs, interactions, Q and A with Cisco execs and one key customer. So we're going to share our takeaways from these sessions and add our additional thoughts. Now, in particular, we're going to talk about Cisco's TAM, its transformation to a subscription-based model, and how we see that evolving. As always, we're going to bring in some ETR spending data for context and get Zeus' take on what that tells us. And we'll end with a summary of Cisco's cloud strategy and outlook for how it could win in the cloud. So let's talk about Cisco's sort of structure and TAM opportunities. First, Zeus, Cisco has four main lines of business where it's organized it's executives around sort of four product areas. And it's got a large service component as well. Network equipment, SP routing, data center, collaboration that security, and as I say services, that's not necessarily how it's going to market, but that's kind of the way it organizes its ELT, its executive leadership team. >> Yeah, the in fact, the ELT has been organized around those products, as you said. It used to report to the street three product segments, infrastructure platforms, which was by far the biggest, it was all their networking equipment, then applications, and then security. Now it's moved to five new segments, secure agile networks, hybrid work, end to end security, internet for the future and optimized app experiences. And I think what Cisco's trying to do is align their, the way they report along the lines of the way customers buy. 'Cause I think before, you know, they had a very simplistic model before. It was just infrastructure, apps, and security. The ELT is organized around product roadmap and the product innovation, but that's not necessarily the way customers purchase things and so, purchase things so I think they've tried to change things a little bit there. When you look at those segments though, you know, by, it's interesting. They're all big, right? So, by far the biggest distilled networking, which is almost a hundred billion dollar TAM as they reported and they have it growing a about a 9% CAGR as reported by other analyst firms. And when you think about how mature networking is Dave, the fact that that's still growing at high single digit CAGR is still pretty remarkable. So I think that's one of those things that, you know, watchers of Cisco historically have been calling for the network to be commoditized for decades. For as long as I've been watching Cisco, we've been, people have been waiting for the network to be commoditized. My thesis has always been, if you can drive enough innovation into things, you can stave off commoditization and that's what they've done. But that's really the anchor for them to sell all their other products, some of which are higher margin, some which are a little bit sore, but they're all good high margin businesses to your point. >> Awesome. We're going to dig into that. So, so they flattened the organization when Geckler left. You've got Todd Nightingale, Jonathan Davidson, Liz Centoni, and Jeetu Patel who we heard from and we'll make some comments on what we heard from them. One of the big takeaways at the financial analysts meeting was on the TAM, as you just mentioned. Liz Centoni who also is heavily involved in strategy and the CFO Scott Herren, showed this slide, which speaks to the company's TAM and the organizational structure that you were just talking about. So the big message was that Cisco has got a large and growing market, you know, no shortage of available market. Somewhere between eight and 900 billion, depending on which of the slides you pull out of the deck. And ironically Zeus, when you look at the current markets number here on the right hand side of this slide, 260 billion, it just about matches the company's market cap. Maybe an interesting coincidence, but at any rate, what was your takeaway from this data? >> Well, I think, you know, the big takeaway from the data is there's still a lot of room ahead for Cisco to grow, right? Again, this is a, it's a company that I think most people would put in the camp of legacy IT vendor, just because of how long they've been around. But they have done a very good job of staving off innovation. And part of that is just these markets that they play in continue to grow and they continue to have challenges that they can solve. I think one of the things Cisco has done though, since the arrival of Chuck Robbins, is they don't fight these trends anymore, Dave. I know prior to Chuck's arrival, they really fought the tide of software defined networking and you know, trends like that, and even cloud to some extent. And I remember one of the first meetings I had with Chuck, I asked him about that and he said that Cisco will never do that again. That under his watch, if customers are going through a market transition, Cisco wants to lead them through it, not try and hold them back. And I think for that reason, they're able to look at, all of those trends and try and take a leadership position in them, even though you might look at some of those and feel that some of them might be detrimental to Cisco's business in the short term. So something like software defined WANs, which you would throw into secure agile networks, certainly doesn't, may not carry the same kind of RPOs and margins with it that their traditional routers did, but ultimately customers are going to buy it and Cisco would like to be the ones to sell it to them. >> You know, you bring up a great point. This industry is littered, there's a graveyard of executives who fought the trend. Many people, some people remember Ken Olson of Digital Equipment Corporation. "Unix is snake oil," is what he said. IBM mainframe guys said, "PCs are a toy." And of course the history, they were the wrong side of history. The other big takeaway was the shift to software in subscription. They really made a big point of this. Here's a chart Cisco showed a couple of times to make the point that it's one of the largest software companies in the world. You know, in the top 10. They also made the point that Chuck Robbins, when he joined in 2015, and since that time, it's nearly 4x'ed it's subscription software revenue, and roughly doubled its software sales. And it now has an RPO, remaining performance obligations, that exceeds 30 billion. And it's committing to grow its subscription business in the forward-looking statements by 15 to 17% CAGR through 25, which would imply about a doubling of these, the blue lines. Zeus, it's unclear if that forward-looking forecast is just software. I presume it includes some services, but as Herren pointed out, over time, these services will be bundled into the product revenue, same way SAS companies do it. But the point is Cisco is committed, like many of their peers, to moving to an ARR model. But please, share your thoughts on Cisco's move to software subscriptions and how you see the future of consumption-based pricing. >> Yeah, this has been a big shift for Cisco, obviously. It's one that's highly disruptive. It's one that I know gave their partners a lot of angst for a long time because when you sell things upfront, you get a big check for selling that, right? And when you sell things in a subscription model, you get a much smaller check for a number of months over the period of the contract. It also changes the way you deal with the customer. When you sell a one-time product, you basically wipe your hands. You come back in three or four years and say, "it's time to upgrade." When you sell a subscription, now, the one thing that I've tried to talk to Cisco and its partners about is customers don't renew things they don't use. And so it becomes incumbent on the partner, it becomes incumbent upon Cisco to make sure that things that the customer is subscribing to, that they do use. And so Cisco's had to create a customer success organization. They've had to help their partners create those customer success organizations. So it's really changed the model. And Cisco not only made the shift, they've done it faster than they actually had originally forecast. So during the financial analyst day, they actually touted their execution on software, noting that it hit it's 30% revenue as percent of total target well before it was supposed to, it's actually exceeded its targets. And now it's looking to increase that to, it actually raised its guidance in this area a little bit by a few percentage points, looking out over the next few years. And so it's moved to the subscription model, Dave, the thing that you brought up, which I do see as somewhat of a challenge is the shift to consumption-based pricing. So subscription is one thing in that I write you a check every month for the same amount. When I go to the consumption-based pricing, that's easy to do for cloud services, things like WebEx or Duo or, you know, CloudLock, some of the security products. That that shift should be relatively simple. If customers want to buy it that way. It's unclear as to how you do that when you're selling on-prem equipment with the software add-on to it because in that case, you have to put metering technology in to understand how much they're using. You have to have a minimum baseline to start with. They've done it in some respects. The old HCS product that they sold, the Telcos, actually was sold with a minimum commit and then they tacked on a utilization on top of that. So maybe they move into that kind of model. But I know it's something that they've, they get asked about a lot. I know they're still thinking about it, but it's something that I believe is coming and it's going to come pretty fast. >> I want to pick up on that because I think, you know, they made the point that we're one of the top 10 software companies in the world. It's very difficult for hardware companies to make the transition to software. You know, HP couldn't do it. >> Well, no one's done it. >> Well, IBM has kind of done it, but they really struggle. It's kind of this mishmash of tooling and software products that aren't really well-integrated. But, I would say this, everybody now, Cisco, Dell, HPE with GreenLake, Lenovo, pretty much all the traditional hardware players are trying to move to an as a service model or at least for a portion of their business. HPE's all in, Dell transitioning. And for the most part, I would make the following observation. And I'd love to get your thoughts on this. They're pretty much following a SAS like model, which in my view is outdated and kind of flawed from a customer standpoint. All these guys say, "Hey, we're doing this because "this is what the customers want." I think the cloud is really a true consumption based model. And if you look at modern SAS companies, a lot of the startups, they're moving to a consumption based model. You see that with Snowflake, you see that with Stripe. Now they will offer incentives. But most of the traditional enterprise players, they're saying, "Okay, pay us upfront, "commit to some base level. "If you go over it, you know, "we'll charge you for it. "If you go under it, you're still going to pay "for that base level." So it's not true consumption base. It's not really necessarily the customer's best interest. So that's, I think there's some learnings there that are going to have to play out. >> Yeah, the reason customers are shying away from that SAS type model, I think during the pandemic, the one thing we learned, Dave, is that the business will ebb and flow greatly from month to month sometimes. And I was talking with somebody that worked for one of the big hotel chains, and she was telling me that what their CRM providers, she wouldn't tell me who it was, except said it rhymed with Shmalesforce, that their utilization of it went from, you know, from a nice steady level to spiking really high when customers started calling in to cancel hotel rooms. And then it dropped down to almost nothing as we went through that period of stay at home. And now it's risen back up. And so for her, she wanted to move to a consumption-based model because what happens otherwise is you wind up buying for peak utilization, your software subscriptions go largely underutilized the majority of the year, and you wind up paying, you know, a lot more than you need to. If you go to more of a true consumption model, it's harder to model out from a financial perspective 'cause there's a lot of ebbs and flows in the business, but over a longer period of time, it's more cost-effective, right? And so the, again, what the pandemic taught us was we don't really know what we're going to need from a consumption standpoint, you know, nevermind a year from now, maybe even six months from now. And consumption just creates a lot more flexibility and agility. You can scale up, you can scale down. You can bring in users, you can take out users, you can add consultants, things like that. And it just, it's much more aligned with the way businesses are run today. >> Yeah, churn is a silent killer of a software company. And so there's retention is the key here. So again, I think there's lots of learning. Let's put Cisco into context with some of its peers. So this chart we developed compares five companies to Cisco. Core Dell, meaning Dell, without VMware. VMware, HPE, IBM, we've put an AWS, and then Cisco as, IBM, AWS and Cisco is the integrated plays. So the chart shows the latest quarterly revenue multiplied by four to get a run rate, a three-year growth outlook, gross margin percentage, market cap, and revenue multiple. And the key points here are that one, Cisco has got a pretty awesome business model. It's got 60% gross margin, strong operating margins, not shown here, but in the mid twenties, 25%. It's got a higher growth rate than most of its peers. And as such, a much better, multiple than say, for instance, Core Dell gets 33 cents on the revenue dollar. HPE is double that. IBM's below two X. Cisco's revenue multiple rivals VMware, which is a pure software company. Now in a large part that's because VMware stock took a hit recently, but still the point is obvious. Cisco's got a great business. Now for context, we've added AWS, which blows away any company on this chart. We've inferred a market cap of nearly 600 billion, which frankly is conservative at a 10 X revenue multiple given it's inferred margins and growth rate. Now Zeus, if AWS were a separate company, it could have a market cap that approached 800 billion in my view. But what does this data tell you? >> Well, it just tells me that Cisco continues to be a very well-run company that has staved off commoditization, despite the calling for it for years. And I think the big lesson, and I've talked to financial analysts about this over the years, is that if, I don't really believe anything in this world is a commodity, Dave. I think even when Cisco went to the server market, if you remember back then, they created a new way of handling memory management. They were getting well above average margins for service, albeit less than Cisco's network margins, but still above average for server margins. And so I think if you can continue to innovate, you will see the margin stay where they are. You will see customers continue to buy and refresh. And I think one of the challenges Cisco's had in the past, and this is where the subscription business will help, is getting customers to stay with the latest and greatest. Prior to this refresh of network equipment, some of the stuff that I've seen in the fields, 10, 15 years old, once you move to that sell me a box and then tack on the subscription revenue that you pay month by month, you do drive more consistent refresh. Think about the way you just handle your own mobile phone. If you had to go pay, you know, a thousand dollars every three years, you might not do it at that three-year cycle. If you pay 40 bucks a month, every time there's a new phone, you're going to take it, right? So I think Cisco is able to drive greater, better refresh, keep their customers current, keep the features in there. And we've seen that with a lot of the new products. The new Cat 9,000, some of the new service provider products, the new wifi products, they've all done very well. In fact, they've all outpaced their previous generation products as far as growth rate goes. And so I think that is a testament to the way they've run the business. But I do think when people bucket Cisco in with HP and Dell, and I understand why they do, their businesses were similar at one time, it's really not a true comparison anymore. I think Cisco has completely changed their business and they're not trying to commoditize markets, they're trying to drive innovation and keep the margins up, where I think HP and Dell tend to really compete on price versus innovation. >> Well, and we are going to get to this point about the tailwinds and headwinds and cloud, and how Cisco to do it. But, to your point about, you know, the cell phone analogy. To the extent that Cisco can make that seamless for customers could hide that underlying complexity, that's going to be critical for the cloud. Now, but before we get there, I want to talk about one of the reasons why Cisco such a high multiple, and has been able to preserve its margins, to your point, not being commoditized. And it's been able to grow both organically, but also has a strong history of M and A. It's this chart shows a dominant position in core networking. So this shows, so ETR data within the Fortune 500. It plots companies in the ETR taxonomy in two dimensions, net score on the vertical axis, which is a measure of spending velocity, and market share on the horizontal axis, which is a measure of presence in the survey. It's not like IDC market share, it's mentioned market share if you will. The point is Cisco is far and away the most pervasive player in the market, it's generally held its dominant position. Although, it's been under pressure in the last few years in core networking, but it retains or maintains a very respectable net score and consistently performs well for such a large company. Zeus, anything you'd add with respect to Cisco's core networking business? >> Yeah, it's maintained a dominant network position historically. I think part of because it drives good products, but also because the competitive landscape, historically has been pretty weak, right? We saw companies like 3Com and Nortel who aren't around anymore. It'll be interesting to see moving forward now that companies like VMware are involved in networking. AWS is interested in networking. Arista is a much stronger company. You know, Juniper bought Mist and is in better position. Even Extreme Networks who most people thought was dead a few years ago has made a number of acquisitions and is now a billion dollar company. So while Cisco has done a great job of execution, they've done a great job on the innovation side, their competitive landscape, looking out over the next five years, I think is going to be more difficult than it has been over the previous five years. And largely, Dave, I think that's good for Cisco. I think whenever Cisco's pressed a little bit from competition, they tend to step on the innovation gas a little bit more. And I look back and even just the transition when VMware bought Nicira, that got Cisco's SDN business into gear, like nothing else could have, right? So competition for that company, they always seem to respond well to it. >> So, let's break down Cisco's net score a little bit. Explain why the company has been able to hold its spending momentum despite its large size. This will give you a little insight to the survey. So this chart shows the granular components of net score. The lime green is new adoptions to Cisco. The forest green is spending more than 6%. The gray is flat plus or minus 5%. The pink is spending drops by more than 5%. And the red is we're chucking the platform, we're getting off. And Cisco's overall net score here is 25%, which for a company of its size speaks to the relationships that it has with customers. It's of course got a fat middle in the gray area, like all sort of large established companies. But very low defections as well, it's got low new adoptions. But very respectable. So that is background, Zeus. Let's look at spending momentum over time across Cisco's portfolio. So this chart shows Cisco's net score by that methodology within the ETR taxonomy for Cisco over three survey periods. And what jumps out is Meraki on the left, very strong. Virtualization business, its core networking, analytics and security, all showing upward momentum. AppD is a little bit concerning, but that could be related to Cisco's sort of pivot to full stack observability. So maybe AppD is being bundled there. Although some practitioners have cited to us some concerns in that space. And then WebEx at the end of the chart, it's showing some relative strength, but not that high. Zeus, maybe you could comment on Meraki and any other takeaways across the portfolio. >> Yeah, Meraki has proven to be an excellent acquisition for Cisco. In fact, you might, I think it's arguable to say it's its best acquisition in history going all the way back to camp Kalpana and Grand Junction, the ones that brought up catalyst switches. So, in fact, I think Meraki's revenue might be larger than security now. So, that shows you the momentum it has. I think one of the lessons it brought to Cisco was that simpler is better, sometimes. I think when they first bought Meraki, the way Meraki's deployed, it's very easy to set up. There's a lot of engineering work though that goes into making a product simple to use. And I think a lot of Cisco engineers historically looked at Meraki as, that's a little bit of a toy. It's meant for small businesses, things like that, but it's not for enterprise. But, Rocky's done a nice job of expanding the portfolio, of leveraging the cloud for analytics and showing you a lot of things that you wouldn't necessarily get from traditional networking equipment. And one of the things that I was really delighted to see was when they put Todd Nightingale in charge of all the networking business, because that showed to me that Chuck Robbins understood that the things Meraki were doing were right and they infuse a little bit of Meraki into the rest of the company. You know, that's certainly a good thing. The other areas that you showed on the chart, not really a surprise, Dave. When you think of the shift hybrid work and you think of the, some of the other transitions going on, I think you would expect to see the server business in decline, the storage business, you know, maybe in a little bit of decline, just because people aren't building out data centers. Where the other ones are related more to hybrid working, hybrid cloud, things like that. So it is what you would expect. The WebEx one was interesting too, because it did show somewhat of a dip and then a rise. And I think that's indicative of what we've seen in the collaboration space since the pandemic came about. Companies like Zoom and RingCentral really got a lot of the headlines. Again, when you, the comment I made on competition, Cisco got caught a little bit flat-footed, they've caught up in features and now they really stepped on the gas there. Chuck joked that he gave the WebEx team a bit of a blank check to go do what it had to do. And I don't think that was a joke. I think he actually did that because they've added more features into WebEx in the last year then I think they did the previous five years before that. >> Well, let's just drill into video conferencing real quick here, if we could. Here's that two dimensional view, again, showing net score against market share or pervasiveness of mentions, and you can see Microsoft Teams in the upper right. I mean, it's off the chart, literally. Zoom's well ahead of Cisco in terms of, you know, mentions presence. And that could be a spate of freemium, you know, but it's basically a three horse race in this game. And Cisco, I don't think is trying to take Zoom head on, rather it seems to be making WebEx a core part of its broader collaboration agenda. But Zeus, maybe you could comment. >> Well, it's all coming together, right? So, it's hard to decouple calling from video from meetings. All of the vendors, including Teams, are going after the hybrid work experience. And if you believe the future is hybrid and not just work from home, then Cisco does have a pretty interesting advantage because it's the only one that makes its own end points, where Teams and Zoom doesn't. And so that end to end experience it can deliver. The Microsoft Teams one's interesting because that product, frankly, when you talk to users, it doesn't have a great user score, like as far as user satisfaction goes, but the one thing Microsoft has done a very good job of is bundling it in to the Office365 licenses, making it very easy for IT to deploy. Zoom is a little bit in the middle where they've appealed to the users. They've done a better job of appealing to IT, but there is a, there is a battleground now going on where video's not just video. It includes calling, includes meetings, includes room systems now, and I think this hybrid work friend is going to change the way we think about these meeting tools. >> Now we'd be remiss if we didn't spend a moment talking about security as a key part of Cisco's business. And we have a graphic on this same kind of X, Y. And it's been, we've seen several quarters of growth. Although, the last quarter security growth was in the low single digits, but Cisco is a major player in security. And this X, Y graph shows, they've got both a large presence and a solid spending momentum. Not nearly as much momentum as Okta or Zscaler or a CrowdStrike and some of the smaller companies, but they're, these guys are on a rocket ship, but others that we featured in these episodes, but much more than respectable for Cisco. And security is critical to the strategy. It's a big part of the subscriber base. And the last thing, Zeus, I'll say about Cisco made the point in analyst day, that this market is crowded. You can see that in this chart. And their goal is to simplify this picture and make it easier for customers to secure their data and apps. But that's not easy, Zeus. What are your thoughts on Cisco's security opportunities? >> Yeah, I've been waiting for Cisco go to break up in security a little more than it has. I do think, I was talking with a CSO the other day, Dave, that said to me he's starting to understand that you don't have to have best of breed everywhere to have best in class threat protection. In fact, there's a lot of buyers now will tell you that if you try and have best of breed everywhere, it actually creates a negative when it comes to threat protection because keeping all the policies and things up to date is very, very difficult. And so the industry is moving more to a platform model, right? Now, the challenge for Cisco is how do you get that, the customer to think of the network as part of the platform? Because while the platform model, I think, is starting to gain traction, FloridaNet, Palo Alto, even McAfee, companies like that also have their own version of a security platform. And if you look at the financial performance of companies like FloridaNet and Palo Alto over the past, you know, over the past couple of years, they've been through the roof, right? And so I think an interesting and unique challenge for Cisco is can they convince the security buyer that the network is as important a part of that platform as any other component? If they can do that, I think they can break away from the pack. If not, then they'll stay mixed in with those, you know, Palo, FloridaNet, Checkpoint, and, you know, and Cisco, in that mix. But I do think that may present their single biggest needle moving opportunity just because of how big the security TAM is, and the fact that there is no de facto leader in security today. If they could gain the same kind of position in security as they have a networking, who, I mean, that would move the needle like no other market would. >> Yeah, it's really interesting that they're coming at security, obviously from a position of networking strength. You've got, to your point, you've got best of breed, Okta in identity, you got CrowdStrike in endpoint, Zscaler in cloud security. They're all growing like crazy. And you got Cisco and you know, Palo Alto, CSOs tell us they want to work with Palo Alto because they're the thought leader and they're obviously a major player here. You mentioned FloridaNet, there's a zillion others. We could talk all day about security. But let's bring it back to cloud. We've talked about a number of the piece in Cisco's portfolio, and we haven't really spent any time on full stack observability, which is a big push for Cisco with AppD, Intersight and the ThousandEyes acquisition. And that plays into this equation. But my take, Zeus, is Cisco has a number of cloud knobs that it can turn, it sells core networking equipment to hyperscalers. It can be the abstraction layer to connect on-prem to the cloud and hybrid and across clouds. And it's in a good position with Telcos too, to go after the 5G. But let's use this chart to talk about Cisco's cloud prospects. It's an ETR cut of the cloud customer spending. So we cut it by cloud customers. And they're are, I don't know, 800 or so in the survey. And then looking at various companies performance within that cut. So these are companies that compete, or in the case of HashiCorp, partner with Cisco at some level. Let me just set this up and get your take. So the insert on the chart by the way shows the raw data that positions each dot, the net score and the shared n, i.e. the number of accounts in the survey that responded. The key points, first of all, Azure and AWS, dominant players in cloud. GCP is a distant third. We've reported on that a lot. Not only are these two companies big, they have spending momentum on their platforms. They're growing, they are on that flywheel. Second point, VMware and Cisco are very prominent. They have huge customer bases. And while they're often on a collision course, there's lots of room in cloud for multiple players. When we plotted some other Cisco properties like AppD and Meraki, which as we said, is strong. And then for context, we've placed Dell, HPE, Aruba, IBM and Oracle. And also VMware cloud and AWS, which is notable on its elevation. And as I say, we've added HashiCorp because they're critical partner of Cisco and it's a multi-cloud play. Okay, Zeus, there's the setup. What does Cisco have to do to make the cloud a tailwind? Let's talk about strategy, tailwinds, headwinds, competition, and bottom line it for us. >> Yeah, well, I do think, well, I talked about security being the biggest needle mover for Cisco, I think its biggest challenge is convincing Wall Street in particular, that the cloud is a tailwind. I think if you look at the companies with the really high multiples to their stock, Dave, they're all ones where they're viewed as, they go along with the cloud ride, Right? So the, if you can associate yourself with the cloud and then people believe that the cloud is going to, more cloud equals more business, that obviously creates a better multiple because the cloud has almost infinite potential ahead of it. Now with respect to Cisco, I do think cloud has presented somewhat of a double-edged sword for Cisco. I don't believe the current consumption model for cloud is really a tailwind for Cisco, not really a headwind, but it doesn't really change Cisco's business. But I do think the very definition of cloud is changing before our eyes, Dave. And it's shifting away from centralized clouds. If you think of the way customers bought cloud before, it might have used AWS, it might've used Azure, but it really, that's not really multi-cloud, it's just multiple clouds in which I put things in these centralized resources. It's shifting more to this concept of distributed cloud in which a single application can be built using resources from your private cloud, for AWS, from Azure, from Edge locations, all the cloud providers have built their portfolios to support this concept of distributed cloud and what becomes important there, is a highly agile dynamic network. And in that case with distributed cloud, that is a tailwind for Cisco because now the network is that resource that ties all those distributed cloud components together. Now the network itself has to change. It needs to become a lot more agile and microservices and container friendly itself so I can spin up resources and, you know, in an Edge location, as fast as I can on-prem and things like that. But I do think it creates another wave of innovation and networking, and in that case, I think it does act as a tailwind for Cisco, aside from just the work it's done with the web scalers, you know, those types of companies. So, but I do think that Cisco needs to rethink its delivery model on network services somewhat to take advantage of that. >> At the analyst meeting, Cisco made the point that it does sell to the hyperscalers. It talked about the top six hyperscalers. You know, you had mentioned to me, maybe IBM and Oracle were in there. I always talk about four hyperscalers and only four, but that's fine. Here's my question. Practitioners have told me, buyers have told me, the more money and more workloads I put in the cloud, the less I spend with Cisco. Now, even though that might be Cisco gear powering those clouds, do you see that as a potential threat in that they don't own that relationship anymore and value will confer to the cloud players? >> Yeah, that's, I've heard that too. And I don't, I believe that's true when it comes to general purpose compute. You're probably not buying as many UCS servers and things like that because you are putting them in the cloud. But I do think you do need a refresh the network. I think the network becomes a very important role, plays a very important role there. The variant, the really interesting trend will be, what is your WAM look like? Do you have thousands of workers scattered all over the place, or do you just have a few centralized locations? So I think also, you know, Cisco will wind up providing connectivity within the cloud. If you think of the transition we've seen in other industries, Dave, as far as cloud goes, you think of, you know, F5, a company like that. People thought that AWS would commoditize F5's business because AWS provides their own load balancers, right? But what AWS provides is a very basic, very basic functionality and then use F5's virtual edition or a cloud edition for a lot of the advanced capabilities. And I think you'll see the same thing with the cloud that customers will start buying versions of Cisco that go in the cloud to drive a lot of those advanced capabilities that only Cisco delivers. And so I think you wind up buying more Cisco over time, although the per unit price of what you buy might be a little bit lower. If that makes sense here. >> It does, I think it makes a lot of sense and that fits into the cloud model. You know, you bring up a good point, the conversation with the customer was Rakuten. And that individual was essentially sharing with us, somebody was asking, one of the analysts was asking, "Well, what about the cloud guys? "Aren't they going to really threaten the whole Telco "industry and disrupt it?" And his point was, "Look at, this stuff is not trivial." So to your point, you know, maybe they'll provide some basic functionality. Kind of like they do in a lot of different areas. Data protection is another good example. Security is another good example. Where there's plenty of room for partners, competitors, of on-prem players to add value. And I've always said, "Look, the opportunity "is the cloud players spend 100 billion dollars a year "on CapEx." It's a gift to companies like Cisco who can build an abstraction layer that connects on-prem, cloud for hybrid, across clouds, out to the edge, and really be that layer that is that layer that takes advantage of cloud native, but also delivers that experience, I don't want to use the word seamlessly, but that experience across those clouds as the cloud expands. And that's fundamentally Cisco's cloud strategy, isn't it? >> Oh yeah. And I think people have underestimated over the years, how hard it is to build good networking products. Anybody can go get some silicon and build a product to connect two things together. The question is, can you do it at scale? Can you do it securely? And lots of companies have tried to commoditize networking, you know, White Boxes was looked at as the existential threat to Cisco. Huawei was looked at as the big threat to Cisco. And all of those have kind of come and gone because building high quality network equipment that scales is tough. And it's tougher than most people realize. And your other point on the cloud providers as well, they will provide a basic level of functionality. You know, AWS network equipment doesn't work in Azure. And Azure stuff doesn't work in Google, and Google doesn't work in AWS. And so you do need a third party to come in and act as almost the cloud middleware that can connect all those things together with a consistent set of policies. And that's what Cisco does really well. They did that, you know back when they were founded with routing protocols and you can think this is just an extension of what they're doing just up at the cloud layer. >> Excellent. Okay, Zeus, we're going to leave it there. Thanks to my guest today, Zeus Kerravala. Great analysis as always. Would love to have you back. Check out ZKresearch.com to reach him. Thank you again. >> Thank you, Dave. >> Now, remember I publish each week on Wikibond.com and siliconangle.com. All these episodes are available as podcasts, just search "Braking Analysis" podcast, and you can connect on Twitter at DVallante or email me David.Vallante@siliconangle.com. Thanks for the comments on LinkedIn. Check out etr.plus for all the survey action. This is Dave Vallante for theCUBE insights powered by ETR. Be well and we'll see you next time. (light music)

>>live from Seattle, Washington. It's the booth covering smartsheet engaged 2019. Brought to you by smartsheet. >>Welcome back, everyone to the cubes. Live coverage of smartsheet engaged here in Seattle. I'm your host, Rebecca Night, along with my co host, Jeff. Rick. We're joined by Anna Griffin. She is the CMO of smartsheet. Thanks so much for coming on the Cube. Thank you, guys for having me appreciate it. So you were your pretty new to this company. Joined in April. I'd love to hear, but you've also had an illustrious career in marketing. You've worked summers and big names, including Apple and Nortel and and Saturn. And you've also worked for Land's end and a whole bunch of different varied career. What attracted you to smart? >>She You know, it was interesting when I first got the call about smartsheet. I had never heard of it. And the way that it was positioned to me was super intriguing. I realized it was one of those a category that's just not established, but a category that has the potential to be the next big thing. And we're not even the potential. I mean, it will be the next big thing and, you know, I met with that was intriguing. But then, you know, I met with the executive team, and it was a perfect combination of a killer product, but a killer company. I can't tell you how special the leadership of this company is and their authenticity and their passion and their drive and their belief. It's so contagious. There's no way you would not want to be a part of it. So on, then, the privilege to be able to tell this company's story I feel like it is the best kept story. Not only in Seattle, potentially the world on I plan to tell the story and And what a gift it was. A great opportunity is a marketer toe have this type of opportunity. >>Well, we're gonna get into how you're going to tell the story. Okay, See you later. But so now you've been here a few months. It is your first ever engaged. What? What does he what are your impressions? >>Well, I wish I had been thio previous engaged to have something to compare it to. But the fact that this conference has doubled in size 4000 customers here and it's only its third show. I will tell you in the industry I've worked, you know, managing events teams for many, many, many years. Not a lot of conferences grow at this size, and Soto have 4000 customers here who are zealots. They are their passion for the product and what it's doing and what it's doing for there. Not only their companies, but their own personal careers. There isn't an empowerment story through their mouse that will just inspire you. So it's It's incredible. The energy here is really, really especially. >>Feel it, too. Way See >>it a lot of the smaller conferences, early days. That's why they're fun to be. Here were last year, when those 2000 it was adjacent to the to the office across the across the water. Exactly, but it is a really passion community, and, you know, Thio here, literal, literal cheers and claps at features. Well, it's great to see, like copy paste from one road to the other because it's clearly something that means something these people and that they have asked for and the company is delivered and really demonstrates, is listening to engage these crazy people. It's a great asset >>wave. That listening thing is huge, and I feel like that's one of the things. And I think it's why there is a CMO now. That's why I get the privilege to be the first CMO is because the customers said way need more awareness of this company. We need our our executives. We need lines of business leaders. We need i t to know who you are and the magic of what you do. We need awareness is gonna make it that much easier for us to get much wider adoption across these companies. If people know who you are and they know you know what you're capable of. So listening. That is one of the number one things we've heard. It's like awareness. They wanted awareness. So because it'll help make them more successful. So I think that was the catalyst for Okay, let's get a cheap Marty Officer, Let's go build >>that about you. What are you gonna do? What it wanted? Some of your top priority is to tell the story and to build brand awareness. >>Yeah, well, um well, you're the first thing was to really kind of Titan are positioning again. It's a great great products make great brands, and this is a great product company. But man were starting to do so much ward than just killer products. We're really getting into this enablement this, um right, transforming companies. And so I wanted to make sure we're positioned properly. And we're really positioning mawr in a more transformative altitude and the capabilities of what we can do. We have found we've spent way too much time talking about technology versus people versus what technology and people are going to do together. And that is the magic of what smartsheet does. It really takes platform a common platform that basically integrates with the Czech investment that you've already made with the systems of record that you already have pools that data out and then allows the people I work with that data all in a common really time, you know, application. And when you can marry those two things together that tech and people, that's when one plus one equals three. And so we call that that three is what we really call achievement again, Like everybody in our space is work work, work, task management, project management, the capability of smart shit Yeah, we do all that, too. But when you play in that transformative altitude, we're in a bling achievement and it enterprise wide level and achieve it like what your business can achieve. But this is the more special part. And this is where I get excited. Did you feel to tell this story is the achievement happens at a personal level to like again? I'm telling you when I talk to customers and I see what they're doing right, you don't understand. You have changed my career. I'm doing more strategic work. I am. I am seen differently in my company. I champion this, like all of a sudden, I am leading big teams. I went from this to this, and there they're empowerment is so big and so really that last mile of digital transformation is cultural transformation. And that's what this product does. And so job one was position. That's properly so we can tell that type of story and really put our solutions in that kind of light because that's what it does on then job to is to launch the campaign launches to the world. So we just launched two weeks ago, and it's a slow roll. I mean, we have hundreds of assets, it in place. So if I love seeing us on television, you know I love seeing is deeply in digital. I love some of the new interesting things that that we could do in media. But when our customers are saying that, you know they're seeing it a CMO like you high from it. Yeah, So it's fun. So jump to launch the campaign and the campaign is, well, we call the campaign can do you know we're positioning the brand as the platform for enterprise achievement. Number one Smart sheet is a platform, I think a lot of people, you know as it's grown. I mean, it truly is a platform, and it really is enterprise strong and wide. It's skills which is important, but its scales So everybody and a company can align organizational alignment to truly achieve something bigger aligned organizations do not fill. And so that's the That's the power. But I digress. >>No question that way >>you know, one of the great legs of your of your go to market strategy and your lead jen is your licensing formula, which enables me as the Spartan sheet licensee to engage lots of people, many outside my own, not by my own team, but my own company. And let them have access to this tool. What a smart, smart waiver. Whoever came up with that licensing strategy? What a great way to introduce the opportunity to use this transformational tool to ongoing and broad audience. >>Yes, your table is so exciting. When I was in the interview process and I was riding on a plane and clearly I had met with the company and I heard somebody in front of me was a consultant, one of the consulting firms who had met a complete stranger on the plane. And somehow Smartsheet came up that she was going you got Oh, my gosh, Smartsheet. This is like she was going. This is the best kept secret. We're using it with all of our clients. We heard about it through one of our clients. That wasn't one of them. We'll use it like Oh, my gosh, this is the game changer. I'm like putting >>my here in between the wayward. I put my hand it as it did You just say smart shape. >>Literally six people on the airplane, random people like, Oh, my gosh, we use it to It was the most surreal experience, and that was when I knew, like, Okay, I've got to be a part of this Coast special. Did a lot of people are now just getting that sensation of what this thing is capable of. And, >>well, it's funny to your personal achievement story. Reminds me of any time you know you got a new software company and whether, you know, centered alloy Dorian, Why, when those guys come in, they're making a big bet right there. Some new partner's gonna bet. Bet their career on this new technology. We've heard from a number of people how betting their career internally with smartsheet has changed their position in the company. Yes, for that today, a couple of times. So clearly you know it. It is an enablement platform for someone to, you know, grab on to the to the rocket ship and ride this Marchi wave thio new and bigger, better things, >>but but also her point about just even just participating in the technology. And then they're able to, as you said, work on more strategic work, be able to do more things in their jobs that have been catapulted them to new job. So it's not even necessarily betting on smartsheet bringing in smart cheat. But it is just just using smart sheet and then therefore they have more brain time. Yes, yes, oh, engagement we're talking about, >>right, right? You know, it is because we've been talking a lot about you know, some of the really scary statistics about how disengaged people are at work and how many people are ready to quit their job. And, you know, they've got all these blocks. Is menial roadblocks in their day to day existence that are that are negatively impacting their ability to want to do their job or but actually just want to be there anymore. And so it's It's like seems maybe to the outside, looking in some of these things by seem low value, but they're actually tremendous value. If you're removing these roadblocks so I can get my job done >>totally and love your job, you love your job. But know that the work that you do matters and I think so many people have lost that feeling like there's something about working and I don't know if it's the corporate world. But it has become such a grind, and that rare opportunity would like. I love what I do, and I know that it matters. It's a gift, and this is a platform that enables bad in people. And so I think that's when the fascinating things I've been spending a lot of time on the road with customers and I was at a very big multi national, big global agricultural company. And, um, Singer, Actually, I'm watching WAY Bet with probably 200 different Just what I would call power users across seven different you know, roll types like from I t toe hsc thio, you name it. And, um, every single one of them is like art. We're doing more like we are in power, like the engagement, the employee engagement in that company through the roof because every single person felt like were hurt. I have ownership, you know. I'm doing work. I'm taking it to a new level. And so you know, sure, there is a Thanh of operational efficiencies that are gonna come out of working with smartsheet. But I think the one to watch is what's gonna happen when your workforce is truly engaged and taking ownership of the work. Those were the good. Those are the companies that are going to have a higher retention. They're gonna have you. They're going to see something in that in that talent area. So this is more than just We're getting more work done and return on investment of our our our systems, like you're going to see you know what happens when your when your employees are empowered. >>Well, the word you didn't use his innovation that I firmly believe everyone wants more innovation, their company. >>But how do you do >>it? One of those? I think it's really simple. Lever on that is you just get more people more access to more data and then the ability to do something about it and open it up to all the smart people that see problem to different prisons in different opportunities. And that's where you start to get in. A leverage is amazing talent that you already have inside your four walls. >>But what is interesting about innovation, as I think sometimes the world so over rotates that innovation is gonna be that next killer line of code or it's going to be and they forget that the power of practical innovation like it's that Siri's of small collected things at out up, allowing your entire, you know, employee population to feel like they have the power to innovate us. That every person in the company has the power because the power practical innovation can lead to something Justus Big is the big already. >>Dev. Ops has shown that that's a better way anyway, right in software development, with the grand idea with the market development plan and the product development plan and the three year build cycle that's does not win against constant religious narrative improvement. Improvement, improvement, improvement, improvement. Yes, >>indeed. So you and you said this earlier and I saw it on your Lincoln to the last mile of digital transformation is cultural transformation. How do you describe the culture at smart shape now? I mean, we've talked about the evangelical customers Yeah, about with in smartsheet itself. >>It's, um it's pretty special. Know what you're gonna say? Of course. And see him? I was gonna say special, but it is. It is rare when people everyone comes to work with this belief like this true belief that they are They have the power to influence something and touch something that's going to do something great for other people. And I think that's what eyes, the most specialised. They they're not just doing it for themselves. They know they're doing it for others, like they know they love these guys. Every single person in the company loves that customer like the love ability, They love the customer, and they feel like they've got to do their best work so their customer can do something great with it. You know, they really understand that, and that's Ah, it's an incredible place to wanna work when you, when you feel that way but toe love your customers. I think that's why our customers love us back and to be loved. You must first love and because they love you know, it's it's >>rare. Well, congratulations. It sounds like it's a great role and you're in the right place. And I can't talk to you next year and hear more about can do and and all of the wonderful things you're doing. Thank you. Thank you, guys. I'm Rebecca Knight. That wraps up the cubes. Interviews. Stay tuned for our rap of engaged 2019 you're watching the Cube

>>live from Seattle, Washington. It's the booth covering smartsheet engaged 2019. Brought to you by smartsheet. >>Welcome back, everyone to the cubes. Live coverage of smart. She engaged here in Seattle. I'm your host, Rebecca Night, along with my co host, Jeff. Rick. We're joined by Anna Griffin. She is the CMO of smartsheet. Thanks so much for coming on the Q. Thank you, guys for having me appreciate it. So you were your pretty new to this company joined in April. I'd love to hear, but you've also had an illustrious career in marketing. You've worked several big names, including Apple and Nortel and and Saturn. And you've also worked for Land's end and a whole bunch of different varied career. What attracted you to smart? She You know, it >>was interesting when I first got the call about smartsheet. I had never heard of it, and the way that it was positioned to me was super intriguing. I realized it was one of those a category that's just not established, but a category that has the potential to be the next big thing. And we're not even the potential. I mean, it will be the next big thing and you know, I met with that was intriguing. But, you know, I met with the executive team and it was a perfect combination of a killer product, but a killer company. I can't tell you how special the leadership of this company is and their authenticity and their passion and their drive and their belief. It's so contagious. There's no way you would not want to be a part of it. So on, then, the privilege to be able to tell this company's story I feel like it is the best kept story not only in Seattle, potentially the world on I plan to tell the story and and what a gift. But what a great opportunity is. A marketer toe have this type of opportunity. >>Well, we're gonna get into how you're going to tell the story, okay, a little bit later, but so now you've been here a few months. It is your first ever engaged What? What does he what are your impressions? >>Well, I wish I had been thio previous engaged to have something to compare it to. But the fact that this conference has doubled in size 4000 customers here and it's only its third show. I will tell you in the industry who have worked, you know, managing events teams for many, many, many years. Not a lot of conferences grow at this size, and Soto have 4000 customers here who are zealots. They are their passion for the product and what it's doing and what it's doing for there. Not only their companies, but their own personal careers. There isn't an empowerment story through their mouse that will just inspire you. So it's It's incredible. The energy here is really, really especially. >>Feel it, too. Way See >>it a lot of the smaller conferences early days. That's why they're fun to be. Here were last year, when those 2000 it was adjacent to the to the office across the across the water. Exactly, but it is a really passion community, and you know, Thio here, literal, literal cheers and claps at features. It's great. It's like copy paste from one road to the other because it's clearly something that means something these people and that they have asked for and the company is delivered and really demonstrates, is listening to engage these crazy people. It's a great asset >>wave. That listening thing is huge, and I feel like that's one of the things. And I think it's why there is a CMO now. Why get the privilege to be the first CMO is because the customers said way need more awareness of this company. We need our our executives. We need lines of business leaders. We need i t to know who you are and the magic of what you do. We need awareness is gonna make it that much easier for us to get much wider adoption across these companies. If people know who you are and they know you know what you're capable of. So listening. That is one of the number one things we've heard. It's like awareness. They wanted awareness, so because >>it'll help make them >>more successful. So I think that was the >>catalyst for OK, let's get achieve, Marty. Officer, Let's go build that about you. What are you gonna do? What were some of your top priority is to tell the story and to build brand awareness. Yeah, well, um well, you're the first thing >>was to really kind of Titan are positioning again. It's a great great products make great brands, and this is a great product company. But man were starting to do so much more than just killer products were really getting into this enablement this, right, transforming companies. And so I wanted to make sure we're positioned properly. And we're really positioning mawr in a more transformative altitude and the capabilities of what we could do. You know, we have found we've spent way too much time talking about technology versus people versus what technology and people are going to do together. And that is the magic of what Smartsheet does. It really takes a platform, a common platform that basically integrates with the tech investments. And you've >>already made with the systems of record that you already have pools that data out and then allows >>the people I work with that data all in a common really time application. And when >>you can marry >>those two things together, that tech and people, that's when one plus one equals three. And so we call that that three is what we really call achievement again, like >>everybody in our space >>is work work, work, task management, project management, the capability of smart shit. Yeah, we do all that too. But when you're playing that transformative altitude, we're in Ebeling achievement and it enterprise wide level and achievement, like what your business can achieve. But this is the more special part, and this is where I get excited. Did you feel to tell this story is the achievement happens at a personal level to like again? I'm telling you when I talk to customers and I see what they're doing right, you don't understand. You have changed my career. I'm doing more strategic work. I am. I am seeing differently in my company. I champion this, like all of a sudden I am leading big teams. I went from this to this, and there they're empowerment is so big and so really that last mile of digital transformation is cultural transformation. And that's what this product does. And so job one was position. That's properly so we can tell that type of story and really put our solutions in that kind of light because that's what it does on then job to is to launch the campaign launches to the world. So we just launched two weeks ago and it's a slow roll. I mean, we have hundreds of assets it in place. So if I love seeing us on television, you know I love seeing is deeply in digital. I love some of the new interesting things that that we can do in media. But when our customers are saying that you know they're seeing it, a CMO like you gonna get a high from it. Yeah, So it's fun job to launch the campaign, >>and the campaign is, well, we call the campaign can do you know we're positioning >>the brand as the platform for enterprise achievement. Number one Smart sheet is a platform, I think a lot of people, you know as it's grown. I mean, it truly is a platform, and it really is enterprise strong and wide. It's skills which is important, but its scales So everybody and a company can align organizational alignment to truly achieve something bigger aligned organizations do not fill. And so that's the That's the power. But I digress. >>No question that way >>you know, one of the great legs of your of your go to market strategy and your lead Jen is your licensing formula, which enables me as the Spartan sheet licensee to engage lots of people many outside my own, not by my own team, but my own company. And let them have access to this tool. What a smart, smart waiver. Whoever came up with that licensing strategy? What a great way to introduce the opportunity to use this transformational tool to ongoing and broad audience. Yes, >>your table is so exciting. >>When I was in the interview process and I was riding on a plane and clearly I had met with the company and I heard somebody in front of me was a consultant, one of the consulting firms who had met a complete stranger on the plane. And somehow Smartsheet came up that she was going you got Oh, my gosh, Smartsheet. >>This is like she was going. This is the best kept secret. We're using it with all of our clients. We heard about it through one of our clients That wasn't one of them. We'll use it like Oh, my gosh, this is the game changer. I'm like putting my here in between the wayward I put my hand in as it did You just say smart shape. Literally six people on the airplane, random people like, Oh, my gosh, we use it to. It was the >>most surreal experience, and that was when I knew, like, Okay, I've got to be a part of this Coast special. Did a lot of people are now just getting that sensation of what this thing is capable of. >>And, well, it's funny to your personal achievement story. Reminds me of any time you know you got a new software company and whether you know, center Deloitte or even why, when those guys come in, they're making a big bet right there. Some new partner's gonna bet. Bet their career on this new technology. We've heard from a number of people how betting their career internally with smartsheet has changed their position in the company. Yes, we find that today a couple of times so clearly you know it. It is an enablement platform for someone to, you know, grab on to the to the rocket ship and ride this Marchi wave thio new and bigger, better things, >>but but also her point about just even just participating in the technology. And then they're able to, as you said, work on more strategic work, be able to do more things in their jobs that have been catapulted them to new job. So it's not even necessarily betting on smartsheet and bringing in smart cheat. But it is just just using smart sheet and then therefore they have more brain time. Yes, yes, oh, engagement we're talking about, >>right, right? You know, it is because we've been talking a lot about you know, some of the really scary statistics about how disengaged people are at work and how many people are ready to quit their job. And, you know, they've got all these blocks. Is menial roadblocks in their day to day existence that are that are negatively impacting their ability to want to do their job or but actually just want to be there anymore. And so it's It's like it seems, maybe to the outside, looking in some of these things by seem low value, but they're actually tremendous value if you're removing these roadblocks so I could get my job done >>totally and love your job, you love >>your job. But know that the work that you do matters and I think so many people have lost that feeling like there's something about working and I don't know if it's the corporate world, but it has become such a grind and that rare opportunity. We feel like I love what I do, and I know that it matters like it's a gift and this is a platform that enables bad in people. And so I think that's when the fascinating things I've been spending a lot of time on the road with customers and I was at a very big multi national, big global agricultural company. And, um, Singer, Actually, I'm watching WAY Bet with probably 200 different Just what I would call power users across seven different you know, roll types like from I t toe hsc thio, you name it. And, um, every single one of them is like art. We're doing more like we are empowered, like the engagement, the employee engagement in that company, through the roof because every single person felt like were hurt. I have ownership, you know. I'm doing work. I'm taking it to a new level. And so you know, sure, there is a Thanh of operational efficiencies that are gonna come out of working with smart shape, But I think the one to watch is what's gonna happen when your workforce is truly engaged and taking ownership of the work. >>Those were the good. Those are the companies that are >>going to have a higher retention they're gonna have >>They're going to see >>something in that in that talent area. So this is more than just We're getting more work done and return on investment of our our our systems like you're going to see you know, what happens when your when your employees are empowered. >>Well, the word you didn't use his innovation that I firmly believe everyone wants more innovation, their company. >>But how do you do >>it? One of those? I think it's really simple. Lever on that is you just get more people more access to more data and then the ability to do something about it and open it up to all the smart people that see problem to different prisons in different opportunities. And that's where you start to get in. A leverage is amazing talent that you already have inside your four walls. >>But what is interesting about >>innovation is I think sometimes the world so over rotates that innovation is gonna be that next killer line of code, or it's going to be and they forget that the power of practical innovation like it's that Siri's of small collected things at out up, allowing your entire, you know, employee population to feel like they have the power to innovate us. That every person in the company has the power because the power practical innovation can lead to something Justus biggest the big already >>Dev Ops has shown that that's a better way anyway, right in software development, with the grand idea with the market development plan and the product development plan in the three year build cycle that's does not win against constant religious narrative improvement. Improvement, improvement, improvement, improvement. Yes, >>indeed. So you and you said this earlier and I saw it on your Lincoln to the last mile of digital transformation is cultural transformation. Yes. How do you describe the culture at smart shape now that we've done talked about the evangelical customers Yeah, about with in smartsheet itself, it's, um it's pretty >>special. Know what you're gonna say? Of course. And see if I was >>gonna say special. But it is. It is rare >>when people everyone comes to work with this belief like this true belief that they are. They have the power to influence something and touch something that's going to do something great for other people. And I think that's what is the most special is they? They're not just doing it for themselves. They know they're doing it for others, like they know they love these guys. Every single person in the company loves that customer like the love ability, They love the customer and they feel like they've got to do their best work. So their customer, I can do something great >>with it. You know, they really understand that. >>And that's Ah, it's an incredible place to wanna work when you, when you feel that way but toe love your customers. I think that's why our customers love us back and to be loved. You must first love >>and because they love you know, it's it's rare. Well, congratulations. It sounds like it's a great role and you're in the right place. And I can't talk to you next year and hear more about can do and and all of the wonderful things you're doing. Thank you. Thank you, guys. I'm Rebecca Knight. That wraps up the cubes. Interviews. Stay tuned for our rap of engaged 2019 you're watching the Cube

>> (announcer) Live from Las Vegas, it's the Cube. Covering Fortinet Accelerate '18. Brought to you by Fortinet. (upbeat music) >> Welcome back to the Cube. We are live at Fortinet Accelerate 2018. I'm Lisa Martin, with my co-host, Peter Burris. And we're excited to be joined by Myk Conrad, the VP of Product Management at Ribbon Communications. Myk, welcome to the Cube. >> Well, thank you very much, and it's great to be here. >> So tell us about Ribbon, your Technology Alliance's partner. Tell us about Ribbon Communications, and what you guys do with Fortinet. >> Okay, so a few things. Ribbon Communications, we basically are a security and cloud company, in the voice and video space. So what does that practically mean? That means we sell something called a session border controller, which is a voice and video firewall, into both service providers and into enterprises. So an example would be, when you make a mobile call, with AT&T, or Verizon, or Deutsche Tel, or British Talk, I mean, whoever your particular service provider is, that voice session becomes an IP packet, wends its way through the network, and as it's wending its way through the network, it has to be potentially encrypted, it has to be protected, denial service attacks, all of that stuff, that's what we do. Now how does that work into what Fortinet does? We are a part of their cloud security fabric, and we have the ability, with a new product that we're launching, or have launched this week, or announced this week. It will be actually GA and available in the summer. It will be included in passing information into the security fabric. So we protect voice and video, Fortinet protects data, web, email, you know, everything that they do very well. What we are, what this new product that we call Ribbon Protect is, is going to be a bridge between the voice and video world of IP communications, and the data world that Fortinet works with. And we're going to be passing information and talking between those two worlds, and therefore adding an extra layer of security to that. So that's how we work with them. >> (Peter) So voice and video have some certain special communications requirements, and basically, you're bringing the capacity to do voice video security, and the special requirements associated therein into the Fortinet ecosystem. >> (Mykola) Yeah, so a great example is, so let's use an enterprise as an example, alright? So let's say you're a big bank, somebody along the lines of a Bank of America, and I'm not saying it's Bank of America, or Wells Fargo. I'm not naming anyone, but just along those lines. Big bank. You probably have a SIP trunk, which is an IP trunk, and IP packets for communications coming into a data center, or multiple data centers around the world, and into individual branches of all your retail locations. And those are voice and video packets. And your tellers, or your contact center agents, are picking up the phone, and that's all IP audio and video. Or they might be using a handset, and again, that's all IP to the laptop, or to the handset. And they're having these conversations. You may want to encrypt those conversations. You definitely want to make sure, if a contact center is up, and it's doing mortgage calls, it's taking individual requests for checking account balances, that that contact center stays up. In the world of IP, especially in SIP communications, it's very easy to send a denial service attack against, for example, a contact center, and bring that down. So nothing keeps somebody from generating, from a single laptop, 20 gigabytes, 30 gigabytes, or petabytes worth of calls into a contact center. And that will bring down the infrastructure, unless you're protecting that infrastructure with a download service type of device. Similar, very analogous to what you would see is in a DDoS device that, for example, Fortinet sells, on the data side, to protect your web servers and your email servers, and all the other things, except on the voice side. So that's what we do. And now, with Ribbon Protect, we're going to be taking all the information that we're gleaning, as these ports are being opened and closed, and as we are getting attacked on the voice and video side. so an IP address comes in. We've decided that there's a lot of bad calls coming in from that side of the fence. We blacklist that. We will then pass that information over to the data side of the house. Through the security fabric, we will pass through, and then Fortinet can, on their side, say, "Hey, this is now blacklisted also." So any packets coming from that IP address that are doing something else, that have nothing to do with voice and video, because it's two separate networks, typically, will now be protected. So now the bank has an added level of security. >> (Peter) And Fortinet propagates that, cascades it throughout. >> Cascades it throughout their entire partner ecosystem. >> Right. >> So that's what we do. And we have deep visibility into SIP. So one of the things, as an example, firewalls are very good at opening and closing ports. And the default for most firewalls is port closed. The problem is with SIP it's a phone call. Ports are typically closed. A call comes in, and it's ringing. You answer, and when you answer the UDP port has to be open, so that a media stream can come through and cut through the call, so you can actually have a conversation. Otherwise, the packets will get blocked, and there will be no conversation. You'll get one-way audio, or no audio. We have very good visibility into which ports are being assigned the duration of that call, so when somebody says, "Okay, bye." Hang up, click, and you kill that packet stream, that port will get closed automatically. A lot of firewalls don't do that. They keep the ports open, because they don't know at that SIP level that a call's coming through right this very second for Myk, open the port for three minutes because he's talking to his mom, conversation's over, close the port, because they don't go to that depth of information on the SIP application level. We do, because that's our job. And we then pass that information, say, "Listen, you should be closing this port, or opening this port." We have a lot of visibility that firewalls just don't have. And now, as part of the security fabric, we're going to be passing that information onwards. So now we're going to have a stronger security perimeter for enterprises as well as service providers that are using the combination of our session border controllers, Ribbon Protect, the new product that's coming out, and the Fortinet panoply of products. >> So if I'm a CSO at a bank, and we were speaking with Fortinet's CSO earlier today, and kind of talking about the evolution of that. We talked as well, I think with John Madison, about the security architect. If I'm the CSO at a bank, or a service provider, what is my material value that this technology alliance is going to give to my organization? >> (Mykola) That's a good question. So there's a couple different aspects of this. So let me talk about Ribbon Protect. We frame Ribbon Protect in three different value propositions: one is for telephony fraud, or communications fraud, another one is in cybersecurity threats, and a third one is network visibility. So I'm going to start with network visibility and work my way back up that chain. So there's a value proposition, not necessarily for the CSO, but for the CIO and the people running the communications network, in having really good visibility into the communications network, an end-to end view across multiple different disparate items. So let me give you an example. Typical bank will have Cisco, they might have Juniper, they might also have an Avia system, when it comes to communications, they might have an old Nortel system, they might have some cloud communications from a Vonage, or a Fuse, or Verizon. All these disparate systems, all under this one CIO, and a call comes in, and nothing works. For some reason it's not routing correctly, the contact center agent isn't getting the call. You know, have you ever called, and you get transferred, and you get dropped? That's the problem. And then when they try to troubleshoot that, it's very hard, because there's so many disparate elements. So the first thing you need is visibility. So from a CIO perspective this product, Ribbon Protect, will give you visibility into the network, and that will allow you to troubleshoot and bring the network up. Then you go into the next level. So once you have visibility. So you can't provide security until you have visibility into a network, so now that you've got this N10 visibility, now let's talk about security. Two different types of security threats that our customers are seeing when it comes to communications. One is sort of robo dialing, toll fraud. And I would even put denial service attacks sort of in there. Denial service attacks also go to the next level, which is cybersecurity. But robo dialing: how many of you are getting calls all the time now? I'm getting them on my mobile, literally, I get like three or four a day on my mobile phone from a different random number, because they know my area code and they think if they mask it, it's a friend of mine, and I'll answer the call. That's becoming more and more prevalent. Now think about if you're an enterprise, and if you're a CSO, and now you're tasked with keeping these employees productive, but they're starting to get all these random calls, your contact center agent. And we've actually had this happen to customers of ours, where they picked up the phone and they were getting random garbled noise on the other end. And you're a contact center agent, your job is to sit there, and you hear these weird noises in your earphone, you hang up, next one comes in, it's weird noises. Third one comes in, it's actually a person that is asking about their mortgage. Great. That's your job. But then the next one is some weird ... It brings productivity way down. So there's that one area. And then there's toll fraud, which is in the billions of dollars, now, of cost to both enterprises and service providers, where people are doing things like calling Zambia, or weird little countries, and routing through enterprise networks. So that's another aspect that a CSO would be worried about. And lastly, and the most important one, is the cybersecurity issue. Packet-based denial service attacks across your entire system, that can not only take down your web server and your email server, but also your communications, your real-time communications, but also exfiltration of data. So what we've seen is the following: a hacker comes in through the data side and understands the network typology, puts in some malware, but because they're using something from Fortinet or somebody else, they can't do anything with that information. There's no way out. But here's the SIP network, this UC network, sitting in the system, and it's sort of unguarded, not that there's no guards there in place, but the data side, if you look at everything that Fortinet and others have been putting out, that side of the fence is getting a lot of attention. And over the last few years even more attention, as hacks have taken place, and PII has been stolen. But on the SIP side of the fence, that hasn't really happened as much. And so we believe that's the weakest chain right now, or will soon be the weakest chain. And hackers will use the open ports, because if your just using a firewall, those ports are open. The range of UDP ports to put media through is wide open. It has to be, otherwise it won't work. And so they can exfiltrate data through that. So they use some other means to find the typology of the network, get in, and then they can pass data out through that. And it might look like a good media stream, like a video call, and we've actually seen examples where people have sent video and embedded, underneath that, data inside the video. >> They piggyback. >> And they piggyback it. So you're going to see, the value to the CSO is, listen, if you're concerned about people finding a different way into your network, you're protected against, or you think you're protected against malware, you're protected against email, you're protected against web server attacks. Well have you really thought about the UC side? So if I'm a CSO, I should be really worried about securing that side of my fence, because I haven't been worried about it for the last three or four years, and there's been an increase in attacks, or increasing amount of attacks on that side of the fence. And then there's these other values of Ribbon Protect that hit other aspects of the IT chain. So we believe that there's a, sort of three core value propositions, two that really affect the CSO, and one that's more of a CIO issue. >> Well, look, once a port's open it's open. >> Correct, yeah. >> And video and voice do have characteristics that if a device is set up to introspect it and understand it, then it can recognize it. But as you said, your general-purpose firewall typically is not looking at that. And you don't want to introduce an entirely distinct and separate management platform, and paying, if you don't have to. So the CSO gets to see the same paying, while the CIO gets to ensure that voice and video happens without being hit? >> (Myk) And works. Yes. >> And at the same time, that the CSO is getting the paying that they need, so they have some visibility into what's going on with the network. >> (Myk) Exactly, and that's the entire purpose of this product. We believe it meshes nicely with what Fortinet's talking about, in that they have their Fortiguard Artificial Intelligence product that they've been talking about, and how it's detecting what's going on in the network, and millions of nodes, and features, and really actually quite sophisticated stuff. I just sat through an entire presentation on it. We are doing the same thing with Ribbon Protect, where we have an artificial intelligence layer that would sit inside the company, but it's specifically looking at the communications pathways, what's normal communications, what's abnormal communications. what's normal packet flows on the communications side, and abnormal communication flows. And putting two and two together, and doing machine learning, similar analogous things to what they're doing on the data side, and on the virus malware detection side, is what we're doing on the communications side, and putting together our own database, again, similar to what they have, where they have a database, and they apply that database of known bad, known good, to their ... And we're doing the same thing, and then we're going to share that information into the Fortinet fabric. >> So you're really collaborating and, it sounds like complimentary technologies. >> (Peter) Yeah, you're complimenting. >> That the customer benefits from. We've got about a minute left, but I'd love for you to share, maybe at a super high level, an example of a joint Fortinet/Ribbon customer, where the CIO and the CSO are being very happy with the technologies that you are delivering in this collaboration. >> I can't name any names, unfortunately, but we are talking with a large service provider right now, that is very enamored of Fortinet, and uses them extensively on the data side, to provide services to their customers, meaning: as a service provider, you're providing data and managed services to your enterprise customers. And they also use us today to provide voice services - >> (Peter) To secure voice. >> To secure voice services to the same set of customers. And so now what we're talking about is marrying the two, not sending data to Fortinet, and what is getting this service provider very excited is to be able to offer a differentiated service to their enterprise customer base, something that the other service providers can't, because they either aren't using Fortinet, or aren't using us. They need somebody that is using both, and this particular one happens to be using both of us, so we can put Ribbon Protect into their environment, into their network, and it'll start sharing their information, and what that will allow them to do is market to their customers at a higher level of security, and even to the point where they might be able to go out and say things like, "The most secure voice video system in the world today." >> (Peter) Yeah. They're expanding the scope of a common security footprint, and thereby allowing a new class of services to be provided to, whether CSO or CIO. >> And they view it as a differentiator for themselves. >> (Lisa) That's exactly what I was thinking - >> Which is why, when they're talking to the CSO or the CIO, why should you use us versus the other three guys you're probably talking to right now, well here's one reason. There's probably a few others, but here's at least one reason. >> Differentiation, a key fundamental for digital transformation. Well Myk, Mykola, thank you so much for joining us on the Cube. You're now a Cube alumni. >> Thank you very much, happy to be an alumni. >> (Lisa) Excellent. We want to thank you for watching the Cube's continuing coverage of Accelerate 2018. I'm Lisa Martin. For my co-host, Peter Burris, stick around. We've got great interviews coming up next. (upbeat music)