from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation as we've been reporting the Koba 19 pandemic has created a bifurcated IT spending picture and over the last several weeks we've reported both on the macro and even some come at it from from a vendor and a sector view I mean for example we've reported on some of the companies that have really continued to thrive we look at the NASDAQ and its you know near at all-time highs companies like oh and in CrowdStrike we've reported on snowflake uipath the sectors are PA some of the analytic databases around AI maybe even to a lesser extent cloud but still has a lot of tailwind relative to some of those on-prem infrastructure plays even companies like Cisco bifurcated in and of themselves where you see this Meraki side of the house you know doing quite well the work from home stuff but maybe some of the traditional networking not as much well now what if you flip that to really try to understand what's going on with the shape of the recovery which is the main narrative right now is it a v-shape does it a u-shape what is what's that what do people expect and now you understand that you really have to look at different industries because different industries are going to come back at a different pace with me again is Sagar khadiyah who's the director of research at EGR Sagar you guys are all over this as usual timely information it's great to see you again hope all is well in New York City thanks so much David it's a pleasure to be back on again yeah so where are we in the cycle we give dividend a great job and very timely ETR was the first to really put out data on the koban impact with the survey that ran from mid-march to to mid-april and now everybody's attention sagar is focused on okay we're starting to come back stores are starting to open people are beginning to to go out again and everybody wants to know what the shape of the recovery looks like so where are we actually in that research cycle for you guys yeah no problem so like you said you know in that kind of march/april timeframe we really want to go out there and get an idea of what we're doing the budget impacts you know as it relates to IT because of kovat 19 right so we kind of ended off there around a decline of 5% and coming into the year the consensus was of growth of 4 or 5% right so we saw about a 900,000 basis points wing you know to the negative side and the public covered in March and April were you know which sectors and vendors were going to benefit as a result of work from home and so now as we kind of fast forward to the research cycle as we kind of go more into May and into the summer rather than asking those exact same question to get again because it's just been you know maybe 40 or 50 days we really want Singh on the recovery type as well as kind of more emerging private vendors right we want to understand what's gonna be the impact on on these vendors that typically rely on you know larger conferences more in-person meetings because these are younger technologies there's not a lot of information about them and so last Thursday we launched our biannual emerging technology study it covers roughly 300 private emerging technologies across maybe 60 sectors of technology and in tandem we've launched a co-ed flash poll right what we wanted to do was kind of twofold one really understand from CIOs the recovery type they had in mind as well as if they were seeing any any kind of permanent changes in their IT stacks IT spend because of koban 19 and so if we kind of look at the first chart here and kind of get more into that first question around recovery type what we asked CIOs and this kind of COBIT flash poll again we did it last Thursday was what type of recovery are you expecting is it v-shaped so kind of a brief decline you know maybe one quarter and then you're gonna start seeing growth in 2 to H 20 is it you shaped so two to three quarters of a decline or deceleration revenue and you're kind of forecasting that growth in revenue as an organization to come back in 2021 is it l-shaped right so maybe three four five quarters of a decline or deceleration and then you know very minimal to moderate growth or none of the above you know your organization is actually benefiting from from from koban 19 as you know we've seen some many reports so those are kind of the options that we gave CIOs and you kind of see it on that first chart here interesting and this is a survey a flash service 700 CIOs or approximately and the interesting thing I really want to point out here is this you know the koban pandemic was it didn't suppress you know all companies you know and in the return it's not going to be a rising tide lifts all ships you really got to do your research you have to understand the different sectors really try to peel back the onion skin and understand why there's certain momentum how certain organizations are accommodating the work from home we heard you know several weeks ago how there's a major change in in networking mindsets we're talking about how security is changing we're going to talk about some of the permanence but it's really really important to try to understand these different trends by different industries which you're going to talk about in a minute but if you take a look at this slide I mean obviously most people expect this u-shaped decline I mean a you know a u-shaped recovery rather so it's two or three quarters followed by some growth next year but as we'll see some of these industries are gonna really go deeper with an l-shape recovery and then it's really interesting that a pretty large and substantial portion see this as a tailwind presumably those with you know strong SAS models some annual recurring revenue models your thoughts if we kind of star on this kind of aggregate chart you know you're looking at about forty four percent of CIOs anticipated u-shaped recovery right that's the largest bucket and then you can see another 15 percent and to say an l-shape recovery 14 on the v-shaped and then 16 percent to your point that are kind of seeing this this tailwind but if we kind of focus on that largest bucket that you shaped you know one of the thing to remember and again when we asked is two CIOs within the within this kind of coded flash poll we also asked can you give us some commentary and so one of the things that or one of the themes that are kind of coming along with this u-shaped recovery is you know CIOs are cautiously optimistic about this u-shaped recovery you know they believe that they can get back on to a growth cycle into 2021 as long as there's a vaccine available we don't go into a second wave of lockdowns economic activity picks up a lot of the government actions you know become effective so there are some kind of let's call it qualifiers with this bucket of CIOs that are anticipating a u-shape recovery what they're saying is that look we are expecting these things to happen we're not expecting that our lock down we are expecting a vaccine and if that takes place then we do expect an uptick in growth or going back to kind of pre coded levels in in 2021 but you know I think it's fair to assume that if one or more of these are apps and and things do get worse as all these states are opening up maybe the recovery cycle gets pushed along so kind of at the aggregate this is where we are right now yeah so as I was saying and you really have to understand the different not only different sectors and all the different vendors but you got to look into the industries and then even within industries so if we pull up the next chart we have the industry to the breakdown and sort of the responses by the industries v-shape you shape or shape I had a conversation with a CIO of a major resort just the other day and even he was saying what was actually I'll tell you it was Windham Resorts public company I mean and obviously that business got a good crush they had their earnings call the other day they talked about how they cut their capex in half but the stock sagar since the March lows is more than doubled yeah and you know that's amazing and now but even there within that sector they're peeling that on you're saying well certain parts are going to come back sooner or certain parts are going to longer depending on you know what type of resort what type of hotel so it really is a complicated situation so take us through what you're seeing by industry sure so let's start with kind of the IT telco retail consumer space Dave to your point there's gonna be a tremendous amount of bifurcation within both of those verticals look if we start on the IT telco side you know you're seeing a very large bucket of individuals right over twenty percent that indicated they're seeing a tail with our additional revenue because of covin 19 and you know Dave we spoke about this all the way back in March right all these work from home vendors you know CIOs were doubling down on cloud and SAS and we've seen how some of these events have reported in April you know with this very good reports all the major cloud vendors right select security vendors and so that's why you're seeing on the kind of telco side definitely more positivity right as it relates to recovery type right some of them are not even going through recovery they're they're seeing an acceleration same thing on the retail consumer side you're seeing another large bucket of people who are indicating what we've benefited and again there's going to be a lot of bifurcation here there's been a lot of retail consumers you just mentioned with the hotel lines that are definitely hurting but you know if you have a good online presence as a retailer and you know you had essential goods or groceries you benefited and and those are the organizations that we're seeing you know really indicate that they saw an acceleration due to Koga 19 so I thought those two those two verticals between kind of the IT and retail side there was a big bucket or you know of people who indicated positivity so I thought that was kind of the first kind of you know I was talking about kind of peeling this onion back you know that was really interesting you know tech continues to power on and I think you know a lot of people try I think that somebody was saying that the record of the time in which we've developed a fit of vaccine previously was like mumps or something and it was I mean it was just like years but now today 2020 we've got a I we've got all this data you've got these great companies all working on this and so you know wow if we can compress that that's going to change the equation a couple other things sagar that jump out at me here in this chart I want to ask you about I mean the education you know colleges are really you know kind of freaking out right now some are coming back I know like for instance my daughter University Arizona they're coming back in the fall evidently others are saying and no you can clearly see the airlines and transportation as the biggest sort of l-shape which is the most negative I'm sure restaurants and hospitality are kind of similar and then you see energy you know which got crushed we had you know oil you know negative people paying it big barrels of oil but now look at that you know expectation of a pretty strong you know you shape recovery as people start driving again and the economy picks up so maybe you could give us some thoughts on on some of those sort of outliers yeah so I kind of bucket you know the the next two outliers as from an l-shaped in a u-shaped so on the l-shaped side like like you said education airlines transportation and probably to a little bit lesser extent industrials materials manufacturing services consulting these verticals are indicating the highest percentages from an l-shaped recovery right so three plus orders of revenue declines and deceleration followed by kind of you know minimal to moderate growth and look there's no surprise here those are the verticals that have been impacted the most by less demand from consumers and and businesses and then as you mentioned on the energy utility side and then I would probably bucket maybe healthcare Pharma those have some of the largest percentages of u-shaped recovery and it's funny like I read a lot of commentary from some of the energy in the healthcare CIOs and they were said they were very optimistic about a u-shaped type of recovery and so it kind of you know maybe with those two issues then you could even kind of lump them into you know probably to a lesser extent but you could probably open into the prior one with the airlines and the education and services consulting and IMM where you know these are definitely the verticals that are going to see the longest longest recoveries it's probably a little bit more uniform versus what we've kind of talked about a few minutes ago with you know IT and and retail consumer where it's definitely very bifurcated you know there's definitely winners and losers there yeah and again it's a very complicated situation a lot of people that I've talked to are saying look you know we really don't have a clear picture that's why all these companies have are not giving guidance many people however are optimistic not only for a vet a vaccine but but but also they're thinking as young people with disposable income they're gonna kind of say dorm damn the torpedoes I'm not really going to be exposed and you know they can come back much stronger you know there seems to be pent up demand for some of the things like elective surgery or even the weather is sort of more important health care needs so that obviously could be a snap back so you know obviously we're really closely looking at this one thing though is is certain is that people are expecting a permanent change and you've got data that really shows that on the on the next chart that's right so one of the one of the last questions that we asked on this you know quick coded flash poll was do you anticipate permanent changes to your kind of IT stack IT spend based on the last few months you know as everyone has been working remotely and you know rarely do you see results point this much in one direction but 92% of CIOs and and kind of IT you know high level ITN users indicated yes there are going to be permanent changes and you know one of the things we talked about in March and look we were really the first ones you know you know in our discussion where we were talking about work from home spend kind of negating or balancing out all these declines right we were saying look yes we are seeing a lot of budgets come down but surprisingly we're seeing 2030 percent of organizations accelerate spent and even the ones that are spending less they even then you know some of their some of their budgets are kind of being negated by this work from home spend right when you think about collaboration tool is an additional VPN and networking bandwidth in laptops and then security all that stuff CIOs now continue to spend on because what what CIO is now understand as productivity has remained at very high levels right in March CIOs were very with the catastrophe and productivity that has not come true so on the margin CIOs and organizations are probably much more positive on that front and so now because there is no vaccine where you know CIOs and just in general the population we don't know when one is coming and so remote work seems to be the new norm moving forward especially that productivity you know levels are are pretty good with people working from home so from that perspective everything that looked like it was maybe going to be temporary just for the next few months as people work from home that's how organizations are now moving forward well and we saw Twitter basically said we're gonna make work from home permanent that's probably cuz their CEO wants to you know live in Africa Google I think is going to the end of the year I think many companies are going to look at a hybrid and give employees a choice say look if you want to work from home and you can be productive you get your stuff done you know we're cool with that I think the other point is you know everybody talks about these digital transformations you know leading into Kovan and I got to tell you I think a lot of companies were sort of complacent they talked the talk but they weren't walking the walk meaning they really weren't becoming digital businesses they really weren't putting data at the core and I think now it's really becoming an imperative there's no question that that what we've been talking about and forecasting has been pulled forward and you you're either going to have to step up your digital game or you're going to be in big trouble and the other thing that's I'm really interested in is will companies sub optimize profitability in the near term in order to put better business resiliency in place and better flexibility will they make those investments and I think if they do you know longer term they're going to be in better shape you know if they don't they could maybe be okay in the near term but I'm gonna put a caution sign a little longer term no look I think everything that's been done in the last few months you know in terms of having those continuation plans because you know do two pandemics all that stuff that is now it look you got to have that in your playbook right and so to your point you know this is where CIOs are going and if you're not transforming yourself or you didn't or you know lesson learned because now you're probably having to move twice as fast to support all your employees so I think you know this pandemic really kind of sped up you know digital transformation initiatives which is why you know you're seeing some companies desks and cloud related companies with very good earnings reports that are guiding well and then you're seeing other companies that are pulling their guidance because of uncertainty but it's it's likely more on the side of they're just not seeing the same levels of spend because if they haven't oriented themselves on that digital transformation side so I think you know events like this they typically you know Showcase winners and losers then you know when when things are going well and you know everything is kind of going up well I think that - there's a big you know discussion around is the ESPY overvalued right now I won't make that call but I will say this then there's a lot of data out there there's data and earnings reports there's data about this pandemic which change continues to change maybe not so much daily but you're getting new information multiple times a week so you got to look to that data you got to make your call pick your spot so you talk about a stock pickers market I think it's very much true here there are some some gonna be really strong companies emerging out of this you know don't gamble but do your research and I think you'll you'll find some you know some Dems out there you know maybe Warren Buffett can't find them okay but the guys at Main Street I think you know the I am I'm optimistic I wonder how you feel about about the recovery I I think we may be tainted by tech you know I'm very much concerned about certain industries but I think the tech industry which is our business is gonna come out of this pretty strong yeah we look at the one thing we we should we should have stated this earlier the majority of organizations are not expecting a v-shaped recovery and yet I still think there's part of the consensus is expecting a v-shaped recovery you can see as we demonstrate in some of the earlier charts the you know almost the majority of organizations are expecting a u-shaped recovery and even then as we mentioned right that you shape there is some cautious up around there and I have it you probably have it where yes if everything goes well it looks like 2021 we can really get back on track but there's so much unknown and so yes that does give I think everyone pause when it comes from an investment perspective and even just bringing on technologies and into your organization right which ones are gonna work which ones are it so I'm definitely on the boat of this is a more u-shaped in a v-shaped recovery I think the data backs that up I think you know when it comes to cloud and SAS players those areas and I think you've seen this on the investment side a lot of money has come out of all these other sectors that we mentioned that are having these l-shaped recoveries a lot of it has gone into the tech space I imagine that will continue and so that might be kind of you know it's tough to sometimes balance what's going on on the investor in the stock market side with you know how organizations are recovering I think people are really looking out in two to three quarters and saying look you know to your point where you set up earlier is there a lot of that pent up demand are things gonna get right back to normal because I think you know a lot of people are anticipating that and if we don't see that I think you know the next time we do some of these kind of coded flash bolts you know I'm interested to see whether or not you know maybe towards the end of the summer these recovery cycles are actually longer because maybe we didn't see some of that stuff so there's still a lot of unknowns but what we do know right now is it's not a v-shaped recovery agree especially on the unknowns there's monetary policy there's fiscal policy there's an election coming up there's a third there's escalating tensions with China there's your thoughts on the efficacy of the vaccine what about therapeutics you know do people who have this yet immunity how many people actually have it what about testing so the point I'm making here is it's very very important that you update your forecast regularly that's why it's so great that I have this partnership with you guys because we you know you're constantly updating the numbers it's not just a one-shot deal so suck it you know thanks so much for coming on looking forward to having you on in in the coming weeks really appreciate it absolutely yeah well I will really start kind of digging into how a lot of these emerging technologies are faring because of kovat 19 so that's I'm actually interested to start thinking through the data myself so yeah well we'll do some reporting in the coming weeks about that as well well thanks everybody for watching this episode of the cube insights powered by ETR I'm Dave Volante for sauger kuraki check out ETR dot plus that's where all the ETR data lives i published weekly on wiki bon calm and silicon angle calm and reach me at evil on Tay we'll see you next time [Music]

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation LeBron's special conversation I'm John Tory here in the cube I'm not in the studio I'm at home we're sheltering in place the studio quarantine crew is there we've got a great guest here to break down and Alice in the tech industries for vallah who's this principle of zk research Aziz great to check in with you for our check-in last time we chatted you broke down entire industry a lot to talk about now we have the Cisco earnings just came out and a lot of other great things are happening thanks for joining me well what's your take on what's going on yeah I think so thanks John it's uh it's been heard about tumultuous last few months I think one of the takeaways I had from Cisco's earnings actually was that it's not as bad as you think I know if you read a lot of what's going on the media we get everything from doomsday and the world's ending or whatever but I think what Cisco's earnings showed and in Cisco I know they have a lot of enemies and a lot of competitors out there but they're really still a bellwether for the industry and so everyone should rejoice in the fact that they actually had a pretty good quarter I think what was was telling about that was security was up the services business was up the margins were good and what that shows me is that there's still room for innovation customers relax are still buying things and they're willing to pay for things that actually help drive their business forward and so Cisco's put a lot of energy into their services group to make sure that customers are able to adapt their technology and change their business right and so from an overall market perspective Cisco is you know they're the quarters are the court has shifted from almost everybody else's and so they're generally a leading indicator of where things are going so I think the fact that they showed some strength they guided up from where the street thought I think that's a good thing for the entire industry and I think I'm not saying we're out of this yet but I think businesses are starting to spend money where they need to in order to put themselves in a position to come on strong after well once we start going back to work whoever knows what that'll be I think the other sort of interesting pivot here is that I think the overall role the network has changed with income right we've covered networking technologies a long time it gets a little bit of interest sometimes from sea level certainly not as much as it should from CEOs and CIOs a lot of people think of it as the plumbing and the pipes it's hard to understand it's a very complicated technology sometimes but when you look at what's happened with digital transformation initiatives and now covent we've got more people at home or adopting cloud services we use video for connecting more things with IOT initiatives so the overall value of the network is increased that I think that was also reflected in Cisco's numbers I think this transition had started when you look at a lot of the building blocks and digital transformation IOT cloud mobility things like that they're all Network centric in nature and so for the first time in history I think business leaders actually need to look at their network strategies because if that's without a sound network strategy as we sort of come out of this and the companies that have a good one will be able to really step on the gas and do what they want with their business the ones that don't I think I'd a really struggle to survive because I'm not gonna be able to do a lot of these advanced things yeah great point one of the things Brazil the new cisco has a new leadership new c has been in place for a while positioning they're going after and you know with the cloven crisis it really puts more pressure knock the move of the network because it's a core staple of an organization yet the transformation journey is going to be accelerated this gives Cisco it's a lucky strike for Cisco because it'll move packets around and the multi cloud conversation comes in and the enablement of application development all being five to the network is what cisco has been preparing on and this has kind of been a nuance point then that everyone understands but coming out of Cova to have a growth strategy if you're not programming up and down the stack with DevOps and Nets a cops or whatever you want to call it people working at home a new perimeter is now emerged that's everything everything is the premise is this a tailwind for Cisco your thoughts on that your face oh yeah the big time tailwind francisco i think what's happened gentlemen you look at network evolution over the last five years we can do much more with our network that's coming to cost and that cost us complexity so trying to tie all these things together SP Winn Sassie datacenter Sdn right we've got Wi-Fi six coming we've got 5g coming so we've got all these great things that we're gonna let our networks be faster than ever before and run applications we can never run before right you look at some of the demos on 5g we're able to wear untethered Wi-Fi our virtual reality headsets complete creating completely new shopping experiences educational experiences but you need a lot of bandwidth that but not only you need bandwidth I think the one thing that Kovac has taught us is do you have any weakness in the network anywhere right from the user's hand all the way to the cloud that weak point at the time and so now you have to start thinking of your network not in pieces of having a campus network Wi-Fi network data center network and that a single network right and so cisco is really one of the few companies maybe the only company that can actually deliver that end and network that starts in the company extends to people's homes goes out to the cloud and with what they've done masterfully under Chuck Robbins is they've been able to pile those things together to create a much simpler way of operating this complicated network so you look at what they're doing you know with a CI and intent based networking what that is is you can think of it almost as a software overlay that masks the complexity of the network that's underneath it yeah talking about cisco over the past decade and a half and i'm with the stack guys you gotta move up the stack this has been this is now their opportunity and with multi cloud on the horizon or here this is going to give cisco a path but I got to ask you what is your take and advice to Cisco when you're out there talking to them you're talking to of the customers all the time and practitioners you're the analyst what do they need to do better because you can't just wish a multi cloud upon the marketplace it's coming but it's not clearly not the use case yet so that's a time lag between a CI intent based networking to true multi-cloud what if Cisco do in the meantime yeah well I think what's this go has to do is is think about what they're doing with a CI and multi cloud and actually help their customers implement it in in pieces and what the description I'd use is is the paths this goes on and the path customers are on actually in this world of you think if the end state is true hybrid multi-cloud right we have to get there in ship shots and not moon shots and what I mean by that is if you were to say to a customer this is your end state right the path to get there is so donkey and it's like a moon shot that it paralyzes the customer if you break this down into a set of chip shots right that gets much easier so so put the infrastructure in place to be able to just have the visibility across applause then maybe automate movement from hi private the public cloud right then automate some of the processes that give you the most headaches then move to a bigger Ottoman Ottoman automation framework right so yeah areas like security network configuration right things like that those are those are very difficult for customers to do manually those are the things they should be automating today so what they want to do is almost take through their intent-based network to almost as a lighthouse the road to a visionary state and then help customers get there in pieces because if they try and rush them along too fast I think they'll lose the customer because the complexity is too high the other area they should really be focused on is continuing to mature the services business I think that's something under Chuck Robbins that's night and day different than what it was the services business - Cisco prior to Chuck was a lot of break fix you know their TAC is well renowned as being a great pack but now they've gotten more of the pro services they've gotten more into adoption services and I think the more subscription they sell what Cisco needs to really understand is that customers tend not to renew things they don't use right so making sure that the services group helps customers and use the things that they're paying for and that'll pay dividends for them multiple dividends for them down the road I want to get the silken one on that opportunity to upsell and do a refresh because what refreshes are not gonna be on the docket early on unless discuss business value so let's hold that for a second John Chambers has been on the cube recently in his new role as a coach and investor and he says to us on the cube you know transitions versus transformation Cisco and the big companies are expected to win the transitions but now with coming out of this there's real transformation so you got to look at things like collaboration hey guys get better this is not just win the enterprise with a better web max zoom is they can ask Bob teams is out there so you know Cisco's that's a huge collaboration piece and a bunch of other business so where's their transition wins and where's their transformational opportunity in Europe in well I think the entire company is kind of going through transformations right even on the network side so it's right it's like you know the industry has been calling Francisco to get commoditized for years right and if you look the product gross margins are actually the strongest they've been in a decade right so I remember when I fell below 60% they everybody thought the world was falling this quarter I think was a little over 65 on the product side and so my belief is nothing is really a commodity if you can drive innovation that's what's this has been doing so from a transition standpoint I think they've done a lot of that they've transitioned the company to software and services they've transitioned the company more terrain model they've actually decoupled software from the hardware so customers can buy differently and you brought up the fact that we may not have a hardware refresh but that's okay as long as they keep the software a newa cycles forth where the transformations has to come is completely change the dynamics of how something works and so with intent-based networking you think of the old way that network engineers to work like the way I used to work when I was an engineer a lot of hunting pecking and at a CLI doing a lot of cutting and pasting and using homegrown tools that doesn't scale anymore my research shows that on average takes companies about four months the implemented change network-wide far too slow for digital company right so Francisco's done is they've accelerated that by letting customers automate more things and so Francisco the transformation comes in allowing customers to new new things I think you read in the collaboration side there's more work to do nobody's got a bigger collaboration portfolio than Cisco they got endpoints they got rooms just right they've got software they were a cloud on Prem but they got to take that and tie it together and I think the other area that's is gonna need improving is on they've they've got a lot of management tools that that look at different things they have at the ACI manager and a whole bunch of different security consoles in fact they funded them sometimes and said that the market leader in single panes of glass because they have more than anybody right I think eventually they got to be able to tie that information together and help customers understand what it means from a cross domain perspective because they still build a product's wireless campus data center but as I mentioned before we just have one network and so Cisco can aggregate this data up apply machine learning to it and help customers what that means they see insight across the entire network that would really be powerful because they they've got the footprint now they just have to be able to deliver the machine learning based insights some customers understand what that data means and they have a unique opportunity in the short term no one's going to be kidding Cisco out anytime soon there's a safety rating and using the big companies I think what what Cisco is able to bring is a there's a level of financial stability that other companies may not have and so they can weather the storm for a long time so you know I it's easy to say going to Cisco is the safe bet it has been for a long time but but i but I think it's also the smart bet I think they're they're able to continue to invest in things maybe smaller companies more people do yeah my question on Cisco a big fan of their strategy have been vocal about that for a while my question on Cisco want to be critical is to say how fast can you get that development going show the software value in market show customers a growth trajectory that they can execute on it can advantage the network policy intelligence if they could do that they're gonna be in good shape you agree yeah I think one of the challenges though is the transformation of their customer base do and that's where the work Suzy we've been doing in the dev that teams so important like if if they were to shift their whole strategy over at the developer folks talk word today I think that would largely put them in a position or trouble because the engineers that work with the stuff and the resellers that work with the stuff aren't they don't really have the skill sets they advantage that right so last year Suzy we she really talked a lot about the growth a definite this year they came out with in Barcelona this year they they came up with a bunch of certifications for dev net now there they were actually coming out with a number of a partner certifications as well so the resellers can get certified but I think it's important that they continue to push their engineer base into gaining these new skills I'll give you an interesting data point for my research and that's you know that only about a quarter of networking engineers has ever made an API call right and so you look at all Cisco's new gear it's all API driven and so if you want to do something as simple as say get all the IP addresses in your network you can just use an API call for that right the other way to do it is you do a show command and the CLI your screen scrape and you take a visual basic trip that you parse it you know and you get it that way right so the API map using those is a lot easier and so I think Cisco's got a good strategy with Deb net they've grown that face a lot it's still relatively small you know it's under a million people and you think of the overall size the Cisco customer user base point that's where they gonna put some effort right more and more out driving adoption to them now well I think you're smarter than I think you're researching them they must be listening to you because they haven't really tried to jam that down their throats they've been very humble about it and I think a million is pretty damn good number I think Cisco again to your point they're bringing people into the water the low end first before you you go to the deep end so swim with the bubble if you will with definite what they did was they assumed the engineer had no knowledge of software because I think at first when they put the lot of the programs a place they assumed people would have some knowledge of how to code right and and I also think the industry did them a bit of a disservice we used her there was a lot of stuff written in the media how every network engineer needs to become a software developer well they don't have to summer get make them software developers but they at least have to come software power ease right so do your job through software but you don't have to be a developer and that's where definite really when it really matured is that diverge down to past developer engineer who's your saw common software skills and then you break down a specialist after that and so they've they've actually helped with the maturity of that they've changed their certification programs for reflect that and I think Devin that really is a big be and if they can transition that engineer base then it helps the adoption of the new on these I want to get your final thoughts on this segment on multi-cloud obviously it would be a really great win for it creates of interoperability strictly with the network intelligence cisco could bring to the table and others you got startups out there like aviatrix and others and vmware with nsx trying to get that for the security fabric a lot of action going on with multi cloud and networking your thoughts what does your research tell you what's gonna transpire how do you see that market playing out in my research shows that little R ad percent of companies prior to Co vid had multi-cloud on the roadmap and I'm assuming that's that's gone up I haven't actually done a survey since then um one of the I think it's funny koban exposed a lot of things from a lot of vendors right and I think one of the things that is is shown cracks in the cloud yeah you look at some of the the data and how many outages Microsoft had Google had some strains AWS has held up pretty well under the strain of of a lot of the higher utilization when coated but they've been building a lot of capacity into theirs as well so I think from a customer perspective it makes sense you don't want to put all your eggs in one basket some cloud providers are stronger in some regions they each have different their own different cloud platforms other private cloud platforms and the problem is is if you decide if you decide to go multi-cloud you can't use the cloud providers tools right so if I use an AWS load balancer that works great in AWS but it's not gonna help me with Azure or GCE similarly if I use GCP tools I can't extend that out the azure so something needs to connect those and be able to five security and policy and that's where multi cloud comes from and you're right there's some good startups there I think um the difference with Cisco this time versus the Sdn world was when as the ends came about I think Cisco didn't want that to happen and I think they actually actively worked against us the end and I've talked to chuck Robbins about that he said you'll never ever see Cisco do that again if something is good for the customers they want to lead that transition and so Cisco's been very active in multi focking and given they've got the install base already I do think they will help bring this long but there are some good stir yeah it's interesting Sdn really wasn't ready for primetime even when VMware bought in this era hey when it was still there I didn't have a lot of revenue it had a future VMware claims that's the saves and NSX was saved by a Sdn some people say was completely rewritten final thoughts on outlook and you see coming out of Ovid obviously it's been well reported we've been reporting VPNs have been under provision that was a blind spot bought a blind spots and disruption that wasn't forecasted in the classic sense there was no there was no you know hurricane there was no flood it was a covin invisible disruption yeah and there's no impact right like even with when you think of what happened with the the floods in New York and 9/11 people knew that they'd eventually go back and so business continuity and disaster recovery was a temporary thing and I can I set up a data center to work for a couple months so I can go back to New York that's not the case with koban where we're trying to manage for an undefined endpoint which is extremely difficult for an IT perspective I do think that Kogan again has highlighted the value of the network I think we'll see a lot of transition from VPN to sd when I think that's that's certainly good I think the rise in video will also cause a Wi-Fi upgrade cycle we'll get back to the office and I think you'll see a lot of focus on programmability and agility because I don't believe we're gonna see everybody return to the office was like one big bang John I think we're more likely to see is the future work to be almost like when you and I were in college we do a bunch of stuff at home we go to the campus when we have classes and when we want to meet people similarly we'll go to work when we have meetings and then in between meetings we'll go find an open place to work but in general we'll do a lot of work a lot more work from home in fact my research shows 93 percent of the business leaders I interviewed said they expect to see at least a 30 percent increase in the work from home post Kovan right so we're gonna have a lot more people doing that but it's not gonna be everyone working for home everybody work in the office it's gonna be a hybrid of the two people are gonna come and go and that bribes the need for agility and today's networks really not that agile and so I need I want to go back to college if we do thirsty happy hours do I mean have the whole week or the stupid stuff it's the final point you mentioned SP when I was talking with Dave Volante SP Minutemen just last week and I said you know this SD win today is not your grandfather's sdn meaning SP where it's changed a lot it's basically the internet now so what was the modern update definition of SD grin I mean it used to be you connect the wide area network you can have some campus you'd do some networking what is it now what's the same name but it's yeah what is it your journey the technology if you look at the adoption of anything right the first wave of stuff is to make the new stuff look like the old stuff so we put VoIP in we made it look a lot like TDM when we had cloud we lifted and shift it and how did we didn't really enjoy wraps and then we eventually get smart and think what can I do with the new thing that I can't do the old thing and so a lot of early SD win deployments were simply just replacements for MPLS and they were put in to save a bit of money but now companies are getting smarter they're thinking about what can I do with my SD win that I couldn't do before so there's a lot more tighter integration with security I think as companies but SD win in and and think about what the win is today John it used to be corporate offices and data centers I think it's everybody's house right and so being able to extend your win at the single people out to planes trains and automobiles you remember that movie but those are all getting connected as well people's back acts fan kiosk those are all becoming way endpoints right so that's where you need to embed more security in the network and so I think that's a transition we've seen into that see you and I think the technology has matured to the point where it's getting easier to deploy faster to flow and you're right we can use the internet for transport in some cases some will still keep there still be a lot of MPLS out there but I do think we wind up in this hybrid world but clearly then the time has never been better for for SD win I will see a rule of curve for that because it's the only way to extend the win the people's homes the things the cars and really anything that's connected you know that's such a great point and I think this is a real new once in the industry it's a whole nother rebirth of the category because the aperture is brighter you got policy you've got reliability and get security built in this is key key Johnny H salt key yeah yeah whole concept the AI ops becomes real because we're collecting data and we're able to use AI to automate operations so Z's we call it s T win 2.0 that's what you got to do we got making an acronym out of this come on we can't just saw s T when it is SD win - righto because it's the next it's that it's it's the second wave of it we're actually thinking about how to transform our companies so the the John Chambers quote of transition for transversus transformation is apropos because the like I said a lot of the waves that that Cisco went through early on was we transition the market and then we transform right and so SD win so far has been transitional moving away from the old thing but now in strength and defense formed where our entire network operates these gradients that always a pleasure to talk to you get the straight scoop for the signal right there from all the noise in the industry now more than ever people are gonna be focused on critical project so thanks for your insight as DK now can research great stuff and we'll keep keep following you in great guest thank you come on thanks John first burger okay cute conversation here remote we're doing our part either at home and studio quarantine in this is the cube virtual virtualization has come to the cube will do will do whatever it takes to get the content out there Z's thanks so much for coming I appreciate thanks for watching on John Currier [Music]

[Music] from the cube studios in Palo Alto in Boston it's the cube covering the IBM think brought to you by IBM hi everybody we're back and this is Dave Valentine you're watching the cubes coverage of the IBM think 20/20 digital event experience lisa cisco is here she's the global head of go to market and IBM cloud at wit-pro Lisa good to see you thanks for coming on how you doing you're welcome how things holding up down in Florida you guys staying safe good working from home like like most of us everyone's doing good so I want to ask you don't go right to it talk about digital transformation and I want to get your take and maybe share some thoughts that we've heard from clients but digital transformation you're kind of in the heart of it you've got cloud you do and work with cognitive and AI and and blockchain and and the like so what are you seeing in terms of how clients are adopting this notion this digital transformation journey and how has kovat affected that great question so the hopefully the digital transformation won't always be about Kovan but there always will be a need for companies to move quickly and adopt new technologies and do things that are unexpected whether that's from an acquisition or an unexpected competitive move or new market that they want to be in so any of those things and affect businesses and what we're seeing right now is businesses who have adopted digital technology and by extension adopted cloud as the backbone to that digital technology have been able to move faster in this environment they're able to do things like work from home they're able to ensure security is in place they're able to give their employees and their customers access to information in a faster and more cost-effective way and so we're really not excited to have coated but we're really it's an interesting time to be looking at digital technologies and first mover advantages here and the digital Tudo era is all about enabling business responsiveness and those are the things that we're doing with the technology plays that we're working on today yeah I mean the customers we've talked to the the CIOs the CISOs they've said in many hard-hit industries hey we basically has shut down spending with some exceptions digital transformation being one of them you've got experience in two areas that are being affected pretty dramatically by kovat want a supply chain on the other is e-commerce you know supply chains are just you know especially for a while we're just in shambles or seeming to come back you know a little bit but what have you seen from the supply chain and what do you think what kind of changes do you expect are gonna be affected by koban going forward so again this was an area that if you had invested in your supply chain and you have automated some of those processes you're having an easier time onboarding your suppliers and knowing where your shipments are and understanding what your forward-looking position is going to be if you haven't done those things um even though your IT budgets might be being slashed they're things that you have to do right now and so doing some of those things using supply chain automation on the cloud it's it's um it's the right way for companies to go right now that find themself in a predicament and maybe aren't as prepared as they'd like to be so some of the technologies that we're helping bring to market we've we're seeing results with with things like five times faster adoption and 40% more cost efficient than if they weren't trying to do these things in an automated way using the cloud and so for companies that that need help doing this iBM has some of the best supply chain solutions in the market and and Wipro certainly has years of experience bringing those turquoise and then e-commerce is the other one I mean obviously there's been an explosion nobody wants to go out if they don't have to we're ordering anything and everything online there's been a kind of similar situation right if you if you had your kind of e-commerce you know we have you been running water through the pipes and you've perfected that over the last you know a couple of years or part of a decade then you're in pretty good shape but what are you seeing there with if you didn't have a loyal customer base now the time to really get used to interacting with your customers in that way so restaurants for example think the local mom-and-pop shops I live in a small town outside of Orlando and I'm seeing little businesses get online and and sew clothing and wine and things that they wouldn't normally see and dabbling in e-commerce so it's it's really comfortable for most people now to buy things online and we're seeing services that you wouldn't normally be be having online things like education k12 all allerjies everything can be pretty much bought on-line these days or consumed in a digital format and so I think again customers that have experience in doing this are ahead of the curve and customers that don't are going to quickly find that they have too I want to turn our attention to in the conversation to cloud and get your perspectives I mean I've reported a number of times that you know the IBM cloud it's not it's not an infrastructure as a service and the race to the bottom obviously IBM offers infrastructure of service but IBM strategy is not to try to take AWS head-on and you know storage cost per bit it's really to bring value through its software estate and portfolio and help its customers really take advantage of that the cloud model how are you and your clients taking advantage of the IBM cloud what kind of solutions do you have that are that are specific that leverage the IBM cloud that's correct we have two solutions that we're working on building out with with IBM and leveraging hybrid clouds so for an environment where 94% of enterprises have multiple clouds now they all have a combination of AWS or Azure or private clouds or IBM cloud and 73% of our clients see the ability to move between those clouds as a high priority and we are addressing that with two main solutions that we've built out at with row one is called our boundary list enterprise solution and you can think of that as the infrastructure and the knowledge we've taken the knowledge from thousands of successful hybrid cloud migrations that we've done and we've built it into this framework to help our customers be able to have a single dashboard and manage their view across hybrid cloud in an automated way and be able to be nimble and move between those clouds as business requirements it demand that they do and so that's the boundary-less Enterprise side the other side that we're working on with IBM is the application and integration modernization and we have a solution that we call moderniser and that is using some of the IBM technologies some third-party technologies and again the with our knowledge from our successful engagement and making it so that we can easily see what the workload is going to be to contain a rise and a single integration methodology that we're going to be bringing to our clients to help them be able to do this in a in an automated in a better way a faster way a more economical way so those are the two things that we're working on now and some of IBM's products are under the covers things like multiple cloud manager some of their DevOps and automation tools and there's some some tools again from third parties in firmware that we've brought in there as well so the boundary let's enterprise them in the idea there is that you've got a layer that allows you to go across clouds and have the same experience whether you're on pram whether you're in an Amazon Cloud and IBM cloud as you're wherever is that correct and it's a single sort of cloud experience single dashboard you know glass that you can look and you can serve you know in an IT environment your constituents the best way possible so that you're not locked into any cloud vendor and you can take advantage of where your workloads need to go and the modernization piece the modernized moderniser you talk about how clients are approaching it where do they start when they modernize their applicants that they do kind of and you help them do an application portfolio assessment they identify the high value workloads in their portfolio maybe the ones that they're going to sunset is a rationalization exercise the first step may be to talk about that every client is different but if the plant was to approach us and recommend the best practice we actually have a free two-week consulting engagement that we use for our clients that take a look at the workloads that they have and potentially will want to move to good we help them organize those workloads and figure out what the low-hanging fruit will be the things that will take a little bit more time on the things that are going to give them the highest bang for the buck and we will make some recommendations to them and that that two-week engagement about how to get started what about the I wanna shift gears talk about the you guys done in India with the Novus lab what is that all about what kind of expertise is there how does how two clients take advantage of that so we in IBM and out of the first soon-to-be announced we've just built it and we're soon to launch the I began with pro nobis loan you know this is the latin word from new or for innovation and that's what we plan to be doing in this lounge together so we have we pro talent and 150 seats where we'll have clients and different experts coming in and in residing in that center as well as access to all of the products i just talked about we'll be working closely with the IBM on GSI labs and bringing in new technologies building out new solutions so everything from taking supply chain to the next step to adding additional industry solutions one of the first things that we're going to do in that IBM Davis line just take advantage of the new IBM finance services cloud which is going to be a covering cloud focused at that industry and we're really excited to get started working on that technology to bring in our clients so ok so that's a that's an example of an industry solution and it's what it's it's optimized or for for banking and financial services or explain that if you would that's correct so iBM has worked with their clients in the financial services industry and they have packaged some of the governance and security and regulations that are needed for the financial services industry and they've put that into a solution that they'll be rolling out shortly I'm sure you'll hear more about it at IBM thing and that solution is going to be based on the industry guidelines by country on rolling out in the US and then shortly to Europe and we're going to be able to use that to jumpstart a lot of the workloads that we want to bring to our financial services clients without having to make them reinvent the wheel or all of the governance and security and regulatory things that they need well I can see you guys doing this across multiple industries kind of an out of the box you know tune something for retail government financial services Manufacturing healthcare where you've got the the requisite of security and compliance edicts depending on where you are in the world if it's a global organization you're able to you know identify what those local laws are maybe there's certain analytics capabilities and dashboards that you'd include is that is that kind of the right way to think about this that's exactly where we're headed and we're already starting to talk about healthcare as the next industry where we tackling after the services yeah well I mean the healthcare is that there are so heads down right now yeah believe you know we could think they'd come out of this and take a take a little breather and then can really you know get back to some of the more strategic things that they want to do in the industry I'll leave you with the last word kind of where you see the IBM Wipro partnership going you know what's your vision for that we really like IBM's approach in terms of avoiding vendor lock-in but we love what's happened with the acquisition of Red Hat and being able to use that technology more easily in our solutions we think that the industry approach is the right approach all of those things will have our focus in the noon double Ange this year and so while things are unusual in this current environment and we have a lot of things that we have to do immediately to help our clients just be able to survive we're very much looking to the future and what we can bring when this is all over that will help our clients make sure that they're ready for whatever the next Rose might be well Lisa thanks very much for coming on the cube you got a deep experience appreciate you sharing that with our with our audience they say you're welcome and thank you for watching everybody this is Dave Volante for the cube and our continuing coverage wall-to-wall coverage of IBM think 2020 the digital event experience you watch in the cube we were right back right after this short break [Music] you