 From the CUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. CIOs and CISOs of industries that have been hard hit, see significant near-term and many permanent shifts to their IT and security strategies. This was the consensus of four technology executives at leading companies that are feeling the brunt of the coronavirus pandemic. Welcome to this week's CUBE Insights powered by ETR. My name is Dave Vellante, and in this breaking analysis, we want to accomplish three things. First, we want to tap into a new piece of research from ETR. It involves an intimate focus group-like setup via an open discussion with leading technology executives. We interviewed Eric Bradley, the managing director of ETR's Venn program, and we'll bring him into this discussion. The next thing we want to do is we want to drill in to the various sector commentaries from the four leaders. Third, we're going to comment on our take, try to add some color, and then share with you some of the specific vendor commentary that was called out by the executives. Let's start by looking at what ETR Venn is. ETR Venn is a roundtable discussion. It applies a tried and true methodology similar to a focus group or in-depth interviews, what we sometimes in the research business call IDIs. ETR invites execs in from its community to participate in a private but open conversation. ETR clients get to listen in. The names of the execs and their companies are transparent, but the CUBE is only allowed to refer to them generically as shown on this slide. Now, we can validate these participants. They are legit CIOs and CISOs, some at very well-known firms. Now what I want to do is summarize the CIO and CISO sentiment from this Venn discussion. The overall budget impact for these four organizations is very, very severe. Essentially, large projects are being put on hold, although digital transformation initiatives remain a priority. There were really four significant areas of emphasis that were cited by these execs. Cloud First on-prem is losing out to cloud, SAS, and of course remote access solutions. In fact, the best comment on the panel was as a service is saving our SAS. Traditional networking is shifting to SD-WAN, especially rigid MPLS networks. Securing endpoints and zero-trust solutions are the winners, and there are a number of vendors rising to the occasion that will talk about it. Let's hear how Eric Bradley of ETR summarizes the Venn. To summarize, what we're seeing here was the real winners and losers are clear. Not everyone was prepared to have a work-from-home strategy. Not everyone was prepared to send their workers out, their VPN didn't have enough bandwidth. So there was a real quick uptick in spending, but longer term, we're starting to see that these changes will become more permanent. So the real winners and losers right now, we're going to see on the loser's side, traditional networking, the MPLS networking isn't a lot of trouble according to all the data and the commentary that we're seeing. It's expensive, it's difficult to ramp up and with as quickly as you need and it doesn't support remote. Okay, what I want to do now is I want to take a look at some of the verbatim comments and I'll just, I'll read them from this slide. All spending is shut down. 70% of big projects are cut. All next-gen projects have been shelled. The relationship with our SaaS vendor has been a miracle. We're accelerating from MPLS to SD-WAN. On top of secure gateway technologies, these will win. This was interesting. Our business continuity plans were way too DR focused. Essentially we weren't prepared. Now let's unpack the cloud-first commentary and give you some additional color. I feel like all we do around here sometimes is talk about the cloud. But it's clear from the data and the ETR data set surveys and the Venn and other data from theCUBE that the cloud is only going to be accelerated. We said this in 2008 and 2009. Down turns have been good to cloud. One of the execs literally said I would like to see my data centers completely deleted. Wow. Let's listen to Eric Bradley's take on this comment. I was also shocked about that comment. That gentleman also stated that his executives outside of the IT area, the CEO, the CFO had never ever ever wanted to discuss cloud. They did not want to discuss work from home. They did not want to discuss remote access. He said that conversation has changed immediately. So we've been talking a lot about those aspects of people and process and technology that might be permanent post COVID. And clearly you see C-level execs as having a bit of an awakening for things like cloud and work from home. Not that they didn't see them before but these things are going to accelerate in our view. I want to spend a minute talking about networks, SaaS and bring cloud again into the discussion. I gotta say the panel members really trashed MPLS networks in a big way. Let me explain. MPLS stands for multi-protocol label switching. You find this type of infrastructure in big telecom networks and it's data route traffic. MPLS is used to create dedicated and essentially reliable connections that enables things like VPNs, quality of service management, traffic engineering or shaping. But while MPLS is definitely cheaper than T1, it's more expensive than Ethernet. Now it came into prominence well before the cloud and these execs see it as outdated and inflexible. And this is where SD-WAN comes into play, software defined wide area networks. They're gaining popularity. Especially with the classification of applications and of course the general trend toward cloud. Here's Eric Bradley again explaining what the panel members said from his perspectives. Winners there are in the SD-WAN space. It's gonna be impossible to ignore that going forward. And some of our CIO and even CISO panelists said that change will be permanent. Also we're seeing at the same time what they were calling on SaaS and cloud. Now we know these trends obviously were already happening but they're being exacerbated. They're happening even more quickly and more strong. And I don't see that changing anytime soon. That of course is at the expense of network, I'm sorry data centers, whether it be your own or hosted, which has huge ramifications on on-prem hardware, even the firewall providers. So what would end it really seems as if as networking refresh starts to come up and it's coming up with a lot of large enterprises. When your network refresh comes up, people are going to do an RFP for SD-WAN. They are sick and tired of paying MPLS network vendors and they really want to look at something else. That was even prior to this situation. Now what we're hearing is this is a permanent change. I particularly had one person say, I wanted to find this quote real quickly if I can. But basically they were basically saying that from a permanency perspective, the freedom from MPLS will reduce our network spend by over half while more than doubling or tripling our bandwidth. Now the challenge of course is customers have multiple MPLS contracts with several different vendors. And often they just rubber stamp their renewal. But what customers are going to start doing is layering in SD-WAN and letting those agreements expire. Okay, I want to talk about secure endpoints in this notion of zero trust solutions. As I've said in theCUBE many, many times, the idea of digging a moat around the castle doesn't protect your queen anymore. Because the queen, i.e., the data, has left the castle. So companies that can secure gateways and secure endpoints, they are going to have more momentum during and post COVID. Now in the panel, Zscaler came up a lot in this context as well as Fortinet who as I've reported has done a good job in getting its cloud products to market. And of course the ETR data shows that Fortinet and Zscaler both have strong net scores or spending momentum. And Fortinet especially has really strong pervasiveness in the ETR dataset as I've reported previously. I've also analyzed that there's been a valuation divergence between Palo Alto Networks and Fortinet and how Zscaler as well is a disruptor in this space. I want you to listen to what Eric Bradley said specifically about Zscaler and Palo Alto Networks. Roll the clip. Yes, it certainly is, it is. And I'm glad you brought up Zscaler to very recently by client request we did a very in-depth research on Zscaler versus Palo Alto Prisma Access. And they were very interested, and this was before all this happened. Does Palo Alto have a chance of catching up, taking share from Zscaler? And I've had the pleasure of myself personally hosting Jay, the CEO of Zscaler at an event here at City. And I have nothing but incredible respect for the company. But what we found out through this research is Zscaler at the moment, their technology is still ahead according to their interests, there is no doubt. However, there doesn't seem to be any real secret sauce that will stop Palo Alto from catching up. So if I had to choose that in a year from now, Palo Alto might have had a better chance. So in this panel, as you brought up, Zscaler was mentioned numerous times as just the wave of the future along with CASB brokers, right? Whether you're talking about a net scope or a force pointer, all those people that also play in the CASB space to secure your access. Zero trust is no longer a marketing hype term, it is real and it is becoming more real by the week. Now, I personally agree with Eric that Palo Alto is definitely going to be in the mix. Customers that we've talked to, they want to work with Palo Alto networks, but there's a sea change going on and it's being driven by SaaS and cloud and now accelerating because of COVID. Of course, the trend to remote workers is we think here to stay. Now, I want to end by talking about some specific vendor mentions in addition to the ones we've talked about already. And this chart shows some of the vendors and their logos that were called out as either being really, really helpful during this pandemic or super important to the CIOs and CISOs. These executives really stressed how thankful they are to these companies and that the fact that these companies have worked very closely with them, they've been flexible on pricing and payments and they also specifically mentioned how off-put they were by this notion of ambulance chasing. For example, trials that required them to make some kind of commitment or swipe or credit card. They just don't have time for that right now and they don't have the patience for it. Let me call out a few of the companies that were cited in a positive light. Look at Microsoft is all over the ETR dataset in so many sectors, Microsoft Teams, security solutions, cloud really came up a lot on this event. IBM was mentioned as being a great partner. As was Oracle many, many times. We talked about Fortinet and Zscaler already. Cisco was called out as a strategic vendor was very helpful both in networking and with Cisco teams for collaboration. CrowdStrike came up a number of times from CISOs as did Trend Micro and Carbon Black, gotta mention. That's the VMware acquisition and security. Of course, mobile iron, that makes sense as well because they're securing and managing remote worker devices. Now finally, interestingly Salesforce was brought up many times as a critical vendor. One exec said that before coronavirus, multiple workers could share a Salesforce license by sharing passwords. But with the spike in work from home, they had to purchase more licenses. The one last thing that I want to bring up is startups. I got this question the other day from a client who said, how will startups fare? You might think that in this climate, especially among four hard hit customers that there might be risk averse as it pertains to using startups. One CIO however said the following, paraphrasing. You always hear about the guy that says, we'll pick three companies in the upper right hand corner of the Gartner Magic Quadrant. We'll test them out. And this CISO said that one of the things that he's always done is pick two from the upper right and one from the lower left, one of the emerging techs. And he gives them a shot. Let's listen to how Eric Bradley describes this dynamic. Roll the clip. It's a great comment. And honestly, if you're in charge of procurement you'd be stupid not to do that. Not only just to see what the technology is, but now I can play you off the big guys because I have negotiating leverage. And I can say, oh, well I can always just take their contract. So it's silly not to do it from a business perspective. So it's really interesting and somewhat non-intuitive these comments on startups, which of course means despite all the consolidation and acquisitions that you see in the industry, you know, there's still gonna be a lot of fragmentation, especially as I've said many, many times in the security space. People still want best of breed and innovation and if it can drive business value, they're gonna go for it. Okay, so look, I realize that these are narrow comments from four CIOs and CISOs, but they give us some added texture and flavor and color to the core ETR dataset. And we're going to continue to report on these trends and share more details as they become available both from the ETR dataset and from other Vens. And remember, we're going to be digging into the latest ETR survey over the coming weeks as ETR exits its self-imposed quiet period. So you can always check out ETR.plus. I publish weekly on wikibon.com and on siliconangle.com. And of course, our YouTube library has all these videos. That's youtube.com slash siliconangle. By the way, these segments are also available as podcast. You can DM me or tweet me at D-Velante. And please, by all means, comment on my LinkedIn posts or email me at david.Velante at siliconangle.com. Always appreciate the feedback. Thanks for watching, everybody. This is Breaking Analysis, brought to you by theCUBE, powered by ETR. This is Dave Vellante and we'll see you next time. Thanks for watching.