 Hello and welcome to the special CUBE Conversations here at Palo Office. The CUBE Studios, I'm John Furrier, the founder of Silicon Angle on theCUBE. We're here with Devesh Garga, the founder and CEO of Arcus, Inc., Arcus.com, A-R-R-C-U-S.com. And Steve Herrod, general partner at General Canalist, VCU's funded them. Congratulations on your launch. These guys launched on Monday, a hot new product, software OS for networking, powering white boxes in a whole new generation of potentially cloud computing. Welcome to this CUBE Conversation. Congratulations on your launch. Thank you, John. So Devesh, talk about this startup. When do you guys were founded? Let's get some of the specifics. Date you were founded, some of the people on the team, and the funding. Yeah, we were formally incorporated in February of 2016. We really got going in earnest in August of 2016 and have chosen to stay in stealth. The founding team consists of myself, a gentleman by the name of K. Ur Patel. He's our CTO. We also have a gentleman by the name of Derek Young. He's our chief architect. And our backgrounds are a combination of the semiconductor industry. I spent a lot of time in the semiconductor industry. Most recently, I was president of EasyChip and we sold that company to Melanox. And K. Ur and Derek, our networking protocol experts, spent 20 plus years at places like Cisco. And arguably some of the best protocol guys in the world. Three of us got together and basically saw an opportunity to bring some of the insights and architectural innovation we had in mind to the market. So you got some pedigree in there, some top talent. Absolutely. What are some of the things that they've done in the past from some notable, notable aspects? Yeah, I mean, if you'd like some just high level numbers, we have 600 plus years of experience of deep networking expertise within the company. Our collective team has shipped over 400 products to production. We have over 200 IETF RFC papers that have been filed by the team as well as 150 plus patents. So we really focus- Looking good on the pedigree for sure. Yeah, we absolutely focused on getting the best talent in the world because we felt that it would be a significant differentiation to be able to start from a clean sheet of paper. And so really having people who have that expertise allowed us to kind of take a step back and reimagine what could be possible with an operating system and gave us the benefit of being able to choose best in class approaches. What was the point that this all came together? What was the guiding vision? Was it network OSs are going to be cloud based? Was it going to be more IoT? What was some of the founding principles that really got this going because clearly we see a trend where Intel's been dominating. We see what NVIDIA's doing competitively. Certainly in the GPU side, you're seeing the white boxes become a trend. Google makes their own stuff. Apple's making their own silicon. So you can, there's kind of a whole big scale world out there that has got a lot of hardware experience. What was the catalyst for you guys when you found this kind of, what was the guiding principle on all this? Yeah, I would say there were three, John. And you hit on a couple of them in your reference to Intel and NVIDIA with some of the innovation. But if I start at the top level, the market, the networking market is a large market and it's also very strategic and foundational in a hyper connected world. That market is also dominated by a few people. And there's essentially three vertically integrated OEMs that dominate that market. And when you have that type of dominance, it leads to ultimately high prices and muted innovation. So we felt number one, the market was going through tremendous change, but at the same time, it had been tightly controlled by a few people. The other part of it was that there was a tremendous amount of innovation that was happening at the silicon component level. Coming from the semiconductor industry, I was early at Broadcom, very involved in some of the networking things that happened in the early stages of the company. We saw tremendous amounts of innovation and feature velocity that was happening at the silicon component level. That in turn led to a lot of system hardware, people coming into the market and producing systems based on this wide variety of choices for the silicon. But the missing link was really an operating system that would unleash all that innovation. So Silicon Valley is back, Steve. You're a VC now, but you are the CTO of VMware. One of the companies that actually changed how data centers operate, certainly as a pretext of cloud computing was seen with microservices and the growth of cloud. Silicon's hot. IT operations is certainly being decimated as we all knew it in the past. Everything's being automated away. You need more functionality. There's a demand. Is this kind of how you see it? I mean, you always see things a little early as a technologist, now VC. What got you excited about these guys? What's the bottom line? Yeah, maybe two points on that. So one, Silicon has definitely become interesting again, if you will, in the Silicon Valley area. And I think that's partly because cloud scale and web scale allows these environments where you can afford to put in new hardware and really take advantage of it. I was a semiconductor at first, Austria too. So it's exciting for me to see that. But as Devesh said, it's kind of a straightforward story, especially in a world of whether it's cloud or IoT or everything. Networking is literally the core to all of this working going forward. And the opportunity to rethink it in a new design and in a software-first mentality felt kind of perfect right now. And I think Devesh even saw the team a little short, even with all the numbers that are there. K.R., for instance, his co-founder was sort of, everyone you talk to will call him Mr. BGP, which is one of the main routing protocols in the internet. So just a ridiculously deep team trying to take this on. And there have been a few companies trying to do something kind of like this. And I think, what do they say, that the second mouse gets the cheese. I think we've seen some things that didn't work the first time around and we can really, I think, improve on them and have a chance to make a major impact on the networking market. You know, just to kind of go on a tangent here for a second, because you know, as you're talking kind of, my brain's kind of firing away because you know, one of the things I've been talking about on theCUBE a lot is ageism. And if you look at the movement of the cloud, it's brought a systems mindset back. If you look at all the best successes out there right now, it's almost the old guys and gals, but it's really systems people, people who understand networking and systems. Because the cloud is an operating system, you have an operating system for networking. So, seeing that trend certainly happen. That's awesome. The question I have for you, Devesh, is what is the difference, what's the impact of this new network OS because I'm almost envisioning, if I think through my mind's eye, you got servers and serverless is certainly a big trend you're seeing in cloud. It's one resource pools, one operating system and that needs to have cohesiveness and connectedness through services. So, is this how you guys are thinking about, how are you guys thinking about the network OS? What's different about what you guys are doing with Arc OS versus what's out there today? No, it's a great question, John. So, in terms of what we've done, the third piece of the puzzle, so to speak, when we were talking about our team, I talked a little bit about the market opportunity, I talked a little bit about the innovation that was happening at the semiconductor and systems level and said the missing link was on the OS. And so, as I said at the onset, we had the benefit of hiring some of the best people in the world and what that gave us the opportunity was to look at the 20 plus years of development that had happened on the operating system side for networking and basically identify those things that really made sense. So, we had the benefit of being able to adopt what worked and then augment that with those things that were needed for a modern day networking infrastructure environment. And so, we set about producing a product that we call it Arc OS. And the characteristics of it that are unique are that it's, first of all, it's best in class protocols. We have minimal dependency on open source protocols. And the reason for that is that no serious network operator is going to put an open source networking protocol in the core of their network. They're just not going to risk their business and the efficacy and performance of their network for something like that. So, we start with best in class protocols and then, we captured them in a very open, modular, services, microservices-based architecture. And that allows us the flexibility and the extensibility to be able to compose it in a manner that's consistent with what the end use case is going to be. So, it's designed from the onset to be very scalable and very versatile in terms of where it can be deployed. We can deploy it in a physical environment. We can deploy it vis-a-vis a container or we could deploy it in the cloud. So, we're agnostic to all of those use case scenarios. And then, in addition to that, we knew that we had to make it usable. It makes no sense to have the best in class protocols our end customers can't use them. So, what we've done is we've adopted open config Yang-based models and we have programmable APIs. So, in any environment, people can leverage their existing tools, their existing applications and they can relatively easily and efficiently integrate ArcOS into their networking environment. And then, similarly, we did the same thing on the hardware side. We have something that we call D-PAL. It's a data plane adaptation layer. It's an intelligent HAL. And what that allows us to do is be hardware agnostic. So, we're indifferent to what the underlying hardware is and what we want to do is be able to take advantage of the advancements in the silicon component level as well as at the system level and be able to deploy ArcOS anywhere. Okay, so let's take a step back. So, you guys, so the protocol is awesome. What's the value proposition for ArcOS and who's the target audience? You mentioned data centers in the past. Is it data center operators? Is it developers? Is it service providers? Who is your target customer? Yeah, so the piece of the puzzle that wraps everything together is we wanted to do it at massive scale. And so, we have the ability to support internet scale with deep routing capabilities within ArcOS. And as a byproduct of that and all the other things that we've done architecturally, we're the world's first operating system that's been ported to the high-end, broad-com, strata, DNX family. That product is called Jericho Plus in the marketplace. And as a byproduct of that, we can ingest a full internet routing table. And as a byproduct of that, we can be used in the highest end applications for network operators. So, performance is a key value. Performance as measured by internet scale, as measured by convergence times, as measured by the amount of control, visibility, and access that we provide. And by virtue of being able to solve that high-end problem, it's very easy for us to come down. So, in terms of your specific question about what are the use cases, we have active discussions in data center centric applications for the leaf and spine. We have active discussions for edge applications. We have active discussions going on for cloud-centric applications. ArcOS can be used anywhere. Who's the buyer of those? Network operator? So, it sounds like you can go like a variety of personas. Network operator, large telco. Data center person running a killer app that's high-emission critical, high-scale. Is that right? Yeah, you're absolutely getting it right. Basically, anybody that has a network and has networking infrastructure that is consuming networking equipment is a potential customer for ours. Now, the product has the extensibility to be used anywhere in the data center, at the edge or in the cloud. We're very focused on some of the use cases that are in the CDN peering and IP, you know, route reflector IP peering use cases. Great, Steve, I want to get your thoughts because obviously I know how you invest. You guys have a great, great firm over there. You're pretty finicky on investments. Certainly team, check, pedigrees there on the team. So, that's a good side. Market Tam, big markets, what's the market here for you? How do you see this market? What's the bet for you guys on the market side? Yeah, it's pretty straightforward. As you look at the size of the networking market with three major players around here and a longer tail, owning a small piece of a giant market is a great way to get started. And if you believe in the secular trends that are going on with innovation and hardware and the ability to take advantage of them, I think we have identified a few really interesting starting use cases and web scale companies that have a lot of cost and needs in the networking side. But what I would love about the software architecture, it reminds me a lot of things to have kind of just even the early virtualization pieces. If you can take advantage of movement and advantages and hardware as they improve and really bring them into a company more quickly than before, then those companies are going to be able to have better economics on their networking early on. So, get a great layer in, solve a particular use case, but then the trends of being able to take advantage of new hardware and to be able to provide the data and the APIs to program it and to manage it. Who wouldn't want that? It's a creative limitless opportunity because with custom silicon that has purpose-built protocols, it's easy to put a box together in a large data center or even boxes. Yeah, you can imagine the vendors of the advances and the chips really love that there's a good company that can take advantage of them more quickly than others can. So, Cloud Service Provider certainly is a target audience here. I know large clouds would love if there's an app coming in Broadcom as a customer. Are there a partner of you guys that just wants- Broadcom's a partner. So, we've ported ArcOS onto multiple members of the Broadcom switching family. So, we have five or six of their components, their networking system on chip components that we've ported to including the two highest end, which is the Jericho Plus and- You got to love the Broadcom buying CA. And that's going to open up IT operations to you guys and a whole new set of applications. I mean, talk about what you just said, extensibility of taking what you just said about boxes and tying high-end application performance. You almost can see that vertically integrated and a model developing. Yeah, from a semiconductor perspective, since I spent a lot of time in the industry, one of the challenges, I had founded a high-core count multi-processor company and one of the challenges we always had was the software. And at EasyChip, we had the world's highest end network processor challenged with software. And I think if you take all of the innovation in the Silicon industry and couple it with the right software, the combination of those two things opens up a vast number of opportunities. And we feel that with ArcOS, we provide that software piece that's going to help people take advantage of all the great innovation that's happening in semiconductors. You mentioned earlier open source, people don't want to bring open source into the core of the network, yet the open source communities are growing really at an exponential rate. You're starting to see open source be the lingua franca for all developers, especially the modern software developers. Why not open source in the core? I mean, obviously it's got to be bulletproof. You need security, obviously the answer is there, but that seems antithetical to the trend on open source. What's the answer there on why not open source in the core? Yeah, so we take advantage of open source where it makes sense. So we take advantage of O&L, open network Linux, and we have developed our protocols that run on that environment. The reason we feel that the protocols being developed in-house as opposed to leveraging things from the open source community are the internet scale, multi-threading of BGP, integrating things like open config, Yang-based models into that environment. They're proven. Right, well it's not only proven, but the capabilities that we're able to innovate on and bring unique differentiation weren't really going back to a clean sheet of paper. And so we designed it ground up to really be optimized for the needs of today. Steve, your old boss, Paul Moritz, used to talk about the hard and top. Similar here, right? No one's really going to care if it works great. It's under the hard and top where you use open source as a connection point for services and opportunities to grow. Is that a similar concept? Yes, I mean, at the end of the day, open source is great for certain things and for community and extensibility and for visibility. And then on the flip side, they look to a company that's accountable and for making sure it performs and has high quality. And so I think the modern way for, especially for the mission critical infrastructure is to have a mix of both and to give back to the community where it makes sense to be responsible for hardening things or building them when they don't exist. So how'd you land these guys? Get them early and don't talk to any other VCs. How did it all come together between you guys? We've actually been friends for a while, which has been great. And at one point we actually decided to ask, hey, what do you actually do? Found out I was a venture investor and he was a network engineer. But I actually really like the networking space as a whole. As much as people talk about the cloud or open source or storage being tough, networking is literally everywhere and will be everywhere in whatever our world looks like. So I've always been looking for the most interesting companies in that space. And we always joke like the investment world kind of San Francisco's applications, mid here is sort of operating systems and the lower you get, the more technical it gets. And so- Well, there's a swing back. I mean, we're a media company. I think we're doing things different as we were saying before we came on camera, but I think media is undervalued. I wrote just wrote a tweet on that, got some traction on that. But it's shifting back to Silicon. You're seeing systems. If you look at some of the hottest areas, IT operations is being automated away, AI ops, auto machine learning, starting to see some of these high end, I call them systems like- That's exactly where I was going to go. It's like, I especially just love very deep and electrical property that is hard to replicate and that you can, you know, ultimately, you can charge a premium for something that is that hard to do. And so that's really something I get drawn to. So who else is in the deal with you guys? Do you have any other syndicates in the deal? You want to talk about some of that? Sure, you know, so our initial seed investor was Clear Ventures, a gentleman by the name of Chris Rust is on our board. And then Steve came in and led our most recent round of funding and he also is on the board. What we've done beyond that institutional money is we have a group of very strategic individual investors. Two people I would maybe highlight amongst the vast number of advisors we have are a gentleman by the name of Punkage Patel. Punkage was the chief development officer at Cisco. He was basically number two at Cisco for a number of years. Deep operating experience across all facets of what we would need. And then there's another gentleman by the name of Umarjeet Gill. I've been friends with Umarjeet for 30 years. He's probably one of the single most successful entrepreneurs in the valley. He's incubated companies that have been purchased by Broadcom, by Apple, by Google, by Facebook, by Intel, by EMC. So we were fortunate enough to get him involved and keep him busy. Great pedigree, great investors with that kind of intellectual property and those smart minds there. A lot of pressure on you as the CEO not to screw it up, right? I mean, come on now, get all those smart people. Come on. You got it looking really good. You know, I welcome it actually. I enjoy it. We, look, when you have a great team and you have as many capable people surrounding you, it really comes together. And so I don't think it's about me. I actually think, number one, it's about the team. I was just kidding, by the way. I think it's about the team. And I'm merely a spokesperson to represent all the great work that our team has done. So I'm really proud of the guys we have. And frankly, it makes my job easier. Yeah, you got a lot of people to tap for advice. Certainly the shared experiences. Collectively in the different areas make a lot of sense and the investors certainly topped here. Absolutely, absolutely. And it's not just at the board. It's just not at the investor level. It's at the advisor level and also at our individual team members. When we have a team that executes as well as we have, everything falls into place. Well, we think the software world's changing. We think the economics are changing. Certainly when you look at cloud, whether it's cloud computing or token economics with blockchain and new emerging tech around AI, we think the world is certainly going to change. So you guys got a great team to kind of figure it out. I mean, you got to execute in real time. You got real technology play with IP. Question is, what's the next step? What's your priorities now that you're out there? Congratulations on your launch. Thank you. In stealth mode, you got some customers. You got a Broadcom relationship looking out in the landscape. What's your plan for the next year? What's your goals? Really to take every facet of what you said and just scale the business. We're actively hiring. We have a lot of customer activity. This week happens to be the most recent IETF conference that happened in Montreal. Given our company launch on Monday, there's been a tremendous amount of interest in everything that we're doing. So that coupled with the existing customer discussions we have is only going to expand. And then we have a very robust roadmap to continue to augment and add capabilities to the baseline capabilities that we brought to the market. So I really view the next year as scaling the business in all aspects. And increasingly my time is going to be focused on commercially centric activities. Great. Well, congratulations. You got a great team. Exciting to see great investment. Cube Conversation here. I'm John Furrier here. Hot start up here. Launching this week here in California in Silicon Valley where Silicon is back and software is back. It's theCUBE bringing you all the action. I'm John Furrier. Thanks for watching.