 Welcome back everyone to the live coverage here with theCUBE here in Mobile World Congress. I'm WC24, I'm John Furrier, your host with Dave Vellante. Dave, 14 years doing theCUBE, and this is our 14th season. And it's been- Third year here. Third year here. I've been to Mobile World Congress since 2009 when we first started working together. Boy, the industry's changed a lot. So much going on. And I've said always from day one, Dave, it's a networking problem, all right? And we're going to talk about it today. Nabil Bakari, Chief Technology and Product Officer, EVP and GM of Subscription and Business as Extreme, networks. Well, thank you guys. Thanks for coming on. Yeah, my pleasure, my pleasure. Every year it's the same conversation. Even when cloud hit the scene in 2013 when we started going to reinvent and we had cloud before that, it was always like, okay, get the compute up. But all of the policy, all the networking was cloud native, still always was doing. It feels like this year, it's the final year where that puzzle piece is going to snap into place, to scale up with what is obviously high demand of the future AI workflows, new kinds of clusters, clustered systems, new kinds of data centers emerging, micro clouds, and still public cloud and edge booming. So like so much is going on and now the network is the focus point. It always has been, but more than ever. Yeah, absolutely. And I think, and this is what we were talking about a little bit earlier, that there are so many technologies out there, right? There was cloud and now cloud seems like so passe and now there's like AI and then tomorrow there's going to be something else. There's a lot of this show-off technology and this promise of technology, but sometimes we have to take a step back and go back to, as you were talking about, the Maslow's hierarchy law for enterprises, especially, is that some of the basics are not there. Because in the end, yes, we want to provide value through AI to everybody, but how about we first connect everybody? And it's just like, in terms of connectivity, we call it the infinite connectivity, is that let's connect every application, every person and every device out there. And once you connect them, then we can kind of like talk about like, okay, well now how do I deliver value through things like AI and stuff? So I believe that the value and the role that networking plays in attaching all kinds of people, devices and application to the system is fundamental. And I think there are issues in that area to really unlock the potential of things like AI and stuff. You were sharing with us earlier how you sell to enterprises and enterprises aren't going 5G crazy. They're talking about how do we connect everybody? You just sort of mentioned that. Is it, they're trying to fill the holes still from the COVID march to remote or hybrid? Is that part of it? Are they trying to get more out of their Wi-Fi networks which are still, you know, they're good, but they're not great. What's the state of the enterprise mindset? Yeah, so you know, that's a great question and it depends upon who you're talking to within that enterprise. If you're talking to, you know, a CIO or a networking infrastructure VP or somebody like that, they are kind of thinking about like, well, how do I roll out all of these technologies to provide that connectivity, right? And they are thinking about, hey, I need to connect my people. Some of them are going to work from home. Some of them are going to be in offices. There's wired, they're wireless. There's 5G. And then there by the way, other technologies as well. A lot of our customers are looking at Laura. They're looking at satellite-based connectivity and stuff. So they are focused on the technology side. But as you go a little bit higher in those organizations to like a CXO or a board level, they have the following three concerns. One is all of this, you know, technology and stuff, wow, boy, that sounds expensive. That's the first reaction. Right. Second one is, well, how on earth are we going to find people to run all of these things? Every new year you come up with like a new set of technologies and now I got to go find these resources and stuff. And the third one is, well, how do I build a strategy that is agnostic of the underlying connecting technology? And that is a fundamental point. Enterprises do not want to lock themselves down in either a Wi-Fi or a wired or a 5G because they know they're going to need all of these technologies to connect their businesses. Now the question is, well, how do I fix the economics from acquisition to operations? And we sell into some of the largest enterprises in the world all the way down into the mid-market. And I would tell you is that that is where most of the conversation, you know, ends up at. It typically starts from like, oh, I really want to do something with 5G or I want to do something with AI, but that's where it ends up at. What are the complicated constraints that you're looking at with most of your customers? Is it just skill gap issues, just cautious optimism? What's the vibe right now with the customers? Because AI certainly has got the hype. The enthusiasm's high, confidence levels, certainly we see foundation models, okay, they're cool. But when you got to operationalize it, there's some opportunities with networking in there to use the data. So there's some light at the end of the tunnel there. What's your view of the innovation of where you see the opportunities? Yeah, so John, when it, so let's talk about AI and networking, right? So we kind of started on this journey like almost like three or four years ago. You know, we started rolling out, think about it, products, widgets, or you know, we call it co-pilot. Now that name is very ubiquitous in the industry. So we started rolling that out. So that has been there for almost like two, three years. Now obviously with every new generation of AI that happens like in minutes, it seems like. So it has better capabilities and more capabilities. But the fundamental point is this, when we step back and look at AI, the use cases are going to come in three phases. The first one is augmentation, right? It is like, okay, well I can help your IT teams do more, right? Or I can help them do these things through the use of AI. It's really an augmentation use case. The second one, whether we like it or not is going to be replacement, where you're going to come in and say like, oh, these functions and these teams are all, guess what, just not really needed because we're going to automate us through AI and it's not really needed. And the last phase is going to be the creation phase, which is where the revenue generation really comes in. I like to call it the arc framework because we are in networking, we love our like letter words and stuff. So it's the augmentation, replacement and creation, the arc framework. I believe that most of the enterprises are really looking in that phase and most of the focus is in augmentation. Now what I will also tell you is that we at Xtreme Networks, we kind of come up with a slightly different view. We say like, yes, augmentation is good, but unless you start pulling that creation phase in, you're going to struggle with showing the ROI of this. What are some examples of some creation examples? Right, so think about, so we are very big in stadiums, right? So we have like 25, 30 of the, some of the largest stadiums around in the world. And by the way, if we're a decade, we have been running. By the way, Ziaz and I, I want to do speed tests in all the stadiums so we can go test them out. And if you're watching anyone in marketing for Xtreme Networks, they're happy to go to all the stadiums and watch a game too while we're there. Yeah, yeah, yeah, exactly. Yeah, but you guys are really big on stage, which is cool. Yeah, and think about that, that's a perfect example of this, right? We have been bringing 5G and sell like in Wi-Fi and wired together in a stadium for over a decade now. I know this private 5G and Wi-Fi thing debate is like very recent, but we've been doing it for like over a decade now, but it is really about bringing that experience to the users or spectators in this case so that they don't sit in their living room on big TVs and come to the stadium. And by the way, the stadium problems are hard, not to crack because you have massive concentration of density. 100%. And you got all kinds of management issues on RF. 100%, right? So think about, so that is a perfect use case for bringing an AI for revenue generation. So some of our customers are thinking about like, okay, so I have 80,000 people in the stadium and I can collect data from them over a whole season or multiple seasons and out there. Well, then how the hell do I monetize that? The question of like, hey, I can give you a direction towards the shortest line to the toilet. I mean, that use case was like five years ago. But now think about in-stadium betting. Now think about like knowing what your spectators are doing when they're in stadium and then using that in terms of sponsorships and bringing in partnerships and stuff. Those are real AI use cases that we are doing. Those are net new creations. Those are net new creation. And this is my fundamental point that as people look at AI, do not just look at the augmentation use cases. It will become very difficult to show that ROI on the long-term because people underestimate the amount of investment that is required on AI once they go on this journey. So my message to everybody is look at those creation use cases upfront. Early on, you might not do them right away but have that story to be able to do the ROI. I mean, the data shows that about 40% of the AI projects that are getting funded are getting stealing budget from other projects. And to your point, if the macro spending is not growing, people are, you know, they're still pretty cautious. It's back-ended. People are expecting, I don't know, a four or 5% growth this year, but it's all second half. To your point, if they don't see ROI, there's not going to be that gain sharing to keep funding this. And CFOs are going to go, hold on. What are we getting? Let's pull back a little bit. There's only that much funding that you can do in from the bottom line, right? You can say, like, oh, I can bring this cost efficiency. There's a limit to that. And in the end, as business leaders, like, you know, I'm the GM of our subscription business and my teams come up with all sorts of examples of AI where like, oh, I can reduce it by 10% here and 10% here. But that's not the sustainable growth that I need. I need to grow the business at 70, 80% year over year. I need AI to bring in new revenue and stuff. So just sharing my own example. So in that arc framework, focus on the A and the C at the same time. And I think that's critical as we look at AI. The cost savings is one, revenue, generations. Where the data opportunities, net new, are going to be interesting. You know, you brought up this data and I want to go back to that because it brings up the whole, you know, user experience. We've heard here at the show here on theCUBE that the telco opportunity is to get to the device. Okay, because they have the devices, right? So all the devices, the data coming off the device. So the stadium, one of the things everyone can relate to is the Wi-Fi is terrible. Oh, 5G is here. So is the 5G Wi-Fi relationship going to be, going changing? Because Wi-Fi 7 is coming on. We're going to have the Broadcom president tomorrow. I'll ask him about Wi-Fi 7. You guys are involved with Wi-Fi 7. So is Wi-Fi going to be replacing that local ethernet or is it going to be over the top 5G? Or does the users don't even know? What's, can you share your thoughts on that? So it's John, great question. And maybe we're sitting at Mobile World Congress so my message is going to be a little bit contrarian, I guess. But in the end, nobody really cares whether it is Wi-Fi or 5G. That's what works for sure. This is fast. Can I get, does the water work? Yeah, it's just in the end, like, and think about, I think your point and just, you know, not being physicians, but just coming back to the point. You know, that data and the end device, that's really critical. And I think anybody that thinks that devices are going to connect just one way are actually missing the point. So think about the stadium example. That same device is switching between the cellular and the Wi-Fi, depending on which one does better. Because sometimes Wi-Fi is not working, but a lot of the times actually the 5G doesn't work, or the cellular, in this case, LTE doesn't work, and you offload that. So look, the fundamental question is- Whoever could manage that, take that away from the user, seamlessly under the covers. That's the key. Switching between the transceivers and the antennas, whatever the radio's going on there. That's the key. And I mean, and that's the stadium use case, but you know, people talk about industry and stuff. People forget that one of the largest growths in the industry is happening actually on the good old ethernet. Because it can provide you power and reliability both in the same case. So PoE is a big use case. The point that I'm making here is that, look, this 5G versus Wi-Fi debate is just the wrong question. The question is going to be, which company or ecosystem is going to provide you that data, that security, and that analytics towards the user and the end device, regardless of the connecting technology? So you guys are doing that. And we are doing that. Right, for us, the idea is that we have this concept of one network and one cloud. So we say like, look, it's one network doesn't really matter whether it is wired or wireless or Laura or 5G or satellite or what have you. The idea is to just connect people, connect them securely, and then provide them an experience and more importantly do it within the budgets of our customers. That in the end, it always comes down to economics, right? So to me, that's the real question. So when we talk to our partners, obviously we have a lot of partners on the telco sides and on the 5G side. It is like, well, how do we bring in? So an enterprise can run 5G just like it has always been running wired and wireless or Wi-Fi and Ethernet, right? So to me, that's the real fundamental question. And at Xtreme, we are like just hyper focused on doing that. And we have had quite a bit of success around that. Explain your business for our audience. You run the subscription business. Xtreme was born at kind of the beginning of the dot com boom, right? You're really right in the middle of it. The subscription business, so you're going through a transition. What's it all about? Yeah, so great question. It's just like, look, we were born as a hardware company. And like most of the companies here, right? And the key is that now, I actually don't use the word transition because I feel like if you're transitioning your hardware business into a subscription business or you value proposition from hardware perpetual to a subscription, you typically end up with a dip before you kind of like come back up. I have the view and in the last five years we have kind of proven that is that you leave your hardware business the way it is and look, the customers are going to want to buy a different way. They want to buy a CapEx. They want to buy OpEx. They want to buy consumption. That's fine. Let them buy the way they want to buy it. But these cloud and subscription models are really well suited for this value that sits over the top. It could be management through the cloud. It is analytics. It is now AI as everybody's talking about it. It is about experience. It is about compliance and reliance and stuff like that. And the way we have modeled our businesses that our hardware business continues to grow and we have kind of created this subscription business on top of it that provides this higher tier of value. And that has worked out really well for us. And I really believe that's why I don't use the word transforming from hardware. It's an augmentation. So it's not as a servicizing your hardware business. It's adding a layer on top. Exactly. That is incremental value that customers and you know, John, you said this Maslow's hierarchy law for networking. I'm going to do something about that. I love that effort because I'm happy to help. At the bottom sits connectivity. And the connectivity could be wired by 5G satellite. What have you. And as you go up, then it's like, okay, well, I connect them, but now I want to secure them. Well, now it's securely connected. Well, now I want to provide them access to application. Well, now I want to do analytics. Now I want to do AI. And it's really that's how you need to think about it. And that's how our customers are thinking about it. It's just, I brought that up mainly because you brought the stadium. Most people with their Wi-Fi and their devices really get bummed out. They're emotionally bummed out when they can't send their photos of their pictures to their friends who aren't at the game. So Wi-Fi and the internet has become quite frankly part of our lives. So I think this Wi-Fi seven conversation is important. And the power over ethernet, you brought that up. Again, that's a gets nerdy into the weeds, but like there's advantages there again. So again, as long as you can make the users get the plumbing they need. That's the thing. That's the food and shelter in my Wi-Fi. That is what it is. And I really believe that getting- It's like running water. No one goes to the bathroom and says, hey, what pipes are they using? Yeah, and in the end, those are the people that are going to fund all of this awesome technical stuff that we do. So the key is always focus at the end user and they really don't care how they can have it. And the thing about the AI, and I think what's coming out is that if you can use AI to make that more efficient. Okay, that's where the data is going to come in. I think that's what we're watching as a creation opportunity. The augmentation is interesting. We've been covering a lot of the platform engineering challenges in cloud native and now AI native. There's just not enough time for people to get skilled up. So I think AI was probably going to fill that void. How do you see that as a product executive? So it's interesting. I think there's a lot of thing that, hey, the AI is going to fill up the gap. And you know, there's a lot of products that are out there that help coders kind of code and stuff like that. And some of them are really useful. We're using some of them as well. But you know, the point that I'll make is that within product companies, like technology companies like ourselves, there needs to be a cultural change. Building a platform for the cloud and data ingestion and normalization and then doing something with it and distributing. Yes, challenging, but doable. But creating that data first culture within your organizations and more importantly in your customers, that is a much bigger challenge. And I think as we think about AI and as we think about data, we cannot separate the technology from the cultural change that is required because in the end it is about humans. Right? The bill, thanks for coming on theCUBE. We're going to end theCUBE research, our team look at the market the same way. There's a lot of challenges but opportunities, big investments coming into AI and the implementations of how things are going to be deployed are changing. So really the perfect storm for innovation. So I really appreciate your share and your vision. Love the 5G, Wi-Fi, and congratulations on all your stadium success. Again, Zs and I have been talking about that. Yeah, yeah, yeah. It's like, look, it's a perfect use case of how you can bring different technologies for a singular purpose of delivering an experience. I think that's the future and that's where all of this is going to go. I really appreciate you guys having me here. The fans are thankful. The bill's here on theCUBE. Okay, more live coverage day two of four days of live feed here on theCUBE. Here in Barcelona, we'll be right back with more after this short break.