 Live from Barcelona, Spain, it's theCUBE. Covering Cisco Live 2018. Brought to you by Cisco, Veeam, and theCUBE's ecosystem partners. Hey, welcome back, everyone. This is theCUBE's exclusive coverage. Day two, we're wrapping up the show here at Cisco Live 2018 in Europe. We're in Barcelona, Spain. Past two days we've been here. I'm John Furrier with Stu Miniman, talking to the most important people at Cisco, the top executives, some developers, and really kind of getting the lay of the land. It's the first time theCUBE has been at Cisco Live in its existence, so it's great to be here. Stu, Cisco Live, there's a lot of smart people, so it's great to have theCUBE. theCUBE fits beautifully with Cisco Live because you got people sharing. You have great, smart networking guys, but they're also doing applications. This is really an awesome opportunity because this is like the perfect storm for Cisco. This is an opportunity to galvanize their base, grow them into the new kind of talent to move forward in this cloud-edge world where the network needs to be more intelligent. This is your wheelhouse. You've been covering this for a long time. So, John, yeah, I was looking forward to this. It's been years since I've attended Cisco Live in person. There's a term we haven't talked about a lot this week, but I think it fits. It's the digital transformation. And Cisco is in the midst of this transformation. I sat in our open on day one. My barometer was going to be, look, how is Cisco becoming a software company? Of course, things like iOS have been in the guts of what they did from networking, but being here in the DevNet zone, DevNet, Susie Wee's team, really helping to drive some of that transformation. We had a great conversation with Rowan talking about the future. We were talking about apps, talking about so many of the different things that Cisco was doing to not just be boxes and ports. Hardware is still an important piece. I'm actually concerned that maybe they have a little bit of that hardware holding them back a tiny bit because Cisco has skills there. They have lots of expertise. It might be mostly software, but even when they talk about things like collaboration, there's hardware underneath a lot of that. Stu, Rowan Trollop, who's the SVP, a general manager of the applications team, is the rising star. He is being promoted. And watch this as a signal from Cisco. They recognize it. So, you know, we heard from Andy Jassy at AWS ReInvent. There's the old guard being the hell about Oracle. And then the new guard, trying to obviously position himself as the new guard to carry customers into the future. Rowan Trollop on his keynote yesterday, who was the big story because the CEO wasn't here. He was the lead dog, so he's getting promoted. He was talking about the future. So the question I have for you is, as an analyst, is Cisco an old guard or are they a new guard? Or are they moving to be a new guard? What's your opinion? Yeah, too soon to say. Cisco was one of the four horsemen of the internet era. Absolutely, they should have a place going forward. But look, they're not one of the big public cloud providers. They don't sell a lot to the hyperscale players. But, you know, they have a very strong position in a lot of places. Still dominant in traditional network and do very well in collaboration. You know, have a lot of software pieces. They've made a number of acquisitions. Viptella company we had tracked before doing well inside of Cisco. AppD, a lot of buzz what's going on. We got to learn a bunch about Spark this week, John. Heck, even little tidbits I got. There's these two colored globes sitting behind you. It's like, oh, it's Alexa apps. And there's been people doing developer labs this entire week. So Cisco, part of helping to educate and do that transformation. Other companies like Pivotal is a partner. Lots of partnerships. And not just the traditional infrastructure companies, but we heard about what they're doing with Google, with Apple and others. So I'm not ready to anoint Cisco as a winner in the new world, but if multicloud, which I'd love to get your take on what you think with the multicloud strategy is, but Cisco at least has a right to be at the table. They've got strong customer relationships. Strong in the enterprise, strong in service providers. But if Oracle's an old guard, then why isn't Cisco? I mean, Oracle is plumbing. They have these database deals. They're not going anywhere soon. So you can make an argument that Oracle is not going to be displaced anytime soon because they have the mass of deals. But a lot of people will say, and we've been said that Oracle's relevance is waning with new database growth happening outside the proprietary database. So, is Cisco relevant? Yeah, John, it's a good question. So for one piece, if you say, okay, how are they doing on the transition to becoming recurring revenue rather than boxes? They still have quite a ways to go. They're not far enough along that journey. But, you know, my measuring stick was how much are they a software company? How much are they an infrastructure company? They're kind of straddling the line. They're moving up the stack more than some of the other initiatives in the past. It's taken hold, thousands of people. So, you know, I give them good marks, John. What's your take? I mean, I don't know. I mean, I think, here's my take on Cisco. Cisco knows the networking. You can't, like I was saying with Oracle, they're not going anywhere. No one's going to rip out Cisco and replace it. There's nothing else to replace it with. I mean, there's no other competition, really. The competition to Oracle, I mean, Cisco is not being on the right side of history. So, to me, I think Cisco should be worried about one thing, making the bet wrong on architecture. So, they own the network. The other thing that people don't know about Cisco that's competitive advantage is they know the edge of the network. They've been doing edge computing since it existed. So, okay, extending it out to IoT is not a big deal, in my opinion. I think that is going to be an easy get for Cisco. Extending it to wireless, they have that with their deal with Jasper. That's interesting. That's going to be a game changer. But that's not going to be their problem. Wireless, human, cars, that's the new edge. That's just an extension for Cisco. That is a major advantage. So, competitively speaking, I think that is a real point that they're going to really nail home that a lot of people understand. The second thing is that their DevNet program is showing that they're upgrading and advancing their capabilities up the stack and bringing along with them their entire developer constituencies, which were essentially network engineers. So, they were once the rock stars, those network engineers of any enterprise. You go into any enterprise, you say, the network engineers, they ran the show. Now, the threat is coming from an alpha perspective from developers. So, now you have this kind of dynamic going on, Stu, where the network engineers need to move up the stack to meet the new developers and that's where the rubbing's going on. And that's where the action, that's what DevNet's doing. They're doing a masterful job of my opinion. They're not over-driving, not over-playing their hand. They're in the cloud-native role with DevNet Create. So, I think their best move is to just continue to march down that path, but they got to own the IoT edge. Without the IoT edge, Cisco could crumble. Yeah, so, a couple comments on that, John. One, IoT, Cisco started messaging IoT really early and they've gone through a couple of iterations so that what they're talking about IoT wasn't what they were talking a few years ago. I like their story much better today. Absolutely, both from a wireless standpoint, they've got the hardware gear, like Meraki they talked on stage, some software standpoint, like Jasper. One of the areas we got feedback from the community, John, they're talking about containers in Kubernetes, sure. They're not involved with serverless yet. And that is a blindness. Is it something that the big public clouds are going to do there? You know, they're, I'm sorry? I have an opinion on that. Oh, okay. Cisco's running billion dollar partnerships. They're doing billions in dollars in revenue. So, I think you can't really judge them by their participation in these open source projects yet. I think they got to bring something to the party quickly. I think, it's too early to tell, I would agree with you on that point on this piece. They got to go to open source and they got to figure out a way to do it in a way that's not distracting from the core mission. If I'm Cisco, if I'm advising to see you, I'm like, march with the network as the value, maximize the software play, and don't blow off open source. They cannot blow off open source. Are they brilliant in open source right now? Outside of Lutucker, who do we see? Dude. No, I mean, from a network standpoint, Cisco's been involved across lots of projects, you know, not just open stack containers. We've talked about what they're doing with Kubernetes and Istio. Give them a grade, open source, give them a grade. A, B, C, or D, or F? I'd say at least a strong B. Okay, decent. No, I mean, look, they're not monetizing open source. They're not rallying around the flag. They're doing great with developers, which, John, I guess what we say, is it contributing for contributing's sake, or how does it fit in the business model? We did a couple of interviews here where it says, no, no, open source. We're not negative on it. They're not pushing against public cloud. They're not against these things. It just doesn't fit as much into their environment. I think the multi-cloud thing, well, getting back to your question about containers. So containers are being commoditized. Red Hat just bought CoreOS. Dockers, Docker. Docker's got a business model challenge. We've reported on that, Stu, and we're doing a feature report on it now. And so what are they going to do? But still, container is a goodness. People like containers. Is it super complicated? Not really. Is Kubernetes strategic and important? Yes, that's obvious. So the service match is interesting to me. And I think the net DevOps positioning that they announced here, Cisco is kind of bringing this DevOps culture to the networking world. They're kind of creating a new DevOps ethos at a networking layer. I think that's going to be a really, really big deal. And that is either going to be a go big or go home situation. It's either going to work like a charm, or it's going to fail miserably. So what do you think? I mean, it lines up with Istio, it lines up with service mesh, programmable infrastructures, managing microservices. I mean, it kind of hangs together, Stu. What do you think? Yeah, I mean, John, it goes along with the whole trend we've been seeing. The people that were managing the network can't be managing devices, or even groups of devices. Intent-based networking is one of the big items coming into here. It's how do I let the machine learning, the programmability help me in this environment because it's only going to get more complicated. The edge you talked about is critical. IoT keeps growing. And it's not something that people alone can do. It needs to be people plus machines. And I've seen nice maturation of how Cisco does this. Cisco, to be critical on Cisco for the last decade, is they have thrived in complexity. And I think they're trying to get over that sum and shift their model to more of a software model. Well, Stu, I think you nailed it. So here's my take. Software model allows them to scale. With machine learning, they could do what Facebook and Google's done. So you go to Google, for instance, how they manage their data center. They have Site Reliability Engineers. They've changed the IT model to scale the number of machines that they have. The number of devices that are coming on the network cannot be physically managed by people. So this means machine learning and software has to automate it. That is Cisco's opportunity. I'm not seeing it clearly right now, but if that's what they're talking about, that to me will be the tell sign. If Cisco can create kind of a Site Reliability Engineer like what Google did for networks, that's a game changer. All right, Stu, final thoughts. Let's go through what's riff on what we saw here. Obviously, Barcelona, great city. The weather's been phenomenal. It's been really great. Good food, good tapas. But Cisco, good vibe. Cube in the DevNet zone. It's been really interesting to watch. People love the labs. It's very kind of chill and relaxed, but very active. The keynote, looking forward, not looking back. Notable point. The CEO wasn't here. So that to me... Yeah, it's the end of the quarter and he was just at Davos and there's a bunch there. He didn't come last year either. But look, Chuck will be at the Orlando Show. Hoping we'll have him on the Cube when we go there. We're going to be at the Orlando Show. Got the Cube at the DevNet Create Show again. And John, chill, I think, was the right word. And part of me is wondering, is it because we're here in Barcelona and it's just kind of a relaxed atmosphere of a city? I've really enjoyed this week. Or network people, as I said, used to be a little bit uptight. I mean, it's the risk and fear are things that kind of ruled in networking before and people seemed a little bit more chill here. Pros and cons, too. Or observations that were good and not so good. Observations, to me, were on the good side, was a lot of activity in the DevNet zone, a lot of energy in the hallway, in a Barcelona way. So it's a lot of European flavor. I was the signal I thought was good was the keynote was packed. You and I thought it might be empty, right? Given, you know, but people strolled in, they packed every seat. The other area is that you can just tell people were interested in the new direction. The critical analysis, to me, would be, I didn't hear enough data-driven. I want to see more data-driven, but I didn't want to hear AI changing the world. I want to see real practical examples of data-driven impact to data center, and I wanted to see more meat on the bone on multi-cloud. So I didn't really see much there. I just heard about it. It was almost like we're going there. Not a lot of data-driven, not a lot of multi-cloud. Outside of that, I thought it was really, really a great conference. Yeah, and John, we had some phenomenal guests here. So on the data-driven piece, Michelle Denady, Chief Privacy Officer, really good piece, and she said, oh, guys, you're missing it if you didn't hear the data-driven, and she drove home in the interview with us how Cisco is involved there. So, John, there's a lot going on. Cisco's a big company, big show. There's a lot we're not going to be able to get. Riaz Rehan got the IoT piece, seeing some new players, really helping to shift along this transition. Love Susie Wee's discussion about the four-year transformation that we're talking, and Rowan, strong executive, good ventures Cisco. Stock has been up, like most of the tech stocks, the last few months, but... I mean, we've got to mention that. Good points, too. New Sheriff in town on IoT. That was a great interview. Again, Susie's at DevNet's hit home run here. She's got a great group she's developing. Awesome stuff to do. So, last thing, John, right, if Chuck Robbins would give you a call and say, hey, John, right, I've got that 10, 20, 30 billion dollars that I might be able to play with. Any final advice for him? I would really shore up the collab stuff. I think there's a distraction there from the sense of that I get why it's developing, but if you use WebEx or use these tools, you're biased. You don't understand. It's a tool to you. You're just going to use it. I think that is a great data, and I think that the collab apps, if you look at it not as a software play, but as an IoT edge device, data-driven device, that's a good play. So I like the direction. I would throw a lot of dough at the collab and make that an IoT edge feature, because they can cross-connect great data from WebEx to Spark. And I think Spark is, feels like an app. I want to, it's not an app. It's just platform. Look, it's a messy space. You know, who leads in those spaces tends to be a lot more of the consumer companies that did this. Cisco killed most of their consumer stuff than they did after the, you know, they had flip and the set-top boxes. So, you know, very different Cisco. What assets do they have? But tell us, to answer your questions too, what I would say, I'd say, Chuck, own the edge. This is a strategic imperative. I would throw the kitchen sink at owning the edge of the network. That means from the core to the edge, and I'd push that edge all the way to the wearables, all the way to the implants in your brain in the future, own it end-to-end, lock that down, make it dynamic, make it programmable. That is a holy grail moment. And to me, lock it down, and everything will fall into place. You'll have cloud traction, you'll have ab traction, everything will happen. And they don't need to be the owner of the public cloud to be successful in what you said, John, to a good strategy. I like it. All right, theCUBE, with all the strategy for the CEO, Chuck Robbins, who's watching. Chuck, good to see you. Thanks for having us at Cisco Live. Let's do a great analysis. So I want to thank all the guests. Thanks to the crew here. Tony Day and the team, and Brendan and Brian. Great job, and all the people back home at theCUBE. Network and theCUBE, Network Operating Center in Palo Alto in Boston. This is live coverage. This is our wrap up from Barcelona, Spain. CUBE is calling it a day here at Cisco Live 2018 in Europe. Thanks for watching.