 From theCUBE Studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. Hello everyone, this is Dave Vellante with theCUBE and welcome to this conversation. With me is Anil Singhal, who is the CEO of NetScout. Anil, it's a pleasure to speak with you today. Thanks so much for coming on the program. Thank you. So I want to talk a little bit about NetScout. We're kind of at theCUBE, we're sort of enamored by founder led companies. I mean, you started NetScout right around the same time that I entered the tech business. And you remember back then, it was an industry dominated by IBM monolithic systems with a norm in the form of mainframes, you had mini computers, PCs and things like PC, local area networks, they were in their infancy. In fact, most of the PCs, as you remember, they didn't even have hard disks in them. So I want to start with what was it that you saw 35 years ago that led you to start NetScout and at the time, did you even imagine that you'd be creating a company with a billion dollars worth of revenue and a much larger market cap? Well, certainly I had not imagined where we'll be right now. And we didn't need, we didn't know that this will be the outcome where, I mean, we just happened to be at the right place at the right time, but we did have a vision. Some of you had the feeling we're enamored by networking. And we thought that network will be the business. In fact, our business card in 91 said network is the business. And so somehow we got that right. And we said, these things will be connected and overall we found that with the IP convergence, first in the enterprise in 90s and then internet and carriers moving from analog to digital. We call talk about digital transformation in last few years, but this has been going on for the last 30 years. And as we, what we were doing become relevant to more and more people over time. For example, right now even power companies use our product, okay, and we have IoT devices coming in. So basically what we do is we said, we are going to provide visibility through looking at the traffic, through the lens and the vantage point of the network. A lot of people think we're just doing network monitoring or had been doing that, but actually we use the network as a vantage point, which is other people are not doing. Most of the people have accidental data from devices as the basis of visibility. And that turned out to be very successful. But at some point, different points in our life, we became responsible for the market, not just for Netsco. And that changed the shape of the company and what we did and how we drove the innovation. Yeah, and I want to get into some of that, but I'm still really enamored of and fascinated by the beginnings. I mean, I worked for a founder led chairman, a guy named Pat McGovern who built a media empire. He had these 10 sort of core principles he used to test us on them. We'd carry him around a little note card, things that today still serve us, stay close to the customer, keep the corporate staff lean, promote from within, respect for individuals, the things that are drilled into your head. I wonder what are the principles that, sometimes they become dogma, but they're good dogma. I don't mean that as a pejorative. What are the things that you built your business on, the principles that you're sort of most proud of? Well, I think there are five, in fact, we call some of these 10 and so five tenants we have, we call this high ambition leadership, which is more than just about making money. And just like the US is the leader of the free world, we have a responsibility beyond US, same way, Netscott has a responsibility beyond our own company and revenue and our stakeholders. So with that in mind, we have these five things which I think I wouldn't have been able to articulate that 20 years ago, like this and that, but they were always there. So first is this guardians of the connected world, which you see it on our website. Guardians care about their asset, it's not just about money, we are going to solve problems in the connected world, which nobody else is able to solve or have the passion or have the resources and willpower to do it. So that's the overall theme of the company, guardians of the connected world. Connected world is changing, new problems are coming. Our goal is there are pros and cons of every new thing. Our goal is to remove all the cons so you can enjoy the pros. So that's guardian of the connected world. Then our mission is accelerate digital transformation, meaning remove the roadblocks. People are looking at enablers, but there are barriers also. How do you remove the barriers for our customer so they can improve the fruits of digital transformation? For example, going to the cloud allows you to outsource some of our steps, especially in these time of agility and dependency, you can cut your cost, but that comes with the price that you lose control. So our product brings the control back. So now you can enjoy the pros and the cons and I call it sometimes, how do you change the wheels of your car while driving? Well, if you change the four wheels, then car is going to fall down. But how do you put one wheel in the cloud? Well, that's what our vision is, visibility without border. We'll give you the same information, which is the third part. So we have this tagline for the company and then we have the mission, accelerating digital transformation. Our vision is visibility without border. When you run your application, no matter where you run, we'll give you the same piece of information that allows the people to make this transparent, transparent migration, that's migration transparent from a monitoring and visibility point of view. Then the fourth area is about the technology. We call it smart data technology. The whole world is talking about artificial intelligence, machine learning, but what are you going to learn? Is your AI really authentic or is it truly artificial? And that comes from smart data. Data is the oil of that new industry. That's the oil and people are not focusing on that. They're saying, I have lots of data, but you don't have the data which we have. In the past, we said, we are not going to share the data with third parties. So in recently, we have changed that. You say, yeah, there is a price for that, we'll do that. So we are branding ourselves as a smart data company where the whole industry is talking about smart analytics. And I said, we make smart people smarter. And lastly, the value system of net score is called lean but not mean, okay? And anybody can get lean. If you get fat, you can get to operation, but how do you do lean decision making? So you never have to be in mean. Like net score never had a layoff in last 35 years. We have ups and downs. Our stock has gone to $3 and that's gone to $40. But company continue to invest. And that's why we have this reputation. We have this Tom here or Steve here. A 10 year at net score is 10, 15 years minimum, even in sales. And people don't realize the power of that because some of our customers tell us, hey, your salespeople are around longer than our employees. And that how it builds a franchise of loyalty in the customer base. We underestimate that, this continuity part. So there are many aspects of what is the definition of not being mean? That lean and mean is sort of, people are very proud of that. And I think you can be lean without being mean. And how do you become lean is don't hire when in good times, unless you need them. The reason people are able to do it is because they think I can fire anytime. So let's build up the fact. So there are a lot of decision making we do around this. And that's what I talk about in the book. It's not about technology. And this is, I would say it's just one of the five but it's probably one of the most important ones. And it's one of the biggest differentiator of that stuff. Well, it's obviously served you well. I mean, no layoffs in 35 years. The retention metric is very impressive. I mean, again, I go back to my experience. I was at IDG for 15 years. My passion was always to start my own company but I didn't want to leave because it was such a great culture. And it seems like it created something similar. You know, I talked to CIOs and CTOs a lot too about, you know, it's always people process technology. And of course, we want to talk about tech because we love talking about tech but they always tell me, look, tech comes and goes. It's the processes that you put in place, the culture that you have in place. We could deal with the tech and it sounds like you've created a similar dynamic. And I think back, again, when you started there were proprietary networks. It was IBM, SNA, DEC network. Every mini computer had its own network. Then, you know, TCP, IP came in the whole world it changed and exploded. But yet, you said guardians of the connected world. And that's kind of been your focus from really day one. You know, I loved what you said about the business. The network is the business. Remember, the network is the computer that Scott McNeely popularized. So really kind of a similar dynamic there. So it seems, Anil, that that framework that you just laid out, those core principles have actually allowed you to ebb, to flow, to deal with stock prices and still retain people for a very long periods of time. Maybe one more thing to add there is that on the Dean but when you talk about generalities we don't look any different. Like everyone cares about happy customers. They care about happy employees and they care about happy stakeholders, shareholders. Everyone, including us. But what's the order and what's, where do you start? So we start with employees. We say if they're happy employees they create happy customers. And then because of that, they buy more stuff and we create happy shareholders. Whereas if you start with happy shareholders you may not get happy employees. And so all I'm saying is that everyone probably believes in what we are saying or what I'm saying, but how they implement it and then they're like really walking the talk is the most important part. Well I think you're right. I mean I think the financials is a byproduct of happy employees which drive happy customers. If you take care of employees and customers then good things will happen. If you start with trying to micromanage the finances. Of course we all attempted to do that. I wonder if we could talk a little bit about, so just to bring it forward a little bit we're talking about how NetScout has essentially from a cultural standpoint been able to withstand the ups, the downs. I mean you've seen since over 35 years a lot of the downturns and the tech softness, the tech bubbles, the great recession. Obviously now we're in the middle of the pandemic. And I wonder if you could talk to that specifically. So the data that we have from our survey partner ETR, Enterprise Technology Research shows that before the pandemic around 16% of employees worked from home. We're talking about truly remote workers not a couple days a week. And when we talk to CIOs today they tell us it's well over 70% now but they fully expect that when the world comes back to the new abnormal I call it that number's gonna, that 16% is gonna double to, more than double to 34%. So it puts stress on the network. It changes the direction of the traffic. It changes the security emphasis. Maybe you could talk a little bit about that just in terms of how you are helping your customers respond specifically. So I always talk about like, is this a new problem or is the bad problem getting worse? And so I put it in that bad problem getting worse. So if you make the bad to zero then you can't multiply it. So I think it's highlighting some of the problems which are already there are being highlighted by a lot of people are telling, are you seeing more attacks? No, we are becoming more conscious of the attack we always had. We have more time. By the way hackers have more time too because they're also sitting at home doing things. So what I'm saying, what I feel is that two parts, one is that I think people should not in the new normal comes or new abnormal then I think people should not make people work from home for the wrong reason. Certain people are saying, oh I can save money that's the wrong reason. But if it's efficient, we should do that. So we are doing some interesting things for home users to feel how they can feel that they're really working from the office. And so yeah, there are some new challenges on how we monitor because I mean, the user complaints now about a performance to IT because they can't get their work. They don't know whether it's our network or is the ISP or is their Wi-Fi network. So we try to provide the root cause analysis as quickly as possible, which we call mean time to know. And one of the things I didn't mention earlier about what is the uniqueness of our technology when we use the network vantage point to drive visibility is almost like the blood test. When you have a problem, if you tell the doctor, I say, hey, what is my problem? And they start looking at all kinds of things. It's going to take forever. But if I take the blood test, I'll be able to do the, I will know what the next thing to do. So in a way, we are doing the blood test of the user experience, security problems. And when we do that, we can come up with some very unique things. So we think that we'll be moving on into other areas of the visibility is the means to an end. The end could be performance management, could be visibility, troubleshooting and could be security forensic. Like blood test can be used for DNA evidence also. And so we have all the technology. So we are moving on as we move to the home user. We are applying that our techniques, not just for service assurance or end user experience monitoring, but also for security forensic. And one example I give you the, I always talk about, and you'll see that in my book, being different before being better, first be different, get the earplugs out of the audience before you tell the story. And you don't do that even though we are very big, we are very small compared to a lot of companies in the industry, compared to big players like Cisco, IBM and all those. So the new thing which we are looking at in security is, the security industry is catching the act. We are going to catch the actors. If I can get into the, what they were doing before the act, before they did the ransomware, what were they doing? Well, that requires continuous monitoring of the traffic. And that's what we do. So when we do catch the actor catching the thief, not what they're stealing, then you are preventing tomorrow's attack. And that's basically the innovation part of net scout, which we have been pushing for, but we somehow decided not to apply that to security because we had enough problems to be solved as guardians of the connected world from a monitoring point of view. And so those are some of the things we'll be applying as we move forward. And I feel that those are equally applicable before the pandemic and after the pandemic. And it's just polarized more because more people are working from home. It's interesting what you're saying about the blood test. That's a great analogy because it kind of eliminates the guesswork and removes the opaqueness. It goes right to sort of the hard of the matter you call it mean time to know. And it's interesting too to look at productivity. I mentioned some of the survey work. When we talk to organizations, they say to us that actually productivity has gone up since the pandemic. And my response to that is, yeah, no kidding. Cause people are working 15 hour days. You can't keep that up. And the silent killer of productivity is the knot has having an elongated mean time to know and having to guess. And so my premise is that this productivity gain, if in fact it exists, is not sustainable because we're doing it on the backs of our employees and it's going to burn them out. I'm not sure whether it's real also. See, there are both sides. It's not possible, practical as you are saying, because for example, you are a salesperson and you are working six, seven hours and you are traveling six hours. You can't be on the phone for 12 hours with the customer right now. So I don't know can they be productive. There are both sides going, some people are overworked. And so definition of productivity itself is in question and how do you measure that? And so that's what we'll have to look. I think basically what I'm saying is we should do it. Whatever we do after the pandemic is over about how many people work from home should be based on your business model, your expectation, not just based on cost. And a lot of people are looking at once again, oh, this is another cost saving exercise. And that should not be the reason. That's a wrong reason because then they're measuring the productivity in terms of reduced cost, not everything else. Plus, at least in Netscov is a company which I mean, every meeting I go to, I use chalkboard. And it's very, very hard for our company. Like somebody like IBM where most of the people were their 50 officers, they were the most easy transition. It's not easy for Netscov. And so right now we focus on safety but we'll need to come up with a good hybrid model later on and different people will set up differently. But what we do will be relevant in all cases. Yeah, but I think you're making a good point that it's not some kind of mandate to drive cost down. Or we saw last decade, there were a couple of prominent companies that were mandating actually working in the office, eliminating work from home. So obviously in the wrong side of history, they didn't know a pandemic was coming. But so how will you make that decision? Will you, is it really a discussion case by case with the employees or what's the framework for you guys to decide that? Well, I think so right now our focus is on safety. So it's completely option. In fact, we don't even allow more than 20% and that's only in the headquarter. Other places, we have less than 5% people coming. And only essential workers, manufacturing and all those. So right now it's completely optional. But my personal preference when there is no risk is people should come to work like they were coming before. We like to make it as close as possible to the old normal. But that's not going to be the case for other companies because they are bigger in size. They have other things at play. But certainly we are not going to do it or because it's cheaper for net start because when people work from home. And so we will see how it goes. I think it will be a transition. But I can see we're going back to new normal in a year from now. If the things start winding down in six months within a year or so, we should be getting back to some normalcy. But that doesn't mean it's going to be true for our customers. So for a product point of view, we are doing several things so we can help the customer through this transition. And by the way, one other thing I wanted to mention earlier, when we talk about the blood test, how does it relate to guardians of the connected world? If you believe in that, what did the industry do? They made sure needles were not painful. That blood test was reliable. You could, there is no hygiene issues or no issues like that. Cost has come down. As a guardian of the connected world, because we do that, that's what we have been doing. We are removing the barriers to a great idea. But a lot of other companies gave up and then they have different strategy and some of them are successful, some are not. So as a guardian of the connected world, our goal is to continue to make this practical use. Imagine if blood test industry has not done that, where we'll be right now. And that's what I meant by guardian of the connected world. This is not easy to do and sustain that for a period of 20, 30 years. But we have been able to do that and we get a lot of challenges from naysayers. Oh, this will not work at high speed. When I started, it was 10 megabit ethernet. Now we have 100 gig ethernet. And we are still able to handle it. And nobody thought in those days that you can even get to 100 meg. People were questioning us. But what happens is other things keep working in the market. Intel is making improvements. A lot of people are doing work to solve the problem and we leverage that. And that's how we are able to sort of sustain this guardian of the connected world team. Yeah, the other key aspect of the guardian of the connected world, again, not to overdo the blood test analogy, but the time to results is very important if you have an issue and you have to wait weeks for the results and your doctor, you can't get a hold of her. And so you're successfully dealing with that in real time or near real time. And that to me is critical. Yeah, very important point, Doug. Thanks for reminding us. I forgot today that's one of the things I say all the time. Hey, this is one of the big things we have done and blood test industry has done is how long take to get results. Nowadays you can get results done in like two hours. Doctors can get a report in couple of hours. That's what we have done. That's like mean time to know which we talked about with our technology. I think we're basically all the issues you can't even breathe without doing something on the network. So if you're listening to the traffic or hearing that, what the conversation, you can form an independent view of what is happening. And that could be the, that's the smart data which then becomes the basis of analytics, whether analytics in the security space or not. And so that's, and that one thing we have not changed is technique. Now the outcomes are different. What are we doing with the visibility is different. You keep changing the number of customers and the type of customers are different. But ultimately that part interestingly has not changed. I wonder if I could ask you, I'd like to ask CEOs, especially those that are technologists and business leaders, their thoughts on the cloud. I mean, our data shows that the public cloud is growing in the 30% plus range annually. The big three cloud, public cloud players now account this year probably for close to $75 billion in revenue, maybe even a little bit more. What do you see driving this growth? What does it mean for your customers? Well, I think so. First of all, we have a big announcement coming out called smart cloud monitoring to address this. But what's the meaning of that? I think what our customers are looking for is that it's not all or nothing. It's not that everything is in the cloud or everything is in the program. It could be private cloud, public cloud, colos, the way VPNs are laid out. So they want to make sure that they can use our technology to do this triage and analytics, regardless of what decision they make. And even five years from now, there'll be enough non-cloud stuff, okay? So that's what we are striving to do. We want to, that's what is visibility without water. And when they do that, they say that helps them decide what's the best mode of operation for them for what application. Moving blindly to the cloud is a problem. Not going into that area is also a problem. But I think the two new things have happened recently. I would say one is sort of because of this crisis. People don't want to own hospitality industry, okay? I mean, they're obviously having big issues with them. But if they own a lot of the infrastructure, they could have turned off some of that. And so that's driving more movement to the cloud. But I think there is not other choices available. About a year or two ago, I think affordable pricing model, multiple choices, not just AWS and technology maturing where you can, you can really implement and have a good experience. I think those have become big enablers. And so I think now it is possible to get to massive movement to the cloud, but then they want to make sure that I'm not, I'm outsourcing my problem, but I'm not also outsourcing my vision to the cloud vendors because previously the way in the IT industry, a lot of problems were solved is what's called the war rule. Let's get everyone who reports to me and everyone who reported to you. But now everyone doesn't report to you. So how do you maintain the control? When I complain to my CIO, hey, my Webex is slow or Office 365 is slow. And how does it resolve that problem? Because they cannot tell me. Oh, we outsource them. So I can't tell you that well, we should not have outsourced them to the cloud. So how do you drive this collaboration between the providers and the consumers? Is going to be key to accelerating this transformation because otherwise the cost of, Kpex cost of reduction of moving to the cloud will be offsetted by the increase in OpEx and customer satisfaction for the customer. And so if we can help deal with one of the parts, industry is already doing the other big part of making cloud work, I think then we'll have the best chance of success. Yeah, and of course the security, it has implications on the security model. We were talking earlier about that as an opportunity, people sometimes think, oh yeah, I put my data in the cloud. I'm good on security, but there's a shared responsibility. Again, we talked about different traffic patterns. You've got work from home going on. So, and it's interesting when you juxtapose the sort of industry narrative on security, which is harder and harder and harder. And you hear some of the cloud players say, hey, the state of security is really good. But when you talk to CISOs, you know, they'll talk about the lack of talent, the challenges they have, the tools creep, the fact that they spend more, but the adversaries just keep getting stronger and stronger and stronger. It's a really serious problem. I mean, maybe we close there. I mean, kind of how do you see it from your vantage point? Let's look at the blood test. So I look at, if you don't, the technique which we are talking about, at least in the dimension of security monitoring, then you are going to do a lot of little things. Because you're doing little things, you'll want to be to a tool creep. And because of that, you have a talent issue. And I think if we can make the right stuff work, then you will not have this talent issue. And I feel that we are always looking, solving yesterday's problem, okay? Because we are not watching what led to the attack. We are just dealing with the attack as an incident, a security issue. So I think continuous monitoring of deviation, traffic allows you to look at the deviation of the north. So signature based security is a big portion, but how do you know the signature of tomorrow? And well, you know that because you know the normal, but only way you know normal is if you have been monitoring what was going on, not for a specific event, but deviation from normal, that's what our approach is going to be, anomalous behavior detection through our smart data. And then you apply machine learning and AI algorithms to that. I think that's could be Nirvana. And, but we don't have all the smart people for analytics, but we can feed our data to those smart people. And that's something we are going to bring up. And the reason I feel it will be successful because this idea has been widely successful for net stock in the non-security space. Yeah, I think you're bringing up another point that I've talked about a lot, which is the industry has gone from sort of an industry of products to platforms and now ecosystems is really driving a lot of the innovation. It's exactly what you're talking about. Feeding data to other partners, data partners. And now you start thinking about IoT and the edge and machines talking to machines. I mean, I put video cameras up in my house to make my environment more secure, but of course I'm scared to death that those things can get hacked. It's a very complicated situation and the power of many is going to trump the resources of one. And so I'm glad you brought that out. Maybe give us your final thoughts, Anil. It really has been a pleasure talking to you. Well, I think the, one of the things people have asked me is why didn't you start another company, especially Silicon Valley? I said, we did start many companies but they all happened to be called Netscot. Netscot 1.0, 2.0, 3.0, actually we are into the 4.0. I sometimes say, you know, George Foreman's four sons, they're all called George Foreman. So it's like, and so every time we do something different and now we are in the process of launching Netscot 5.0. It was partly because maybe accelerated because of what's going on with the pandemic because there are some new challenges which we didn't hear for. And we are entering the security space. So I'm very excited about repeating what we did in the traditional monitoring space, service assurance space was for enterprise and carriers to the security space. And people will question us, how come it took so long? Well, we were solving other problems which were more interesting than this for Netscot. And now we're going to bring that technology and all the antennas, guardian of the connected world, smart data to the security space. And also, I mean, people around for a long time, we're also building the next generation of leaders at Netscot and so we have our hands full over the next two, three years in building the next generation of Netscot, solving some of the problems which industry is facing without abandoning our tenants and the culture. And if we can do that, I think then we'll be going to the next level in terms of Netscot branding and leadership. Well, given the guiding principles that you shared with us earlier, the fundamental technology that you have around visibility, I think that's served you very well. And I think there's no shortage of opportunity for Netscot, so Neil, thanks so much for sharing your story and coming on theCUBE. Good, thank you. All right, and thank you for watching everybody. This is Dave Vellante for theCUBE. We'll see you next time.