 Live from San Diego, California. It's theCUBE. Covering Cisco Live US 2019. Brought to you by Cisco and its ecosystem partners. Welcome back to theCUBE. We are rounding out day two of our coverage of Cisco Live 2019 from San Diego. I'm Lisa Martin and joining me is Dave Vellante. Dave and I are welcoming Carl Moeberg to theCUBE for the first time. Director of Product Management for Network Service Orchestration from Cisco. Welcome Carl. Thank you so much, thanks for having you guys. Welcome. We're in the DevNet zone. This area has been completely jammed, so buzzy, so full of excitement for the last two full days. We've been talking about all of the news, the announcements, but network automation is something that we've also been talking about. I was looking at some stats from the Cisco website. I think it was an infographic the other day where 95% of network management is still manual. And I think, what hit to OPEX alone does that create? Talk to us about network automation and orchestration. In 2019, what's the state of the art? Oh, that's a big topic. But let me see if we can peel some of the layers off it. I have a feeling you can. I do spend quite a bit of time with this. And I also have the pleasure of having this conversation with many, many customers. Because let me tell you, as uncomfortable as it may feel for a company like Cisco, that is actually the number one topic that customers bring to us. They trust us on so many other dimensions and terms in terms of the infrastructure that we bring. But the one thing that they really want to bring to the front is how can we help them automate their networks, right? And there's a couple of pressure points going for them. I mean, it's the obvious basic stuff that manual steps introduce an insane amount of outages and lowers the quality. But it's also preparing for what's going to come. So it's that perfect mix between unavoidable and somewhat tedious. It is, truly somewhat tedious. It's about cleaning up in front of your door, right? So they're turning to us to try to understand, and this is where it gets really interesting, what are others doing around this, right? So we get to build a very nice and interesting body of experience, working with a number of, as you can imagine, large network owners going through the motions towards network automation. Because that's observation number one, is that it's a long journey. It involves a whole lot of roles inside of the organization, and it just takes time. So it's not one of these things you can buy yourself out of, or you can, you know, hardware yourself out of. It's literally a big turning point for how they organize themselves, how they hire people, which is huge. We've even had examples of they had to rethink the interior decoration of some of their sites, because with the emergence of software people, automation experts, they don't work the same way as traditional network engineers, right? They need another type of building, and that's how it really dawns on some of our customers that, okay, we have to step back. So I would, coming back to your actual question, is that the state of the art right now is the insight, that it's a big, big, I wouldn't say revolution, but evolution towards the software centric world, and that it permeates the entire life of people that owns large networks. So that insight is actually what's on the front front. The light bulb goes off, but it's a maturity curve. It's a bell curve. It is, for sure. So do you still, I mean, I'm sure you do, you see complacency, you see fear. What's that mix look like? Right, right. Is it just tip of the spear or leaning in, or is it the fat middle is now going for it? From a vendor perspective, I am, after all, representative of a vendor. What's really unique at this place in time is that customers are open and front-loading the conversation with their problems. In many other phases of technology churn, they don't want to talk about their problems, even worse. They don't want us to remind them about their problems. They take a front. Now that's what they want to do. And they want to talk about how bad it is, right? It's almost like they're competing. Now I'll tell you how bad it is for me compared to how the others are. So that's huge because that's truly the tip of the iceberg, like you said, on the insight, that they actually have a big honking issue, and that time is against them, right? So they are reaching out to vendors wanting to talk about their problems. That's pretty unique. So I think most of the fear and most of the rationalizing why they're in a bad spot, that's actually behind them. Now it's about getting two solutions. Now it's about opening up, asking for help, sharing the problem with other vendors and other players in the field, and actually kind of almost like huddling around the problem and trying to move it forward as an industry. Why now? Is it because, you saw the hyperscalers had so much success with automation? Is it because of digital transformation? They're trying to grow global scale? They want to take cost out and shift resources? Why now? Why is it so top of mind? So not one big thing, but a certain number of incremental pressures that has been building up towards a breaking point. I'd say the one thing maybe that comes around mostly is that everybody's very excited about to see what virtualization can do for them. But virtualization assumes a certain type of ephemeral asset management and a certain type of automation that blindly assumes humans are out of the loop. So a big pressure point is to understand as long as we're doing things manual, there is no virtualization to be had or actually virtualization will just make it more complex and there are no gains to be had. So when I'm thinking about maybe the number one pressure, that's the one thing. We have to get humans out of the loop in order to be able to virtualize anything, right? Otherwise there will be no gains to be had. And also I think it's the pressure and the expectations from the customer base and they fundamentally don't understand why networking isn't as agile as workload management applications and all that kinds of things. So we're kind of inheriting the flexibility of the application world and the expectations are kind of falling back on the networking side of things. So when you talk about virtualization, I presume you're including containers in that context, right? So that has another dimension of flexibility. Yeah, so the thing, you want to spin up a container, takes optimized cases below a second and then go to the phone and call the networking team and ask for a new VLAN in the top of Rack Switch, simply won't be a good thing, right? So you want to, exactly, so that was fast, took me less than a second now, let me put a fax in to the networking team so they can go and set the connectivity up. I said no one ever, right? So, smoke signal, send up a smoke signal, they might see it. The string, phone, things. Carrier pigeons. Carrier pigeons, fly little one, fly, and eventually we will have a VLAN. So that is the thing, they expect the network to respond with the same lightning speed and not only to creating things, but moving things. Actually tearing down things and removing configurations from the network. That whole life cycle making the network look like a malleable resource in the same sense that applications now are through containerizations and other things. It's truly at the breaking point then for the network engineers. I mean they've had an uphill battle for a while anyway, but that one really took the price, right? Are there any industries in particular that you're seeing or are the first to raise their hands and say, we've got a problem? Anything that surprises you or is it pretty horizontal what you're seeing? There's one thing that I really try to follow and I'll let you in on this secret between the three of us here, of course. The communication service providers and let me spend a couple of seconds on this. Mostly the carriers' carriers. So there's a whole slew of companies that does nothing but sell bandwidth to other carriers. They don't have many end customers themselves, but they pass traffic between the cloud giants and others, right? It's paper thin margins on enormous amounts of bandwidth and there's simply no room for humans, right? It's almost like cloud economics where power is the deciding factor. How cheap you can gain, you can get power, right? It's the same thing for these people. How cheap can we produce massive bandwidth? Those guys were the first one to do things like connecting their CRM system, a sales force or whatever they're running, straight into their network, right? No humans, nothing like that, right? So that's one of my little secrets. I track what they do because they're under such extreme margin pressures. Yeah, right, because they're, the costs are coming down and the data volumes are going through the roof. So they have no room. They're probably the first true commodity player in networking, right? So they have to get everything that's not fixed, just get it out, get it off the ship, right? Just get it off the ship to win, right? So they are my little secrets. I try to track what they do because they're usually a little bit ahead. So what are they doing? So they are, again, what they're trying to do, normally in a communication service provider, for that matter, in an ambitious enterprise, you have a pretty thick stack of software, right? So at the bottom, obviously you have the packet passing things, physical or virtual, then you have orchestration, maybe then provisioning, you know? Layer after layer after layer, that has served the services companies really well over the years, right? But when you step back and look at what you actually do with commodity services, you realize that that little path through that software, you can fix with a very, very small set of functions, right? So they're literally just ripping things out and connecting, again, their CRM systems straight into their network. And you can hear the pain scream of many companies that make a whole lot of money in integration services and business services and billing and rating and charging and all that kind of stuff, right? They do just like a bare metal implementation of communication, right? So that's what they do. It turns out to be, first of all, doable. So they're showing us all that you actually don't have to. Now they have a pretty particular menu of services that they provide. It's pretty short and sweet. It's bandwidth, and it's cost per megabit. No frills. Exactly, nothing, no upselling here, but it's what it is, it is what it is. So they have it a little easier, but they're really blazing the trail and showing that this can be done with very, very limited amounts of software. I think that's what they're showing. And the second thing, you almost said it, is many, of course, enterprises are now extremely application-centric. That permeates the whole conversation, right? People think of the world in application topologies and the network supports the application topologies. So being able to have the network then lockstep and move with the applications is truly key. I know it sounds simple, but it's a big thing for many of our customers. It's an ocean. It is an ocean, and it's about making the network come alive for the application owner so it can follow in an ergonomically nice and robust fashion. That's the other really big pressure. So following people that has a strong application bias and trying to delight them as a networking person, which is by no means easy. Some of them actually don't like us much. Some of them would actually like to get rid of the network if they physically could, right? But they can't, so they have to live with it. And it's up to us then to prove that there's actually value in the network by surfacing all the cool stuff that we have to them on their home turf, so to speak. So that's the kind of the second driver here. This gold and that data that's traveling over the network. It is for sure. It's just we haven't made it real easy for them to love us. We have to improve on that. That's what we have to do. Well, Carl, thank you so much for a excited, passionate conversation with Dave and me about network service orchestration and the opportunities. And I love how you're starting to see customers the first step in any problem situation is admitting, I have a problem and you're saying that that's awesome. We thank you so much for sharing your time and your energy with us today. Thanks for having me, thanks for having me. Our pleasure. For Dave Vellante, I'm Lisa Martin. We are wrapping up day two of our coverage of Cisco Live. Join Dave, Stu Miniman and myself tomorrow as we broadcast all day, our third and final day here at Cisco Live in San Diego. Thanks for watching.