 From New York, it's the Cube, covering Riverbed Disrupt. Brought to you by Riverbed. Now, here are your hosts, Dave Vellante and Stu Miniman. Welcome back to New York City, everybody. This is the Cube, the worldwide leader in live tech coverage. Barat Badranaath is here, the Vice President of Marketing Solutions at Riverbed Barat. Welcome to the Cube, we're here to wrap up the day. The party's going, wine's flowin'. How's the day been? Oh, thank you for having me. It's been a great day. You've seen the energy and the energy is still continuing. You see it from our customers. Our customers really love what we bring to the market, so it's been great. Well, so, we've been going all day, kind of unpacking the new product announcements, the innovations. It's kind of interesting to see the evolution of Riverbed from a company that's highly focused on when optimization to one that's really solving some really gnarly cloud problems, visibility in the network, application performance management. Talk a little bit about, from a marketing standpoint, how you guys are positioning for that broader opportunity. Yeah, I think from a marketing perspective, it's a great company to be, right? Primarily because the customers who know Riverbed love Riverbed. Our only challenge is how do you get it in front of more customers and how do you get them, the existing customers, to see more of our product value. You saw some of the announcements today. We brought some of our products together, packaged them better, so it's easier for customers to consume them in terms of the internet-only branch, the cloud-ready branch essentials, the advanced and the advanced plus. That helps them understand that these products are not disparate products, they actually go together. So when you think about SD-WAN, you should also be thinking about WAN optimization as applicable. When you're thinking about any connectivity, you should be thinking about visibility. So you can troubleshoot problems faster, but also ensure that the application performance is delivered. Stu, I'm going to get your take. So you've obviously followed the networking business for a long time. We've heard the keynotes today, interviewed a number of guests. What are your thoughts on the networking business, how Riverbed has been able to sort of carve out fairly successful niche in WAN optimization and their prospects going forward? Yeah, so we've been talking, Dave, networking has really thrived, and the networking vendors have thrived on the complexity that's out there. And I totally agree with the kind of the sentiments we heard from a number of our guests that it's ready for some change. As Steve DuPlessis said, actually, people won't make a change until they're forced to, and you just can't move fast enough. If you throw in cloud, you throw in mobile, you look at where your users are, you look at where your customers are. If I'm managing individual devices, there's no way I can get my applications and reach my customers the way I need to. So I need a bit of a rewrite, and it's some complex problems to have, and if we talk to kind of skating to the puck, Riverbed's been doing this for a long time as to kind of applications over a wide area, and this whole SD WAN seems to be like, if Riverbed had wrote the justification to create a new market, they would have written SD WAN. So it headed a good point. They've pulled together pieces of their portfolio, they've done some acquisitions, real focus, worked with some really good partner ecosystem, and I think they've got a great opportunity here to be right at the cusp of an exciting wave in networking. So we talked about, we heard from the keynotes this morning, somebody invoked the Andreessen comment about softwares eating the world, and then Benioff made a comment a while back, said there'll be more SaaS companies coming out of non-tech companies and there will be tech companies. So you talk and think about your customers using the cloud, building software, putting data to work, that puts Riverbed in a pretty interesting situation, and also probably a pretty competitive one. I think a lot of guys are going after it. So what gives you confidence brought that you guys are on the right path and can thrive the way you have in the initial markets of Riverbed? Yeah, so I think you hit it on the head. It's all about the software, right? So all our products are software only. Today we announced the virtual edge steel fusion, steel fusion virtual edge product that brings every one of our products as deliverable in the software only function, form fashion. You also start putting this and working with our partnership such as Amazon, AWS or with Azure and Google. You start seeing the possibilities where if your job is to ensure end user experience is optimal, you have to take Riverbed and we are there in the form factor that the customers are asking for. We're also there when you're looking at the big cloud players as well as SaaS vendors partnering with them so that they can deliver the optimal customer experience there. So what do you think happens to the hardware business? Everybody's talking about software, software, software. Does it just become totally commoditized or there's still maybe pockets? Can you still make money in hardware or what's the future of hardware? When people talk about hardware and software, hardware has always had intelligence. Now all we are bringing is bringing that intelligence into the software so you can find the best provider of hardware without having, it becomes commoditized in a big way whether it's in a cloud vendor or in a white box within your location. You have the choice. So it makes it programmable and people will pay for that programmability, right? So that's the play and then, I mean what happens to margins in that business? They go actually go up if you succeed in achieving software to find, not that you're going to predict. But just conceptually, maybe it's a better question for Stu because that would be a forward looking statement for a company who might be public someday but if you have a comment, I'd be interested. No, from my perspective, I think it's somewhat shifting of the margins but more importantly it gives customers the choice, right? At the end of the day, this shift allows customers better agility more than anything else and that's what they want to do and this shift helps them get there. So at the end of the day, the customer benefits, whether how the margins shifts and whether it's a pocket shift depends on what business you're in and we see almost all vendors moving in that direction but still margins are being made. The reality is just to your point, Bharata. I mean, you guys have both worked at storage companies who took a Seagate disk drive and marked it up 10 times and sold it. Why were companies like NetApp and EMC able to do that? It's because they had software in the controller that was proprietary and delivered unique value whether it was copy services or win optimization or whatever it was, people will continue to pay for that value whether it's in software or hardware. Right, and from our perspective, we're giving customers the choice, right? So if you want one optimization, for example, or our SD-WAN or any of our products, Steel Fusion, you can buy it either as a virtual edition in which case you can just deploy it in the cloud or deploy it as a SaaS version. It gives you the choice so they can decide what is the best option and again, it helps us to give the customer the choice and we'll see what they pick on. So, Steel, we talk about cloud all the time. Obviously, the folks at Riverbed sort of acknowledged it today. It really started when Amazon introduced, they gave the date, it was like March of 2006, I think it was, and that changed the industry. We didn't really realize at the time, although some of us were sort of early on saying this is going to really be significant. Where are we, Steel? We used to talk about innings. Is it game over for infrastructure as a service or Furrier says it's just starting or where are we? Maybe not just starting, but early innings he's saying. Yeah, I think we had a year ago, we said, I think the first game's over, but it's a double header that's going on here because in the big public cloud markets, we know who the horses are. I mean, it's Amazon, it's Azure, and Google is coming up there. Doesn't mean that IBM doesn't have a big piece they could play, but I still think they look much more like a host or a server provider than they do some of the hyper scale guys. Still important, IBM has lots of applications. To me, what's been exciting today is, if you're not talking about cloud and you're not talking about the applications, what are you doing in the infrastructure space? Because we talked about software eating the world, it's going to kill your margins. Riverbed has from day one been focused on the application and they have a nice message as to how they work with and tie into the cloud providers so you can understand where they're doing and their core IP from the way in optimization ties straight into what they're doing going forward. So it's been a good day for me. I've learned a lot here and understand how, as Jerry told us, he sees visibility as to how he's going to take the company towards like $5 billion. So back to your, I mean cloud, it's still pretty early. I'm sure you saw Pat Gelsinger's comments in his keynote that said five years from now is, he actually, it was like, on June 5th, five years from now on this day of the month and on this hour is when we will surpass 50% of workloads will be in public cloud. Kind of making a joke at it, but we know public cloud, it's growing, it's still relatively small compared to all of IT. Today from Wikibon's numbers, two thirds of public cloud is SaaS today, infrastructure as a service, $10 billion from both Amazon and Azure kind of in that ballpark. That's still really small compared to if you take Cisco, Dell, HPE, Oracle and line them up against it, but they're growing, sustained it, the 40 to 70 to 80% year over year and we've still got many years of steep growth for public cloud and companies need to figure out how to fit into that from the vendor side and customers need to understand how to adopt it. Well, it's interesting to hear you, Seth, on theCUBE today saying, our point of view is there aren't going to be a lot of us around, at least at the infrastructure as a service level because you have to have the scale. The interesting part of that is cloud services and services have always been fragmented and distributed geographically, but from an economic standpoint, you could say, well, he's probably right. There probably aren't going to be a lot of these guys who are not withstanding SaaS, there'll be tons of SaaS players. Does it matter to Riverbed? I mean, if there are a lot or a few, you could still sell your services through Azure, AWS and Google. I think the more the merrier. The more the merrier because the more clouds you have, you have to connect those clouds more. So we play a big role there. Yes, but if Microsoft and Amazon are the last standing, they're going to have a zillion data centers and clouds around, right? But okay. But from Riverbed's point of view, it really doesn't matter, right? At the end of the day, the customer is going to bring some unique combination of clouds, whether they have two to choose from or 200 or 2000, doesn't matter. But if their focus is on how they marry those clouds together to provide their customers with the right solution and we can play a part in it, we all win, right? And I think SaaS is the big winner. Yeah. Well, the big tailwind for you guys because as the back venue offset, more SaaS companies coming out of non-tech companies. I think that's a clear change. Everybody's a SaaS company. Everybody's writing and publishing APIs. That's a great trend for you guys, isn't it? Yeah, and SaaS, to be fair, makes Riverbed even more important in the environment because typically when you start sizing your SaaS and start deploying your SaaS applications to your end users, you usually use two or three pilot locations where you check for performance, check for user experience and all that good stuff. And then you roll it out globally and immediately you notice that the response times you get in San Francisco, for example, are not the same as you get in southern part of Africa and other parts of the globe. But that's where Riverbed comes into play in a pretty substantial fashion, right? We can guarantee that, but we can also offer the visibility for the IT administrators to know what customers are getting or their customers are getting at different parts of the world. Well, in applications or infrastructure rather, there's always been subservient to applications. I guess database notwithstanding, if you count database as infrastructure, but even database is shifting to SaaS. You can see Larry Ellison's acquisition of NetSuite, accelerating the move to SaaS. SaaS is the new control point. Infrastructure is the plumbing, right? And if the water is not flowing through the pipes, then there's a problem, but if it is, nobody wants to pay attention to it. And that's really what your goal is to make the infrastructure invisible, right? Right, absolutely. And I think our role and the direction we are heading in, we want to make the platform, the application performance platform, as extensible as possible. So when people are deploying their apps, whether it's in the SaaS and the Private Data Center, if they have a platform they can deploy or attach along with it and not worry about everything else, their implementations get a lot easier and faster. So how does the competition respond to all this trend? I mean, it just goes highly entrenched as 60, 70% of the market for years. Riverbed's shown that you can compete in the way on optimization, more than compete. We've got half the market, so dominant player there. But how does Cisco respond to this? You got NSX coming at them. You got... I saw, I mean... You know, Jay Shree. Cisco has so many pieces. I mean, I've always said, Cisco's not one company, they're really 100. And they've got individual pieces. What they've had challenges doing is what, you know, Riverbed's looking to do here, which is to take a bunch of different pieces, pull them together, build a whole solution. Because that's what customers need. They need simplicity. That takes a lot of work. And, you know, Cisco makes a lot of money off putting all those pieces together in the field and allowing their channel to make money off of it and keep their people CCIE trained. So, absolutely, you know, we talked about in the intro, Dave, you know, it's not a billion dollar market yet. And I don't know if there's anybody that's even a hundred million dollars in SD-WAN. But I know Cisco's looking at it. You know, they've made acquisitions around this space. They've got a number of products. I'm sure as it gets a little bit bigger, they'll come on full bore. They'll probably claim leadership in the space, just like every market leader does. But you're saying integration for them is harder because of the piece parts. Why is it easier for Riverbed? Just because they're smaller? Yeah, I think a lot of it is that they're smaller. It can be more nimble. We don't have a legacy. You're private, Dave. Yeah, we're private. And we don't have a legacy. They can write their own narrative. We can. And we don't have a legacy business to protect, right? So, for us, we can now take this transformation that's happening in the data center all the way up to the branch. We don't have to worry about them buying or managing existing routers that they have, which is why this becomes a game changer, right? It's bringing networking to the cloud era, if you will, where you can now deploy on a click of a button at a remote location and not have to worry about local expertise entering command line interface code. So, I think from that perspective, we don't have a legacy or baggage to worry about. Right, and the whole flash storage trend has been great for network companies who can solve problems because it used to be the spinning disk was the bottleneck. It didn't matter what else. It couldn't get the data off the disk. But now with flash, it's really shifted the bottleneck, hasn't it? Yeah, absolutely. Network, if network's now the bottleneck, that can be a challenge. And we've talked about it a few times. The Yard cloud, U-Out mobile, moving data's tough. I mean, David Fleurer's been teaching me for years about how tough this is. So, if I don't need to move it, I don't want to, but you've got your systems of record and your system of engagement, and I need to get some pieces of data all over the place. IoT is a whole other ball of wax as to what it's going to have at the edge and what I'm going to need to feedback. So, lots of opportunity for solutions that can try to fight the speed of light, like Riverbeth been doing for a year. Well, it's interesting. You don't want to move data, but you have to move data sometimes. You guys are all about moving data as efficiently as possible. And the digital transformation, digital revolution, whatever you want to call it, it's all about data. Digital is data. And the shape of the curve is, it's getting even beyond exponential, right? In terms of data growth. We always talk about the data growth, but it's beyond, well beyond Moore's law. And that's a great trend for you. Yeah, absolutely. I think users are demanding different experiences on their mobile phone, whatever we used to use our laptops for in the past, maybe even three, four years ago, we expect all that functionality and more to be available on our mobile devices, which means data has to move through different networks, depending on where you are, you have that flexibility to still get you that user experience, right? So, you mentioned earlier, data, you don't want to move it as much as possible. The users are asking that data to move to their choice of location, which makes it a very tricky problem for IT to solve, and Riverbed is here to help with that. All right, how about disrupt? Where are you taking this? Where's it going? What should we expect going forward the next couple of years? So, as you rightfully started, this is our first big event for this year. We'd probably see some more events next year coming through where we want to bring in and increase our presence in the market. So, SD-WAN is very exciting technology, but so is our SteelCentral and our user experience products from eternity that we applied. So, you're going to see Riverbed make a lot more noise around this. Great. Well, Bharat, thanks very much for coming on theCUBE. Thank you for having us at Disrupt. We look forward to tracking Riverbed and watching the progress. I'm personally very excited. I love Stu, the new private equity model, where private equity realizes that the VC shouldn't have all the fun getting these giant returns, that there's more than just suckin' cash that you can use debt as a lever judiciously, as we heard from Jerry, if you acquire companies with a creative EBITDA and you can add value for your shareholders, I'm really excited to see the next chapter of Riverbed as it's expanded into these new markets. So, again, thanks for having us and really appreciate it. Thank you. Okay, so thanks for watching everybody. Let's see, this is a wrap next week. Actually, right now in the West Coast, the HIO data center event is going on. We're at IBM Edge next week, Oracle Open World also next week. And then the fall schedule, check out SiliconANGLE TV, SiliconANGLE.tv for the upcoming events. Check out wikibon.com for all the research. SiliconANGLE.com for all the news. Thanks to Patrick, Alex, Leonard, Kristen, Nicole for all the live blogging. Appreciate all the tweets. That's a wrap. We'll see you next time. This is theCUBE.