 Welcome back everyone to theCUBE's live coverage from theCUBE stage here in Barcelona, Spain for MWC24, formerly Mobile World Congress. I'm John Furrier with Dave Vellante and my co-host extracting the signal from the noise here at this great show, telecom, cloud, data all happening at once. We've got two great guests from NetScout who are going to unpack the future of telco, cloud and security. We've got Bruce Kelly, known as BK. BK, good to see you. Yeah, good afternoon. Darren Anastee who's the CTO for security. Bruce is the SVP and CTO guys. Thanks for coming on. You guys are our subject matter experts obviously in security, cloud and telco. BK, your history, entrepreneur go back to the, well actually the roots to the deck. You know a lot about open systems, networks, entrepreneur and NetScout. You're pioneering a lot of work in telco going back years. And you got a great product right now but the telcos are moving faster than they've ever done before. And guess what? The territory is cloud, large scale and AI new for the telcos but they have to move. Yes, absolutely. So it's a very interesting time if you kind of look, they have a dilemma. They saturated the mobile phone market so they have their existing infrastructure, existing network, 4G but now to grow they need to get into 5G and get at the enterprise. And when you look at those two architectures of those worlds it's very disruptive and it's because of what you mentioned which is, hey when you went from 3G to 4G it was a physical network, not cell traffic, it just got faster. Now when you go 4G to 5G it's a game changer because all the wheels of the car are off. You're going cloud native, everything's being encrypted. So there's new barriers that come in and so we've been working very closely with the ecosystems that are involved in building out 5G and it's complicated. It's complexity and it's because of all this skills gap. You not only have to know voice and data, you now got to know cloud and all these things. It's not so simple. Well let's lay out the couple of key areas that I want to cover here because I mentioned a few things. 5G is going to help the telcos make money with the enterprise, that's one. You got mobility across public private, private 5G and public 5G. Then you got the whole infrastructure scale. The data opportunity involves. So now you have a lot of touch points. So let's lay out the landscape of what we want to talk about here. What are the core areas that you guys want to talk about and unpack here? So I think that the core areas, it goes back to basics when you look at 5G and you move it into the cloud, all of a sudden you go blind. What does that mean? That means you got microservices talking to each other inside the cloud, east-west. Well you're not seeing that traffic. So for observability, that's critical. You've got gaps. If you're trying to secure, which if you look at telcos, they're typically five nines, right? From the old voice day. Now they're going to be selling to banks, hospitals, right? 5G slicing when it's eventually here. And they're going to have to guarantee it. So observability is going to be a must. They're going to have to be able to see, improve the SLAs. At the same time, they're going to have to offer clean slices to these banks and enterprises. So they're going to have to secure and assure it. And the challenges we've seen in the cloud native world is that we had to work with the ecosystems. It wasn't like one player could come in. So we started working with the Ericsons, the Nokia's, the new players that are born in the cloud, Mavinears and so on, just to make sure that we had access to the communications east-west in an encrypted world. So once you get beyond that, we spent two and a half years on that and we've removed those barriers. You now get into, I can secure and assure, right? You have the foundation laid. And so that's been a challenge. So that opens up what benefit? More market opportunity for the telcos and usability by the enterprise. Is that right? Yeah, and the enterprise is going to want guarantees. They're not going to just sign up for 5G and say, well, I hope it works. They're going to hold them to a certain latency, a certain throughput that's promised, the service they're signing up for, and they're going to want to guarantee it all the time. Right? It's not humans on a phone where you drop a call and you go, oh, I'll just recall. These are banks, these are hospitals. They could be life or death. It could be loss of revenue. It could be brand reputation. So the telcos are going to have to go back to the 5G9s with 5G slicing. Yeah, and they don't control the environments outside their own networks. Yes, yes. And so Darren, maybe you want to talk a little bit about the importance of not just assuring it and having visibility or observability, but the security angle. Yes, I mean, one of the key things that we've realized recently is the dataset that we build for observability to help our customers assure performance and all of those kinds of things within their networks, within the services that they deliver to their enterprises. That dataset can also drive a lot of different security value propositions. And as Bruce mentioned, Enterprise wants these new services to be secure, whether it's LAN-WAN extension, whether it's OT, ICS, any of these things, there needs to be security built into these services. So we kind of realized earlier on that we can't be everything to everybody. The dataset can be everything to everybody, but we can't be everything to everybody. So for example, we announced a partnership yesterday with Palo Alto, where we're going to feed some of our datasets into their solution so that they can make more use of them to enrich their capability and the overall service that the mobile operator can offer to the enterprise as they roll out private 5G, sliced 5G, higher value services, things like that. But then there's also things that we've seen now around the subscriber side of what the operators are having to deal with. If you look at where the security pillar in NetScout came from, our product set there has always been very focused in wireline, securing wireline ISPs, giving visibility within wireline ISP networks. Mobile operators, especially as fixed wireless access has rolled out in the subscriber space, which is a revenue stream, a key revenue stream. They're seeing a lot of the same problems that wireline ISPs have seen over the years. So we've been looking at moving our capability from the wireline side into the mobile side, using some of the same technology that Bruce has been talking about, leveraging that same dataset to drive those new capabilities. So we're kind of looking at the subscriber services, the high value services, and how we use the data as fuel, really, to drive the use cases, to drive the value for the mobile network operator. I'm moving back up a little bit and explain to the audience a little bit about NetScout. NetScout, you said, I can't do everything. You're not, I mean, you're in security, but you're not security pure play, necessarily. You're talking about observability. How should people think about what you are? Everybody wants to put companies in buckets, and I think you're a difficult company to do that because you're so specialized, but you have data that feeds so many parts of the industry. So explain a little bit how you think we should understand your company. So in simple terms, think of us as the smart data company. We sit on the largest networks in the world. All the tier ones were in 90% of them. We got very high definition visibility into the subscriber, the type of device they're on, the cell tower they're off of, we track all of that. And so think of us as the fuel needed for three key areas. The first area is where we started, which is NetOps, which is service assurance. And now you got the second area, SecOps, where you're saying, hey, I got a secure one, sure. But what we haven't talked about, which is critical when you go in connected world with 5G, is that it's going to be machine, so you're going to have to get into AIOps, which is automation, AI and ML, to really be in control of this. So when you look at the observability space, think of NetScout as a smart data company, but now we can play into the ecosystems with that smart data in those three buckets. Service Assurance, NetOps, SecOps, which Darren is covering, but now AIOps. And inside these telcos, they have their own big data groups, AIOps groups, so the ecosystem there would be, hey, we got this great data that they can leverage and maybe they're monetizing. It's not always about just troubleshooting and securing, which could be like a tax, they want to monetize this data, it's very valuable. And so they need to protect that too. Yes, so explain that. So SecurOps, so a telco would say, okay, we're going to guarantee you this service level, we're going to charge you X, give you Y, and we're going to make sure we can monitor that. And our margin is that Delta, you actually preserve that margin so that they don't have to over provision. That would be an example, correct? Correct. It's also a value add. Yeah, so. Yeah, please. You know, if you look at it the way the mobile operators are rolling out private 5G now, sliced 5G in some cases, they're offering a kind of vanilla service to a degree. What they're trying to do is make more money from their expertise in delivering the capability. So they want to be layering on top of that vanilla service security capability. They want to be layering on top of it service assurance capability so that they can guarantee to that enterprise that they are getting what they need. And that becomes hugely important when you start trying to manage risk as an enterprise because if it's land-wann extension, that's one side of things. If it's an industrial control process or autonomous public transport, smart environments, there are very different levels of risk there where you really need that built-in capability that uses data from within the mobile network and the kind of the threat detection capabilities that we expect in those spaces. So how's the Palo Alto deal work? What's that all about? Is that a go-to-market deal? Is Palo Alto adding value on top of your data? Explain how everybody wins there. I could take that. So think of Palo Alto as not really being mobile aware. They don't understand the subscriber. They understand an IP address. They don't understand a handset as an iPhone or a Samsung. So when you look at smart data, that's what we have. So we got this very rich data set with a very large market presence that can start to play into the ecosystem. Think of NetScout like in the security as detection. Think of Palo Alto as mitigation. So we can say, hey, you know, you should block this subscriber or you should block this cell tower. You can't just shut off good traffic, right? So that's the revenue generating. You're enabling them to have a better security product. Correct, yes. Okay, so, and I'll get this right now. I'm going to try to connect the dots in real time here. You have a great presence and you're tapping the networks of the telcos. That has great subscriber metadata. Correct. Their problem is that you have now disparate environments like cloud, which is growing with microservices and encryption, which is traffic now over encrypted, encrypted lines, which is standard. That's causing an observability problem, which means that the software that everyone's getting VC money for ain't working. I'm putting it bluntly. Yes. So now the problem is, how do you make it work? And you're saying that's what you guys are doing because you're the mobile side of the piece of the puzzle. Yeah, we give them mobility intelligence, mobility dataset. They're very good at blocking and things like that mitigation. So just think of detection and mitigation. And then what I would say as a differentiator would be, if I go to CSPX and they say, hey, I'm signing up a bank and I can give you clean slices, secure slices, that's a value that maybe differentiates that carrier's slices from another, right? So you're helping the telecos make more money. Yeah, yeah, yeah. And you're giving the ecosystem protection. Yeah, the traditional five nines that they always, you know, you're a connector. You know, almost like a layer between the two worlds. Service creation and monetization is the thing in the operators at the moment. They're all looking for new ways of getting services out there, monetizing datasets, monetizing their expertise, fundamentally. Yeah, so how do you, what BK described earlier is like two separate capex, you know, Yeah. Tronches that have to go in. So that's why Darren's point is, I mean, monetization is everything for these guys. Yeah, they got to lower the cost of running the networks, but they got to make money on top. I mean, it's trillions that they're putting in. And if you look at the coverage that we do today, just to give a little bit of depth, we sit truly end to end. We sit on all the links, N1, N2, N3. So when we look at a subscriber, we're looking at them end to end in the network, even from the air interface in. And so that dataset is pretty powerful when you want to get into automated, dark data centers, hopefully in the future, right? The dataset is going to enable that. We've been talking about that for a while. But so what's the secret sauce in your tech? Explain that. So the secret sauce is, we've been doing this for over 35 years, right? And we were on stock trading floors, which are sub-second. And if I think of that, I look at 5G, they're just getting there with low latency, the banks have been doing that, but computers trading against computers, not humans, right? With the stock market. And we were monitoring all the Wall Street trading floors. That's where we started. And so now we look at 5G, it's the same movie all over again, right? But it's playing to the enterprise. And so, yeah. And they have real-time needs. Yeah, so our secret sauce is real-time, right? Very granular data. We were watching stock trades, now we're watching business transactions in a mobile network. And so it gives them complete observability end-to-end. They know the customer experience. You can't do the can-you-hear-me-now thing with 5G. That's right. That's right. Sorry, transaction dropped. And machines not going to call and complain. Yeah, right. About to buy that flight. Oops. Yeah, yeah. So online e-commerce. I mean, we're all going digital, right? So, all right, so back to the cloud. So cloud's been a big part of this show. Those guys are coming in. Hyperscales are adopting a lot of AI right now. So AI's been a big story. How do you see the AI becoming an accelerant for your business model? Obviously you guys are doing something completely different. I'm sure AI is going to help you because you got data too. A lot of data here with systems that don't, that need to be used. What's the AI angle for you? What are the advantages we have and we've already implemented and it's running in live networks and we'll GA it pretty soon is that we've got a ton of domain knowledge from 2G all the way up to 5G. So when you say AI, it's like a buzzword. What we're blending is domain knowledge with AI. We use AI as a tool. So think about like a cop of the building a house. He had a hammer and then he got a power drill. That's not the only tool you need to build the house. You need other tools. So when I look at the space with AI, there's a lot of hype. And so our approach is different. We understand voice networks. We understand video. And so when you blend those two together, you can start to automate true root cause in the observability space, for example. What are some of the big implementation changes you're seeing right now? Obviously with 5G, there's a lot of talk about hybrid implementations, public, private, private 5G. Everyone's smoking that big time right now and saying, hey, a lot of hype in private 5G. How real is private 5G? What are some of the points starting to look like? And where do you see the puck going to use the Hockey analogy? Yep. So I think 5G, when you kind of look at the enterprise, you can have in a box, simple private 5G like you're talking about, or it could just be a slice, right? Just depends on the use case, right? Each industry is different. And so I think that 5G is slowing down right now. They're looking for the killer app. So there's all this hype around 5G and it's going to deliver all these things, but the killer app hasn't been found yet. The application developers need to come along in the banking industry, the healthcare industry, and all these things. They'll talk about gaming. Well, well, gamers want to pay, right? So I still think they've got to figure out how to monetize, right? And so the jury's out. A telco challenge. A telco challenge. What's slowing down? You're saying the investment is slowing down? Yeah. The investment's slowing down because they're under a lot of price pressure. Killer app's not there. They're definitely going. Killer app is not there. Fixed wireless access is successful. So you're not digging up streets. And so there's different initiatives at different times where you're investing. And so this is going to be a journey. Let's say it's like the CEOs on day one in the keynotes were saying they have a $200 billion shortfall. These are European telcos. $200 billion CapEx shortfall. Of course they're trying to negotiate to be able to consolidate and get a better deal. But yeah, that's... You don't have to be a rock of science to figure out what happens next. Fixed wireless is a good thing. Okay, that's positive. Check. So we're evolutionary, right? So it's still... But now the developer angle is interesting. We've been observing here at this show not a lot of discussion about developers. This is the chicken and the egg, the carp before the horse. You got to get the infrastructure down. Okay, fix what? Check. 5G. Now the applications are going to come from banks and enterprises. Guess what? We don't want anything that's not secure or drops where it's not reliable. So this seems to be what you keep repeating. We're at a point now where there's a reliability problem. There's a serviceability problem. There's an observability problem. And that's the bottleneck. That happens. Then the experimentation on the app side will kick in. Where's that going to come from? Is it the cloud ecosystems? I mean, we've been asking this. GSMA announced open APIs and okay, that's cool. Is it... Open gateway? I've been saying, you know, before you had a funny word for it, COTS commercial off to self software. Before that, everybody developed their own apps. Is that what's going to happen inside of banks? Or is it going to be that cloud ecosystem where guys, you know, AWS created such a frenzy of application developers, Microsoft of course, Google? What are your thoughts on that? It's been interesting because I've watched the whole history of this over time where the telco was going to open up and you could get a geolocation, all that and never really happened, right? So one of the things that I look at but it's further out is that when you look at NetScout's angle, smart data. So I'll just give you an analogy, what we did in the banking world and what I think can happen in the 5G world with enterprises. So in the banking world, you've got computers trading against computers. So they'll just hook up to three carriers. It's AT&T Verizon and on a given day, it's the speed of the trade that they care about. So what we were was the feedback loop to say, AT&T is faster than Verizon today, send the trade down that way. So the app developer could leverage that information and beat the competition, right? Now when I look at 5G, the telco's network, the last mile has been a blind spot for the app developer. You could, instead of showing the physical infrastructure, you could show a logical view of that that they could, like the banking, leverage that. So they could be APIs for the app developer that comes along and maybe this is a differentiating service of a CSP that says, hey, I just opened up that last mile and maybe you're doing a gaming experience and I can give you a feedback loop. It's not about troubleshooting, it's about a better customer experience with that application. So I think APIs is the answer. Who gives you those APIs, we'll see, right? Whether it's the standards or not. But I think the world is going towards automation, APIs, and they'll come from somewhere. They'll leverage the low latency, they'll leverage this throughput, but it will take time. BK, if you had a magic wand and you could just wave it right now, what would you say? What would you want the wish to be? For the telcos and for the enterprises, what would be the ideal dream scenario? The ideal dream scenario is we get to 5G slicing. I think there's a lot of hype. I would say to people, hey, it's three to five years away, they thought I was crazy. And that's got, we went and implemented it all, but it's in the labs and you don't have the devices. So I look at the market needs to mature. You've got the cloud migration going on. It's like all the wheels of the car are off. 5G slicing for the people who don't know what it is. Explain what is real quick and why is that different than just using 5G? Fixed wireless. Yeah, so think of, I go to the carrier and it's really multi-tenancy. You know, it's the way I look at it. You're taking the mobile infrastructure and you're sharing it. So it's basically building you virtual networks over the mobile infrastructure. So I can come along and be Coke and say, well, Coke, I'm going to sell you a slice. So you're using the shared network. You don't, you think you have your own network, your own virtual network, and you're going to get a guarantee of certain latency or throughput that you need, right? So that's all slicing is doing. It's carving up that physical infrastructure. It's another network. Yeah, it's just another network. Like B lands where with Ethernet, you now can do on the mobile infrastructure. That's simple. And it's attractive because I'm not digging up streets, running fiber expense, right? It's all wireless, right? Simple. And so it's going to allow agility. Like think of a manufacturing floor. You don't have unions, moving things around. It's, you just, you can quickly change, quickly adapt, quickly compete. Yeah, and that, Darren? Yeah, it kind of brought, yeah. So I'm completely with what Bruce said because the key thing that this does is we bring out more sliced services and they become more scoped and more defined. Is it broadens the ecosystems that we can use our data sets in fundamentally? And that means the app developers get an advantage in terms of understanding locality, understanding the individual that's using something and all of those kinds of things. But the operators also get much more of an ability to monetize those data sets into those ecosystems and into those new use cases. Well, I got to ask the final question as we wrap up here. Since you just laid out the secret sauce on the big problem and all the competitions watching, they're going to replicate and steal your idea and say, oh, they just identified the big market problem. I'm going to go do slicing, I'm going to create virtual networks and thanks guys for the tip. What's the, how do you keep this from, what's the difference between you guys and the competition? What's the competition look like and what's your differentiator? How does NetScout provide that? Because, I mean, the telco's got to be motivated. Yeah. If that's happening, the competition might come in. So how do you guys differentiate from, say, an alternative? Or is there an alternative? One of the biggest things is, it's easy to say, but when you've got to go do it and we've already done this, so we've spent 20 years on the largest networks in the world and it's all about scalability. And so you can come up, if you're a startup and you can win the product, you'll spend the next five, 10 years like we had to, just trying to scale to a Verizon network or an AT&T, or a reliant-sized network. That's not easy. It takes a small army. So we've accomplished that. We've got scalability, we watch 100 million subs. You've got to come to scale in both the technology trajectory, business trajectory. We've got the history of 3G, 4G, 5G, and we deal with multi-generational networks. 4G's not going away, right? It's, so they got to support the oldie in the new. You speak telco. Yeah, you speak telco. Yeah, and I think it's ecosystems, so we'll go to Darren, but I think it's, we're not going to go do it alone. These ecosystems, and you got to figure out where you fit when you ask the question, hey, what's NetScout's role? We know we're the fuel, the smart data for, SecOps, DevOps, and others, but there's other players like Palo Alto or like Ericsson or- You're a service provider with data. Yeah. For telco data too. I think the key thing for me is that we understand the ecosystems and the requirements on both the enterprise and the service provider side because we've got a long history of working with both large enterprise and the mobile operators and the wireline operators. So we can pull those three things together to help create something that's a lot better integrated. Great, great stuff guys. Really appreciate your time here. We're going to have to unpack this back at the studios, but final 30 seconds left, each of you, tell us about what's going on at MWC. What do you think of the show? What's the top story? Give a quick 30 seconds each on MWC. I'll let you go first. So for me, it's busier than it has been in the previous couple of years. We seem to be back to where we were pre-COVID. I know personally I've had back-to-back meetings for the first couple of days and that's going to continue, so. You look good. You look like you're not tired at all. I'm only actually 25, so I don't. No. You're joking. I'm joking. I know you're joking. So yeah, lots of AI, lots of buzz around, new ways of using data, lots of things like that. So really interesting this year. Awesome. DK? Yeah, similar for me. I came in for two days because I was skeptical how well it was being tended and I think it's very well attended. And so we'll be back with a bigger booth next year. We actually didn't do a booth this year because we were just wondering if it's really back. It's worth the investment and it clearly is. I think it's, yeah. It clearly is. And the big buzz to me is all around AI, right? It's about automation. And in 5G. It's good. It's a good, the world's spun in your backyard now. It's on your doorstep waiting for your value proposition. Another growth vector for you. Yeah, exactly. All right guys, thanks so much for sharing. Thanks for having us. Really great conversation. As the fixed wireless expands, more opportunity, more bandwidth. I mean, I wired my home with fiber optic. What did I do that for? More wireless, more bandwidth. But slicing is going to be key in the enterprise and the monetization of telcos. You keep live coverage here in Barcelona. Stay with us for more after this short break.