 Live from Santa Clara in the heart of Silicon Valley, it's theCUBE, covering Juniper Nextwork 2016, brought to you by Juniper. Now, here are your hosts, John Furrier and Stu Miniman. Okay, we're back here live at Silicon Valley with Raheem Raheem. Raheem Raheem, who's the CEO of Juniper Networks. Here live with theCUBE, I'm John Furrier with Stu Miniman. Welcome back, good to see you. It's great to be here, thank you. Long day, big event, good morning keynote here. You guys are kicking off. The big news about security, but also digital cohesion. I said data cohesion earlier, but that's ultimately data too, but talk about the vision, because this is an extension of last year's conversation with all these services, the fabric of the network, now providing the data in security. Talk about what we mean. We've gone from disaggregation to cohesion. There's cohesion, there you go. Well, it has been an exciting day, so thanks for the opportunity to talk a little bit about this vision. I find myself honestly in awe at the pace of change of innovation that's happening all around us, and I find it super exciting to participate, to be in this world today with this technology adding value in our lives, but also to participate in helping it make it happen. Digital cohesion is about this next era of innovation that essentially talks about the coming together of different discrete point services so that a mega service provider can actually offer really compelling, lifestyle enhancing services that truly are amazing. And I used an example in education, children's education, right, where somebody is going to come and pull together things like augmented reality, gamification, learning curriculum together to provide a truly immersive learning experience for our children. And I even provided an example of imagine a child that's in a supermarket, puts on a pair of augmented reality glasses and is presented with a game to build a balanced meal for their family for $25. It's been proven that this kind of immersive teaching can be more effective than that of a classroom or a textbook. This is the driver, though, that we've seen the shift almost reverse the way it used to be in technology where the apps have forced the change down the networks or where the action is. So you have enablement, packets still move around networks, has been invisible for a while, but now you're starting to see that next generation set of examples like virtual reality, augmented reality. How do you do that? It's really hard. At the same time, you get security problems from whether it's foreign actors. What is the key thing going on right now? Is it the bringing together a cohesive services or is it certain parts of the stack? Can you just share some insight into how it all happens? So this coming together of applications in this vision of digital cohesion is just an example of how fast things are changing and how important it is for technology players like Juniper and like our peers in the industry to continue to innovate. Because at the end of the day, all innovation in technology happens as a result of progress in three basic building blocks of compute storage and networking. And while we have seen tremendous gains, thousands of percent in the improvement of performance of these building blocks historically, we are up against some pretty significant barriers going forward. Barriers like the coming to the end of Moore's Law. Barriers like trust as we exchange information between users and applications. Barriers like interoperability at every layer of networking, at the IP layer, at the optical layer and at higher layers where different application providers are going to need to work effectively together to offer these compelling mega services in the future. The IoT market is happening in real time too. And let's go back down to your example about this cohesion. It's interesting, I want to give you thoughts on this. The two big mega trends that we're seeing, certainly in science is genome and DNA sequencing that's on the medical side, which talks about compute, autonomous vehicles. This is kind of a Silicon Valley growth area, AI, machine learning, and then the IoT market, as Wikibon just put out a report, personal IoT, home IoT, government IoT, health IoT, small business IoT, office IoT and industrial IoT. So there's a zillion different now categorical human societal pieces where, again, packets are moving across the networks, but it's now impacting real life, whether it's science on the medical side and then whether you're driving a car, it's software. Yes. How do we make that work as real time is the key? All this is going to, the big aha moment for most people. It's, there is so much excitement around IoT and I think it is founded. I mean, there is so much value to be reaped by so many different stakeholders from this vision of IoT. At its core, it's about connecting billions of devices in meaningful ways, but there's so much more to it. The infrastructure for IoT, I believe, is going to be cloud native. It's not just about IP connectivity. The infrastructure and the services for IoT are going to be delivered from highly distributed cloud environments. This is a place where Juniper believes we can absolutely innovate today. And so for example, one of the most prevalent use cases of our SDN controller, Contrail today, is in developing the distributed telco cloud infrastructure that enables a whole slew of services, IoT being just one of many. And I can say that one of the services that we have seen go into production already is in connected car and the other one is in the industrial area. So it's happening today. There are first early deployments, but this is only the beginning of what is going to be a huge market and an opportunity for Juniper. Now that brings up the security question because IoT is an increased surface area. You've got people walking around with Fitbits, they're accessing the networks. Now the security announcement today, how does that play in because you guys still have to enable the new functionality and provide a secure, trusted environment? IoT is not going to go anywhere if there isn't trust at the end of the day. And you're absolutely right that with the pervasive nature of devices and the connectivity between those devices, you're essentially creating more opportunities for bad guys to tap into and to exploit and to do bad things to networks, to data, to users. And you have to rethink your security posture when it comes to IoT or your security architecture. And we outlined a vision a while back, a year and a half ago Juniper called the Software Defined Secure Network Vision. And this is a vision in which it can't just be about where the firewalls happen to be in the network that where all the security action is. It's just not enough. Every element in the network ultimately needs to participate in creating the most effective security posture overall, meaning that you're going to be tapping into information that's flowing through the network and use that information to determine if there are threats. And then on top of that, when there are threats to put in place a security policy to stop attacks where it makes the most sense to stop it. So you think of the future of networks as being not just about connectivity but being a secure fabric. And we are now going to, it's no longer going to be a vision because before the end of this year, we're going to have the first phase of that where our switching products will move from just switching to also being able to block attacks based on a common security policy framework. Rami, last year we spent a lot of time talking about the switch of hardware to software and the implications that has as to how you're tracked and everything like that. Great to hear the progress you've made. Congratulations. Very much a software strategy that we here laid out here. People that watch Juniper as a public company, what can you say about kind of the shifts of software and services and what that means for how we should track Juniper? Yeah, the way in which we are delivering value to our customers is evolving. There's no doubt about it. The traditional approach is about essentially shipping a box that sits in a crate that has all of the very different elements inside it. The forwarding, the control, the services, the management, that world is changing where the value is going to essentially explode into piece parts and you're seeing it already. Our SDN controller is now a separate, discreet piece of software and the intellectual property associated with our contrail controller is not just about the software itself. It's in the know-how that Juniper has in helping our customers deploy a truly automated SDN network and helping them shift to what is sort of current mode of operation to new mode of operation and that comes in the form of professional services. So that's a huge part of our strategy. The services is now sitting in the cloud through virtual network functions. We're offering virtual routers and virtual security not just as a product that can be deployed in a private cloud environment but off of the public cloud marketplace. So there is no doubt a big shift that's happening. We're embracing it, we're using it as an opportunity and we've in fact put a stake in the ground that by 2019, 45% of our revenue as a company will come from the combination of software and services. You spent a bunch of time in the keynote talking about automation and you said, it's easy to say, it's hard to do, something we've been trying in this industry to do for a long time. You also said things are changing faster than ever but certain people push back and say, well, if you take any individual person, they're probably not ready to change. How are you helping customers through this transformation and bringing them along? Yeah, so I'm on record as saying automation is the next big thing in networking. I believe that is the case and the most important reason why automation is necessary is that too many IT professionals today are bogged down in just keeping the lights on, in managing legacy infrastructure and that is going to slow us down from gaining these skill sets, the insights, the capacity to take advantage of all of these new technology innovations that are upon us and so automation is essentially this essential tool that will free up the capacity that will help us in embracing these new techniques. Also goes back to how we help our customers to get there is not just about the technology, it's increasingly about the services that we wrap around that technology. We are seeing that already in our orchestration software, in our virtual network functions, in our SDN software where we are seeing a large professional services attach rate that's happening where the experience that Juniper has gained in working effectively with a variety of customers becomes extremely valuable for the next customer that's ready to make this transformation. There was a great line in kind of the opening video and said your customers don't go out to build networks. What you want to do in partnership is build something amazing together. So I guess going forward, the question is, is Juniper a networking company? Do you have to change the way we think about Juniper overall? Yeah, Juniper is going through a transformation just as the industry is going through a transformation but I still think of us as a pure play IP and security network innovator. That said, what we enable is for our customers to build way more than just a network. You know, what keeps us going, what keeps us energized, what keeps us motivated as a team, as a Juniper team, is this understanding that so much of the innovation around us depends on the work that we do. We have a very important mission that we serve in this industry. At the end of the day, the internet itself which we have helped to create is probably the greatest platform for innovation that the world has ever seen. It's a network, I mean it's not going away, it's kind of like storage. So it's going to be more storage for the data. This is a good point. The definition of the network changes. So you mentioned the culture of the people. If automation can free them up, they can now work on things that they're being asked to. So the question to you is on the security announcement today, what we've been hearing on theCUBE and also in the industry at other events is the security data, the events, networks have events that go on all the time. Packets moving around, is where the security action is. So from a personnel standpoint, I'd imagine your customers want to free up from the racking and stacking, provisioning, managing ports and doing all the network stuff to automating that kind of, I won't say mundane, but basic stuff that can be automated away and focusing in on and being a contributor to thwarting attacks. That's exactly right. It's now the command center. That's exactly right. We call this concept somewhat humorously self-driving networks, but there's a lot of truth to it. In fact, there are a lot of parallels. Today in the automotive industry, we have automatic transmission, we have automatic steering. We have a bunch of different things that we have automated to facilitate the act of driving, but the act of driving still happens. In networking, we have a variety of different automation techniques that we've also employed to make running networks easier, but networks are not yet self-running completely, and that's the sort of bold statement and mission that we've outlined. We think about the self-driving cars with autonomous vehicles. The first generation is going to be fleets and well-defined paths, aka networks. That's right. So they're defined, well-defined and structured, but you guys are now taking to the home level. I want to comment on up the stack as you guys play in more of a software world, which makes total sense. You're unbundling the IP intellectual property and putting out in the networks. How are you guys integrating with other parts of the stack because malware was discussed today? That could be a software approach, a lot of spearfishing going on. How are you guys interacting with apps either on-prem or on the cloud to bring that data to the benefit of identifying stuff that's maybe outside the network or your purview? Yeah, yeah. So far, even in the domain of software, our primary focus is on the infrastructure of the cloud and in the management, automation, and simplification of running a cloud network. That in and of itself adds tremendous value to anybody that is deploying applications and workloads in the cloud. Security plays a fundamentally important problem for anybody that is moving applications and workloads to the cloud because if you ask anybody, the first thing that comes to mind when they talk about what is holding them back from going all in on either public or private cloud, it is trust. And so the stack, the software stack we're developing is very much tied around the virtualization of our security products, the creation of trust in a public cloud environment and in a private cloud environment that enables our customers to truly embrace this very important cloud transformation. Final question is how has the transformation of this business and the industry impacted Juniper Networks in terms of the business model? Are you guys seeing some specific changes? Can you take a minute to explain to the folks how the business is changing and how you guys tend to seize on these new opportunities? Well, the biggest driver of our business today is in this cloud transformation. What does that mean specifically? We're seeing tremendous strength and momentum in our native cloud business. I mean, selling the infrastructure, the tools, the software to our cloud provider customers that are dealing with an insatiable appetite for network capacity, for their customers accessing their services. We're also now engaging very heavily with an eye to be true leaders in what is the telco cloud transformation. So as telcos evolve their networks to what are essentially a highly distributed cloud network, I think we are at the forefront of being able to deploy these telco clouds and to become a leader in the future of telco cloud. We're already seeing tremendous momentum with our SDN software and our infrastructure. Last but not least is hybrid cloud. And again there, that's been a big driver of our business today. That's where the real strength in the business is. Rami, final, final question for you. As you look out, give us some predictions. Cube's here talking to you at Nextwork 2017. What will change in the industry? Let's see, public cloud is here to stay and will only grow in importance. Hybrid cloud is not going away anytime soon. Hybrid cloud is going to be an extremely important architectural decision by many of our customers. Network function virtualization and the distributed telco cloud will go into really meaningful production networks next year. Security will be just as hot a topic next year as it is this year, if not more important. A lot of headroom and security, that's for sure. Congratulations, Rami. Thanks for spending some time on the Cube. Appreciate it. Congratulations on a great event and thanks for sharing your insight. Thank you very much. I appreciate it. We're here live in Silicon Valley. We'll be back with more. I'm John Furrier with Stu Miniman. We'll be right back with more after this short break.