 Live from Santa Clara, California, extracting the signal from the noise. It's theCUBE, covering Nextwork 2015. Brought to you by Juniper Networks. Now your hosts, John Furrier and Stu Miniman. Okay, welcome back everyone. We are here live in Silicon Valley in the shadows of Levi's Stadium for a special CUBE presentation of Nextwork. Hashtag NXTWORK Nextwork. Juniper Networks customer summit. I'm John Furrier, the founder of Silicon Angle on my coast, Stu Miniman. And we're here with Rami Rahim, Juniper Network CEO, welcome to theCUBE. Great to see you. Thanks for having me. I'm looking for this interview of all the interviews because one, you're the chief executive officer. Two, in March, you had a customer event. Kind of a beginning, not a full summit, more of a brief and a lot of press were there. And I was really astonished. I remember tweeting the moment and I felt the vibe. I've been a big fan of Juniper, I've been following the company for many, many years and the new management. All geeks, tech guys who have built product, now leading the company and that's your role as CEO. But there was some mojo. There was a new kind of spring to your step and the company was unified, so it was cool. So I got to ask, what's it like right now? Is it that kind of vibe right now? What is the mojo at Juniper and what's some of the momentum you guys have? Well, thanks for saying that. I have now been at the company for close to 19 years. So I have really worked in many different areas. It's been an incredible journey for me throughout those years. I've learned from each and every step along the way and most importantly, I think in working at Juniper for this long and in this industry, I've developed a deep passion for the problems that Juniper solves, for the kinds of challenges our customers are facing today, for the technologies and the products that I've personally helped in developing. And that energy I think just shows in how I talk about the company and our products and our customers and our employees. And so you're right. Look, the mojo at Juniper is there. It's real, people are excited, people are happy about the innovation that we are working on right now. The product pipeline has never been better really since the beginning of the company. And it's a great time to be a Juniper now. So the bold moves that you guys have made in the past were game-changing, the control plane thing. And then there's kind of like a new game-changing thing going on, end of the client-server era. We see that out in the market today, big consolidations. We just talked with the Western Digital HGST guys yesterday. That's a big mega merger, Dell buying EMC. This kind of marks the end of a chapter of the computer industry. And Juniper has been a big player in all that. What's the big bold move right now that you guys are making? Because you're technically very relevant, great superior product, great engineering team. You've always had that kind of culture. The founder led company. What's your bold move right now? Well, you're absolutely right that there's a lot of transformation that's happening in the industry. I think that there is absolutely a place for a true pure play technology innovator in IP networks. Because the industry is moving so rapidly, you need somebody that's focused on innovation and somebody that is not going to be afraid of doing things differently. I.e. doing things with boldness. There are a number of things. I think if you look up and summarize what Juniper is doing today, it's all around transforming the economics of networking. And you do that by achieving the economical scale and performance our customers need to keep up with the insatiable appetite for network capacity. But then the other part of it is around automation. And the automation drives agility in delivering value over those networks. And it drives optimization in cost and operational costs. So everything that we're doing aligns with that strategy. Today, we announced a pretty bold move in that we're completely disaggregating our crown jewels, our operating system Junos from the underlying physical hardware. Why? Because our customers want that flexibility and we're giving it to them. So talk about the engineering aspects of what's changed because this era of shift, the shift to this new modern era, you guys all about it on stage, is not a rip and replace. It's a build on top of concept. It's a layering of new innovation. What are some of the engineering challenges that you guys have cracked the code on that you feel is relevant to share? Well, things are moving so fast today. Development cycles that last in years, even quarters are now too long. Nobody has the patience, if you will, for that kind of slow pace of innovation. So the biggest engineering challenge that we are solving as a company now is in automating ourselves, developing the infrastructure and also the behavior and how we are innovating and pumping out products in such a way that we can keep pace with that appetite, if you will, in the industry of rapid innovation. And that's exactly what we're doing. I mean, you look at our products like Contrail or Virtual MX, these are pure software products that enable us to adapt to the requirements of our customers, add features and capabilities that are very specific to use cases our customers are asking for in a matter of days, not weeks or months or years. That's the new approach to innovating and networking that has to be done for this industry today. So, Rami, you and Jonathan painted a great picture of kind of the industry transformation when it comes to networking. Transition to a software business is a pretty audacious thing. The disaggregation is a bold move. I wonder if you look at some of your peers in the marketplace that have gone private. And are you envious at all about their ability to be able to transform without kind of Wall Street all over every move of every product that they're doing? You know, when I took this role, I made sure that I'm going to have the support of my board, our investors, our customers, our employees, that I will have the levers, if you will, to operate the company in a way that makes us successful through innovation. And that's exactly what has happened. I have gotten everything that I need in terms of the support and the freedom, if you will, to make the changes that are necessary to truly innovate and you see that. We announced this year the best product portfolio since the company was born. And it's true in the Silicon we're developing, it's true in the software they're developing, and the business models that we are creating. I feel extremely confident in how we're operating as a company and the products that we're developing. So how do you think we're doing overall with kind of that transformation? It's one thing to kind of get your message in line, another thing to get your products in line, but the people that track the industry. I mean, it's ports and boxes and revenue from a very hardware centric which has certain top line and bottom line revenue. Then there's the customers, critically important. Can you talk about some of those constituencies and how you see the market and kind of moving around to your vision? Yeah, well, you're absolutely right. And I mentioned this up on stage. Usually the hardest thing to address when it comes to a transformation are the people aspects. People are used to certain behaviors, approaches, business models, and changing that doesn't happen overnight. This is an industry where the vast majority of the development and the innovation happens in software already. 85% of Juniper's resources are in software, but yet the monetization happens on a per port basis. This has to change. It won't change overnight, but it will change. And it requires a few leaders to lead, to show the path and the bold step we're taking today by disaggregating our operating system from our hardware is intended to help promote that change and to make it a reality. I truly do think, and we have set in motion right now a set of initiatives to build our infrastructure, our backend systems to make software a bigger component of our overall revenue base. And now we are complimenting that with the products like Contrail, Juno's in a disaggregated way or VirtualMX or VirtualSRX. The products are of course the most important aspects of achieving a true software business. And I feel that we're there now. We've got incredible products that can help us with this transformation. Ryan, one of the things we're hearing from your customers here on theCUBE is enabling the rapid deployment of services, network services. So in an age of real-time analytics, real-time data, DevOps in the cloud, these are table stakes now. So I want you to talk about your view of Juniper as an enabling platform because those services now plug directly into your customer's business model. What is your vision for this platform? And can you give some examples of use cases where it's worked? Yeah, the easiest way to talk about it is to provide an example. Our cloud CPE solution that we just launched is essentially a next generation approach to delivering value to enterprises. Now, the solution will be deployed by service providers. Today, when a service provider rolls out a service to an end user, an enterprise, they're doing it with value that's locked in the hardware that sits on premises. It's not flexible, it's expensive, changing or upgrading the capabilities requires truck rolls. That has got to change, that has got to be improved. Cloud CPE essentially moves to a model where you have essentially a server sitting on-prem and the services sit in virtual machines that can move from that server up into the cloud and back and done with literally a click of a button or a mouse click. That automation and the way in which services are going to be delivered not in months but literally in seconds is the way of the future. And it's the solution that Juniper is developing to. And we've already scored some pretty big wins in the industry today. I mean, CPE has always been a problem, whether you're talking about wireless or anything at the edge device, the premise equipment is a cost. They want to move to an operating model. So the benefits if I get this right is you guys can have rapid refresh of CPE functionality and economics for the customer. Yeah, today most of the cost is in operations. And you can optimize the physical infrastructure cost but only to a certain extent. If most of the cost is in the operations, what you want to do is to automate that away. And just think about it. Imagine the world we live in today requires literally people going on-site and deploying systems to deliver certain value. In the future, if that can be done with a click of a button, it's going to be far, far more advantageous from a cost but also from a revenue standpoint because of the agility they achieve in a solution like that. So talk about the customer situation now because I'm going to put my customer, pretend I'm a customer. Rami, look, I got so much going on. I have consolidating, which we've been doing for decades, as you know, we've been partner of ours. Now I'm under pressure for top-line growth. I got to get the apps out there, I got workloads to run. I got my DevOps transformation on human capital, resource management, hiring guys, trying to train them. I got so much going on. I need a partner to cross the bridge to the future with. What do you offer? Well, the best approach, what we offer is we are purely Intervair and IP networking. We develop better solutions, more scalable solutions, more agility in the products that we're offering, more of an ability to keep up with the incredible pace of demand for network capacity. But beyond all of that, the most effective way that I have found to work in an environment where the industry is transitioning so rapidly is to roll up your sleeve and to work hand-in-hand as a partner with the network operator. It's not about a lot of analysis or forming committees or- Hyped up marketing campaigns. Or hyped up marketing campaigns, it's literally rolling up your sleeves and solving a problem. And the best thing to do is start small, think big, but start small with a specific use case that you want to do and to prove it out. And I can guarantee you that the end result is probably going to be different than what you thought initially. But you have to learn by actually doing as opposed to analyzing and thinking and so on. You have to do, and our most forward-thinking customers, those that truly have the courage to take the first step in these sorts of transformational projects are engaging with us in that way and it's working very effectively. So, Rami, when you talk about having services, both on-prem and in the clouds, one of the questions comes up is, well, okay, we know how Juniper does in the carriers, service fighters, but when it comes to the public clouds, where are you having wins? You've got a broad portfolio. What solutions are you having? Is there anything either specific clouds or services that you can share a little bit of color for us? The web-scale cloud vertical is one of our most important market verticals, one where we've seen tremendous momentum, success and growth over the last several years. It's actually become a very meaningful portion of our overall revenue as a company and we've engaged very closely with our customers in this space. We have a true appreciation of the challenges that they need to solve and really what they're looking for, and I'll just summarize it, they move such a massive amount of information, either within the data center or between data centers or between the data centers that consumers of cloud services, they need cost-effective technology, they need incredible scale and performance, they also need the ability to peer into the network in real time and extract information that helps them run the network and monetize those networks, and last but not least, this is probably maybe the most important point, they need programmability. There are some incredibly smart engineers sitting at these types of customers and they have the ability and the desire to control traffic in ways that only they can do, and so providing them with the hooks, the APIs, the interfaces, deep inside your systems is something that is very important to them, something that we've become very comfortable in doing with them. Yeah, that makes great sense. I've toured some of the Equinex data centers, I see huge racks of Juniper gear there and strong presence. I'm wondering if you can give us a little more color on the disaggregation, because we kind of look at that market, as I said, you go down to the commercial space or up to the hyper scale, is it the carriers, the service fighters, where do you expect people to go to that kind of fully disaggregated space, who's kind of really engaged in, what markers can we as kind of industry watchers go to and say, okay, we should expect to see kind of the next six to 12 months, these wins or this kind of market trend continuing. Well, the web scale companies have already moved there to at least, for at least some layers of their networks. I don't expect that everybody's going to flip to this model overnight. The most important thing that we have done in this move is to send a very clear message that Juniper is absolutely comfortable competing on the merits of our software and our hardware separately. There's no lock-in. You can kick the tires on Junos by itself and compare it to the competition, same thing for our hardware. And that's a powerful message, ultimately whether they decide to buy it in aggregated fashion or not, I think that message is important. Second, the architecture, by separating software and hardware architecturally, we have the ability to move Junos from one type of platform to another internally, whether it be our own or white box, much, much more rapidly with greater agility, which helps us, helps our customers. And then to address your question, you know, I think many of our customers are dabbling in this today. Telecom operators, large enterprises, some government customers have been asking for these types of models. And you know, the best way for us and them to learn the advantages or not of this model is to actually do, is to engage, is to offer it and work together and partner together. We now have the ability to do it. How fast is it going to go in the market? It, you know, almost doesn't matter. We're in there, we're going to learn from this experience, we're going to adapt accordingly based on what our customers see. I mean, talk about SDN, that thing has been hyped up, this has been a category, but customers now see benefits there with SDN. And there's barriers obviously with SDN, legacy and or skills you mentioned earlier. What is the readiness in your mind of customers? In terms of SDN, and what do they need to do to overcome some of those barriers? You know, the early days of SDN, there was a lot of confusion, a lot of lofty claims. There were some that said that SDN means you suck all intelligence out of the boxes and you make it and put it in some central environment and you've solved all problems, that clearly doesn't work. There are some that advocated flow-based SDN architectures and found that it doesn't scale. I think we're now beyond that, reality has set in and we have achieved balance in the true advantages of SDN and the limitations of SDN and it has gone into prime time. I mean, I think actually SDN is now here. It's actually pretty awesome. It's solving real problems in the cloud in terms of automation and also in terms of micro segmentation to improve security and we're participating. Our Contrail controller is a truly special controller in terms of the adoption that it has seen, the problems that it's solving, the real world deployments that it's seeing right now completely open. We're actually increasing our development community, they're writing and they're contributing to the software base and we're just seeing that momentum that makes me very proud. Is that one of the issues right now with customers readiness, assessing readiness, assessing roadmap? Is that the core conversation? Well, some customers are already there. They've deployed it and they're reaping the benefits but as with any transformation, there will be some that are going to be ahead of others and we're working closely with the ones that are making the moves. They're evaluating us and in many cases, they're choosing us to help them with the transformation. So, Rami, on the Contrail piece, you talked about we can use any kind of northbound or southbound, somebody's hardware, somebody's software. One of the proofs in the pudding, of course, is can you get ISVs and companies to write codes and write applications? So, there are a number of solutions out there that will claim we're the open source option. Why Contrail? Why not, you know, kind of the big consortium that's out there? Yeah, yeah. I believe we have now around a million lines of code that's been submitted through the developer community. So, in terms of how truly open it is, anybody can go download it, modify it and check it in and you can look at the momentum simply by who it is that's actually innovating and contributing and the pace at which that's happening and you can also gauge its success by just some of the major wins that we have now seen with Contrail across a broad spectrum of verticals, including telecom operators, some of the software as a service providers, the larger enterprises, especially in financial services, the momentum is real and it's encouraging. Talk about your cloud strategy. I always ask all the CEOs, we talk, I think you, what's your cloud strategy? And I kind of like to leave a vanilla and open because I want to kind of see how the answer is, but I want to be more specific with you on this one because you, the networks are critical and there's always been the bottlenecks, what we always talk about on theCUBE. It's a lot of work's being done, you mentioned years of architectural work being done at Juniper and I'll see the readiness there, but now you're seeing a lot of land grabbing. Amazon's shown great success with public cloud, hybrid clouds and engineering opportunity to build those new next-generation networks, but you see also things like Cloud Foundry, Cisco just joined today and these kind of consortium groups and big data is seeing the same thing with open data, so it's kind of an open source component. I know you guys are very open source. Do you guys have a certain prescription for your cloud strategy? What is your cloud strategy? Well, cloud is a pretty broad term, but cloud is actually a direction of travel for everybody in this industry. If you're an enterprise, you're reaping the benefits of the cloud by moving your application, your data sets in either a private or a public cloud. If you're a telecom operator, you're transforming your central offices into cloud-like scale-out entities from which you're delivering services to your end user. If you're born in the cloud, like the large web-scale providers, you are building massive networks that connects the data centers together and connects them to the consumers of cloud services. All of this requires infrastructure that's scalable, that's power efficient, that's controllable, that's automated, that's secure, and we are involved in all of these, and this is why- You're an arms dealer. Well, you can say- Well, you don't have to say that. Don't answer that question. Under advisement of counsel- I appreciate you. I appreciate that. I would say that we are reaping the benefit of that and you're seeing it in the numbers. I mean, the growth in cloud infrastructure is there, but there's more than that. We're also embracing cloud as a service delivery vehicle. Take, for example, Sky Advanced Threat Protection, which we've announced now as a next-time firewall capability that leverages our deception technology for our security products. Anybody now, when this is offered later this year, can take a SRX, attach to it a cloud-based next-time firewall service that we are hosting and now offering, and you see the benefits of that because it's an instant attach, very deployable, and we're enhancing it on a continuous basis. The value of cloud is very evident in this service. It's just why your guys are so excited because you have a lot of IPs. Juniper's got a ton of IP, no actual property. It's almost like you're kind of like re-dealing the cards out again from a network perspective. I mean, network's obviously critical. Case in point, Amazon Web Services. We were at re-invent, we had theCUBE up there, we interviewed Gary Clark. Great interview, and some good commentary on the EMC Dell acquisition, which I thought was priceless, about some of the challenges there and the consolidation. But you're playing with Amazon, right? There are real things happening with Juniper. Are you kind of spreading the IP around? Is this part of the strategy? Can you expand more and give some color to? It's no, without naming specific names, we have a lot, pretty much all of the major web-scale providers that are using our technology in some way, shape, or form. I think we have cracked the code of how to work very effectively with this incredibly smart group of very talented customers that have a lot of specific requirements to what they are trying to solve in terms of the manageability, the controllability, the visibility they need inside of these networks. We just offer that, that's why we're being so successful there. So I break that down, your real customer profile really is on one end of the spectrum, highly engineering focus, a lot of white boxes, tuning, really kind of building that race car, kind of like network. And then you have kind of, I won't say general purpose, but for the lack of a better description, another customer base that wants hardened product. Did I get that right? Anything in between? Well, everybody wants hardened. I mean, hardened is part of the course. And cloud, I should say, carrier class capability, whether it's resiliency or the features or the scale, has now moved from a requirement for just the large telcos to a requirement across the board, which is why the vertical markets that we're focusing on have all embraced our technology. And then this notion of flexibility that you talk about and the ability to program, certainly it is something that is already there with our cloud customers. But as I mentioned, everybody's moving in this direction. The technologies that we develop for our cloud customers ultimately will be very much desired by all of our customers across our key verticals. So, Rami, I'm wondering if I can ask you a little bit of a personal question here. You've been with Juniper for 19 years. You've had the head job for about a year. I mean, Juniper has always had customers that kind of love the product, really passionate. What shifted for you being in the head job versus moving up through the ranks over all the years? Yeah, it's a good question. I've had many different roles. I've had the pleasure of really participating in Juniper's growth throughout the years. And I've learned from each and every step along the way. And I bring all of that to bear now in this job as CEO. It's a demanding job in terms of time, certainly, right? The number of people, and I'm one that loves to engage, that loves to get my hands dirty to talk to our customers and our partners around the world and balancing all of your stakeholders from your customers to partners to investors to the analyst community to your own employees is certainly a challenge. But that's the part that I'm figuring out. But the passion that I have for the company, our technology, our employees is so profound, if you will, that it's just a, I do all of this with great pride, if you will, and that's the thing that keeps me going. That's the thing that gives me energy. So my final question, I know we're coming up on the time on the segment is on all those lines. Another personal question. Founder-led companies thrive, especially in transformational moments where these ways of innovations could sink the boats. When you're seeing companies that do have founder-led, Larry Ellison, Michael Dell's making his moves, you know, you're a founder, very technical, you've worked with for years. I'm not quite a founder. I was one of the first few employees. Well, Pradeep is a founder-loved, involved, he's not passive, that's for sure. No, not at all. But you're the CEO, but he's your wingman, right? So what's it like working with him? And as a founder-led company, how would you describe that dynamic to customers who are looking to make these partnership choices for the next 10 to 20, 30 years? Yeah, sorry, I thought you said you're a founder. I'm not a founder, I was one of the first few employees, but yes, Juniper's founder is absolutely in the company. My true partner to me throughout the years, a real personal friend of mine. Pradeep is somebody that has an almost uncanny ability to take any problem of arbitrary complexity and distill it down to first principles and solve it in ways that are truly impressive, I mean, really impressive. He did that with our very first product and he continues to do that until today. He is a five-year guy. His ability to predict the future and to determine where this industry is going is incredible. And I rely on him to do just that. He's also just a great person to talk to when I'm making tough decisions and it's just absolutely incredible to have him around. I think there's a podcast of me interviewing him from 2009 that's still in there. I'm going to have to find it and share it in the crowd chat. But thanks so much for coming on and sharing your insight and vision around Juniper and some of the things here. Final, final question. What's the focus of this event? Because customers aren't here. The ones that are watching, the ones we'll watch. What's this event all about here at Juniper's customer summit? This event is all about innovation that helps you cope with a very rapidly transitioning industry. So we're here to talk to them about those innovations, about the solutions, the bold moves that Juniper is taking and the way in which we can work with them effectively to navigate this transformation. The CEO of Juniper Network is here inside theCUBE for a special presentation here in Silicon Valley. Next work, we'll be right back with more live coverage after this start break.