 Live from Barcelona, Spain. It's theCUBE, covering Cisco Live 2018. Brought to you by Cisco, Veeam, and theCUBE's ecosystem partners. Hello everyone, welcome to a special CUBE presentation here in Barcelona, Spain. We're live at Cisco Live in Europe. I'm John Furrier with my co-student admin, head analyst for networking and for Wikibon. Stu, we're kicking off Cisco Live. In Barcelona, it's the European show to the main North America show in the U.S. But really kicking off 2018 for Cisco and some stark changes to Cisco's positioning. Really, they've always been innovative, but you're starting to see what they're thinking in terms of cloud, multi-cloud, IoT, and the role of the network and the networking industry. Two different things. Again, we're going to break that down. Day one of two days of wall-to-wall coverage. Again, I'm John Furrier with theCUBE. Stu, I got to get your take. Yesterday was kind of a set-up day. Everyone's coming in for these conferences. Big story was the women connected women's conference with DevNet and across Cisco. Great turnout, great energy, and then today the keynote with Rowan who's up on stage for Chuck Robbins who did not make the trip. Really kind of laying out the vision for Cisco. Your take so far on Cisco, DevNet, the women's conference and the keynote. Yeah, so John, first of all, I know we're excited to be here. So it's first time we've had theCUBE at one of the Cisco Live events. We've done plenty of shows with Cisco, tons of Cisco people in the alumni database. It's actually second time I've done Cisco Live. The last time was 2009. My description in 2009 was you had network engineers that were in their wiring closets or somewhere in a dark dungeon. They kind of crawled out, got their CCIE recertification, got a couple of free beers and t-shirts and then kind of went back home after they did some networking. It's a very different vibe here. My question coming in to this show is how much is Cisco a software company? You used to, you talked about Chuck Robbins isn't here, but Chuck and John Chambers before him used to, they talked about the software innovation and then they pull a chip out of their pocket and say, we spent a billion dollars innovating on this chip. Now, what was nice here in the keynote this morning is a lot of talk about the future. Software is a piece of it. Intent-based, content managing the pieces. Maraki getting up talking about wireless. It's not about boxes, ports, cabling. It is about software, but Cisco's going through their transition, John. How do they go from kind of the quarterly sales targets of working with their traditional partners to this multi-cloud software world? Intent, absolutely a big piece of it. Cisco's got such a broad portfolio, John, so much to get into in the next couple of days. And good points, too, about the software role. And then Cisco's always been moving up the stack. They've been following theCUBE, you know we've been talking about this. You look at the old guard companies. Cisco falls in that category. Okay, the new guard companies, Amazon, cloud, and some new startups, they're playing with cloud economics. They're playing with a whole new generation of software developers. Gone are the days of waterfall. Hello, Agile, Agile programming and development. But Stu, the big contrast now with cloud is the perimeter does not exist. This opens up security, which is the number one thing on the keynote that Rowan brought up, as well as the main speakers. This is huge, because now there's no perimeter. Classic networking days are changed. Cisco's always been talking internally about moving up the stack. They're finally doing it. They're doing it fast. And they have to because of the air under siege. Yeah, John, so let's dig into that a little bit. I mean, you think back, Cisco was one of the four horsemen of the internet era. It was Sun, Oracle, Cisco, and I'm trying to remember who the fourth one was, but I think Intel was there. So Cisco's been there. Security always been part of the Cisco portfolio, front and center. Any customer I've talked to, I love, there was a stat up there that 71% of customers said that security might be impacting innovation for customers. And I joked, I said, well, 29% are living in a hermetically sealed underground bunker if they aren't worried about how security is going to impact what they're doing. Maybe they feel that they've solved it and they're not slowing down because of it, but absolutely, security front and center, a lot going on in that space. IoT, I have to be honest. Cisco's been talking about IoT for many years, and I felt like they kind of, for years, it was like, well, there's going to be trillions of devices and we're going to network them. And I kind of said, okay, that's nice, but really how are you solving the business problem? How are you helping me? And really, that's where kind of the update is to where they're going, where Cisco positions, where they have the assets. They've made a number of acquisitions in the space, everything from the SD-WAN, Viptela's company, we followed pretty closely for a number of years, as well as AppD or AppDynamics. We interviewed them at Amazon Reinvent. It was over a billion dollars for that acquisition, really a software company. Doesn't mesh with the traditional Cisco model, so a lot of changes going on. Cisco positioned for a lot of those pieces, but definitely a lot of challenges as well as opportunities for us. Stu, I mean, you mentioned IoT. One of the things that people, if you follow the industry know, if you're a historian like us, they got it right. Stu, their vision of internet of everything was absolutely spot on, just 10 years too early. They had that awesome campaign and it was more window dressing and vision, but it actually was panning out. If you look at what they were talking about 10 years ago about connecting devices, they pretty much nailed it. However, they missed a lot of things, so they didn't move the stack fast enough, in my opinion. And two, the cloud came on really, really fast, but now they're already seeing that as an opportunity. But it's a double-edged sword, like I said on my tweet during the keynote. They could make a lot of money with the cloud by doing multi-cloud, but it's a double-edged sword. If they miss fires, Stu, this could be a problem. So let's talk about that. What does Cisco need to do in multi-cloud to really be that TCP-IP moment? Because you got all kinds of new dynamics with networking, you got end-to-end, but now you have a surface area, including IoT, that's everywhere, smart cities, sensors, on-premises, and in the cloud, all over the place. So this is a huge, complex equation, but Cisco's not new to complexity, your thoughts. Yeah, first of all, John, nice job on-premises. We got it right. From cloud standpoints. On-premise, a shortcut that I, you always use, Stu. Absolutely, still talking about data centers, talking about edge computing, talking about those, but Cisco, like many of the, hate to say, legacy companies, had a little bit of a falter when we talked about public cloud. The whole inter-cloud message really was a little bit complicated. We talked to some really smart Cisco DEs and got to really understand it a little bit, but at the end of the day, Cisco really understands they have a huge piece of their ecosystem as the service riders, and that's who they're working with. Cisco is not selling to Amazon. Amazon buys from some of Cisco's competitors, but they're not selling to a couple of the biggest hyperscalers out there, and that is a risk for Cisco. But, huge ecosystem, thousands of service riders, that's who Cisco needs to partner with. That was part of the inter-cloud message, and that's been rebooted with how they're doing it. They really look at, in Rowan's keynote this morning, it was about the management interface. Cisco has always made lots of pieces, but the challenge is I've got lots of device managers, and how do I get multi-cloud? I'm using Amazon, I'm using Azure, I'm using Google. I've got my own data center, IBM, Oracle. Cisco partners with lots of these companies, how are they going to make it easy, and why do they have the right to be in the center of a lot of those discussions? They partner, yes, but I would argue that, if I'm going to be critical of Cisco, they got to partner smart in a smart way. So the kind of partnerships they need to do now is really joint engineering partnerships, because if you look at the big whales right now, it's Amazon, Microsoft, and Google. The rest are all either customers, like the Facebook and those guys, but the real cloud that they really need to go after, and don't forget Alibaba and all the Chinese and European clouds as well, with GDPR, a lot of complexity there as well. They got to do partnering at a deeper level. So the new Intel inside model is over. It's now cloud inside with Cisco. They got to think differently. This is not an alliance with them as a channel partner or them in charge. They have to come in and understand that they have to peer with these clouds. I mean, Google's at such a large scale. I met with them last week. Their site reliability engineering team is freaking phenomenal. They got chops, they know networking. They're going to push Cisco hard. Your thoughts. Absolutely. Look, when Google Cloud launched, I said Google has the best network in the world, stop bar none. Absolutely. There are SREs setting the bar for how people look at these environments. I didn't hear much public cloud discussion. Cisco, I'm worrying, is a little bit over rotating towards that IoT and edge piece. Edge does not get rid of cloud. Amazon's not going away at all. Cloud and Edge go together. Google, Amazon, Microsoft, you think they understand the edge and what that's going to take there? All of them have a play with devices. Even, Microsoft's phone might have failed, but absolutely they've got applications and they know what's happening at the edge. Google, come on, who created Android? They understand how to get there. Amazon's got Alexa all over the place. Google, of course, has their smart devices. So, John, didn't hear anything about voice in the discussion here. They talked about things like telepathy, which struck me as a little bit interesting. Google has communications. They've got WebEx as a platform. They've got Spark on the phone to be able to communicate. They've got a lot of unified communication. Collaboration. I mean, John, I know one of your topics of interest, not just the networking of devices, but the networking of people. Cisco looks a lot about it. Any take you want to have on that piece of it? Yeah, I mean, here's my take. I love this intent networking concept with context. I think they're spot on on that. I think Cisco really needs to add attention and reputation because as you have promiscuous devices out there, from IoT to wearables to automotive, you're going to have trust issues around the network nodes now that these network nodes are going to have different personas, if you will. So, if you look at that, I think they really need to add attention and reputation to what to pay attention to in real time and the reputation of, say, a device or node in the network. That has to be added on top of intent because intent is just contextual and they've addressed that. So, to me, that's the holy grail for Cisco. They got to build these new stacks with these new software variables so they can scale both in real time and kind of in a typical network way, which is normal for them, but real time's where it's at. Low latency, wire speed, this is the language that they understand, but bring it to the cars. Bring it to those devices. They got to nail that. So, Stu, they have to think differently and I think the re-imagining of Cisco, the vision is about looking forward. Rowan's speech today was awesome on that front. He took us to 2015. It was awesome. It was 2050. 2050, I mean. I mean, phenomenal. That is what Cisco needs to do. Show their customers that they're not just a gear company. They can't be a gear company anymore. They got to move to the software model and they got to have proof points. They got to look at apps that they don't want anymore and either get rid of them or double down. So, it'd be interesting to see that, Stu, what they will double down on. Is it Spark? I mean, I download the Spark app. I have no friends. Is it a social network or is it a collaboration tool like Alibaba Ding Talk? Right. I mean, it's not WeChat. It's not Facebook or Twitter. Yeah. Applications, Stu, they're kind of looking at the edge. They have to have a position there. Your thoughts. So, John, I think you're right. I was happy not to see a bunch of boxes up on stage talking about that. Now, not to get me wrong. We're going to be talking about a lot of the networking technologies. Where is the intent-based networking? Lives on the portfolio Cisco products. There is what they're doing with the service providers, what they're doing in the campus environment and from a wireless standpoint, Meraki obviously centered what they're doing there. They have UCS has been the workhorse. Really, Cisco in the virtualization age, they felt that they missed out on buying VMware. But UCS really took the virtualization age and drove them into a market that everybody kind of didn't think that they could get into, kind of expanded the TAM. But UCS has kind of plateaued out from a revenue standpoint and where can they go in the future? You don't see UCS was built for kind of big workloads. When we hear Dell and HP talking about how do they take compute to the edge, haven't heard Cisco saying, oh, their architecture wasn't built for kind of those small, low cost, low margin pieces. So where will they add value and get revenue there? I think hardware gets deprecated over time and it really is software. Where are they going to get that move? First of all, they made a number of big acquisitions but John, we haven't talked about, they've got somewhere between 50 and 60 billion dollars that's going to be repatriated back to the United States this year and that can make them even more acquisitive than usual. Yeah, they're going to have to definitely take that money from overseas bringing in like Apple did and then go on a spending spree. But Stu, let's kind of wrap the segment up on the kickoff. Talk about kind of where they should go. And to me, the big story at Cisco and following these guys over the past decade or so, you've seen them foundationally rock solid on networking. No doubt about it. And even UCS, you're kind of critical but also they've done a good job there. They had the foundational footprint and you're starting to see them move up the stack. And I think the big story to me is what DevNet's doing, going into their network engineering community and turning those guys into modern cloud native developers. To me, that is critical to Cisco. It's an investment. Is it going to be long in the tooth? Will it be real? To me, it looks real. DevNet can transform and create an innovation surge. Cisco needs that innovation to come from their own community. They need to come from new developers while keeping their existing. Because that's going to be ultimately what's going to be built on top of the Cisco Foundation. That is the network. And to me, I don't think they need to make it a lot of moves right now. I think, let the developers be creative with innovation. Use the cash to buy companies and let those flowers bloom. To me, that's the model. If they try to do the old internet days where they would just integrate companies in, there's not a lot of companies out there that can just plug into their model right now. Yeah, definitely, John. And we've been tracking for years, a lot of the software pieces that Cisco's been working in. They've been big supporters of us at OpenStack, in Docker, the container world, at the Kubernetes show. So Cisco absolutely beating the drum towards that software. It takes a little while for the big tanker ship that is the dominant player in networking to move from relying on that hardware. There's that big iron. It's not like they can just flip a switch and say, hey, we're software and our margins and our sales are all going to be different. UCS, great, but it kind of reached a high watermark and where does that transition and move forward to? And as you said, partnerships are going to be key and not just lift service, but true engineering, where are they going to develop? Where are they going to find there? And DevNet, great buzz already. The labs here have been just cranking nonstop since I showed up. Lots of people digging in and not just the old certifications. It's really, builders, John, is something that you hear the Amazon community talk a lot about. Definitely the DevNet group gets that mentality. And the community is technical, Stu, so they'd love to get their teeth on these demos. There's black hat demos, there's white hat demos for security, always good. I want to give a shout out to the Connected Women's Group at Cisco. I attended their session they had yesterday. It was kind of a get together, very inspiring. And as a man, inclusion is very key. And Cisco actually, Stu, is doing something really that I noticed, which is they've swapped diversity and inclusion, and they call it inclusion and diversity. And they recognize that the conversations that need to include everyone, then the diversity issues can be addressed. So shout out to the Women's Connected Network here at Cisco for that great event and got a great group of people. I also want to shout out to our sponsors that allow us to come to Europe to get all the top stories here at Cisco Live. That's the Cisco team here on the partner group and of DevNet, thank you to those guys at Cisco. So check them out. Veeam, IBM, and NetApp, thanks for your support. About two days of wall-to-wall coverage here in Barcelona live with theCUBE. We back with more coverage and interviews after this short break.