Cisco Systems Inc Technology Strategy Investor Briefing Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : If you don't mind, I'll start with a couple of AI questions for you. So leaving aside Jonathan's portfolio where we understand the infrastructure sort of upside when it comes to AI infrastructure, how are you thinking about the rest of the portfolio when it comes to AI in terms of monetization versus creating a differentiation like in terms of some of the securities that you sort of talked about at the keynote as you talked about, there's clearly a differentiation but how you think about monetization? And secondly, more -- maybe this is more in sort of Jonathan's wheelhouse in terms of AI, sort of when you think about, as you said, like as a service model, how are you thinking about how much of that increases the relevance of on-prem versus sort of going to the public cloud. What does that do to the relevance of on-prem?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Maybe if I can just clarify. So when you say the platform will be GA in end of October, does it mean all of your point solutions at that point?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Yes, yes. So when I think about the entire sort of product solution portfolio moving on to one platform, is there a sort of time line of how you think about sort of going through with that? And then sort of a second part, when you think about sort of customers adopting it, and they have, let's say, they say, "I'd like some parts of the platform still. I'm not completely on board with buying all parts of the platform," how does the sort of experience look like for the customer, particularly as multiple vendors come in?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Samik from JPMorgan. Just a couple of questions. So when we look at the D.C. -- AIDC switching market today. Obviously, InfiniBand has that early advantage, right, early mover advantage. What does it take for Ethernet to sort of eclipse that in your mind? Is it just sort of now going through the design wins and sort of ramping on that? Because you also mentioned there's the sort of trying to avoid sort of being sole source to the existing suppliers. So is it more about that it's not just your innovation that makes it happen. You need more suppliers to come through with similar innovation that for really that to change? And then the second part there, like when you are going and sort of talking to your customers, is the competition that you're competing against NVIDIA on InfiniBand or is the primary customer in that compared in that discussion, Broadcom at the Silicon level or the rest at the device level. Like who is the customer really then sort of comparing you to? Rakesh Chopra Yes. So it's a great question. So several pieces to it. So I think -- forgetting about Cisco for a second, the raw scale of the AI-ML networks are 100% unsustainable with a sole source technology. Even though I work on this stuff, day in and day out, sometimes have a hard time wrapping my head around the size and the scale of these clustered -- in these networks, it is absolutely huge. That fact alone means that they have to move away from InfiniBand. Every customer out there at this point is saying, "I've got to get off of this sole-source technology. I'll use it for now because I have lineage to HPC, but it's not -- it's not sustainable. Obviously, it has to change. And that's compounded by the fact that as more cheap new vendors, either built by the customers themselves, web scalers themselves or by other people in the industry. When they're putting interfaces on, they're not putting proprietary InfiniBand they're putting Ethernet -- and that, again, is sort of the clear sign that the transitioning is happening with Ethernet. And I think another way to think about it is if you want to look at -- a proof point that the transition to Ethernet is well underway, look at what companies who build InfiniBand, which have recently announced in terms of Ethernet base switches for AON. That trend is very, very clear. It has already been deployed in production in large-scale AI-ML cluster that already exists with Ethernet. So that transition's happening or has happened in some cases, in some customers. So that will flush through. And then the key question is who makes the best switches, who makes REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2023 / 8:00PM, CSCO.OQ - Cisco Systems Inc Technology Strategy Investor Briefing the most efficient switches and what value add can you add on top of that sort of open infrastructure. That's sort of, I think, where Cisco differentiates itself versus all of the other folks coming to play in sort of the Ethernet switch market.