Cisco CEO Chuck Robbins gives us his state of the market from Davos. Learn what he is saying below ⬇️
Patrick Moorhead, Daniel Newman, and Chuck spoke about, wait, you guessed it…. #AI, but Chuck connected the dots on its transformative nature from infrastructure to security. Plus, we got the scoop on the future of Agentic AI and Cisco’s ongoing transformation.
Specifically learn:
- How AI is driving Cisco’s evolution: From infrastructure to security, Cisco is integrating AI across its portfolio
- The next frontier of Agentic AI: Imagine a network administrator that’s an AI agent
- Cisco’s transformation continues: The company’s pivot to recurring revenue and software, with AI driving further growth
- The role of technology in addressing global challenges
- Key takeaways from the Davos meeting for businesses and governments
Watch now and stay tuned for another Cisco segment with their Product Chief Jeetu Patel.
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Transcript:
Patrick Moorhead: The Six Five is On the Road with a View from Davos. We are here at the World Economic Forum having some great conversations. WEF is a unique event. It’s the combination that pulls together, technology, finance, government, regulation, all of that, and of course the biggest conversation so far is artificial intelligence.
Daniel Newman: Yeah, Pat, it is really great, and we’re right here on the promenade and the action is all around us. You know, I just took my eye off you for just a second because some car drove by that I had to point to Chuck and say, “Hey, Chuck, look at that thing.” But, you know, it is really an interesting moment here in Davos. You know, they call it the Magic Mountain, and it really is scenic. It’s hard to actually get on camera how beautiful it is here, but people descend on this location to really see this opportunity to bring the public private conversation forward. Some of the biggest inflections in history are happening right now. It’s been a really big week in politics. It’s a massive shift for almost every business on the planet because of AI and being able to meet so many leaders in one place, the density, as a couple chip guys, the density here is awesome.
Patrick Moorhead: Yeah. It really is. So Chuck, thanks for coming on the show.
Chuck Robbins: Great to be here.
Patrick Moorhead: No. It is.
Chuck Robbins: This weather’s terrible too.
Patrick Moorhead: No. No. They tell me it’s always like this.
Chuck Robbins: It’s always like this. If you’re the Chamber of Commerce, no, you probably want snow actually.
Patrick Moorhead: So maybe a great place to start is why do you come to Davos? And what do you want to get out of it, or what observations have you seen so far?
Chuck Robbins: Dan just described why I come to Davos.
Daniel Newman: It’s cars?
Chuck Robbins: The great cars. Exactly. No. Look, it’s an incredible place where you can meet CEOs. I can meet government leaders. You can actually spend a lot of time talking to companies about next generation technologies, what’s going on, the geopolitical dynamics that are happening around the world. It’s just a great convening and a lot of great people to spend time with. It’s highly efficient for a lot of meetings.
Patrick Moorhead: Right. It really is right here on the promenade.
Chuck Robbins: Not efficient getting here. It’s highly efficient once you’re here.
Patrick Moorhead: Exactly. Well said.
Daniel Newman: It’s really interesting. But I said that, you know, when I convinced him to come, he had to do his whole mea culpa because all those years where he said, why he didn’t come.
Patrick Moorhead: Exactly.
Daniel Newman: Now he’s here. He is like, oh my gosh. I said, by 11 o’clock we’d had six meetings that would’ve taken us three months to have.
Chuck Robbins: Exactly.
Daniel Newman: Chuck, Cisco’s in a transformation of its own. You’ve completely evolved the company. AI, of course, is probably the biggest conversation that’s on the ground here. Talk a little bit about how Cisco is thinking about it, how it’s impacting the business. Some of the recent announcements, you had a huge summit a week ago.
Chuck Robbins: Yep.
Daniel Newman: I’d just kind of love for the market out there to hear the story because Cisco’s never been more relevant than it is right now.
Chuck Robbins: Yeah. I think the way to think about us is we plan in three areas. Number one, we provide infrastructure for AI. So if you’re a cloud player, we’re selling high performance ethernet underneath these GPU clusters. To help drive the connectivity, we’re selling optics to connect the clusters. We’re selling optics to connect data centers. And it’s just a huge opportunity for us in that space. Secondly, we’re building integrated technology for the enterprise. So integration of GPUs or NPUs or LPUs with traditional CPUs, but also with storage, networking, and an orchestration layer to really help our customers deploy AI apps more easily. And then the final area we plan in a big way is security.
And the launch you talked about last week, we had an AI summit where we launched AI defense, which is an incredible suite of products that really help our customers put guardrails around their models. And the great news is it applies to all models. So you don’t have to have a different security posture for every model. The team came out with it. We had a great turnout last week from both customers and analysts and press, and the feedback’s been very positive. Most customers that came want to get into trials with us pretty quickly. So that’s all going well. And then obviously we’re looking now at Agentic and what we can do there. And there’s some great thinking going on right now inside the company about some new offers that we think we can bring forward.
Patrick Moorhead: So Chuck, since you became leader, I mean it really has been transition after transition after transition. I mean, you successfully parlayed the networking opportunity, which still is an opportunity into security, and then you added another element which was data with the acquisition of Splunk and you’re layering, what should we expect over the next, I mean, I know there’s a lot of execution around AI, but what should we be looking for the next transformation?
Chuck Robbins: Well, I think two things I would call out. Number one, you’re going to see very tight integration across all those things that you just mentioned, because the reality of the power of all of them being together at Cisco is us leveraging them to give our customers more immediate insights about what’s going on in their infrastructure. So real quickly, application has a problem. Is it the application itself? Is it infrastructure? Is it storage? Is it networking? Is it a cyber attack? They don’t know. It takes too long to figure that out. We think we can help them get to that. So bringing all this stuff together is very important. But the second is this whole notion of Agentic AI, you think about what we could do to potentially create a network administrator that’s actually an agent…
Patrick Moorhead: Sure.
Chuck Robbins: … and actually an integrated solution in that space, so I think stay tuned. We’re looking at bringing some of that stuff forward as well.
Patrick Moorhead: Yeah. So it sounds a lot, I mean, you’ve been known for the easy button for a long time and you’re essentially extending the easy button. I’ve never had a CIO ever say, hey, I’d like more vendors to work with and I want it to be more complex. So I think with all of this, you’re really addressing that. And I, at least, our research suggests it’s very unique.
Chuck Robbins: Well, if you think about it, even when we acquire a company, you have a management console and then a management console. AI just allows you to put an abstraction layer on top of it and not go through the complex long integration that you typically have to do to get those things to work together.
Patrick Moorhead: Right.
Chuck Robbins: And you can put a layer of AI on top and solve the problem immediately. It’s incredible what this technology’s doing for us.
Patrick Moorhead: Yeah. It really is.
Daniel Newman: Yeah. There’s not a technology inflection in history, Chuck, that is going to move more quickly and it is going to abstract away more complexity and change the dynamic of these- a lot of these companies, I think there’s going to be a lot of change of who we see, what we see here. Now we’ve only got about a minute, but I did want to ask you one thing. You guys have been through, you know, Pat sort of alluded to this massive pivot. You’ve pivoted to more than half your revenue recurring. You’ve pivoted to a lot of your revenue in software. I mean, over the next few years, is Cisco going to, you know, I mean, how much more of your business can you turn to, that sort of high value EV shifting business? It should be a great market play.
Chuck Robbins: Well, the great news is that as long as we’re selling a lot of infrastructure for AI, that percentage isn’t going to go up significantly because we sell this stuff to our customers, and it’s a traditional buying method, but we’re okay with that. So we’re designing on silicon. We’re building great hardware, and the teams are doing a phenomenal job. And I think there’s going to be a lot of that. And over time, you know, I think over time we still look at consumption options where customers want to consume anything as a service and we’re going to deliver on it where we need to.
Daniel Newman: So it’s kind of an and you grow all the sides.
Chuck Robbins: Yeah. We like both.
Daniel Newman: And it keeps catching up. By the way, I love that he mentioned LPUs.
Patrick Moorhead: Me too. Me too.
Daniel Newman: So interesting.
Chuck Robbins: Isn’t that what you told me to say?
Daniel Newman: I couldn’t have paid you to say it, Chuck. Thank you so much. Thank you everybody for being part of this Six Five On the Road. It’s a View from Davos. We enjoy you being part of our community. Hit that subscribe button. Check out all the coverage from Patrick and myself here at Davos. For now, though, we got to say goodbye. We’ll see you all later.
