Cisco Systems, Inc. (CSCO) Earnings Call Transcript & Summary

Okay. Are we live? Can you hear me? Great. Thanks, everyone. Appreciate you coming to the second day of ETS 2020. My name is Alex Kurtz, part of the equity tech research team here covering infrastructure software. We appreciate everyone making the trip and supporting the platform. And please make sure to drop into our panels and spotlight sessions as well. I told Amy that I have a lot of jokes I'm going to try to tell, and she's going to grade them for me. So here's the first one. We still have a lot of great content to go. 4:15, we're going to have Pat from VMWare presenting our last keynote. And we're going to have cocktails in the back, cocktails as a service. Okay, not so good. All right. I'm sorry. We also have a great fireside chat with you, with Amy and Omar in a few minutes here. Amy Chang is leading Cisco's software collaboration suite. Also on stage is Omar Tawakol, GM of Cisco's contact center solutions. So a lot of changes to Cisco's collaboration suite over the last couple of years. We thought this would be a great conference for Cisco to come. The schedules worked out, thank you, Marilyn, to get Cisco here and talk about what are those changes to the UC estate that maybe you're not hearing from all the competitors in the marketplace that maybe come to this kind of conference. And I have to say, Amy, thank you for dressing in KeyBanc's red and black. Look at this, everybody.

I'm ready, I'm ready.

What is this? It's unbelievable. So before I do more formal introduction to Amy, I'm going to have Marilyn come up and read a few comments or maybe from memory.

From memory. It will be very brief. So thank you, Alex, for hosting Cisco here today. And I have to make our safe harbor statements. So we may be making forward-looking statements today, so I'd refer you to our Forms 10-K and 10-Q that can be found on the Investor Relations website. With that, I'll turn it back over to you, Alex.

Thank you, Marilyn. So I'll just do a quick intro to Amy, then Amy's going to turn around and intro Omar.

And can I just say, there's plenty of seats up here. Like I feel bad for people having to stand and eat. That's...

Tom, I see you out there.

Yes. There's plenty of seats.

Yes. Okay. All right, we'll get -- Tom, we'll make sure everyone comes up into the front here. So Amy is responsible for the collaboration in the broader software strategy at Cisco. She serves on the Board of Directors at Procter & Gamble, for sure it's interesting, and has previously served on the Board of Cisco, Splunk and Informatica. Cisco -- being on the Board of Cisco, this is kind of how you ended up here, right?

Yes.

So we'll get into that. Cisco acquired Accompany in 2018 to bring AI and ML into the collaboration suite. We'll get into that a bit. Prior to Accompany, Amy was at Google where she led teams for Google Analytics for 7 years, bringing its infancy to serving 86% of the entire web. Degrees in Electrical Engineering, of course, from Stanford. So I'm going to have Amy come up, say a few words and introduce Omar and then we'll get into questions.

Can I just do it from here?

You can do it from there.

All right. I'll do it from here. So I'm going to embarrass Omar for 60 seconds. So Omar and I first kind of got to know each other a little bit when he was still the founder of Blue Kai, which was one of the best data management platforms out there when I was still at Google running Google Analytics. And we were so jealous when Oracle bought it for a little under $0.5 billion in 2012. Then Omar served as SVP of the whole Oracle Data Cloud for about 3 years, and then he hopped out to found his second successful start-up. And the striking thing was the whole team that had been at Blue Kai, the whole leadership team followed him out to Voicea. And when we bought Voicea only a few months ago, they already had 10,000 customers on the platform, which was pretty phenomenal. And we bought it because, as Cisco, we've now invested about $0.5 billion in building out a phenomenal kind of cadre of assets into a platform for cognitive collaboration, is what we're calling it. So really, it's ML, right, and it's infusing into our whole collaboration portfolio. So Voicea focused on advanced speech recognition, and that is how Omar arrived at Cisco. And he has since taken over the contact center business, and we're so excited to have him.

Thank you, Amy. Great. And before we get into some of the questions for you and Omar, I wanted to address sort of the WebEx usage spike that maybe the company have seen, so -- over the last week or 2. So maybe you wanted to take us through that.

Yes, absolutely. So sadly, because of what is going on from a health standpoint at the moment, we have seen a 22x increase in our traffic in China. And you can imagine, if we had not been prepared for that vast scale and in a modular way, being able to scale up those data centers, we would be in trouble with a 22x increase in traffic. But that is part of what the team has been preparing for, for the last 2 years, this massive, massive scale.

And I think you're giving away the product for free now.

We are, in fact, giving away the product for free to 50 -- in 52 countries worldwide to make sure that we help as much as we can, so that providers -- health care providers can interact with patients, so companies can allow people to work from home, and so that health worldwide is positively affected. The other thing we've seen is a 7x increase in sign-ups on WebEx just over the last couple of weeks, so sevenfold increase, which is pretty insane.

Right.

Given the scale that we're at already.

So we'll get into WebEx a little bit more. But just -- I want to get your perspective and Omar's perspective on joining Cisco, coming from a software background, coming into the world of Catalyst 9000s and all that kind of stuff, so maybe a little bit of what the first couple of years have been like for you.

Well, people always think it's really weird to have come from the Board onto the executive leadership team. And their question is always, "Oh, so what's it like? Is it different?" I would tell you a 30-second story. You have that moment like when you are back at high school, where you walk into the room for your first Board meeting after you've moved from Board to exec leadership team and you go, "Oh, where should I sit? Do I sit in my normal seat with the Board? Or do I sit with the exec leadership team? Oh, no." And then I kind of adjust into it. And the Board has the view at the 20,000-foot level, and we're there to ask questions, right? But when you get into the role and you're fully immersed in it, it's very, very different, right? You see things -- it's the topology on the ground level is much more visible. And it's been a crazy, fantastic 2 years. We've remade the entire leadership team on the collaboration side, and you will see that everyone there now is cloud-native. They are web scale players, and they are serious engineering kind of talent, right, that are coming into scale the heck out of this platform, make it modular, make it something that others in the ecosystem can build on. We are interoperable now, which is something that we weren't before. We kind of had a little bit of a build it and they will come attitude. And instead, it needs to be whatever the customer has in place. That's what we work with. So...

Right. Omar, do you want to add anything to that? Your first...

Yes. So I think my experience is a bit different because I came into a team with Amy, and Amy had run a start-up, in addition to being on the Board of Cisco. So she understands the mentality of somebody who wants to move fast, move fast to get stuff done and operate at web speed. So it doesn't feel just like I joined a very large company of the assets of it. So we did a product release recently, and the pipeline on that product that's only been out for a couple of months is insanely big. You don't get that luxury in a start-up. So it's been a fun ride.

As far as the moving -- the -- Cisco is obviously trying to move for more recurring revenue, right? And you are -- both of you sit in seats where you can help accelerate that. So interfacing with other executives, whether it's in sales or marketing, what's the process been like to kind of get them to kind of see the light and move to subscription and SaaS?

Well, the crazy part is, and I think this is the part people don't realize, Cisco already has one of the largest SaaS businesses in the world, right? It's WebEx, and it is a $50 billion business that's been around for some time, but has been growing. And the crazy part is, yes, of the roughly $50 billion in revenue, we take down annually, a lot of that is hardware, but a lot is software. So it's actually a larger software company than most software companies on earth. And that's the part where that motion already exists to sell that software. Now for mid-market and SMB, we're beefing up. But in terms of the enterprise software sales, the team knows how to do that.

Okay. Anything you want to add about the contact center and...

We've also had several years of run time with a commercial model called Flex, and so we've figured out all the issues about how you compensate, how you incent. And I think that paved the way to make it easier for the contact centers to really transition to cloud.

Right.

Can I add something to your previous point? So we were talking about distribution for a second. Having come from Google and then gone to a start-up and then come back into a giant company, the thing -- and we have a lot of start-up founders and CEOs here today. The thing that you so miss, like viscerally miss, when you go into a start-up is that massive distribution engine because you still take it for granted. When I was at Google, we could have launched anything, and it could have been a steaming pile, and 1 million people would have used it, or at least tried it. Now they might not have kept using it, but they would have at least given you a shot, right? You're a start-up. Nobody knows you from the Adam. They don't owe you anything. They don't need to use your stuff, right? And every single customer you get, you got to scruff it out and fight for it. So that's the major difference. Now coming back into this platform. And then the reason -- one of the big reasons we sold our company was this already -- this platform serves 300 million humans worldwide. And what does every single good product and engineering person want in their heart of hearts? They want their stuff to help hundreds of millions of people because it's fantastic. So that piece, it is -- that distribution is so precious, but if you can't...

So let's talk about that for a second. So you've been at this for a couple of years now. The conversations with CIOs about Cisco's UC estate a couple of years ago from now, what's that been like, the change?

So it has been pretty stark. I -- one of the things that we had not done previously, prior to having leaders like Omar, who understood how to create much more modular and platformized systems and assets underneath, was how to make all the pieces work together. So we had, like, 8 different silos. And our own stuff didn't necessarily work well together because some of that had come through acquisitions, right, and you got to work through that technical debt to get things to work together. And people do have to decide consciously if they're going to make the pieces work together. It doesn't just magically happen. And we hadn't made enough of that investment to create one single portfolio yet. And what you've seen us do for the last 2 years is massively double down and focus in there. And it's -- some of it's just a lot of shoveling and hard work, right? You got to work through all the different integration issues to make sure things work together. Finally, the analysts have -- our industry analysts, not our financial analysts, our industry analysts came for a conference about 3 weeks ago. 40 of them came into a room. They're skeptical because they go to everybody's conferences every week, and they hear the same thing. But when they left, the most vocal ones who were kind of heckling some of our general managers for the first few hours, by day 3, they left and they said, "Okay. We now believe you, you have one platform, one portfolio and that you interoperate with what other people have in place. We've seen you execute. We've seen this team innovate. Now you need to tell the rest of the world. That's your job now, is bringing that awareness to bear."

Anything you want to add about the contact center? I know you're in the seat very short time here, but just what's that been like?

It's a huge period of transformation right now because we have the largest position in the United States in terms of contact center agents on our platform. And if you look at the on-prem business that people usually associate with us, in general, the market is decreasing, we're growing, and that's because of this major innovation towards creating a cloud delivery model, both at the low end of the market and high end of the market. So it's a really interesting time, and we're actually transforming the business in many different ways. And I'll talk about them when we dive into that, but there's a huge transformation happening.

It's a good jumping off point to the current state of the collaboration estate. So we have some videos, you should just let them know when you want to run those. But maybe hit us up on WebEx and the changes there, then the contact center, then we can kind of wrap it all together.

Well, can I -- I would love to just show rather than tell because I can sit here and go like this because you may not believe it unless you see the real version that people -- Fortune 50 companies use, that we have customers who are using upwards of 50 million minutes a month on this new platform. And what we see is video usage just go like this when they get on the modern version. Some people are still on 3- or 4-year-old versions of WebEx, and I really pray that's none of your companies. If it is, please let us know and we will work to get -- work with your IT folks to get you off that old, old software because nobody wants for a 4-year-old software, right? That's terrible. But let me show you what exists today because I think it's going to surprise you a little bit. So can we actually roll your video? [Presentation]

Some of you have facial expressions like, "Okay." But that's what's live and real and in the hands of customers today. So if that's not what you're experiencing, I apologize and we'll fix that. So that is what is live and real today.

Maybe let's start in the contact center and what are the changes there. So we talked earlier about innovation and moving to more of a cloud-native model. Then I'm going to have Amy jump in on WebEx.

Sure. So there's 3 areas where we're radically transforming the way the contact center works, and it's really driven by our customers wanting to meet the new demands or they're in a world where the customers' expectations are becoming unbounded, right? They have relations with Disney+, with Tesla. They're seeing the world change, and so the contact center is changing. So the -- here are 3 pillars. The first one is we're using AI to, rather than automate out agents, turn agents into super agents. So essentially, what that means is you're dialing into a contact center, and the easy stuff will be handled by a virtual agent, right? You'll be able to, instead of hitting 1, 2, 3, you'll go speak naturally, and the system will answer your question. But for the majority of queries, you actually want to speak to a human. You don't want to be on that situation where you're like, "Agent, agent, agent," where you're getting frustrated. So instead, what we're doing is we're making it easier for you to get to a human, and we're supplying the AI to the agent, listening to what you're saying and providing some answers to the agent. First of all, the context, when you spoke to the virtual agent, transfers to the real person, so you don't have to repeat yourself. Then answers are popped up to the agent to help them close the resolutions faster, more accurately and provide opportunities for training of the agents to retain them longer. So this will radically transform the profile of how long you keep agents, how fast they answer questions, how fast they get trained. This is one of the biggest transformations we see out there.

And does everybody know for contact center what that is? Because, sometimes, people are like, okay, contact center, when you call into, for example, an airline to change your flight, that's usually our software that's helping route that call. So you can imagine how much better that can get given the experiences you've all had with your various service providers.

Awesome.

So that's one of the pillars. We're doing that through the 3 acquisitions that Amy talked about, over $0.5 billion invested in AI. And we also have a partnership with Google where we're going deep. So we're doing some real innovation areas work in AI, the second pillar, and we're about -- and I'll show a video right after I introduce it. The second pillar is about 70% of the queries that come into a contact center requires someone other than the agent to help them. So there's some collaboration going on behind the scenes to get to a better answer for you. So we're part of the collaboration group, right? So the contact center embeds in it capabilities around chat, around teams, around video, around calling, all so that you can get to an answer more efficiently. I'd love to show the T-Mobile video to explain that second pillar. [Presentation]

So what was not mentioned there is that if you look at the NPS for T-Mobile, it went from a carrier-level NPS to Nordstrom level. So this transformation has been amazing. So a summary on that is collaboration and makes it easier for the agent to do their jobs. Happy agents, happy customers. The third pillar is really about realizing that the context -- so if you have a customer calling in, they didn't just appear there. Something went wrong somewhere else. And after you fix this, you want them to continue their journey. So you need to understand your interactions as part of a customer's journey holistically. And a large percentage of people in contact center business report into CX. So we acquired a company called CloudCherry. We've integrated their capabilities in record time. In one quarter, they're already integrated into the product. And it's all about journey analytics, journey predictions, how to actually improve what happens in the contact center and in the CX at large. So these 3 transformations just are completely shaking up the business and driving some real growth.

So a lot of the changes that you showed in that video, I mean, how recent are those, for people in the room, like those things that we saw in the video there?

They're quite recent. I mean, of course, the work at T-Mobile has been going on for some time. So -- but this was just shared initially, I think, about 3 months ago.

Okay. Amy, WebEx, Jabber, what is new? So I think people have their impression on these products?

Well, they just got to see what -- and what is new and they -- I hope you saw facial recognition. I hope you saw the side bar there where people scrolled through, and you saw everything about the person, everything about the company, their internal directory info. That was my company that we actually acquired in, and we've integrated it. Now here's the thing that I think people don't realize. So Voicea has been integrated in, in 3 months, 4 months?

3.

3 months. Can you imagine somebody buying something and integrating it in 3 months? In order for that to happen, the underlying API hooks in the platform has to be right, right? You have to have actually created a platform to hook into for that kind of integration to happen at speed. So you can't see that with a naked eye. It's sits underneath. It's like the part of the iceberg under the water. But it's a really important part of the iceberg because that means everything in terms of innovation can happen way faster as a result of that platform being ready and those hooks being there, right? So that's the best kind of visual manifestation I can think off of that. But you saw all of that incorporated. And I think you saw the modernness of the interface, right? So that -- we kind of fell asleep for a few years on WebEx. Marilyn, don't skewer me with this later, but we did, right? And we opened the market up, and we allowed competitors to take massive share because we weren't innovating. Okay. I think you can tell we're awake, right? We're awake, and we're ready to fight. And the platform is in a place where it is the most scalable video conferencing platform on earth. And now there is going to be differentiation on top again, and the user experience is really crisp. So all of those things. And then on the Jabber side...

Yes.

Okay. So...

We're big users of Jabber at KeyBanc, so I wanted to hear your comments.

Okay, that's the thing is in the last 2 years, we've grown a whack and a half on the Jabber side. We have 50 million actives on Jabber. And I think people always forget that. And what we've done is pulled that all into our unified client. So if you're premise-based or cloud-based, I'd like to challenge the sales and partner teams to do a Coke versus Pepsi challenge because we've actually made the premise-based experience, which is Jabber, and the cloud-based experience, which is WebEx Teams, look exactly alike. So that as companies make that transition, they don't have to retrain 20,000 employees because who wants to do that. That is a terrible thing to do to people. So they can just overnight -- we've seen people, literally overnight, make that transition completely smoothly.

One of the questions that we get from investors in this space, in particular the UC space, is just how are the larger customers going to be buying this software? Are they going to be buying it in a suite, a collaboration suite? Or are they going to be buying best-of-breed point solution? So as some of these new products have rolled out, has there been any changes to the buying patterns of the customers or the conversations with the Global 2000?

So I think it depends. Is it coming from line of business? Is it coming from IT? Which buyer is it coming from? So what we need to be able to do is serve both, right? If you want an EA and you want to consume the entire platform, you want that whole employee experience enabled through that unified client where you can -- I can start with messaging you. And then all of a sudden, let's say, actually, it's just easier to get on a call. One button, and we're now on a call. And then I need to share something with you. It's one touch, and now we're sharing. So that seamless experience, a lot of companies do want that. Most of the Fortune 500 does want that for their employee base. So it makes sense then to get the platform. But if you're smaller and all you want is cloud calling or all you want is video conferencing, whatever it is that you want, we should be able to serve you on that, too, and it should be simple. Why not?

And then the contact center, how important is having UC -- this cloud telephony options and what you have with WebEx and Jabber as part of what you're selling with contact center?

Yes. So it's a very integral part. If you look at the lower end of the market, where you're going to just buy a contact center, you want calling and contact center embedded in one offer. So that's the first one. The second one is 48% of customers prefer voice interaction with contact center. But then 52% wants other forms of transactions. So you're going to be texting, you're going to be chatting, and those capabilities are embedded in the contact center. Video is also embedded in the contact center. The AI capabilities were written for the whole contact center, and those APIs are exposed to all. So it's a pretty fundamental part of what we do.

Okay. I think one -- well, one of the other questions we get about the contact center space is just looking at the number of minutes that are going to be happening in the marketplace now versus like 5 years from now, it's obviously going to be on a decline, right? So you mentioned text. How does Cisco think about the world of customer support and sort of this new omnichannel approach where not everyone is calling in to a customer service rep.

It's a great business opportunity because if you think of the cost that they have to bear when they have 10,000, 20,000, 30,000 agents, and they can take that and say, "We're going to take 20% of that volume and move into virtual agents," it's a huge opportunity. That is software revenue, right, as opposed to labor that's being paid to the agents. So that's an opportunity for us. Yes, you might see a lower amount of minutes when that world comes to pass. But you're going to see a lot more revenue from the AI that supports it, from the analytics that supports it. I think it's a big net growth opportunity.

Just imagine this, right, let's say you are, just for example, say, United Airlines. And let's say you have 18,000 agents that are inbound agents. So when somebody calls and wants to do something, the agent picks up the phone and helps them. Okay, well, what if you can augment those 18,000? So that's 16,000 now. Can you take the call volume and be fine with it? And then you take 2,000, you make them outbound, so that every single business class and first class seat is filled within 48 hours when that plane takes off. How much more likely are you to say, yes, if I offer you a cheap upgrade 24 hours before your flight because you're about -- you're packing, you're, like, this is going to suck. I'm going to be stuck in this sardine-like seat for 12 hours. And then someone offers you the ability to upgrade for pennies on the dollar, right, because the seat is going to stay empty otherwise. That outbound conversion rate is likely to be extremely high if you pick the right people to be calling before that window closes, right? So that level of intelligence can begin to completely reshape all of these industries and the customer experience that is in them.

Okay. Do you feel like the portfolio is -- to be able to capture this new omnichannel approach, the customer support, do you feel like the portfolio is there or there's going to be a lot more coming in the next 24, 36 months?

We're definitely innovating at a very rapid pace here. So if you don't see a lot of change, then I'm not doing my job.

Okay. Ahead of this keynote, a lot of the clients, a lot of investors were asking, well, you got to ask about the competitive landscape, right?

Yes.

Because a lot of them target you and Avaya and others when they talk about the TAM and the growth opportunity for smaller companies. So I'll start with you and then go to you, Omar. But just the impact that Zoom has had on how you think about WebEx internally, I'm sure there's a lot of discussions that happened internally around Cisco, around what's happened at Zoom. So what's your high-level view right now?

I think, again, we fell asleep for a little while on the wheel on the collaboration side, and we're awake, right? So for a little while, you didn't see much innovation coming out of our team for about a 3-year period. We kind of let the market just go, and we were not fighting hard enough. We were not out in front of it. We weren't providing the experience that we needed to be providing. But you look at what is there now, right, and you look at how much kind of the platform has matured and how much that means we can innovate going forward, and you see the investment that has been made on the cognitive and machine learning side, right, and you can guess what that means for the next year to 2 years. And those investments take time to bear fruit. And we've been sitting there kind of putting in the work for 2 years. So you're about to see that, let's just call it, the first fireworks, and you're about to see an entire show go off, right?

So as far as the contact center, Five9 comes up from time to time. There's been some disruption with Twilio talking about getting into this space. So how do you feel the contact center platform matches up with what's out there in the marketplace?

Yes. So we just released the new contact center offering, well, that's contact center enterprise, which is aimed at the very large contact centers as a cloud offering, and that has a tremendous uptake in demand. The area where I see the world evolving to is one where these contact centers become what I call programmatic contact centers, where you're able to take the large companies with developers and partners who have developers to come in and customize via API. And I think that's where the world is going to go to and expect to see a lot of change in that. And I definitely don't see kind of the Five9s and the Genesys as leaders in that at all. I think that's more of an open area. Twilio certainly would like to go that way.

Amazon.

But it's early days. Amazon would like to go that way. So that's the way I think it's going, is kind of the programmatic.

When you think about Twilio and their growth in the CPaaS market, and I'm sure you're watching them closely from Cisco's perspective, that market -- how the market is developing, is that of interest to you? Or...

Every market that's adjacent to us is of interest.

Yes. Fair enough.

And we've got to keep our eyes open and look at everything that's happening in the landscape all the time.

Right. Okay. Let's just finish up here before we...

Can I just add one thing to that?

Go ahead.

Sure.

In the contact center space, CPaaS is dual level. Because it's too complex a solution you need to put together, so you need something, a layer higher that is still kind of programmable. But CPaaS on its own doesn't cut it for the big contact center buyers. You need something higher level.

Okay. Fair enough. Before we take a couple of questions from the audience, just wanted to ask, let's just wrap up the whole conversation around the AI strategy and how that's going to help -- you've touched on it a couple of times. But how it's going to help Cisco differentiate versus some of the point providers in the marketplace.

So Omar, I'll let you address the contact center because I do think that, of all our sub industries, is the most ripe for disruption in terms of the highest degree of improvement can be found in really bringing machine learning to bear in the areas -- in the kind of squishier areas that have yet to solidify there through the customer experience. In terms of the entire experience, if you will, customers are expecting we would be more proactively understanding and more preemptive about what they need. They're expecting more from their software. They're expecting a clean and easy-to-use experience, but they're expecting us to know, "Okay. You know what? Let me just compare with something because you're going to need this in 10 minutes, right?" So as an example, real-time kind of live transcription, which Voicea helps with. Translation. So a lot of times -- I don't know if this ever happens to you guys, but someone may have an accent and I may have trouble understanding them or they may have trouble understanding me. It's fantastic to see them and hear them, but also to be able to read any words that I missed, right? And then after the meeting, I'd actually like to -- if I wasn't at the meeting, and it's a 90-minute meeting, I don't want to watch a 90-minute recording. Like I don't know how many of you want to do that, but I really don't, even at 2x speed, I just don't. So what I want is the entire word cloud of themes to come out, and I want to be able to jump to any specific portion that I'm interested in. Guess what, that's available now. That's this product that we've now integrated into WebEx. And I want to be able to say, "Hi. Take an action item, put it into Trello, put it into Asana, put it into whatever." Guess what? That's also available now. So this workflow augmentation and this intelligence of bringing this very long meeting and kind of pulling it into just the pieces that I need to know about, just the action items, just the pieces that are thematically important to me, all of that's part of the pre-meeting, during meeting and post-meeting kind of experience. And that's the way we're thinking.

Got it. Do you want to add anything to the contact center?

Yes. So the contact center, if you think about it, there's roughly 5 areas that we're transforming. The first thing, the call comes in and the system could use AI to do the routing as opposed to using kind of sophisticated rule-based techniques. Second one, you're speaking to this -- you're having conversational IVR conversation, and you're saying, "Hey, I'm about to travel to Spain. Does my data plan cover Spain?" And the system says, "Yes. Do you have any other questions?" And you say, "Yes, let me speak to an agent." So that's 2 applications. You come to speak to the agent, asking him some more complex billing question. The AI surfaces the answer to the agent who's speaking to me, now that gets resolved. Fourth phase, the call is done. Usually, an agent spends 3 to 5 minutes summarizing the call. They don't have to. The AI can summarize the call for them, save that time for them. Next part, you're trying to coach your newest agents and you want the AI to select the best, most representative call to do the coaching for that person and identify, for your existing agent, what they may have missed. Maybe they weren't as polite, maybe there were moments of emotional contention that they messed up. So all these opportunities are AI, just completely change the economics of doing business. So yes, we're all in there.

Okay. Do we have a microphone in the back? We have a couple of minutes for questions. Yes, up here.

With coming 5G...

Hold on, Aaron.

With coming 5G, can you talk about the investments that Cisco is making to make air products see more native mobile as opposed to, as shown in the video, it also works on mobile?

So the investments are more broadly in the networking and security spaces as well, not just in the collaboration space. I think, from an applications perspective, which is kind of what Omar and I focus on, I am so excited about faster and faster speeds and more and more bandwidth because you can imagine how that affects video quality, you can imagine how that affects latency and resiliency, all of the different pieces that affect the user experience massively. So we could not be more excited about the fact that users are going to have a bigger and bigger kind of pipe to then consume more and have a better experience. We're very excited about that. And from the networking side -- sorry, did I interrupt you?

Go ahead.

From the networking side, obviously, we're making massive investments there to enable those pieces as well. Go ahead, Omar.

Just to add one thing. Back in 2012, Facebook had its mobile-first moment where they said, "Let's design for mobile first." I think there's an opportunity now for enterprises to have a voice-first moment, which is where you design interfaces to just handle speech. And instead of customers learning UI, they learn how to respond via natural language. So that's one of the things we're thinking through in various of our applications.

Yes?

Do you work with psychologists in envisioning the future of the platform? And so that -- in that sense, do you believe the platform can evolve to make meetings more efficient in real time, as in like really guiding and coaching? The button that's like, "Get to the point already."

I love that question. You should take it. This is your area.

Yes. So basically, I think gone are the days where you could have the software, the infrastructure to get you into the meeting. So what you need to do is have a smarter meeting, smarter meeting in the following ways. Number one, you start out and people have a shared agenda. Two, you know something about the profile of the people you're speaking to because, let's admit it, we sometimes forget. And people grasp the software, right? Look, from a company, we'll tell you something about the people. Now you're in the meeting and you want people to actually stop taking notes because when people are taking notes, they get distracted. And when they multitask, their IQ drops by about 15 points. So you basically say, "Put the software aside, focus on the human conversation." And now you have a better meeting. And then you want the software to identify the key takeaways, follow up on action items to push it in to workflow. And the result of this should actually be fewer meetings. I don't know if you hear any of the leading company out there saying, "We want you to have fewer meetings." So that instead of having the fear of missing out, you have the joy of missing out because we've implemented better meeting hygiene. So what you're saying is near and dear to our heart. When we first started Voicea, we started out with a bunch of psychology-class coaches on how they thought the meeting should transform, which kind of moved our mind away from just the features and bits and bytes.

Omar, I'll never be able to take notes again. [ Couple of meetings ], no note taking. All right. Any other questions before we wrap up here? I just wanted to finish with this concept that there's a lot of -- tens and tens of millions of telephony seats out there in the world. I think there's assumption that they're all going to kind of -- or a large portion of...

We have 92 million of them.

Yes. So how do you think about the process of converting your existing non-cloud telephony seats to your new platform? And how do you go into account to kind of execute that?

Okay. That is one of the most exciting parts of this job right now actually.

Okay.

Because you have this mountain of 92 million users, right, that have been your users for a really long time, that are generally very happy, right, but they are going to have to move to cloud at some point. They may not do it today or next week or in a month. But at some point, that's going to happen. And as long as we have the nominal kind of option for them there, and we're walking them through smoothly, there's no reason why the majority of that 92 million should not stay with us. We've got to earn it every step of the way. We're going to make sure that there's a fantastic option there for them when they choose to exercise it.

Is there something you're doing differently with your sales approach or the portfolio selling?

Simplifying.

Okay.

Massively simplifying.

Okay. Well how was it complicated before? And what is it going to -- what are you simplifying?

So I will just say, if you were a salesperson in the field and you had to fill out this form to get that particular solution, you would not be happy. So we need you to be happy, and we need you to be able to do it fast, right? So simplifying is a very good thing. It helps the velocity of everything. The other piece of this -- so I just want to level set. Ring has about -- I think the last time they published, about 3 million users on cloud calling. Okay, so all of the cloud calling is actually growing at a faster rate, and I cannot give you the exact rate, but it's faster. And we have 92 million to pull from. So just let that sit with you for a second.

Understood.

It's a thing of beauty.

Big installed base to work from. Well, listen, I think we're out of time here. Really appreciate you guys finding time in your busy schedule to come down and do this keynote with us. Amy and Omar, thank you very much. Appreciate it. Thank you.