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

Hello, everyone. I'm Katie Lindner, facilitator for today's Cisco Knowledge Network webinar. In a moment, I'm going to turn the session over to our host, Ken Seitz. But before doing so, I have a few housekeeping notes to cover. [Operator Instructions] This session is being recorded, and you will receive an e-mail with a link to the recorded session later this week. Also, please take a moment to fill out the survey, which is going to pop up when your session is closed. With that, let's go ahead and start. Ken, you now have the floor.

Thanks, Katie. Good morning. Good afternoon. Good evening. Welcome, everyone. Thank you, esteemed Cisco partners for being with us today. You're joining us to talk about 5G private mobile networks and the opportunity to create value with your enterprise customers using Cisco-based solutions and your expertise. My name is Ken Seitz. I am the Director of Offer Development in our global partner organization, focused on partner managed services. I'm joined today by 3 of my esteemed colleagues: Neeraj Kumar, Matthias Falkner and Jeff Minson. They will each talk to you a bit about -- throughout the session today about their areas of expertise and help you understand Cisco's capability as we explore this space. So with that, let me set the scene for today's discussion. The private 5G and 5G in general is certainly a journey that we're on with you, our trusted partners. We are seeing it within our collective customer bases that they are at different phases of their journeys as well. There's kind of 3 key categories that we would say that they're in: The exploration phase of not really understanding where 5G can benefit their business and help drive digital transformation, but they feel like there's something there, and they're trying to understand what's the relevance and how do they take advantage of that. There are others that are further along that understand exactly which applications would benefit from a private 5G type of solution. They may understand that there's a business benefit but don't understand how they would implement. What would the cost of this be? What are the requirements to them from an IT and management perspective? And then finally, those that are ready to get going right now today, they have budget, they have use case, they have a defined need, and that's where they're looking for expertise. Today's discussion is going to focus on the leftmost of those columns, that exploration phase. We want to share with you our perspective on that and give you the tools to go out and then speak with your customers and prospective customers about private 5G networks and how you can leverage that to build value for them and help those businesses along their digital transformation journey. We're going to focus that and then follow up with you with subsequent sections to take you through the later stages of this into the defining and ready to start. Our agenda for today is this: We're going to talk through the what is it, making sure we're baselined on kind of what are the key components of a private 5G network, what are the technologies involved. We'll talk through some of the key use cases that Cisco is seeing in our experience and a global perspective and what we're seeing from other partner conversations and other customer conversations. We'll take you into the architectures that would help deliver on these promises of how private 5G networks can unpack and deliver that value. And we'll talk through your role in this as we see it and where is the opportunity for you to build practices in this space, monetize the technology and leverage your expertise to be -- have profitable practices. And then we'll reserve a few minutes at the end for question and answer. [Operator Instructions] We'll answer a lot of those as we go through. And then here at the end, we'll read some of those that we think are most applicable to the broader audience out loud and share kind of additional commentary and feedback in a verbal exchange. And with that, Neeraj, I'll turn it over to you.

So if you think about private -- if you think about the private mobile networks, this is probably one of the most discussed and debated topic in the 5G area and 5G use cases today. And whether we look at different industries, we can look at manufacturing, we can look at oil and gas, we can look at utilities, we can look at different departments of defense. All these places, all these customers, and these customers would be enterprise customers, they could be public sector customers, they could be even now small, medium enterprises, they are looking at private 5G for some specific benefits. So let's now talk about what are some of the benefits and what is the value that private 5G brings to the table for all these diverse industries. Ken, if you'd move to the next slide, please. So let's start with what is indeed private mobile network. Now a little bit of tongue in cheek, you can see the picture on the left-hand side. It's often -- I often feel it's almost like different people are looking at the elephant from different sides, right? And depending on who you talk to, there could be a perspective of whether asset ownership means a private mobile network, whether spectrum ownership means a private mobile network, right? Who manages? All those are good questions. But from our perspective, I think if we talk about 3 things, those pretty well define what a private mobile network should be. So first of all, a private mobile network should be really dedicated to one business entity. It could be, again, an enterprise customer. It could be a public sector customer. But it is dedicated to a business entity. It carries only the data and voice traffic of that business entity only. And in some ways, the ownership, now ownership could be by straightaway owning it. It could be on the basis of monthly consumption models. But in some way, that particular business entity to which that private mobile network has been dedicated, that owns and has an ownership interest in that network. So I think if we think about a private mobile network of 3 -- those 3 dimensions, then, probably, it's better. It becomes easier to differentiate from the typical public networks that we have seen so far. Now if we go to the next slide, Ken. We will talk about the basic components of a private 5G or private mobile network. And I'm using the word private 5G here because private mobile networks could be constructed from 4G technology, they can be constructed from 5G technology, they can be constructed from WiFi or any other access technology. For the purposes of this discussion, we are going to be more focused on private 5G networks, and hence, I use private 5G network technology. So if you think about it, there are 3 basic components. And let me start with the first and the most obvious one. This is the user equipment. Now user equipment are essentially 5G devices or devices which have multiple radios. 4G could be one. 5G could be one, right? But those are the devices that are moving around. Now in a traditional sense, we have always thought about smartphones and tablets as 5G devices. In the IoT-rich world that we are in and we'll continue to move into the future, 5G devices are going to be more devices such as drones, automated guided vehicles, heavy industrial manufacturing devices, robotics, Department of Defense assets, consumables and things like that. So essentially, devices which have been used in each of these industries that carry 5G radios, and these are the ones that we are tracking, these are the ones that we are monitoring. And obviously, one of the questions that we talk about in private 5G always is how quickly our devices, all these different types of devices, are going to be 5G enabled, but we'll talk more about that in this presentation later. What is the second key component of a private 5G network? What is a radio network? And the radio network is essentially the part of the entire system that essentially is responsible for managing the spectrum on which we are doing the communications. Managing the spectrum means essentially managing the spectrum efficiently, making sure that the user devices are being tracked properly, making sure that their quality of service needs, making sure that their SLAs are being met. So that's essentially what the radio network is doing. And typically, the radio network, the RAN network, is also called as the base station. The base stations are the towers that you see where, essentially, the antennas and so on have been put up. And when we talk about 4G technology -- and you'll see some of that in the slide. When we talk about 4G technology, we are talking about eNodeB. When we talk about 5G technology, you will see it gNodeB. So that is what a radio access network would be. And then finally, we come to the mobile core network, which acts as a bridge between the radio network and the Internet. And this is where all the packets -- the IP packets forwarding of the data and the voice services, this is where it takes place. So rather than thinking about mobile core as a box or as one entity, in 5G, we think about mobile core network as more of a set of features and functionalities that create this bridge between the radio access network and the Internet network. Now what are the kind of things that a mobile core network would do? It would also track the user mobility. It would do -- follow the quality control functions. It would have policy and identity, which is going to be governing how we manage these user interfaces or user devices. It's going to have things like billing and charging functions, which is how really the customers would pay. So those essentially are the 3 key components of mobile private networks or 5G private networks. One important thing to note is that we are in a process of transition where, earlier, these features and functionalities would sit on -- in almost a box and a hardware. Now they are getting differentiated. Now they're actually moving towards software. They can be delivered from different places from different white box technologies, and that's the trend towards O-RAN that we are watching. So it's not really about who manages or operates or where it is hosted. It's more about features and functionalities when we talk about 5G. So if you go to the next slide, Ken, we can get a little bit more into what is different about private 5G. And I think when I think about private 5G and how it differentiates from the earlier technologies, there are 3 things that come to my mind: One is the level of security and control that you have, that an enterprise or a public sector customer will have. It is light years ahead and different from what you had in the prior technologies. The second point is the availability of private spectrum. I think this is a very exciting progression in enterprise technologies that we are seeing, the ability of a company to use spectrum which is largely for its purposes. And they are different entities in different parts of the world who are really driving it but more and more spectrum available in different parts of the world. And then the third and final point is the ability to create new business models, new technology models which we have never tried before. And some of those business models could be, for example, the asset is owned by a business entity, but the management could be done by a managed service provider, right? That's one of those functionalities or business models that's emerging that we traditionally have not seen in the past. So if you could go to the next slide, Ken. Let's just start talk about what are the type of benefits that a business entity would see and why they're so interested in that. Typically, the type of benefits they would see are extended and better coverage, as you could merge private/public spectrums together, as you could merge unlicensed and licensed spectrums together. We have always known that, that of small cells actually costs quite a bit for the end customer, and using private 5G networks could actually reduce the cost. There is the question of security that I talked about, better ease of management and, frankly, a better way of collecting all the analytics-based data and using it really to go back and improve the production, manufacturing, asset management and so on. So we think that there's going to be a lot of operational benefits that the end customers would see when they use this private 5G network. Finally, we can talk about the use cases, Ken, if we go to the next slide. So there are many different use cases that we are seeing emerging. But there are 3 that I could touch on: One is in the utility space, utilities, oil and gas, transportation, mining. The other one, which we'll talk in a moment, is manufacturing, and the third one is going to be logistics and distribution. But let's just talk about utilities, oil and gas and transportation, as you know very well, a lot of remote spots, a lot of high-value, high-bandwidth video surveillance and a lot of, frankly, moving assets. And so therefore, private 5G with its low latency, with its high bandwidth, with its safety and security features, it is going to be playing a role. And we see, for example, a lot of companies in the mining industry really leaning in and looking at this use case. If we go to the next slide, Ken. We can -- manufacturing is a very interesting, exciting area. Industry 4.0 is predicated on things like automation, predicated on things like robotics. And all of that requires use of more smart, intelligent manufacturing devices and equipment, includes things like automated guided vehicles. And again, the need to have ubiquitous connectivity, clean spectrum, less congestion, high performance, low latency, the need to have high bandwidth applications such as, I would say, remote diagnostic, remote engineering and design, all those are critical use cases which are going to be used in industrial manufacturing. And we see a lot of excitement in this area, a lot of leaning in, especially from auto companies in Europe, who are really -- who have leaned into this use case. And then finally, I can -- as a final use case, I can touch on logistics. If you could go to the next slide, distribution, logistics and warehousing. As you know, some of the largest warehouses are owned by the Department of Defense. They're used by some of the largest logistics companies, companies like Amazon and UPS and companies of that sort. And essentially, with all the moving parts, with all the consumables, with all the high-value assets, there's an acute need to have very seamless connectivity between all these assets. And so distribution, logistics and warehousing is also one of the areas where we are seeing a lot of use cases evolve. So hopefully, that gives you -- this gives you a view of why we think private 5G is important, what are the benefits that customers can expect and what are some of the use cases. And with that, let me move forward and give it -- hand it over to my colleague, Matt, who will talk about some of the technical aspects, architectural aspects of private 5G. So Ken, could you go to the next slide?

Thank you, Neeraj. That's a really nice and perfect setup for sort of the next 10, 15 minutes. I wanted to touch on a little bit more technical aspect when we look at 5G in an enterprise context. So Neeraj already nicely set the stage and sort of introduced the 3 main components and the use cases, so I'm going to take it a little bit deeper in the next 10, 15 minutes and share with you some of the technical perspectives and then gradually moving more and more into sort of the enterprise point of view and the partner view. So as we saw earlier on, there are 3 main building blocks, areas in a 5G architecture, specifically, sort of the left-hand side on this slide showing the devices and the radio. And now from a partner or an enterprise perspective themselves, the question here really becomes what devices already have 5G interfaces enabled. What is the device landscape that is out there that I can use in order to build a 5G practice? Today -- or in the past few months and years, we've seen sort of a ramp-up, of an increase in devices being available, and we see a lot of momentum now picking up on the device side in supporting also 5G interfaces on the UE side of this bigger architecture picture. Obviously, here, as an IT operator for an enterprise or a partner, you have to think about the radio aspect, as sort of Neeraj alluded to. How do these UEs, these end devices, connect to my network? What spectrum am I using? And where do I deploy the radios? One of the key benefits that's often touted in 5G is its high bandwidth. And implied in that, also a discussion about density of the different radios, size of the individual cells and, therefore, also, how do I connect it. So there's quite a few aspects from an architectural perspective to consider on that left-hand side, on the device and radio side, on how to enable devices, what spectrum to use, where to deploy the radios and, obviously, also the associated management. Neeraj pointed out that we basically -- no. Don't move on yet, please. I'm not done yet -- that we need to connect those radios ultimately to a packet core. And so the second main building block is this middle part, and that's the transport. For those of you who are more on the managed service provider side already or on the large service provider side, in the past, with a fully licensed spectrum, we were typically talking here about the backhaul network, so the connectivity of the radios through a maybe service provider infrastructure in order to reach that mobile core that's on the right. In an enterprise context, that connectivity to the mobile core may very well be established over an existing campus or WAN infrastructure with maybe an Internet breakout point or a connectivity into the data center. So as you think about your services, thinking a little bit about the transport, how do I connect these radios, over what infrastructure, do I use a public infrastructure of a large service provider, do I leverage my own, how much bandwidth do I provide and does that transport network have the right functional capabilities is an important aspect to consider. On the right-hand side, we see the packet core. Neeraj alluded to that at a high level. Here, what is really important is to think about sort of the requirements that specifically come out of the use cases. So what requirements do I have from a UE mobility perspective? Do my devices -- I think you showed trucks earlier on or robots. Do they actually need to move about? Or do they have really strict low-latency requirements where maybe I want to do some caching much closer to the radios into the UEs? So those are all kind of mobile-correlated aspects. Interesting is this whole discussion around roaming, and by roaming here, we mean also roaming into, let's say, the licensed spectrum, global mobility, if you will, whether that is a requirement or not. In many use cases we're touching on right now in the private 5G discussion, that is not necessarily a requirement, but it is something you should consider. And obviously overarching is the whole aspect that, as architects, we need to consider from how do I automate the deployments and the services in general without having to do, let's say, box-by-box manual online configuration, how do I assure that my 5G service is actually working. And very importantly nowadays is how do I provide security all the way from, let's say, the device side through the radio all the way to the packet core. So quite a few architectural aspects to consider. Actually, in the deck that we're going to share with you, there's a more elaborate version of this sort of architecture deck that I invite you to look at. It would probably expand the session length quite a bit if I went into detail, so I'll leave that up for your reference. Next slide, please. One of the key discussions that always comes up as we talk to partners that serve the enterprise or even enterprises themselves is what is the relationship between 5G and WiFi 6. And I quickly wanted to touch up on that because it's -- in some sense, it is one of the elephants in the room that Neeraj showed earlier on. And clearly, here, what Neeraj basically introduced with the use cases is a fundamental importance in any private -- especially private 5G discussion. To preempt sort of the main message of this slide, we really see WiFi 6 and 5G as very complementary technologies. And for us, it's not about choosing either-or but to have an and discussion. We see a lot of enterprises still focusing on the evolution towards WiFi 6, especially for those indoor use cases. Think about all the deployed access points that are out there that meet the requirements of a lot of the traditional use cases that we have in our offices. And so WiFi 6 is still going to play a role in those predominantly, I would say, indoor scenarios. Likewise, 5G also has a very well-established use case in place if we think about pure outdoor environments, especially when we need nationwide or global mobility even, where we are leveraging the licensed spectrum of cellular technologies. So here, use cases like transportation in particular or even consumer mobility really still will rely on licensed spectrum 5G. But what Neeraj maybe alluded to and what is shown here in a different way is that there are these new use cases that we think about and that we can enable that are kind of in this hybrid area of indoor plus outdoor, maybe where I want to start off in an indoor environment and then roam somewhat outdoor but not necessarily have the requirement to do global roaming. So these near-door, indoor/outdoor use cases or even use cases that have ultra-low latency, high bandwidth requirements in a particular stadium, for example, that are of particular interest to us as we think about 5G. So next slide, please. And so if we take that discussion to another level, actually, if we unpeel the onion, in 5G, we not only have sort of the high-level decision to make around do I use WiFi as a technology or 5G. We have -- also have to think about different forms of spectrum. And with 5G, we get actually a lot more choice here because of the new types of spectrum that are being opened up. Obviously, we have our traditional unlicensed spectrum that is associated with WiFi 6 or with licensed 5G. But even here, we have extensions now like the Citizens Broadband Radio Service, CBRS, which kind of gives us a semiprivate spectrum to play with that is applicable, maybe licensed for a particular geographic area and, therefore, enjoy sort of a hybrid of the fully licensed and the WiFi capabilities. For some use cases, you can have the option now to leverage millimeter wave spectrum or other forms of spectrum, like narrowband IoT or LoRaWAN. So in a 5G discussion, the point that Neeraj made about the use case, that's of critical importance because it can help us guide towards the right spectrum -- decision as we think about the services and our customer needs. The actual goal that we have in mind or that we're pursuing is to actually offer consistent identity and policy for enterprise customers no matter how end devices connect between all those different technology types. And that basically means, again, the end between WiFi and 5G technologies. And what we really want to get to is basically the mobile intent-based networking. In the past few years, if you've followed our technology evolution, we've put a lot of focus on simplifying enterprise operation with intent-based networking. And we want to make that notion and that architecture very much inclusive also of 5G and mobile networks so that it becomes completely seamless, whether an end device, a UE, needs to attach to the enterprise infrastructure over a 5G air interface or over WiFi or, lo and behold, even maybe a wired cable. The idea is that we basically anchor a lot of the user policies on how endpoints connect and who they are allowed to communicate with around this notion of identity while still maintaining control in the enterprise itself. So the notion of controllers in our architecture discussions plays a crucial role here because the controllers facilitate those policy expansions that you as an IT practitioner for a particular enterprise customer or for an enterprise themselves can set the policies, the rules and regulations with which these UEs communicate that you define these policies but then, with the help of a controller, drive those policies into no matter what part of the infrastructure that we outlined earlier on. Next slide, please. So basically, what we're striving towards is to have an access-agnostic, mobile intent-based network. That's our strategy is to say, hey, it should not really matter how an endpoint connects into the network, whether it's WiFi 6 or any other 5G spectrum technologies. If the policy -- the connectivity of an endpoint is anchored and governed by policy and underlined with intent with making sure that the network delivers what the endpoint needs and requires, then it facilitates and simplifies the operation. And so that's why we -- in our architectural discussion, we have a lot of focus on this WiFi and 5G on the notion of controllers and why the discussions around abstractions and intent-based networking policy are absolutely part of any 5G discussion. Next slide, please. So maybe just to line it up for Jeff. What is then a service definition for private 5G? Some of our discussion that we've had so far may have been a little more generic from a 5G technology perspective. When we think about private 5G, we are concentrating on a dedicated private network for enterprise that leverages 5G technologies and the seamless deployment of those technologies for enterprise customers. So where the endpoint itself is clearly owned and operated by an enterprise employee or maybe by contractors, where the applications that are accessed are under the governance of the enterprise IT, not necessarily maybe on-premise applications because we know that a lot of enterprise applications are increasingly moving into public clouds or are consumed as a service but where basically the governance is with the enterprise themselves. We're looking at services that are very much cloud-enabled with a high-performance edge platform as well as support from portals that give us visibility into the key performance indicators and SLAs for that enterprise IT network operator. So the 5 main service building blocks that we have in mind as you think about defining 5G services are, first of all, what devices does the service support and, in some respects, even considering 4G handhelds and user devices but also new end devices, as we touched upon earlier on, maybe automatic guided vehicles or even high-definition video, cranes, industrial routers; and making sure that the service addresses the carrier-class resilience and availability requirement, offering as part of the private 5G service flexible deployment methods, not only for complete outdoor but maybe also this hybrid that I talked about earlier on, indoor/outdoor, or where different elements of the 5G architecture are deployed. And here, 5G is particularly valuable; fourth, allowing for you to also have flexible consumption models. So we're very much considering in this discussion also notions around SaaS for flexible consumption with different T-shirt sizes, what we sometimes call it, small, medium, large options, depending on the customer need, the use cases. And last but not least, obviously, making sure that the service itself, when it's defined, addresses a broad range of use cases. Now at that point, hopefully, I gave you a few technical perspectives on what to consider in a 5G and especially enterprise-centric 5G deployment. I'll hand it over to Jeff, who will now elaborate a little bit more on our notion of 5G services.

Thank you, Matt. I really appreciate the deeper dive into the technology. It really helps set the stage for, I think, what's coming as we think about what this looks like from a real go-to-market perspective. And in our view -- Cisco's view of the world, excuse me, is that we think -- and I think we have data to back this up as well. We think the partners and the broad ecosystem of partner types are really going to play a crucial role in the success of private 5G across the enterprise -- across those enterprise use cases that both Matt and Neeraj talked about. And really, too, that's regardless of what the spectrum -- where the spectrum is, who has the spectrum, what type of spectrum it is. There's a number of business models that we see developing that will allow for various differentiated value-add offer constructs and services coming from a broad range of partners as we go forward. And so we wanted to talk a little bit about what does that look like from a partner perspective, why is that the case and then potentially, here as well, some partner models that we believe will come forward as Cisco services come together and our ecosystem kind of continues to evolve and adopt some of these technologies and service options. So Ken, next slide, please. Yes. So we do have data that backs up the notion that enterprises are really going to want to consume, not only, as Matt mentioned, in kind of an as-a-service model. They want that simplicity of the consumption economics to carry forward for these kinds of solutions. But also, and maybe even more importantly for us here, they really want this to be delivered and offered and managed by partners. They don't have that expertise. They don't understand or necessarily want to adopt and invest in the technology outright and leverage that kind of OpEx model, not only for the technology but for the surrounding services. And so when you look at the diagrams on the right, where we see what the partner base can bring to the table for our SPs, lots of areas of value that they know that they need -- those enterprise customers need as they're sorting out their use cases and implementing and operating this technology for its life cycle. So it's pretty easy to hit on, right? Lower their risks, having that single point of accountability, less complexity and faster support, just bringing that suite of expertise and capabilities to the table. And this is taken from a CIO survey so we feel pretty good about this data as being very true and reflective of the way the market is going to shape up here in calendar year '21 and going forward from there. So Ken, next slide, please. So what does that actually look like when we're thinking about how our enterprise customers and those developing those use cases and those needs, the cranes, the warehouses, the venues? Looking at the provider space or the partner space, it's a one-stop shop. So I can go to one spot. Not only do I have that operational capability coming forward with that one-stop shop, but I get options around assurance and billing and regulatory and compliance requirements that I don't have to -- as an enterprise customer, necessarily have to worry about or even want to worry about. And certainly not the least of which to bring to a private 5G solution set for the enterprises is spectrum. Where am I going to get spectrum? I might have private spectrum. There's option for unlicensed spectrum. And that's all something that the end customers are really going to want to have, that consultative engagement with a managed service partner to help them sort that out. Another area that's really interesting for our enterprise customers, I believe, is just the integrations, the verticalized applications, right? So is there a marketplace of sorts that comes forward out of these options and use cases that allows for verticalized software to be -- present relevant expertise is built into an offer as well. So coming forward with a verticalized solution that accounts for not only technology, operationalizing the technology and life cycle management but bringing software and applications and really helping get to -- the true value of all this is -- what is my environment doing? Where is that data? How do I make use of all that data? So let's bring some software to the table as well and help realize that value. Another key area is what else can I bring as a managed service partner. Matt did a great job kind of highlighting all the kind of -- all of the architectural elements that are in play. If you broaden the scope a little bit, you think of things like not only intent-based networking, but where is crosshaul and backhaul? Where does that live? What about security? And our MSP partners have a broad portfolio of additional adjacent capabilities and offers that they can bring to the table as well. So a lot of opportunity for addition of supplementary services. And I think, too, really, when we think about let's go win the business together, when we bring our partners to the discussion and bring their expertise and bring their value and help them realize that value with service creation that Matt mentioned, we're just here to collectively maximize the features and functions together and go deliver on those key business outcomes. So next slide, please, Ken. And really -- so what -- a little click into that, what does that look like from the perspective of the engagement between partners, MSP partners, across MSP partners and with Cisco as well? And so certainly, we see options and opportunities for straight partner-led Cisco-branded kind of private 5G solution coming forward. We see white label options as well, where we've got partners that will take, perhaps, a Cisco solution and go-to-market with that under their brand and leverage all those capabilities we just talked about that they have and Cisco kind of in the back end helping realize and provide that technology and operational solution from our site. And co-branded. There actually is a number of options and opportunities in the co-branding space where there actually could be multiple partners when we think about where applications come from and where edge compute comes from and where the core comes from and where spectrum comes from, right? So there's options for some interesting scenarios that could be co-branded as well. And again, really, it's all let's look at these options. And at the end of it, let's drive additional customer value together, right? So bringing that expertise, bringing those vertical solutions, addressing brownfield environments and regulatory requirements and bringing that kind of full-service asset of options and solutions together in a catalog, that is interesting and valuable for the end customer as they're standing up these environments and driving towards those business outcomes for their applications. And I think that's the end, Ken, for me. I'll hand it back to you, I believe, and we'll go from there.

Terrific. Thanks, Jeff. And thanks, Neeraj and Matt, for sharing your clear expertise around the industry of mobility and Cisco solutions in this space. To our trusted partners on the line, we hope you found the kind of the information shared with you useful as you think about how to build out your service catalogs related to private 5G, how you start to engage with your customers and prospective customers around where the opportunity is to use this transformative technology, to drive new business value and new business innovation. And you can expect a lot more along this conversation online from us. We'll bring you the kind of the in-depth detail of the various packages that we have around Cisco's solutions in this space. We'll talk to you more about how to engage within proof of concept and how to make that a balanced kind of engagement for both you and the customers and where Cisco's involved with as well. But please expect that you'll see more of this. If you have a desire to have these conversations now, it's more active, it's front and center for you, reach out. Your Cisco account teams can engage. They can help give you additional details that you may be interested in, and we can help you start to engage with your product management teams to build out capabilities and ultimately start to engage with customer opportunities perhaps as you're continuing to build out your managed services portfolio in this space. So look for that as it comes. And with that, I'm going to stop sharing and flip over to our Q&A panel here and see what great questions may have come in. Bear with me here for a second while I get to that.

While you're looking at it, Ken, I think we can talk about the question that came in about how WiFi and 5G and other technologies would -- could coexist together and would there be conflicts between these technologies. Matt, you touched on that a little bit. But again, from -- I thought it was a good question because we really feel that 5G is going to complement the existing technologies. WiFi is ubiquitous. WiFi is very simple to use. WiFi has its own advantages, and WiFi is pretty much being used in every industry, in every, I would say, almost site. So WiFi is going to be very important. It's going to continue. There are business applications and there are use cases where a customer might have different business outcomes. You might want to have latency that may not be available from WiFi. You might -- as a customer, you might need -- you might see that the WiFi spectrum that you're using, because it's unlicensed, is getting very congested and the performance is deteriorating. There's a lot of excitement around WiFi 6. It's going to improve the features and functionalities of existing WiFi systems. But at the same time, 5G will have its room. There are use cases that we see where there's need for seamless mobility, for seamless identity and policy between native mobility, which is at one place, and moving out of site, going into different regions. 5G has a role there. So both of those are going to complement each other along with NB-IoT, along with LoRaWAN and other technologies. It's going to be determined by what is the use case, what is it that the customer wants. Anyone else? Matt, would you like to weigh in? Yes?

Yes. I mean maybe adding a little bit of a technical spin to this discussion. Ultimately, this has also been a discussion around what is the back-end controller or the anchor for those sessions, right? And in a WiFi environment, we have the wireless line controller, which regulates and governs the communication out to the end device. In public 5G, we have basically the public 5G core that helps to manage the radios and helps to establish those sessions with the UPF. In a private 5G, we then have to think about, well, what type of core do we have. Is it a private core, right? So these anchors for the end-to-end communications then are important to consider. And why I'm saying that is because, initially, well, obviously, we're envisaging and we already -- I think it's fairly easy to realize an environment where you can use either-or, right, where you say, hey, now I'm on WiFi 6, and then I switch my session over to, let's say, a 5G technology. It's not very dissimilar to what we can do already today with our handheld devices. But it's not necessarily seamless, right? And in order to reach that seamless migration, let's say, from a WiFi environment into a 5G environment requires a common anchor, maybe common policy. That is being worked on, absolutely something that sort of industry is working towards, but a little bit uncommon right now from a practical use case perspective. So stay tuned on that. It's a great question.

Thank you, gentlemen. As I got caught up on the Q&A here after this slide sharing, I see there were some great questions that did come in. So we'll work probably here for the next 10 minutes just to talk through some of these. One of the questions that -- Neeraj, this is probably directly to your expertise. But spectrum could be both licensed and unlicensed. Or where does private spectrum come into play and unlicensed spectrum? I guess what are the options available?

Well, so it's a good question, Ken. A lot of -- again, I would say it depends. A lot of private 5G networks have been constructed around licensed spectrums. If you look at, for example, a lot of work which is being done in EMEA or even APJC, in Japan, in Germany, a lot of spectrum can be dedicated, can be used by enterprises for their private use, right? So a lot of private 5G networks have been constructed around that. In U.S., for example, we have CBRS, which is -- part of it is unlicensed. Part of it is lightly licensed, right? And so you could have a connection across that as well. You could architect a network across that as well. I think it's more a question of what exactly is the comfort factor for our end customer. Do they really feel that -- obviously, by definition, a licensed spectrum has better performance. It has got more -- better availability because there are limited number of people on that. There's better control. So is the end customer looking for requirements like that? Or is it that they could have a hybrid spectrum where one part of their operations could reside in unlicensed spectrum and another part resides on a licensed spectrum? And typically, we are seeing that in case of CBRS, right? So again, it depends on what the end customer is looking for and what are their business needs and what is the level of comfort with using a spectrum which may not be fully managed. Matt, from a technical perspective, Matt, do you have any thoughts on that?

Nothing to add right now, Neeraj.

All right. A question about where to best deploy the radio network related to 5G. I infer that this is kind of relating to an indoor use case. But if I think about indoor 5G or private 5G deployments, where would you deploy the radio? Does it go in the basement? Does it go on the outer walls? Or any guidance for how to think about that?

So yes, that is very much a discussion also about what type of spectrum you use. For example, maybe in a little bit different context, when we think about sort of the evolution of our on-premise CPE devices and equip those with 5G interfaces, we have requirements for high bandwidth, and we are basically toying with the idea of using maybe millimeter wave licensed spectrum for this. But then you very quickly get into sort of an issue around penetration. And so what you will see is maybe for those use cases environments where maybe the CPE sits in the basement, but the radio itself is sort of a satellite connection that has line of sight visibility to the -- to maybe the back-end RAN. So indeed, where to deploy the radios is a consideration, but it's very much a function of what type of spectrum you use and how far that spectrum penetrates and, obviously, what environment you have. From a base station perspective itself, when we talk about the radio access network, just maybe an additional insight here, in 5G, this notion of, basically, virtualization is very much at the forefront of architectural discussions. And we talk a lot about sort of the CUPS detector, the Control Plane and User Plane Separation. And 5G supports basically having the -- a so-called distributed unit and a centralized unit, so to split certain functions that are in the protocol stack into different virtual network functions and also have them in different geographic locations. And the idea is basically to say, well, if I have some of those protocol stack functions more centralized, it scales better, and it supports the low-latency use cases a lot better. So even on the radio side, not just the physical radio that basically does the modulation, demodulation and sends out the bits over the air, but even at the back end, so the IP protocol stack, TCP security stack, that kind of functionality can now be separated into what is called the centralized unit -- distributed unit. And there's different variants of how to architect that. So again, it comes back to the use case, which is why the scene, the context that they are set is so important in this discussion.

Thanks, gentlemen. The other...

The -- go ahead, Ken.

Go ahead, Neeraj.

No, no, no. [ I'll take next, please. ]

What -- the other element I would infer from that is, right, there is spectrum expertise in radio access design capabilities. That is, if you represent product management or a potential partner, just think through where you're going to get that expertise to design and implement that radio access network because it is a specialized skill set. And if you haven't played in this or if you're coming more from an enterprise network managed services perspective, you may have to partner with another entity then to help you with this, is the consideration for me personally that comes to mind.

Yes. Great point, Ken.

Is there kind of thinking around pricing? And maybe from an order of magnitude, if we think about the delivery or connectivity from a traditional WiFi network, the translation into private 5G, is there any sort of economic context, appreciating that each solution is a little bit differently designed and density and those sort of things factor in? But I don't know whether there's any kind of rule of thumb or general order of magnitude that you could speak to.

Matt, are you going to talk about that? Or should I? So -- all right. So Ken, that's a great question. Ken...

Please go ahead, Neeraj.

Okay. No, no. That's a great question, Ken. Look, I mean we know the price advantages of WiFi. I mean it's there. When we're using a private 5G network, obviously, think about the difference that somebody has to pay for the spectrum. Somebody has to pay for systems integration, right? Somebody has to pay for radio management. So WiFi, at least from my perspective, has an inherent price advantage. However, there are other factors come into play, Ken. The amount of radios that you're going to put in, the amount of access points that you're going to put in because, in certain cases, private 5G may have better coverage, right? Now on top of that, Ken -- so that's just one aspect of it. That's the cost of service aspect of it. But then the other aspect is going to be what is the value that is really going to be created by this type of network. We have seen -- I'll give you an example. Remote maintenance, right? Some of the remote maintenance, remote manufacturing machines, right? These are machines which cost hundreds of thousands of dollars that even 1 day of downtime takes a lot of business costs, right? It has a lot of business cost, revenue costs involved in that. Now if we find that a machine is at a remote location and WiFi is not available or, frankly, WiFi cannot do -- allow remote diagnostics and private 5G network or private 5G offering can allow that remote diagnostic, this would preclude maybe an engineer flying all the way overseas and a downtime of 24 hours. In a case like this, the value that you would create by having a private 5G network then would far transcend the cost of just a WiFi network, right? So there are all those questions. That's why a business case -- doing a complete business case and having an understanding of what are the costs, what is the operating expense involved, what is the business value that's going to be created, how to quantify that, all that is going to be important, really, for enterprise and for our other service provider customers as well.

Thank you. Thank you. That was comprehensive. Kind of stitching it together, I think your response from that and the previous discussion around WiFi 6 versus private 5G, the way that I kind of synthesize that is, if you've got an existing use case, right, that WiFi may be able to help you meet that, if you've got new transformation activities or use cases which WiFi is not able to address today, that's where to look to private 5G and to use that for new business value that we haven't been able to capture previously. All right. A final, final question here. Matt, this probably goes to you. But just any sort of guidance or capability that exists between, I think, private and the macro 5G mobility? I guess what should we expect there? Will that be seamless? Or is that ubiquitous in all solutions?

I would say not today. I mean, right, today, the modus operandi that a lot of providers and vendor are starting off with is this sort of, hey, you're anchored around a particular core. Absolutely, the goal is to say, hey, I want to be able to take an end device and maybe attach to a semiprivate spectrum, the CBRS spectrum, and then roam, if I happen to, into the licensed spectrum. That's very much also a question of SIM management, right? Like, who -- where do you get your spectrum from and who owns it as well as then in the packet core to set up the roaming agreements between the private 5G core and then the public core? So I would say, architecturally, those discussions are in -- sort of at the beginning, maybe not necessarily infancy but beginning, right, and definitely something that we're working on but depends very much on the where you get your spectrum from and what your architecture is for the actual core, both the private core as well as the public core.

Terrific. Thanks for that, Matt. Well, team, I appreciate we're 1 minute before the top of the hour. I want to make sure that our fantastic attendees get on to their next event in their day on time. I'll just say a note of thanks for our attendees. Thanks for your time today. Thanks for your interest in this. Please just reach out and have these additional conversations for Cisco. Thanks for your partnership and working with Cisco and trusting us to be your technology partner in these sort of spaces. Thanks. Have a great day. Katie, back over to you.

Thank you, Ken. And yes, thanks to all our attendees out there for joining today. As a reminder, a short survey is going to pop up when you close your browser. Please click through and provide us with your feedback. And with that, we hope you have a great rest of your day.