Cisco's Service Provider Boss: Pankaj Patel

More an engineer than a salesman, Pankaj Patel has been relatively shy with the media since taking the top telecom post at Cisco Systems Inc. (Nasdaq: CSCO), where his official title is Senior Vice President and General Manager of Cisco’s Service Provider Group (SPG). Light Reading was the first publication offered a chance to speak with him at length, and how could we say no to that?

Patel joined Cisco with the Stratacom acquisition in 1996. He and Tony Bates were eventually appointed by Mike Volpi to run Cisco's service provider business. About a year ago, CEO John Chambers split up the team, putting Bates in charge of the enterprise business and Patel in charge of service providers, including cable MSOs. Patel has since overseen major product launches, including the ASR 9000 and the CRS-3 core router. (See Cisco Pumps Up the Edge, Cisco Boosts the Core With CRS-3, and Soaking Up the CRS-3.)

Light Reading first met Patel at the 2010 International CES in January, with NBC representatives, to discuss networked-video plans for the upcoming Olympics. (See Cisco Preps for Olympics Trial.)

That set the stage for a recent one-on-one talk (well, with two handlers in the room) at Cisco's Building 11 in San Jose, Calif., in Patel's office. More specifically, it was in the annex to his office -- a small meeting room outfitted with a computer, a videophone, and, of course, telepresence.

We learned, among other things, that Duke basketball fandom spreads far throughout the executive team. Not included in the interview is Patel's claim that he's still a Boston Celtics fan. That might not be the topic to bring up if you run into him in the next few days.

Let's get on with the interview, shall we? Here’s a hyperlinked contents list:

— Craig Matsumoto, West Coast Editor, Light Reading

Next Page Shooting Hoops

Light Reading: Did you get to go to the Olympics?

Pankaj Patel: No, I didn't. I'm hoping I make it to London [in 2012].

LR: How did it go?

Patel: It went very well. We are looking forward to taking that beyond the distribution and contribution stages. Hopefully, 2012 will be even more powerful.

LR: I think I saw ESPN -- ABC, basically -- quoted saying if they got the Olympics, they would try to do more live broadcasts. Is that necessarily any harder? Everything was getting filmed and transmitted anyway.

Patel: It will clearly put some of the technologies to the test at a scale, because now you're talking about delivering this to millions of people. We'd love to do it.

What we talked about in Vegas [at CES] was being able to sustain the transmission of very large files for a long period of time. Those levels of quality-of-service will be something that people will get to expect. Size of the screen will become less of an issue. And service providers will be able to offer this over the cloud.

Collaboration will take a very different meaning. We had a chance to talk about consumer telepresence back in Vegas, and those kinds of collaborative tools will start to become more prevalent. And as 3D becomes more popular, it's something people expect to see, whether it be games on ESPN or more movies. When we talked about core-router bandwidth, people said, "That sounds too big," but I believe that the need may be there, for a period of time.

LR: Some of those things don't take as much bandwidth as people thought, though. I remember talking to Ken Wirt about telepresence -- I can't remember the number he gave me, but the bandwidth used is a lot smaller than I thought it would be. [Ed. note: Hey, genius -- 1.5 Mbit/s.]

Even so, doesn't all this hinge on the one part of the network you don't have control over -- the span between the network and the house?

Patel: You're right. At the same time, that's the area where the SPs are investing very nicely. [Patel frequently says "SP" in place of "service provider." We hope he's not referring to ESPYs.] You have FioS and U-verse going up in speeds, and on the MSO side, you have Docsis 3.0. They've been going up to 50-Mbit/s services, and if you happen to be in some parts of the country, some of the offering of 100-Mbit/s service has started. In Europe, they've started even 200 Mbit/s.

LR: Do you have U-verse or anything like that at home?

Patel: U-verse -- actually, I got a note that it's coming to my home. I'm on one of those fringes. The pizza doesn't deliver because we're, like, one block over [the boundary]. So, at Super Bowl time, it's not the happiest moment for my boys. They have to go and get it.

I have a pretty fast data service at home, so I enjoy that.

LR: Are you a sports fan yourself?

Patel: Yes, I am. Well, my boys -- I've got two sons in their 20s. My younger one went to Duke.

LR: That explains it. [Eyes the framed, autographed Duke basketball poster on Patel's office wall.]

Patel: They get basketball as part of their religion, so it's tough. My older one went to UCLA and Stanford. These are all good basketball schools. So, the two of them always argue. My older one will say, "Yeah, forget about Coach K, nobody can come close to Coach Wooden, period." [This interview took place before John Wooden, venerated UCLA basketball coach, died at age 99.]

So, yes. We watch a lot of basketball. When I go home, it's either on or it's taped in one form or another.

LR: So, tell me about the poster.

Patel: This is when J.J. Redick was a star four years ago, like [Tyler] Hansbrough was last year with UNC. He was of the same caliber. He plays with the Magic now.

PR Guy: He [Redick] looks like a different person now; he looks twice as big.

Patel: My son was used to camping to get in. At Duke, you can't get in unless you camp to get the tickets. And he stood, I don't know how long, in line, to get three of the posters signed -- because the team, at the end of the year, will sign the posters. I gave one to John [Chambers] four years ago and one to another hardcore Duke fan on my team. Dan Scheinman [head of Cisco's Eos group], by the way, is a big-time Duke fan, because he went to Duke. (See John Chambers's Bracket.)

Next Page: Telco Futures

Light Reading: Do you think the service providers are prepared to deal with the threat they're getting from over-the-top services and Google (Nasdaq: GOOG)?

Pankaj Patel: They understand the threat.

LR: That's Step One, but now what?

Patel: They have their own plans they're discussing, in very early stages. They're pretty smart. They've been pioneers in a lot of technologies, but even when they're not the pioneer, not the first one out of the chute, they create interesting business models like there is no tomorrow. I'll give you one example. If you think about the DVR, this is something that TiVo Inc. (Nasdaq: TIVO) has to be given a lot of credit for. At the same time, you look at the way it really propagated and what really created the scale that was needed -- it really came through set-top boxes and the like, the networked DVR.

My point is that, sometimes it may not quite look as if they are right there with our companies in the Valley, but they're really careful thinkers. They put together their technology, their architectures, and their business plans in a very well thought-out way, and they go out with meaningful scale.

I've been thinking they're going to see a lot of opportunity in a B-to-B-to-C model. [That's business to business to consumer.] Traditionally, they have relied on the B-to-C model.

LR: Right. They send a bill every month.

Patel: But look at Amazon.com Inc. (Nasdaq: AMZN). Over Christmastime, they sold more e-books than physical books. They developed and put into practice a business model where you and I shop online and they charge it -- but what they did was open up a lot of their back end to the content providers. When they did that at first, people were, like, "Are you sure?" But they actually leveraged that very well. That contributed to Amazon's top line only in single digits, I think, but it contributed very significantly to their bottom line, because it becomes a straight flow-through.

Similar models have been used by credit card companies, because they collect money from both sides: They collect from us, because a lot of people don't exactly pay their bills on a monthly basis, and they collect money from the merchants.

I think in some sense this is where the future of video is going to be, because you have an open services platform, which is very Web-friendly. It brings in the linear TV, pay TV, VoD, as well as anything that's on the Web. More importantly, it provides a platform where Cisco and other providers -- and more importantly, the application developers, the video companies, the content providers, the retailers, and the service providers -- all of them can participate. That to me is where a lot of the future for video is going to head to.

LR: If we take the analogy of what Amazon did, does that mean opening up the network and even opening up the billing systems to these other guys?

Patel: Someday, it can. I don't know as to what SPs will do; it's really up to them. Clearly, you will see more and more open platforms.

LR: Have you talked to them about that? Because service providers have a reputation of being very guarded about their networks.

Patel: I have not talked to them specifically about their billing systems. A couple of big telcos have already talked openly about the open ecosystem for application developers. They were talking about that at CES, right? They have not shared plans with me, but I've got to believe that at some point in time they will do that.

LR: I know you guys talk a lot about open standards. The response that comes back from that is that the standards consist of what Cisco did first and then pushed on the standards bodies. What do you think of that image, of Cisco trying to build an all-Cisco world?

Patel: I'm a bit surprised -- I shouldn't say I'm totally surprised, but I've got to say that dating back to our early IP days, Cisco has worked very closely with the Internet Engineering Task Force (IETF) , with the Institute of Electrical and Electronics Engineers Inc. (IEEE) , with the Optical Internetworking Forum (OIF) , you name it, right? Internet/IP was all formed on open standards. We are a big believer in that. We contribute, not just in terms of the RFCs, but in terms of a lot of our IP [intellectual property] contributed over the years. If we have developed something, we work with the industry.

Now, one might argue that gives Cisco the early edge, and it does, but if you're going to innovate, then I would say we should have some edge or some advantage. History will prove that we have a pretty good track record contributing to the open standards.

Next Page: ASIC Days

Light Reading: You were an ASIC guy...

Pankaj Patel: I was, absolutely. I can envision the job of an ASIC engineer or a software developer or a tester to be more and more exciting, through the innovations that will increase productivity x-fold. I envision the ASICs getting to a billion or so transistors over time.

LR: What does this mean as far as the distance between generations of technology?

Patel: I think it's the same as what we have heard from some of our largest customers: When they built a backbone with 10 Gbit/s, it lasted them maybe seven years. Forty Gbit/s, they're saying might last three, and 100 Gbit/s, they're questioning if it'll last, what, 18 months or so.

I think we have seen the same in silicon, going from [line widths of] 90 nanometers to 65 to 40-something to 22 and beyond. As the complexity is increasing, I go back to the productivity tools. People will be designing at a different level. There will be a lot of IP created, and there will be reuse of IP.

LR: Do you miss those ASIC days?

Patel: I do, and that has been one of my attributes: that I still remain very engaged in technology. My passion has always been engineering, even though I have been in the business world a long time.

LR: [Pointing out the door.] If we threw you into one of those cubicles today...

Patel: It would take me a while! But I probably could come up to speed eventually. I have to be honest with you; I don't get as much chance to spend time in the labs as I used to. But I still do. Every once in a while I'll go to Buildings 15 and 16 and say, "Guys, let's take a look at this multichassis," or "Let's see the nondescriptive switchover of the route processor." I just can't get away from it. It's something that's still with me.

LR: I take it you like the idea that Cisco still does its own chips, too.

Patel: Yeah. One of the things we have done is to recognize there is a lot of value silicon providers bring to the table -- Broadcom Corp. (Nasdaq: BRCM) and others, we leverage them on a regular basis. But at the same time, we believe that we have to add our own value, and we do that, pretty much as you saw on the announcement that we made with the CRS-3, or a couple of years ago, with the ASR 1000 and the QuantumFlow processor. It's development money well spent, because it's part of our differentiation.

LR: You think it will always be that way?

Patel: I think in one form or another, it will always be that way.

LR: Really? There have always been efforts to build the kinds of chips you -- meaning Cisco -- would want, and I would assume those are getting better over time. What would it take to close the gap all the way and get Cisco to say, "We're going to just do the software"?

Patel: There are always opportunities where we have something we used to do, even 10 years ago, that's gone away, because I don't need as great a job and [an outside chip] can meet the needs. Then you move on. Clearly the value more and more moves into software.

When you look at how to bring the core infrastructure of networking in line with the data center services -- this is all about moving up in the upper layers, 4 through 7, and how to really make both the networking and data center look as one. There will always be more value as you move into the upper layers. A lot of our investments over a period of time will go up into that area.

LR: Do you like running the service provider business on your own? You don't have to deal with Tony any more. [That's a joke, Tony.]

Patel: Actually, he's right next door. We talk a lot.

LR: [Envisions Bates crashing through the wall dramatically to have his say. It doesn't happen.]

Patel: We rely on each other's input for our daily business quite a bit. We have great camaraderie.

LR: How about starting your own company after this?

Patel: I have done that, you know.

LR: Yeah, but you didn't do it for very long. Two months and then acquired -- that's the easy way. [Patel left Cisco in 1999 to join Siara, which was scooped up by Redback two months later, for $4.3 billion.]

Patel: Actually, before I came to Stratacom, I had my own company for five-plus years. It was a semi company, and my company had almost 20 people. I was focused, back in the time, on developing ASIC IP [intellectual property] cores as well as developing interesting tools. This was before a lot of push by Synopsys and other companies that came into existence -- this was the early days of Cadence, and the era of Micrografx and companies like that.

So, I had my own company for five-plus years. It brings a lot of humility, learning the truth of the trade, meeting your own payroll, and going out and selling. I have done that, and I enjoyed it. But this is what I love and enjoy now, and this is where I am.

— Craig Matsumoto, West Coast Editor, Light Reading

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