Silverlinings – Interview with Ido Susan and Hillel Kobrinsky

Steve Saunders:  Ido, hello. Nice to see you. Congratulations on this extraordinary success that you’re having with your business. You’ve had this amazing breakthrough with AT&T, where you’re actually now carrying 52% of their core cloud traffic. That’s unheard of for a startup to have that level of success. And with the largest service provider in the world, how have you managed to do that? 

Ido: I think it’s all about to create a value to your customer. So as long as you are able to prove them that you are helping them to either create a new revenue or reducing the cost per bit or changing the economy of their network, they are with you. Then you need to move to the next steps that you need to prove them that it’s working. And this is generally of a few years.  that we are well known

Steve Saunders:  and they’re obviously happy. They’re out talking about you and singing your praises. What do you think has been the biggest surprise for them, perhaps in terms of the performance of the products? 

Hillel : That it’s working. Really? They actually were very surprised by moving from the lab into production and not going back to the lab. Right. Usually the case is that you go to the lab, you go to the network and then go back. In our case, it’s just there. So they were very happy, and I think it was a great effort from their side as well. But we needed to show that it’s really working and it served their needs. This is not about just technology exercise. It’s really deliver value. So as they make progress, they saw the advantages and as it is bigger, the big advantage you get from it.

Steve Saunders: Well, let’s talk about advantages. I think your company has been quoted as saying that you win 65% of the bids that you go in for as service providers against the incumbents, like Cisco and Juniper and Nokia. What are you winning those bids based on? Is it saving money? Is it making money? Is it reliability? What are the criteria that you think that you win on?

Ido: Everybody want to move to the next generation in order to create those values, but it’s not a question anymore if the software or hardware will win. I think the battle already done. Moving to the cloud, it’s not important if it’s a private hybrid or public cloud and we are the bridge for them to be able to move to those clouds, I hope to increase even more our converge rate. This is what we call of winning. We’re working very hard to do it, but I think, as Hillel mentioned, we’re going to the customer lab. We prove the technology is working, we’re getting their trust, the technology trust, and then we help them to move there and convert the network to be a software based solution. And then they start to see the benefits.  AT&T mentioned about huge savings. I can tell you that we have many customers that already use and see it and building business model that see the same value and even bigger. Right. So I think this is all about. 

Hillel:  And bear in mind one more thing that they’re really happy about the fact that we are very focused on the service provider. If you think about the other incumbents, they have many businesses, they have enterprises, they have many things and we are very focused on them. So this is something that really they care much. 

Steve Saunders:  Well they need to become operators of cloud networks and you support I think mainly native cloud. Right? It’s not a halfway house of sort of an Encapsulation or Kubernetes or this is real Native Cloud. And that seems to be and we’re at MWC, and that seems to be a theme here, that we’ve kind of gone through the workarounds or the bootstrap versions of Cloud. And now it’s time for some Cloud clarity, some pure Native Cloud implementation. That’s really where you reside, is that right?

Ido: Yes. If I will compare what we are doing to what happened in the compute and the storage industry so computer and storage industry start from the mainframe move to the X86 then VMWare, OK VM, the virtualization come on top and today everybody using the cloud public cloud, private cloud system. I think we are doing the same. Okay we took the whitebox set as a layer of the X86 generic purpose. We developed the VMO of the world, our network cloud solution and in the end of the day I believe everybody will consume it as a cloud either private or public or multicloud  I think we see exactly the same journey. But you know, you you need to build a building from first floor, moving to the second etc. Until you come into the penthouse and this is what we are doing. 

Steve Saunders: Can you give me a sense of what happens next to the company in terms of the company? I mean you keep on getting these extraordinary investment rounds. I mean what are you going to do with all of this money and at what point do you become a company which doesn’t need any more investment but has to go public?

Hillel: The investments are first of all because it’s a long journey and we need to keep investing to make our service provider happy and we need to make them comfortable. There is enough in our tanks to allow us to run for the long run. Obviously the goal will be to grow a big company and to go public. But this is a long journey. We are both after several startup, successful startup. So this one we knew that it will take longer and you need enough resources to keep investing because it’s easy as a slogan to say we will move them into the new area of the cloud. But in reality it’s take long years and effort and technology to make it effort. 

Steve Saunders: So it’s a constant R&D effort, I suppose. 

Ido:  And operations and services. 

Steve Saunders: And providing the level of service which telco or service providers need, which includes obviously, reliability and predictability and that level. 

Ido: Of 24/7 support and whatever. It’s coming with a package to sell five, nine solutions. 

Steve Saunders: And, and, and that seems to be what you were saying as well, Hillel, is that you have that laser focus on the service providers, which perhaps the company wouldn’t be so successful if you had targeted multiple different verticals or industries to start with.

Ido: You raise money as a tool to achieve something to invest and create more value to our customers and to be able to cover more. I will call it the ecosystem for customer perspective. Okay. We are engaging with tens of customers, different steps. Okay? Some of them are in POC lab, some of them in production, some of them we are in negotiations and it. 

Steve Saunders: Seems to be going fantastically well. Thank you. In some ways, you have the best type of competition. They’re big incumbent vendors. They don’t seem to be doing as much to compete in your space as they might be. Why do you think that is?

Ido: First, they are competing very hard. Second, for big companies, it’s very hard to change, very hard to change the culture, the product you need, the startup, is disruptive to coming and shift it around. I think this is the reason that we see AWS as a new vendor that came and creates the biggest cloud in the world. Okay, why not other vendors? That was before. So we see competition from the incumbent. It’s competing with the traditional product and the business model or the go to market. This is the reason that I think that we are able to win more and more. But this is the nature of any business that you disrupt.

Hillel: In reality, you also can look at it differently and say, we don’t mind about the competition. I mean, those are big companies and very successful and in some aspects we admire them. But if they want to keep buying what they’re buying in the last 20 years, there is nothing for us there. We are in a different journey there. So we are not really looking it’s not a competition that you’re looking what the competition is doing and try to improve. We are in a journey to take them into the network cloud area and this is a totally different offer with all the benefit associated with and we are very focused on that. So in the outside you can say, okay, they compete. In the reality, the service provider need to choose when is the right moment for them to move.

Steve Saunders:  Yeah, I think the story of service providers has always been one of transitions. It’s a journey which has many transitions along the way. And you know, these companies have been around for over 100 years in many cases, so they know about that. The thing which drivenets has done is make an irresistible argument for the technology that you’re selling. It’s just at just the right time for these companies. And as I was saying before, when we were first chatting, is there is no other company which is more representative of what Silver Linings is about than DriveNets. So we’re really enjoying talking to you about this. Well, I’m going to be coming out to Israel to see you in person. You can give me the tour. Thank you. Thank you very much. Thanks.