tv Maria Bartiromos Wall Street FOX Business February 23, 2019 3:00am-3:31am EST
i'm jamie colby. thanks so much for watching "strange inheritance," and remember, you can't take it with you. ♪ wall street week starts next. >> from new york city, this is maria bartiromo wall street. maria: welcome to the weekend. i am maria bartiromo, great to have you with us this weekend. coming up in just a moment, my interview with the chairman and ceo of cisco. chuck robbins is with us this weekend. but first, the u.s. meeting with china this week to try to hash out a trade deal before the march 1 deadline. on thursday sat down with secretary of state, mike pompeo to discuss china and huawei, and how they are posing a threat for privacy and national security.
>> they are creating a real risk for these countries and the security of their people. europeans carry deeply about their privacy it is very real. we are out sharing this information i acknowledge that we have gained through this vast network and making sure countries understand the risk. we think they will make good decisions. >> it is not even the risk for them, it's the risks for the world. if you are in high-level talks talks about national security with polling, with the five eyes, american information is out there, too. china has tapped into their network. >> that's a second piece we are shared with them, as well. which is, the country adopts this and puts it in their critical information system, we will not be able to share information with them. maria: are really important headline right there. try to be as the crr of cisco. chuck robbins. i want to get your reaction to
the whole huawei issue. the europeans that push back when the secretary was overseas last week. they said the, we have already invested all of this money and huawei, how are we going to redo our telecom structure. we should point out that this is subsidized. the government already chose before, years ago. >> these customers around the world have made decisions on most of them are using a combination of technology and other technology. you are going to find a very small number telecom providers around the world who have a single vendor. we built an incredible network in india, with alliance geo. that's pretty much our stock. the radio network comes from a third party. there are investments that have been made. these issues are clearly between the government, the united states government, european government leaders, and they have to make these decisions between them about what is going on. what we focus on right now, is we are focused on delivering the innovation that is needed to take advantage of these major
technology transitions ready to occur. maria: there analysts out there who believe that cisco is going to get on market share gains as a result of the questions around huawei. putting that aside for a moment, are you see in an increase in business around security in general? this is becoming a hotter issue with a lot if you're around it. >> i think there is a couple of aspects to this question. for small, our security business grew 18% last quarter. we are one of the largest security providers for enterprise and government customers around the world. we are blocking in excess of 20 billion threads per day for our customers. so, that part of our business continues to ramp. the threat surface is increasing. we are seeing more and more threats every day. then, as you look at the other issues that are occurring around the world, i think that as our
customers look to make decisions now, they are assessing not only the innovation which we are focused on, they are assessing trust. they are assessing how secure they believe the products are. these are becoming more and more important criteria for their decisions. maria: yes, because you are seeing all of these cyber intrusions. characterize how bad it is. we are talking with the secretary of state yesterday. he basically said, were talking about thousands of cyber intrusions a day, whether it's in china, russia, north korea. we know who the bad actors are. you must have incredible to intelligence on how many attacks or attempted. >> if you just look at the customers that our products are defending, because we see the threats, we aggregate the threat so we can defend other customers. when we see any threat coming in in asia, we actually correlated and dynamically update networks in europe, technology and the u.s. to actually protect against that threat. we are seeing billions a day. billions on a global basis. so, these are not all new, but
it is massive. it is just increasing. again, as we move into iot and have more connected devices the threat service gets bigger and more attacks. maria: in your last earnings call you were pretty confident on the macro environment. tell us what you're seeing in terms of enterprise spending, in terms of businesses putting money to work and getting ready for 5g. how would you characterize what you see today in your anticipation for the year? >> if you look at our orders last quarter, which ended i think it was four or five weeks ago, our enterprise business was double digits, our midmarket commercial business was up 7% globally. our orders were up like 18%. so, we saw a very consistent demand. our service provider business which is where the 5g will come was slightly down, like 1%. but, we don't expect the five in g build outs to really start in mass until 2020.
but, we say very consistent demand from the first day of the quarter till the end. we sought across customer segment, across geographies. europe, middle east and africa the orders were up 11% for us. so, asia was up in single digits, the u.s. was up 7%. was i really consistent demand. now, there is clearly, there continues to be lots of geopolitical risk. if the trade talks go sideways, who knows what happens. maria: one of the analyst at goldman sachs is the biggest surprise for him was the very high order rate for the public sector. you mentioned the 18%. it has been 2% going back all the way until 2010. what happened? >> i think there is a couple things going on. first of all, this technology is at the heart of the strategy of our customers. it is no longer enabling their strategy. they are taking the technology and they are defined in their
strategy of what makes possible. so, a lot of the focus over the last decade has been around consumer tech. if it's on your phone, you know what it does. if you use social media apps, then you know what it does. but, what we do isn't that clear to the everyday investor. maria: that's right. >> so, the technology that we are building are really enabling our enterprise customer and public sector customers to digitize and really take advantage of the new methods of revenue stream in the case of public sector. new ways of delivering citizen services, putting video connectivity in the rural areas and delivering citizen services virtually. there are all of these things happening which are leading to continuing demands. maria: there is this expectation that it continues leading up to 5g. what happens then? this week i haven't a
foxbusiness exclusive with the chairman of at&t, who you know very well, he said 5g changes everything. here's what he says. i want your reaction to it. >> growth, as we look into the future, as you mentioned at the beginning, is 5g. i have seen a lot of technological innovation in this industry over my 36 year career. i've yet to witness what we are about to see in 5g. this is going to change everything. this becomes, you talk about a faster network, it's more than that. it's an instantaneous network. no latency. it is an immediately responsive network. maria: what about that? tell us what that means and when this would be a reality. i know this is not on the market today. >> know, but we have been talking about it for many years. maria: and the retooling has begun. >> it has begun. the trials are beginning this year. you have heard some customers talk about it. i think this is one of those great examples with hyper building up to this, the reality is going to match the height. the fundamental difference that this technology is going to
bring, you're going to see speeds in 2022, you're going to see speeds that average four or five times more than what we get today. if you think about what it enables, not only higher speeds for mobile devices, but we are going to get connectivity into rural areas that we have not been able to, because the cost of digging trenches and lane fiber has been prohibitive. now, we can do this with 5g. we can connect people who have not been connected before. we have done a study, and we believe in 2022 there will be over 400,000,005g connections. maria: while. >> you know what happens when you get to a place where you have all of this high bandwidth capacity at the edge of the network, their core infrastructure has to be updated to accommodate that. that's one of the big roles we will play as delivering innovation that actually allows our customers to deal with all this traffic. maria: it is amazing that the
wireless business keeps growing. they find wireless customers, weathers people like what you're talking about who haven't had the connection or haven't had a fast connection, certainly. sometimes there are areas where you just don't have good broadband, still. or, there are other situations where people are taking one or two phones. that's not even including the smart appliances are the autonomous cars. but is also going to get fired up with the 5g. >> 5g is going to provide everything from the ability to connect iot devices so things in your home, vehicles, all the way to connecting enterprise branch locations. because, the whole notion of lower latency is really what is required to do real-time video applications. if you think about what this is going to create, we believe in 2022 that the amount of new traffic created in that year, will exceed all the traffic
created since the inception of the internet. maria: let's take a short break. after this break with chairman and ceo of cisco, stay with us i but i can tell you i liberty mutual customized my car insurance so i only pay for what i need. oh no, no, no, no, no, no, no... only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪
>> welcome back. cisco ceo, chuck robbins is with me this weekend. chuck, i want to ask you what's driving the business today. were talking about security which is such an important part of your business, i recognize. as well as all of these new developments on the horizon weather is 5g, ai, look over the next three years for the cisco shareholder watching out there, would you find the growth?
to really drive things. >> maria, if you think about areas like security which% for us. our application business which includes iot platforms and at dynamics, our collaboration portfolio grew 24% last quarter. our core platforms group. what we see happening is this transition to the cloud is requiring our customers to change everything about how the technology infrastructure is architected. it's a little complicated, but if you just think about it for a moment, for the last 15 years, their network infrastructure was built based on an assumption that you had users at the edge and you had application to your private data center. so, all of the traffic was coming back to the center. now, they find themselves in a super complicated world. well, you have users, branches, mobile users and devices at edge, but you have applications
in hundreds of places. you have sass applications for companies like salesforce, you had public cloud applications, you still have private data center applications. so, the traffic there is in all sorts of directions. the underlying assumptions that they use when they put their technology infrastructure are no longer valid. that is what is driving them to be rearchitect their infrastructure. the irony of all irony is what is supposed to be bad to us as customers retool their technology to take advantage of this. maria: the retooling is going on globally. there are some areas certainly slower than others. are you seen the same level of activity in the u.s. versus europe? i was looking at a report the other day, i know there's a lot of uncertainty in europe with brexit, france, italy budget issues, but i didn't recognize the economy was looking at a growth of 1%. is that the kind of activity you are seen slow in europe? >> well, last quarter our europe
region was the fastest growing for us, believe it or not. from an orders perspective. i think even in the midst of brexit, we would double digits up. so, i think these trends and what our customers are trying to accomplish, they don't view it is optional. there is great concern from an enterprise perspective about falling behind if you don't continue to invest. i think the public sector entities around the world and governments just see the value from this technology and what they are trying to achieve, that so far we have seen pretty consistent demand. i think we are in the early days of this retooling that we are talking earlier. maria: i want to ask you about ai, artificial intelligence seems to be the new buzzword. we'll take a short break and come back with that. chuck robbins, we'll be right
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>> welcome back to wall street. my special guesses chuck robbins, the chairman and ceo of cisco. you are headed to the mobile world conference next week. this is all about 5g. >> it's all about 5g. maria: i know you have some announcements are going to make. what should we expect in terms of the town, the important themes there? >> the theme is going to be 5g, 5g, 5g. it has been for several years.
last year, it was just very clear that we were moving into execution mode. every customer last year wanted to begin conversations about what does this do for the architecture. what is it mean to my infrastructure to actually build this out? we begin those discussions last year. this year, you're going to see announcements from us. were going to talk about partnerships we have with providers around the world and work that we are doing. there's going to be a lot of discussion around to enterprise services that are enabled because of 5g. a lot of people think about it in the mobile handset space, but, the enterprise service capability across these high-speed networks is going to be impressive. our business in the enterprise is really strong. we have a unique opportunity to help our service provider customers actually build out services. maria: what about ai? how often is this coming up?
are you seeing artificial intelligence as a big factor in terms of enterprise spending? >> i think that there is a bit of a misconception that you go out and buy ai. the reality is, a lot of the technology that are we are delivering for our customers have an underlying technology around ai that are helping us do that. the number of security threats we see every day, we are using massive data machine in ai to correlate and dynamically demand for our customers. we are using it in understanding application for those using it and various other ways. it's an enabler that is flowing across our entire portfolio. maria: and it is based on data. a couple of weeks ago we had the former president of google china. he is considered the oracle of ai. here's what he said about america remaining the leader in ai. watch this. >> if u.s. wants to stay ahead in ai, probably one of the best
bets is to bet that apple but google, or amazon, or facebook becomes the world's strongest ai company by having a great scientist and deployment, and data, and that would be strong both for the u.s. economically and technologically. however, that may, at an expensive individual privacy and things like that. so, that is a conscious trade-off. i would personally question not to go too far on either side. maria: so, privacy is in the hot button issue for american citizens right now. that is why we are talking about the vulnerabilities around huawei and the vulnerabilities will china. what's your take on this? europe is ahead of the u.s. in terms of regulating the social media companies, that's for sure. >> i think in listening to the conversation, i firmly believe that you can balance the two. i think we definitely need
clarity around privacy. our citizens should be able to feel comfortable that their data is being used responsibly, whatever that means. i think gdp are from europe is a reasonable start. i will tell you what we can have in the united states is a state-by-state balkanized approach to this. we need an approach for the country and frankly, we need countries around the world to come together and to find some standards for how this is going to occur. because, if you don't, if tech companies have to build out capabilities on a country by country basis, smaller countries lose. because you're not going to go there. but, i think in this case companies that have access to massive amounts of data, great data scientist, you need the data to actually do it. that doesn't mean you have to violate people's privacy. you can have lots of data without doing that. i feel very confident and where the u.s. is and our ability to continue to lead, here. maria: that's an important point.
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plus every weekday radio the foxbusiness network, 6:00 a.m. to 9:00 a.m. eastern, "mornings with maria" airs weekdays. that'll do it for us right now. have a great rest of the weekend. i'll see you next time. >> hello, and welcome to the wall street journal at large. this week, were going to take a deep dive into healthcare. now, we live in an age of exciting and extraordinarily rapid progress in medical research. some of the most dramatic and consequential advantage in recent years have taken place in the world of genetics. sinche