Sean McManus, TelecomTV (00:07):
Hello, I'm Sean McManus from TelecomTV and I'm delighted to be joined now by Shekar Ayyar, who is the CEO and chairman of Arrcus.

Shekar Ayyar, Arrcus (00:14):
Thank you. Thank you for having me here.

Sean McManus, TelecomTV (00:16):
Thank you for joining us. Tell me, first of all, for those who aren't familiar with Arrcus, what do you do and what sets you apart in the networking industry?

Shekar Ayyar, Arrcus (00:24):
Yeah, so Arrcus is a company that provides networking in the form of switching and routing for our customers, somewhat similar to what Cisco and Arista and Juniper and Huawei do, except that we are focused on providing the best possible software network, operating system for our customers that can do everything from low-end switching to high-end routing. We also can take our software and land it on different silicon underpinning, so we can actually work on the complete spectrum of silicon from Broadcom. We can equally work on silicon from Nvidia as well as compute infrastructure from companies like Intel Arm, et cetera. So as a result, our customers who can be carriers, telcos, as well as data center customers, they have the flexibility of having this one single programming networking software layer that they can use in order to complete the stack for all of their routing and switching needs as opposed to having vertical siloed infrastructure that they would typically get from incumbents like Cisco, Juniper, ata, and others.

Sean McManus, TelecomTV (01:41):
So it's greatly simplifying the network management for them.

Shekar Ayyar, Arrcus (01:44):
We are simplifying the network management. We are reducing the cost for them because typically this leads to about at least 30 to 40% TCO reduction for them. But perhaps most importantly, we enable them to create and deploy new services faster that are monetizable immediately. And as you know, one of the big problems for telecom operators is that they're building all this new 5G and now 16 infrastructure. They're putting a lot of CapEx into it, but the monetizable sources are not quite evident. Whereas if you now build a network with acas, you can go in and decide to launch a NAS service or you can launch a multi-cloud networking service. And that can be done purely by programming the software layer on top.

Sean McManus, TelecomTV (02:29):
You have made some exciting announcements at MWC. Give us the highlights of those and tell us a bit about their potential impact on the industry.

Shekar Ayyar, Arrcus (02:38):
So we had great announcements today. So three of them in particular, we announced a new switch called the TGAX with Nvidia. And in particular, what the switch does is it allows telecom operators at the edge to create a service that they can deploy on top of the switch, which can do everything from run AI as a service to a number of different networking functions that they can monetize as services. But also when they're ready, they can actually take their RAN environment and drop it on top of the same infrastructure. So you can think about it as almost a three in one infrastructure bucket that is built using ARCA software on top of Nvidia hardware. Then separately, we announced the creation of an AI infrastructure for a tapio, and a tapio is essentially a data center provider that supports a lot of customers in Japan. And this we have done using ARCA software on top of Broadcom's Tomahawk five silicon, which is one of the latest greatest silicon inventions coming from Broadcom that enables 800 gig switching.

(03:52):
And then the third announcement was with Liberty Global, where Liberty Global has demonstrated an application for volumetric video and other video applications running on top of orcas operating system, working side by side with partners like Fujitsu. And this allows the operator like Liberty Global to function as an AI powered telco. And then tomorrow, in fact, one of our partners, lanner is going to announce a platform that combines the lanner infrastructure with A DPU, and that will be running RCOs on top. And this platform will now be capable of getting the telecom operators to run a number of monetizable applications as well on top of this infrastructure.

Sean McManus, TelecomTV (04:42):
Brilliant. Now, tell me about some of the trends and challenges you see in the telco industry and how you are addressing them.

Shekar Ayyar, Arrcus (04:48):
Yeah, so I would say that one of the biggest opportunity areas and challenges for the telecom industry is what is happening in the AI domain. I mean, if you think about it a decade back, I would've said that that challenge was cloud because the operators didn't quite know how to adapt to the cloud or how to monetize it. Right Now that has actually shifted to ai. Everybody's talking about ai, but telecom carriers are not quite sure how they can take AI and make that into a monetizable revenue stream for them. In turn, I would say that the incumbent network providers are too rigid and they cannot in fact adapt their infrastructure to make them ready for the operator to monetize ai. This is where Arrcus comes in with our flexibility, with our programmability, with our ability to take an infrastructure and actually create and launch new services on top and bring best of breed silicon together, like Tomahawk five from Broadcom with Bluefield dpu, as well as spectrum silicon from Nvidia, and then layer on top the Arrcus layer on top. This is the kind of flexibility that the operators need in order to make them into AI powered telcos. Hence, the announcements of today are each an example of how that is possible. And so I see this as a big opportunity going forward, and I am truly delighted that we are actually right place, right time to take advantage of that.

Sean McManus, TelecomTV (06:20):
Tell us about some of the other innovations that you're bringing to market and how they will give your customers a competitive edge.

Shekar Ayyar, Arrcus (06:26):
So the brain of Arrcus is really the operating system, and it's called a OS. It's complimented by what we call R iq, arc Orchestrator, but inside ROS we do a number of different things that are innovative and that can accrue to the benefit of our customers. I mean, I'll just give you one example. It's called egress cost control management. So what we do is at the OS level for the router, we enable the router to be able to read the cost tables of data packets and how when they egress from hyperscaler highways, what is the tax that is imposed on them by the hyperscalers. So unbeknownst to customers, they often end up paying large dollars in these taxes if they don't quite know where data is actually moving off. So what we can do is by, with the knowledge of these cost tables, we can impose policies on top of the routers to say, Hey, you know what?

(07:29):
This application doesn't actually need this packet to get there in whatever split millisecond latencies, it's okay if it gets there a bit later, but I want to do this as a lowest cost route. And that in turn could save. I mean, an average operator that is moving terabytes of data from one point to the other, this could easily be several tens of millions of dollars of cost savings for an operator. And so that's the kind of innovation that we have baked in at the OS level. And then, like I said, once you package that as part of the operating system environment for your entire network, you just get the benefit of this as you are starting to put your applications on top of it.

Sean McManus, TelecomTV (08:11):
It's all about building those foundations, isn't it?

Shekar Ayyar, Arrcus (08:13):
Exactly, exactly. You build the foundation, you make it flexible, you make it programmable, and then you derive cost benefit, both because unit for unit, if you replace an incumbent network component with arcus, that's less expensive. But more interestingly, innovations like egress, cost control management, et cetera, architecturally bring you savings. So net you end up in a much better place than where you would've been.

Sean McManus, TelecomTV (08:39):
Brilliant. Well, thank you very much for talking us through that and enjoy the rest of the conference.

Shekar Ayyar, Arrcus (08:43):
Thank you. Wonderful seeing you.