WEBVTT - Palo Alto Networks CEO Nikesh Arora Talks Latest Acquisition

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Pan Also our networks manages to fight the narrative of

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<v Speaker 2>a downward.

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<v Speaker 1>Draft in the markets. We're up a quarter percent.

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<v Speaker 2>And look we're seeing the cybersecurity leader announced its intent.

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<v Speaker 1>To acquire protect AI.

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<v Speaker 2>It's expanding the company's capabilities in security basically combating new threats,

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<v Speaker 2>I mean, an explosion in artificial intelligence.

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<v Speaker 1>All of this as we get the CRSA.

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<v Speaker 2>Conference underway, joining us now Nikesha or a Powo Alto

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<v Speaker 2>Network CEO, You've got a lot to announce new security platform,

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<v Speaker 2>but let's just go to the new announcement. In terms

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<v Speaker 2>of M and A. You're going to go us an

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<v Speaker 2>amount that you paid. I was hearing about up to

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<v Speaker 2>six hundred and fifty million dollars.

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<v Speaker 3>We're not going to talk about what we paid. Caroline.

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<v Speaker 3>Nice to see you. Like we're again at a technology

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<v Speaker 3>inflection point. We're all talking about AI. You had people

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<v Speaker 3>talking about AAI earlier. And every time you have a

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<v Speaker 3>technology inflection point, it becomes very important that we are

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<v Speaker 3>able to come forward and provide solutions to our customers

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<v Speaker 3>so they can securely deploy technology. And in that context,

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<v Speaker 3>we're very excertively and aggressively working on both a build

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<v Speaker 3>and buy strategy to build perhaps what will be the

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<v Speaker 3>most important thing over the next few years, which is

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<v Speaker 3>a platform that allows you to deploy I securely.

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<v Speaker 2>Okay, so let's talk about build versus buy and why

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<v Speaker 2>was this asset protect AI so necessary to go inorganic

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<v Speaker 2>at this moment?

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<v Speaker 3>Well, kind of like if you look at what's going

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<v Speaker 3>on in AI you were on before. People talk about LMS,

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<v Speaker 3>people talk about deploying AI based applications. People trying to

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<v Speaker 3>figure out how to deploy infrastructure, whether it's on prem

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<v Speaker 3>or in the public cloud, with chips set to use,

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<v Speaker 3>which model to use. All these are very important technological

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<v Speaker 3>decisions which are going to underpin the platforms of the future. Now,

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<v Speaker 3>when you put them together and you deploy them, you

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<v Speaker 3>have to make sure that you're looking at the security

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<v Speaker 3>aspect of every one of these things. Protector AI, after

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<v Speaker 3>an extensive look around the market, we found was working

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<v Speaker 3>on some very interesting topics which are complementary to what

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<v Speaker 3>we've been building. People are building a great run time

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<v Speaker 3>platform if we protect our customers. As the DEPLOYAI, protect

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<v Speaker 3>OI was working on something similar where they're looking at

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<v Speaker 3>all the models in the world, scanning them to make

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<v Speaker 3>sure there wasn't bad stuff lurking in them. So the

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<v Speaker 3>combination of the two, which we will integrate into one platform,

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<v Speaker 3>actually allows us to be more comprehensive and we will

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<v Speaker 3>offer our customers.

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<v Speaker 2>I just want to get your birdside perspective here in

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<v Speaker 2>a kesh, because no one can push us forward as

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<v Speaker 2>much as you can in many ways to the future

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<v Speaker 2>of agenic KI.

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<v Speaker 1>And the fact that where are we to ultimately be

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<v Speaker 1>protecting ourselves.

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<v Speaker 2>There's demand for traditional basically farwall endpoint products of security.

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<v Speaker 2>How does that shift if you're going from a user

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<v Speaker 2>level to an agent level in this moment, Well, I think.

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<v Speaker 3>That's going to be the buzzword for RSA Carol, and

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<v Speaker 3>people are going to talk a lot about how do

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<v Speaker 3>you make agents work? I think it's still unclear. There's

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<v Speaker 3>a lot of innovation being put out in the market,

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<v Speaker 3>whether as the A to A model, there's an MCP model.

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<v Speaker 3>It's all wonderful buzzwords we create in our industry. But

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<v Speaker 3>has agendic Yeah, Look, I've said before to me, Agendici

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<v Speaker 3>becomes real when you start giving AI arms and legs,

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<v Speaker 3>whether robotic arms and robotic legs or real arms and

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<v Speaker 3>legs in terms of replacing human beings. And I think

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<v Speaker 3>that's where the question becomes, can I rely on AI

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<v Speaker 3>to accomplish the task without supervision? And that's where things

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<v Speaker 3>will get very interesting and very hairy in certain cases.

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<v Speaker 3>There it becomes important only to make sure that the

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<v Speaker 3>agent you're giving autonomy to is something that you're very

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<v Speaker 3>comfortable will act within the guardrails that you put out

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<v Speaker 3>there for that agent. And then you got to make

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<v Speaker 3>sure nobody can take over your agent and hijack it

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<v Speaker 3>in a way that can make them do things you

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<v Speaker 3>don't want them to do. So I think that's going

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<v Speaker 3>to be the next frontier of cybersecurity as we get

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<v Speaker 3>AI deployed in multiple places, how do we give autonomous

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<v Speaker 3>control to these agents? How do we give them agency effectively?

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<v Speaker 3>And can't wait for that world to happen, But it's

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<v Speaker 3>going to be a whole new set of opportunities that

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<v Speaker 3>will open up for us.

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<v Speaker 2>There are a lot of names trying to make the

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<v Speaker 2>most of this opportunity. A lot of them are the hyperscalers.

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<v Speaker 2>A lot of them in many ways become your competitors

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<v Speaker 2>as they add their own security offerings. Where do you

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<v Speaker 2>sit in this whole frenemy environment.

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<v Speaker 3>Well, you know, as we fascinating Caroline, logically, the cloud

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<v Speaker 3>providers should have been our competitors and cloud security. They

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<v Speaker 3>should have our competitors and endpoints secure, but they're not.

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<v Speaker 3>They're focused on making sure technology gets deployed as quickly

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<v Speaker 3>as possible, which is good perhaps for their business for

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<v Speaker 3>all of their customers. Our job is to make sure

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<v Speaker 3>that we stay in lockstep with them and work with

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<v Speaker 3>our customers to make sure they can deploy technology in

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<v Speaker 3>a secure fashion. Let's be fair if our customers have

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<v Speaker 3>comfort that when they deploy AI, when they give autonomous

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<v Speaker 3>control to AI to do some repetitive tasks or interesting tasks,

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<v Speaker 3>it can be done securely. The moment we can provide

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<v Speaker 3>the underpinning of trust, the underprinting of reliability, the fact

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<v Speaker 3>that if you deploy with follow auto networks, there is

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<v Speaker 3>a very high probability that it's going to be much

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<v Speaker 3>safer than anything else. I think that's where the winning

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<v Speaker 3>combination happens. So I don't see this as sort of

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<v Speaker 3>a competitor environment for now with the hyperscalers. I see

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<v Speaker 3>it as an opportunity for us to work together and

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<v Speaker 3>make sure we accelerate the adoption of the technology, as

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<v Speaker 3>opposed to have our customers be confused.

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<v Speaker 2>Which way to go. I mean used to work out Google.

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<v Speaker 2>You host your products on Google Cloud. How do you

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<v Speaker 2>feel about their big splashy deal for wiz.

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<v Speaker 3>It'll be interesting to watch. I have lots of conversations

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<v Speaker 3>with people at Google about it, and we don't intend

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<v Speaker 3>to change how we deploy our products. We buy infrastructure

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<v Speaker 3>from them, and sometimes we see them in the market.

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<v Speaker 3>Our hope is that our customers will understand that you

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<v Speaker 3>want an unbiased product that can operate effectively on every

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<v Speaker 3>cloud provider as opposed to something that is beholden to

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<v Speaker 3>a particular cloud provider. We still need to solve for

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<v Speaker 3>everybody else out there, so I think that's our sort

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<v Speaker 3>of ethos. We want to be independent. We want to

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<v Speaker 3>be somebody that can deliver the same level and capability

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<v Speaker 3>of security across every platform there is out there, so

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<v Speaker 3>our customers don't have to spend time trying to integrate

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<v Speaker 3>all this stuff together, which is our entire around platformization.

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<v Speaker 2>I love following what you're doing in terms of platform offerings, products,

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<v Speaker 2>what you're doing in terms of well the latest MNA,

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<v Speaker 2>but I also love following on social and perhaps whether

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<v Speaker 2>you wanted to or not, you involved in the AI

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<v Speaker 2>debate about whether we're going to get as much CAPEX spend,

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<v Speaker 2>whether infrastructure is reality versus hype.

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<v Speaker 1>Where do you stand on it right now? Nikesh?

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<v Speaker 3>I think if you look around you, everybody is getting

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<v Speaker 3>ready for a very large adoption of AI scenario because

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<v Speaker 3>you see tens of billions of dollars being committed by

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<v Speaker 3>people in terms of building infrastructure. I think that's right.

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<v Speaker 3>I think we may get the sort of the timing

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<v Speaker 3>not perfect. You know, you may build too much before

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<v Speaker 3>it's all consumed. But I think it's headed in the

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<v Speaker 3>right direction. I think short term, in this twelve to

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<v Speaker 3>twenty four months timeframe, you could see that a lot

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<v Speaker 3>of the investment that's going is going towards innovation. I say,

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<v Speaker 3>make a smarter model, make robotics work. So you need

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<v Speaker 3>a lot of power, you need a lot of compute

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<v Speaker 3>to get to a place where these models become extremely useful.

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<v Speaker 3>Once you get to a point where these models are

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<v Speaker 3>extremely useful, the question becomes how do I deploy them

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<v Speaker 3>in my business? How do I, as a regular company,

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<v Speaker 3>regular customer, deploy these things effectively securely. I think that

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<v Speaker 3>could take a little longer than people think because everybody's

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<v Speaker 3>experimenting and we're not all experts yet. Now this is

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<v Speaker 3>something that came about less than twenty four months ago,

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<v Speaker 3>so we all have to get our muscle understand how

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<v Speaker 3>this affects our business. How do I build robotic things

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<v Speaker 3>that can do stuff for me around my enterprise? How

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<v Speaker 3>do I build AI agents that can do stuff for

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<v Speaker 3>me on my enterprise? Do I build or do I

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<v Speaker 3>buy from somebody? So all that stuff will take a

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<v Speaker 3>little longer to pan out, But when it happens, we're

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<v Speaker 3>going to need all that capacity that's being built, and unfortunately,

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<v Speaker 3>you can't wait to build capacity. You have to build

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<v Speaker 3>it ahead of demand. So I think I think it's

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<v Speaker 3>the right direction. Timing's still to be figured out.

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<v Speaker 2>Well, thanks for sharing your expertise across all the subjects

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<v Speaker 2>and the deal news nikesha or go enjoy RSA.

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<v Speaker 1>We thank you. Paloelta Networks CEO