We caught up with Netgear co-founder and CEO Patrick Lo at the Australian launch of the company’s Nighthawk Pro XR 500 Gaming Router in Sydney and had a chat that covered everything from the rise of eSports to the state of the NBN.
Netgear has been around for just over two decades. You’ve probably a great long-term perspective and insight on how the the networking and technology businesses have changed over that period. What’s do you think the biggest trends have been?
“We are not networking per se. I mean, the company was established regarding to internet connectivity. So when we first established pretty much with the vision that everything that is powered by electricity will eventually be connected to the internet for some reason. We don't know what the reason is. We don't know how they are going to get connected but that's what we envisioned [that] the future is. It is everything that is electrical powered will be connected to the internet for certain reasons, and of course as time goes by, [this] vision is being realized bit by bit, and recently it's been accelerated pretty significantly.”
“So as you can see right now, TVs of course, computers, phones of course, but then [also] refrigerators, light bulbs, door locks. Everything is connected to the internet, right. So, it's pretty exciting. But what we're seeing in the last four, five years is not just pure connectivity. It's once you've connected, then you can add so much intelligence onto it. That's where all these artificial intelligence, the VR, the AR, all these things [are] coming in to make this connectivity even richer, and really change a lot of things.”
“Just like today: gaming. When gaming was first invented, it was you play against the machine. But right now it's you play against other players across the internet. And now gaming has evolved into, it's not [just] you playing alone, you are playing as a professional player and people are watching you play computer games! And then, the gaming world has changed into real-time, into VR. We haven't seen the end of it yet.”
“The most popular things these days about gaming is eSports. In the US, the trend is, for every single real sports league, there will be a mirror image of a eSports league. People are going to watch the eSports games as fervently as they watch the real ones. And it's very interesting because if you want to play basketball you got to be tall, you’ve got to be fast, right? But if you play eSports basketball, you don't have to. It becomes a level playing field that anybody could do without a physical limitation.”
“So, it's very exciting and I think we haven't seen- we use a baseball analogy. In the US in baseball you play nine innings before you conclude the game, and I think what we have seen is not even in the second inning, there is still a lot more to come. And Netgear is definitely going to play in three aspects of it.”
“In the plumbing side, which we have been doing for a long time, and then on the end-point device side such as our Arlo line of products, and then also in the intelligence side, because today you can see the gaming route today that we are introducing is not only providing the hardware connectivity, it has the fastest CPU, the best WiFi, the best Ethernet. That's the hardware. But we are putting so much software intelligence onto it, we'll let you decide who you want to play against. We let you decide how do you allocate the bandwidth? We will let you in real-time look at all the statistics to see why you're winning, why you're losing against your competitors. So that's the intelligence.”
“And then end-point, we have announced two end-point products, well actually we have previously announced a lot of end-point products such as, we had Skype phones, which didn't quite work, and we had internet radios, which didn't quite work, and we had an Apple TV competent, which didn't quite work. We keep trying and now we have Arlo. We have announced two lines of products. One is IP cameras, which completely took the market by storm. And then we just announced lights, outdoor lights. Which we believe that will do very well. We're going to roll it out in about a month or two.”
You’re now spinning off Arlo into its own company. Can you talk about why you’re doing that and what that means both for Arlo customers and your own trajectory? Does this mean that you’re backing away from consumer smart home products?
“No. Netgear will definitely continue playing in other end-point devices. It will continue to play in the plumbing and also in the intelligence space, but will not play the current Arlo line of products - which is primarily surrounded around the cameras, the lights, things that related primarily to security.”
I was reading an older interview from you in the Sydney Morning Herald where you said what some might call some pretty optimistic things about Australia’s National Broadband Network back in 2011. Any updated thoughts on the roll-out?
“I think [the] National Broadband Network is a reality right now. It's pretty much the fixed line de-facto supplier nationwide. If you want to fixed line, you want it fast, NBN is pretty much the only solution. So I think it's delivering probably 100mbps in many places, and of course there's still a lot of build-out to be done. I think the Australian government has to make a decision how to finish the rest of the project but I think the idea they have is great.”
“It’s all about the execution and how they execute it, but then of course you also have to be nimble. Because technology moves so fast, sometimes it overwhelms the decision process of government. For example, 5G is going to come. 5G is probably going to roll out en-masse around the world sometime next year. Then 5G will give you 5 gigabit download and 1 gigabit upload. Then you have to think, I mean, do you need to build out the fixed line or you want to supplement whatever you have built out with 5G? Those are some of the technology decisions that NBN needs to make going forward.”
In the past, you’ve been pretty critical about Apple's closed-ecosystem approach to tech. Do you still feel that way?
“No, I mean, I think Apple has changed over the years. For example, HomeKit is pretty wide open and our products are HomeKit compatible. I think they are embracing [a more open approach]. I think now with the Google Assistant, Alexa, getting so popular, I'm sure that Apple would like to get more Siri-enabled devices. They are putting their Apple Map [and] Apple interface into more cars, so I think they have embraced a more open environment to get more partners to get on their platform - which is a good thing.”
There's been a lot of talk in the news, initially I think in Australia and then also in the States recently, about the trustworthiness and security of Chinese technology brands. As a networking vendor who deals in user security - what do you think? What do you make of that?
“I don’t mean to be frank with you but I'm not CIA. What do you call the Australian national whatever? The British MI5, MI6? I'm not into that - so I have no idea what that is all about. But I would say Chinese would have the same bad feeling about using the CISCO router [or] Google search engine. Unfortunately, that is the reality.”
“We have two political systems that we just have not built enough trust across the aisle.”
Another thing I noticed in your older interviews is how on-point a some of your predictions on industry trends - specifically regarding the rise of Android and video streaming - have been. The smart assistant space is a bit of a scramble right now, who do you think will end up on top?
“I really believe that, ultimately, it's irrelevant because, to a user, I think ultimately it's [all] going to be voice activation. It will be all voice controlled. And then, seriously, if I'm a user do I care if the voice engine is a Siri or is it a Google Assistant or is it Alexa? I don't care. All I want is, I walk up to my door, I say "Hey Sesame, open the door! I am so on and so on" and then it recognizes me voice, and maybe the camera could recognize my face, open the door. When I get into the door I say "turn the lights on", "Hey Alexa, or Google or whatever, please turn the music on for me in rooms one, two, three". So everything will be voice activated. I don't care what platform it is.”
“I think that's the future - voice activation - as well as artificial intelligence because I think eventually when you do those routine work all the time, then the home environment will [be able to] predict that. You don't have to say [anything] anymore! When you walk up to the door, the door opens. When you walk in the door, specific lights turn on, and then specific music turns on. I think that's gonna be the future.”
AI and machine learning stuff is already beginning to affect the way that your products work. What do you think that looks like five, ten years from now?
“As I said, right, five-ten years from now, a lot of the routine work will be predictive. You don't have to repeat it every day. For example, people with the Google Home at home, every morning he wakes up "Hey Google tell me what's the traffic condition out there". "Hey Google tell me, what is today's weather?" I think it doesn't make any sense that you have to do it every day. The Google Home, after learning, you ask that same question three or four times. It just senses you waking up, because you stop snoring, they figure out "hey you just woke up.” So I think that's what predictive responses [are] going to come, in the future.”
Then how many different voice assistants do you think the market can support?
If you take- now this is marketing 101, famous professor Michael Porter who's supposedly the most business genius in history. He always say, "At the end of every day, the market will go down to two". I mean, we've seen it right?
We've still got Bixby and Siri as well.
“Yeah, but at the end of every day the market will go down to two popular ones. I mean, maybe you're too young for that. In my days there's the video tape. It gets down to VHS and Data. And then, they do the same thing and if you get to the phone system, it's down to Android and Apple. Same thing for TVs.”
“Michael Porter has to say that very loudly "over time, the market will eventually galvanize into two" but to me as an end-user, when was the last time you asked "Hey, what's my TV standard? Is it PAL or NTSC?" I don't care! As long as I can watch TV, I'm okay.”
What two do you think it will end up being?
“It's hard. It's still a free for all - but then I am American so I would favor American.”
In January of last year, there was a bunch of issues with exploits in the security side of Netgear products. How did that change your approach or perspective or internal processes around that area?
“Last year we started a program, so we get bounties for people to report, and that's why you get a surge of those reports. And then we quickly put a lot of resources behind fixing it. So we imposed upon ourselves a timeline on how to classify those exploits as what we call ‘critical’, ‘serious’, or ‘can wait’. And then for the critical ones, we try to get it done as quickly as possible internally.”
“So ever since then, I think it's quite down significantly and we have put a bounty site together. We have employed outside agencies who would hack our products all the time to try to preempt [these things]. So I think we have come a long way but, as I said, in this world, there is no bullet-proof solution and some famous cyber security experts say is that the difference is not between whether you get hacked or you have not been hacked.”
“The only difference is whether you know it or you don't. Everybody gets hacked! It's just whether you know it or you don't. So what we are trying to do is to increase the avenue that people can tell us in a productive manner that you've been hacked so [we can] quickly fix it.”
On the cyber security side, you've partnered with Bitdefender on Netgear Armor. Why go with Bitdefender over the other options?
“We've scanned through [and] we've talked to many experts and they all tell us Bitdefender is the best in the market today. As a matter of fact, we have a cyber security committee on our board. We have a cyber security committee in our own management. So for each product line we have a security architect and in our CTO office we have a security architect. Going through external advisors, our security committee, and our own management security committee we looked at three, four different options and we all came to the same, unanimous conclusion, that Bitdefender is the most robust out there for consumer usage.”
Mesh Wi-Fi is one of the biggest driving factors in networking market at the moment. Why do you think that is?
“Because the world has changed. Before, Wi-Fi is just about you pounding on the laptop, pounding on your mobile phone. But today, Wi-Fi is necessary for entertainment, for security, for comfort in and around your house.”
“You could have a speaker playing internet-music in the backyard. You could have IP cameras monitoring your driveway. It's not limited to within a reasonable distance of the single router. So Wi-Fi of high speed in every single corner of your property is a necessity right now and we do believe that right now, on average, in the US household, there are 12 internet connected devices. That will double in about a year or two. And eventually in three, four years time, it will go up to 60. That means you need the high speed Wi-Fi in every single corner of your property. And the only way to get that done is Mesh.”
“What we believe at Netgear is [that] Mesh is the next generation of Wi-Fi. It's the Wi-Fi of today. So we always say "Hey, you're not on Mesh, it's like you're using a flip-phone”. Come to the world of Mesh. Come to the world of smart phones, don't use flip phones anymore". Of course there are still people using flip phones. But those are the minority. So we do believe that today, the real deal of Wi-Fi is Wi-Fi mesh and the single router Wi-Fi is pretty much like flip phones. And you got to move over to smart phones, which is mesh.”