How's everyone doing this morning? Yeah? Before we start, let's have a big round of applause for all the customers and team members who got on stage in front of all of you last night and kicked the show off with the band. Let's give a big round of applause for the band. All right. I just got told something, that you guys liked the pavilion outside more than you liked what we did last year in the other place. My question, yeah, who wants it there next year outside? Yeah, big round. There you go. Scott, looks like that's done. All right. Welcome. Welcome to ConneXions. I was just reflecting, this is my 10th year at Calix, this is my 10th year at ConneXions. If I think about what we've accomplished together over the last 10 years, it's incredible.
We've transitioned this conference slowly but surely into what's all about you. It's about how do we innovate with you, and you're going to see thematically throughout the morning that we talk a lot about together, together. Then how do we celebrate your success? How do we focus on your success every single day and ensure that we harvest that knowledge so this community of people, which John's going to talk about later today, how do we make this community stronger and stronger and help each other to thrive in what is a crazy time in this world? If I reflect back on 2025, October last year, when I stood on stage with you, that's when we unveiled multiple years of work.
The work that we started back in November of 2023, where our team started to pivot into artificial intelligence, hundreds of millions of dollars invested into our platform so that you could be successful with what will be the biggest trend in human history. If you look back in time, and we're going to talk a lot about that, the pace of change that all of us are living in has never been seen before. I was joking with someone as I walked to the stage this morning as we were walking in the hallway, and we were both joking about the fact that I grew up with a black and white television playing Pong. Who here grew up with a black and white television? Yes, exactly. To talk now about autonomous cars.
If you're in Las Vegas and you haven't taken the time to get into a Waymo or get into Amazon Zoox and try that out, that's the future. Everything is changing at what is an astronomical pace that humankind is really going to struggle with. But the good thing is, we saw that in November of 2023. Shane Eleniak and his team, he saw that AI was finally ready where we can make it trusted and secured, and we're going to talk about that today. We made those significant investments so that you don't have to worry about the things that everybody else is freaking out about, which is how do I use artificial intelligence in a safe and secure way to drive predictable outcomes? We made that investment, and in March, at the end of March, every single one of our customers is now AI-enabled.
You have exactly zero to do. You just need to use it because it's embedded in all elements of our platform. I do know that it was difficult because let's be clear, think back on your career. I've been working for, I don't know, 40 years, probably since I was 10 years old when I had a paper route. If I think about all the things that I did through my life, you know what never happened to me? Nothing worthwhile ever happened easily. Everything that I did, everything that my teammates did, everything that our company has done with you has required sacrifice, hard work, weekends, pain. Because the only way something is worthwhile is if there's some pain to get to it. If that wasn't the case, anyone could do it. This was hard, but it was worthwhile.
Today, we're going to walk you through all the ways that is worthwhile for your teams. How we are going to litter AI into everything that you do every day. So instead of thinking about how I have to go build this stuff and worry about like what Anthropic did, and things break out and worried about losing my customer data, you can focus on what's important, which is selling, marketing, building more and winning, not monkeying around with technology. So it was hard. We know we slowed down some implementations. We had some problems. Because when you're holding a petabyte of data every single day, it's a juggling act, and there's going to be a bit of that. So I want to start by saying thank you to all of our customers for going on that journey with us. We acknowledge how hard that was.
We deeply appreciate it, and my promise to you is now it pays, and it pays big. Because that investment and time and effort and the communications that we've had together, it's going to pay. So a big round of applause and thank you for everything that you've done and working through that with us. Let's be really clear. There is absolutely, positively no version of the future where AI is optional. None. Everything is changing, and you either change or you get run over. You will find my dialogue on LinkedIn this morning with somebody who doesn't acknowledge that fact quite humorous because the individual was unwilling to accept the fact that we as humankind need to change. We need to change how we think. We need to change how we learn.
We have to accept this isn't going to stop. Pushing against AI is like the stable carrier, the guy who bred horses saying, "I don't think cars are coming." The difference between Ford Motor putting out cars and eliminating the horse-drawn carriage, and what's happening today is the pace. What happened in decades is happening in weeks, and this is something that we're going to talk about a lot today. How do we embrace that change and make the most of it? Because we will put you to the front. Game on. That's why we've invested all this money to get to this point. That investment is managed by what you tell us. I still remember when Carl, our Chairman, recruited me into Calix, and I had multiple choices. I was working for Salesforce.
I had another huge company pre-IPO trying to get me. Then I met Carl, and what he described was you. His biggest selling point about why to join Calix is because of what you do every day. You change your communities. You help the police, fire, ambulance do greater things. You invest in places that no one else invested to ensure that everybody's connected, so it doesn't matter what your economic strata, that you can be successful, raise yourself out and do great things. When he talked about that, what we really built on in my last 10 years is how to make sure programmatically that everything that we do is a partnership together. Shane and his organization spend a huge amount of time from a product discussion point of view, debating with you, talking about things, collaborating.
This is my favorite statistic of the entire show other than all your successes. It's all the things that we did together over 12,000 engagements, over 352 collaborations. We're still running massive customer engagement processes that allow us to communicate together. This becomes really important as we go through the stage of AI, because unless we communicate and do it together, we won't succeed. Again, where you need to come together as a community is when change is at a rapid pace. It's easy when things are going well. But when changes are all around you, we must talk a lot. If there's things on your mind, I encourage you to call me. People send me a text. People call me. Send me an email. Glad to respond. Might be a little slow on email. Sorry.
Planes get in the way of that, but I will respond. If there's things that we can do better, make sure you tell our team. We have a team here whose only job is to make sure we understand what you need, what we're doing well, what we're not doing well. That's what this conference is about, innovation and your success. I want to also say thank you. Thank you, because if you look at all those engagements, that's a lot of your time. If we're not listening, then that's not good. What I will show you as we go through this conference is just how much we're going to listen this year, because we finally have a massive amount of capacity to do what you need to do to be successful. So, huge thank you.
Big round of applause for yourselves, and thank you for the partnership that you've allowed us to have. One of the speakers who's going to come up at the end of the morning is actually Juergen, our new Chief Marketing Officer. What he's going to talk to you about is the massive transition that we're going to have with regards to partners. I talked about this last year at ConneXions, that the future of artificial intelligence is not just language models and those things, but it's also these core technologies that shift us away from APIs and allow us to engage with partners in a new way.
Those core technologies are A2A, which is agent to agent, and MCP, which is model context protocol, which is the ability to leave data where it exists and just harvest what is the context that an agent needs to do great work and share the context and then into knowledge. We have put those in place. In fact, we built out an MCP server, so if one of your partners is not actually moving fast enough, you can drop an MCP server in front of it, and we can harvest that context. We have made big investments, and as you can see, the ones in orange are the ones who are actually moving fast to also ensure that MCP works between our partnerships. The second part of it is these partners are the future. Working together is very important.
Not only are they making these investments to get to A2A and MCP, but at the same time, they are here at the conference. They are in the partner showcase. Please take the time to go and talk to them, because every single day, they are focused on making you more successful and driving your business. Let us give them a big round of applause and thanks. As I said, there is no future that does not include AI. I put this quote up last year, "AI won't replace humans, but humans who use AI will replace those who don't." I would trade humans for companies. AI won't replace companies, but companies who use AI will replace those who don't.
To all the first movers, there are a couple hundred of you out there, those of you who have actually jumped in with us and are collaborating deeply on artificial intelligence, you have actually adopted what we are doing end to end from a platform point of view. Thank you, because what you are doing is you are helping us go faster so that everybody else can benefit by collaborating very closely with us around all the workflows and the agents that we are releasing at a very, very fast pace. Let us give these first movers who actually have signed up with us and are embedding their business with AI a huge round of applause. Well done. Thanks to the community. Look, I am a CEO.
The pressure just keeps going up and this pace of change thing, it actually may cause a lot of tension for all of us, our teams, our customers, our employees. This is a huge pressure cooker. I was reflecting back is that if you go back five years ago, just before COVID, the big conversation we were all having was, "Well, I am going to have a multi-fiber market." That was probably the biggest thing that we were worried about, the multi-fiber market. Then we started to see the big guys put together, they call it convergence, which is just a price bundle. Then we see the advent of wireless satellites and governments not stopping them from controlling the skies. Those are spreading out. Then you got Amazon. As I have asserted over and over again, Amazon is the biggest enemy. Why? Because they are great.
We actually looked at their NPS. I think my second job is breaking down Amazon boxes every night. Who doesn't buy Amazon? I do. I'm a very, very happy Amazon customer. The NPS, we actually searched out their NPS, and it ranges somewhere between 47 and 73. I don't have an alternative. I love it. When Amazon eero shows up and they're in the home, if you see what they're continuing to expand on devices, what they do is they knock you out, and they turn you into a dumb pipe. When you're a fiber behind an eero, you're irrelevant because the cheapest guy who comes forward is just simply going to plug it in.
To move from an eero instance on one fiber provider to move to another eero instance on a fiber provider involves this, unplug WAN, plug WAN in, because all the loyalty is with Amazon. This to me is the high water mark and what you need to compete with every single day. Then we've got cost. All of us are feeling it. We actually did some quick math. Interest rates in the last few years are up almost 5,000%. That has an impact on all of our businesses. It has an impact on our homes. It has impact on our kids. We're all feeling that crunch. Memory costs, thanks to these AI nut bars, are up 5x . We're all getting screwed by the AI companies when it comes to memory. It's through the roof. What's cost a $1, costs $30. It's insane. That'll bust. It's coming.
I'll explain that later. We all feel this pressure. Then on top of it is the pace of change. The pace of change is so rapid. It's something we've never seen in history before. We're all worried about, "What's going to happen to my kids? What are the jobs going to be like?" All those kind of things, while at the same time trying to run a company while our board is saying, "Get going faster, because if we don't do it, someone else will." The key thing I want you to think about as we go through today, as we go through the next two days, is one word. We're going to do this together.
One of the things that I'm proudest of in my 10 years at Calix is that, yes, we've made mistakes, but the enemy of good or the enemy of good is great. You have to do these things. You're going to make mistakes because frankly, if you think back through your career, and I say this all the time, if I think back through my career, my biggest learnings are when I screwed up. Not when I did it the right way, because I already learned that. It's actually when something went wrong. So we're going to work through this together, and if we try things and they don't work, then what do we do? We move on to the next thing. We try things, and then we make them work.
That's the power of a platform, that we can actually do these things fast and control them and be safe and trusted and do it together. I cannot amplify enough that we're in this together. Look, that shift is big. In your mind, the thing you really need to think about is capacity. The next two days are all about how do we give you capacity to do more things? I made the statement, how do we free you up instead of playing with technology and building things and those kind of things, taking that headcount and putting it into sales? Because you can grow your way out of any problem. You can't cut your way out of a problem. You can grow your way out of it.
This, I have put this up every year, is a simple example of what you can do to grow your business tomorrow. Because we're not getting it done. So we did a little bit of research with AI. Fascinating. Then we fact-checked it because it lies. What we did was we went through. It does. It's called a drift, but it's a lie. So we went through it, and what we found out is that 8% of homes in the U.S., smaller in Canada due to ice, but 8% of homes in the U.S. have a pool. Then John, in the conversation, said, "Yeah, but we're in rural America. There's a lot of ponds." We found out that ponds are actually classified as recreational ponds. So 4% of homes in the U.S., single-family units, actually have a recreational pond. Who knew? I didn't.
12% target for outdoor Wi-Fi. What is our collective attach rate on outdoor Wi-Fi for every GigaCenter and GigaSpire that's been installed across the base? 0.5% . You might as well burn a $10 bill every single month because if we want to create the capacity to win more, build more, be more successful, if you have members who want to show profit or you have investors who want profit, $10 a month is being burned if your attach rate isn't higher than that. We can argue what the right target number is, but you're going to hear someone come up on stage where he went from that to 2%, to 4%, and is climbing his way up.
Whether your number is 6%, 8%, it's a heck of a lot better than that, and that'll put hundreds of millions of dollars in the pockets collectively of this group. More importantly, it crushes churn. Who's going to change? I have outdoor Wi-Fi. I have four outdoor Wi-Fi systems at my house. If someone came along and said, "You could save $10 a month on your fiber if you swap, but you have to rip everything out and put up all the antennas and make it all work again outside," what would my answer be? Have you met my family? Because they're going to guaranteed say I'm going to screw it up somehow, and so no, that's not happening. It's not happening. It is the ultimate churn preventer.
The key thing that I hear from everybody is, "I need capacity." Through the day, what you are going to see is how we are going to add capacity so that same team member can do more. Run more campaigns, do better segmentation, understand the subscribers. You are going to see videos today that are going to blow your mind because we did them for a price that you can afford. It is a massive shift and a great opportunity for us to rethink where is your capacity today and how do you drive good outcomes. SmartTown. 16% of people still have SmartTown turned on. I hear you. There is all kinds of things that we use as excuses around why it is not turned on. It does not quite turn on fast enough, these kind of things.
We have capacity to work through those workflows to ensure we get it perfect, but it should be 80%. It frankly should be 100%. There is no excuse for us not partnering with police, fire, and ambulance locally so that they can have an ancillary benefit from Wi-Fi on any of their devices if they are in an area. It does not cost you a $0.01 . We made it free. You can flip the switch like Scott Hendrix did at Tombigbee, and overnight he put on 35,000 routers, zero problems. A survey that we just did went through buying preferences of customers with regards to broadband, and 75% of them said, "I would love to have a community Wi-Fi experience." It was a preference because we chose ranking of what are the preferences, and that was highly up there.
It represents an opportunity to make money, an opportunity to reduce churn, and we are going to work hard to make sure we give you the capacity to do it. That capacity comes from this. What you are going to see from Calix in 2027 is something you have never seen us do before. I told you about how we started AI. Not allowed to touch the screen. Apparently, I will break it. November 2023, we started, and then what happened was we peaked in our delivery of 918 in 2024, and then in 2025, we tanked. Last year was a slow year for putting out product that you can consume. Why? Who has run an IT product, a software project? Because everybody pivots over and humps through the end. We had to hump through the end, and we did. March 2026, we launched the new product.
We launched the third generation of our platform. Shane stood in front of our board, Shane, our product leader, and made this commitment. We will deliver more capability, AI, PON, all these different elements, automations, in 2027 than we have in the last two years. Why? Two reasons. One, platform is in, and we are going to walk through a lot around how our AI and security and all those component parts allow us to go slow, to go fast. Second, artificial intelligence is changing our organization, too. I am a CEO. I have two businesses. I have our product team who is serving you, and then I have an enterprise business just like all of you. I have a CIO, I have these different people, and we are deploying artificial intelligence in everything that we do with our partners. We are not building it because building it is dumb.
We're using Salesforce, we're using ServiceNow, we're using Oracle, we're using all our partners and everything that they give us from an AI point of view, and we're consuming it. We could build it. Shane's got 900 engineers ready to go and who understand AI deeply than most people, but we're not. Because you know what we need to do? We need to focus on you, help you sell, help you market, support your success. We need to be out there humping in the field and helping you crush your competition, not building stuff. It's not tinker toy time. It's actually focus on the customer and get it done. Shane gives a great example.
In our product team, he actually had a product feature that was scheduled inside our organization to take 15 man months, and they did it after our platform, leveraging AI and our processes and our platform, in three. So when he told me that he was going to tell the board that we're going to do over 1,400 next year, the equivalent of two years of work, it's actually more. That adds to 1,300. It's significantly more than we've ever done. I said, "Game on. Let's make our customers successful." As we step into this next stage, the thing we want to talk to you about over the next couple years or next couple of days is how do we support your success?
How do we help you take what we've done with SmartHome, SmartTown, SmartBiz, SmartMDU, Agent Workforce, and all the AI that we are going to be laying out for you to consume as fast as you can to transform? Because in the end, just like with SmartTown, just like with selling outdoor Wi-Fi, it can't get done if you don't make the choice. You need to move capacity to get selling and leading. You need to actually make those changes, transform your team, transform your business.
Then transform your community, because that is something I talk about all the time. From a focus point of view, we are not going to chase this shiny nickel and head over to the data center. We're here. I'm not on public investor calls talking about how you're not important. When on my investor calls, the one thing I'm talking about is we live and breathe and die with you in the trenches to make sure you compete and win. That you can take to the bank. As we do this event, it's all about how do you compete and win at a faster and faster pace, and we got your back. It's game on. Let's start the show.
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I always wanted to do that, come out with the roar of the crowd, right. Good morning, everybody. It's my favorite time of the year because I get to be with all of you. I'm so excited to share stories today about three companies that challenged the status quo, transformed how they operated to beat the competition, and continued to win and win and win. Before we get into the stories, I want to recognize the people that make this conference what it is, and that's all of you. Thank you. Because to me, this is not just an event. This is our community. This is a chance for us to come together, right, representing this entire industry. It's a chance for us to learn.
It's a chance to us to share best practices, to challenge each other, to collaborate, to network, to meet new friends and have fun. Did anybody have fun last night at the concert. How was the band. Every year, new people join this community and bring new energy and new ideas, new thoughts, and new voices. If this is your first ConneXions, could you please stand up so we can give you all a warm welcome. Turn the lights up. Give them a warm welcome. Welcome to our community. Thank you. We appreciate you coming. Many of you come back year, after year, after year, and you not only shape this industry and grow this community, but you keep the momentum going. If this is your fifth ConneXions or more, will you please stand up. Let's see. Okay. Thank you.
Now, if you've been to 10 or more ConneXions, please remain standing because you are the ones, you are the pioneers. You are the ones that made this industry what it is. Be recognized. Thank you. I'm so inspired by what you do and proud to be part of this community. What I appreciate about this audience is how much your work matters beyond your own business, right. You keep your communities running, connected. You help businesses operate. You help kids learn. You help families stay connected. We're honored to do this work with you. Having a mission does not make the work any easier, right. We all know that. We still have goals we have to go and deliver, and I've been here four years, and none of these goals have changed, right. Growth, customer expectations, creating efficiencies, but most importantly, competing and winning.
Michael talked about this earlier, right? We have never been in a more competitive environment than we ever have, and I think it is because of those transformation technologies. We are all focused on AI, but there is a lot of other technology innovation that is occurring that is making it difficult for us to compete the way we have always competed. Our customers have changed as well. They have more sophisticated expectations that are based on their experiences in other industries, right? Other industries have made it really easy, and they expect us to deliver that as well. The last is these cost pressures that Michael hit on. It is making it more and more difficult to compete. This makes me think of the Tour de France, okay? Stay with me here.
You say, "Where are you going with this?" In any race that you have ever watched, I know many of you watch the Tour de France and know the riders, Lance Armstrong, but maybe you do not know about the race dynamics. You are leaving some beautiful town in France and you are riding out the countryside and the road is flat. You are in the pack. If you are in the middle of that pack, it becomes a lot easier. You use 30%-40% less energy, right? Your weaknesses are hidden, and that is what happens when a strong market is happening, right? We may have some weaknesses, but we are pulled along by that market.
That all changes when market conditions get tough, just like what happens in the Tour when they hit the first climb. I think a lot of us would say this is the time when it starts to get hard to sit in and conserve energy. Waiting has a cost. The winners actually change the game. They accelerate, and if you do not change, you do not stay with them, and they open up a gap. What happens when you open up that gap at the top of the summit and they start to go down and business momentum changes to a positive, it is very difficult to catch up. In fact, if you watch these races, the riders who are trying to bridge the gap have to take huge risks. Right? They go into every corner, no brakes. What happens when you take huge risks?
The chances of something bad happening go up exponentially. Right? They are out of the race. We have seen that happen in the business world as well. Right? BlackBerry fell behind. They tried to catch up, and they were out of the race. Happened with Eastman Kodak, right? We know all of those stories. I went on this search of finding companies that were in challenging positions and took the opportunity to move now, right?
They actually were meeting the velocity of the market that they were in. I looked outside our industry, and three companies stood out. Each one questioned some belief and said, "Maybe there is a different way. We will change how we operate." The first one I am going to cover you, I guarantee everybody in this room has done business with them, both at home and at work. They didn't get off on the right foot. They had a product problem, and this is what their customers were saying about it. It's Domino's. Let's hear what their customers said.
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You can see, look, most of us as executives would say, "Hey, we have to protect the brand. What are we going to do? Let's run a campaign that talks about all the great things that we do." It takes courage to go and say, "Our core product is not very good." But that's exactly what they did. They took ownership, and they committed to that, and they took those cuts and they made them into a commercial. They really had to back that up. Let's see what they did.
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Now, that's great. Their employees were saying very positive things about the product, but does that matter? Absolutely not. What matters is what the customers thought. What the customers thought, that it was really good pizza. Within a year, they had 14% increase in sales year-over-year, which I would take that any day. Most executives said, "Hey, our challenge was it's all about the pizza, that would be game over. Mission accomplished. We're done." What Domino's knew was that was not the game that they were in. The product had to be good, but what was more important was the experience. They went looking for problems and friction anywhere between when you order a pizza and when you get a pizza. They looked at that, you heard them say, talk about blank slate, starting completely over.
The first thing they did was create the pizza app, right? So that you could order digitally in any channel. What was great about that? Well, customers could reorder. They could go in and see I ordered this yesterday, hit the button, makes it a lot easier. Order processing is better as well. Well, if that's going smooth, what's the next question you have after you order a pizza? We all have the same one. When is it going to get here, right? They created the pizza tracker. Now, what's crazy about this is back in 2009, if you think about it, we're in 2026, there are companies that still don't do this. Right? You have no idea what happens between when you put your order in and the outcome you're looking for. They were way ahead of the game, right?
You could put your order in and you knew when the chef was making that pizza, it went in the oven, and it would be in your house in seven minutes. Now, we all love pizza, right? I love pizza in the office. I love pizza at home. But we also love pizza at the beach, in a park, in a parking lot, at a tailgate. And what they did is, hey, through dropping a pin, you can get this pizza delivered anywhere. And they made it, again, easier for them to get the pizza. So I challenge you after this conference, go out on the street corner in Vegas, go to a park, see if you can order it, get your app out, give it a try. Now, what were the results of doing all this, changing that experience? Well, they were phenomenal.
They went from 30% to 85% digital channel. I said this earlier, why was that important? Because they knew more about the customers. They knew all kinds of data, what their buying behavior was, and when they were getting orders, how frequently. And there's a story when I was researching that I actually didn't believe. There was a gentleman that ordered pizza every day for 10 years, and I'm thinking, boy, that might have killed him. Quite the opposite was true. He didn't order for four days. They noticed that. They sent a pizza delivery car over to his house. He was having a medical emergency. Pizza saved his life. Which is crazy. And that's how they became the number one pizza company in the world. Last year, I was on stage saying I missed the opportunity to invest in Amazon and Google.
Just for kicks, I said, "Well, I wonder how Domino's did. What was their growth?" Let's take a look. Is that nuts? Fact check me on that, but it's true. I couldn't believe it either. So let's wrap up. What was the conventional? They said, "Hey, we're a pizza company." That's what most people said. "I make pizza. Only thing that matters is the pizza." They said, no. The pizza's got to be good, but the experience wins every single time, and I think we all can learn from that. Every lesson that I went through when I was doing this research was like, we need to apply this at Calix as well. This is not just about you. All right, the next story is about, I would say, how we work.
Every one of us in this room doesn't have enough capacity to do all the things that we want to do. But we're often hesitant to change how we work. We say, "Hey, if it's working, don't fix it. It's fine. Just leave it alone. It's fine." That sounds like discipline, but it's actually neglect. It's actually neglect. Because there's a huge opportunity because a lot of the things that we've done started years and years and years ago. And if you think about how many business conditions changed, how many products you added, how the business is approached today, well, you just added all that stuff onto the work. This company, Shopify, did something different. Now, if you know Tobi Lütke, he's a bit of a maverick, and he had this blank slate mindset, and I worked for a similar CEO.
He always said to me, "Start with a beginner's mind. Everything you do should be thinking about how do you disrupt our own company. If you were building a company, what would you do to compete against us? Whatever that is, we should be doing that." His COO was inspired by these words of a blank mindset. What did he do? He went into their scheduling system and he deleted every single meeting that had three or more people, immediately creating 320,000 hours. It was the equivalent of adding 150 new people to the organization. Think about what you could all do if you got 150 new people in your organization. Look, I know that they were going to add meetings back, but it was a forcing function. The easy thing would have let business continue on.
What he did is he challenged them in saying, "Are these meetings important? Are we working on the most important things?" Only add the most important back in. So they really looked at that so they could make a bigger impact. It didn't stop there. I think you guys all remember this last year when Tobi's memo got into the media. Tobi had said, "No one can hire a new employee unless you can prove to the leadership team that you can't do it with an agent." What was important about that is the easy thing is to continue to add people. I did it at my last company. There comes a point when that's not a good idea, and he was trying to stop that before. He was trying to make people think, is there a better way?
Should there be something else we're doing? Should there be a different way of working? He just didn't do a mandate, because mandates really don't work. He put friction there, but then he also democratized all of the tools. It wasn't just the tools. He provided training, he provided resources, he provided experts. What happened is, of course, the engineering team led the way, and they got a lot of productivity, just like our engineering team led the way when we were doing this. Then the other functions did as well because they knew where the problems were, and they could solve them themselves. This is great. They had a high adoption of AI. It started to get into the organization. Tobi understood that mandates and adoption weren't probably going to be good enough.
He actually had to tell people, what should we be doing differently, and what are we still accountable for? Michael told us this the other day. He's building this game app. Ask him all about it. He's very proud of the work he's doing with it. I said, "Welcome to the game, Michael. Some of us have already been doing this for a year." He built a chief of staff AI tool. That chief of staff AI tool would call other agents around finance, and product, and operations. What he was doing was collecting information. He was trying to have different points of view from different experts. When he told the organization, this is helpful, but I still own the decision. It's still me, and I want to have different points of view. That's still very important.
The last thing that occurs in any organization, we all have a few people that aren't very productive, and we give them AI. What it actually does is ruin the productivity for the rest of the team because why? They just use AI and then they just put it out. This happened last week. I don't know if you saw the article. He said, "No more slop." He said, "Everybody that's using AI, we think it's great, but you have to have accountability for the output that you're creating. You own that." That was very important. They adopted another framework around making sure that people weren't doing that. We've all seen that. We've got a presentation. You could tell that somebody just went to AI and said, "Build it." The same sentences are in there four or five times.
We can't do that, right? We have to change everything. What they did is had a mandate, and then they trained people, made it easy, changed the operations. What was the outcome? The outcome was they had 20% more productivity. All these projects they weren't getting to, they could do. New products that they wanted to introduce to the marketplace, and what did that drive? It drives huge growth for them, and they were able to scale their business without adding people. We're all in that same situation, so I think we can learn a lot. What conventional wisdom did they question? If it's working, don't fix it, to saying start with a beginner's mind. That's difficult. We're doing a lot of transformation at Calix that I'm responsible for. It's very hard to change people's habits.
If you start with that beginner's mind or a blank slate, it can happen. The next story I want to tell you about is around adding more value to the customer. Here's a product that probably many of us had back in the day. It was a Fitbit. Did anybody have a Fitbit? Probably many of you had a Fitbit. It told you how many steps. That was revolutionary. After a while, you said, "Why am I walking 10,000 steps? I have no idea." Right? They were giving you data. Right? The conventional wisdom was that data was important because it tells customers something, but they were leaving the responsibility of my health, of interpreting that data, making a plan. That's not everybody's kind of jam. There was a lot of attrition.
Along came Oura, who asked a very different question, and they said, "What should the data tell you to do?" Right? Give you insight, give you action. How many people have a wearable? Put the lights up. Band. More important question is how many changed a behavior because of that? Let me see how many hands. I want you all on my team because you're all very coachable. The rest of us, including myself, are not coachable, and we need a lot more help, and that's what Oura focused on, right? I'm going to share my personal data that's coming off my ring leading up to ConneXions. It's very ugly. The first one is data. Averaging five hours and 40 minutes of sleep. It's not great. I knew that. The ring didn't need to tell me that.
It's been a terrible week of preparation and no sleep. What it did tell me was, "Hey, John, this has been happening longer than this week run up, and you're going to have a serious health condition if you don't take care of this." You're working in 15 hours of sleep debt. You're not showing up at work in your best or at home. Well, that's great. I realize the importance of this, but what's really more important is what it told me next. It didn't tell me go to bed at 11:00 P.M. That's a directive. It said, "Hey, you need to adopt a wind-down routine, and if you don't have one, let me give you some tips on how that works." Many of you may have had a band or a ring and abandoned it.
You put it in the drawer and didn't use it, most likely because you didn't have an advisor. What's great about this is you can ask this advisor through AI to really help guide you. Many of us are not going to take all of our guidance from an application. So what do they do? They connected this data back to your primary health physician, and that primary physician has a lot more data and probably can convince you that you may need to make behavioral change. This is a very competitive landscape. How has this gone when they try to make more and more action with the data, do something with the data? I think the most important metric here is this one, because the first year is free when you buy your ring.
That 85% of people continuing on with their subscription is enormous, especially if you know the industry average is 20%-30%. That's 50% higher than any other company in that space. So they're really getting it right with the insight to action. What did they do? They challenged this conventional wisdom that data is going to tell your customers what happened, and they're going to be able to act on it. We know that's not the case. What it is insight amplifies value, which we all have to do. Look, all these transformations that we just talked about, they are not easy. They're hard. Nobody wakes up on a Tuesday and says, "You know what I think I'm going to do?
I'm going to go look at our life cycle, both product and customer, and start over." We are doing this at Calix. It is hard work. It has a cost. But by doing it now, you can be like the cyclist in this video and you can break away. This is where it happens. This is where transformation can put you ahead and continue to have you win. So there's a really easy framework that you can follow. One, I would ask all of you to think about challenging conventional wisdom. There's something you're doing today that may have been something you've always done that may not be the right thing. Second, how would you transform how you operate? Lastly, Michael talked about this a little bit. Technology can help you accelerate. Pull away from your competition and win. And continue to win.
What's your takeaway? If you're like me, you're still probably back on Domino's thinking, "God, I'm hungry. I wish I had a pizza or more breakfast." Or you said to yourself, "I wish I knew my readiness score." Well, some folks who are sitting right over here, you should look underneath your chair because 46 of you are going to win both an Oura Ring or some Domino's Pizza. So take a look. Turn the lights up, see who the winners are. Underneath your chair. There you go. All right, if you won something, stand up.
Everybody should look under your chairs. Everybody.
There's 46 prizes under there. By the way, you guys should know this about me. Every time I come up here, I give out a prize. So congratulations to all the winners. Thanks and enjoy the rest of the show.
[Presentation]
Please welcome back Michael Weening.
All right. Congratulations to all of those who won an Oura Ring. I'm going to let you in on a little secret. There's more at the front. Next year, if something happens, perhaps that's a good little hint around where they'll be. Just saying. John was really inspiring when he talked about transformation and what the payoff is. This is flat out absolutely every single year my favorite slide for us to put together and my favorite slide to present. Why? Because you're awesome. John talked about the fact that we're a community. John talked about the fact that you go into your businesses and you change them. Nathan Stooke, all these other folks, everybody's doing this every single day. They're going into places that were neglected and you're changing how those towns and cities operate. It's filled with all the awesome things you can do.
As you can see, our platform through this partnership is helping us do amazing things together where we deliver results that frankly are the envy of any industry, flat out. You tell me an industry that can put up customer after customer after customer who can say, "My NPS is over 75." It doesn't exist. It doesn't exist. Look at these numbers, 4.9 out of five launch score satisfaction at Blue Stream Fiber, who's been partnering really closely with us to make sure that SmartMDU helps you crush everybody in every apartment building and do it at an incredibly profitable level. 50 Gbps in the trial with Astound, 200% increase in SmartBiz subscribers, 64% SmartBiz adoption goal, 80 markets in the ecosystem with Conexon, 16% growth in ARPU. Everyone's talking about the ARPU pressures we're under, well, there's one 16% growth. On and on and on.
133% achievement on their small business goals, 50% unnecessary truck rolls gone. This is what we do today with a platform that can do anything by working together to understand where you want to go, what are the KPIs that you have, and how do we make them better. 40% reduction in service calls per month at P River. These translate to one thing, profitability. Because capital cost is not the focal point if you want to run a long-term business. Everybody knows. You can go back to the days of IBM when IBM got turned around. It's about one thing, cash flow, profit. You know what? If you're member-led and you're saying, "Well, I'm a member-led cooperative," nonsense. You know what your members want to hear? They want to hear that we're making more money.
Put some money in their jeans, do more things for the community, transform more. If you are investor-led, I am investor-led. That is the question every day. Let us be really clear, you can do great things and still be great profit. That is what the platform does, and that is the power of what we do every single day. Let us give you a big round of applause because these are awesome results. For the other 20 slides of these numbers that I could not put up, know that we went through them all. There are so many of you accomplishing these types of goals every single day that I could not put them all up. This togetherness is what roots our company in the success that we have had with you. It is why you are successful, because you are a community.
If you go back to the engagement, you have invested the time around talking to us. You have invested the time in our advisory boards. You have invested the time with our success teams to understand problems and make things better. We have done the same thing and invested over 15 years into our platform. We have invested over $2 billion this year alone. We will put over almost $200 million into our platform to do one thing. Not to go chase new markets and data centers and all those other things, to do one thing, to make you successful. It is worth taking a moment to reflect on what you have. Because what you have in your networks, in the subscriber's prem, is about to be unleashed at a level we have never been able to do before, but to be really clear, we have always known is coming.
In that network and in that prem, you have two pieces of it. The first is everything that we are doing on Access. Let us be really clear. This is the most profound shift that we did eight years ago from an architecture point of view, that Verizon has chosen, that Brightspeed has chosen, and many others, to transform the network. It starts with investing. I believe we invested about $1 billion to build this operating system, roughly. It has these four capabilities, and the first is the most important, functional consolidation. If you are running a network today that has a Nokia BNG or a Juniper BNG in it, you are disadvantaged. If you are running access aggregation BNG and you do not run a tiny, itsy-bitsy Cisco PE router because you put MPLS on our stack, you are disadvantaged. Why?
Because if you run four boxes versus running one, who has the advantage in a world where automation is the future? If you can virtualize the data path through the network through a single E9-2 extended with an E7-2 and an E3-2, you are going to crush everybody from a cost point of view. Why? Because you do not need four teams who go to four conferences and take four training things. You need one team. They can run the whole thing. Anybody who tells you that you cannot have a plan to rip your Nokia and Juniper BNG out of your network over the next five years is wrong. If they want to have that challenge, Shane and I would gladly meet with you.
Verizon just went through a massive RFP to actually go through the next stage of where they're going with their network, and you know what they did? They did it again because this works. If I can go from four boxes down to one box, I am saving a fortune. But more importantly, that is an AI beast, because now that entire data path is under control of automation that's never been seen before. It represents a massive opportunity. If you're not walking out of here and saying, "How do I kill my BNG?" You're missing an opportunity. You're missing a huge opportunity. We built the modular operating system that gives us the flexibility to run different functions in a container.
Inside of that, and this is why that virtualization of the data path is so important, we have telemetry, policy, content, and cyber sitting in that system that gives you the flexibility to do incredible things. Because now what you have is the flexibility of physics and economics. We're going to talk about the future of AI in a minute. Let's be really clear. AI is not going to be in the cloud. AI is going to be on every single device. It's going to sit on an E9-2 in your network, stopping Russian hackers. That's what it's going to do. But you have to make that choice, because if you actually daisy chain four boxes together, you know what happens with that stuff? It just breaks. It just breaks.
Everyone's selling you, how do I put an aggregation layer on top of it so I can orchestrate across the four boxes? That's death. Simplicity wins, and it drives profitability so that you can actually run your business successfully and make your community and your investors happy. If you don't make the hard choice to step up and get it done, you will fall behind. Because a Brightspeed or a Verizon, if they come into your market, they're going to crush you because their cost level is going to be dramatically lower. Verizon is clearly quoted 80% lower cost to run a network than when they had Nokia and Juniper BNGs, when they had the big Cisco PE routers. We run MPLS, and if we can do it for Verizon, who's bought Lord knows how many E9-2s from us, we can do it for you.
You got to make the hard choices because you got to free up that capacity to sell. Because the future's all about selling and marketing. You built your network, now how are you going to fill it? How are you going to make sure that you got 90% market share? Because you can do it. You can do it if you have the right cost structure. Artificial intelligence gives us the flexibility to decide where do we put AI. Because with a physics and economics model like we built, which is insane technology on an E9-2 or on an E7-2, we now have the flexibility to say, "You know what? I'm going to run a small containerized AI at the edge, and then I'm going to run some functions in the cloud," but I have the choice.
Being able to decide from a physics, how fast do I need to do it? I can decide from an economics, that's a free processor waiting for me to leverage. That's the future. We've been building towards that for 15 years. We did the same thing on-prem. People can go on about Wi-Fi this and test that, and you can put it in your basement. I'm like, "Oh, geez, I get a little bit better by the pool." It doesn't matter. It doesn't matter. What matters is the operating system that's running on top of it, which does two things. One, it gives you the flexibility regardless of use case. I can use all of these systems in a home, in a business, and in an MDU, and soon in a hotel, in an event, all these different spaces.
I can mix and match them infinitely to meet any use case. Then I can run different software, SmartHome, SmartTown, SmartBiz, SmartMDU, and the other products like hospitality and things we're going to provide you. I can run them wherever I need to run them using the same systems. What does that mean? That means that where I used one vendor, Ubiquiti, to do business, and I ran SmartMDU with Ruckus . I don't need that anymore. I don't need those teams. I don't need that complexity in my business. I can run all of it with one team. What does that mean? You crush everybody because you're simple. What do your customers want? They want you to be simple.
Yes, we will do things like Shane and his organization, we're rolling out right now the ability to manage Adtran. We're rolling out the ability to Nokia with Operations Cloud. We'll do that. So we'll partner with you as you go through these transitions to get to the right place to set your business up to be successful for the next 10 years. In this case, so we've got the operating system with the same rich telemetry. We pull 300 data points a minute out of every single GigaSpire. Why? So you can deliver the best experience possible. Then same thing, physics and economics. The future of AI is at a local level on the edge, and we've got all that processing power just waiting for us to leverage together to give you the best experiences.
Then over top of it, we have everything we're doing on the cloud and where we're going with AI. On the AI front, last year, I walked you through what we were doing for two and a half years. We are building this. This stack has a couple important parts to it. The first is we went down the path of an open weight model. To make sure everybody understands what an open weight model is, an open weight model, if you look at what AI really is, the magic in AI is how you train it, and then how you weight that training. In other words, the AI is learning how to judge, how to make decisions.
What is fascinating, the reason why, from my perspective, Anthropic and OpenAI are screwed, you saw Anthropic lose $500 billion worth of its market cap, I think it was last week, is because of the fact that the future is open weight models. Why? This is really important to understand, because the beasts who are running these open weight models and making them available to big companies is actually Google running Gemma, Meta running Llama, Mistral, Phi by Microsoft, and Nemotron by NVIDIA. They were available for the companies who can actually leverage them to be successful. Shane and his organization started there. They implemented the RAG model so that we could take these open weight models and put control around them. More importantly, what do you think that those guys are going to do?
They have got more money than God, for crying out loud. They got so much money. They are going to pile money into it, they are going to compete. One day, Llama is going to be ahead. The next day, something else is going to be ahead. They are going to be ping-ponging. The great thing that we built in our architecture is we can run one of them, or we can run all of them based upon who is best for a use case. Most important, we can rip the brain out. We can rip an open weight model out quickly and easily and switch to someone else. It gives us the ultimate flexibility to stay ahead as they go beat the crap out of each other. They will invest.
The reason why Anthropic and OpenAI are in trouble is because you know what those guys do not need to do? Make a $0.01 on AI. All their revenue streams are somewhere else. So they are just going to keep investing, that benefits this community in a huge way. We put that in place. It was hard. It was hard. Hundreds of millions of dollars, two and a half years of work to get to where we are today. Then what we did was on top of it, is we built the layers that allow you to have something that is trusted, secure, and predictable. First, we built the data layer. The data layer was a single database aggregating, it is bringing all that great information from your Access network, from your subscriber solutions. We have got standards to go and get third-party information.
Then back to the pool and the pond, we can collect that information and put it in the data layer, too. So we cleaned up that data. Then we extended that data through something called MCP. I talked about MCP. MCP is the ability to get to knowledge. In the end, how does an AI engine work? It works through knowledge. Data by itself, any of those of us who have run data warehousing projects, I have run some really big ones through my career, know that data by itself is worthless. What has to come out of it is what are the correlations? What are the insights? What are the actions I am going to take to make my business better? That is what knowledge is. We built a full knowledge layer to look at all that data and do the correlations.
A plus F plus Q equals an outcome, equals an opportunity, equals an unhappy customer, equals churn. These correlations is what's in the knowledge layer. Then through MCP, we extended it so we can grab the correlations that other systems are actually leveraging and bring them into our knowledge layer so that our AI engine can make smarter and smarter decisions with your humans. Because in the end, this knowledge is all around how do you augment the performance of your teams? So we put that in place. Next, big next, we acted with AI as if it was an employee. Just like in your businesses, you don't let all your employees go in and change everyone's salaries. You can't do that.
You have to have a trust layer in place and identity layer in place, which means that every single agent, every single workflow, has tight controls on what systems can be touched, whether it can be edited, whether it can be deleted, whether it can be updated. All these different component parts. That was a huge, huge investment because if you haven't read the news about OpenAI and Anthropic talking about these AI agents going crazy and escaping, that's what we had to control. And we did. Then we put orchestration in place, and orchestration is just how we work. Everything that we do every day. When I show up in the morning, I execute workflows. I have a goal. I have a process that I do it with. I work with different team members. We interact, we make decisions, and then we have an outcome.
That's a workflow, and it requires an orchestration layer because orchestration requires you and AI doing all these different things to drive to outcomes. So we built the trust and orchestration layer, and then that finally led to the agents. And the agents are the ones you've started to see. These are the folks who are actually executing every single day with your team members to make them great. Operations, service, marketing, subscriber. You know what you're going to see soon? Cyber. A couple other things popping up there. Why? Because they're part of your team, but they're tightly controlled to ensure that what we do is right. And that control is really important because the opportunity ahead is significant. I go back to my statement. There is no future that isn't buried in AI. AI is everywhere. And the opportunities, look, they're massive. 29% increase in breast cancer detection.
That's incredible. 2,000-year-old scroll that all the scholars behind their tenured leather desks couldn't figure out. 80-year-old math problem solved with a single prompt. The story about that one is he kicked it off before he went to a football match during the World Cup. New DNA. The things that are going to happen are going to change humankind. But at the same time, sadly, bad people do bad things faster, and we got to make sure that we're stopping them. We have to stop. We have to put layers in place that stop the intrusion of malicious AI into the network, into our stack. And as you see, the risk is getting bigger. The biggest threat as we go into 2027 is not like some bombing or thing like that.
It is actually nation-state attacks through AI, cyber attacks, where they go shut down an entire state and knock a grid down. These are the things that we have to protect against. 89% increase in AI attacks, 200 organization breached, 700 autonomous agents. That big red scary thing is what our board talks about for two or three hours every quarter. That cyber meeting has expanded from a 30-minute meeting into three hours of deep analysis, and it is what Shane's team wakes up every single day and thinks about. That stack helps you manage both the opportunity and the risk, and it delivers three things: trust, security, and predictability. Trust, I have a funny story. There is this guy, Jackson Jones, who I heard about a month ago. It came up to me.
I am not sure how it came up to me, but someone mentioned that a kid tried to convince our AI agent that it worked at McDonald's, which I found quite funny. I started digging into what did Jackson Jones do? By the way, I have his permission. Let us just say he freaked out a little when I emailed him and I said, "Can I put you on stage?" What Jackson Jones did was he said, "Okay, let us test trust. Will the Calix agent just do what it is supposed to do?" What he did was he actually tested a human theory that is used by lawyers, three-letter organizations, and police to break people, and it is called repetitive exhaustion.
If you actually go look it up, human nature is that when you get asked a question three, four, five, six, seven times, the same question, bang, bang. Question, question, question. What happens is humans will start to break. You will become emotionally overloaded, and you will start to get confused in your brain, and all of a sudden you will start thinking, "Okay, what did I say? What? No, maybe it was this." Then you start to get confused. It is a proven tactic used by these organizations and by lawyers in court. He tested the theory, can he apply repetitive exhaustion to an agent to convince it that it should answer a McDonald's question? The question he asked is, "How many calories are in a McDouble?" I am a Canadian, so when I heard McDouble, what I thought of was a coffee with two creams.
I did not actually know what a McDouble was because I only eat an Egg McMuffin, and if I am going to have a, I am going to have a Big Mac. I figured it out, okay, it is two patties, a cheeseburger, right? He pounded it, and after 51 times, it relented and it gave up the ghost. It said, "You know what? 390 calories." Most people, that was, in essence, a malicious attack, an intent by a human to try and break it. We learned from it. Shane and his team saying, "How did that happen?" They actually put it in so that is not happening again. So thanks to him for helping us all get better. More importantly, how many people in your call center are going to take the time to pound on something 51 times to try and break it? They are not.
If they had asked that question three or four times, the trust is in place with regards to what our system and our platform does to ensure that it would only give the answers it should. The answer every time was, "I don't do that. No, I don't work at McDonald's." It actually made the right moves. More importantly, because our platform is incredibly secure, again, unless you've got a couple of hundred million bucks to spare and a lot of knowledge, that's what it costs to basically also make sure that Jackson didn't see customer data, wasn't able to execute an action, and no system was impacted. Because in the end, that's the most important thing, is that your employees do the right things that they're allowed to do with great insight. That great insight leads to the last one, which is predictability.
Predictability of outcomes is really important, but also predictability of costs. We've all been reading about the cost of tokens and how budgets blow out. Uber here wrote they blew out their AI budget in four months. More importantly, I don't know if they got an ROI because it only was participating in 10% of their code. That's not a lot. The ROI is the big thing, because it's great to go do AI stuff, but if it isn't actually focused on what you do every day, it's of no value. It's playing with tinker toys. What we need to do is what you do all the time, that we do together. These are results you're doing without AI. 500% boost in monthly recurring revenue, 35% reduction in support calls, NPS at sharing and value of 88.
That's what we do today on a platform that is just rolling this out. Imagine what we're going to do when we go to that next level and apply all of those engagements and workflows and insights into how we partner into building out the greatest workflows on the market. Which now leads me to the last piece to understand that the future of AI, there is a monster change coming. Look, I talked about these guys over here, these open weight model guys. I'll get to him in a sec. These open weights are fantastic. But they're 30 and 40 billion parameters. They're running in massive data centers. Even if you have big checks to write, you're not guaranteed you're going to get an outcome. The latest one from Meta was, I think, half a trillion parameters. These are huge, huge models.
While it can paint John on a unicorn in a pink suit, which is a lot of fun, and it is funny that he wore a pink shirt with his jacket as an Easter egg, you don't need that to run a broadband provider, do you? You don't need it to create the cool videos that we've been showing. What you need is network insights, Wi-Fi. You need the things that you need to do every single day in an AI model. Which is why the next wave is for those of us who have the investment capacity, the monster teams, we are in the process of going through a next stage, which is how do you take these massive overcapacity capabilities, and how do you drive them down into something smaller and more consumable so it can exist anywhere? How do you do specialized domain expertise?
How do you make it cost-effective through specialization? How do you make it faster? It's not thinking about, I can paint John on a unicorn. We just know that it's going to run a great network, it's going to find you new subscribers, it's going to drive your upsell, and it's going to help you be wildly efficient because we know broadband. That's the next stage of the market, and it's right-sized for the use case. Which is why I'm proud to announce Calix Communications Language Model Foundation. That is the first and last time you will ever hear me say Communications Language Model Foundation. We'll call it CLM Foundation.
What CLM Foundation is our AI team's investing a significant amount of time and money into building out how do we take that from a process point of view and drive it into something that can be consumed and it just cares about your business. The difference between that and this is the insight. This, insights into 5 billion workflows, insights into what's important in your business, insights in what it takes to run a broadband company. This is a huge amount of work, but what it's going to do is pay off because all of a sudden, we're going to free up a lot of capacity in your networks to do great things. These foundations, it's not just one. There's one to start.
There's going to be 10, 15, 20 of these because of the fact that as this changes, you have to keep up with a pace of change that's never been seen in human history. We have to go fast. Our teams have built out repeatable models to take 30 billion parameter models and turn them into 3 billion, 2 billion, 1 billion, 100 million. Actually really different. What those are is what you're going to start seeing in your release cycles. They're called Calix Gems. What a Gem is think of it as a category, marketing, security, repair, troubleshooting. What we're doing is we're taking those foundational language models and we're running them through a process to make them even smaller. They'll be sized large, medium, small, extra small.
A good example in cyber is going to be an extra small language model that we at Calix have curated and trained to run on a GigaSpire to stop all the bad things from happening inside a subscriber's business and home. A medium one, maybe which is going to run on one of our managed network products so that it actually can protect all your business subscribers. What you're going to see is that over the coming months, you don't have to really care about this. You just need to know what we're doing and why we're doing it.
Because the way it's going to show up is new workflows, new capabilities, new advancements that your teams can have that our success team will work with you to understand how you can move faster and faster and faster, how you can drive cost out of your business, how you can win more customers. This is a big step forward for us, what these Calix Gems are going to do is sit out in the network. Look, the reason why we're doing that is back to the pace of change. Because we have invested so massively in your business, you've invested in your business putting E9-2s, E7-2s, E3-2s, putting GigaSpires, all of that technology in your networks and in your customers' premises, then run with our clouds. What we can do is we can beat this together.
What this is that every week there is going to be yet another titanic shift in the world. Wild. Last week was one of the biggest weeks in history, if you think about some of the things that are going on with regards to AI. Someone stole all of Adobe's stuff with AI, basically created an AI knockoff of Adobe. Bigger yet, a hacker went and hacked into Sony PlayStation, took all of their IP just before, if you're a gamer, you know GTA VI. You know you don't want your kids playing that, I'm just saying. If you know GTA VI, it's just before that launch, that thing prints money. It's more profitable than drug running, that's for sure. In GTA VI, when that comes out, if every PlayStation game is now available, well, GTA VI, good luck making money.
It was all done with AI. From a human point of view, I've been theorizing on this on LinkedIn for quite a while. Apple is the dark horse in AI. Why? Because every Apple device has an M chip. If you want to really understand what Apple's been doing, they've been building out chips onto all of their devices so they can do one thing, run AI locally. Meta came out this week in an announcement with Apple, with Apple Developer, in a couple of clicks, you can actually run their open source model, that open weight model, a version of it, which does certain things on your desktop. You're going to see more and more of this.
Meta, to compete with a bunch of big companies out there like Kimi and others, released one of the biggest AI models and most capable AI models and open weight model ever. It's like a half a billion parameters, or sorry, half a trillion parameters. You're going to see these types of titanic shifts every single day. The question becomes, do you actually try to chase that horse? Or do you partner with us because we've done it all, what we spent is the last three years and over $2 billion. We've got another $200 million going into it this year to make sure that you don't have to worry about chasing that horse. We're doing it for you, we're doing it with you.
Because again, back to our capacity, Shane and his organization are ready to listen, and we have a lot of capacity to make sure that you can crush your competition with what we're doing every single day. Look, this is where that's going to sit. You're going to see significant shifts of AI coming down to the edge. We made it simple with an enterprise agreement so that you can just consume it all. What is going to happen is all this localized AI is going to start popping up there, it's going to start popping up there, then tagged in with the agents, you're going to start seeing automations pop out, and your biggest thing you're going to have to work on is which of this abundance am I going to pick first to help my team understand and grow?
Because in the end, most of us are the same way. We want to see operating costs stay like this or go down a little bit, want to see revenue go like this. It's about how do we help our teams do more with less. None of us are not busy. Look, the question we get all the time is, "It's great. You're up here, you're talking about AI, what about all the other stuff? Do you do hardware yet?" Heck yeah. Best in market. Flat out, absolutely 100%. If you look at what we're doing on 50 Gbps PON, we have managed switches coming out. Go to the Innovation Showcase and look at what we've done for managed switches. Why do we do managed switches? Well, you want to do them in MDUs. In fact, if you look at an MDU, what is an MDU?
It's actually a network ecosystem. In fact, if you run an E7-2 at the bottom of an MDU and run it with all the different technologies, whether it's copper or fiber or whatever it is, you can actually run the entire building in a very unique way, and you're going to see us doing that. We're actually already down the path of doing it, but it also needs managed switches. Because just like in your network, Juniper and others are there, and they shouldn't be. Rip them out. Let's put in a single system running software and actually making it so that MDU can actually run with a single stack and a single team. There's no room for a Nokia or a Juniper in that building. Out. There's no room for Ruckus. Out. Let's put a single system right into the subscriber and give them the greatest experience.
More importantly, give you incredible profitability and to sit down with a building owner and say, "You are going to have people loving it when they live in your rental apartment." We have a full managed switch portfolio that's come out. We also have some small ones so that you can put them into consumers' homes. It's not the fancy people who have 10,000 sq ft houses who need switches at their house. That's nonsense. Actually, I was asking somebody who has a 2,500 sq ft house, because I was in this argument, and the product marketing team was saying, "You can't say prosumer." I said, "I'm not going to say prosumer. I'm going to say consumer," because it's nonsense. The person was there and she goes, "Hey, I overheard your conversation. I have a 2,500 sq ft house.
Here is my basement." She had three crappy switches downstairs from Netgear that are unmanaged that cause problems. What you're going to be able to do is when that product. How many of us had that call? All of us. Now we're going to have managed switches so you can actually extend through Service Cloud, so if they're having a problem, you're running it as if it was a bespoke network, and you can see everything top to bottom. We'll be the first on Wi-Fi 8. Workflows and agents, we talked about that. Everything we're doing around SmartMDU. How many people have launched ScamWatch? ScamWatch is identity protection. It gives you the flexibility to give it to all of your customers for free, so grandma can't get hacked, and then you can upsell to ScamPRO.
A great service if your brand is about, I care about my community. Then last, we're going to come out with significant investments in grid monitoring for utilities, because we've been asked. Many of our customers are broadband companies, but they're also utilities, and they want us to actually put SCADA and all those other capabilities into the network so you can run the most unbreakable network if you're running a utility. That's all coming, because Shane's team has a ton of capacity and now we go fast. Go slow to go fast. Now we go fast. On outdoor Wi-Fi, the new Wi-Fi 7 outdoor unit is en masse in February. Lots of customers are already testing it. So you can go get back that $10 you're owed. As we think about this, there is going to be an abundance of choice.
We are going to give you everything that you asked for at a faster and faster pace, so that you can work with your teams, the operations, service, marketing, subscriber teams, to change how you run your business so that you can go to that next level and frankly, compete and win. After the break, I'm going to have four amazing leaders come up on the stage and we're going to talk about how they're using what we're doing on the platform and AI, and how they're envisioning what happens next. With that, let's go have a break. We'll see you back here in 10 minutes.
Thank you everyone for joining us this morning. This is a 10-minute break. We will begin promptly. You do not want to miss the opening of the next session, so please be back in time. Thank you.
[Break]
Welcome back everyone. As you make your way into the room, please take your seats. We are hoping for an on-time departure. Come on in, take a seat. Those of you who have made it back in the room, if you'll kindly take your seats. Our program is about to begin.
[Presentation]
Please welcome back Michael Weening.
Awesome. Well, I would like to start by saying in no way, shape, or form did I condone being eaten by a zombie, but I got overruled. Look, I started out with this. There is no version of the future where AI is optional. Did you see what we just did on that video? To understand the magnitude of change, I think this is a great example because for us to assemble that today versus what it took us two years ago. Two years ago, to do three videos for this conference, which we gave to you to help you amplify your sales and marketing, cost us $800 thousand- $1 million. It took days and days. It took 50, 70 people. We could now do this with three or four really smart people using artificial intelligence, and look at how incredible it is.
The change is coming, and while we can push back on this, and we can deny it, and we can think that I have got more time, you do not. You do not. You either embrace artificial intelligence or you get run over by someone else who does. The great thing is we saw this coming. We started playing with neural networks 10 years ago, and we started to understand them and then build out what you needed to be successful over the long time. We built that relationship together where we learned how to collaborate, how to share, how to understand what you need to be successful, to lower your costs, and improve your profitability to win subscribers and change the communities you serve. That is what we have been doing together for the last 15 years.
That is what our $200 million this year, just for you, not chasing after some data center because that is the shiny nickel. Just for you, because you are really important. That is what it is going to do for you as we go through 2027 at a pace we have never been able to match before. As I said, we will do more in 2027 than we did in 2025 and in 2026.
Significant jump up and it just comes down to you have to choose to transform. To go to this next step and talk about how do you transform, how do you lead your teams through this? What is the opportunity ahead? I have four incredible customers who collaborate with us every day, who push us to be better so that all of you can benefit and that their teams can benefit. With that, I would like to invite the first person on stage. Let us kick it off, Shane West, the new CEO of ALLO.
ALLO serves just over 250,000 total subscribers across its footprint in Nebraska, Colorado, and Arizona. Where we've seen the most significant increases in ARPU have really been our switch to DIRECTV, a streaming platform that we use for video service, as well as our business-to-business security platforms, which allowed us to better serve our commercial subscribers. SmartTown is a key part of our strategy. SmartTown has allowed us to differentiate ourselves from our competition by extending our broadband service beyond the home and into the communities we serve.
When our customers leave their homes and go out into their communities, whether it's the park or a public event, they take that great ALLO experience with them, and it's a real differentiator in our communities. The relationship that ALLO and Calix has is probably one of the most unique relationships I've seen between two providers in this business. I've been in this industry for 30 years and have not seen the level of partnership and coordination and focus on being successful together than these two companies.
All right, give a big round of applause. Welcome Shane to the stage. Thank you, Shane. Nice to see you. Welcome.
Thank you, Michael.
Welcome to ConneXions.
Thank you, Michael.
All right, let's tell everybody the first thing is you came from a multi-vendor environment.
Yep.
Right? You saw the complexity and all those different component parts. You became the new CEO of ALLO.
Yep.
You move over into this deep partnership that we've had, and why don't you share how that's gone and what your observations are?
It's been great so far. Michael's right. You heard about it a little bit earlier, but I'm used to running multi-platform networks. A lot of complexity there, but one of the things I can tell you, complexity isn't free. Our teams, when you start running multi-platform networks, our teams are spending time troubleshooting, integrating systems. Just simply spending time moving data from one side to the other to figure out what's going on with their network.
Well, and who's broken.
Yep, absolutely. You don't have visibility into where it's broken, what is happening there. Ultimately, what that does is drives up the total cost of ownership for the network. We spend a lot of time being less efficient, and ultimately, it negatively impacts the customer experience.
All right, so the first statistic I'd like you to share is that in your previous company, you had 400. How many people in IT versus how many people in IT you have here?
Yeah, so this complexity that I'm talking about is the difference between having a 25-person IT staff and a 400-person IT staff building integrations and simply moving information from one screen to the next for our teammates.
Well, and trying to figure out, back to the BNG and all these other component parts, I got to figure out who's culpable and who broke it.
Absolutely. You end up pointing fingers at each other, trying to figure out what is happening
Right
with that customer experience.
Well, I remember when you first started, because we've known each other for a long time.
Long time.
Right? Can you share the story of, you're like, "The data can't be right." You looked at truck rolls, and it was fiber to fiber, ALLO with Calix, and then another company with multi-vendor and all that complexity-
Yeah
with those 400 IT people trying to manage the mess.
Yeah.
What was the difference? You got to talk about how you didn't believe it.
Yeah, the one thing I did here when I came to ALLO, the first thing I did is I looked at the trouble ticket index, the percentage of customers that have a trouble in a particular month. I'm looking at this, and I'm like, "The numbers just are not right. They're not wrong.
Someone's lying.
They're wrong. I'm like-
I'm the new CEO. Someone's lying.
Something is off here.
Right.
The trouble ticket index at ALLO, where we run one platform, is 40% less than a multi-platform network. The first thing I did was call somebody I knew, and he's like, "Do you realize what happens handing off from a Nokia network to, God forbid, homegrown middleware?
Right.
To something at the end, whatever that in the home solution is. He's like, "No, it's the end-to-end solution.
Well, then you also looked at NPS.
Right.
They're running multiple platforms for subscriber, and the difference in NPS was what, zero and-
40.
Right. Yeah.
40. 60 here.
Yeah.
60 at Allo, actually. Zero where
60, and I think there is 60, 70, and then versus zero.
Correct.
Right?
Yeah.
There's a profound shift in difference.
Absolutely.
Again, the difference is the people.
Right.
Right?
It's the customer experience.
Right
showing up in NPS. It's the customer experience showing up in churn, and it's a cost structure component because you're spending time Building these integrations, that stuff doesn't cost. That's not free.
Right.
Especially in a world where we are all more competitive for IT resources.
Well, especially if you are homegrown.
Absolutely.
What happens when we all go through this, is what happens when those people start to retire?
Right.
Right? It is like the COBOL.
Right.
I still remember when all these people were freaking out, "Are you a COBOL programmer?" Because if you're a COBOL programmer, you can make $1 million a year because no one's a COBOL programmer.
Right. Absolutely.
Right?
That talent resource is getting more and more restricted, and it's going to go away, and it's this platform that allows us to do that and retain that knowledge.
We had you and your team, when we talked about the launch of artificial intelligence, it was actually you guys who spurred us on to reveal it all.
Right.
That was a year ago. Since then, we have got together many, many times. We have been running pilots. At one point, we had 14 AI pilots running with you. What is your view as you see this now and you see what is possible? How do you look at AI and where it can go?
So-
Because you are already doing really well, but how do you go to the next level?
Yeah. Let me talk about a very specific instance with AI and some of the work we have done. Operations Cloud has got a ton of capability, but it is really about how you impact the customer and how you impact the business.
Right.
The specific instance I will talk about is that thing our companies all hate, that customer that calls in with an intermittent connectivity issue.
Right.
Right? It is just a nightmare because that customer calls in, and half the time when that customer calls in, it is working when they talk to our They talk to somebody.
Of course. Murphy's Law.
Absolutely. Absolutely. Our teammates or our employees spend 15 minutes in some research project trying to replicate what happened with the customer, figure out what happened. We were actually able to put Operations Agent in an actual customer experience to do that. The teammate with the Operations Agent, we were able to actually resolve or understand that customer's issue, instead of 15 minutes, in 30 seconds. So we knew where the service was degrading, when it was degrading, and get to servicing that customer faster instead of 15 minutes flipping through screens with a technician in the home or a teammate on the phone. It-
When you go through that, then it also comes down to, then you can also look at, "Okay, now how do we fix this so it doesn't happen intermittently?" Which is a nightmare
Yeah
in other places, too.
Absolutely, because that's the worst that you end up with an intermittent issue, but there's 37 other intermittent issues with
Sure
37 other customers having that same experience.
All right. So you as a CEO, you're pretty AI forward.
Yeah.
Right? Over dinner, you told me a funny story. Apparently, he was a little worried about coming on stage with me because I can, at times, go off script. Why don't you share what you did personally with AI to
Yeah
kind of solve that problem?
Yeah, it's a personal use case with Michael, is he's not wrong, right? Even this version is not the same script we went through.
By the way, these questions are purely for guidance.
Yes.
Not relevant.
We're practicing, and I go to Claude, and I'm like, "Okay, this is what I've got to do. I got four questions. Go out and take a look at everything you've seen Mike speak of online over the last three years." Claude comes back and goes, "Basically, this has the opportunity to go off the rails." Literally, Claude tells me, "If you've ever seen the show 'Between Two Ferns,' don't watch it at work." It's like, be prepared for an interview like that. What I was able to do, personal use, and how the world has changed from AI, I was able to use that data, have a really quick back and forth with Claude version of Michael, and get up here and have a good conversation.
Well, it actually came out with some, "Oh, that's a good question," right? I'm going to ask what I think was the best question.
Yeah
that Claude came up with. Look, you're PE-backed, right? Then you have all of these customers, and you have incredible results. You have the NPS that you've delivered. How do you balance driving profitability and EBITDA and can you do it with a great customer experience?
Yep. My answer to that question was I reject the notion that those two things are mutually exclusive, and I'll tie this back to why we're here-
I agree.
on stage. When I look at where we're going as a telecom industry, it's the combination of the guy on the right and the agent on the left.
Yep.
I think we are going to be able to use the technology in concert to provide better customer service and drive profitability in our business.
Well, you think about it, if you can do with 25 people what others are doing with 400.
Absolutely
right? That puts you in a unique, competitive position. The other part, too, is as you deploy this AI, which is going to flow out to you quickly
Absolutely
it allows those 25 people to operate like they're 400.
Right.
Right?
This is an augmented
Yes, augmented human, for sure.
team. This is an augmented team, and this is the future of where we're going.
Well, let's give Shane a big round of applause and a huge thanks.
Great. Thank you.
Congratulations on the success. All right. What Shane talked about was I don't know what I'm supposed to do with those cards. What Shane talked about is that from an operations scenario, how they took what was 15 minutes in an intermittent scenario, which actually is the worst scenario because those 15 minutes are reoccurring until you finally solve it, and Lord knows we've all gone through that, and he's actually talking about how do I really drive out this operational workflows. Here's an operational workflow that's coming out in November that you will just get. Simple example. It's going to be analyzing. The Operations Agent's going to be analyzing what's going on in the network, service connections, performance thresholds, and it sees an issue. It's going to diagnose it. It's going to bring it over to a human.
Because in the end, this is about how do humans and agents work together. How do you actually bring it to someone, one of your incredibly smart network architects, and say, "Here's the data that you need to make a great decision to reconfigure something, to make a change." Maybe it's roll a truck. They click it, and at the same time that that's happening, we identify the subscriber, and a decision matrix will decide, do we actually have to notify the subscribers that something's happening in the network? "Hey, you're not diluted. There's an issue going on." So we notify the subscribers, "Hey, there might be a slowdown. We're working on it." It gets fixed, and up comes through the applications. The subscriber agent says, "Hey, you're fixed." Then this is the biggest part.
After all that is done, because we're often running around like chickens with our heads cut off, solving problems, we don't have a lot of time to stop and say, "What happened? How do I change my business? What processes do I have to change?" Instead, what I can do is I can bring all of that knowledge from everything that was collected as we went through this, from all the different agents, as they interacted with subscribers, as they looked at the network, as we identified what's going on, and bring it together in improvements. It's interesting.
The power of what's next is an interesting conversation that I had with our CIO just before I came to ConneXions, and he was talking about how one of our vendors actually gave us AI and put it on top of a bunch of our operations, in this case, on top of how we run tickets for our employees. Which is not unlike what you do when you support subscribers, because that's what a CIO is. They serve the business. He was on with his team, and they were going through all the tickets for the last month, and then there was this category called unknown. He said, "Well, what's the unknown category?" They're like, "Oh, we're not sure. It's unknown." He said, "Well, you should've showed up with that answer, but that's fine." So they said, "Okay, you know what?
We'll go away and we'll come back and we'll let you know what it is." He said, "No. We're looking at this data with an agent. Ask the agent." Ask the agent. So they did. They queried the agent, and it said unknown consists of MuleSoft integration problems and a number of other issues. In the case, the AI was already there. It was ready to do it. In that case, what he learned, he's got a process and a people thinking process issue that he has to work through. He has to help his teams understand these things are here to serve.
Unless you start thinking different and basically eschewing how you used to work before, looking at reports, generating reports that no one looks at, and get into this mindset of everything's at my fingertips to research as I go, you are not going to make the most of it. We have this big shift ahead. Now, if you see this workflow and you are like me, you are going to have the same reaction I did. My first reaction when I saw this workflow is, it is great, but none of you are McDonald's who have a handbook and implement it exactly how we say we do it. You are all different. I am proud to announce that we are launching Workflow Studio. What Workflow Studio is is the ability to customize workflows for your business. It works like this.
You have Workflow Studio, and it will show all of the different elements affiliated with your business. It is going to include everything you have done that connects A2A, MCP servers, and then all of the agents that we have available. What you have to think about with all the workflows that I present over the next three customer stories is think of them as like templates, as reference guides based upon the best practices of over 1,000 customers who help us understand what is the best operational workflow, what is the best marketing workflow, what is the best subscriber workflow. Then what you do is you say, "Well, that is not how I work," and I encourage you through this process to do this. You need to say, "Do I work right?" Do I work right? Because how you did it before, this goes back to the BNG.
Just because you used to do a BNG does not mean you should have it. You shouldn't. Five, 10 years from now, they should all be ripped out of your network because you need to think different if you want to be successful in the future. So you use this process to go through your workflow, and you then lay it all out using all the different component parts. Out comes a test campaign. You deploy the agent, and off we go. The great thing that you are going to see through 2027 with the massive amount of capacity that we are unleashing to help your business be more successful is a significant work with partners to make sure that can happen. Now let us look at what does that look like with that old workflow.
Now what I am going to do with regards to what is going on in the network, I am going to augment it with GIS data, National Weather Service, other systems using A2A and MCP. Then what I am going to do is I go through that diagnostics. Perhaps it requires a truck roll, and I happen to be using Salesforce or ServiceNow or NICE or whomever, gaiia, whatever, pick a partner. I have my partners that I am doing this work for. It actually uses agent to agent, sends the truck roll, and the communication, and then we go through it. The great thing about these agents is that in our knowledge context, they will store all that MCP data so that they have the broader context, which includes what the partners are doing. That is the future of workflows. We heard you. This is all coming.
I would encourage you to go to the innovation center where you can actually talk to our teams about it. This is the future of work, and all of you in the room need to rethink how you run your business. You need to rethink how you run your business because this is a great opportunity to completely change and uplift everything. Next to stage, let's bring up Brooks Goodall to talk about service. Roll the video
Our RTC network serves roughly 15,000 broadband subscribers in Western North Dakota and Eastern Montana. We are a member-owned cooperative, and we recently celebrated 75 years this past summer. Because the area that we serve is extremely remote, access to business IT services historically has been a challenge. Most of our businesses and organizations do not have local personnel, often resulting in wait times of a week or more for on-site support. Our customers benefit from a simple, unified approach. One call, one provider, one trusted local partner. This model has been extremely successful, allowing businesses to receive timely support from people who understand their operations and are part of the community. Our partnership with Calix is both strategic and collaborative. Calix provides more than technology. They help us deliver exceptional subscriber experiences.
Through Calix Cloud, managed services, and operational insights, we can proactively support customers, improve network visibility, and create new revenue opportunities. Together, we're focused on helping rural communities.
[Presentation]
All right, let's welcome Brooks. Welcome to the stage.
[Presentation]
Hey, Brooks.
Michael.
Nice to see you again.
Nice to see you.
Michael, I made a joke that Brooks has the first name of where I grew up. Brooks, you've had some great success. Your customers are doing great. You're growing at an incredible pace, but you have some complexity in your business. One of the things we talked about was that your customers have a lot of devices and peculiarities that you need to deal with. Why don't you share how you're thinking about those things?
Yeah, Michael, we have around 15,000 broadband subscribers, and with an average of 20 to 25 connected devices in every home or business. At that scale, it's just not simply possible for humans or people to continuously monitor every network and every device. We want to get to a place where we can identify those issues sooner and be more proactive and solve those problems before it impacts our customer experience.
Right. When you think about proactivity and where we go with that, walk us through how you're starting to think about how you get proactive with agents to solve those problems?
Again, I got a couple examples. One example was we had a local school who had a volleyball game on a Saturday.
Right
That was going to be live-streamed. The broadcast crew showed up at 6:30 for a 7:00 game. The connection was down in the gym. The broadcast crew is scrambling, the school is scrambling. They got ahold of our support team, and luckily in that town, we have one employee, and that employee happens to be a technician. Thankfully, he is a sports fan. He was on his way to the game when he got the call, and he was able to restore the service a few minutes before the game got broadcast. The pregame was kind of cut short, but the game went on without a hitch. When we.
Yeah, but like we talked about, you cannot run a business on luck.
That was luck.
Right.
So
It was lucky that he was there. It is lucky that he happened to be going to that volleyball game, right? That is not a way that you can be repeatable. Plus, what if he was not going to the volleyball game and he was going to something else, or he had an incident, right?
Correct. We did get lucky in that, and there was a few grandparents that had no idea who could not make the game that were very excited to watch the game and had no idea that they almost did not get to watch the game. That was a fortunate thing. But when we looked into that, Michael, that connection went down a few days earlier.
Right.
The school did not notice it because they do not use that connection every day in the gym. Although we have visibility into that, it just was not at our fingertips. It just did not jump out and say, "Service in the gym is down.
Right.
With the proactive agent, we could have got ahead of that trouble, fixed it earlier in the week, and reduced a lot of stress.
Well, if you think through that scenario, too, we talked about the fact that imagine if he wouldn't have been there. What would have been the brand damage that you would have faced because everybody goes to the local games, whether it's a football game or a volleyball game, right?
Right. That's about being proactive, not reactive, not waiting for the customer to call us when they have a problem. A recent study I read, Michael, was 24% of broadband subscribers do not reach out to their provider if they have an issue or a problem.
Wow.
You talk about churn or high-risk people leaving to a competitor, that's your group right there. We talk about competitors and competition. In our small communities in rural America, competition has never been stronger. With Starlink, T-Mobile, Verizon. Verizon, they're advertising in all of our communities cheaper rates than what our current price points are. We talked earlier about change, about using AI, and it's not an option. I'm confident that our team, along with the Calix agents, can beat down the competition, and that's-
We call them the silent sufferers, I think we call them.
The silent sufferers.
Right?
Yes.
You've been starting to work with what we're doing around service and agents and those things. If you think about that, what are your goals? Because you've set some pretty clear goals with your team on what's going to happen in 2027.
Our goal is we're excited to take the Calix agents, the service agents, and take them to the next level. Along with being proactive, there's also customers that call us, and a lot of times the customer isn't educated on what to tell our customer support team. They don't really understand technology, so it takes a while sometimes to find out what the root of the problem is. With an agent working in the background, it can identify issues sooner. When we have someone on the phone, it gives our support team confidence, it gives them knowledge, and it also resolves the call quicker and the trouble quicker. And that helps with first-call resolution. When we talk about first-call resolution and the other efficiencies that agents can create, the price of everything is going up. Like fuel, for example.
The price of gas is something we all think about right now.
You are talking churn and truck rolls. You know where we The area that we serve, if you got to roll with a truck, you got to pack a pretty big lunch and make sure you got a full tank of fuel, right?
Yeah.
Reducing truck rolls is very important as well.
Yeah, gone for the day.
You're gone for the day, right? I think at the end of the day, we really are looking forward for the agents to help us be more proactive, to help us be more efficient, and really that helps us save costs and time that we can reinvest back into our community.
Well, and they have a lot of devices. You talked about all the devices. You dropped a managed switch that can be seen by Service Cloud and fully managed, and that's just another level of control to reduce trucks, right?
Correct. Yes.
Right. Let's give Brooks a big round of applause. To you, thanks.
Thank you, Michael.
Thanks, Brooks. All right. Brooks talked about service workflows. Here is the reference workflow that is going to be coming out in November, and we just talked about it. Hey, intermittent anomaly detected. Things are happening. I am confused by what is going on inside the network. I identify there is a churn risk, so I am starting to see some incremental packet losses. The customer might not know why they are unhappy, but they are unhappy. In this case, they actually have an unmanaged switch that has been detected. I put this one up because this is actually something that happened to me, and I worked with the product team on it because of the fact that they could not see the crappy piece of device that I bought from Amazon, to quote them, the challenges it was having, and apparently it was causing a loop.
They did not have that insight because of the fact that they were not running that managed switch. There is this great opportunity to identify and, again, go back to the innovation center, and then we will show that to you, where we can actually now drop in a managed switch as an offer and say, "Hello, Mr. Customer, Mrs. Customer, we think you are having some problems.
Here is what is happening." They go, "Oh, yeah, that is happening." Right? "Well, the reason why is because you bought something that does not really work very well. Here is an offer. How would you like a managed switch? We will drop it off." Because we have done a great job of helping you, thanks to the collaboration that we have gone through, self-install. Shows up the next day, they plug it in, and if they have a problem, you can see everything that is going on.
Just another level of extension of controlling the home, controlling the small business, controlling the MDU, so you can be successful. As I said, just like with the other workflows, Workflow Studio is going to give you the flexibility to start integrating the different technologies and different partners that you use in your service workflow. If you do not run your call center with Service Cloud, if you are using different products, if you are using Salesforce or NICE or gaiia or all the different folks out there that are doing these technologies, if you need them, they will give that to you. At the same time, you can also bring in different pieces of technology as you communicate with customers. Maybe what you are going to do is they have a managed switch, but you cannot get ahold of them. You are trying to reach out to them.
Well, you can start buying ads and pop it up on their feeds through HubSpot or through Facebook or Instagram so that they can actually get to that purchase point. Then, once again, getting to a better outcome with the customer. Because in the end, all these service opportunities at the same time represent a great opportunity for you to elevate your brand and also to seek out sales opportunities that allow you to grow profit and get sticky. I cannot say this enough. When that person is making that call, they should ask, or they should be armed with the information, "By the way, I noticed you have a pool. Would you also like to have better Wi-Fi by the backyard?" It was funny, I was talking to someone, actually the next speaker.
We were talking about barbecuing in the backyard, and the people he brings over to the backyard are amazed by how great his Wi-Fi is in the backyard. This represents a great opportunity that we all need. With that, let's go on to marketing. Let's bring John Walburn from Conexon out. Big round of applause and show the video.
We launched Conexon Connect in 2021 and are based out of Kansas City, Missouri. We today serve 145,000 subscribers across nine states. We offer a 200 Mbps service, a 1 Gbps , 2 Gbps , and 5 Gbps service now. Calix has been able to grow with us and help us as we've continued to offer new services for our customers and a better experience. So that partnership has really taken us a long way in our journey.
When I think about Game On at ConneXions, it really gets me excited for the opportunities that broadband has in the future. When I think of our one, five, 10-year plans going forward, we really think about a continued, strong, sustainable growth to offer world-class internet to more and more communities adjacent to our services today and meet the emerging needs of both business and consumers. I just can't wait to see what 2027 is going to bring for us.
Big round of applause for John. John, welcome.
Thank you.
Welcome to the stage at ConneXions.
Appreciate it.
All right. You are a little different, although I am sure you can relate to what Shane was saying. You guys had the opportunity right from the get-go to build a new company from the bottom up.
Yes.
Why don't you walk us through how you do that, how you built that team, what it was like, the decisions that you made.
Yeah. It was really specifically around the marketing team. It was on purpose. When the team was built, we were looking for folks that were very engaged. We were looking for folks that were going to be agile, willing to pivot, and then, of course, folks that were going to be able to listen to our current customer base, new customer base, and our employees, which is very important because, by the way, if all of you don't realize in the audience, you are all marketing experts.
You may not know it, but you will wake up at some point in your career, as Michael and I probably both have, and you will have an epiphany for the greatest marketing campaign possible, and you will feel the need to tell marketing that. It actually happens to me a couple of times a month. Luckily, they don't take many of my ideas, but
That's right.
But-
Yes sir, no sir.
Exactly.
Exactly. Good point.
By building a team like that, as we've continued to progress for the last five years, when AI starts to become available, it's amazing. They jumped right in. They wanted more and more data. How do we understand who our current customer base is, and how can we support them better? And how do we understand what our passings are and what those potential customers are desiring in the systems? And so that's really helped us with our growth.
That's how you're really taking this AI-first approach to things because the other part, too, is scarcity is good.
Yeah.
Because scarcity creates the need to not do it the same way and actually think and do it differently, right?
Yeah, absolutely. Again, we're willing to pivot. You go out and you look and say, "What's working? What's not working? What's at your disposal with some of this?
Right.
Through some of the new marketing agent that we've got out, we've been able to segment now, and we understand what our customers' needs are, when it's relationship to the outdoor Wi-Fi especially. We've really embraced the outdoor Wi-Fi over the last 90- 120 days. We're now able to pull in these segments to see who has things out there like pool pumps or spas or something that we can do more tactical targeting to. Because when you really think about it, we were really doing a shotgun blast before for outdoor Wi-Fi.
Right.
We were sending it to everybody. Who wants it? Now we can really get a little bit more down in the weeds with these folks and how we offer that product to them. With these new recreational ponds, I'm going to use that, by the way, I'm going to steal that with the marketing team like it's my idea. Yeah, so folks with recreational ponds, as you guys saw, we're in southeast U.S., so there's a lot of ponds. We're in true rural America. That's going to be a great opportunity for us.
Well, we were talking about your barbecue, right?
Yeah.
How many people come over and are just amazed by what it's like to have a barbecue at your house.
Yeah. My personal home, I get one bar. I don't know if anybody else does that. I get one bar on my cellular service at home. So it's horrible. When I have friends and family come over, we're enjoying the backyard, they'll ask me, "How do you have Wi-Fi signal out here the way you do?" I talk to them about the outdoor Wi-Fi solution that we have.
Always selling.
Always selling. It is really fun because they then go back, and they start talking to people, and you get neighbors talking about all of these services, and that is going to help you sell it, for sure.
Let us apply this to everybody else. When you first started, you were kind of in the bad state that we talked about. You were at the 0.6, 0.7, right?
Yeah.
That is where you started.
Yeah.
You saw a jump and then another jump. Why don't you walk people through that?
Yeah. Again, as we took more of a focus to it, and again, we segmented out these customers that we said, "Okay, these are the absolute customers we want to go after." Not that we don't want everybody on the outdoor Wi-Fi. Everybody has some solution for outdoor Wi-Fi. Again, when we did the shotgun approach, it was scattered, we'll just do it to everybody out there. We didn't have the results. We were, I think on our current customer base right now, we're at about a 0.72.
Yep.
With our new subscribers we're bringing in-
That's attached to outdoor.
Yes. Attached to outdoor.
So 0.72% of his base actually has an outdoor unit.
Which less than 1%, that is tough. That is a tough number. We know we can continue to grow that. Now we are looking at our new attach rate is about 2.1% as we go forward. We just did a new email campaign with our customers.
That was the segmentation work you did with the agent.
Segmentation work, that is right.
over the last couple weeks.
Yeah. Utilizing the teams together on this. What we saw was about a 2X on that. As customers were buying for the previous three weeks, then we did our email campaign, we did a 2X response on our next campaign.
That gets you to 4%.
Yeah. So we're doing fantastic, and we're really excited for it. Look, it creates the customer value that we want our customers to have, the experience that we have for them.
Yeah.
It's working for us because it's helping us continue to increase our ARPU and our revenues.
So as you think about the future and you think about what's possible with AI, how do you start thinking about what are the business outcomes you're going to drive?
Well, we really want to take that now to the next level, to your point. Right now, we're emailing our customers and trying to get them to sign up for service. What we want to do is continue to work with you guys as partners to not only take that segment and email them, but we want to now put it in the hands of our technical support team and our customer support team. So when a customer calls in, we can pop up on the screen for them and say, "Hey, this is a great opportunity for this customer. You should offer them an upsell campaign." It's not only with outdoor Wi-Fi, by the way. We have 200 Mbps, one, two, and five, as I stated earlier. So we take all of our 200 Mbps customers, and we want to kind of wrap them up.
As you look at how many devices they have in the home, 50, 60 devices, it's a perfect opportunity for that CSR to now offer an upgrade opportunity. Every call that comes in is a churn mitigator, and every call that comes in is
100%
an upgrade opportunity for us.
Every support call is a sales call.
Absolutely.
100%.
Yeah.
Well, thank you, John. Congratulations on your success.
Thank you. Appreciate it.
Give him a big round of applause.
Thank you.
Thank you, John. You heard what John's doing. They're starting to think through their processes. They're starting to understand, "Look, how do I go from 0.7% attach on outdoor and get myself to 4%?" That's just the start. If they're doing that from 2% to 4% in the last three weeks, how's he going to get to 5%, 6%? This is money that helps you fund other things. As we think about marketing, you're going to see a lot of focus from Calix on this area and how we help your teams do more quicker and quicker. Simple workflow, right? You're going to see developing the campaign goals and parameters, working with the agent to understand what's possible, then look at ideal customer lookalikes, and be able to profile. The key thing which I talked about with regards to Ed was that query ability.
If I come in, and as a marketer, I am starting to think about what are the right things to do, what if the agent can tell me who is the highest propensity to buy? What if I can actually look at a different market and start to understand the nuances between why does this market like outdoors? Why does it not? If I am in a southern state versus a northern state, what are the implications of those different demographic shifts? Then going through and starting to scrape out what is your competition doing? What are their offers? What does their website look like? If you haven't played with AI and asked it to scrape a website, you should.
It is highly powerful, but it is most powerful if you also align it to all of these other insights on what your subscriber is doing today, where the market is going, and then what the competitor is doing. Then you can make smart decisions as you build out an incredible campaign, and you launch it with a flick of a switch. That flick of the switch is going to become quicker and easier and quicker and easier as we put that power at the fingertips of your teams.
Then like every other workflow, you can then go and map out and really challenge your marketing teams on, how do we market today? This, in my view, is probably one of the most important things that CEOs focus on. If you do not understand how your sales and marketing organization works, you are going to get run over by someone who does.
I used to love competing with people who don't understand how important this is, all the time. Because your sales and marketing organization, along with your success teams, the support organizations, everybody engaging with the customer, need to be your focus. We are going to make that easier and easier, and then at the same time, giving you the augmentation of incredible capabilities by integrating all of these different systems, whether it is Experian, LiveRamp. There is a myriad of ways and places that you can pull information from, build out those great campaigns, and then decide, do I want to launch it on HubSpot? Do I launch it on Google? Meta? What are my different choices? But most important, as that campaign launches, how do I bring it back to the start and really farm what happened?
If I bought an ad doing this, that, and the other thing, will it actually drive outcomes? Because in the end, advertising without a correlated ROI and outcome, you might as well burn the money. Now we make it a full loop. This is the next step. Again, go to the innovation center. We will be able to show you the things that we are doing, and the marketing workflows are on their way out in November. Last, let us talk about what is most important, which is the subscriber. I would like to welcome to the stage Chris Rhodes from CoastConnect to talk about where do we go with building great subscriber experiences. Run the video.
I am the president and CEO of Coast Electric and CoastConnect. We are located on the Mississippi Gulf Coast, and we serve three counties, Pearl River, Hancock, and Harrison County. On the internet side, we have about 27,000 subscribers. Calix is considered one of our most valued partners and has been since the beginning of CoastConnect. They provide high-quality solutions for access equipment, for residential units, and really a management platform that enhances our ability to deliver the best overall experience to our subscribers. We are really in the early stages of deploying SmartTown. It is going to, I think, really enhance the overall experience of our CoastConnect subscribers. We are very excited about the potential that we see there, and we are beginning to get that deployed. We are new, and we are trying to work towards becoming profitable.
In order to do that, we have to be as efficient as we possibly can. We have to be able to do more with less. What we really want to be, and what we want to be positioned to be, is the ultimate experience provider on the Mississippi Gulf Coast.
All right. Let us welcome Chris to the stage. Morning, Chris.
How you doing?
Welcome to ConneXions. Welcome to the big stage.
Yes, sir.
All right. Let's start by saying, look at that NPS.
Very proud of that NPS.
91, right? Big round of applause on an NPS. Come on. Right? To achieve an NPS, we go back to what Shane West said. He said, "I think that great NPS leads to great outcomes." Right? Why don't you share a little bit about a philosophy of how you ran the company to get to achieve that?
Well, first of all, this is actually the second year that we've been over 90.
Right
at least on our NPS, and we're very proud of it. I hope you all are proud of it.
We are here
Very much.
because your team has been a big part of that. Our employees work very hard to provide the best service that we possibly can to our subscribers. We committed to have our subscribers' issues resolved, all their questions answered within a 24-hour period. We have been very successful in that. In fact, we've done it-
99.9%
Actually, it's 99.9% is the actual number.
Right.
We're almost hitting 100%. We're very proud of that. Like many of the people in here, we're a new company. As I said in the video, a company that's trying to become profitable. Working hard to that. We're getting very close. We continue to grow. We continue to add subscribers, and as you add subscribers, there's more issues that has to be resolved. There's more questions that have to be answered, and as a new company trying to move toward profitability, how do we continue to maintain that level of that resolution rate without necessarily adding people? I really think that's where the subscriber agent, through this workforce agent, is really going to come into play. We're excited about that. To really help us, as I said in the video, do more with less.
Well, and-
Continue to provide that quality of service.
Well, profitability is about, it is great that you build it, but they are not going to come. You better get good at sales and marketing, right?
Absolutely.
Right.
That is one of the things that when you remove your attention from answering simple questions, taking care of simple problems,
Right
you can focus on things like that.
You free that capacity, and everything that we're going to do
That's exactly right.
you can go and fill that network.
That's exciting. I would love to have people just sitting around thinking about, how can we better sell this stuff?
How to sell more.
Yeah.
Right.
So.
One of the things you have done is you have 70% of your customers using the app.
We do. We are very-
That is pretty incredible.
We're very proud of that. Our folks do a very good job when we sign up a subscriber, when we get in their homes to do the install, of going ahead and getting the app loaded, giving a brief tutorial on how to use it. We really do a good job of pushing people towards it. Even still, with the app, they have to navigate a lot of screens to use that app.
Right.
If that doesn't work, then they'll call us, call our call center line. If it's after hours, they may have to wait till the next morning to receive a call back. Not the best ideal experience.
Right.
Another reason we're excited about the subscriber agent is that's going to allow our subscribers to really use just normal language. Even if you sound like somebody from the South like me, you can use the normal language to ask questions, to see why they're having the issue they're having, and really get immediate resolution. Again, continue with our high resolution rate that we want to see.
Well, if your team members, as long as we make it controlled, simple, trusted, and predictable, right? If your team members can query an agent to get answers, there's no reason why in a mobile app with 70% of your customers, why they can't have the same thing.
Well, I agree with that. I think that the fact that we've got 70% using the app like they are is a step in the right direction for them to really buy in to using the subscriber agent and the interacting with an AI agent like they're going to need to.
Yeah. Well, we talked a little bit about the younger generation. They don't want to phone in, right?
They don't. Look, I'm 54 years old, and-
We're getting old.
Yes. By the way, today's the first day I've ever worn makeup. Thank you for that.
There you go.
Yeah. In fact, the lady-
That's a first to remember.
Yeah. The lady in the back said we got to do it to take the shine off. I said, "Good luck with that.
Take the shine.
You're right. Look, as an electric cooperative that got in the internet business, we are used to working across and communicating with members that are generational.
Right.
We have the young members all the way up to the old members, and doing that successfully. We will be successful in this. I will say this, even as somebody at my age that this is really new to, if I have an opportunity to solve my own problem-
I want to
I'm going to do that.
Yes.
I really think that's going to be something that our subscribers are going to buy into, we're real excited about. The biggest thing is being able to focus on other things that will help make us be more successful by using a subscriber agent to take care of the more simple things.
Well, it's like a self-install.
It is.
All the data shows the same thing. They do not want to wait around.
Yes.
They would rather do a self-install. They would rather, if you are going to do the next generation product, they would rather do an upgrade. If you can actually make it seamless and plug the WANs, now, obviously, playing with fiber cables might be a little bit more tricky.
Yeah.
If you can make it simple to do the upgrade or when you add on an outdoor Wi-Fi system, those types of things, that is what they want.
I agree with you 100%. We are excited about it.
Well, this now transitions into your primary communication method with customers, too. Yes.
Yes, sir.
All right.
Say that again. I didn't hear you.
It turns into your primary communication- method with customers, too.
Yes, it does.
Right? Then you can get more proactive with them. Then when you are on the call, you can talk about the important things.
We do. Being able to kind of walk them through things, it will make the whole process quicker. We will be able to see the issues they are having even before they call in.
Yes.
That is going to be. Because in fact, being able to reach out to them before they ever call us.
Is important.
that's going to be huge.
Right.
You want to talk about reducing churn, is to be able to do that and be proactive in that way.
Let's give Chris a big round of applause for all his achievements.
Yes.
Well done on 91.
Appreciate it.
Great job.
Yes, sir.
What's amazing is, again, so proud to be your partners because stories like that, achieving 70, 80, 91 NPS, you all in this room are best in industry. What's great is that we're building from this position of strength where we can now go to the next level. As we think about the subscriber workflow, what's going to change is that, first of all, CommandIQ, go to the innovation center, go take a look at the fourth version of CommandIQ. It's coming out. It's ready to go, and it's subscriber first with regards to an agent, queries, and how it works. Don't try to find out how many calories are in a McDouble. We have made sure that 51 is not enough to get that answer. We have a queryable discussion. The agents come together. They're looking at all the different elements.
It's not just good enough around what's going on in Wi-Fi. Maybe there's low light levels. Maybe you had a fiber cut. All these groups, the agents, operations, subscribers, service coming together to understand what's going on. Then what they do in this case, they identify, and this is what we've always really been focused on. It's great to solve the problems, but how do you take problems and turn them into opportunities to drive higher revenue and greater customer loyalty? In this case, we go back to the networking situation. "Hey, you have a second router. It's not working so well. Here's what you want. You want to call us?" Or, "Here's the offer." Click, and boom, it gets installed. Then through that flow, obviously, you're going to have many partners.
Many partners who you have to map into what are your data sources, what's your For example, do you have someone that you use for intent? What are they saying on Instagram? Are they happy? Are they sad? All those kind of things, and how do you bring that into your workflow so you have better and better context with regards to the engagement with the subscriber? We bring all that together, and then you can decide, for example, in this case, hey, the customer's going to get that router, but they don't want to install it themselves. They're generationally someone who would prefer someone who came in and fixed those things. No problem. You can auto-dispatch using agent-to-agent ServiceNow, then sends it out to somebody else, and boom, they get up and running and they're happy.
What we showed you was how we move across operations, service, marketing, and now closing out with the most important, the subscriber, to build incredible experiences and help you do more. As I stated before, as we go into 2027, we will do more in one year than we have done in the last two combined. You are going to face a richness of choice, and that choice is going to be centered on one thing. What is it that you want to change today? What are you going to evolve? What are you going to change in how you work? Because we can put it out, but if you don't embrace it and really use, for example, what we talked about, how you map out your workflows.
How do you make long-term decisions and rip that BNG out of the network so 10 years from now, you don't have access aggregation, BNG, and a big fat PE? Because we do MPLS too, you have a tiny PE on a single system run by AI, and your team members are really happy because what they're doing is helping you farm for opportunity. At the same time, as we bring out more capabilities on the subscriber push, we've talked to you about MDU. We now do business, we do MDU. Both of those, we're going to see a radical expansion in capacity. You add in that managed switch, and now you can run a small home, a big home. You can run the campground. Because we have indoor and outdoor, you can run an office. We're now running in the biggest MDUs in North America.
At the same time, we are going to add hospitality so that the local towns, anything that is in there that has a hotel, no problem, will be managed. At the same time, we are going to continue to expand. I would encourage you to go to the Innovation Showcase. There is a lot to show. Our sales organization, our service organization, they are here to help to ensure that you understand what is next and you build out that plan to rearchitect not only what you do in your networks, but how you work in your call centers and how you go to the next level. I would highly encourage you to go get a demo of CommandIQ 4, which is releasing, ready to go, so you can see everything that we are doing from an interaction point of view.
This continues to have a lot of interaction with customers around how this evolves. You can be guaranteed that Shane and his team are going to continue to evolve this as we go forward so we give you more and more insight into how to engage with the customer. They will show you the AI Control Center, so the evolution of how we really understand what is going on across your business. They will give you insights into where we are going in the first half of 2027 around the Workflow Studio, and then a view of where the agents are going to continue to evolve. What is going to be happening is now that this suspenders and a belt platform can manage trust and security and give you predictable outcomes, we are going to pile agents and workflows into your business to make your team more and more successful.
In the end, the most important thing I want you to take away is the reason why we can put up insane numbers like NPSs of 91, where Shane West was up here and talked about how fiber-to-fiber we are 40% better from a truck roll point of view, which really matters with the price of gas today. The reason why we can do this is because we do it together. Everything that we build is based upon insights into your business and how we collaborate to take your business to the next level. As we go into this massive stage of AI that is moving at an insane pace, all of our investments come together to do one thing: have your back.
You can feel comfortable that while everybody else is worried about AI is escaping and doing crazy things, and I am not sure how much my tokens are going to allow me to drive an outcome, that we got your back, because we have had your back the entire time, and the numbers that we put up together are unmatched in any industry. As we take this next big step forward, you can be guaranteed that our success organization, our sales organization, our marketing organization, our product organization, all of us as a team are going to be in the trenches with you, fighting and helping you win. The evolution of that is together has always been us. You, us, collaborating, doing all these great things.
But as I shared with MCP and where we go with A2A, there's a big step forward with partners, too, and those partners are amazing. They're in the partner showcase. Please embrace them, take time to talk to them, because together, we're going to elevate your business even faster and faster. Next, to celebrate that togetherness, we're going to kick off with the Customer Innovation Awards, and then we're going to follow up with Juergen, who's going to come up on stage and talk about where we go with partners in 2027. Kick off the video.
[Presentation]
Please welcome Chief Marketing Officer Calix, Juergen Lindner.
Good morning, everyone. This is the last segment of the show. You didn't see me sprint on stage like John did. I didn't want to pull a hammy and cut it artificially short, actually. You know you're in a great conference, actually, if you learn something new, and hopefully you all took something away from this early segment here. The mind-bending innovation that we have delivered on and that we're continuing to invest in because we tend to look around corners. We want to go and proactively invest where we're going. The other thing is, you learned from John how vitally important it is to lean into transformation right now. There's no more pushing down the can, the curb. It's really essential that we're all leaning in into transformation. I also learned something that I am wearing one of those sleep trackers.
I learned that I am coachable. Call it rule follower, call it competitive. I like to stay with competitive, actually. But I clock, in average, a solid 95 every night, and that is pretty spectacular if you compare it to John's sleep score of 52. So I have quite a leg up when it comes to that. But I love my job. I genuinely do. The reason why I love my job so much is, yes, I get to work with rockstar talent here at Calix, but in all practicality, my team works for you and your teams, help you win in your markets, enter new markets, and win the heart of your subscribers over and over again. That's part of my job description as well. I take that very seriously. I didn't get to meet everyone just yet.
I hope we can change that over the course of the conference. Please approach me. Please let us know how we can partner up. It's vitally important that I'm going to become part of this family, and it's great to see that we have such a long tenure here of attending the event. This is about as formal as it gets with me. You will not see me often in my natural habitat. I tend to be the guy with the sleeves rolled up and quite proud with a grin, dirt under the fingernails, of really tackling business problems jointly with you. But this is also what brought me to Calix. It's this focus on execution, this focus on the trusted, secure, and predictable platform. Because if it comes to my history a little bit . There we go. 30 years in transformation. Yes, I'm aging myself.
I look on stage maybe way more younger. I hope I do. But it is something that is deeply ingrained in me. I always try to look as to where can I be part of a transformation. Is it within a company transforming their own operations? Is it helping customers guide transformation at scale? Ultimately, I get quite a kick out of technology and trying to apply technology and scale that globally. That is what I take a lot of oxygen out of. I love that. A lot of those logos you might know. They might be partners of yours as well. But I also got to satisfy this entrepreneurial itch several times over my career. I was part of spin-outs. I co-founded an own AI startup, and I got deep into the belly of AI, and I love it.
I am highly convicted, actually, that this is the future. When generative AI came out, we applied it to a business problem, changing the world of consulting. Technology is a catalyst, and we should always see it as such because it forces us, it liberates us to think differently about how the future can unfold. Those business outcomes need to be paramount, and technology needs to be somewhat ambient to those conversations because if you do not know where you are going, the best technology is not going to help you. To illustrate that, allow me to introduce you to the pinnacle of inconvenience, actually.
[Presentation]
We have all been there, right? It is just four words. Four words, but they upend everything. They rock your world and not in the most pleasant way. They upend your ingeniously conceived travel plans that you are so proud of, and actually, it is a health hazard, right? Because your blood level might be rising to downright hazardous levels here. Statistically speaking, since we are in Las Vegas, there is 2% of flight cancellation every year in the U.S. It does not sound like a lot, right? But for the gamblers among us, there is a 1 : 61 chance that it impacts your personal travel. Compounding impact, of course, if you travel more. If you add flight delays, the odds are forever not in your favor. It actually gets worse. It is 1: 4 flights.
By the way, show of hands, is there anyone in the room who did not have that happen to them? Seriously? I am going to rip off my mic. We are going to go to the gambling tables right now. You are one lucky person. We do not see that very often, actually. What typically happens to mere mortals of us is this. You have two or three mobile phones, if you can afford them, trying to navigate several applications in parallel. Right? Typically, you also have your carry-on that you are dragging, and likely by the time now, you have a mood enhancer spiked into your drink. We have all been there. I am not judging. Okay. But if we take a not-so-fictitious employee, Scott Neuman, whom hopefully all of you know. If not, Scott is back there. He looks very distressed in this picture.
Rightfully, though, because he is experiencing the fatally non-integrated nature of those applications. Individually, they all work great, but he has become the physical interface for all of those applications. The point I am trying to make is, this is painful. I could have prompted him with his hair on fire, but I wanted to prevent that as well. You have now an airline to deal with. You have a hotel to deal with. You have the rental car, potentially. You had those fancy dinner reservation that you were planning on. You have a travel and compliance system to take care of. All of that needs to be orchestrated. Now, what if, magically, a team of AI agent came to your help? They work for you on your behalf. They understand you. They know that your flight is canceled. They can convey this information to your travel agent.
They can team up, actually, to find the right itinerary for you. They can inform your rental car company that now your new flight touches down after midnight, so they better hold the car, and worse, your hotel better holds your room because now you are at the risk of a no-show, a cancellation. We don't want Scott sleeping on the streets. God forbid. It is really important that we think differently in the agentic world, how experiences can unfold in a very different way. Because I like that picture so much more. Scott in a zen state. We want Scott in a zen state. All of that is possible with A2A and MCP. So you are going to hear those three letter acronyms very often. But the thing is about those integration technologies, that you don't need to know where the data resides.
You need to have those agents teaming up on your behalf. This is actually good right now. Scott is very happy. The Bills won yesterday. He is a confessing Buffalo Bills fan. I am German. I am a soccer guy. I would have more fun with that, likely. But what would have been extremely cool if Scott would have had those swanky seats here, and he connected with my agents because the system knows I have a layover, too. We could have both gone jointly to the game. That is contextual intelligence. That is how you need to think about the next best offer. Don't think in the confinement of your current datasets. Think ecosystem of intelligence. Think context. Those contextual experiences are really important. That is pixie dust on top of an already good working workflow. But the best workflow can potentially take it over the top.
If you have one agent that is potentially too helpful and gives Scott the trip of a lifetime, the same fail guards, fail overs, they all are in place in agentic ecosystem as well. Because if this one agent is eager to please, and you have Emirates, you have all the luxury rentals here, the expense agent would have certainly catch this violation of the expense policy. So the same fail overs are in place. Sorry, Scott, not happening this time. But the intent here is really that we need to think differently. We need to think bigger. We need to think exponentially. What I have learned in 30 years in the industry is that workflows, business workflows, don't ever stop at applications boundaries, vendor boundaries, or system boundaries. They have potentially been architected technically this way, but the flow is not complete. Now you can do this.
Now you can integrate across a vast ecosystem of your investment and stitch together an experience that is unparalleled. The other thing I have learned as a founder, very painfully actually, in the AI space, is that your best AI architecture can be rendered obsolete overnight. We had to reinvent ourselves several times over because today Gemini was awesome. Tomorrow, OpenAI was better. We found out that the partnership we had was labeled a global supply chain risk. It can happen overnight. Please, let us help. Let's work together. Don't do it alone, because now we can work as an ecosystem. Michael has just shown you this workflow, so I am not going to go deep here. But what it allows you to do is think differently. Don't think within the confinements of what we are shipping today.
It's already mesmerizing what we can do with our workflows, but as soon as you operate across the vast ecosystem of your investments, you can unlock scenarios that we haven't even thought of yet. So we will always try to keep the ball as much in front of us as we can, but you have the utmost flexibility to cater to your individual IT nature, the partnerships that you have. You can access any information out of those systems. I am not going to geek out on you, but MCP servers are a thing, so even if your current provider is maybe not as fast, we can help you with that. Call 1-800-CHAIN, and we can set you up. We can really get you going pretty quickly here. So if you have all of the subscriber information, you can architect marketing workflows so much more efficiently.
You can architect experiences, segmentation, and then activate it through every channel of your choosing. There's very ones that you're using today, but you're no longer confined potentially by application-to-application integration, but agent-to-agent integration and to technologies and the Workflow Studio that Michael was explaining just earlier. You can modify what we are shipping, you can extend it, and we can do that jointly. This speed that Michael was talking about, let me put that into context. Why is that so important? In the past, it's been oftentimes curvy roads. It took us a long time as an industry to find our groove. I am going to take one example. Some of you in the room might know those standards here, right? Kubernetes, OpenID, those are the integration standards, the protocols that allow us to really operate in this world.
But on average, it took multiple companies years to align on those standards. On average, we have seen two and a half years as an agreement type of framework to get this done. This means governance board, hundreds of hours of meetings, several hundred companies needing to agree globally on a standard. If you contrast that to what just happened in 10 weeks, 10 weeks, was to agree on an agent-to-agent type of framework and the protocol. That is a 10x cycle time compression. That is the speed that allows us to orchestrate those agentic ecosystems in a very different way. We are enthused about this type of speed because look at this map. These are the partners who are on this journey already with us.
This ecosystem is going to grow so much faster because now we can move at this machine speed that I was hinting towards. That is really, really important for us. Those integration standard of agent-to-agent, model context protocol, and the Workflow Studio are the unlock to this particular event. If you are a partner and we haven't partnered up, now is the time to have the conversation. I know I'm standing between you and a break here. Let me wrap up. Today, you heard all about why transformation is essential. You saw John on a pink unicorn, which is also something that's likely going to be imprinted on your retina for a long time to come. But transformation and the examples that he picked were very well-chosen. Shopify, Oura, Domino's Pizza, they all did something very remarkable. They realized that they needed to lean into transformation.
They did it. Michael gave you in detail an explanation as to how have we invested so far and where are we going to invest, and how can you use that when you get home with your teams to accelerate your own transformation. We just heard from a glorious panel here of customers how they're putting technologies to use, how they're leaning in jointly with us in going at that together. Tomorrow, a little bit of a preview. I'm going to start with 10 minutes giving you a little bit of market insights that we have gathered. Then the meaty part starts with Melina Palmer coming on stage. She is a behavioral economist.
It's a pretty rare name and as a title, but what she does better than most is she connects the dots as to why customer behave the way they do and how you should be behaving as a company to connect with your customers in very different ways. I look forward to that. You will hear more from your peers and your partners. There's more customer interviews. There's more partner interviews. Nancy's going to close with shoulder to shoulder as a team. How can we team up like never before? She's our new Chief Customer Officer, and I look forward to hearing how we can do this. But in essence, what we have done, and you cannot buy this toolbox at Home Depot, at OSH, or your hardware choice. We try to give you a transformation toolbox that you can apply readily.
Everything that we do is packed into this transformation toolbox. Our platform, our agents. It's about the success offerings that we have, the partner community. Everything is here for you to accelerate and lean in jointly with us. I leave you with a heartfelt congratulation. Now you might say, "Huh? Did I miss that promotion email while I was traveling to Vegas or so?" Close to that.
You are the first generation, actually. We are all the first generation that has an infinite bench of talent all of a sudden. Your existing talent paired with agent gives you a rockstar bench of talent. Trust me, I wouldn't want to be on the other team. With that, I'm going to go into the post-game show. Enjoy the rest of the conference. I hope we can connect over the course of the next two days as much as possible. Look forward to tomorrow. Thank you.