(bright upbeat music) >> Hello and welcome to this Cube Conversation. I'm John Furrier, host of theCUBE. We've got a great conversation featuring Arthur AI. I'm your host. I'm excited to have Adam Wenchel who's the Co-Founder and CEO. Thanks for joining us today, appreciate it. >> Yeah, thanks for having me on, John, looking forward to the conversation. >> I got to say, it's been an exciting world in AI or artificial intelligence. Just an explosion of interest kind of in the mainstream with the language models, which people don't really get, but they're seeing the benefits of some of the hype around OpenAI. Which kind of wakes everyone up to, "Oh, I get it now." And then of course the pessimism comes in, all the skeptics are out there. But this breakthrough in generative AI field is just awesome, it's really a shift, it's a wave. We've been calling it probably the biggest inflection point, then the others combined of what this can do from a surge standpoint, applications. I mean, all aspects of what we used to know is the computing industry, software industry, hardware, is completely going to get turbo. So we're totally obviously bullish on this thing. So, this is really interesting. So my first question is, I got to ask you, what's you guys taking? 'Cause you've been doing this, you're in it, and now all of a sudden you're at the beach where the big waves are. What's the explosion of interest is there? What are you seeing right now? >> Yeah, I mean, it's amazing, so for starters, I've been in AI for over 20 years and just seeing this amount of excitement and the growth, and like you said, the inflection point we've hit in the last six months has just been amazing. And, you know, what we're seeing is like people are getting applications into production using LLMs. I mean, really all this excitement just started a few months ago, with ChatGPT and other breakthroughs and the amount of activity and the amount of new systems that we're seeing hitting production already so soon after that is just unlike anything we've ever seen. So it's pretty awesome. And, you know, these language models are just, they could be applied in so many different business contexts and that it's just the amount of value that's being created is again, like unprecedented compared to anything. >> Adam, you know, you've been in this for a while, so it's an interesting point you're bringing up, and this is a good point. I was talking with my friend John Markoff, former New York Times journalist and he was talking about, there's been a lot of work been done on ethics. So there's been, it's not like it's new. It's like been, there's a lot of stuff that's been baking over many, many years and, you know, decades. So now everyone wakes up in the season, so I think that is a key point I want to get into some of your observations. But before we get into it, I want you to explain for the folks watching, just so we can kind of get a definition on the record. What's an LLM, what's a foundational model and what's generative ai? Can you just quickly explain the three things there? >> Yeah, absolutely. So an LLM or a large language model, it's just a large, they would imply a large language model that's been trained on a huge amount of data typically pulled from the internet. And it's a general purpose language model that can be built on top for all sorts of different things, that includes traditional NLP tasks like document classification and sentiment understanding. But the thing that's gotten people really excited is it's used for generative tasks. So, you know, asking it to summarize documents or asking it to answer questions. And these aren't new techniques, they've been around for a while, but what's changed is just this new class of models that's based on new architectures. They're just so much more capable that they've gone from sort of science projects to something that's actually incredibly useful in the real world. And there's a number of companies that are making them accessible to everyone so that you can build on top of them. So that's the other big thing is, this kind of access to these models that can power generative tasks has been democratized in the last few months and it's just opening up all these new possibilities. And then the third one you mentioned foundation models is sort of a broader term for the category that includes LLMs, but it's not just language models that are included. So we've actually seen this for a while in the computer vision world. So people have been building on top of computer vision models, pre-trained computer vision models for a while for image classification, object detection, that's something we've had customers doing for three or four years already. And so, you know, like you said, there are antecedents to like, everything that's happened, it's not entirely new, but it does feel like a step change. >> Yeah, I did ask ChatGPT to give me a riveting introduction to you and it gave me an interesting read. If we have time, I'll read it. It's kind of, it's fun, you get a kick out of it. "Ladies and gentlemen, today we're a privileged "to have Adam Wenchel, Founder of Arthur who's going to talk "about the exciting world of artificial intelligence." And then it goes on with some really riveting sentences. So if we have time, I'll share that, it's kind of funny. It was good. >> Okay. >> So anyway, this is what people see and this is why I think it's exciting 'cause I think people are going to start refactoring what they do. And I've been saying this on theCUBE now for about a couple months is that, you know, there's a scene in "Moneyball" where Billy Beane sits down with the Red Sox owner and the Red Sox owner says, "If people aren't rebuilding their teams on your model, "they're going to be dinosaurs." And it reminds me of what's happening right now. And I think everyone that I talk to in the business sphere is looking at this and they're connecting the dots and just saying, if we don't rebuild our business with this new wave, they're going to be out of business because there's so much efficiency, there's so much automation, not like DevOps automation, but like the generative tasks that will free up the intellect of people. Like just the simple things like do an intro or do this for me, write some code, write a countermeasure to a hack. I mean, this is kind of what people are doing. And you mentioned computer vision, again, another huge field where 5G things are coming on, it's going to accelerate. What do you say to people when they kind of are leaning towards that, I need to rethink my business? >> Yeah, it's 100% accurate and what's been amazing to watch the last few months is the speed at which, and the urgency that companies like Microsoft and Google or others are actually racing to, to do that rethinking of their business. And you know, those teams, those companies which are large and haven't always been the fastest moving companies are working around the clock. And the pace at which they're rolling out LLMs across their suite of products is just phenomenal to watch. And it's not just the big, the large tech companies as well, I mean, we're seeing the number of startups, like we get, every week a couple of new startups get in touch with us for help with their LLMs and you know, there's just a huge amount of venture capital flowing into it right now because everyone realizes the opportunities for transforming like legal and healthcare and content creation in all these different areas is just wide open. And so there's a massive gold rush going on right now, which is amazing. >> And the cloud scale, obviously horizontal scalability of the cloud brings us to another level. We've been seeing data infrastructure since the Hadoop days where big data was coined. Now you're seeing this kind of take fruit, now you have vertical specialization where data shines, large language models all of a set up perfectly for kind of this piece. And you know, as you mentioned, you've been doing it for a long time. Let's take a step back and I want to get into how you started the company, what drove you to start it? Because you know, as an entrepreneur you're probably saw this opportunity before other people like, "Hey, this is finally it, it's here." Can you share the origination story of what you guys came up with, how you started it, what was the motivation and take us through that origination story. >> Yeah, absolutely. So as I mentioned, I've been doing AI for many years. I started my career at DARPA, but it wasn't really until 2015, 2016, my previous company was acquired by Capital One. Then I started working there and shortly after I joined, I was asked to start their AI team and scale it up. And for the first time I was actually doing it, had production models that we were working with, that was at scale, right? And so there was hundreds of millions of dollars of business revenue and certainly a big group of customers who were impacted by the way these models acted. And so it got me hyper-aware of these issues of when you get models into production, it, you know. So I think people who are earlier in the AI maturity look at that as a finish line, but it's really just the beginning and there's this constant drive to make them better, make sure they're not degrading, make sure you can explain what they're doing, if they're impacting people, making sure they're not biased. And so at that time, there really weren't any tools to exist to do this, there wasn't open source, there wasn't anything. And so after a few years there, I really started talking to other people in the industry and there was a really clear theme that this needed to be addressed. And so, I joined with my Co-Founder John Dickerson, who was on the faculty in University of Maryland and he'd been doing a lot of research in these areas. And so we ended up joining up together and starting Arthur. >> Awesome. Well, let's get into what you guys do. Can you explain the value proposition? What are people using you for now? Where's the action? What's the customers look like? What do prospects look like? Obviously you mentioned production, this has been the theme. It's not like people woke up one day and said, "Hey, I'm going to put stuff into production." This has kind of been happening. There's been companies that have been doing this at scale and then yet there's a whole follower model coming on mainstream enterprise and businesses. So there's kind of the early adopters are there now in production. What do you guys do? I mean, 'cause I think about just driving the car off the lot is not, you got to manage operations. I mean, that's a big thing. So what do you guys do? Talk about the value proposition and how you guys make money? >> Yeah, so what we do is, listen, when you go to validate ahead of deploying these models in production, starts at that point, right? So you want to make sure that if you're going to be upgrading a model, if you're going to replacing one that's currently in production, that you've proven that it's going to perform well, that it's going to be perform ethically and that you can explain what it's doing. And then when you launch it into production, traditionally data scientists would spend 25, 30% of their time just manually checking in on their model day-to-day babysitting as we call it, just to make sure that the data hasn't drifted, the model performance hasn't degraded, that a programmer did make a change in an upstream data system. You know, there's all sorts of reasons why the world changes and that can have a real adverse effect on these models. And so what we do is bring the same kind of automation that you have for other kinds of, let's say infrastructure monitoring, application monitoring, we bring that to your AI systems. And that way if there ever is an issue, it's not like weeks or months till you find it and you find it before it has an effect on your P&L and your balance sheet, which is too often before they had tools like Arthur, that was the way they were detected. >> You know, I was talking to Swami at Amazon who I've known for a long time for 13 years and been on theCUBE multiple times and you know, I watched Amazon try to pick up that sting with stage maker about six years ago and so much has happened since then. And he and I were talking about this wave, and I kind of brought up this analogy to how when cloud started, it was, Hey, I don't need a data center. 'Cause when I did my startup that time when Amazon, one of my startups at that time, my choice was put a box in the colo, get all the configuration before I could write over the line of code. So the cloud became the benefit for that and you can stand up stuff quickly and then it grew from there. Here it's kind of the same dynamic, you don't want to have to provision a large language model or do all this heavy lifting. So that seeing companies coming out there saying, you can get started faster, there's like a new way to get it going. So it's kind of like the same vibe of limiting that heavy lifting. >> Absolutely. >> How do you look at that because this seems to be a wave that's going to be coming in and how do you guys help companies who are going to move quickly and start developing? >> Yeah, so I think in the race to this kind of gold rush mentality, race to get these models into production, there's starting to see more sort of examples and evidence that there are a lot of risks that go along with it. Either your model says things, your system says things that are just wrong, you know, whether it's hallucination or just making things up, there's lots of examples. If you go on Twitter and the news, you can read about those, as well as sort of times when there could be toxic content coming out of things like that. And so there's a lot of risks there that you need to think about and be thoughtful about when you're deploying these systems. But you know, you need to balance that with the business imperative of getting these things into production and really transforming your business. And so that's where we help people, we say go ahead, put them in production, but just make sure you have the right guardrails in place so that you can do it in a smart way that's going to reflect well on you and your company. >> Let's frame the challenge for the companies now that you have, obviously there's the people who doing large scale production and then you have companies maybe like as small as us who have large linguistic databases or transcripts for example, right? So what are customers doing and why are they deploying AI right now? And is it a speed game, is it a cost game? Why have some companies been able to deploy AI at such faster rates than others? And what's a best practice to onboard new customers? >> Yeah, absolutely. So I mean, we're seeing across a bunch of different verticals, there are leaders who have really kind of started to solve this puzzle about getting AI models into production quickly and being able to iterate on them quickly. And I think those are the ones that realize that imperative that you mentioned earlier about how transformational this technology is. And you know, a lot of times, even like the CEOs or the boards are very personally kind of driving this sense of urgency around it. And so, you know, that creates a lot of movement, right? And so those companies have put in place really smart infrastructure and rails so that people can, data scientists aren't encumbered by having to like hunt down data, get access to it. They're not encumbered by having to stand up new platforms every time they want to deploy an AI system, but that stuff is already in place. There's a really nice ecosystem of products out there, including Arthur, that you can tap into. Compared to five or six years ago when I was building at a top 10 US bank, at that point you really had to build almost everything yourself and that's not the case now. And so it's really nice to have things like, you know, you mentioned AWS SageMaker and a whole host of other tools that can really accelerate things. >> What's your profile customer? Is it someone who already has a team or can people who are learning just dial into the service? What's the persona? What's the pitch, if you will, how do you align with that customer value proposition? Do people have to be built out with a team and in play or is it pre-production or can you start with people who are just getting going? >> Yeah, people do start using it pre-production for validation, but I think a lot of our customers do have a team going and they're starting to put, either close to putting something into production or about to, it's everything from large enterprises that have really sort of complicated, they have dozens of models running all over doing all sorts of use cases to tech startups that are very focused on a single problem, but that's like the lifeblood of the company and so they need to guarantee that it works well. And you know, we make it really easy to get started, especially if you're using one of the common model development platforms, you can just kind of turn key, get going and make sure that you have a nice feedback loop. So then when your models are out there, it's pointing out, areas where it's performing well, areas where it's performing less well, giving you that feedback so that you can make improvements, whether it's in training data or futurization work or algorithm selection. There's a number of, you know, depending on the symptoms, there's a number of things you can do to increase performance over time and we help guide people on that journey. >> So Adam, I have to ask, since you have such a great customer base and they're smart and they got teams and you're on the front end, I mean, early adopters is kind of an overused word, but they're killing it. They're putting stuff in the production's, not like it's a test, it's not like it's early. So as the next wave comes of fast followers, how do you see that coming online? What's your vision for that? How do you see companies that are like just waking up out of the frozen, you know, freeze of like old IT to like, okay, they got cloud, but they're not yet there. What do you see in the market? I see you're in the front end now with the top people really nailing AI and working hard. What's the- >> Yeah, I think a lot of these tools are becoming, or every year they get easier, more accessible, easier to use. And so, you know, even for that kind of like, as the market broadens, it takes less and less of a lift to put these systems in place. And the thing is, every business is unique, they have their own kind of data and so you can use these foundation models which have just been trained on generic data. They're a great starting point, a great accelerant, but then, in most cases you're either going to want to create a model or fine tune a model using data that's really kind of comes from your particular customers, the people you serve and so that it really reflects that and takes that into account. And so I do think that these, like the size of that market is expanding and its broadening as these tools just become easier to use and also the knowledge about how to build these systems becomes more widespread. >> Talk about your customer base you have now, what's the makeup, what size are they? Give a taste a little bit of a customer base you got there, what's they look like? I'll say Capital One, we know very well while you were at there, they were large scale, lot of data from fraud detection to all kinds of cool stuff. What do your customers now look like? >> Yeah, so we have a variety, but I would say one area we're really strong, we have several of the top 10 US banks, that's not surprising, that's a strength for us, but we also have Fortune 100 customers in healthcare, in manufacturing, in retail, in semiconductor and electronics. So what we find is like in any sort of these major verticals, there's typically, you know, one, two, three kind of companies that are really leading the charge and are the ones that, you know, in our opinion, those are the ones that for the next multiple decades are going to be the leaders, the ones that really kind of lead the charge on this AI transformation. And so we're very fortunate to be working with some of those. And then we have a number of startups as well who we love working with just because they're really pushing the boundaries technologically and so they provide great feedback and make sure that we're continuing to innovate and staying abreast of everything that's going on. >> You know, these early markups, even when the hyperscalers were coming online, they had to build everything themselves. That's the new, they're like the alphas out there building it. This is going to be a big wave again as that fast follower comes in. And so when you look at the scale, what advice would you give folks out there right now who want to tee it up and what's your secret sauce that will help them get there? >> Yeah, I think that the secret to teeing it up is just dive in and start like the, I think these are, there's not really a secret. I think it's amazing how accessible these are. I mean, there's all sorts of ways to access LLMs either via either API access or downloadable in some cases. And so, you know, go ahead and get started. And then our secret sauce really is the way that we provide that performance analysis of what's going on, right? So we can tell you in a very actionable way, like, hey, here's where your model is doing good things, here's where it's doing bad things. Here's something you want to take a look at, here's some potential remedies for it. We can help guide you through that. And that way when you're putting it out there, A, you're avoiding a lot of the common pitfalls that people see and B, you're able to really kind of make it better in a much faster way with that tight feedback loop. >> It's interesting, we've been kind of riffing on this supercloud idea because it was just different name than multicloud and you see apps like Snowflake built on top of AWS without even spending any CapEx, you just ride that cloud wave. This next AI, super AI wave is coming. I don't want to call AIOps because I think there's a different distinction. If you, MLOps and AIOps seem a little bit old, almost a few years back, how do you view that because everyone's is like, "Is this AIOps?" And like, "No, not kind of, but not really." How would you, you know, when someone says, just shoots off the hip, "Hey Adam, aren't you doing AIOps?" Do you say, yes we are, do you say, yes, but we do differently because it's doesn't seem like it's the same old AIOps. What's your- >> Yeah, it's a good question. AIOps has been a term that was co-opted for other things and MLOps also has people have used it for different meanings. So I like the term just AI infrastructure, I think it kind of like describes it really well and succinctly. >> But you guys are doing the ops. I mean that's the kind of ironic thing, it's like the next level, it's like NextGen ops, but it's not, you don't want to be put in that bucket. >> Yeah, no, it's very operationally focused platform that we have, I mean, it fires alerts, people can action off them. If you're familiar with like the way people run security operations centers or network operations centers, we do that for data science, right? So think of it as a DSOC, a Data Science Operations Center where all your models, you might have hundreds of models running across your organization, you may have five, but as problems are detected, alerts can be fired and you can actually work the case, make sure they're resolved, escalate them as necessary. And so there is a very strong operational aspect to it, you're right. >> You know, one of the things I think is interesting is, is that, if you don't mind commenting on it, is that the aspect of scale is huge and it feels like that was made up and now you have scale and production. What's your reaction to that when people say, how does scale impact this? >> Yeah, scale is huge for some of, you know, I think, I think look, the highest leverage business areas to apply these to, are generally going to be the ones at the biggest scale, right? And I think that's one of the advantages we have. Several of us come from enterprise backgrounds and we're used to doing things enterprise grade at scale and so, you know, we're seeing more and more companies, I think they started out deploying AI and sort of, you know, important but not necessarily like the crown jewel area of their business, but now they're deploying AI right in the heart of things and yeah, the scale that some of our companies are operating at is pretty impressive. >> John: Well, super exciting, great to have you on and congratulations. I got a final question for you, just random. What are you most excited about right now? Because I mean, you got to be pretty pumped right now with the way the world is going and again, I think this is just the beginning. What's your personal view? How do you feel right now? >> Yeah, the thing I'm really excited about for the next couple years now, you touched on it a little bit earlier, but is a sort of convergence of AI and AI systems with sort of turning into AI native businesses. And so, as you sort of do more, get good further along this transformation curve with AI, it turns out that like the better the performance of your AI systems, the better the performance of your business. Because these models are really starting to underpin all these key areas that cumulatively drive your P&L. And so one of the things that we work a lot with our customers is to do is just understand, you know, take these really esoteric data science notions and performance and tie them to all their business KPIs so that way you really are, it's kind of like the operating system for running your AI native business. And we're starting to see more and more companies get farther along that maturity curve and starting to think that way, which is really exciting. >> I love the AI native. I haven't heard any startup yet say AI first, although we kind of use the term, but I guarantee that's going to come in all the pitch decks, we're an AI first company, it's going to be great run. Adam, congratulations on your success to you and the team. Hey, if we do a few more interviews, we'll get the linguistics down. We can have bots just interact with you directly and ask you, have an interview directly. >> That sounds good, I'm going to go hang out on the beach, right? So, sounds good. >> Thanks for coming on, really appreciate the conversation. Super exciting, really important area and you guys doing great work. Thanks for coming on. >> Adam: Yeah, thanks John. >> Again, this is Cube Conversation. I'm John Furrier here in Palo Alto, AI going next gen. This is legit, this is going to a whole nother level that's going to open up huge opportunities for startups, that's going to use opportunities for investors and the value to the users and the experience will come in, in ways I think no one will ever see. So keep an eye out for more coverage on siliconangle.com and theCUBE.net, thanks for watching. (bright upbeat music)

(Upbeat music playing) >> Hey everyone, thanks for joining us today. Welcome to this event of Building your Cloud Center of Excellence with Hitachi Vantara. I'm your host, Lisa Martin. I've got a couple of guests here with me next to talk about redefining cloud operations and application modernization for customers. Please welcome Prem Balasubramanian the SVP and CTO at Hitachi Vantara, and Manoj Narayanan is here as well, the Managing Director of Technology at GTCR. Guys, thank you so much for joining me today. Excited to have this conversation about redefining CloudOps with you. >> Pleasure to be here. >> Pleasure to be here >> Prem, let's go ahead and start with you. You have done well over a thousand cloud engagements in your career. I'd love to get your point of view on how the complexity around cloud operations and management has evolved in the last, say, three to four years. >> It's a great question, Lisa before we understand the complexity around the management itself, the cloud has evolved over the last decade significantly from being a backend infrastructure or infrastructure as a service for many companies to become the business for many companies. If you think about a lot of these cloud bond companies cloud is where their entire workload and their business wants. With that, as a background for this conversation if you think about the cloud operations, there was a lot of there was a lot of lift and shift happening in the market where people lifted their workloads or applications and moved them onto the cloud where they treated cloud significantly as an infrastructure. And the way they started to manage it was again, the same format they were managing there on-prem infrastructure and they call it I&O, Infrastructure and Operations. That's kind of the way traditionally cloud is managed. In the last few years, we are seeing a significant shift around thinking of cloud more as a workload rather than as just an infrastructure. And what I mean by workload is in the cloud, everything is now code. So you are codifying your infrastructure. Your application is already code and your data is also codified as data services. With now that context apply the way you think about managing the cloud has to significantly change and many companies are moving towards trying to change their models to look at this complex environment as opposed to treating it like a simple infrastructure that is sitting somewhere else. So that's one of the biggest changes and shifts that are causing a lot of complexity and headache for actually a lot of customers for managing environments. The second critical aspect is even that, even exasperates the situation is multicloud environments. Now, there are companies that have got it right with things about right cloud for the right workload. So there are companies that I reach out and I talk with. They've got their office applications and emails and stuff running on Microsoft 365 which can be on the Azure cloud whereas they're running their engineering applications the ones that they build and leverage for their end customers on Amazon. And to some extent they've got it right but still they have a multiple cloud that they have to go after and maintain. This becomes complex when you have two clouds for the same type of workload. When I have to host applications for my end customers on Amazon as well as Azure, Azure as well as Google then, I get into security issues that I have to be consistent across all three. I get into talent because I need to have people that focus on Amazon as well as Azure, as well as Google which means I need so much more workforce, I need so many so much more skills that I need to build, right? That's becoming the second issue. The third one is around data costs. Can I make these clouds talk to each other? Then you get into the ingress egress cost and that creates some complexity. So bringing all of this together and managing is really become becoming more complex for our customers. And obviously as a part of this we will talk about some of the, some of the ideas that we can bring for in managing such complex environments but this is what we are seeing in terms of why the complexity has become a lot more in the last few years. >> Right. A lot of complexity in the last few years. Manoj, let's bring you into the conversation now. Before we dig into your cloud environment give the audience a little bit of an overview of GTCR. What kind of company are you? What do you guys do? >> Definitely Lisa. GTCR is a Chicago based private equity firm. We've been in the market for more than 40 years and what we do is we invest in companies across different sectors and then we manage the company drive it to increase the value and then over a period of time, sell it to future buyers. So in a nutshell, we got a large portfolio of companies that we need to manage and make sure that they perform to expectations. And my role within GTCR is from a technology viewpoint so where I work with all the companies their technology leadership to make sure that we are getting the best out of technology and technology today drives everything. So how can technology be a good compliment to the business itself? So, my role is to play that intermediary role to make sure that there is synergy between the investment thesis and the technology lures that we can pull and also work with partners like Hitachi to make sure that it is done in an optimal manner. >> I like that you said, you know, technology needs to really compliment the business and vice versa. So Manoj, let's get into the cloud operations environment at GTCR. Talk to me about what the experience has been the last couple of years. Give us an idea of some of the challenges that you were facing with existing cloud ops and and the solution that you're using from Hitachi Vantara. >> A a absolutely. In fact, in fact Prem phrased it really well, one of the key things that we're facing is the workload management. So there's so many choices there, so much complexities. We have these companies buying more companies there is organic growth that is happening. So the variables that we have to deal with are very high in such a scenario to make sure that the workload management of each of the companies are done in an optimal manner is becoming an increasing concern. So, so that's one area where any help we can get anything we can try to make sure it is done better becomes a huge value at each. A second aspect is a financial transparency. We need to know where the money is going where the money is coming in from, what is the scale especially in the cloud environment. We are talking about an auto scale ecosystem. Having that financial transparency and the metrics associated with that, it, these these become very, very critical to ensure that we have a successful presence in the multicloud environment. >> Talk a little bit about the solution that you're using with Hitachi and, and the challenges that it is eradicated. >> Yeah, so it end of the day, right, we we need to focus on our core competence. So, so we have got a very strong technology leadership team. We've got a very strong presence in the respective domains of each of the portfolio companies. But where Hitachi comes in and HAR comes in as a solution is that they allow us to excel in focusing on our core business and then make sure that we are able to take care of workload management or financial transparency. All of that is taken off the table from us and and Hitachi manages it for us, right? So it's such a perfectly compliment relationship where they act as two partners and HARC is a solution that is extremely useful in driving that. And, and and I'm anticipating that it'll become more important with time as the complexity of cloud and cloud associate workloads are only becoming more challenging to manage and not less. >> Right? That's the thing that complexity is there and it's also increasing Prem, you talked about the complexities that are existent today with respect to cloud operations the things that have happened over the last couple of years. What are some of your tips, Prem for the audience, like the the top two or three things that you would say on cloud operations that that people need to understand so that they can manage that complexity and allow their business to be driven and complimented by technology? >> Yeah, a big great question again, Lisa, right? And I think Manoj alluded to a few of these things as well. The first one is in the new world of the cloud I think think of migration, modernization and management as a single continuum to the cloud. Now there is no lift and shift and there is no way somebody else separately manages it, right? If you do not lift and shift the right applications the right way onto the cloud, you are going to deal with the complexity of managing it and you'll end up spending more money time and effort in managing it. So that's number one. Migration, modernization, management of cloud work growth is a single continuum and it's not three separate activities, right? That's number one. And the, the second is cost. Cost traditionally has been an afterthought, right? People move the workload to the cloud. And I think, again, like I said, I'll refer back to what Manoj said once we move it to the cloud and then we put all these fancy engineering capability around self-provisioning, every developer can go and ask for what he or she wants and they get an environment immediately spun up so on and so forth. Suddenly the CIO wakes up to a bill that is significantly larger than what he or she expected right? And, and this is this is become a bit common nowadays, right? The the challenge is because we think cost in the cloud as an afterthought. But consider this example in, in previous world you buy hard, well, you put it in your data center you have already amortized the cost as a CapEx. So you can write an application throw it onto the infrastructure and the application continues to use the infrastructure until you hit a ceiling, you don't care about the money you spent. But if I write a line of code that is inefficient today and I deploy it on the cloud from minute one, I am paying for the inefficiency. So if I realize it after six months, I've already spent the money. So financial discipline, especially when managing the cloud is now is no more an afterthought. It is as much something that you have to include in your engineering practice as much as any other DevOps practices, right? Those are my top two tips, Lisa, from my standpoint, think about cloud, think about cloud work, cloud workloads. And the last one again, and you will see you will hear me saying this again and again, get into the mindset of everything is code. You don't have a touch and feel infrastructure anymore. So you don't really need to have foot on the ground to go manage that infrastructure. It's codified. So your code should be managing it, but think of how it happens, right? That's where we, we are going as an evolution >> Everything is code. That's great advice, great tips for the audience there. Manoj, I'll bring you back into the conversation. You know, we, we can talk about skills gaps on on in many different facets of technology the SRE role, relatively new, skillset. We're hearing, hearing a lot about it. SRE led DevSecOps is probably even more so of a new skillset. If I'm an IT leader or an application leader how do I ensure that I have the right skillset within my organization to be able to manage my cloud operations to, to dial down that complexity so that I can really operate successfully as a business? >> Yeah. And so unfortunately there is no perfect answer, right? It's such a, such a scarce skillset that a, any day any of the portfolio company CTOs if I go and talk and say, Hey here's a great SRE team member, they'll be more than willing to fight with each of to get the person in right? It's just that scarce of a skillset. So, so a few things we need to look at it. One is, how can I build it within, right? So nobody gets born as an SRE, you, you make a person an SRE. So how do you inculcate that culture? So like Prem said earlier, right? Everything is software. So how do we make sure that everybody inculcates that as part of their operating philosophy be they part of the operations team or the development team or the testing team they need to understand that that is a common guideline and common objective that we are driving towards. So, so that skillset and that associated training needs to be driven from within the organization. And that in my mind is the fastest way to make sure that that role gets propagated across organization. That is one. The second thing is rely on the right partners. So it's not going to be possible for us, to get all of these roles built in-house. So instead prioritize what roles need to be done from within the organization and what roles can we rely on our partners to drive it for us. So that becomes an important consideration for us to look at as well. >> Absolutely. That partnership angle is incredibly important from, from the, the beginning really kind of weaving these companies together on this journey to to redefine cloud operations and build that, as we talked about at the beginning of the conversation really building a cloud center of excellence that allows the organization to be competitive, successful and and really deliver what the end user is, is expecting. I want to ask - Sorry Lisa, - go ahead. >> May I add something to it, I think? >> Sure. >> Yeah. One of the, one of the common things that I tell customers when we talk about SRE and to manages point is don't think of SRE as a skillset which is the common way today the industry tries to solve the problem. SRE is a mindset, right? Everybody in >> Well well said, yeah >> That, so everybody in a company should think of him or her as a cycle liability engineer. And everybody has a role in it, right? Even if you take the new process layout from SRE there are individuals that are responsible to whom we can go to when there is a problem directly as opposed to going through the traditional ways of AI talk to L one and L one contras all. They go to L two and then L three. So we, we, we are trying to move away from an issue escalation model to what we call as a a issue routing or a incident routing model, right? Move away from incident escalation to an incident routing model. So you get to route to the right folks. So again, to sum it up, SRE should not be solved as a skillset set because there is not enough people in the market to solve it that way. If you start solving it as a mindset I think companies can get a handhold of it. >> I love that. I've actually never heard that before, but it it makes perfect sense to think about the SRE as a mindset rather than a skillset that will allow organizations to be much more successful. Prem I wanted to get your thoughts as enterprises are are innovating, they're moving more products and services to the as a service model. Talk about how the dev teams the ops teams are working together to build and run reliable, cost efficient services. Are they working better together? >> Again, a a very polarizing question because some customers are getting it right many customers aren't, there is still a big wall between development and operations, right? Even when you think about DevOps as a terminology the fundamental principle was to make sure dev and ops works together. But what many companies have achieved today, honestly is automating the operations for development. For example, as a developer, I can check in code and my code will appear in production without any friction, right? There is automated testing, automated provisioning and it gets promoted to production, but after production, it goes back into the 20 year old model of operating the code, right? So there is more work that needs to be done for Devon and Ops to come closer and work together. And one of the ways that we think this is achievable is not by doing radical org changes, but more by focusing on a product-oriented single backlog approach across development and operations. Which is, again, there is change management involved but I think that's a way to start embracing the culture of dev ops coming together much better now, again SRE principles as we double click and understand it more and Google has done a very good job playing it out for the world. As you think about SRE principle, there are ways and means in that process of how to think about a single backlog. And in HARC, Hitachi Application Reliability Centers we've really got a way to look at prioritizing the backlog. And what I mean by that is dev teams try to work on backlog that come from product managers on features. The SRE and the operations team try to put backlog into the say sorry, try to put features into the same backlog for improving stability, availability and financials financial optimization of your code. And there are ways when you look at your SLOs and error budgets to really coach the product teams to prioritize your backlog based on what's important for you. So if you understand your spending more money then you reduce your product features going in and implement the financial optimization that came from your operations team, right? So you now have the ability to throttle these parameters and that's where SRE becomes a mindset and a principle as opposed to a skillset because this is not an individual telling you to do. This is the company that is, is embarking on how to prioritize my backlog beyond just user features. >> Right. Great point. Last question for both of you is the same talk kind of take away things that you want me to remember. If I am at an IT leader at, at an organization and I am planning on redefining CloudOps for my company Manoj will start with you and then Prem to you what are the top two things that you want me to walk away with understanding how to do that successfully? >> Yeah, so I'll, I'll go back to basics. So the two things I would say need to be taken care of is, one is customer experience. So all the things that I do end of the day is it improving the customer experience or not? So that's a first metric. The second thing is anything that I do is there an ROI by doing that incremental step or not? Otherwise we might get lost in the technology with surgery, the new tech, et cetera. But end of the day, if the customers are not happy if there is no ROI, everything else you just can't do much on top of that >> Now it's all about the customer experience. Right? That's so true. Prem what are your thoughts, the the top things that I need to be taking away if I am a a leader planning to redefine my cloud eye company? >> Absolutely. And I think from a, from a company standpoint I think Manoj summarized it extremely well, right? There is this ROI and there is this customer experience from my end, again, I'll, I'll suggest two two more things as a takeaway, right? One, cloud cost is not an afterthought. It's essential for us to think about it upfront. Number two, do not delink migration modernization and operations. They are one stream. If you migrate a long, wrong workload onto the cloud you're going to be stuck with it for a long time. And an example of a wrong workload, Lisa for everybody that that is listening to this is if my cost per transaction profile doesn't change and I am not improving my revenue per transaction for a piece of code that's going run in production it's better off running in a data center where my cost is CapEx than amortized and I have control over when I want to upgrade as opposed to putting it on a cloud and continuing to pay unless it gives me more dividends towards improvement. But that's a simple example of when we think about what should I migrate and how will it cost pain when I want to manage it in the longer run. But that's, that's something that I'll leave the audience and you with as a takeaway. >> Excellent. Guys, thank you so much for talking to me today about what Hitachi Vantara and GTCR are doing together how you've really dialed down those complexities enabling the business and the technology folks to really live harmoniously. We appreciate your insights and your perspectives on building a cloud center of excellence. Thank you both for joining me. >> Thank you. >> For my guests, I'm Lisa. Martin, you're watching this event building Your Cloud Center of Excellence with Hitachi Vantara. Thanks for watching. (Upbeat music playing) (Upbeat music playing) (Upbeat music playing) (Upbeat music playing)

(low-key music) >> The cube's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (uplifting electronic music) (crowd chattering in background) >> Welcome back to Spain, everybody. My name's Dave Vellante. I'm here with Dave Nicholson. We are live at the Fira in Barcelona, covering MWC23 day four. We've been talking about, you know, 5G all week. We're going to talk about it some more. Jillian Kaplan is here. She's the head of Global Telecom Thought Leadership at Dell Technologies, and we're pleased to have Meg Knauth, who's the Vice President for Digital Platform Engineering at T-Mobile. Ladies, welcome to theCUBE. Thanks for coming on. >> Thanks for having us. >> Yeah, thank you. >> All right, Meg, can you explain 5G and edge to folks that may not be familiar with it? Give us the 101 on 5G and edge. >> Sure, I'd be happy to. So, at T-Mobile, we want businesses to be able to focus on their business outcomes and not have to stress about network technology. So we're here to handle the networking behind the scenes for you to achieve your business goals. The main way to think about 5G is speed, reduced latency, and heightened security. And you can apply that to so many different business goals and objectives. You know, some of the use cases that get touted out the most are in the retail manufacturing sectors with sensors and with control of inventory and things of that nature. But it can be applied to pretty much any industry because who doesn't need more (chuckles) more speed and lower latency. >> Yeah. And reliability, right? >> Exactly. >> I mean, that's what you're going to have there. So it's not like it's necessarily going to- you know, you think about 5G and these private networks, right? I mean, it's not going to, oh, maybe it is going to eat into, there's a Venn there, I know, but it's not going to going to replace wireless, right? I mean, it's new use cases. >> Yeah. >> Maybe you could talk about that a little bit. >> Yeah, they definitely coexist, right? And Meg touched a little bit on like all the use cases that are coming to be, but as we look at 5G, it's really the- we call it like the Enterprise G, right? It's where the enterprise is going to be able to see changes in their business and the way that they do things. And for them, it's going to be about reducing costs and heightening ROI, and safety too, right? Like being able to automate manufacturing facilities where you don't have workers, like, you know, getting hit by various pieces of equipment and you can take them out of harm's way and put robots in their place. And having them really work in an autonomous situation is going to be super, super key. And 5G is just the, it's the backbone of all future technologies if you look at it. We have to have a network like that in order to build things like AI and ML, and we talk about VR and the Metaverse. You have to have a super reliable network that can handle the amount of devices that we're putting out today, right? So, extremely important. >> From T-Mobile's perspective, I mean we hear a lot about, oh, we spent a lot on CapEx, we know that. You know, trillion and a half over the next seven years, going into 5G infrastructure. We heard in the early keynotes at MWC, we heard the call to you know, tax the over the top vendors. We heard the OTT, Netflix shot back, they said, "Why don't you help us pay for the content that we're creating?" But, okay, so I get that, but telcos have a great business. Where's T-Mobile stand on future revenue opportunities? Are you looking to get more data and monetize that data? Are you looking to do things like partner with Dell to do, you know, 5G networks? Where are the opportunities for T-Mobile? >> I think it's more, as Jillian said, it's the opportunities for each business and it's unique to those businesses. So we're not in it just for ourselves. We're in it to help others achieve their business goals and to do more with all of the new capabilities that this network provides. >> Yeah, man, I like that answer because again, listening to some of the CEOs of the large telcos, it's like, hmm, what's in it for me as the customer or the business? I didn't hear enough of that. And at least in the early keynotes, I'm hearing it more, you know, as the show goes on. But I don't know, Dave, what do you think about what you've heard at the event? >> Well, I'm curious from T-Mobile's perspective, you know when a consumer thinks about 5G, we think of voice, text, and data. And if we think about the 5G network that you already have in place, I'm curious, if you can share this kind of information, what percentage of that's being utilized now? How much is available for the, you know, for the Enterprise G that we're talking about, and maybe, you know, in five years in the future, do you have like a projected mix of consumer use versus all of these back office, call them processes that a consumer's not aware of, but you know the factory floor being connected via 5G, that frontiers that emerges, where are we now and what are you looking towards? Does that make sense? Kind of the mixed question? >> Hand over the business plan! (all laugh) >> Yeah! Yeah, yeah, yeah. >> Yeah, I- >> I want numbers Meg, numbers! >> Wow. (Dave and Dave laugh) I'm probably actually not the right person to speak to that. But as you know, T-Mobile has the largest 5G network in North America, and we just say, bring it, right? Let's talk- >> So you got room, you got room for Jillian's stuff? >> Yeah, let's solve >> Well, we can build so many >> business problems together. >> private 5G networks, right? Like I would say like the opportunities are... There's not a limit, right? Because as we build out these private networks, right? We're not on a public network when we're talking about like connecting these massive factories or connecting like a retail store to you and your house to be able to basically continue to try on the clothes remotely, something like that. It's limitless and what we can build- >> So they're related, but they're not necessarily mutually exclusive in the sense that what you are doing in the factory example is going to interfere with my ability to get my data through T-mobile. >> No, no, I- >> These are separated. >> Yeah. Yeah. >> Okay. >> As we build out these private networks and these private facilities, and there are so many applications in the consumer space that haven't even been realized yet. Like, when we think about 4G, when 4G launched, there were no applications that needed 4G to run on our cell phones, right? But then the engineers got to work, right? And we ended up with Uber and Instagram stories and all these applications that require 4G to launch. And that's what's going to happen with 5G too, it's like, as the network continues to get built, in the consumer space as well as the enterprise space, there's going to be new applications realized on this is all the stuff that we can do with this amazing network and look how many more devices and look how much faster it is, and the lower latency and the higher bandwidth, and you know, what we can really build. And I think what we're seeing at this show compared to last year is this stuff actually in practice. There was a lot of talk last year, like about, oh, this is what we can build, but now we're building it. And I think that's really key to show that companies like T-Mobile can help the enterprise in this space with cooperation, right? Like, we're not just talking about it now, we're actually putting it into practice. >> So how does it work? If I put in a private network, what are you doing? You slice out a piece of the network and charge me for it and then I get that as part of my private network. How does it actually work for the customer? >> You want to take that one? >> So I was going to say, yeah, you can do a network slice. You can actually physically build a private network, right? It depends, there's so many different ways to engineer it. So I think you can do it either way, basically. >> We just, we don't want it to be scary, right? >> Yep. >> So it starts with having a conversation about the business challenges that you're facing and then backing it into the technology and letting the technology power those solutions. But we don't want it to be scary for people because there's so much buzz around 5G, around edge, and it can be overwhelming and you can feel like you need a PhD in engineering to have a conversation. And we just want to kind of simplify things and talk in your language, not in our language. We'll figure out the tech behind the scenes. Just tell us what problems we can solve together. >> And so many non-technical companies are having to transform, right? Like retail, like manufacturing, that haven't had to be tech companies before. But together with T-Mobile and Dell, we can help enable that and make it not scary like Meg said. >> Right, so you come into my factory, I say, okay, look around. I got all these people there, and they're making hoses and they're physically putting 'em together. And we go and we have to take a physical measurement as to, you know, is it right? And because if we don't do that, then we have to rework it. Okay, now that's a problem. Okay, can you help me digitize that business? I need a network to do that. I'm going to put in some robots to do that. This is, I mean, I'm making this up but this has got to be a common use case, right? >> Yeah. >> So how do you simplify that for the business owner? >> So we start with what we can provide, and then in some cases you need additional solution providers. You might need a robotics company, you might need a sensor company. But we have those contacts to bring that together for you so that you don't have to be the expert in all those things. >> And what do I do with all the data that I'm collecting? Because, you know, I'm not really a data expert. Maybe, you know, I'm good at putting hoses together, but what's the data layer look like here? (all laughing) >> It's a hose business! >> I know! >> Great business. >> Back to the hoses again. >> There's a lot of different things you can do with it, right? You can collect it in a database, you can send it up to a cloud, you can, you know, use an edge device. It depends how we build the network. >> Dave V.: Can you guys help me do that? Can you guys- >> Sure, yeah. >> Help me figure that out. Should I put it into cloud? Should I use this database or that data? What kind of skills do I need? >> And it depends on the size of the network, right? And the size of the business. Like, you know, there's very simple. You don't have to be a massive manufacturer in order to install this stuff. >> No, I'm asking small business questions. >> Yeah. >> Right, I might not have this giant IT team. I might not have somebody who knows how to do ETL and PBA. >> Exactly. And we can talk to you too about what data matters, right? And we can, together, talk about what data might be the most valuable to you. We can talk to you about how we use data. But again, simplifying it down and making it personal to your business. >> Your point about scary is interesting, because no one has mentioned that until you did in four days. Three? Four days. Somebody says, let's do a private 5G network. That sounds like you're offering, you know, it's like, "Hey, you know what we should do Dave? We'll build you a cruise ship." It's like, I don't need a cruise ship, I just want to go bass fishing. >> Right, right, right. >> But in fact, these things are scalable in the sense that it can be scaled down from the trillions of dollars of infrastructure investment. >> Yeah. >> Yeah. It needs to be focused on your outcome, right? And not on the tech. >> When I was at the Dell booth I saw this little private network, it was about this big. I'm like, how much is that? I want one of those. (all laugh) >> I'm not the right person to talk about that! >> The little black one? >> Yes. >> I wanted one of those, too! >> I saw it, it had a little case to carry it around. I'm like, that could fit in my business. >> Just take it with you. >> theCUBE could use that! (all laugh) >> Anything that could go in a pelican case, I want. >> It's true. Like, it's so incredibly important, like you said, to focus on outcomes, right? Not just tech for the sake of tech. What's the problem? Let's solve the problem together. And then you're getting the outcome you want. You'll know what data you need. If you know what the problem is, you're like, okay this is the data I need to know if this problem is solved or not. >> So it sounds like 2022 was the year of talking about it. 2023, I'm inferring is the year of seeing it. >> Yep. >> And 2024 is going to be the year of doing it? >> I think we're doing it now. >> We're doing it now. >> Yeah. >> Okay. >> Yeah, yeah. We're definitely doing it now. >> All right. >> I see a lot of this stuff being put into place and a lot more innovation and a lot more working together. And Meg mentioned working with other partners. No one's going to do this alone. You've got to like, you know, Dell especially, we're focused on open and making sure that, you know, we have the right software partners. We're bringing in smaller players, right? Like ISVs too, as well as like the big software guys. Incredibly, incredibly important. The sensor companies, whatever we need you've got to be able to solve your customer's issue, which in this case, we're looking to help the enterprise together to transform their space. And Dell knows a little bit about the enterprise, so. >> So if we are there in 2023, then I assume 2024 will be the year that each of your companies sets up a dedicated vertical to address the hose manufacturing market. (Meg laughing) >> Oh, the hose manufacturing market. >> Further segmentation is usually a hallmark of the maturity of an industry. >> I got a lead for you. >> Yeah, there you go. >> And that's one thing we've done at Dell, too. We've built like this use case directory to help the service providers understand what, not just say like, oh, you can help manufacturers. Yeah, but how, what are the use cases to do that? And we worked with a research firm to figure out, like, you know these are the most mature, these are the best ROIs. Like to really help hone in on exactly what we can deploy for 5G and edge solutions that make the most sense, not only for service providers, right, but also for the enterprises. >> Where do you guys want to see this partnership go? Give us the vision. >> To infinity and beyond. To 5G! (Meg laughing) To 5G and beyond. >> I love it. >> It's continuation. I love that we're partnering together. It's incredibly important to the future of the business. >> Good deal. >> To bring the strengths of both together. And like Jillian said, other partners in the ecosystem, it has to be approached from a partnership perspective, but focused on outcomes. >> Jillian: Yep. >> To 5G and beyond. I love it. >> To 5G and beyond. >> Folks, thanks for coming on theCUBE. >> Thanks for having us. >> Appreciate your insights. >> Thank you. >> All right. Dave Vellante for Dave Nicholson, keep it right there. You're watching theCUBE. Go to silliconANGLE.com. John Furrier is banging out all the news. theCUBE.net has all the videos. We're live at the Fira in Barcelona, MWC23. We'll be right back. (uplifting electronic music)

>> Narrator: TheCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (light airy music) >> Hi, everybody, welcome back to the Fira in Barcelona. My name is Dave Vellante. I'm here with my co-host Dave Nicholson. Lisa Martin is in the house. John Furrier is pounding the news from our Palo Alto studio. We are super excited to be talking about cloud at the edge, what that means. Charles Tsai is here. He's the Senior Director of product management at Dell Technologies and Peter Fetterolf is the Chief Technology Officer at ACG Business Analytics, a firm that goes deep into the TCO and the telco space, among other things. Gents, welcome to theCUBE. Thanks for coming on. Thank you. >> Good to be here. >> Yeah, good to be here. >> So I've been in search all week of the elusive next wave of monetization for the telcos. We know they make great money on connectivity, they're really good at that. But they're all talking about how they can't let this happen again. Meaning we can't let the over the top vendors yet again, basically steal our cookies. So we're going to not mess it up this time. We're going to win in the monetization. Charles, where are those monetization opportunities? Obviously at the edge, the telco cloud at the edge. What is that all about and where's the money? >> Well, Dave, I think from a Dell's perspective, what we want to be able to enable operators is a solution that enable them to roll out services much quicker, right? We know there's a lot of innovation around IoT, MEG and so on and so forth, but they continue to rely on traditional technology and way of operations is going to take them years to enable new services. So what Dell is doing is now, creating the entire vertical stack from the hardware through CAST and automation that enable them, not only to push out services very quickly, but operating them using cloud principles. >> So it's when you say the entire vertical stack, it's the integrated hardware components with like, for example, Red Hat on top- >> Right. >> Or a Wind River? >> That's correct. >> Okay, and then open API, so the developers can create workloads, I presume data companies. We just had a data conversation 'cause that was part of the original stack- >> That's correct. >> So through an open ecosystem, you can actually sort of recreate that value, correct? >> That's correct. >> Okay. >> So one thing Dell is doing, is we are offering an infrastructure block where we are taking over the overhead of certifying every release coming from the Red Hat or the Wind River of the world, right? We want telcos to spend their resources on what is going to generate them revenue. Not the overhead of creating this cloud stack. >> Dave, I remember when we went through this in the enterprise and you had companies like, you know, IBM with the AS400 and the mainframe saying it's easier to manage, which it was, but it's still, you know, it was subsumed by the open systems trend. >> Yeah, yeah. And I think that's an important thing to probe on, is this idea of what is, what exactly does it mean to be cloud at the edge in the telecom space? Because it's a much used term. >> Yeah. >> When we talk about cloud and edge, in sort of generalized IT, but what specifically does it mean? >> Yeah, so when we talk about telco cloud, first of all it's kind of different from what you're thinking about public cloud today. And there's a couple differences. One, if you look at the big hyperscaler public cloud today, they tend to be centralized in huge data centers. Okay, telco cloud, there are big data centers, but then there's also regional data centers. There are edge data centers, which are your typical like access central offices that have turned data centers, and then now even cell sites are becoming mini data centers. So it's distributed. I mean like you could have like, even in a country like say Germany, you'd have 30,000 soul sites, each one of them being a data center. So it's a very different model. Now the other thing I want to go back to the question of monetization, okay? So how do you do monetization? The only way to do that, is to be able to offer new services, like Charles said. How do you offer new services? You have to have an open ecosystem that's going to be very, very flexible. And if we look at where telcos are coming from today, they tend to be very inflexible 'cause they're all kind of single vendor solutions. And even as we've moved to virtualization, you know, if you look at packet core for instance, a lot of them are these vertical stacks of say a Nokia or Ericson or Huawei where you know, you can't really put any other vendors or any other solutions into that. So basically the idea is this kind of horizontal architecture, right? Where now across, not just my central data centers, but across my edge data centers, which would be traditionally my access COs, as well as my cell sites. I have an open environment. And we're kind of starting with, you know, packet core obviously with, and UPFs being distributed, but now open ran or virtual ran, where I can have CUs and DUs and I can split CUs, they could be at the soul site, they could be in edge data centers. But then moving forward, we're going to have like MEG, which are, you know, which are new kinds of services, you know, could be, you know, remote cars it could be gaming, it could be the Metaverse. And these are going to be a multi-vendor environment. So one of the things you need to do is you need to have you know, this cloud layer, and that's what Charles was talking about with the infrastructure blocks is helping the service providers do that, but they still own their infrastructure. >> Yeah, so it's still not clear to me how the service providers win that game but we can maybe come back to that because I want to dig into TCO a little bit. >> Sure. >> Because I have a lot of friends at Dell. I don't have a lot of friends at HPE. I've always been critical when they take an X86 server put a name on it that implies edge and they throw it over the fence to the edge, that's not going to work, okay? We're now seeing, you know we were just at the Dell booth yesterday, you did the booth crawl, which was awesome. Purpose-built servers for this environment. >> Charles: That's right. >> So there's two factors here that I want to explore in TCO. One is, how those next gen servers compare to the previous gen, especially in terms of power consumption but other factors and then how these sort of open ran, open ecosystem stacks compared to proprietary stacks. Peter, can you help us understand those? >> Yeah, sure. And Charles can comment on this as well. But I mean there, there's a couple areas. One is just moving the next generation. So especially on the Intel side, moving from Ice Lake to the Sapphire Rapids is a big deal, especially when it comes to the DU. And you know, with the radios, right? There's the radio unit, the RU, and then there's the DU the distributed unit, and the CU. The DU is really like part of the radio, but it's virtualized. When we moved from Ice lake to Sapphire Rapids, which is third generation intel to fourth generation intel, we're literally almost doubling the performance in the DU. And that's really important 'cause it means like almost half the number of servers and we're talking like 30, 40, 50,000 servers in some cases. So, you know, being able to divide that by two, that's really big, right? In terms of not only the the cost but all the TCO and the OpEx. Now another area that's really important, when I was talking moving from these vertical silos to the horizontal, the issue with the vertical silos is, you can't place any other workloads into those silos. So it's kind of inefficient, right? Whereas when we have the horizontal architecture, now you can place workloads wherever you want, which basically also means less servers but also more flexibility, more service agility. And then, you know, I think Charles can comment more, specifically on the XR8000, some things Dell's doing, 'cause it's really exciting relative to- >> Sure. >> What's happening in there. >> So, you know, when we start looking at putting compute at the edge, right? We recognize the first thing we have to do is understand the environment we are going into. So we spend with a lot of time with telcos going to the south side, going to the edge data center, looking at operation, how do the engineer today deal with maintenance replacement at those locations? Then based on understanding the operation constraints at those sites, we create innovation and take a traditional server, remodel it to make sure that we minimize the disruption to the operations, right? Just because we are helping them going from appliances to open compute, we do not want to disrupt what is have been a very efficient operation on the remote sites. So we created a lot of new ideas and develop them on general compute, where we believe we can save a lot of headache and disruptions and still provide the same level of availability, resiliency, and redundancy on an open compute platform. >> So when we talk about open, we don't mean generic? Fair? See what I mean? >> Open is more from the software workload perspective, right? A Dell server can run any type of workload that customer intend. >> But it's engineered for this? >> Environment. >> Environment. >> That's correct. >> And so what are some of the environmental issues that are dealt with in the telecom space that are different than the average data center? >> The most basic one, is in most of the traditional cell tower, they are deployed within cabinets instead of racks. So they are depth constraints that you just have no access to the rear of the chassis. So that means on a server, is everything you need to access, need to be in the front, nothing should be in the back. Then you need to consider how labor union come into play, right? There's a lot of constraint on who can go to a cell tower and touch power, who can go there and touch compute, right? So we minimize all that disruption through a modular design and make it very efficient. >> So when we took a look at XR8000, literally right here, sitting on the desk. >> Uh-huh. >> Took it apart, don't panic, just pulled out some sleds and things. >> Right, right. >> One of the interesting demonstrations was how it compared to the size of a shoe. Now apparently you hired someone at Dell specifically because they wear a size 14 shoe, (Charles laughs) so it was even more dramatic. >> That's right. >> But when you see it, and I would suggest that viewers go back and take a look at that segment, specifically on the hardware. You can see exactly what you just referenced. This idea that everything is accessible from the front. Yeah. >> So I want to dig in a couple things. So I want to push back a little bit on what you were saying about the horizontal 'cause there's the benefit, if you've got the horizontal infrastructure, you can run a lot more workloads. But I compare it to the enterprise 'cause I, that was the argument, I've made that argument with converged infrastructure versus say an Oracle vertical stack, but it turned out that actually Oracle ran Oracle better, okay? Is there an analog in telco or is this new open architecture going to be able to not only service the wide range of emerging apps but also be as resilient as the proprietary infrastructure? >> Yeah and you know, before I answer that, I also want to say that we've been writing a number of white papers. So we have actually three white papers we've just done with Dell looking at infrastructure blocks and looking at vertical versus horizontal and also looking at moving from the previous generation hardware to the next generation hardware. So all those details, you can find the white papers, and you can find them either in the Dell website or at the ACG research website >> ACGresearch.com? >> ACG research. Yeah, if you just search ACG research, you'll find- >> Yeah. >> Lots of white papers on TCO. So you know, what I want to say, relative to the vertical versus horizontal. Yeah, obviously in the vertical side, some of those things will run well, I mean it won't have issues. However, that being said, as we move to cloud native, you know, it's very high performance, okay? In terms of the stack, whether it be a Red Hat or a VMware or other cloud layers, that's really become much more mature. It now it's all CNF base, which is really containerized, very high performance. And so I don't think really performance is an issue. However, my feeling is that, if you want to offer new services and generate new revenue, you're not going to do it in vertical stacks, period. You're going to be able to do a packet core, you'll be able to do a ran over here. But now what if I want to offer a gaming service? What if I want to do metaverse? What if I want to do, you have to have an environment that's a multi-vendor environment that supports an ecosystem. Even in the RAN, when we look at the RIC, and the xApps and the rApps, these are multi-vendor environments that's going to create a lot of flexibility and you can't do that if you're restricted to, I can only have one vendor running on this hardware. >> Yeah, we're seeing these vendors work together and create RICs. That's obviously a key point, but what I'm hearing is that there may be trade offs, but the incremental value is going to overwhelm that. Second question I have, Peter is, TCO, I've been hearing a lot about 30%, you know, where's that 30% come from? Is it Op, is it from an OpEx standpoint? Is it labor, is it power? Is it, you mentioned, you know, cutting the number of servers in half. If I can unpack the granularity of that TCO, where's the benefit coming from? >> Yeah, the answer is yes. (Peter and Charles laugh) >> Okay, we'll do. >> Yeah, so- >> One side that, in terms of, where is the big bang for the bucks? >> So I mean, so you really need to look at the white paper to see details, but definitely power, definitely labor, definitely reducing the number of servers, you know, reducing the CapEx. The other thing is, is as you move to this really next generation horizontal telco cloud, there's the whole automation and orchestration, that is a key component as well. And it's enabled by what Dell is doing. It's enabled by the, because the thing is you're not going to have end-to-end automation if you have all this legacy stuff there or if you have these vertical stacks where you can't integrate. I mean you can automate that part and then you have separate automation here, you separate. you need to have integrated automation and orchestration across the whole thing. >> One other point I would add also, right, on the hardware perspective, right? With the customized hardware, what we allow operator to do is, take out the existing appliance and push a edge optimized server without reworking the entire infrastructure. There is a significant saving where you don't have to rethink about what is my power infrastructure, right? What is my security infrastructure? The server is designed to leverage the existing, what is already there. >> How should telco, Charles, plan for this transformation? Are there specific best practices that you would recommend in terms of the operational model? >> Great question. I think first thing is do an inventory of what you have. Understand what your constraints are and then come to Dell, we will love to consult with you, based on our experience on the best practices. We know how to minimize additional changes. We know how to help your support engineer, understand how to shift appliance based operation to a cloud-based operation. >> Is that a service you offer? Is that a pre-sales freebie? What is maybe both? >> It's both. >> Yeah. >> It's both. >> Yeah. >> Guys- >> Just really quickly. >> We're going to wrap. >> The, yeah. Dave loves the TCO discussion. I'm always thinking in terms of, well how do you measure TCO when you're comparing something where you can't do something to an environment where you're going to be able to do something new? And I know that that's always the challenge in any kind of emerging market where things are changing, any? >> Well, I mean we also look at, not only TCO, but we look at overall business case. So there's basically service at GLD and revenue and then there's faster time to revenues. Well, and actually ACG, we actually have a platform called the BAE or Business Analytics Engine that's a very sophisticated simulation cloud-based platform, where we can actually look at revenue month by month. And we look at what's the impact of accelerating revenue by three months. By four months. >> So you're looking into- >> By six months- >> So you're forward looking. You're just not consistently- >> So we're not just looking at TCO, we're looking at the overall business case benefit. >> Yeah, exactly right. There's the TCO, which is the hard dollars. >> Right. >> CFO wants to see that, he or she needs to see that. But you got to, you can convince that individual, that there's a business case around it. >> Peter: Yeah. >> And then you're going to sign up for that number. >> Peter: Yeah. >> And they're going to be held to it. That's the story the world wants. >> At the end of the day, telcos have to be offered new services 'cause look at all the money that's been spent. >> Dave: Yeah, that's right. >> On investment on 5G and everything else. >> 0.5 trillion over the next seven years. All right, guys, we got to go. Sorry to cut you off. >> Okay, thank you very much. >> But we're wall to wall here. All right, thanks so much for coming on. >> Dave: Fantastic. >> All right, Dave Vellante, for Dave Nicholson. Lisa Martin's in the house. John Furrier in Palo Alto Studios. Keep it right there. MWC 23 live from the Fira in Barcelona. (light airy music)

>> Announcer: theCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (upbeat music) >> Hi everybody. Welcome back to Barcelona. We're here at the Fira Live, theCUBE's ongoing coverage of day two of MWC 23. Back in 2021 was my first Mobile World Congress. And you know what? It was actually quite an experience because there was nobody there. I talked to my friend, who's now my co-host, Chris Lewis about what to expect. He said, Dave, I don't think a lot of people are going to be there, but Danielle Royston is here and she's the CEO of Totoge. And that year when Erickson tapped out of its space she took out 60,000 square feet and built out Cloud City. If it weren't for Cloud City, there would've been no Mobile World Congress in June and July of 2021. DR is back. Great to see you. Thanks for coming on. >> It's great to see you. >> Chris. Awesome to see you. >> Yeah, Chris. Yep. >> Good to be back. Yep. >> You guys remember the narrative back then. There was this lady running around this crazy lady that I met at at Google Cloud next saying >> Yeah. Yeah. >> the cloud's going to take over Telco. And everybody's like, well, this lady's nuts. The cloud's been leaning in, you know? >> Yeah. >> So what do you think, I mean, what's changed since since you first caused all those ripples? >> I mean, I have to say that I think that I caused a lot of change in the industry. I was talking to leaders over at AWS yesterday and they were like, we've never seen someone push like you have and change so much in a short period of time. And Telco moves slow. It's known for that. And they're like, you are pushing buttons and you're getting people to change and thank you and keep going. And so it's been great. It's awesome. >> Yeah. I mean, it was interesting, Chris, we heard on the keynotes we had Microsoft, Satya came in, Thomas Curian came in. There was no AWS. And now I asked CMO of GSMA about that. She goes, hey, we got a great relationship with it, AWS. >> Danielle: Yeah. >> But why do you think they weren't here? >> Well, they, I mean, they are here. >> Mean, not here. Why do you think they weren't profiled? >> They weren't on the keynote stage. >> But, you know, at AWS, a lot of the times they want to be the main thing. They want to be the main part of the show. They don't like sharing the limelight. I think they just didn't want be on the stage with the Google CLoud guys and the these other guys, what they're doing they're building out, they're doing so much stuff. As Danielle said, with Telcos change in the ecosystem which is what's happening with cloud. Cloud's making the Telcos think about what the next move is, how they fit in with the way other people do business. Right? So Telcos never used to have to listen to anybody. They only listened to themselves and they dictated the way things were done. They're very successful and made a lot of money but they're now having to open up they're having to leverage the cloud they're having to leverage the services that (indistinct words) and people out provide and they're changing the way they work. >> So, okay in 2021, we talked a lot about the cloud as a potential disruptor, and your whole premise was, look you got to lean into the cloud, or you're screwed. >> Danielle: Yeah. >> But the flip side of that is, if they lean into the cloud too much, they might be screwed. >> Danielle: Yeah. >> So what's that equilibrium? Have they been able to find it? Are you working with just the disruptors or how's that? >> No I think they're finding it right. So my talk at MWC 21 was all about the cloud is a double-edged sword, right? There's two sides to it, and you definitely need to proceed through it with caution, but also I don't know that you have a choice, right? I mean, the multicloud, you know is there another industry that spends more on CapEx than Telco? >> No. >> Right. The hyperscalers are doing it right. They spend, you know, easily approaching over a $100 billion in CapEx that rivals this industry. And so when you have a player like that an industry driving, you know and investing so much Telco, you're always complaining how everyone's riding your coattails. This is the opportunity to write someone else's coattails. So jump on, right? I think you don't have a choice especially if other Telco competitors are using hyperscalers and you don't, they're going to be left behind. >> So you advise these companies all the time, but >> I mean, the issue is they're all they're all using all the hyperscalers, right? So they're the multi, the multiple relationships. And as Danielle said, the multi-layer of relationship they're using the hyperscalers to change their own internal operational environments to become more IT-centric to move to that software centric Telco. And they're also then with the hyperscalers going to market in different ways sometimes with them, sometimes competing with them. What what it means from an analyst point of view is you're suddenly changing the dynamic of a market where we used to have nicely well defined markets previously. Now they're, everyone's in it together, you know, it's great. And, and it's making people change the way they think about services. What I, what I really hope it changes more than anything else is the way the customers at the end of the, at the end of the supply, the value chain think this is what we can get hold of this stuff. Now we can go into the network through the cloud and we can get those APIs. We can draw on the mechanisms we need to to run our personal lives, to run our business lives. And frankly, society as a whole. It's really exciting. >> Then your premise is basically you were saying they should ride on the top over the top of the cloud vendor. >> Yeah. Right? >> No. Okay. But don't they lose the, all the data if they do that? >> I don't know. I mean, I think the hyperscalers are not going to take their data, right? I mean, that would be a really really bad business move if Google Cloud and Azure and and AWS start to take over that, that data. >> But they can't take it. >> They can't. >> From regulate, from sovereignty and regulation. >> They can't because of regulation, but also just like business, right? If they started taking their data and like no enterprises would use them. So I think, I think the data is safe. I think you, obviously every country is different. You got to understand the different rules and regulations for data privacy and, and how you keep it. But I think as we look at the long term, right and we always talk about 10 and 20 years there's going to be a hyperscaler region in every country right? And there will be a way for every Telco to use it. I think their data will be safe. And I think it just, you're going to be able to stand on on the shoulders of someone else for once and use the building blocks of software that these guys provide to make better experiences for subscribers. >> You guys got to explain this to me because when I say data I'm not talking about, you know, personal information. I'm talking about all the telemetry, you know, all the all the, you know the plumbing. >> Danielle: Yeah. >> Data, which is- >> It will increasingly be shared because you need to share it in order to deliver the services in the streamline efficient way that needs to be deliver. >> Did I hear the CEO of Ericsson Wright where basically he said, we're going to charge developers for access to that data through APIs. >> What the Ericsson have done, obviously with the Vage acquisition is they want to get into APIs. So the idea is you're exposing features, quality policy on demand type features for example, or even pulling we still use that a lot of SMS, right? So pulling those out using those APIs. So it will be charged in some way. Whether- >> Man: Like Twitter's charging me for APIs, now I API calls, you >> Know what it is? I think it's Twilio. >> Man: Oh, okay. >> Right. >> Man: No, no, that's sure. >> There's no reason why telcos couldn't provide a Twilio like service itself. >> It's a horizontal play though right? >> Danielle: Correct because developers need to be charged by the API. >> But doesn't there need to be an industry standard to do that as- >> Well. I think that's what they just announced. >> Industry standard. >> Danielle: I think they just announced that. Yeah. Right now I haven't looked at that API set, right? >> There's like eight of them. >> There's eight of them. Twilio has, it's a start you got to start somewhere Dave. (crosstalk) >> And there's all, the TM forum is all the other standard >> Right? Eight is better than zero- >> Right? >> Haven't got plenty. >> I mean for an industry that didn't really understand APIs as a feature, as a product as a service, right? For Mats Granryd, the deputy general of GSMA to stand on the keynote stage and say we partnered and we're unveiling, right. Pay by the use APIs. I was for it. I was like, that is insane. >> I liked his keynote actually, because I thought he was going to talk about how many attendees and how much economic benefiting >> Danielle: We're super diverse. >> He said, I would usually talk about that and you know greening in the network by what you did talk about a little bit. But, but that's, that surprised me. >> Yeah. >> But I've seen in the enterprise this is not my space as, you know, you guys don't live this but I've seen Oracle try to get developers. IBM had to pay $35 billion trying to get for Red Hat to get developers, right? EMC used to have a thing called EMC code, failed. >> I mean they got to do something, right? So 4G they didn't really make the business case the ROI on the investment in the network. Here we are with 5G, same discussion is having where's the use case? How are we going to monetize and make the ROI on this massive investment? And now they're starting to talk about 6G. Same fricking problem is going to happen again. And so I think they need to start experimenting with new ideas. I don't know if it's going to work. I don't know if this new a API network gateway theme that Mats talked about yesterday will work. But they need to start unbundling that unlimited plan. They need to start charging people who are using the network more, more money. Those who are using it less, less. They need to figure this out. This is a crisis for them. >> Yeah our own CEO, I mean she basically said, Hey, I'm for net neutrality, but I want to be able to charge the people that are using it more and more >> To make a return on, on a capital. >> I mean it costs billions of dollars to build these networks, right? And they're valuable. We use them and we talked about this in Cloud City 21, right? The ability to start building better metaverses. And I know that's a buzzword and everyone hates it, but it's true. Like we're working from home. We need- there's got to be a better experience in Zoom in 2D, right? And you need a great network for that metaverse to be awesome. >> You do. But Danielle, you don't need cellular for doing that, do you? So the fixed network is as important. >> Sure. >> And we're at mobile worlds. But actually what we beginning to hear and Crystal Bren did say this exactly, it's about the comp the access is sort of irrelevant. Fixed is better because it's more the cost the return on investment is better from fiber. Mobile we're going to change every so many years because we're a new generation. But we need to get the mechanism in place to deliver that. I actually don't agree that we should everyone should pay differently for what they use. It's a universal service. We need it as individuals. We need to make it sustainable for every user. Let's just not go for the biggest user. It's not, it's not the way to build it. It won't work if you do that you'll crash the system if you do that. And, and the other thing which I disagree on it's not about standing on the shoulders and benefiting from what- It's about cooperating across all levels. The hyperscalers want to work with the telcos as much as the telcos want to work with the hyperscalers. There's a lot of synergy there. There's a lot of ways they can work together. It's not one or the other. >> But I think you're saying let the cloud guys do the heavy lifting and I'm - >> Yeah. >> Not at all. >> And so you don't think so because I feel like the telcos are really good at pipes. They've always been good at pipes. They're engineers. >> Danielle: Yeah. >> Are they hanging on to the to the connectivity or should they let that go and well and go toward the developer. >> I mean AWS had two announcements on the 21st a week before MWC. And one was that telco network builder. This is literally being able to deploy a network capability at AWS with keystrokes. >> As a managed service. >> Danielle: Correct. >> Yeah. >> And so I don't know how the telco world I felt the shock waves, right? I was like, whoa, that seems really big. Because they're taking something that previously was like bread and butter. This is what differentiates each telco and now they've standardized it and made it super easy so anyone can do it. Now do I think the five nines of super crazy hardcore network criteria will be built on AWS this way? Probably not, but no >> It's not, it's not end twin. So you can't, no. >> Right. But private networks could be built with this pretty easily, right? And so telcos that don't have as much funding, right. Smaller, more experiments. I think it's going to change the way we think about building networks in telcos >> And those smaller telcos I think are going to be more developer friendly. >> Danielle: Yeah. >> They're going to have business models that invite those developers in. And that's, it's the disruption's going to come from the ISVs and the workloads that are on top of that. >> Well certainly what Dish is trying to do, right? Dish is trying to build a- they launched it reinvent a developer experience. >> Dave: Yeah. >> Right. Built around their network and you know, again I don't know, they were not part of this group that designed these eight APIs but I'm sure they're looking with great intent on what does this mean for them. They'll probably adopt them because they want people to consume the network as APIs. That's their whole thing that Mark Roanne is trying to do. >> Okay, and then they're doing open ran. But is it- they're not really cons- They're not as concerned as Rakuten with the reliability and is that the right play? >> In this discussion? Open RAN is not an issue. It really is irrelevant. It's relevant for the longer term future of the industry by dis aggregating and being able to share, especially ran sharing, for example, in the short term in rural environments. But we'll see some of that happening and it will change, but it will also influence the way the other, the existing ran providers build their services and offer their value. Look you got to remember in the relationship between the equipment providers and the telcos are very dramatically. Whether it's Ericson, NOKIA, Samsung, Huawei, whoever. So those relations really, and the managed services element to that depends on what skills people have in-house within the telco and what service they're trying to deliver. So there's never one size fits all in this industry. >> You're very balanced in your analysis and I appreciate that. >> I try to be. >> But I am not. (chuckles) >> So when Dr went off, this is my question. When Dr went off a couple years ago on the cloud's going to take over the world, you were skeptical. You gave a approach. Have you? >> I still am. >> Have you moderated your thoughts on that or- >> I believe the telecom industry is is a very strong industry. It's my industry of course I love it. But the relationship it is developing much different relationships with the ecosystem players around it. You mentioned developers, you mentioned the cloud players the equipment guys are changing there's so many moving parts to build the telco of the future that every country needs a very strong telco environment to be able to support the site as a whole. People individuals so- >> Well I think two years ago we were talking about should they or shouldn't they, and now it's an inevitability. >> I don't think we were Danielle. >> All using the hyperscalers. >> We were always going to need to transform the telcos from the conservative environments in which they developed. And they've had control of everything in order to reduce if they get no extra revenue at all, reducing the cost they've got to go on a cloud migration path to do that. >> Amenable. >> Has it been harder than you thought? >> It's been easier than I thought. >> You think it's gone faster than >> It's gone way faster than I thought. I mean pushing on this flywheel I thought for sure it would take five to 10 years it is moving. I mean the maths comp thing the AWS announcements last week they're putting in hyperscalers in Saudi Arabia which is probably one of the most sort of data private places in the world. It's happening really fast. >> What Azure's doing? >> I feel like I can't even go to sleep. Because I got to keep up with it. It's crazy. >> Guys. >> This is awesome. >> So awesome having you back on. >> Yeah. >> Chris, thanks for co-hosting. Appreciate you stay here. >> Yep. >> Danielle, amazing. We'll see you. >> See you soon. >> A lot of action here. We're going to come out >> Great. >> Check out your venue. >> Yeah the Togi buses that are outside. >> The big buses. You got a great setup there. We're going to see you on Wednesday. Thanks again. >> Awesome. Thanks. >> All right. Keep it right there. We'll be back to wrap up day two from MWC 23 on theCUBE. (upbeat music)

(soft music) >> Announcer: TheCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (upbeat music) >> Welcome back to Spain, everybody. We're here at the Fira in MWC23. Is just an amazing day. This place is packed. They said 80,000 people. I think it might even be a few more walk-ins. I'm Dave Vellante, Lisa Martin is here, David Nicholson. But right now we have the Analyst Hot Takes with three friends of theCUBE. Chris Lewis is back again with me in the co-host seat. Zeus Kerravala, analyst extraordinaire. Great to see you, Z. and Sarbjeet SJ Johal. Good to see you again, theCUBE contributor. And that's my new name for him. He says that is his nickname. Guys, thanks for coming back on. We got the all male panel, sorry, but it is what it is. So Z, is this the first time you've been on it at MWC. Take aways from the show, Hot Takes. What are you seeing? Same wine, new bottle? >> In a lot of ways, yeah. I mean, I was talking to somebody this earlier that if you had come from like MWC five years ago to this year, a lot of the themes are the same. Telco transformation, cloud. I mean, 5G is a little new. Sustainability is certainly a newer theme here. But I think it highlights just the difficulty I think the telcos have in making this transformation. And I think, in some ways, I've been unfair to them in some degree 'cause I've picked on them in the past for not moving fast enough. These are, you know, I think these kind of big transformations almost take like a perfect storm of things that come together to happen, right? And so, in the past, we had technologies that maybe might have lowered opex, but they're hard to deploy. They're vertically integrated. We didn't have the software stacks. But it appears today that between the cloudification of, you know, going to cloud native, the software stacks, the APIs, the ecosystems, I think we're actually in a position to see this industry finally move forward. >> Yeah, and Chris, I mean, you have served this industry for a long time. And you know, when you, when you do that, you get briefed as an analyst, you actually realize, wow, there's a lot of really smart people here, and they're actually, they have challenges, they're working through it. So Zeus was saying he's been tough on the industry. You know, what do you think about how the telcos have evolved in the last five years? >> I think they've changed enormously. I think the problem we have is we're always looking for the great change, the big step change, and there is no big step change in a way. What telcos deliver to us as individuals, businesses, society, the connectivity piece, that's changed. We get better and better and more reliable connectivity. We're shunting a load more capacity through. What I think has really changed is their attitude to their suppliers, their attitude to their partners, and their attitude to the ecosystem in which they play. Understanding that connectivity is not the end game. Connectivity is part of the emerging end game where it will include storage, compute, connect, and analytics and everything else. So I think the realization that they are not playing their own game anymore, it's a much more open game. And some things they will continue to do, some things they'll stop doing. We've seen them withdraw from moving into adjacent markets as much as we used to see. So a lot of them in the past went off to try and do movies, media, and a lot went way way into business IT stuff. They've mainly pulled back from that, and they're focusing on, and let's face it, it's not just a 5G show. The fixed environment is unbelievably important. We saw that during the pandemic. Having that fixed broadband connection using wifi, combining with cellular. We love it. But the problem as an industry is that the users often don't even know the connectivity's there. They only know when it doesn't work, right? >> If it's not media and it's not business services, what is it? >> Well, in my view, it will be enabling third parties to deliver the services that will include media, that will include business services. So embedding the connectivity all the way into the application that gets delivered or embedding it so the quality mechanism deliver the gaming much more accurately or, I'm not a gamer, so I can't comment on that. But no, the video quality if you want to have a high quality video will come through better. >> And those cohorts will pay for that value? >> Somebody will pay somewhere along the line. >> Seems fuzzy to me. >> Me too. >> I do think it's use case dependent. Like you look at all the work Verizon did at the Super Bowl this year, that's a perfect case where they could have upsold. >> Explain that. I'm not familiar with it. >> So Verizon provided all the 5G in the Super Bowl. They provided a lot of, they provided private connectivity for the coaches to talk to the sidelines. And that's a mission critical application, right? In the NFL, if one side can't talk, the other side gets shut down. You can't communicate with the quarterback or the coaches. There's a lot of risk at that. So, but you know, there's a case there, though, I think where they could have even made that fan facing. Right? And if you're paying 2000 bucks to go to a game, would you pay 50 bucks more to have a higher tier of bandwidth so you can post things on social? People that go there, they want people to know they were there. >> Every football game you go to, you can't use your cell. >> Analyst: Yeah, I know, right? >> All right, let's talk about developers because we saw the eight APIs come out. I think ISVs are going to be a big part of this. But it's like Dee Arthur said. Hey, eight's better than zero, I guess. Okay, so, but so the innovation is going to come from ISVs and developers, but what are your hot takes from this show and now day two, we're a day and a half in, almost two days in. >> Yeah, yeah. There's a thing that we have talked, I mentioned many times is skills gravity, right? Skills have gravity, and also, to outcompete, you have to also educate. That's another theme actually of my talks is, or my research is that to puts your technology out there to the practitioners, you have to educate them. And that's the only way to democratize your technology. What telcos have been doing is they have been stuck to the proprietary software and proprietary hardware for too long, from Nokia's of the world and other vendors like that. So now with the open sourcing of some of the components and a few others, right? And they're open source space and antenna, you know? Antennas are becoming software now. So with the invent of these things, which is open source, it helps us democratize that to the other sort of skirts of the practitioners, if you will. And that will bring in more applications first into the IOT space, and then maybe into the core sort of California, if you will. >> So what does a telco developer look like? I mean, all the blockchain developers and crypto developers are moving into generative AI, right? So maybe those worlds come together. >> You'd like to think though that the developers would understand everything's network centric today. So you'd like to think they'd understand that how the network responds, you know, you'd take a simple app like Zoom or something. If it notices the bandwidth changes, it should knock down the resolution. If it goes up it, then you can add different features and things and you can make apps a lot smarter that way. >> Well, G2 was saying today that they did a deal with Mercedes, you know this probably better than I do, where they're going to embed WebEx in the car. And if you're driving, it'll shut off the camera. >> Of course. >> I'm like, okay. >> I'll give you a better example though. >> But that's my point. Like, isn't there more that we can do? >> You noticed down on the SKT stand the little helicopter. That's a vertical lift helicopter. So it's an electric vertical lift helicopter. Just think of that for a second. And then think of the connectivity to control that, to securely control that. And then I was recently at an event with Zeus actually where we saw an air traffic control system where there was no people manning the tower. It was managed by someone remotely with all the cameras around them. So managing all of those different elements, we call it IOT, but actually it's way more than what we thought of as IOT. All those components connecting, communicating securely and safely. 'Cause I don't want that helicopter to come down on my head, do you? (men laugh) >> Especially if you're in there. (men laugh) >> Okay, so you mentioned sustainability. Everybody's talking about power. I don't know if you guys have a lot of experience around TCO, but I'm trying to get to, well, is this just because energy costs are so high, and then when the energy becomes cheap again, nobody's going to pay any attention to it? Or is this the real deal? >> So one of the issues around the, if we want to experience all that connectivity locally or that helicopter wants to have that connectivity, we have to ultimately build denser, more reliable networks. So there's a CapEx, we're going to put more base stations in place. We need more fiber in the ground to support them. Therefore, the energy consumption will go up. So we need to be more efficient in the use of energy. Simple as that. >> How much of the operating expense is energy? Like what percent of it? Is it 10%? Is it 20%? Is it, does anybody know? >> It depends who you ask and it depends on the- >> I can't get an answer to that. I mean, in the enterprise- >> Analyst: The data centers? >> Yeah, the data centers. >> We have the numbers. I think 10 to 15%. >> It's 10 to 12%, something like that. Is it much higher? >> I've got feeling it's 30%. >> Okay, so if it's 30%, that's pretty good. >> I do think we have to get better at understanding how to measure too. You know, like I was talking with John Davidson at Sysco about this that every rev of silicon they come out with uses more power, but it's a lot more dense. So at the surface, you go, well, that's using a lot more power. But you can consolidate 10 switches down to two switches. >> Well, Intel was on early and talking about how they can intelligently control the cores. >> But it's based off workload, right? That's the thing. So what are you running over it? You know, and so, I don't think our industry measures that very well. I think we look at things kind of boxed by box versus look at total consumption. >> Well, somebody else in theCUBE was saying they go full throttle. That the networks just say just full throttle everything. And that obviously has to change from the power consumption standpoint. >> Obviously sustainability and sensory or sensors from IOT side, they go hand in hand. Just simple examples like, you know, lights in the restrooms, like in public areas. Somebody goes in there and just only then turns. The same concept is being applied to servers and compute and storage and every aspects and to networks as well. >> Cell tower. >> Yeah. >> Cut 'em off, right? >> Like the serverless telco? (crosstalk) >> Cell towers. >> Well, no, I'm saying, right, but like serverless, you're not paying for the compute when you're not using it, you know? >> It is serverless from the economics point of view. Yes, it's like that, you know? It goes to the lowest level almost like sleep on our laptops, sleep level when you need more power, more compute. >> I mean, some of that stuff's been in networking equipment for a long time, it just never really got turned on. >> I want to ask you about private networks. You wrote a piece, Athenet was acquired by HPE right after Dell announced a relationship with Athenet, which was kind of, that was kind of funny. And so a good move, good judo move by by HP. I asked Dell about it, and they said, look, we're open. They said the right things. We'll see, but I think it's up to HP. >> Well, and the network inside Dell is. >> Yeah, okay, so. Okay, cool. So, but you said something in that article you wrote on Silicon Angle that a lot of people feel like P5G is going to basically replace wireless or cannibalize wireless. You said you didn't agree with that. Explain why? >> Analyst: Wifi. >> Wifi, sorry, I said wireless. >> No, that's, I mean that's ridiculous. Pat Gelsinger said that in his last VMware, which I thought was completely irresponsible. >> That it was going to cannibalize? >> Cannibalize wifi globally is what he said, right? Now he had Verizon on stage with him, so. >> Analyst: Wifi's too inexpensive and flexible. >> Wifi's cheap- >> Analyst: It's going to embed really well. Embedded in that. >> It's reached near ubiquity. It's unlicensed. So a lot of businesses don't want to manage their own spectrum, right? And it's great for this, right? >> Analyst: It does the job. >> For casual connectivity. >> Not today. >> Well, it does for the most part. Right now- >> For the most part. But never at these events. >> If it's engineered correctly, it will. Right? Where you need private 5G is when reliability is an absolute must. So, Chris, you and I visited the Port of Rotterdam, right? So they're putting 5G, private 5G there, but there's metal containers everywhere, right? And that's going to disrupt it. And so there are certain use cases where it makes sense. >> I've been in your basement, and you got some pretty intense equipment in there. You have private 5G in there. >> But for carpeted offices, it does not make sense to bring private. The economics don't make any sense. And you know, it runs hot. >> So where's it going to be used? Give us some examples of where we should be looking for. >> The early ones are obviously in mining, and you say in ports, in airports. It broadens cities because you've got so many moving parts in there, and always think about it, very expensive moving parts. The cranes in the port are normally expensive piece of kits. You're moving that, all that logistics around. So managing that over a distance where the wifi won't work over the distance. And in mining, we're going to see enormous expensive trucks moving around trying to- >> I think a great new use case though, so the Cleveland Browns actually the first NFL team to use it for facial recognition to enter the stadium. So instead of having to even pull your phone out, it says, hey Dave Vellante. You've got four tickets, can we check you all in? And you just walk through. You could apply that to airports. You could do put that in a hotel. You could walk up and check in. >> Analyst: Retail. >> Yeah, retail. And so I think video, realtime video analytics, I think it's a perfect use case for that. >> But you don't need 5G to do that. You could do that through another mechanism, couldn't you? >> You could do wire depending on how mobile you want to do it. Like in a stadium, you're pulling those things in and out all the time. You're moving 'em around and things, so. >> Yeah, but you're coming in at a static point. >> I'll take the contrary view here. >> See, we can't even agree on that. (men laugh) >> Yeah, I love it. Let's go. >> I believe the reliability of connection is very important, right? And the moving parts. What are the moving parts in wifi? We have the NIC card, you know, the wifi card in these suckers, right? In a machine, you know? They're bigger in size, and the radios for 5G are smaller in size. So neutralization is important part of the whole sort of progress to future, right? >> I think 5G costs as well. Yes, cost as well. But cost, we know that it goes down with time, right? We're already talking about 60, and the 5G stuff will be good. >> Actually, sorry, so one of the big boom areas at the moment is 4G LTE because the component price has come down so much, so it is affordable, you can afford to bring it all together. People don't, because we're still on 5G, if 5G standalone everywhere, you're not going to get a consistent service. So those components are unbelievably important. The skillsets of the people doing integration to bring them all together, unbelievably important. And the business case within the business. So I was talking to one of the heads of one of the big retail outlets in the UK, and I said, when are you going to do 5G in the stores? He said, well, why would I tear out all the wifi? I've got perfectly functioning wifi. >> Yeah, that's true. It's already there. But I think the technology which disappears in front of you, that's the best technology. Like you don't worry about it. You don't think it's there. Wifi, we think we think about that like it's there. >> And I do think wifi 5G switching's got to get easier too. Like for most users, you don't know which is better. You don't even know how to test it. And to your point, it does need to be invisible where the user doesn't need to think about it, right? >> Invisible. See, we came back to invisible. We talked about that yesterday. Telecom should be invisible. >> And it should be, you know? You don't want to be thinking about telecom, but at the same time, telecoms want to be more visible. They want to be visible like Netflix, don't they? I still don't see the path. It's fuzzy to me the path of how they're not going to repeat what happened with the over the top providers if they're invisible. >> Well, if you think about what telcos delivers to consumers, to businesses, then extending that connectivity into your home to help you support secure and extend your connection into Zeus's basement, whatever it is. Obviously that's- >> His awesome setup down there. >> And then in the business environment, there's a big change going on from the old NPLS networks, the old rigid structures of networks to SD1 where the control point is moved outside, which can be under control of the telco, could be under the control of a third party integrator. So there's a lot changing. I think we obsess about the relative role of the telco. The demand is phenomenal for connectivity. So address that, fulfill that. And if they do that, then they'll start to build trust in other areas. >> But don't you think they're going to address that and fulfill that? I mean, they're good at it. That's their wheelhouse. >> And it's a 1.6 trillion market, right? So it's not to be sniffed at. That's fixed on mobile together, obviously. But no, it's a big market. And do we keep changing? As long as the service is good, we don't move away from it. >> So back to the APIs, the eight APIs, right? >> I mean- >> Eight APIs is a joke actually almost. I think they released it too early. The release release on the main stage, you know? Like, what? What is this, right? But of course they will grow into hundreds and thousands of APIs. But they have to spend a lot of time and effort in that sort of context. >> I'd actually like to see the GSMA work with like AWS and Microsoft and VMware and software companies and create some standardization across their APIs. >> Yeah. >> I spoke to them yes- >> We're trying to reinvent them. >> Is that not what they're doing? >> No, they said we are not in the business of a defining standards. And they used a different term, not standard. I mean, seriously. I was like, are you kidding me? >> Let's face it, there aren't just eight APIs out there. There's so many of them. The TM forum's been defining when it's open data architecture. You know, the telcos themselves are defining them. The standards we talked about too earlier with Danielle. There's a lot of APIs out there, but the consistency of APIs, so we can bring them together, to bring all the different services together that will support us in our different lives is really important. I think telcos will do it, it's in their interest to do it. >> All right, guys, we got to wrap. Let's go around the horn here, starting with Chris, Zeus, and then Sarbjeet, just bring us home. Number one hot take from Mobile World Congress MWC23 day two. >> My favorite hot take is the willingness of all the participants who have been traditional telco players who looked inwardly at the industry looking outside for help for partnerships, and to build an ecosystem, a more open ecosystem, which will address our requirements. >> Zeus? >> Yeah, I was going to talk about ecosystem. I think for the first time ever, when I've met with the telcos here, I think they're actually, I don't think they know how to get there yet, but they're at least aware of the fact that they need to understand how to build a big ecosystem around them. So if you think back like 50 years ago, IBM and compute was the center of everything in your company, and then the ecosystem surrounded it. I think today with digital transformation being network centric, the telcos actually have the opportunity to be that center of excellence, and then build an ecosystem around them. I think the SIs are actually in a really interesting place to help them do that 'cause they understand everything top to bottom that I, you know, pre pandemic, I'm not sure the telcos were really understand. I think they understand it today, I'm just not sure they know how to get there. . >> Sarbjeet? >> I've seen the lot of RN demos and testing companies and I'm amazed by it. Everything is turning into software, almost everything. The parts which are not turned into software. I mean every, they will soon. But everybody says that we need the hardware to run something, right? But that hardware, in my view, is getting miniaturized, and it's becoming smaller and smaller. The antennas are becoming smaller. The equipment is getting smaller. That means the cost on the physicality of the assets is going down. But the cost on the software side will go up for telcos in future. And telco is a messy business. Not everybody can do it. So only few will survive, I believe. So that's what- >> Software defined telco. So I'm on a mission. I'm looking for the monetization path. And what I haven't seen yet is, you know, you want to follow the money, follow the data, I say. So next two days, I'm going to be looking for that data play, that potential, the way in which this industry is going to break down the data silos I think there's potential goldmine there, but I haven't figured out yet. >> That's a subject for another day. >> Guys, thanks so much for coming on. You guys are extraordinary partners of theCUBE friends, and great analysts and congratulations and thank you for all you do. Really appreciate it. >> Analyst: Thank you. >> Thanks a lot. >> All right, this is a wrap on day two MWC 23. Go to siliconangle.com for all the news. Where Rob Hope and team are just covering all the news. John Furrier is in the Palo Alto studio. We're rocking all that news, taking all that news and putting it on video. Go to theCUBE.net, you'll see everything on demand. Thanks for watching. This is a wrap on day two. We'll see you tomorrow. (soft music)

>> Narrator: theCUBE's live coverage is made possible by funding from Dell Technologies, creating technologies that drive human progress. (upbeat music) >> Welcome back to the Fira in Barcelona. This is Dave Vellante with David Nicholson. Lisa Martin is also here. This is day two of our coverage of MWC 23 on theCUBE. We're super excited. We're in between hall four and five. Stop by if you're here. Dennis Hoffman is here. He's the senior vice president and general manager of the Telecom systems business at Dell Technologies, and he's joined by Yousef Khalidi, who's the corporate vice president of Azure for Operators from Microsoft. Gents, Welcome. >> Thanks, Dave. >> Thank you. >> So we saw Satya in the keynote. He wired in. We saw T.K. came in. No AWS. I don't know. They're maybe not part of the show, but maybe next year they'll figure it out. >> Indeed, indeed. >> Lots of stuff happened in the Telecom, but the Azure operator distributed service is the big news, you guys got here. What's that all about? >> Oh, first of all, we changed the name. >> Oh, you did? >> You did? >> Oh, yeah. We have a real name now. It's called the Azure Operator Nexus. >> Oh, I like Nexus better than that. >> David: That's much better, much better. >> Dave: The engineers named it first time around. >> I wish, long story, but thank you for our marketing team. But seriously, not only did we rename the platform, we expanded the platform. >> Dave: Yeah. >> So it now covers the whole spectrum from the far-edge to the public cloud as well, including the near-edge as well. So essentially, it's a hybrid platform that can also run network functions. So all these operators around you, they now have a platform which combines cloud technologies with the choice where they want to run, optimized for the network. >> Okay and so, you know, we've talked about the disaggregation of the network and how you're bringing kind of engineered systems to the table. We've seen this movie before, but Dennis, there are differences, right? I mean, you didn't really have engineered systems in the 90s. You didn't have those integration points. You really didn't have the public cloud, you didn't have AI. >> Right. >> So you have all those new powers that you can tap, so give us the update from your perspective, having now spent a day and a half here. What's the vibe, what's the buzz, and what's your take on everything? >> Yeah, I think to build on what Yousef said, there's a lot going on with people still trying to figure out exactly how to architect the Telecom network of the future. They know it's got to have a lot to do with cloud. It does have some pretty significant differences, one of those being, there's definitely got to be a hybrid component because there are pieces of the Telecom network that even when modernized will not end up centralized, right? They're going to be highly distributed. I would say though, you know, we took away two things, yesterday, from all the meetings. One, people are done, I think the network operators are done, questioning technology readiness. They're now beginning to wrestle with operationalization of it all, right? So it's like, okay, it's here. I can in fact build a modern network in a very cloud native way, but I've got to figure out how to do that all. And another big part of it is the ecosystem and certainly the partnership long standing between Dell and Microsoft which we're extending into this space is part of that, making it easier on people to actually acquire, deploy, and importantly, support these new technologies. >> So a lot of the traditional carriers, like you said, they're sort of beyond the technology readiness. Jose Maria Alvarez in the keynote said there are three pillars to the future Telecom network. He said low latency, programmable networks, and then cloud and edge, kind of threw that in. You agree with that, Yousef? (Dave and Yousef speaking altogether) >> I mean, we've been for years talking about the cloud and edge. >> Yeah. >> Satya for years had the same graphic. We still have it. Today, we have expanded the graphic a bit to include the network as one, because you can have a cloud without connectivity as well but this is very, very, very, very much true. >> And so the question then, Dennis, is okay, you've got disruptors, we had Dish on yesterday. >> Oh, did you? Good. >> Yeah, yeah, and they're talking about what they're doing with, you know, ORAN and all the applications, really taking account of it. What I see is a developer friendly, you know, environment. You got the carriers talking about how they're going to charge developers for APIs. I think they've published eight APIs which is nowhere near enough. So you've got that sort of, you know, inertia and yet, you have the disruptors that are going to potentially be a catalyst to, you know, cross the chasm, if you will. So, you know, put on your strategy hat. >> Yeah. >> Dave: How do you see that playing out? >> Well, they're trying to tap into three things, the disruptors. You know, I think the thesis is, "If I get to a truly cloud native, communications network first, I ought to have greater agility so that I can launch more services and create more revenue streams. I ought to be lower cost in terms of both acquisition cost and operating cost, right, and I ought to be able to create scale between my IT organization, everything I know how to do there and my Telecom network." You know, classic, right? Better, faster, cheaper if I embrace cloud early on. And people like Dish, you know, they have a clean sheet of paper with which to do that. So innovation and rate of innovation is huge for them. >> So what would you do? We put your Clay Christensen hat on, now. What if you were at a traditional Telco who's like, complaining about- >> You're going to get me in trouble. >> Dave: Come on, come on. >> Don't do it. >> Dave: Help him out. Help him out, help him out. So if, you know, they're complaining about CapEx, they're highly regulated, right, they want net neutrality but they want to be able to sort of dial up the cost of those using the network. So what would you do? Would you try to disrupt yourself? Would you create a skunkworks? Would you kind of spin off a disruptor? That's a real dilemma for those guys. >> Well for mobile network operators, the beauty of 5G is it's the first cloud native cellular standard. So I don't know if anybody's throwing these terms around, but 5G SA is standalone, right? >> Dave: Yeah, yeah. >> So a lot of 'em, it's not a skunkworks. They're just literally saying, "I've got to have a 5G network." And some of 'em are deciding, "I'm going to stand it up all by itself." Now, that's duplicative expense in a lot of ways, but it creates isolation from the two networks. Others are saying, "No, it's got to be NSA. I've got to be able to combine 4G and 5G." And then you're into the brownfield thing. >> That's the hybrid. >> Not hybrid as in cloud, but hybrid as in, you know. >> Yeah, yeah. >> It's a converge network. >> Dave: Yeah, yeah. >> So, you know, I would say for a lot of them, they're adopting, probably rightly so, a wait and see attitude. One thing we haven't talked about and you got to get on the table, their high order bit is resilience. >> Dave: Yeah, totally. >> David: Yeah. >> Right? Can't go down. It's national, secure infrastructure, first responder. >> Indeed. >> Anytime you ask them to embrace any new technology, the first thing that they have to work through in their minds is, you know, "Is the juice worth the squeeze? Like, can I handle the risk?" >> But you're saying they're not questioning the technology. Aren't they questioning ORAN in terms of the quality of service, or are they beyond that? >> Dennis: They're questioning the timing, not the inevitability. >> Okay, so they agree that ORAN is going to be open over time. >> At some point, RAN will be cloud native, whether it's ORAN the spec, open RAN the concept, (Yousef speaking indistinctly) >> Yeah. >> Virtual RAN. But yeah, I mean I think it seems pretty evident at this point that the mainframe will give way to open systems once again. >> Dave: Yeah, yeah, yeah. >> ERAN, ecosystem RAN. >> Any RAN. (Dave laughing) >> You don't have to start with the ORAN where they're inside the house. So as you probably know, our partner AT&T started with the core. >> Dennis: They almost all have. >> And they've been on the virtualization path since 2014 and 15. And what we are working with them on is the hybrid cloud model to expand all the way, if you will, as I mentioned to the far-edge or the public cloud. So there's a way to be in the brownfield environment, yet jump on the new bandwagon of technology without necessarily taking too much risk, because you're quite right. I mean, resiliency, security, service assurance, I mean, for example, AT&T runs the first responder network for the US on their network, on our platform, and I'm personally very familiar of how high the bar is. So it's doable, but you need to go in stages, of course. >> And they've got to do that integration. >> Yes. >> They do. >> And Yousef made a great point. Like, out of the top 30 largest Telcos by CapEx outside of China, three quarters of them have virtualized their core. So the cloudification, if you will, software definition run on industry standard hardware, embraced cloud native principles, containerized apps, that's happened in the core. It's well accepted. Now it's just a ripple-down through the network which will happen as and when things are faster, better, cheaper. >> Right. >> So as implemented, what does this look like? Is it essentially what we used to loosely refer to as Azure stacked software, running with Dell optimized Telecom infrastructure together, sometimes within a BBU, out in a hybrid cloud model communicating back to Azure locations in some cases? Is that what we're looking at? >> Approximately. So you start with the near-edge, okay? So the near-edge lives in the operator's data centers, edges, whatever the case may be, built out of off the shelf hardware. Dell is our great partner there but in principle, it could be different mix and match. So once you have that true near-edge, then you can think of, "Okay, how can I make sure this environment is as uniform, same APIs, same everything, regardless what the physical location is?" And this is key, key for the network function providers and the NEPs because they need to be able to port once, run everywhere, and it's key for the operator to reduce their costs. You want to teach your workforce, your operations folks, if you will, how to manage this system one time, to automation and so forth. So, and that is actually an expansion of the Azure capabilities that people are familiar with in a public cloud, projected into different locations. And we have technology called Arc which basically models everything. >> Yeah, yeah. >> So if you have trained your IT side, you are halfway there, how to manage your new network. Even though of course the network is carrier graded, there's different gear. So yes, what you said, a lot of it is true but the actual components, whatever they might be running, are carrier grade, highly optimized, the next images and our solution is not a DIY solution, okay? I know you cater to a wide spectrum here but for us, we don't believe in the TCO. The proper TCO can be achieved by just putting stuff by yourself. We just published a report with Analysys Mason that shows that our approach will save 36 percent of the cost compared to a DIY approach. >> Dave: What percent? >> 36 percent. >> Dave: Of the cost? >> Of, compared to DIY, which is already cheaper than classical models. >> And there's a long history of fairly failed DIY, right, >> Yeah. >> That preceded this. As in the early days of public cloud, the network operators wrestled with, "Do I have to become one to survive?" >> Dave: Yeah. Right. >> So they all ended up having cloud projects and by and large, they've all dematerialized in favor of this. >> Yeah, and it's hard for them to really invest at scale. Let me give you an example. So, your biggest tier one operator, without naming anybody, okay, how many developers do they have that can build and maintain an OS image, or can keep track of container technology, or build monitoring at scale? In our company, we have literally thousands of developers doing it already for the cloud and all we're doing for the operator segment is customizing it and focusing it at the carrier grade aspects of it. But so, I don't have half a dozen exterior experts. I literally have a building of developers who can do that and I'm being literal, here. So it's a scale thing. Once you have a product that you can give to multiple people, everybody benefits. >> Dave: Yeah, and the carriers are largely, they're equipment engineers in a large setting. >> Oh, they have a tough job. I always have total respect what they do. >> Oh totally, and a lot of the work happens, you know, kind of underground and here they are. >> They are network operators. >> They don't touch. >> It's their business. >> Right, absolutely, and they're good at it. They're really good at it. That's right. You know, you think about it, we love to, you know, poke fun at the big carriers, but think about what happened during the pandemic. When they had us shift everything to remote work, >> Dennis: Yes. >> Landline traffic went through the roof. You didn't even notice. >> Yep. That's very true. >> I mean, that's the example. >> That's very true. >> However, in the future where there's innovation and it's going to be driven by developers, right, that's where the open ecosystem comes in. >> Yousef: Indeed. >> And that's the hard transition for a lot of these folks because the developers are going to win that with new workloads, new applications that we can't even think of. >> Dennis: Right. And a lot of it is because if you look at it, there's the fundamental back strategy hat back on, fundamental dynamics of the industry, forced investment, flat revenues. >> Dave: Yeah. Right. >> Very true. >> Right? Every few years, a new G comes out. "Man, I got to retool this massive thing and where I can't do towers, I'm dropping fiber or vice a versa." And meanwhile, most diversification efforts into media have failed. They've had to unwind them and resell them. There's a lot of debt in the industry. >> Yousef: Yeah. >> Dennis: And so, they're looking for that next big, adjacent revenue stream and increasingly deciding, "If I don't modernize my network, I can't get it." >> Can't do it. >> Right, and again, what I heard from some of the carriers in the keynote was, "We're going to charge for API access 'cause we have data in the network." Okay, but I feel like there's a lot more innovation beyond that that's going to come from the disruptors. >> Dennis: Oh yeah. >> Yousef: Yes. >> You know, that's going to blow that away, right? And then that may not be the right model. We'll see, you know? I mean, what would Microsoft do? They would say, "Here, here's a platform. Go develop." >> No, I'll tell you. We are actually working with CAMARA and GSMA on the whole API layer. We actually announced a service as well as (indistinct). >> Dave: Yeah, yeah, right. >> And the key there, frankly, in my opinion, are not the disruptors as in operators. It's the ISV community. You want to get developers that can write to a global set of APIs, not per Telco APIs, such that they can do the innovation. I mean, this is what we've seen in other industries, >> Absolutely. >> That I critically can think of. >> This is the way they get a slice of that pie, right? The recent history of this industry is one where 4G LTE begot the smartphone and app store era, a bevy of consumer services, and almost every single profit stream went somewhere other than the operator, right? >> Yousef: Someone else. So they're looking at this saying, "Okay, 5G is the enterprise G and there's going to be a bevy of applications that are business service related, based on 5G capability and I can't let the OTT, over the top, thing happen again." >> Right. >> They'll say that. "We cannot let this happen." >> "We can't let this happen again." >> Okay, but how do they, >> Yeah, how do they make that not happen? >> Not let it happen again? >> Eight APIs, Dave. The answer is eight APIs. No, I mean, it's this approach. They need to make it easy to work with people like Yousef and more importantly, the developer community that people like Yousef and his company have found a way to harness. And by the way, they need to be part of that developer community themselves. >> And they're not, today. They're not speaking that developer language. >> Right. >> It's hard. You know, hey. >> Dennis: Hey, what's the fastest way to sell an enterprise, a business service? Resell Azure, Teams, something, right? But that's a resale. >> Yeah, that's a resale thing. >> See, >> That's not their service. >> They also need to free their resources from all the plumbing they do and leave it to us. We are plumbers, okay? >> Dennis: We are proud plumbers. >> We are proud plumbers. I'm a plumber. I keep telling people this thing. We had the same discussion with banks and enterprises 10 years ago, by the way. Don't do the plumbing. Go add value on the top. Retool your workforce to do applications and work with ISVs to the verticals, as opposed to either reselling, which many do, or do the plumbing. You'd be surprised. Traditionally, many operators do around, "I want to plumb this thing to get this small interrupt per second." Like, who cares? >> Well, 'cause they made money on connectivity. >> Yes. >> And we've seen this before. >> And in a world without telephone poles and your cables- >> Hey, if what you have is a hammer, everything's a nail, right? And we sell connectivity services and that's what we know how to do, and that both build and sell. And if that's no longer driving a revenue stream sufficient to cover this forced investment march, not to mention Huawei rip and government initiatives to pull infrastructure out and accelerate investment, they got to find new ways. >> I mean, the regulations have been tough, right? They don't go forward and ask for permission. They really can't, right? They have to be much more careful. >> Dennis: It is tough. >> So, we don't mean to sound like it's easy for these guys. >> Dennis: No, it's not. >> But it does require a new mindset, new skillsets, and I think some of 'em are going to figure it out and then pff, the wave, and you guys are going to be riding that wave. >> We're going to try. >> Definitely. Definitely. >> As a veteran of working with both Dell and Microsoft, specifically Azure on things, I am struck by how you're very well positioned in this with Microsoft in particular. Because of Azure's history, coming out of the on-premises world that Microsoft knows so well, there's a natural affinity to the hybrid nature of Telecom. We talk about edge, we talk about hybrid, this is it, absolutely the center of it. So it seems like a- >> Yousef: Indeed. Actually, if you look at the history of Azure, from day one, and I was there from day one, we always spoke of the hybrid model. >> Yeah. >> The third point, we came from the on-premises world. >> David: Right. >> And don't get me wrong, I want people to use the public cloud, but I also know due to physics, regulation, geopolitical boundaries, there's something called on-prem, something called an edge here. I want to add something else. Remember our deal on how we are partner-centric? We're applying the same playbook, here. So, you know, for every dollar we make, so many of it's been done by the ecosystem. Same applies here. So we have announced partnerships with Ericson, Nokia, (indistinct), all the names, and of course with Dell and many others. The ecosystem has to come together and customers must retain their optionality to drum up whatever they are on. So it's the same playbook, with this. >> And enterprise technology companies are, actually, really good at, you know, decoding the customer, figuring out specific requirements, making some mistakes the first time through and then eventually getting it right. And as these trends unfold, you know, you're in a good position, I think, as are others and it's an exciting time for enterprise tech in this industry, you know? >> It really is. >> Indeed. >> Dave: Guys, thanks so much for coming on. >> Thank you. >> Dave: It's great to see you. Have a great rest of the show. >> Thank you. >> Thanks, Dave. Thank you, Dave. >> All right, keep it right there. John Furrier is live in our studio. He's breaking down all the news. Go to siliconangle.com to go to theCUBE.net. Dave Vellante, David Nicholson and Lisa Martin, we'll be right back from the theater in Barcelona, MWC 23 right after this short break. (relaxing music)

(soft corporate jingle) >> Announcer: theCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (upbeat jingle intro) >> Welcome back to Barcelona. We're here live at the Fira. (laughs) Just amazing day two of MWC23. It's packed today. It was packed yesterday. It's even more packed today. All the news is flowing. Check out siliconangle.com. John Furrier is in the studio in Palo Alto breaking all the news. And, we are here live. Really excited to have Udayan Mukherjee who's the Senior Fellow and Chief Architect of wireless product at Network and Edge for Intel. And, Manish Singh is back. He's the CTO of Telecom Systems Business at Dell Jets. Welcome. >> Thank you. >> Thank you >> We're going to talk about greening the network. I wonder, Udayan, if you could just set up why that's so important. I mean, it's obvious that it's an important thing, great for the environment, but why is it extra important in Telco? >> Yeah, thank you. Actually, I'll tell you, this morning I had a discussion with an operator. The first thing he said, that the electricity consumption is more expensive nowadays that total real estate that he's spending money on. So, it's like that is the number one thing that if you can change that, bring that power consumption down. And, if you talk about sustainability, look what is happening in Europe, what's happening in all the electricity areas. That's the critical element that we need to address. Whether we are defining chip, platforms, storage systems, that's the number one mantra right now. You know, reduce the power. Electricity consumption, because it's a sustainable planet that we are living in. >> So, you got CapEx and OpEx. We're talking about the big piece of OpEx is now power consumption? >> Power Consumption >> That's the point. Okay, so in my experience, servers are the big culprit for power consumption, which is powered by core semiconductors and microprocessors. So, what's the strategy to reduce the power consumption? You're probably not going to reduce the bill overall. You maybe just can keep pace, but from a technical standpoint, how do you attack that? >> Yeah, there are multiple defined ways of adding. Obviously the process technology, that micro (indistinct) itself is evolving to make it more low-power systems. But, even within the silicon, the server that we develop, if you look in a CPU, there is a lot of power states. So, if you have a 32 code platform, as an example, every code you can vary the frequency and the C-states, power states. So, if you look into any traffic, whether it's a radio access network, packet code. At any given time the load is not peak. So, your power consumption, actual what we are drawing from the wall, it also needs to vary with that. So, that's how if you look into this there's a huge savings. If you go to Intel booth or Ericson booth or anyone, you will see right now every possible, the packet code, radio access network, everything network. They're talking about our energy consumption, how they're lowering this. These states, as we call it power states, C-state P-state they've built in intel chip for a long time. The cloud providers are taking advantage of it. But Telcos, with even two generation before they used to actually switch it off in the bios. I say no, we need peak. Now, that thing is changing. Now, it's all like, how do I take advantage of the built in technologies? >> I remember the enterprise virtualization, Manish, was a big play. I remember PG&E used to give rebates to customers that would install virtualized software, VMware. >> And SSDs. >> Yeah. And SSDs, you know, yes. Because, the spinning disc was, but, nowhere near with a server consumption. So, how virtualized is the telco network? And then, what I'm saying is there other things, other knobs, you can of course turn. So, what's your perspective on this as a server player? >> Yeah, absolutely. Let me just back up a little bit and start at the big picture to share what Udayan said. Here, day two, every conversation I've had yesterday and today morning with every operator, every CTO, they're coming in and first topic they're talking about is energy. And, the reason is, A, it's the right thing to do, sustainability, but, it's also becoming a P&L issue. And, the reason it's becoming a P&L issue is because we are in this energy inflationary environment where the energy costs are constantly going up. So, it's becoming really important for the service providers to really drive more efficiency onto their networks, onto their infrastructure. Number one. Two, then to your question on what all knobs need to be turned on, and what are the knobs? So, Udayan talked about within the intel, silicon, the C-states, P-states and all these capabilities that are being brought up, absolutely important. But again, if we take a macro view of it. First of all, there are opportunities to do infrastructure audit. What's on, why is it on, does it need to be on right now? Number two, there are opportunities to do infrastructure upgrade. And, what I mean by that is as you go from previous generation servers to next generation servers, better cooling, better performance. And through all of that you start to gain power usage efficiency inside a data center. And, you take that out more into the networks you start to achieve same outcomes on the network site. Think about from a cooling perspective, air cooling but for that matter, even liquid cooling, especially inside the data centers. All opportunities around PUE, because PUE, power usage efficiency and improvement on PUE is an opportunity. But, I'll take it even further. Workloads that are coming onto it, core, RAN, these workloads based on the dynamic traffic. Look, if you look at the traffic inside a network, it's not constant, it's varied. As the traffic patterns change, can you reduce the amount of infrastructure you're using? I.e. reduce the amount of power that you're using and when the traffic loads are going up. So, the workloads themselves need to become more smarter about that. And last, but not the least. From an orchestration layer if you think about it, where you are placing these workloads, and depending on what's available, you can start to again, drive better energy outcomes. And, not to forget acceleration. Where you need acceleration, can you have the right hardware infrastructures delivering the right kind of accelerations to again, improve those energy efficiency outcomes. So, it's a complex problem. But, there are a lot of levers, lot of tools that are in place that the service providers, the technology builders like us, are building the infrastructure, and then the workload providers all come together to really solve this problem. >> Yeah, Udayan, Manish mentioned this idea of moving from one generation to a new generation and gaining benefits. Out there on the street, if you will. Most of the time it's an N plus 2 migration. It's not just moving from last generation to this next generation, but it's really a generation ago. So, those significant changes in the dynamics around power density and cooling are meaningful? You talk about where performance should be? We start talking about the edge. It's hard to have a full-blown raised data center floor edge everywhere. Do these advances fundamentally change the kinds of things that you can do at the base of a tower? >> Yeah, absolutely. Manish talked about that, the dynamic nature of the workload. So, we are using a lot of this AIML to actually predict. Like for example, your multiple force in a systems. So, why is the 32 core as a system, why is all running? So, your traffic profile in the night times. So, you are in the office areas, in the night has gone home and nowadays everybody's working from remote anyway. So, why is this thing a full blown, spending the TDP, the total power and extreme powers. You bring it down, different power states, C-states. We talked about it. Deeper C-states or P-states, you bring the frequency down. So, lot of those automation, even at the base of the tower. Lot of our deployment right now, we are doing a whole bunch of massive MIMO deployment. Virtual RAN in Verizon network. All actually cell-site deployment. Those eight centers are very close to the cell-site. And, they're doing aggressive power management. So, you don't have to go to a huge data centers, even there's a small rack of systems, four to five, 10 systems, you can do aggressive power management. And, you built it up that way. >> Okay. >> If I may just build on what Udayan said. I mean if you look at the radio access network, right? And, let's start at the bottom of the tower itself. The infrastructure that's going in there, especially with Open RAN, if you think about it, there are opportunities now to do a centralized RAN where you could do more BBU pooling. And, with that, not only on a given tower but across a given given coverage area, depending on what the traffics are, you can again get the infrastructure to become more efficient in terms of what traffic, what needs are, and really start to benefit. The pooling gains which is obviously going to give you benefit on the CapEx side, but from an energy standpoint going to give you benefits on the OpEx side of things. So that's important. The second thing I will say is we cannot forget, especially on the radio access side of things, that it's not just the bottom of the tower what's happening there. What's happening on the top of the tower especially with the radio, that's super important. And, that goes into how do you drive better PA efficiency, how do you drive better DPD in there? This is where again, applying AI machine learning there is a significant amount of opportunity there to improve the PA performance itself. But then, not only that, looking at traffic patterns. Can you do sleep modes, micro sleep modes to deep sleep modes. Turning down the cells itself, depending on the traffic patterns. So, these are all areas that are now becoming more and more important. And, clearly with our ecosystem of partners we are continuing to work on these. >> So we hear from the operators, it's an OpEx issue. It's hitting the P&L. They're in search of PUE of one. And, they've historically been wasteful, they go full throttle. And now, you're saying with intelligence you can optimize that consumption. So, where does the intelligence live? Is it in the rig. Where is it all throughout the network? Is it in the silicon? Maybe you could paint a picture as to where those smarts exist. >> I can start. It's across the stack. It starts, we talked about the C-states, P-states. If you want to take advantage of that, that intelligence is in the workload, which has to understand when can I really start to clock things down or turn off the cores. If you really look at it from a traffic pattern perspective you start to really look at a rig level where you can have power. And, we are working with the ecosystem partners who are looking at applying machine learning on that to see what can we really start to turn on, turn off, throttle things down, depending on what the, so yes, it's across the stack. And lastly, again, I'll go back to cannot forget orchestration, where you again have the ability to move some of these workloads and look at where your workload placements are happening depending on what infrastructure is and what the traffic needs are at that point in time. So it's, again, there's no silver bullet. It has to be looked across the stack. >> And, this is where actually if I may, last two years a sea change has happened. People used to say, okay there are C-states and P-states, there's silicon every code. OS operating system has a governor built in. We rely on that. So, that used to be the way. Now that applications are getting smarter, if you look at a radio access network or the packet core on the control plane signaling application, they're more aware of the what is the underlying silicon power state sleep states are available. So, every time they find some of these areas there's no enough traffic there, they immediately goes to a transition. So, the workload has become more intelligent. The rig application we talked about. Every possible rig application right now are apps on xApps. Most of them are on energy efficiency. How are they using it? So, I think lot more even the last two years. >> Can I just say one more thing there right? >> Yeah. >> We cannot forget the infrastructure as well, right? I mean, that's the most important thing. That's where the energy is really getting drawn in. And, constant improvement on the infrastructure. And, I'll give you some data points, right? If you really look at the power at servers, right? From 2013 to 2023, like a decade. 85% energy intensity improvement, right? So, these gains are coming from performance with better cooling, better technology applications. So, that's super critical, that's important. And, also to just give you another data point. Apart from the infrastructure what cache layers we are running and how much CPU and compute requirements are there, that's also important. So, looking at it from a cache perspective are we optimizing the required infrastructure blocks for radio access versus core? And again, really taking that back to energy efficiency outcomes. So, some of the work we've been doing with Wind River and Red Hat and some of our ecosystem partners around that for radio access network versus core. Really again, optimizing for those different use cases and the outcomes of those start to come in from an energy utilization perspective >> So, 85% improvement in power consumption. Of course you're doing, I don't know, 2, 300% more work, right? So, let's say, and I'm just sort of spit balling numbers but, let's say that historically powers on the P&L has been, I don't know, single digits, maybe 10%. Now, it's popping up the much higher. >> Udayan: Huge >> Right? >> I mean, I don't know what the number is. Is it over 20% in some cases or is it, do you have a sense of that? Or let's say it is. The objective I presume is you're probably not going to lower the power bill overall, but you're going to be able to lower the percent of cost on the OpEx as you grow, right? I mean, we're talking about 5G networks. So much more data >> Capacity increasing. >> Yeah, and so is it, am I right about that the carriers, the best they can hope for is to sort of stay even on that percentage or maybe somewhat lower that percentage? Or, do you think they can actually cut the bill? What's the goal? What are they trying to do? >> The goal is to cut the bill. >> It is! >> And the way you get started to cut the bill is, as I said, first of all on the radio side. Start to see where the improvements are and look, there's not a whole lot there to be done. I mean, the PS are as efficient as they can be, but as I said, there are things in DPD and all that still can be improved. But then, sleep modes and all, yes there are efficiencies in there. But, I'll give you one important, another interesting data point. We did a work with ACG Research on our 16G platform. The power edge service that we have recently launched based on Intel's Sapphire Rapids. And, if you look at the study there. 30% TCR reduction, 10% in CapEx gains, 30% in OpEx gains from moving away from these legacy monolithic architectures to cloud native architectures. And, a large part of that OpEx gain really starts to come from energy to the point of 800 metric tonnes of carbon reduction to the point of you could have, and if you really translate that to around 160 homes electric use per year, right? So yes, I mean the opportunity there is to reduce the bill. >> Wow, that's big, big goal guys. We got to run. But, thank you for informing the audience on the importance and how you get there. So, appreciate that. >> One thing that bears mentioning really quickly before we wrap, a lot of these things we're talking about are happening in remote locations. >> Oh, back to that point of distributed nature of telecom. >> Yes, we talked about a BBU being at the base of a tower that could be up on a mountain somewhere. >> No, you made the point. You can't just say, oh, hey we're going to go find ambient air or going to go... >> They don't necessarily... >> Go next to a waterfall. >> We don't necessarily have the greatest hydro tower. >> All right, we got to go. Thanks you guys. Alright, keep it right there. Wall to wall coverage is day two of theCUBE's coverage of MWC 23. Stay right there, we'll be right back. (corporate outro jingle)

(Upbeat music playing) >> Hey everyone, thanks for joining us today. Welcome to this event of Building your Cloud Center of Excellence with Hitachi Vantara. I'm your host, Lisa Martin. I've got a couple of guests here with me next to talk about redefining cloud operations and application modernization for customers. Please welcome Prem Balasubramanian the SVP and CTO at Hitachi Vantara, and Manoj Narayanan is here as well, the Managing Director of Technology at GTCR. Guys, thank you so much for joining me today. Excited to have this conversation about redefining CloudOps with you. >> Pleasure to be here. >> Pleasure to be here >> Prem, let's go ahead and start with you. You have done well over a thousand cloud engagements in your career. I'd love to get your point of view on how the complexity around cloud operations and management has evolved in the last, say, three to four years. >> It's a great question, Lisa before we understand the complexity around the management itself, the cloud has evolved over the last decade significantly from being a backend infrastructure or infrastructure as a service for many companies to become the business for many companies. If you think about a lot of these cloud bond companies cloud is where their entire workload and their business wants. With that, as a background for this conversation if you think about the cloud operations, there was a lot of there was a lot of lift and shift happening in the market where people lifted their workloads or applications and moved them onto the cloud where they treated cloud significantly as an infrastructure. And the way they started to manage it was again, the same format they were managing there on-prem infrastructure and they call it I&O, Infrastructure and Operations. That's kind of the way traditionally cloud is managed. In the last few years, we are seeing a significant shift around thinking of cloud more as a workload rather than as just an infrastructure. And what I mean by workload is in the cloud, everything is now code. So you are codifying your infrastructure. Your application is already code and your data is also codified as data services. With now that context apply the way you think about managing the cloud has to significantly change and many companies are moving towards trying to change their models to look at this complex environment as opposed to treating it like a simple infrastructure that is sitting somewhere else. So that's one of the biggest changes and shifts that are causing a lot of complexity and headache for actually a lot of customers for managing environments. The second critical aspect is even that, even exasperates the situation is multicloud environments. Now, there are companies that have got it right with things about right cloud for the right workload. So there are companies that I reach out and I talk with. They've got their office applications and emails and stuff running on Microsoft 365 which can be on the Azure cloud whereas they're running their engineering applications the ones that they build and leverage for their end customers on Amazon. And to some extent they've got it right but still they have a multiple cloud that they have to go after and maintain. This becomes complex when you have two clouds for the same type of workload. When I have to host applications for my end customers on Amazon as well as Azure, Azure as well as Google then, I get into security issues that I have to be consistent across all three. I get into talent because I need to have people that focus on Amazon as well as Azure, as well as Google which means I need so much more workforce, I need so many so much more skills that I need to build, right? That's becoming the second issue. The third one is around data costs. Can I make these clouds talk to each other? Then you get into the ingress egress cost and that creates some complexity. So bringing all of this together and managing is really become becoming more complex for our customers. And obviously as a part of this we will talk about some of the, some of the ideas that we can bring for in managing such complex environments but this is what we are seeing in terms of why the complexity has become a lot more in the last few years. >> Right. A lot of complexity in the last few years. Manoj, let's bring you into the conversation now. Before we dig into your cloud environment give the audience a little bit of an overview of GTCR. What kind of company are you? What do you guys do? >> Definitely Lisa. GTCR is a Chicago based private equity firm. We've been in the market for more than 40 years and what we do is we invest in companies across different sectors and then we manage the company drive it to increase the value and then over a period of time, sell it to future buyers. So in a nutshell, we got a large portfolio of companies that we need to manage and make sure that they perform to expectations. And my role within GTCR is from a technology viewpoint so where I work with all the companies their technology leadership to make sure that we are getting the best out of technology and technology today drives everything. So how can technology be a good compliment to the business itself? So, my role is to play that intermediary role to make sure that there is synergy between the investment thesis and the technology lures that we can pull and also work with partners like Hitachi to make sure that it is done in an optimal manner. >> I like that you said, you know, technology needs to really compliment the business and vice versa. So Manoj, let's get into the cloud operations environment at GTCR. Talk to me about what the experience has been the last couple of years. Give us an idea of some of the challenges that you were facing with existing cloud ops and and the solution that you're using from Hitachi Vantara. >> A a absolutely. In fact, in fact Prem phrased it really well, one of the key things that we're facing is the workload management. So there's so many choices there, so much complexities. We have these companies buying more companies there is organic growth that is happening. So the variables that we have to deal with are very high in such a scenario to make sure that the workload management of each of the companies are done in an optimal manner is becoming an increasing concern. So, so that's one area where any help we can get anything we can try to make sure it is done better becomes a huge value at each. A second aspect is a financial transparency. We need to know where the money is going where the money is coming in from, what is the scale especially in the cloud environment. We are talking about an auto scale ecosystem. Having that financial transparency and the metrics associated with that, it, these these become very, very critical to ensure that we have a successful presence in the multicloud environment. >> Talk a little bit about the solution that you're using with Hitachi and, and the challenges that it is eradicated. >> Yeah, so it end of the day, right, we we need to focus on our core competence. So, so we have got a very strong technology leadership team. We've got a very strong presence in the respective domains of each of the portfolio companies. But where Hitachi comes in and HAR comes in as a solution is that they allow us to excel in focusing on our core business and then make sure that we are able to take care of workload management or financial transparency. All of that is taken off the table from us and and Hitachi manages it for us, right? So it's such a perfectly compliment relationship where they act as two partners and HARC is a solution that is extremely useful in driving that. And, and and I'm anticipating that it'll become more important with time as the complexity of cloud and cloud associate workloads are only becoming more challenging to manage and not less. >> Right? That's the thing that complexity is there and it's also increasing Prem, you talked about the complexities that are existent today with respect to cloud operations the things that have happened over the last couple of years. What are some of your tips, Prem for the audience, like the the top two or three things that you would say on cloud operations that that people need to understand so that they can manage that complexity and allow their business to be driven and complimented by technology? >> Yeah, a big great question again, Lisa, right? And I think Manoj alluded to a few of these things as well. The first one is in the new world of the cloud I think think of migration, modernization and management as a single continuum to the cloud. Now there is no lift and shift and there is no way somebody else separately manages it, right? If you do not lift and shift the right applications the right way onto the cloud, you are going to deal with the complexity of managing it and you'll end up spending more money time and effort in managing it. So that's number one. Migration, modernization, management of cloud work growth is a single continuum and it's not three separate activities, right? That's number one. And the, the second is cost. Cost traditionally has been an afterthought, right? People move the workload to the cloud. And I think, again, like I said, I'll refer back to what Manoj said once we move it to the cloud and then we put all these fancy engineering capability around self-provisioning, every developer can go and ask for what he or she wants and they get an environment immediately spun up so on and so forth. Suddenly the CIO wakes up to a bill that is significantly larger than what he or she expected right? And, and this is this is become a bit common nowadays, right? The the challenge is because we think cost in the cloud as an afterthought. But consider this example in, in previous world you buy hard, well, you put it in your data center you have already amortized the cost as a CapEx. So you can write an application throw it onto the infrastructure and the application continues to use the infrastructure until you hit a ceiling, you don't care about the money you spent. But if I write a line of code that is inefficient today and I deploy it on the cloud from minute one, I am paying for the inefficiency. So if I realize it after six months, I've already spent the money. So financial discipline, especially when managing the cloud is now is no more an afterthought. It is as much something that you have to include in your engineering practice as much as any other DevOps practices, right? Those are my top two tips, Lisa, from my standpoint, think about cloud, think about cloud work, cloud workloads. And the last one again, and you will see you will hear me saying this again and again, get into the mindset of everything is code. You don't have a touch and feel infrastructure anymore. So you don't really need to have foot on the ground to go manage that infrastructure. It's codified. So your code should be managing it, but think of how it happens, right? That's where we, we are going as an evolution >> Everything is code. That's great advice, great tips for the audience there. Manoj, I'll bring you back into the conversation. You know, we, we can talk about skills gaps on on in many different facets of technology the SRE role, relatively new, skillset. We're hearing, hearing a lot about it. SRE led DevSecOps is probably even more so of a new skillset. If I'm an IT leader or an application leader how do I ensure that I have the right skillset within my organization to be able to manage my cloud operations to, to dial down that complexity so that I can really operate successfully as a business? >> Yeah. And so unfortunately there is no perfect answer, right? It's such a, such a scarce skillset that a, any day any of the portfolio company CTOs if I go and talk and say, Hey here's a great SRE team member, they'll be more than willing to fight with each of to get the person in right? It's just that scarce of a skillset. So, so a few things we need to look at it. One is, how can I build it within, right? So nobody gets born as an SRE, you, you make a person an SRE. So how do you inculcate that culture? So like Prem said earlier, right? Everything is software. So how do we make sure that everybody inculcates that as part of their operating philosophy be they part of the operations team or the development team or the testing team they need to understand that that is a common guideline and common objective that we are driving towards. So, so that skillset and that associated training needs to be driven from within the organization. And that in my mind is the fastest way to make sure that that role gets propagated across organization. That is one. The second thing is rely on the right partners. So it's not going to be possible for us, to get all of these roles built in-house. So instead prioritize what roles need to be done from within the organization and what roles can we rely on our partners to drive it for us. So that becomes an important consideration for us to look at as well. >> Absolutely. That partnership angle is incredibly important from, from the, the beginning really kind of weaving these companies together on this journey to to redefine cloud operations and build that, as we talked about at the beginning of the conversation really building a cloud center of excellence that allows the organization to be competitive, successful and and really deliver what the end user is, is expecting. I want to ask - Sorry Lisa, - go ahead. >> May I add something to it, I think? >> Sure. >> Yeah. One of the, one of the common things that I tell customers when we talk about SRE and to manages point is don't think of SRE as a skillset which is the common way today the industry tries to solve the problem. SRE is a mindset, right? Everybody in >> Well well said, yeah >> That, so everybody in a company should think of him or her as a cycle liability engineer. And everybody has a role in it, right? Even if you take the new process layout from SRE there are individuals that are responsible to whom we can go to when there is a problem directly as opposed to going through the traditional ways of AI talk to L one and L one contras all. They go to L two and then L three. So we, we, we are trying to move away from an issue escalation model to what we call as a a issue routing or a incident routing model, right? Move away from incident escalation to an incident routing model. So you get to route to the right folks. So again, to sum it up, SRE should not be solved as a skillset set because there is not enough people in the market to solve it that way. If you start solving it as a mindset I think companies can get a handhold of it. >> I love that. I've actually never heard that before, but it it makes perfect sense to think about the SRE as a mindset rather than a skillset that will allow organizations to be much more successful. Prem I wanted to get your thoughts as enterprises are are innovating, they're moving more products and services to the as a service model. Talk about how the dev teams the ops teams are working together to build and run reliable, cost efficient services. Are they working better together? >> Again, a a very polarizing question because some customers are getting it right many customers aren't, there is still a big wall between development and operations, right? Even when you think about DevOps as a terminology the fundamental principle was to make sure dev and ops works together. But what many companies have achieved today, honestly is automating the operations for development. For example, as a developer, I can check in code and my code will appear in production without any friction, right? There is automated testing, automated provisioning and it gets promoted to production, but after production, it goes back into the 20 year old model of operating the code, right? So there is more work that needs to be done for Devon and Ops to come closer and work together. And one of the ways that we think this is achievable is not by doing radical org changes, but more by focusing on a product-oriented single backlog approach across development and operations. Which is, again, there is change management involved but I think that's a way to start embracing the culture of dev ops coming together much better now, again SRE principles as we double click and understand it more and Google has done a very good job playing it out for the world. As you think about SRE principle, there are ways and means in that process of how to think about a single backlog. And in HARC, Hitachi Application Reliability Centers we've really got a way to look at prioritizing the backlog. And what I mean by that is dev teams try to work on backlog that come from product managers on features. The SRE and the operations team try to put backlog into the say sorry, try to put features into the same backlog for improving stability, availability and financials financial optimization of your code. And there are ways when you look at your SLOs and error budgets to really coach the product teams to prioritize your backlog based on what's important for you. So if you understand your spending more money then you reduce your product features going in and implement the financial optimization that came from your operations team, right? So you now have the ability to throttle these parameters and that's where SRE becomes a mindset and a principle as opposed to a skillset because this is not an individual telling you to do. This is the company that is, is embarking on how to prioritize my backlog beyond just user features. >> Right. Great point. Last question for both of you is the same talk kind of take away things that you want me to remember. If I am at an IT leader at, at an organization and I am planning on redefining CloudOps for my company Manoj will start with you and then Prem to you what are the top two things that you want me to walk away with understanding how to do that successfully? >> Yeah, so I'll, I'll go back to basics. So the two things I would say need to be taken care of is, one is customer experience. So all the things that I do end of the day is it improving the customer experience or not? So that's a first metric. The second thing is anything that I do is there an ROI by doing that incremental step or not? Otherwise we might get lost in the technology with surgery, the new tech, et cetera. But end of the day, if the customers are not happy if there is no ROI, everything else you just can't do much on top of that >> Now it's all about the customer experience. Right? That's so true. Prem what are your thoughts, the the top things that I need to be taking away if I am a a leader planning to redefine my cloud eye company? >> Absolutely. And I think from a, from a company standpoint I think Manoj summarized it extremely well, right? There is this ROI and there is this customer experience from my end, again, I'll, I'll suggest two two more things as a takeaway, right? One, cloud cost is not an afterthought. It's essential for us to think about it upfront. Number two, do not delink migration modernization and operations. They are one stream. If you migrate a long, wrong workload onto the cloud you're going to be stuck with it for a long time. And an example of a wrong workload, Lisa for everybody that that is listening to this is if my cost per transaction profile doesn't change and I am not improving my revenue per transaction for a piece of code that's going run in production it's better off running in a data center where my cost is CapEx than amortized and I have control over when I want to upgrade as opposed to putting it on a cloud and continuing to pay unless it gives me more dividends towards improvement. But that's a simple example of when we think about what should I migrate and how will it cost pain when I want to manage it in the longer run. But that's, that's something that I'll leave the audience and you with as a takeaway. >> Excellent. Guys, thank you so much for talking to me today about what Hitachi Vantara and GTCR are doing together how you've really dialed down those complexities enabling the business and the technology folks to really live harmoniously. We appreciate your insights and your perspectives on building a cloud center of excellence. Thank you both for joining me. >> Thank you. >> For my guests, I'm Lisa. Martin, you're watching this event building Your Cloud Center of Excellence with Hitachi Vantara. Thanks for watching. (Upbeat music playing) (Upbeat music playing) (Upbeat music playing) (Upbeat music playing)

>> Announcer: "theCUBE's" live coverage is made possible by funding from Dell Technologies, creating technologies that drive human progress. (upbeat music) >> Good evening, everyone. Live from Barcelona, Spain, it's "theCUBE". We are at Mobile World, MWC, excuse me, '23. New name this year. I'm Lisa Martin with Dave Vellante. Dave, we have had some great conversations. This is only day one of four days of coverage from "theCUBE" but one of the things that we've been talking about is disaggregation. You've wrote about it in your breaking analysis. We've been talking about it. Today is a big thing that's happening. We're going to be talking about that next. >> Yeah, open ecosystems require integration. Integration requires certification. And so, you got to have labs. We're going to talk about that and what value that brings to the community. >> Right. Please welcome Tibor Fabry-Asztalos, senior vice president of telecom systems and product engineering at Dell. >> Hi. >> And back to "theCUBE" after a couple of hours, Gautam Bhagra, vice president of partnerships at Dell. Guys, great to have you here. >> I love to be here. Thank you. >> Great to be here. >> So, day one, I'm sure lots of conversations, lots of meetings, lots of jet lag that we're all trying to get over. Talk about, Gautam, we'll start with you. Talk about the disaggregation era. What it is intended to support? What is it intended to enable? >> Yeah, so I mean, I think to be honest with you, Lisa, we spoke about this earlier also, like the whole vision with the disaggregation is to make sure our telco providers can take the benefits of having the innovation that comes along with it, right? So currently, we all know they're tied into like lock systems, which kind of constricts them in going after this whole innovative space. So, our hope is by working with our operators and our partners, we can help make that disaggregation journey a lot easier and work on some of these challenges, and make it easier for the telcos to innovate and consolidate going forward. So, we're working very closely and we talked about the community this morning. We're working very closely with Tibor and his team from an engineering perspective to help build those solutions with our partners and we're excited about the announcements we made this morning. >> When you hear challenges from this ecosystem, can you stack rank 'em? What are you hearing? Kind of what's top of mind? And so, the top three, if you would. >> Some of the challenges are just to define moving from a closed system and open system, just to making sure that the acceptance of that to see what's the value proposition is for an open system and then for the carriers to see the path going from a closed system to an open system. Of course, at the end, people realize the value at the end and speed of innovation that you're going to get all the new technologies and new features, functionality you get in an open system. But then the challenge comes with it, how you actually integrate those and then validate them, and you are to deploy them. So in a sense, that's the opportunity and also some of the challenge along the way. And that's where, as Gautam said, that's where we are also looking at playing the key role with the OTEL lab, the Open Telecom Ecosystem Lab, where we take these pieces of the open ecosystem and have combined them, validate them, and provide the pipeline to the customer. Pre-integration and then full integration into the production network. >> Those challenges, I presume, vary whether you're talking to a greenfield network operator versus somebody who's got a 40, 50 year history, a hundred-year history in the business, right? I mean migration is a big issue for them, right? Whereas the greenfield, we heard from DISH earlier, they want to drive innovation so they might be willing to sacrifice some other areas. So, is that a fair summarization and what are you hearing? >> [Tibor and Gautam] Yeah. >> Absolutely it is. I mean, that's where you see that DISH being kind of a leader in the space, as they were deploying in greenfield, they defined what the open ecosystem should look like, defined all the components of it, how you integrate them, validate them, and they were able to, well, go through it and deploy it. To your point, for an open, closed systems, as how you actually start transforming the existing network into the open one, that's going to go to a different process, right? You need to figure out how these new open systems can interrupt and work together with existing networks. So, that's one likely some of those carriers will start in an isolated area and grow from there. Deploy an open system in a rural area, for example, and then build from there. >> So, what a bank would do is they say, "Okay, we're going to write in our own abstraction layer." >> Gautam: Yeah. >> Right? "Using microservices, we're going to connect to the cloud. And we're going to, you know, put maybe some lower risk applications in the cloud first and then we're going to create our own cloud." Is there a similar dynamic here? >> Yeah, I mean, so I think you're spot on, right? Like, I think one of the things that we are seeing with the telco operators that we've spoken to is they're very risk averse. >> Yep. >> Right, they have very strong SLA requirements. They cannot go down even for a second. So, what that basically means is the innovation aspect is constrained by the risks that they perceive on any changes that you want to make on the architecture. So, the question that comes up is how do we make it easier for them to not worry about the bare minimum requirements of making sure the network's running and working while thinking about the new innovative technologies and solutions you want to build on the start. So, back to your bank example, nine years ago, no one in a bank even was thinking about like applications that will run on the cloud. Like for them, it was like a side project. They'll try and test something, see if it works, and then they'll think about cloud in the future, right? But now, core applications on banks are actually being built on public cloud. I think we see the same happening with the telco operators as well. Right now, they're understanding the move from a closed ecosystem to an open ecosystem. They understand the value proposition. On the core side, it's already happening a lot. And I think they are slowly moving there and that's where I think Tibor and team have been doing a great job working with our customers to make the transition happen. >> But there are so many permutations. >> Right. >> And integration points. How is Dell addressing that across the ecosystem? >> So, to give you an example, we talked about OTEL, which is our brand new, kind of 13,000 square feet lab that we kind of inaugurated last year based in Round Rock, Texas. >> Dave: Open Telecom. >> Dave and Tibor: Ecosystem Lab. >> Correct, great. And so, as part of that, that's a physical lab but more importantly, that's kind of a community where partners, customers come together to actually, and collaborate and work on these solutions. And as part of this, we also develop what we call the SIP, or Solution Integration Platform, to enable exactly what you just said. Making sure that we have a platform that actually can take all these various components, validate them individually, combine them, and then provide a DevOps and GitOps model, how you actually combine them, provide the BOM or SBOM, and then push that to pre-production and deployments for our customers. So, that's part of the challenge as we talked earlier. And that's how Dell and we are looking at actually enabling this basically, the validation of this disaggregated wall. >> Oh. >> Sorry, I just wanted to- >> Go ahead. >> just going to add one more point, right? So, when we look at the partners that we are working with as well in the OTEL and there are three ways we are working with them. At the bare minimum, we want to make sure that solution will run on the Dell infrastructure and the hardware, right? So, we have the self-certification process. We had a lot of good uptake on it and we are seeing a lot more come in. In fact, I had a check-in with "theCUBE" this morning in our side and it's more than a hundred plus partners already interested in going through that. Awesome. Then we have other places where we work on with partners to build reference architectures together, right? So, we want some sort of validated solution that will work together that we can take to the market. And then we also have engineered solutions that we are building with partners like the infrastructure block offering that we have taken where it's all pre-packaged, pre-built by Dell, working very closely with our partners. So, the telcos don't have to worry about deployment, integration, and everything else that comes along. >> And I presume the security supply chain is part of that- >> Yes. >> bill of materials- >> Absolutely. >> you just described. >> Yeah. >> Exactly. >> And that would include all those levels, the engineered systems, the reference architectures as well? And how do you decide like candidates, we can't do it all, right? So, it's the big markets get the engineered system, is that right? How do you adjudicate there? >> Yeah, so I mean, I think there are a couple of angles to look at it, right? I think the first and foremost is where we see the biggest demand is coming from the customers in terms of the stack they already have and where they have the pain points. >> Dave: Okay. >> Right, so this is why we are working with Red Hat and Wind River, as an example, because they are in most of the deployments that we are aware of with the customers and where we see an opportunity for Dell to partner with these partners. I think we are seeing a lot of new players also coming up the stack. And as they come up the stack and we find opportunities to co-build and co-innovate, absolutely we'll be building joint solutions with them as well. >> Where are you on, from a partnership perspective, on the strategic vision? You mentioned a number of things that have already been accomplished, quite a few. But from your journey perspective on that strategy, where are you? >> Yeah, so it's a really good question. I think we really want to be the partner of choice for all technology and services company within the telecom space. We're looking to drive the transformation in the network area, right? So, that's the vision that we have in the telecom system business from a partnership side. We have created some really good strategic partnerships with key providers, with independent software vendors, the network equipment providers. We're having some really good, strategic conversations with them. You've heard some of the announcement come out today, the work we are doing with Nokia, with Samsung, the Red Hat announcement, the Wind River, and so on and so forth. And there's a lot more in the pipeline. But more importantly, we want to grow the impact of the ecosystem. So, that's why we are launching the partner community today as well to make that happen. >> How does the lab work? Who has access to it? Can I self-certify? If I can self-certify, how do you make sure that I'm following the rules, all of the stuff- >> Sure. >> that you would- >> Absolutely. >> expect. >> So yes, you can self-certify, that's Gautam just mentioned. We already had quite a few ISVs go through that self-certification. And then there's also, there's reference architecture that's being done and other engineered solutions that we talked about earlier. And the lab is set up in a way that when needed, test lines can be isolated. So, only certain set of partners have access to it. So, it's made up in a way that enables collaborations. At the same times, it kind of enables a certain set of customers and partners working together without having challenges of having a completely open system. >> Okay, but so, if I want to do something with you guys and let's say, I am a candidate for an engineered system, so how does it work? Somebody's got to buy the equipment, right? He's got to ship it, right? There's a lot of Dell equipment involved. >> Tibor: That's correct. >> There's other third-party CapEx software, et cetera. So, you fund that, the partners fund that, it's a hybrid funding model, how does that all get done? >> So today, for obviously, we work closely with those partners. The engineered solutions we've developed so far, we've been funding it largely and as you said, is Dell infrastructure plus the cast layers and the cloud players we work with. So, we actually put those in place. We funded them, of course, with participation from them. And that's being done through those labs. >> Okay, great. So, you guys are providing that benefit to the ecosystem. Writing checks, bringing engineering talent to the table. >> Gautam: Yeah. >> Okay. >> And at the same time, I mean, it's a partnership at the end of the day, right? So, depending on the kind of partnership we are. So, if you're an ISV, it's fairly simple. Come into our labs. You don't have to worry about the infrastructure. >> Sure. >> Run it all in our labs and you're good. If you're a hardware vendor or a NEP, network equipment provider, that's where it gets interesting where they need to send us stuff, we need to send them stuff. And usually, like Tibor mentioned, it's a joint collaboration. We all put in our chips on the table and we work together. >> So, when you're having conversations with prospective partners, obviously different types of partners, Gautam, that you just talked about, what's in it for them? What's the value proposition? What does this community- >> Gautam: Yeah. >> give them from a competitive advantage standpoint? >> Yeah, so I mean there are, so the way I think about it, right? There are three things that Dell is bringing to the table. The first one is our experience and expertise on doing this transformation within the enterprise space and the learnings we have from there that we're bringing to telco now, right? So, Dell's been working with enterprises for many, many years. We are one of the big providers there. We all know what transformation enterprise went through. >> Tibor: Telco transformation, IT transformation. >> Exactly. And that's the experience we have, which we're bringing to telco. The second one is our investment, both from a go-to market side as well as the way we are working with our sales and marketing, and so on and so forth, with the engineering side. And finally, I think, and this for me is the best one, is Dell is a very partner-centric organization. >> Lisa: Yes. >> Our strategy is built around partnerships. So, that's the other piece that we bring to the table. >> Where are the labs? Oh, go ahead. >> And what's one more note on that, and also, we are talking about the engineered solutions. There's also the supply chain then because that's a basically appliance and then that goes to Dell's supply chain, which is best in class. >> Dave: And where are the labs? How many are there? >> So Round Rock, Texas is the biggest one, the 13,000 square feet. We also have extension to it. We just announced opening one in Cork for the EME market to making sure that we can cover any regulatory challenges. But also, basically any test lines that we need to cover that have latency challenges. That's why we want to make sure that we have labs in other areas as well. >> And the go-to market, is it an overlay organization, a dedicated organization? >> Yeah, so it's a bit of both as you know. But yeah, in the telecom business unit, we have a dedicated sales organization as well as an alliance organization working very closely with product and engineering to take it to market. >> Given the strength and the breadth of the partner program in the community, based on this is only day one of MWC but is there anything that you've heard today that excites you where telecom is going and where Dell and its ecosystem is going and really burgeoning? >> Oh, I've had I don't know how many meetings since 6:00 AM this morning. So, it's been an amazing event and we're just having so many great conversations with partners, our customers. And I think a lot of today is all about figuring out what our strategy and our vision is, where is each side going and what the overlap is. I think the end result's going to be follow up conversations with a lot of these partners that we are working with or will be working with soon. And then thinking about, do we build engineered solutions together? Do we go validated route? Like we going to figure that out. But I mean, for me, this is like the perfect place to come and share your vision and strategy and understand what we are trying to solve for. >> To me, what's been interesting that all the interactions and discussions are about how to get to or render open ecosystem. That's great to see that the focus is on how to make it work versus still questioning it and I think that's pretty good. >> Well, you guys launched this business I think during the pandemic, right? >> Yes. >> Yeah, that's right. >> So I mean, you could do a lot over Zoom, but as we were talking about earlier, having the face-to-face interaction, there's no replacement for it. The 6:00 AM meetings versus the 30 minute zoom calls and your body language, I mean, you learn so much that you can take away from these events. >> Absolutely. Seeing someone in 3D is so different and it's good to build that relationship and rapport as well with the folks. >> I agree. >> It is. There's so much value in the hallway conversations that you can't have over Zoom. So, I guess last question for you as we head into to day two, what are some of the things that we can be on the lookout for from Dell and its ecosystem? >> Hmm. >> Interesting. (Tibor chuckling) >> I mean, all our announcements are out. I think what you can look at for us to really be leading in this segment, taking a leadership role, and continuously looking at how we can really enable the open ecosystem and how we can provide more value there, and how we can see how we can lead in this space. >> How you can lead in this space. >> Yeah, I mean for me, I mean, day two is like, I have a lot more meetings in day two than day one so I don't know if it's like people flying in today or what, but it's amazing to just meet the partners and customers. >> So, that theme of velocity for you is going to keep going. >> Oh, it's not stopping. (Lisa laughing) That's for sure. We are excited about it. >> Well, thank you for carving out some time to talk to with us on "theCUBE" about the partner program, the open ecosystem and the commitment to growing that and enabling partners to really differentiate their services with Dell. We appreciate it. >> We appreciate it as well. >> Thank you very much. >> Thank you for having us. >> Thanks. >> Our pleasure. For our guests and for Dave Vellante, I'm Lisa Martin. You're watching "theCUBE" live in Barcelona, Spain at MWC '23. Day one of our coverage. Be right back with our final guest of the day so stick around. (upbeat music continues)

(light music) >> Narrator: theCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (upbeat music) >> Welcome back to Spain everyone. Lisa Martin here with theCUBE Dave Vellante, my co-host for the next four days. We're live in Barcelona, covering MWC23. This is only day one, but I'll tell you the theme of this conference this year is velocity. And I don't know about you Dave, but this day is flying by already. This is ecosystem day. We're going to have a great discussion on the ecosystem next. >> Well we're seeing the disaggregation of the hardened telco stack, and that necessitates an ecosystem open- we're going to talk about Open RAN, we've been talking about even leading up to the show. It's a critical technology enabler and it's compulsory to have an ecosystem to support that. >> Absolutely compulsory. We've got two guests here joining us, Gautam Bhagra, Vice President partnerships at Dell, and Scott Walker, Vice President of global Telco ecosystem at Wind River. Guys, welcome to the program. >> Nice to be here. >> Thanks For having us. >> Thanks for having us. >> So you've got some news, this is day one of the conference, there's some news, Gautam, and let's start with you, unpack it. >> Yeah, well there's a lot of news, as you know, on Dell World. One of the things we are very excited to announce today is the launch of the Open Telecom Ecosystems Community. I think Dave, as you mentioned, getting into an Open RAN world is a challenge. And we know some of the challenges that our customers face. To help solve for those challenges, Dell wants to work with like-minded partners and customers to build innovative solutions, and join go-to-market. So we are launching that today. Wind River is one of our flagship partners for that, and I'm excited to be here to talk about that as well. >> Can you guys talk a little bit about the partnership, maybe a little bit about Wind River so the audience gets that context? >> Sure, absolutely, and the theme of the show, Velocity, is what this partnership is all about. We create velocity for operators if they want to adopt Open RAN, right? We simplify it. Wind River as a company has been around for 40 years. We were part of Intel at one point, and now we're independent, owned by a company called Aptiv. And with that we get another round of investment to help continue our acceleration into this market. So, the Dell partnership is about, like I said, velocity, accelerating the adoption. When we talk to operators, they have told us there are many roadblocks that they face, right? Like systems integration, operating at scale. 'Cause when you buy a traditional radio access network solution from a single supplier, it's very easy. It's works, it's been tested. When you break these components apart and disaggregate 'em, as we talked about David, it creates integration points and support issues, right? And what Dell and Wind River have done together is created a cloud infrastructure solution that could host a variety of RAN workloads, and essentially create a two layer cake. What we're, overall, what we're trying to do is create a traditional RAN experience, with the innovation agility and flexibility of Open RAN. And that's really what this partnership does. >> So these work, this workload innovation is interesting to me because you've got now developers, you know, the, you know, what's the telco developer look like, you know, is to be defined, right? I mean it's like this white sheet of paper that can create all this innovation. And to do that, you've got to have, as I said earlier, an ecosystem. But you've got now, I'm interested in your Open RAN agenda and how you see that sort of maturity model taking place. 'Cause today, you got disruptors that are going to lean right in say "Hey, yeah, that's great." The traditional carriers, they have to have a, you know, they have to migrate, they have to have a hybrid world. We know that takes time. So what's that look like in the marketplace today? >> Yeah, so I mean, I can start, right? So from a Dell's perspective, what we see in the market is yes, there is a drive towards, everyone understands the benefits of being open, right? There's the agility piece, the innovation piece. That's a no-brainer. The question is how do we get there? And I think that's where partnerships become critical to get there, right? So we've been working with partners like Wind River to build solutions that make it easier for customers to start adopting some of the foundational elements of an open network. The, one of the purposes in the agenda of building this community is to bring like-minded developers, like you said like we want those guys to come and work with the customers to create new solutions, and come up with something creative, which no one's even thought about, that accelerates your option even quicker, right? So that's exactly what we want to do as well. And that's one of the reasons why we launched the community. >> Yeah, and what we find with a lot of carriers, they are used to buying, like I said, traditional RAN solutions which are provided from a single provider like Erickson or Nokia and others, right? And we break this apart, and you cloudify that network infrastructure, there's usually a skills gap we see at the operator level, right? And so from a developer standpoint, they struggle with having the expertise in order to execute on that. Wind River helps them, working with companies like Dell, simplify that bottom portion of the stack, the infrastructure stack. So, and we lifecycle manage it, we test- we're continually testing it, and integrating it, so that the operator doesn't have to do that. In addition to that, wind River also has a history and legacy of working with different RAN vendors, both disruptors like Mavenir and Parallel Wireless, as well as traditional RAN providers like Samsung, Erickson, and others soon to be announced. So what we're doing on the northbound side is making it easy by integrating that, and on the southbound side with Dell, so that again, instead of four or five solutions that you need to put together, it's simply two. >> And you think about today how we- how you consume telco services are like there's these fixed blocks of services that you can buy, that has to change. It's more like the, the app stores. It's got to be an open marketplace, and that's where the innovation's going to come in, you know, from the developers, you know, top down maybe. I don't know, how do you see that maturity model evolving? People want to know how long it's going to take. So many questions, when will Open RAN be as reliable. Does it even have to be? You know, so many interesting dynamics going on. >> Yeah, and I think that's something we at Dell are also trying to find out, right? So we have been doing a lot of good work here to help our customers move in that direction. The work with Dish is an example of that. But I think we do understand the challenges as well in terms of getting, adopting the technologies, and adopting the innovation that's being driven by Open. So one of the agendas that we have as a company this year is to work with the community to drive this a lot further, right? We want to have customers adopt the technology more broadly with the tier one, tier two telcos globally. And our sales organizations are going to be working together with Wind Rivers to figure out who's the right set of customers to have these conversations with, so we can drop, drive, start driving this agenda a lot quicker than what we've seen historically. >> And where are you having those customer conversations? Is that at the operator level, is it higher, is it both? >> Well, all operators are deploying 5G in preparation for 6G, right? And we're all looking for those killer use cases which will drive top line revenue and not just make it a TCO discussion. And that starts at a very basic level today by doing things like integrating with Juniper, for their cloud router. So instead of at the far edge cell site, having a separate device that's doing the routing function, right? We take that and we cloudify that application, run it on the same server that's hosting the RAN applications, so you eliminate a device and reduce TCO. Now with Aptiv, which is primarily known as an automotive company, we're having lots of conversations, including with Dell and Intel and others about vehicle to vehicle communication, vehicle to anything communication. And although that's a little bit futuristic, there are shorter term use cases that, like, vehicle to vehicle accident avoidance, which are going to be much nearer term than autonomous driving, for example, which will help drive traffic and new revenue streams for operators. >> So, oh, that's, wow. So many other things (Scott laughs) that's just opened up there too. But I want to come back to, sort of, the Open RAN adoption. And I think you're right, there's a lot of questions that that still have to be determined. But my question is this, based on your knowledge so far does it have to be as hardened and reliable, obviously has to be low latency as existing networks, or can flexibility, like the cloud when it first came out, wasn't better than enterprise IT, it was just more flexible and faster, and you could rent it. And, is there a similar dynamic here where it doesn't have to replicate the hardened stack, it can bring in new benefits that drive adoption, what are your thoughts on that? >> Well there's a couple of things on that, because Wind River, as you know, where our legacy and history is in embedded devices like F-15 fighter jets, right? Or the Mars Rover or the James Web telescope, all run Wind River software. So, we know about can't fail ultra reliable systems, and operators are not letting us off the hook whatsoever. It has to be as hardened and locked down, as secure as a traditional RAN environment. Otherwise they will (indistinct). >> That's table stakes. >> That's table stakes that gets us there. And when River, with our legacy and history, and having operator experience running live commercial networks with a disaggregated stack in the tens of thousands of nodes, understand what this is like because they're running live commercial traffic with live customers. So we can't fail, right? And with that, they want their cake and eat it too, right? Which is, I want ultra reliable, I want what I have today, but I want the agility and flexibility to onboard third party apps. Like for example, this JCNR, this Juniper Cloud-Native Router. You cannot do something as simple as that on a traditional RAN Appliance. In an open ecosystem you can take that workload and onboard it because it is an open ecosystem, and that's really one of the true benefits. >> So they want the mainframe, but they want (Scott laughs) the flexibility of the developer cloud, right? >> That's right. >> They want their, have their cake eat it too and not gain weight. (group laughs) >> Yeah I mean David, I come from the public cloud world. >> We all don't want to do that. >> I used to work with a public cloud company, and nine years ago, public cloud was in the same stage, where you would go to a bank, and they would be like, we don't trust the cloud. It's not secure, it's not safe. It was the digital natives that adopted it, and that that drove the industry forward, right? And that's where the enterprises that realized that they're losing business because of all these innovative new companies that came out. That's what I saw over the last nine years in the cloud space. I think in the telco space also, something similar might happen, right? So a lot of this, I mean a lot of the new age telcos are understanding the value, are looking to innovate are adopting the open technologies, but there's still some inertia and hesitancy, for the reasons as Scott mentioned, to go there so quickly. So we just have to work through and balance between both sides. >> Yeah, well with that said, if there's still some inertia, but there's a theme of velocity, how do you help organizations balance that so they trust evolving? >> Yeah, and I think this is where our solution, like infrastructure block, is a foundational pillar to make that happen, right? So if we can take away the concerns that the organizations have in terms of security, reliability from the fundamental elements that build their infrastructure, by working with partners like Wind River, but Dell takes the ownership end-to-end to make sure that service works and we have those telco grade SLAs, then the telcos can start focusing on what's next. The applications and the customer services on the top. >> Customer service customer experience. >> You know, that's an interesting point Gautam brings up, too, because support is an issue too. We all talk about when you break these things apart, it creates integration points that you need to manage, right? But there's also, so the support aspect of it. So imagine if you will, you had one vendor, you have an outage, you call that one vendor, one necktie to choke, right, for accountability for the network. Now you have four or five vendors that you have to work. You get a lot of finger pointing. So at least at the infrastructure layer, right? Dell takes first call support for both the hardware infrastructure and the Wind River cloud infrastructure for both. And we are training and spinning them up to support, but we're always behind them of course as well. >> Can you give us a favorite customer example of- that really articulates the value of the partnership and the technologies that it's delivering to customers? >> Well, Infra Block- >> (indistinct) >> Is quite new, and we do have our first customer which is LG U plus, which was announced yesterday. Out of Korea, small customer, but a very important one. Okay, and I think they saw the value of the integrated system. They don't have the (indistinct) expertise and they're leveraging Dell and Wind River in order to make that happen. But I always also say historically before this new offering was Vodafone, right? Vodafone is a leader in Europe in terms of Open RAN, been very- Yago and Paco have been very vocal about what they're doing in Open RAN, and Dell and Wind River have been there with them every step of the way. And that's what I would say, kind of, led up to where we are today. We learned from engagements like Vodafone and I think KDDI as well. And it got us where we are today and understanding what the operators need and what the impediments are. And this directly addresses that. >> Those are two very different examples. You were talking about TCO before. I mean, so the earlier example is, that's an example to me of a disruptor. They'll take some chances, you know, maybe not as focused on TCO, of course they're concerned about it. Vodafone I would think very concerned about TCO. But I'm inferring from your comments that you're trying to get the industry, you're trying to check the TCO box, get there. And then move on to higher levels of value monetization. The TCO is going to come down to how many humans it takes to run the network, is it not, is that- >> Well a lot of, okay- >> Or is it devices- >> So the big one now, particularly with Vodafone, is energy cost, right? >> Of course, greening the network. >> Two-thirds of the energy consumption in RAN is the the Radio Access Network. Okay, the OPEX, right? So any reductions, even if they're 5% or 10%, can save tens or hundreds of millions of dollars. So we do things creatively with Dell to understand if there's a lot of traffic at the cell site and if it's not, we will change the C state or P state of the server, which basically spins it down, so it's not consuming power. But that's just at the infrastructure layer. Where this gets really powerful is working with the RAN vendors like Samsung and Ericson and others, and taking data from the traffic information there, applying algorithms to that in AI to shut it down and spin it back up as needed. 'Cause the idea is you don't want that thing powered up if there's no traffic on it. >> Well there's a sustainability, ESG, benefit to that, right? >> Yes. >> And, and it's very compute intensive. >> A hundred percent. >> Which is great for Dell. But at the same time, if you're not able to manage that power consumption, the whole thing fails. I mean it's, because there's going to be so much data, and such a intense requirement. So this is a huge issue. Okay, so Scott, you're saying that in the TCO equation, a big chunk is energy consumption? >> On the OPEX piece. Now there's also the CapEx, right? And Open RAN solutions are now, what we've heard from our customers today, are they're roughly at parity. 'Cause you can do things like repurpose servers after the useful life for a lower demand application which helps the TCO, right? Then you have situations like Juniper, where you can take, now software that runs on the same device, eliminating at a whole other device at the cell site. So we're not just taking a server and software point of view, we're taking a whole cell site point of view as it relates to both CapEx and OPEX. >> And then once that infrastructure it really gets adopted, that's when the innovation occurs. The ecosystem comes in. Developers now start to think of new applications that we haven't thought of yet. >> Gautam: Exactly. >> And that's where, that's going to force the traditional carriers to respond. They're responding, but they're doing so very carefully right now, it's understandable why. >> Yeah, and I think you're already seeing some news in the, I mean Nokia's announcement yesterday with the rebranding, et cetera. That's all positive momentum in my opinion, right? >> What'd you think of the logo? >> I love the logo. >> I liked it too. (group laughs) >> It was beautiful. >> I thought it was good. You had the connectivity down below, You need pipes, right? >> Exactly. >> But you had this sort of cool letters, and then the the pink horizon or pinkish, it was like (Scott laughs) endless opportunity. It was good, I thought it was well thought out. >> Exactly. >> Well, you pick up on an interesting point there, and what we're seeing, like advanced carriers like Dish, who has one of the true Open RAN networks, publishing APIs for programmers to build in their 5G network as part of the application. But we're also seeing the network equipment providers also enable carriers do that, 'cause carriers historically have not been advanced in that way. So there is a real recognition that in order for these networks to monetize new use cases, they need to be programmable, and they need to publish standard APIs, so you can access the 5G network capabilities through software. >> Yeah, and the problem from the carriers, there's not enough APIs that the carriers have produced yet. So that's where the ecosystem comes in, is going to >> A hundred percent >> I think there's eight APIs that are published out of the traditional carriers, which is, I mean there's got to be 8,000 for a marketplace. So that's where the open ecosystem really has the advantage. >> That's right. >> That's right. >> That's right. >> Yeah. >> So it all makes sense on paper, now you just, you got a lot of work to do. >> We got to deliver. Yeah, we launched it today. We got to get some like-minded partners and customers to come together. You'll start seeing results coming out of this hopefully soon, and we'll talk more about it over time. >> Dave: Great Awesome, thanks for sharing with us. >> Excellent. Guys, thank you for sharing, stopping by, sharing what's going on with Dell and Wind River, and why the opportunity's in it for customers and the technological evolution. We appreciate it, you'll have to come back, give us an update. >> Our pleasure, thanks for having us. (Group talks over each other) >> All right, thanks guys >> Appreciate it. >> For our guests and for Dave Vellante, I'm Lisa Martin. You're watching theCUBE, Live from MWC23 in Barcelona. theCUBE is the leader in live tech coverage. (upbeat music)

(upbeat instrumental music) >> TheCUBE's live coverage is made possible by funding from Dell Technologies, creating technologies that drive human progress. (uplifting instrumental music) >> Hey everyone. Welcome to Barcelona, Spain. It's theCUBE Live at MWC '23. I'm Lisa Martin, Dave Vellante, our co-founder, our co-CEO of theCUBE, you know him, you love him. He's here as my co-host. Dave, we have a great couple of guests here to break down day one keynote. Lots of meat. I can't wait to be part of this conversation. Chris Lewis joins us, the founder and MD of Lewis Insight. And Sarbjeet Johal, one of you know him as well. He's a Cube contributor, cloud architect. Guys, welcome to the program. Thank you so much for joining Dave and me today. >> Lovely to be here. >> Thank you. >> Chris, I want to start with you. You have covered all aspects of global telecoms industries over 30 years working as an analyst. Talk about the evolution of the telecom industry that you've witnessed, and what were some of the things you heard in the keynote that excite you about the direction it's going? >> Well, as ever, MWC, there's no lack of glitz and glamour, but it's the underlying issues of the industry that are really at stake here. There's not a lot of new revenue coming into the telecom providers, but there's a lot of adjustment, readjustment of the underlying operational environment. And also, really importantly, what came out of the keynotes is the willingness and the necessity to really engage with the API community, with the developer community, people who traditionally, telecoms would never have even touched. So they're sorting out their own house, they're cleaning their own stables, getting the cost base down, but they're also now realizing they've got to engage with all the other parties. There's a lot of cloud providers here, there's a lot of other people from outside so they're realizing they cannot do it all themselves. It's quite a tough lesson for a very conservative, inward looking industry, right? So should we be spending all this money and all this glitz and glamour of MWC and all be here, or should would be out there really building for the future and making sure the services are right for yours and my needs in a business and personal lives? So a lot of new changes, a lot of realization of what's going on outside, but underlying it, we've just got to get this right this time. >> And it feels like that monetization is front and center. You mentioned developers, we've got to work with developers, but I'm hearing the latest keynote from the Ericsson CEOs, we're going to monetize through those APIs, we're going to charge the developers. I mean, first of all, Chris, am I getting that right? And Sarbjeet, as somebody who's close to the developer community, is that the right way to build bridges? But Chris, are we getting that right? >> Well, let's take the first steps first. So, Ericsson, of course, acquired Vonage, which is a massive API business so they want to make money. They expect to make money by bringing that into the mainstream telecom community. Now, whether it's the developers who pay for it, or let's face it, we are moving into a situation as the telco moves into a techco model where the techco means they're going to be selling bits of the technology to developer guys and to other application developers. So when he says he needs to charge other people for it, it's the way in which people reach in and will take going through those open APIs like the open gateway announced today, but also the way they'll reach in and take things like network slicing. So we're opening up the telecom community, the treasure chest, if you like, where developers' applications and other third parties can come in and take those chunks of technology and build them into their services. This is a complete change from the old telecom industry where everybody used to come and you say, "all right, this is my product, you've got to buy it and you're going to pay me a lot of money for it." So we are looking at a more flexible environment where the other parties can take those chunks. And we know we want collectivity built into our financial applications, into our government applications, everything, into the future of the metaverse, whatever it may be. But it requires that change in attitude of the telcos. And they do need more money 'cause they've said, the baseline of revenue is pretty static, there's not a lot of growth in there so they're looking for new revenues. It's in a B2B2X time model. And it's probably the middle man's going to pay for it rather than the customer. >> But the techco model, Sarbjeet, it looks like the telcos are getting their money on their way in. The techco company model's to get them on their way out like the app store. Go build something of value, build some kind of app or data product, and then when it takes off, we'll take a piece of the action. What are your thoughts from a developer perspective about how the telcos are approaching it? >> Yeah, I think before we came here, like I said, I did some tweets on this, that we talk about all kind of developers, like there's game developers and front end, back end, and they're all talking about like what they're building on top of cloud, but nowhere you will hear the term "telco developer," there's no API from telcos given to the developers to build IoT solutions on top of it because telco as an IoT, I think is a good sort of hand in hand there. And edge computing as well. The glimmer of hope, if you will, for telcos is the edge computing, I believe. And even in edge, I predicted, I said that many times that cloud players will dominate that market with the private 5G. You know that story, right? >> We're going to talk about that. (laughs) >> The key is this, that if you see in general where the population lives, in metros, right? That's where the world population is like flocking to and we have cloud providers covering the local zones with local like heavy duty presence from the big cloud providers and then these telcos are getting sidetracked by that. Even the V2X in cars moving the autonomous cars and all that, even in that space, telcos are getting sidetracked in many ways. What telcos have to do is to join the forces, build some standards, if not standards, some consortium sort of. They're trying to do that with the open gateway here, they have only eight APIs. And it's 2023, eight APIs is nothing, right? (laughs) So they should have started this 10 years back, I think. So, yeah, I think to entice the developers, developers need the employability, we need to train them, we need to show them some light that hey, you can build a lot on top of it. If you tell developers they can develop two things or five things, nobody will come. >> So, Chris, the cloud will dominate the edge. So A, do you buy it? B, the telcos obviously are acting like that might happen. >> Do you know I love people when they've got their heads in the clouds. (all laugh) And you're right in so many ways, but if you flip it around and think about how the customers think about this, business customers and consumers, they don't care about all this background shenanigans going on, do they? >> Lisa: No. >> So I think one of the problems we have is that this is a new territory and whether you call it the edge or whatever you call it, what we need there is we need connectivity, we need security, we need storage, we need compute, we need analytics, and we need applications. And are any of those more important than the others? It's the collective that actually drives the real value there. So we need all those things together. And of course, the people who represented at this show, whether it's the cloud guys, the telcos, the Nokia, the Ericssons of this world, they all own little bits of that. So that's why they're all talking partnerships because they need the combination, they cannot do it on their own. The cloud guys can't do it on their own. >> Well, the cloud guys own all of those things that you just talked about though. (all laugh) >> Well, they don't own the last bit of connectivity, do they? They don't own the access. >> Right, exactly. That's the one thing they don't own. So, okay, we're back to pipes, right? We're back to charging for connectivity- >> Pipes are very valuable things, right? >> Yeah, for sure. >> Never underestimate pipes. I don't know about where you live, plumbers make a lot of money where I live- >> I don't underestimate them but I'm saying can the telcos charge for more than that or are the cloud guys going to mop up the storage, the analytics, the compute, and the apps? >> They may mop it up, but I think what the telcos are doing and we've seen a lot of it here already, is they are working with all those major cloud guys already. So is it an unequal relationship? The cloud guys are global, massive global scale, the telcos are fundamentally national operators. >> Yep. >> Some have a little bit of regional, nobody has global scale. So who stitches it all together? >> Dave: Keep your friends close and your enemies closer. >> Absolutely. >> I know that saying never gets old. It's true. Well, Sarbjeet, one of the things that you tweeted about, I didn't get to see the keynote but I was looking at your tweets. 46% of telcos think they won't make it to the next decade. That's a big number. Did that surprise you? >> No, actually it didn't surprise me because the competition is like closing in on them and the telcos are competing with telcos as well and the telcos are competing with cloud providers on the other side, right? So the smaller ones are getting squeezed. It's the bigger players, they can hook up the newer platforms, I think they will survive. It's like that part is like any other industry, if you will. But the key is here, I think why the pain points were sort of described on the main stage is that they're crying out loud to tell the big tech cloud providers that "hey, you pay your fair share," like we talked, right? You are not paying, you're generating so much content which reverses our networks and you are not paying for it. So they are not able to recoup the cost of laying down their networks. By the way, one thing actually I want to mention is that they said the cloud needs earth. The cloud and earth, it's like there's no physical need to cloud, you know that, right? So like, I think it's the other way around. I think the earth needs the cloud because I'm a cloud guy. (Sarbjeet and Lisa laugh) >> I think you need each other, right? >> I think so too. >> They need each other. When they said cloud needs earth, right? I think they're still in denial that the cloud is a big force. They have to partner. When you can't compete with somebody, what do you do? Partner with them. >> Chris, this is your world. Are they in denial? >> No, I think they're waking up to the pragmatism of the situation. >> Yeah. >> They're building... As we said, most of the telcos, you find have relationships with the cloud guys, I think you're right about the industry. I mean, do you think what's happened since US was '96, the big telecom act when we started breaking up all the big telcos and we had lots of competition came in, we're seeing the signs that we might start to aggregate them back up together again. So it's been an interesting experiment for like 30 years, hasn't it too? >> It made the US less competitive, I would argue, but carry on. >> Yes, I think it's true. And Europe is maybe too competitive and therefore, it's not driven the investment needed. And by the way, it's not just mobile, it's fixed as well. You saw the Orange CEO was talking about the her investment and the massive fiber investments way ahead of many other countries, way ahead of the UK or Germany. We need that fiber in the ground to carry all your cloud traffic to do this. So there is a scale issue, there is a competition issue, but the telcos are very much aware of it. They need the cloud, by the way, to improve their operational environments as well, to change that whole old IT environment to deliver you and I better service. So no, it absolutely is changing. And they're getting scale, but they're fundamentally offering the basic product, you call it pipes, I'll just say they're offering broadband to you and I and the business community. But they're stepping on dangerous ground, I think, when saying they want to charge the over the top guys for all the traffic they use. Those over the top guys now build a lot of the global networks, the backbone submarine network. They're putting a lot of money into it, and by giving us endless data for our individual usage, that cat is out the bag, I think to a large extent. >> Yeah. And Orange CEO basically said that, that they're not paying their fair share. I'm for net neutrality but the governments are going to have to fund this unless you let us charge the OTT. >> Well, I mean, we could of course renationalize. Where would that take us? (Dave laughs) That would make MWC very interesting next year, wouldn't it? To renationalize it. So, no, I think you've got to be careful what we wish for here. Creating the absolute clear product that is required to underpin all of these activities, whether it's IoT or whether it's cloud delivery or whether it's just our own communication stuff, delivering that absolutely ubiquitously high quality for business and for consumer is what we have to do. And telcos have been too conservative in the past. >> I think they need to get together and create standards around... I think they have a big opportunity. We know that the clouds are being built in silos, right? So there's Azure stack, there's AWS and there's Google. And those are three main ones and a few others, right? So that we are fighting... On the cloud side, what we are fighting is the multicloud. How do we consume that multicloud without having standards? So if these people get together and create some standards around IoT and edge computing sort of area, people will flock to them to say, "we will use you guys, your API, we don't care behind the scenes if you use AWS or Google Cloud or Azure, we will come to you." So market, actually is looking for that solution. I think it's an opportunity for these guys, for telcos. But the problem with telcos is they're nationalized, as you said Chris versus the cloud guys are still kind of national in a way, but they're global corporations. And some of the telcos are global corporations as well, BT covers so many countries and TD covers so many... DT is in US as well, so they're all over the place. >> But you know what's interesting is that the TM forum, which is one of the industry associations, they've had an open digital architecture framework for quite some years now. Google had joined that some years ago, Azure in there, AWS just joined it a couple of weeks ago. So when people said this morning, why isn't AWS on the keynote? They don't like sharing the limelight, do they? But they're getting very much in bed with the telco. So I think you'll see the marriage. And in fact, there's a really interesting statement, if you look at the IoT you mentioned, Bosch and Nokia have been working together 'cause they said, the problem we've got, you've got a connectivity network on one hand, you've got the sensor network on the other hand, you're trying to merge them together, it's a nightmare. So we are finally seeing those sort of groups talking to each other. So I think the standards are coming, the cooperation is coming, partnerships are coming, but it means that the telco can't dominate the sector like it used to. It's got to play ball with everybody else. >> I think they have to work with the regulators as well to loosen the regulation. Or you said before we started this segment, you used Chris, the analogy of sports, right? In sports, when you're playing fiercely, you commit the fouls and then ask for ref to blow the whistle. You're now looking at the ref all the time. The telcos are looking at the ref all the time. >> Dave: Yeah, can I do this? Can I do that? Is this a fair move? >> They should be looking for the space in front of the opposition. >> Yeah, they should be just on attack mode and commit these fouls, if you will, and then ask for forgiveness then- >> What do you make of that AWS not you there- >> Well, Chris just made a great point that they don't like to share the limelight 'cause I thought it was very obvious that we had Google Cloud, we had Microsoft there on day one of this 80,000 person event. A lot of people back from COVID and they weren't there. But Chris, you brought up a great point that kind of made me think, maybe you're right. Maybe they're in the afternoon keynote, they want their own time- >> You think GSMA invited them? >> I imagine so. You'd have to ask GSMA. >> I would think so. >> Get Max on here and ask that. >> I'm going to ask them, I will. >> But no, and they don't like it because I think the misconception, by the way, is that everyone says, "oh, it's AWS, it's Google Cloud and it's Azure." They're not all the same business by any stretch of the imagination. AWS has been doing loads of great work, they've been launching private network stuff over the last couple of weeks. Really interesting. Google's been playing catch up. We know that they came in readily late to the market. And Azure, they've all got slightly different angles on it. So perhaps it just wasn't right for AWS and the way they wanted to pitch things so they don't have to be there, do they? >> That's a good point. >> But the industry needs them there, that's the number one cloud. >> Dave, they're there working with the industry. >> Yeah, of course. >> They don't have to be on the keynote stage. And in fact, you think about this show and you mentioned the 80,000 people, the activity going on around in all these massive areas they're in, it's fantastic. That's where the business is done. The business isn't done up on the keynote stage. >> That's why there's the glitz and the glamour, Chris. (all laugh) >> Yeah. It's not glitz, it's espresso. It's not glamour anymore, it's just espresso. >> We need the espresso. >> Yeah. >> I think another thing is that it's interesting how an average European sees the tech market and an average North American, especially you from US, you have to see the market. Here, people are more like process oriented and they want the rules of the road already established before they can take a step- >> Chris: That's because it's your pension in the North American- >> Exactly. So unions are there and the more employee rights and everything, you can't fire people easily here or in Germany or most of the Europe is like that with the exception of UK. >> Well, but it's like I said, that Silicone Valley gets their money on the way out, you know? And that's how they do it, that's how they think it. And they don't... They ask for forgiveness. I think the east coast is more close to Europe, but in the EU, highly regulated, really focused on lifetime employment, things like that. >> But Dave, the issue is the telecom industry is brilliant, right? We keep paying every month whatever we do with it. >> It's a great business, to your point- >> It's a brilliant business model. >> Dave: It's fantastic. >> So it's about then getting the structure right behind it. And you know, we've seen a lot of stratification where people are selling off towers, Orange haven't sold their towers off, they made a big point about that. Others are selling their towers off. Some people are selling off their underlying network, Telecom Italia talking about KKR buying the whole underlying network. It's like what do you want to be in control of? It's a great business. >> But that's why they complain so much is that they're having to sell their assets because of the onerous CapEx requirements, right? >> Yeah, they've had it good, right? And dare I say, perhaps they've not planned well enough for the future. >> They're trying to protect their past from the future. I mean, that's... >> Actually, look at the... Every "n" number of years, there's a new faster network. They have to dig the ground, they have to put the fiber, they have to put this. Now, there are so many booths showing 6G now, we are not even done with 5G yet, now the next 6G you know, like then- >> 10G's coming- >> 10G, that's a different market. (Dave laughs) >> Actually, they're bogged down by the innovation, I think. >> And the generational thing is really important because we're planning for 6G in all sorts of good ways but actually what we use in our daily lives, we've gone through the barrier, we've got enough to do that. So 4G gives us enough, the fiber in the ground or even old copper gives us enough. So the question is, what are we willing to pay for more than that basic connectivity? And the answer to your point, Dave, is not a lot, right? So therefore, that's why the emphasis is on the business market on that B2B and B2B2X. >> But we'll pay for Netflix all day long. >> All day long. (all laugh) >> The one thing Chris, I don't know, I want to know your viewpoints and we have talked in the past as well, there's absence of think tanks in tech, right? So we have think tanks on the foreign policy and economic policy in every country, and we have global think tanks, but tech is becoming a huge part of the economy, global economy as well as national economies, right? But we don't have think tanks on like policy around tech. For example, this 4G is good for a lot of use cases. Then 5G is good for smaller number of use cases. And then 6G will be like, fewer people need 6G for example. Why can't we have sort of those kind of entities dictating those kind of like, okay, is this a wiser way to go about it? >> Lina Khan wants to. She wants to break up big tech- >> You're too young to remember but the IT used to have a show every four years in Geneva, there were standards around there. So I think there are bodies. I think the balance of power obviously has gone from the telecom to the west coast to the IT markets. And it's changing the balance about, it moves more quickly, right? Telecoms has never moved quickly enough. I think there is hope by the way, that telecoms now that we are moving to more softwarized environment, and God forbid, we're moving into CICD in the telecom world, right? Which is a massive change, but I think there's hopes for it to change. The mentality is changing, the culture is changing, but to change those old structured organizations from the British telecom or the France telecom into the modern world, it's a hell of a long journey. It's not an overnight journey at all. >> Well, of course the theme of the event is velocity. >> Yeah, I know that. >> And it's been interesting sitting here with the three of you talking about from a historic perspective, how slow and molasseslike telecom has been. They don't have a choice anymore. As consumers, we have this expectation we're going to get anything we want on our mobile device, 24 by seven. We don't care about how the sausage is made, we just want the end result. So do you really think, and we're only on day one guys... And Chris we'll start with you. Is the theme really velocity? Is it disruption? Are they able to move faster? >> Actually, I think invisibility is the real answer. (Lisa laughs) We want communication to be invisible, right? >> Absolutely. >> We want it to work. When we switch our phones on, we want it to work and we want to... Well, they're not even phones anymore, are they really? I mean that's the... So no, velocity, we've got... There is momentum in the industry, there's no doubt about that. The cloud guys coming in, making telecoms think about the way they run their own business, where they meet, that collision point on the edges you talked about Sarbjeet. We do have velocity, we've got momentum. There's so many interested parties. The way I think of this is that the telecom industry used to be inward looking, just design its own technology and then expect everyone else to dance to our tune. We're now flipping that 180 degrees and we are now having to work with all the different outside forces shaping us. Whether it's devices, whether it's smart cities, governments, the hosting guys, the Equinoxis, all these things. So everyone wants a piece of this telecom world so we've got to make ourselves more open. That's why you get in a more open environment. >> But you did... I just want to bring back a point you made during COVID, which was when everybody switched to work from home, started using their landlines again, telcos had to respond and nothing broke. I mean, it was pretty amazing. >> Chris: It did a good job. >> It was kind of invisible. So, props to the telcos for making that happen. >> They did a great job. >> So it really did. Now, okay, what have you done for me lately? So now they've got to deal with the future and they're talking monetization. But to me, monetization is all about data and not necessarily just the network data. Yeah, they can sell that 'cause they own that but what kind of incremental value are they going to create for the consumers that... >> Yeah, actually that's a problem. I think the problem is that they have been strangled by the regulation for a long time and they cannot look at their data. It's a lot more similar to the FinTech world, right? I used to work at Visa. And then Visa, we did trillion dollars in transactions in '96. Like we moved so much money around, but we couldn't look at these things, right? So yeah, I think regulation is a problem that holds you back, it's the antithesis of velocity, it slows you down. >> But data means everything, doesn't it? I mean, it means everything and nothing. So I think the challenge here is what data do the telcos have that is useful, valuable to me, right? So in the home environment, the fact that my broadband provider says, oh, by the way, you've got 20 gadgets on that network and 20 on that one... That's great, tell me what's on there. I probably don't know what's taking all my valuable bandwidth up. So I think there's security wrapped around that, telling me the way I'm using it if I'm getting the best out of my service. >> You pay for that? >> No, I'm saying they don't do it yet. I think- >> But would you pay for that? >> I think I would, yeah. >> Would you pay a lot for that? I would expect it to be there as part of my dashboard for my monthly fee. They're already charging me enough. >> Well, that's fine, but you pay a lot more in North America than I do in Europe, right? >> Yeah, no, that's true. >> You're really overpaying over there, right? >> Way overpaying. >> So, actually everybody's looking at these devices, right? So this is a radio operated device basically, right? And then why couldn't they benefit from this? This is like we need to like double click on this like 10 times to find out why telcos failed to leverage this device, right? But I think the problem is their reliance on regulations and their being close to the national sort of governments and local bodies and authorities, right? And in some countries, these telcos are totally controlled in very authoritarian ways, right? It's not like open, like in the west, most of the west. Like the world is bigger than five, six countries and we know that, right? But we end up talking about the major economies most of the time. >> Dave: Always. >> Chris: We have a topic we want to hit on. >> We do have a topic. Our last topic, Chris, it's for you. You guys have done an amazing job for the last 25 minutes talking about the industry, where it's going, the evolution. But Chris, you're registered blind throughout your career. You're a leading user of assertive technologies. Talk about diversity, equity, inclusion, accessibility, some of the things you're doing there. >> Well, we should have had 25 minutes on that and five minutes on- (all laugh) >> Lisa: You'll have to come back. >> Really interesting. So I've been looking at it. You're quite right, I've been using accessible technology on my iPhone and on my laptop for 10, 20 years now. It's amazing. And what I'm trying to get across to the industry is to think about inclusive design from day one. When you're designing an app or you're designing a service, make sure you... And telecom's a great example. In fact, there's quite a lot of sign language around here this week. If you look at all the events written, good to see that coming in. Obviously, no use to me whatsoever, but good for the hearing impaired, which by the way is the biggest category of disability in the world. Biggest chunk is hearing impaired, then vision impaired, and then cognitive and then physical. And therefore, whenever you're designing any service, my call to arms to people is think about how that's going to be used and how a blind person might use it or how a deaf person or someone with physical issues or any cognitive issues might use it. And a great example, the GSMA and I have been talking about the app they use for getting into the venue here. I downloaded it. I got the app downloaded and I'm calling my guys going, where's my badge? And he said, "it's top left." And because I work with a screen reader, they hadn't tagged it properly so I couldn't actually open my badge on my own. Now, they changed it overnight so it worked this morning, which is fantastic work by Trevor and the team. But it's those things that if you don't build it in from scratch, you really frustrate a whole group of users. And if you think about it, people with disabilities are excluded from so many services if they can't see the screen or they can't hear it. But it's also the elderly community who don't find it easy to get access to things. Smart speakers have been a real blessing in that respect 'cause you can now talk to that thing and it starts talking back to you. And then there's the people who can't afford it so we need to come down market. This event is about launching these thousand dollars plus devices. Come on, we need below a hundred dollars devices to get to the real mass market and get the next billion people in and then to educate people how to use it. And I think to go back to your previous point, I think governments are starting to realize how important this is about building the community within the countries. You've got some massive projects like NEOM in Saudi Arabia. If you have a look at that, if you get a chance, a fantastic development in the desert where they're building a new city from scratch and they're building it so anyone and everyone can get access to it. So in the past, it was all done very much by individual disability. So I used to use some very expensive, clunky blind tech stuff. I'm now using mostly mainstream. But my call to answer to say is, make sure when you develop an app, it's accessible, anyone can use it, you can talk to it, you can get whatever access you need and it will make all of our lives better. So as we age and hearing starts to go and sight starts to go and dexterity starts to go, then those things become very useful for everybody. >> That's a great point and what a great champion they have in you. Chris, Sarbjeet, Dave, thank you so much for kicking things off, analyzing day one keynote, the ecosystem day, talking about what velocity actually means, where we really are. We're going to have to have you guys back 'cause as you know, we can keep going, but we are out of time. But thank you. >> Pleasure. >> We had a very spirited, lively conversation. >> Thanks, Dave. >> Thank you very much. >> For our guests and for Dave Vellante, I'm Lisa Martin, you're watching theCUBE live in Barcelona, Spain at MWC '23. We'll be back after a short break. See you soon. (uplifting instrumental music)

(Upbeat music playing) >> Hey everyone, thanks for joining us today. Welcome to this event of Building your Cloud Center of Excellence with Hitachi Vantara. I'm your host, Lisa Martin. I've got a couple of guests here with me next to talk about redefining cloud operations and application modernization for customers. Please welcome Param Balasubramanian the SVP and CTO at Hitachi Vantara, and Manoj Narayanan is here as well, the Managing Director of Technology at GTCR. Guys, thank you so much for joining me today. Excited to have this conversation about redefining CloudOps with you. >> Pleasure to be here. >> Pleasure to be here >> Param, let's go ahead and start with you. You have done well over a thousand cloud engagements in your career. I'd love to get your point of view on how the complexity around cloud operations and management has evolved in the last, say, three to four years. >> It's a great question, Lisa before we understand the complexity around the management itself, the cloud has evolved over the last decade significantly from being a backend infrastructure or infrastructure as a service for many companies to become the business for many companies. If you think about a lot of these cloud bond companies cloud is where their entire workload and their business wants. With that, as a background for this conversation if you think about the cloud operations, there was a lot of there was a lot of lift and shift happening in the market where people lifted their workloads or applications and moved them onto the cloud where they treated cloud significantly as an infrastructure. And the way they started to manage it was again, the same format they were managing there on-prem infrastructure and they call it I&O, Infrastructure and Operations. That's kind of the way traditionally cloud is managed. In the last few years, we are seeing a significant shift around thinking of cloud more as a workload rather than as just an infrastructure. And what I mean by workload is in the cloud, everything is now code. So you are codifying your infrastructure. Your application is already code and your data is also codified as data services. With now that context apply the way you think about managing the cloud has to significantly change and many companies are moving towards trying to change their models to look at this complex environment as opposed to treating it like a simple infrastructure that is sitting somewhere else. So that's one of the biggest changes and shifts that are causing a lot of complexity and headache for actually a lot of customers for managing environments. The second critical aspect is even that, even exasperates the situation is multicloud environments. Now, there are companies that have got it right with things about right cloud for the right workload. So there are companies that I reach out and I talk with. They've got their office applications and emails and stuff running on Microsoft 365 which can be on the Azure cloud whereas they're running their engineering applications the ones that they build and leverage for their end customers on Amazon. And to some extent they've got it right but still they have a multiple cloud that they have to go after and maintain. This becomes complex when you have two clouds for the same type of workload. When I have to host applications for my end customers on Amazon as well as Azure, Azure as well as Google then, I get into security issues that I have to be consistent across all three. I get into talent because I need to have people that focus on Amazon as well as Azure, as well as Google which means I need so much more workforce, I need so many so much more skills that I need to build, right? That's becoming the second issue. The third one is around data costs. Can I make these clouds talk to each other? Then you get into the ingress egress cost and that creates some complexity. So bringing all of this together and managing is really become becoming more complex for our customers. And obviously as a part of this we will talk about some of the, some of the ideas that we can bring for in managing such complex environments but this is what we are seeing in terms of why the complexity has become a lot more in the last few years. >> Right. A lot of complexity in the last few years. Manoj, let's bring you into the conversation now. Before we dig into your cloud environment give the audience a little bit of an overview of GTCR. What kind of company are you? What do you guys do? >> Definitely Lisa. GTCR is a Chicago based private equity firm. We've been in the market for more than 40 years and what we do is we invest in companies across different sectors and then we manage the company drive it to increase the value and then over a period of time, sell it to future buyers. So in a nutshell, we got a large portfolio of companies that we need to manage and make sure that they perform to expectations. And my role within GTCR is from a technology viewpoint so where I work with all the companies their technology leadership to make sure that we are getting the best out of technology and technology today drives everything. So how can technology be a good compliment to the business itself? So, my role is to play that intermediary role to make sure that there is synergy between the investment thesis and the technology lures that we can pull and also work with partners like Hitachi to make sure that it is done in an optimal manner. >> I like that you said, you know, technology needs to really compliment the business and vice versa. So Manoj, let's get into the cloud operations environment at GTCR. Talk to me about what the experience has been the last couple of years. Give us an idea of some of the challenges that you were facing with existing cloud ops and and the solution that you're using from Hitachi Vantara. >> A a absolutely. In fact, in fact Param phrased it really well, one of the key things that we're facing is the workload management. So there's so many choices there, so much complexities. We have these companies buying more companies there is organic growth that is happening. So the variables that we have to deal with are very high in such a scenario to make sure that the workload management of each of the companies are done in an optimal manner is becoming an increasing concern. So, so that's one area where any help we can get anything we can try to make sure it is done better becomes a huge value at each. A second aspect is a financial transparency. We need to know where the money is going where the money is coming in from, what is the scale especially in the cloud environment. We are talking about an auto scale ecosystem. Having that financial transparency and the metrics associated with that, it, these these become very, very critical to ensure that we have a successful presence in the multicloud environment. >> Talk a little bit about the solution that you're using with Hitachi and, and the challenges that it is eradicated. >> Yeah, so it end of the day, right, we we need to focus on our core competence. So, so we have got a very strong technology leadership team. We've got a very strong presence in the respective domains of each of the portfolio companies. But where Hitachi comes in and HAR comes in as a solution is that they allow us to excel in focusing on our core business and then make sure that we are able to take care of workload management or financial transparency. All of that is taken off the table from us and and Hitachi manages it for us, right? So it's such a perfectly compliment relationship where they act as two partners and HARC is a solution that is extremely useful in driving that. And, and and I'm anticipating that it'll become more important with time as the complexity of cloud and cloud associate workloads are only becoming more challenging to manage and not less. >> Right? That's the thing that complexity is there and it's also increasing Param, you talked about the complexities that are existent today with respect to cloud operations the things that have happened over the last couple of years. What are some of your tips, Param for the audience, like the the top two or three things that you would say on cloud operations that that people need to understand so that they can manage that complexity and allow their business to be driven and complimented by technology? >> Yeah, a big great question again, Lisa, right? And I think Manoj alluded to a few of these things as well. The first one is in the new world of the cloud I think think of migration, modernization and management as a single continuum to the cloud. Now there is no lift and shift and there is no way somebody else separately manages it, right? If you do not lift and shift the right applications the right way onto the cloud, you are going to deal with the complexity of managing it and you'll end up spending more money time and effort in managing it. So that's number one. Migration, modernization, management of cloud work growth is a single continuum and it's not three separate activities, right? That's number one. And the, the second is cost. Cost traditionally has been an afterthought, right? People move the workload to the cloud. And I think, again, like I said, I'll refer back to what Manoj said once we move it to the cloud and then we put all these fancy engineering capability around self-provisioning, every developer can go and ask for what he or she wants and they get an environment immediately spun up so on and so forth. Suddenly the CIO wakes up to a bill that is significantly larger than what he or she expected right? And, and this is this is become a bit common nowadays, right? The the challenge is because we think cost in the cloud as an afterthought. But consider this example in, in previous world you buy hard, well, you put it in your data center you have already amortized the cost as a CapEx. So you can write an application throw it onto the infrastructure and the application continues to use the infrastructure until you hit a ceiling, you don't care about the money you spent. But if I write a line of code that is inefficient today and I deploy it on the cloud from minute one, I am paying for the inefficiency. So if I realize it after six months, I've already spent the money. So financial discipline, especially when managing the cloud is now is no more an afterthought. It is as much something that you have to include in your engineering practice as much as any other DevOps practices, right? Those are my top two tips, Lisa, from my standpoint, think about cloud, think about cloud work, cloud workloads. And the last one again, and you will see you will hear me saying this again and again, get into the mindset of everything is code. You don't have a touch and feel infrastructure anymore. So you don't really need to have foot on the ground to go manage that infrastructure. It's codified. So your code should be managing it, but think of how it happens, right? That's where we, we are going as an evolution >> Everything is code. That's great advice, great tips for the audience there. Manoj, I'll bring you back into the conversation. You know, we, we can talk about skills gaps on on in many different facets of technology the SRE role, relatively new, skillset. We're hearing, hearing a lot about it. SRE led DevSecOps is probably even more so of a new skillset. If I'm an IT leader or an application leader how do I ensure that I have the right skillset within my organization to be able to manage my cloud operations to, to dial down that complexity so that I can really operate successfully as a business? >> Yeah. And so unfortunately there is no perfect answer, right? It's such a, such a scarce skillset that a, any day any of the portfolio company CTOs if I go and talk and say, Hey here's a great SRE team member, they'll be more than willing to fight with each of to get the person in right? It's just that scarce of a skillset. So, so a few things we need to look at it. One is, how can I build it within, right? So nobody gets born as an SRE, you, you make a person an SRE. So how do you inculcate that culture? So like Param said earlier, right? Everything is software. So how do we make sure that everybody inculcates that as part of their operating philosophy be they part of the operations team or the development team or the testing team they need to understand that that is a common guideline and common objective that we are driving towards. So, so that skillset and that associated training needs to be driven from within the organization. And that in my mind is the fastest way to make sure that that role gets propagated across organization. That is one. The second thing is rely on the right partners. So it's not going to be possible for us, to get all of these roles built in-house. So instead prioritize what roles need to be done from within the organization and what roles can we rely on our partners to drive it for us. So that becomes an important consideration for us to look at as well. >> Absolutely. That partnership angle is incredibly important from, from the, the beginning really kind of weaving these companies together on this journey to to redefine cloud operations and build that, as we talked about at the beginning of the conversation really building a cloud center of excellence that allows the organization to be competitive, successful and and really deliver what the end user is, is expecting. I want to ask - Sorry Lisa, - go ahead. >> May I add something to it, I think? >> Sure. >> Yeah. One of the, one of the common things that I tell customers when we talk about SRE and to manages point is don't think of SRE as a skillset which is the common way today the industry tries to solve the problem. SRE is a mindset, right? Everybody in >> Well well said, yeah >> That, so everybody in a company should think of him or her as a cycle liability engineer. And everybody has a role in it, right? Even if you take the new process layout from SRE there are individuals that are responsible to whom we can go to when there is a problem directly as opposed to going through the traditional ways of AI talk to L one and L one contras all. They go to L two and then L three. So we, we, we are trying to move away from an issue escalation model to what we call as a a issue routing or a incident routing model, right? Move away from incident escalation to an incident routing model. So you get to route to the right folks. So again, to sum it up, SRE should not be solved as a skillset set because there is not enough people in the market to solve it that way. If you start solving it as a mindset I think companies can get a handhold of it. >> I love that. I've actually never heard that before, but it it makes perfect sense to think about the SRE as a mindset rather than a skillset that will allow organizations to be much more successful. Param I wanted to get your thoughts as enterprises are are innovating, they're moving more products and services to the as a service model. Talk about how the dev teams the ops teams are working together to build and run reliable, cost efficient services. Are they working better together? >> Again, a a very polarizing question because some customers are getting it right many customers aren't, there is still a big wall between development and operations, right? Even when you think about DevOps as a terminology the fundamental principle was to make sure dev and ops works together. But what many companies have achieved today, honestly is automating the operations for development. For example, as a developer, I can check in code and my code will appear in production without any friction, right? There is automated testing, automated provisioning and it gets promoted to production, but after production, it goes back into the 20 year old model of operating the code, right? So there is more work that needs to be done for Devon and Ops to come closer and work together. And one of the ways that we think this is achievable is not by doing radical org changes, but more by focusing on a product-oriented single backlog approach across development and operations. Which is, again, there is change management involved but I think that's a way to start embracing the culture of dev ops coming together much better now, again SRE principles as we double click and understand it more and Google has done a very good job playing it out for the world. As you think about SRE principle, there are ways and means in that process of how to think about a single backlog. And in HARC, Hitachi Application Reliability Centers we've really got a way to look at prioritizing the backlog. And what I mean by that is dev teams try to work on backlog that come from product managers on features. The SRE and the operations team try to put backlog into the say sorry, try to put features into the same backlog for improving stability, availability and financials financial optimization of your code. And there are ways when you look at your SLOs and error budgets to really coach the product teams to prioritize your backlog based on what's important for you. So if you understand your spending more money then you reduce your product features going in and implement the financial optimization that came from your operations team, right? So you now have the ability to throttle these parameters and that's where SRE becomes a mindset and a principle as opposed to a skillset because this is not an individual telling you to do. This is the company that is, is embarking on how to prioritize my backlog beyond just user features. >> Right. Great point. Last question for both of you is the same talk kind of take away things that you want me to remember. If I am at an IT leader at, at an organization and I am planning on redefining CloudOps for my company Manoj will start with you and then Param to you what are the top two things that you want me to walk away with understanding how to do that successfully? >> Yeah, so I'll, I'll go back to basics. So the two things I would say need to be taken care of is, one is customer experience. So all the things that I do end of the day is it improving the customer experience or not? So that's a first metric. The second thing is anything that I do is there an ROI by doing that incremental step or not? Otherwise we might get lost in the technology with surgery, the new tech, et cetera. But end of the day, if the customers are not happy if there is no ROI, everything else you just can't do much on top of that >> Now it's all about the customer experience. Right? That's so true. Param what are your thoughts, the the top things that I need to be taking away if I am a a leader planning to redefine my cloud eye company? >> Absolutely. And I think from a, from a company standpoint I think Manoj summarized it extremely well, right? There is this ROI and there is this customer experience from my end, again, I'll, I'll suggest two two more things as a takeaway, right? One, cloud cost is not an afterthought. It's essential for us to think about it upfront. Number two, do not delink migration modernization and operations. They are one stream. If you migrate a long, wrong workload onto the cloud you're going to be stuck with it for a long time. And an example of a wrong workload, Lisa for everybody that that is listening to this is if my cost per transaction profile doesn't change and I am not improving my revenue per transaction for a piece of code that's going run in production it's better off running in a data center where my cost is CapEx than amortized and I have control over when I want to upgrade as opposed to putting it on a cloud and continuing to pay unless it gives me more dividends towards improvement. But that's a simple example of when we think about what should I migrate and how will it cost pain when I want to manage it in the longer run. But that's, that's something that I'll leave the audience and you with as a takeaway. >> Excellent. Guys, thank you so much for talking to me today about what Hitachi Vantara and GTCR are doing together how you've really dialed down those complexities enabling the business and the technology folks to really live harmoniously. We appreciate your insights and your perspectives on building a cloud center of excellence. Thank you both for joining me. >> Thank you. >> For my guests, I'm Lisa. Martin, you're watching this event building Your Cloud Center of Excellence with Hitachi Vantara. Thanks for watching. (Upbeat music playing) (Upbeat music playing) (Upbeat music playing) (Upbeat music playing)

(upbeat music) >> Hey, everyone, welcome to theCube's special program series Women of the Cloud brought to you by AWS. I'm your host, Lisa Martin. I'm very pleased to welcome back one of our alumni Adrianna Bustamante joins me, the VP of Global Alliances at Rackspace Technology. Adrianna, it's great to see you. Thank you so much for joining me today. >> Lisa, thank you so much for having me again. I love this. >> Yeah, me too. Tell me a little bit about you, a little bit about Rackspace Technology, as well as the role that you currently have. >> Sure, so again, I'm Adrianna Bustamante. I look after our global alliances within Rackspace, specifically looking after some of our strategic partners. I've been with Rackspace for a little over 16 years now, working with partners in some form or fashion. Rackspace Technology, we are the multicloud solution experts. We really work with our clients to drive business outcomes and transformations in this multicloud world. And our mission is to embrace technology, empower our customers, and deliver the future. And I get to have the fun pleasure of building and curating and cultivating partnership relationships. So very much our partnerships are important to our success. We are privileged to be able to work with AWS along with other partners across the industry to help do more, and bring more value to clients. >> So you've been with Rackspace Technology for a while. Tell me a little bit about recommendations. Any tactical recommendations that you have for other women, maybe even men who are looking to grow their careers in tech maybe they're wanting to get into tech. What are some of the things that you've learned along the way that you highly recommend? >> Yeah, no, great, great question. I've had the fortune of being at Rackspace now for a number of years, and it's always 'cause I've been able to create my own opportunities and work. And so that really falls in line to some of the recommendations that I hold dear to my heart. And number one is really to stay curious and learn, from reading articles, to staying close, and asking questions from your colleagues. You know, I know just like at AWS and at Rackspace, there are some very talented people across all areas of the business, and they are the best to learn from. You know, I also am a firm believer in developing and expanding that network 'cause that helps you bring and build out your reach and helps you continue to learn in different areas outside the company. I think from raising your hand, leaning in, don't be afraid to speak up. Especially as we think about, you know, women of the cloud which is part of what the theme of this session is. And I think about, you know, how much I love to see women elevated within roles inside of Rackspace and out, you know. It is about raising your hand, getting uncomfortable in speaking up if you're, if you are a bit shy or timid. If there's an area that you are interested in and passionate about, go learn and drive. Because there's opportunities to create new roles for yourself, new ways to bring value into the organization. And then you become memorable for, you know, that, you know this person was known for helping solve this problem. It's been a good fortune. And within our company culture of any Racker, the front lines know how to solve most problems just as much as the top executives. >> Yeah, I love you saying stay curious. I think curiosity is probably one of the best things that people can have. It's, to your point of, I like to call it getting comfortably uncomfortable. Raise your hand, ask a question. I always think, if you're in a meeting, and maybe you tune out or there's something that you don't understand, ask a question. 'Cause I guarantee there's five other people in that room that have the same question, but they're not curious enough or hungry enough to ask the question to learn more. So I think those are such great recommendations that you have provided that I think you probably would tell your younger self stay curious, ask questions. >> Yes, for sure. I also am so big, at least for me personally, context is so important for me. If I understand context, then I'm really able to figure out where can I drive the most value for me personally. And then that goes into leading my teams. And so to me, the only way you get the context is if you're learning or asking the questions if you don't understand. 'Cause it really helps you understand the holistic business. >> A hundred percent. That context is everything. But a lot of people are just a little bit timid sometimes and don't want to be the one to raise their hand in a room or online these days. And I think it's such a great skill that anybody can benefit from. I'd love to know some of your other skills. Some examples of specific success stories where in your current role, where you've really helped organizations solve problems related to the cloud. >> Yes, so, you know, and I think about ultimately we're looking to see and always looking to see how we can help transform our clients' businesses. And often the underlying root of that is through technology solutions. And so, you know, we've helped clients who are mostly, you know, legacy data center based clients that have built large infrastructure components and environments, and they want to learn and lean into the cloud. And they're not really sure how to do that. They probably may have a leader that's told them that they need to do this. Everybody's at a different level of journey. And so, you know, specifically, and especially in partnership with some of our hyperscaler partners just at like AWS is, you know, we can help customers understand what that journey needs to look like. How to successfully move, let's say if they're a large VMware shop today they already have a little bit of cloud native. You know, together through our ecosystem of relationships, we've helped customers not only be able to build and maintain part of their data center footprint that's not ready yet to transform, but move some of this into a facility that is within our data centers to get out of that huge kind of CapEx heavy workload type environment. And then, and especially with AWS, and the partnership that they have along with Rackspace, with VMware, we leverage BMC on AWS solutions. And then we can help them fully embrace that cloud native. And from a Rackspace perspective we are providing those services and expertise across all levels in a single pane of glass. So you can manage from your more traditional workloads to embracing more of a cloud native approach. >> And it's all about helping clients drive business outcomes as you said. Every organization these days, I always like to think, whether it's my grocery store retailer or bank has to be a data driven company. But it has to leverage obviously the cloud. But there's so many options. It's quite nebulous, no pun intended, maybe pun intended. So, but it's all about helping clients drive those business outcomes. I imagine it's quite fulfilling for you to be able to help different types of organizations really maximize their use of technology, their understanding of technology, to really build bridges, deliver the products and services that everybody's expecting these days. >> Yes. No and I think what I, again, it's what I love about being in partnerships because those relationships become fundamental in helping remove those complexities for the clients. And so the more that we as Rackspace are able to connect and deepen these relationships it just becomes less decision making, less things that the client ultimately has to think about. So nothing gives me more joy than being able to help solve the customer's problems. And then in turn we're doing that through our partnership relationships. So we're bringing everybody together to ultimately provide a better outcome for the client. >> Yeah. And as you said, those relationships are foundational to everything and ultimately the outcomes that the end customer is able to deliver to these demanding, whether it's consumer or business or whatnot. A lot of challenges that organizations have today. But it sounds like the relationship cultivating that you're helping lead is really critical in those organizations being able to embrace technology, utilize it in ways that allow them to get products and services to market as fast as the consumer demands. I'd love to get your perspective as a female in technology. We talk a lot about diversity, inclusion, equity. We can talk about it all day long, but there's still some challenges there. What are some of the challenges that you see that are still persistent with respect to diversity and tech today? And maybe some of your recommendations to eradicate some of those? >> No, sure. So, you know, it starts really early. It starts almost in education and making sure that women, and a diverse set of applicants are taking certain, studying certain disciplines. And then I think about it from a recruiting and hiring perspective. Are organizations doing enough to expand their reach? You know, we were actually talking- I have the good fortune of being the executive sponsor of our resource group within Rackspace. It's called Power, which is the professional organization of women's empowerment at Rackspace. And we were talking just I think last week on, we need to make sure we're going where the women are to make sure we are letting them know about Rackspace, the benefits about Rackspace. And it ultimately, in turn that helps build more recruiting into the talent pool. More people are raising their hand and interviewing and hiring. I think talent in general as we're seeing right now, is so hard to come by, and so even more important to retain. And the more diverse pools that we have of Rackers, it's just bringing different perspectives, and Rackers are what we call Rackspace employees. It's bringing those Rackers together to help solve the bigger problems. Because you're able to do more with a diverse set of outlook. And I think, you know, as a woman, I want to have that equitable seat at the table. And so ultimately when I think about myself from a leadership perspective, am I making sure that all of those opportunities are available for the women that come along behind me? And how am I elevating other women within our organization from a day-to-day so they have that spotlight. So, you know, fundamentally, organizations need to focus on how to expand that reach to bring that diverse set of applicants and voices. And then you need strong leaders at every level to be advocates and sponsors to make sure that this is an important topic and top of mind in all organizations. So you can ultimately provide an equitable approach. >> Yeah, I love that. I agree a hundred percent. You know, it's so important to start at the education front, but also to be able to have just the thought diversity alone in organizations. I've seen many studies that show having females in executive positions are, companies that do that, are more profitable. There's a lot of data out there that demonstrates that there are huge advantages to any type of organization to really invest in diversity. But to your point, it's not just about attracting, it's about retaining the talent as well. I mean that, that is critical for every business. >> Yes. No absolutely. You know, more and more we're starting to see that soft benefits are becoming more important as we think about a younger workforce coming in. And when I think about soft benefits, it's more around our employee resource groups. What our benefits look like for our females within our healthcare, within the insurance plans? What type of time off and maternity benefits are we extending? What does that work-life balance look like in a hybrid world or a virtual world? Those questions become, I mean, when I remember years ago no one would even think about asking those questions. And now we see, not only those questions coming up more regularly, but we are trying to be more intentional within our organization. To be proactive about that messaging so we can help show and demonstrate that we are an inclusive community. And that there's support for women to be successful within Rackspace. You know, we have mentoring programs that we do that are you know, that we really try to highlight and promote for our female community. And then also for our broader community. We look at building different circles that women can come together in a space that they feel comfortable to ask questions. To figure out how do they excel and advance in their career. Those become very attractive for getting that talent that we want. >> Absolutely. And you just brought up such a great point, Adrianna and that's intention. Programs like what you're describing that the Rackers have opportunity to access, is that there's intention in all of this. Which is so critical for diversity programs to be successful. To attract the right talent, to retain the right talent. It's like a flywheel, I think it's all, it's all linked together. But I'd love to know what you see that's next in cloud. How do you see your role evolving in the industry? We talked about the great relationship building that you're doing. What do you see as next in cloud? >> No, sure. Again, 'cause I helplessly can't be biased. It is all about to me that that partner ecosystem. It is how we can build strong relationships that help minimize the complexities for the clients. You know, now the pace for innovation and competitive edge is faster than it was than we saw 24 months ago. You know, we saw COVID advance lots of different areas of the business, but really it forced a lot of companies to transform. And this is where I think there's a unique opportunity to really look at what a partner ecosystem looks like. You know, who are the right partners that organizations like AWS, like Rackspace should be working with. 'Cause oftentimes the partners that were our partners and key partners, maybe three to five years ago, maybe aren't going to be as relevant in that same ecosystem in the next five years. So constantly making sure that we have the right ecosystem in place, and the right relationships to help ultimately drive better outcomes for the clients. >> And that's like we said several times already during this interview. It's all about the outcomes for clients. You mentioned COVID, you know, there's been- I call 'em COVID catalysts. A lot of transformation, forcing function. There's definitely been some silver linings, but I'd love to get your perspective if we go back like the last five years. Some of the biggest changes that you've seen in the tech workforce, in innovation, in the last, you know, three to five years that really excite you. >> Yeah, so I think we all had to learn to be virtual by default. And so I think we're just coming out. People are excited to be in person again. You know, when we have different events, whether they be with internal Rackers or with partners or clients, like everyone's excited to to see each other again. But you're still seeing this mix of, we need to be hybrid by default, which I know wasn't in everybody's DNA from a technology perspective. And I think that's enabling more virtual teams, more matrixed type of teams, where you're bringing together different expertise across the organization to move at a faster pace. You know, we talk about, you know, we talk about COVID which led to that great resignation where you saw many people changing their jobs. You know, we saw women not only within Rackspace, but even outside, like really, you know, take a pause and really start thinking about what's important to them in that returning to work. And so I just think all of this has really, as you mentioned, Lisa, of forcing function on being intentional to create the right environments that are building a place that we can retain that level of skill and expertise. And I think that's just going to become something that's more increasingly important with every year and profession choice. >> I agree. It's going to be building upon, like it's that flywheel that I'm talking about. That of successes, of promoting women, of making sure that there's plenty of opportunity. Encouraging women, to your point, to be curious raise your hand, ask the question. There's so much value, it's invaluable for organizations to really have diversity throughout their organization. You did a great job of explaining. Even in the benefits framework. So, I so appreciate you being on theCUBE. Adrianna, it's great to see you again. Thank you for sharing your story, the successes that you've had as a Racker in cloud, and some of the things that you recommend to the next generation. We really appreciate your time. >> No, thank you. If I can walk into more rooms where there is more women at the table and on the calls, I am a happier individual. So I love any opportunity to really see how we can continue to make more space in the rooms for women that are just overly talented and deserve to be there. >> I am with you on that. Again, thank you so much. Great to see you and we'll see you again soon. >> Thank you, Lisa. Take care. Have a good afternoon. >> Thank you. We want to thank you for watching theCube's special program series Women of the Cloud, brought to you by AWS. I'm Lisa Martin, thanks for watching. (upbeat music)

>> From the Cube Studios in Palo Alto in Boston bringing you data-driven insights from the Cube and ETR. This is Breaking Analysis with Dave Vellante. >> The unraveling of market enthusiasm continued in Q4 of 2022 with the earnings reports from the US hyperscalers, the big three now all in. As we said earlier this year, even the cloud is an immune from the macro headwinds and the cracks in the armor that we saw from the data that we shared last summer, they're playing out into 2023. For the most part actuals are disappointing beyond expectations including our own. It turns out that our estimates for the big three hyperscaler's revenue missed by 1.2 billion or 2.7% lower than we had forecast from even our most recent November estimates. And we expect continued decelerating growth rates for the hyperscalers through the summer of 2023 and we don't think that's going to abate until comparisons get easier. Hello and welcome to this week's Wikibon Cube Insights powered by ETR. In this Breaking Analysis, we share our view of what's happening in cloud markets not just for the hyperscalers but other firms that have hitched a ride on the cloud. And we'll share new ETR data that shows why these trends are playing out tactics that customers are employing to deal with their cost challenges and how long the pain is likely to last. You know, riding the cloud wave, it's a two-edged sword. Let's look at the players that have gone all in on or are exposed to both the positive and negative trends of cloud. Look the cloud has been a huge tailwind for so many companies like Snowflake and Databricks, Workday, Salesforce, Mongo's move with Atlas, Red Hats Cloud strategy with OpenShift and so forth. And you know, the flip side is because cloud is elastic what comes up can also go down very easily. Here's an XY graphic from ETR that shows spending momentum or net score on the vertical axis and market presence in the dataset on the horizontal axis provision or called overlap. This is data from the January 2023 survey and that the red dotted lines show the positions of several companies that we've highlighted going back to January 2021. So let's unpack this for a bit starting with the big three hyperscalers. The first point is AWS and Azure continue to solidify their moat relative to Google Cloud platform. And we're going to get into this in a moment, but Azure and AWS revenues are five to six times that of GCP for IaaS. And at those deltas, Google should be gaining ground much faster than the big two. The second point on Google is notice the red line on GCP relative to its starting point. While it appears to be gaining ground on the horizontal axis, its net score is now below that of AWS and Azure in the survey. So despite its significantly smaller size it's just not keeping pace with the leaders in terms of market momentum. Now looking at AWS and Microsoft, what we see is basically AWS is holding serve. As we know both Google and Microsoft benefit from including SaaS in their cloud numbers. So the fact that AWS hasn't seen a huge downward momentum relative to a January 2021 position is one positive in the data. And both companies are well above that magic 40% line on the Y-axis, anything above 40% we consider to be highly elevated. But the fact remains that they're down as are most of the names on this chart. So let's take a closer look. I want to start with Snowflake and Databricks. Snowflake, as we reported from several quarters back came down to Earth, it was up in the 80% range in the Y-axis here. And it's still highly elevated in the 60% range and it continues to move to the right, which is positive but as we'll address in a moment it's customers can dial down consumption just as in any cloud. Now, Databricks is really interesting. It's not a public company, it never made it to IPO during the sort of tech bubble. So we don't have the same level of transparency that we do with other companies that did make it through. But look at how much more prominent it is on the X-axis relative to January 2021. And it's net score is basically held up over that period of time. So that's a real positive for Databricks. Next, look at Workday and Salesforce. They've held up relatively well, both inching to the right and generally holding their net scores. Same from Mongo, which is the brown dot above its name that says Elastic, it says a little gets a little crowded which Elastic's actually the blue dot above it. But generally, SaaS is harder to dial down, Workday, Salesforce, Oracles, SaaS and others. So it's harder to dial down because commitments have been made in advance, they're kind of locked in. Now, one of the discussions from last summer was as Mongo, less discretionary than analytics i.e. Snowflake. And it's an interesting debate but maybe Snowflake customers, you know, they're also generally committed to a dollar amount. So over time the spending is going to be there. But in the short term, yeah maybe Snowflake customers can dial down. Now that highlighted dotted red line, that bolded one is Datadog and you can see it's made major strides on the X-axis but its net score has decelerated quite dramatically. Openshift's momentum in the survey has dropped although IBM just announced that OpenShift has a a billion dollar ARR and I suspect what's happening there is IBM consulting is bundling OpenShift into its modernization projects. It's got a, that sort of captive base if you will. And as such it's probably not as top of mind to the respondents but I'll bet you the developers are certainly aware of it. Now the other really notable call out here is CloudFlare, We've reported on them earlier. Cloudflare's net score has held up really well since January of 2021. It really hasn't seen the downdraft of some of these others, but it's making major major moves to the right gaining market presence. We really like how CloudFlare is performing. And the last comment is on Oracle which as you can see, despite its much, much lower net score continues to gain ground in the market and thrive from a profitability standpoint. But the data pretty clearly shows that there's a downdraft in the market. Okay, so what's happening here? Let's dig deeper into this data. Here's a graphic from the most recent ETR drill down asking customers that said they were going to cut spending what technique they're using to do so. Now, as we've previously reported, consolidating redundant vendors is by far the most cited approach but there's two key points we want to make here. One is reducing excess cloud resources. As you can see in the bars is the second most cited technique and it's up from the previous polling period. The second we're not showing, you know directly but we've got some red call outs there. Reducing cloud costs jumps to 29% and 28% respectively in financial services and tech telco. And it's much closer to second. It's basically neck and neck with consolidating redundant vendors in those two industries. So they're being really aggressive about optimizing cloud cost. Okay, so as we said, cloud is great 'cause you can dial it up but it's just as easy to dial down. We've identified six factors that customers tell us are affecting their cloud consumption and there are probably more, if you got more we'd love to hear them but these are the ones that are fairly prominent that have hit our radar. First, rising mortgage rates mean banks are processing fewer loans means less cloud. The crypto crash means less trading activity and that means less cloud resources. Third lower ad spend has led companies to reduce not only you know, their ad buying but also their frequency of running their analytics and their calculations. And they're also often using less data, maybe compressing the timeframe of the corpus down to a shorter time period. Also very prominent is down to the bottom left, using lower cost compute instances. For example, Graviton from AWS or AMD chips and tiering storage to cheaper S3 or deep archived tiers. And finally, optimizing based on better pricing plans. So customers are moving from, you know, smaller companies in particular moving maybe from on demand or other larger companies that are experimenting using on demand or they're moving to spot pricing or reserved instances or optimized savings plans. That all lowers cost and that means less cloud resource consumption and less cloud revenue. Now in the days when everything was on prem CFOs, what would they do? They would freeze CapEx and IT Pros would have to try to do more with less and often that meant a lot of manual tasks. With the cloud it's much easier to move things around. It still takes some thinking and some effort but it's dramatically simpler to do so. So you can get those savings a lot faster. Now of course the other huge factor is you can cut or you can freeze. And this graphic shows data from a recent ETR survey with 159 respondents and you can see the meaningful uptick in hiring freezes, freezing new IT deployments and layoffs. And as we've been reporting, this has been trending up since earlier last year. And note the call out, this is especially prominent in retail sectors, all three of these techniques jump up in retail and that's a bit of a concern because oftentimes consumer spending helps the economy make a softer landing out of a pullback. But this is a potential canary in the coal mine. If retail firms are pulling back it's because consumers aren't spending as much. And so we're keeping a close eye on that. So let's boil this down to the market data and what this all means. So in this graphic we show our estimates for Q4 IaaS revenues compared to the "actual" IaaS revenues. And we say quote because AWS is the only one that reports, you know clean revenue and IaaS, Azure and GCP don't report actuals. Why would they? Because it would make them look even, you know smaller relative to AWS. Rather, they bury the figures in overall cloud which includes their, you know G-Suite for Google and all the Microsoft SaaS. And then they give us little tidbits about in Microsoft's case, Azure, they give growth rates. Google gives kind of relative growth of GCP. So, and we use survey data and you know, other data to try to really pinpoint and we've been covering this for, I don't know, five or six years ever since the cloud really became a thing. But looking at the data, we had AWS growing at 25% this quarter and it came in at 20%. So a significant decline relative to our expectations. AWS announced that it exited December, actually, sorry it's January data showed about a 15% mid-teens growth rate. So that's, you know, something we're watching. Azure was two points off our forecast coming in at 38% growth. It said it exited December in the 35% growth range and it said that it's expecting five points of deceleration off of that. So think 30% for Azure. GCP came in three points off our expectation coming in 35% and Alibaba has yet to report but we've shaved a bid off that forecast based on some survey data and you know what maybe 9% is even still not enough. Now for the year, the big four hyperscalers generated almost 160 billion of revenue, but that was 7 billion lower than what what we expected coming into 2022. For 2023, we're expecting 21% growth for a total of 193.3 billion. And while it's, you know, lower, you know, significantly lower than historical expectations it's still four to five times the overall spending forecast that we just shared with you in our predictions post of between 4 and 5% for the overall market. We think AWS is going to come in in around 93 billion this year with Azure closing in at over 71 billion. This is, again, we're talking IaaS here. Now, despite Amazon focusing investors on the fact that AWS's absolute dollar growth is still larger than its competitors. By our estimates Azure will come in at more than 75% of AWS's forecasted revenue. That's a significant milestone. AWS is operating margins by the way declined significantly this past quarter, dropping from 30% of revenue to 24%, 30% the year earlier to 24%. Now that's still extremely healthy and we've seen wild fluctuations like this before so I don't get too freaked out about that. But I'll say this, Microsoft has a marginal cost advantage relative to AWS because one, it has a captive cloud on which to run its massive software estate. So it can just throw software at its own cloud and two software marginal costs. Marginal economics despite AWS's awesomeness in high degrees of automation, software is just a better business. Now the upshot for AWS is the ecosystem. AWS is essentially in our view positioning very smartly as a platform for data partners like Snowflake and Databricks, security partners like CrowdStrike and Okta and Palo Alto and many others and SaaS companies. You know, Microsoft is more competitive even though AWS does have competitive products. Now of course Amazon's competitive to retail companies so that's another factor but generally speaking for tech players, Amazon is a really thriving ecosystem that is a secret weapon in our view. AWS happy to spin the meter with its partners even though it sells competitive products, you know, more so in our view than other cloud players. Microsoft, of course is, don't forget is hyping now, we're hearing a lot OpenAI and ChatGPT we reported last week in our predictions post. How OpenAI is shot up in terms of market sentiment in ETR's emerging technology company surveys and people are moving to Azure to get OpenAI and get ChatGPT that is a an interesting lever. Amazon in our view has to have a response. They have lots of AI and they're going to have to make some moves there. Meanwhile, Google is emphasizing itself as an AI first company. In fact, Google spent at least five minutes of continuous dialogue, nonstop on its AI chops during its latest earnings call. So that's an area that we're watching very closely as the buzz around large language models continues. All right, let's wrap up with some assumptions for 2023. We think SaaS players are going to continue to be sticky. They're going to be somewhat insulated from all these downdrafts because they're so tied in and customers, you know they make the commitment up front, you've got the lock in. Now having said that, we do expect some backlash over time on the onerous and generally customer unfriendly pricing models of most large SaaS companies. But that's going to play out over a longer period of time. Now for cloud generally and the hyperscalers specifically we do expect accelerating growth rates into Q3 but the amplitude of the demand swings from this rubber band economy, we expect to continue to compress and become more predictable throughout the year. Estimates are coming down, CEOs we think are going to be more cautious when the market snaps back more cautious about hiring and spending and as such a perhaps we expect a more orderly return to growth which we think will slightly accelerate in Q4 as comps get easier. Now of course the big risk to these scenarios is of course the economy, the FED, consumer spending, inflation, supply chain, energy prices, wars, geopolitics, China relations, you know, all the usual stuff. But as always with our partners at ETR and the Cube community, we're here for you. We have the data and we'll be the first to report when we see a change at the margin. Okay, that's a wrap for today. I want to thank Alex Morrison who's on production and manages the podcast, Ken Schiffman as well out of our Boston studio getting this up on LinkedIn Live. Thank you for that. Kristen Martin also and Cheryl Knight help get the word out on social media and in our newsletters. And Rob Hof is our Editor-in-Chief over at siliconangle.com. He does some great editing for us. Thank you all. Remember all these episodes are available as podcast. Wherever you listen, just search Breaking Analysis podcast. I publish each week on wikibon.com, at siliconangle.com where you can see all the data and you want to get in touch. Just all you can do is email me david.vellante@siliconangle.com or DM me @dvellante if you if you got something interesting, I'll respond. If you don't, it's either 'cause I'm swamped or it's just not tickling me. You can comment on our LinkedIn post as well. And please check out ETR.ai for the best survey data in the enterprise tech business. This is Dave Vellante for the Cube Insights powered by ETR. Thanks for watching and we'll see you next time on Breaking Analysis. (gentle upbeat music)

(uplifting music) >> Hello, welcome back to theCUBE's coverage of CloudNativeSecurityCon, the inaugural event, in Seattle. I'm John Furrier, host of theCUBE, here in the Palo Alto Studios. We're calling it theCUBE Center. It's kind of like our Sports Center for tech. It's kind of remote coverage. We've been doing this now for a few years. We're going to amp it up this year as more events are remote, and happening all around the world. So, we're going to continue the coverage with this segment focusing on the data stack, entrepreneurial opportunities around all things security, and as, obviously, data's involved. And our next guest is a friend of theCUBE, and CUBE alumni from 2013, entrepreneur himself, turned, now, venture capitalist angel investor, with his own firm, Opher Kahane, Managing Director, Sonoma Ventures. Formerly the founder of Origami, sold to Intuit a few years back. Focusing now on having a lot of fun, angel investing on boards, focusing on data-driven applications, and stacks around that, and all the stuff going on in, really, in the wheelhouse for what's going on around security data. Opher, great to see you. Thanks for coming on. >> My pleasure. Great to be back. It's been a while. >> So you're kind of on Easy Street now. You did the entrepreneurial venture, you've worked hard. We were on together in 2013 when theCUBE just started. XCEL Partners had an event in Stanford, XCEL, and they had all the features there. We interviewed Satya Nadella, who was just a manager at Microsoft at that time, he was there. He's now the CEO of Microsoft. >> Yeah, he was. >> A lot's changed in nine years. But congratulations on your venture you sold, and you got an exit there, and now you're doing a lot of investments. I'd love to get your take, because this is really the biggest change I've seen in the past 12 years, around an inflection point around a lot of converging forces. Data, which, big data, 10 years ago, was a big part of your career, but now it's accelerated, with cloud scale. You're seeing people building scale on top of other clouds, and becoming their own cloud. You're seeing data being a big part of it. Cybersecurity kind of has not really changed much, but it's the most important thing everyone's talking about. So, developers are involved, data's involved, a lot of entrepreneurial opportunities. So I'd love to get your take on how you see the current situation, as it relates to what's gone on in the past five years or so. What's the big story? >> So, a lot of big stories, but I think a lot of it has to do with a promise of making value from data, whether it's for cybersecurity, for Fintech, for DevOps, for RevTech startups and companies. There's a lot of challenges in actually driving and monetizing the value from data with velocity. Historically, the challenge has been more around, "How do I store data at massive scale?" And then you had the big data infrastructure company, like Cloudera, and MapR, and others, deal with it from a scale perspective, from a storage perspective. Then you had a whole layer of companies that evolved to deal with, "How do I index massive scales of data, for quick querying, and federated access, et cetera?" But now that a lot of those underlying problems, if you will, have been solved, to a certain extent, although they're always being stretched, given the scale of data, and its utility is becoming more and more massive, in particular with AI use cases being very prominent right now, the next level is how to actually make value from the data. How do I manage the full lifecycle of data in complex environments, with complex organizations, complex use cases? And having seen this from the inside, with Origami Logic, as we dealt with a lot of large corporations, and post-acquisition by Intuit, and a lot of the startups I'm involved with, it's clear that we're now onto that next step. And you have fundamental new paradigms, such as data mesh, that attempt to address that complexity, and responsibly scaling access, and democratizing access in the value monetization from data, across large organizations. You have a slew of startups that are evolving to help the entire lifecycle of data, from the data engineering side of it, to the data analytics side of it, to the AI use cases side of it. And it feels like the early days, to a certain extent, of the revolution that we've seen in transition from traditional databases, to data warehouses, to cloud-based data processing, and big data. It feels like we're at the genesis of that next wave. And it's super, super exciting, for me at least, as someone who's sitting more in the coach seat, rather than being on the pitch, and building startups, helping folks as they go through those motions. >> So that's awesome. I want to get into some of these data infrastructure dynamics you mentioned, but before that, talk to the audience around what you're working on now. You've been a successful entrepreneur, you're focused on angel investing, so, super-early seed stage. What kind of deals are you looking at? What's interesting to you? What is Sonoma Ventures looking for, and what are some of the entrepreneurial dynamics that you're seeing right now, from a startup standpoint? >> Cool, so, at a macro level, this is a little bit of background of my history, because it shapes very heavily what it is that I'm looking at. So, I've been very fortunate with entrepreneurial career. I founded three startups. All three of them are successful. Final two were sold, the first one merged and went public. And my third career has been about data, moving data, passing data, processing data, generating insights from it. And, at this phase, I wanted to really evolve from just going and building startup number four, from going through the same motions again. A 10 year adventure, I'm a little bit too old for that, I guess. But the next best thing is to sit from a point whereby I can be more elevated in where I'm dealing with, and broaden the variety of startups I'm focused on, rather than just do your own thing, and just go very, very deep into it. Now, what specifically am I focused on at Sonoma Ventures? So, basically, looking at what I refer to as a data-driven application stack. Anything from the low-level data infrastructure and cloud infrastructure, that helps any persona in the data universe maximize value for data, from their particular point of view, for their particular role, whether it's data analysts, data scientists, data engineers, cloud engineers, DevOps folks, et cetera. All the way up to the application layer, in applications that are very data-heavy. And what are very typical data-heavy applications? FinTech, cyber, Web3, revenue technologies, and product and DevOps. So these are the areas we're focused on. I have almost 23 or 24 startups in the portfolio that span all these different areas. And this is in terms of the aperture. Now, typically, focus on pre-seed, seed. Sometimes a little bit later stage, but this is the primary focus. And it's really about partnering with entrepreneurs, and helping them make, if you will, original mistakes, avoid the mistakes I made. >> Yeah. >> And take it to the next level, whatever the milestone they're driving with. So I'm very, very hands-on with many of those startups. Now, what is it that's happening right now, initially, and why is it so exciting? So, on one hand, you have this scaling of data and its complexity, yet lagging value creation from it, across those different personas we've touched on. So that's one fundamental opportunity which is secular. The other one, which is more a cyclic situation, is the fact that we're going through a down cycle in tech, as is very evident in the public markets, and everything we're hearing about funding going slower and lower, terms shifting more into the hands of typical VCs versus entrepreneur-friendly market, and so on and so forth. And a very significant amount of layoffs. Now, when you combine these two trends together, you're observing a very interesting thing, that a lot of folks, really bright folks, who have sold a startup to a company, or have been in the guts of the large startup, or a large corporation, have, hands-on, experienced all those challenges we've spoken about earlier, in turf, maximizing value from data, irrespective of their role, in a specific angle, or vantage point they have on those challenges. So, for many of them, it's an opportunity to, "Now, let me now start a startup. I've been laid off, maybe, or my company's stock isn't doing as well as it used to, as a large corporation. Now I have an opportunity to actually go and take my entrepreneurial passion, and apply it to a product and experience as part of this larger company." >> Yeah. >> And you see a slew of folks who are emerging with these great ideas. So it's a very, very exciting period of time to innovate. >> It's interesting, a lot of people look at, I mean, I look at Snowflake as an example of a company that refactored data warehouses. They just basically took data warehouse, and put it on the cloud, and called it a data cloud. That, to me, was compelling. They didn't pay any CapEx. They rode Amazon's wave there. So, a similar thing going on with data. You mentioned this, and I see it as an enabling opportunity. So whether it's cybersecurity, FinTech, whatever vertical, you have an enablement. Now, you mentioned data infrastructure. It's a super exciting area, as there's so many stacks emerging. We got an analytics stack, there's real-time stacks, there's data lakes, AI stack, foundational models. So, you're seeing an explosion of stacks, different tools probably will emerge. So, how do you look at that, as a seasoned entrepreneur, now investor? Is that a good thing? Is that just more of the market? 'Cause it just seems like more and more kind of decomposed stacks targeted at use cases seems to be a trend. >> Yeah. >> And how do you vet that, is it? >> So it's a great observation, and if you take a step back and look at the evolution of technology over the last 30 years, maybe longer, you always see these cycles of expansion, fragmentation, contraction, expansion, contraction. Go decentralize, go centralize, go decentralize, go centralize, as manifested in different types of technology paradigms. From client server, to storage, to microservices, to et cetera, et cetera. So I think we're going through another big bang, to a certain extent, whereby end up with more specialized data stacks for specific use cases, as you need performance, the data models, the tooling to best adapt to the particular task at hand, and the particular personas at hand. As the needs of the data analysts are quite different from the needs of an NL engineer, it's quite different from the needs of the data engineer. And what happens is, when you end up with these siloed stacks, you end up with new fragmentation, and new gaps that need to be filled with a new layer of innovation. And I suspect that, in part, that's what we're seeing right now, in terms of the next wave of data innovation. Whether it's in a service of FinTech use cases, or cyber use cases, or other, is a set of tools that end up having to try and stitch together those elements and bridge between them. So I see that as a fantastic gap to innovate around. I see, also, a fundamental need in creating a common data language, and common data management processes and governance across those different personas, because ultimately, the same underlying data these folks need, albeit in different mediums, different access models, different velocities, et cetera, the subject matter, if you will, the underlying raw data, and some of the taxonomies right on top of it, do need to be consistent. So, once again, a great opportunity to innovate, whether it's about semantic layers, whether it's about data mesh, whether it's about CICD tools for data engineers, and so on and so forth. >> I got to ask you, first of all, I see you have a friend you brought into the interview. You have a dog in the background who made a little cameo appearance. And that's awesome. Sitting right next to you, making sure everything's going well. On the AI thing, 'cause I think that's the hot trend here. >> Yeah. >> You're starting to see, that ChatGPT's got everyone excited, because it's kind of that first time you see kind of next-gen functionality, large-language models, where you can bring data in, and it integrates well. So, to me, I think, connecting the dots, this kind of speaks to the beginning of what will be a trend of really blending of data stacks together, or blending of models. And so, as more data modeling emerges, you start to have this AI stack kind of situation, where you have things out there that you can compose. It's almost very developer-friendly, conceptually. This is kind of new, but kind of the same concept's been working on with Google and others. How do you see this emerging, as an investor? What are some of the things that you're excited about, around the ChatGPT kind of things that's happening? 'Cause it brings it mainstream. Again, a million downloads, fastest applications get a million downloads, even among all the successes. So it's obviously hit a nerve. People are talking about it. What's your take on that? >> Yeah, so, I think that's a great point, and clearly, it feels like an iPhone moment, right, to the industry, in this case, AI, and lots of applications. And I think there's, at a high level, probably three different layers of innovation. One is on top of those platforms. What use cases can one bring to the table that would drive on top of a ChatGPT-like service? Whereby, the startup, the company, can bring some unique datasets to infuse and add value on top of it, by custom-focusing it and purpose-building it for a particular use case or particular vertical. Whether it's applying it to customer service, in a particular vertical, applying it to, I don't know, marketing content creation, and so on and so forth. That's one category. And I do know that, as one of my startups is in Y Combinator, this season, winter '23, they're saying that a very large chunk of the YC companies in this cycle are about GPT use cases. So we'll see a flurry of that. The next layer, the one below that, is those who actually provide those platforms, whether it's ChatGPT, whatever will emerge from the partnership with Microsoft, and any competitive players that emerge from other startups, or from the big cloud providers, whether it's Facebook, if they ever get into this, and Google, which clearly will, as they need to, to survive around search. The third layer is the enabling layer. As you're going to have more and more of those different large-language models and use case running on top of it, the underlying layers, all the way down to cloud infrastructure, the data infrastructure, and the entire set of tools and systems, that take raw data, and massage it into useful, labeled, contextualized features and data to feed the models, the AI models, whether it's during training, or during inference stages, in production. Personally, my focus is more on the infrastructure than on the application use cases. And I believe that there's going to be a massive amount of innovation opportunity around that, to reach cost-effective, quality, fair models that are deployed easily and maintained easily, or at least with as little pain as possible, at scale. So there are startups that are dealing with it, in various areas. Some are about focusing on labeling automation, some about fairness, about, speaking about cyber, protecting models from threats through data and other issues with it, and so on and so forth. And I believe that this will be, too, a big driver for massive innovation, the infrastructure layer. >> Awesome, and I love how you mentioned the iPhone moment. I call it the browser moment, 'cause it felt that way for me, personally. >> Yep. >> But I think, from a business model standpoint, there is that iPhone shift. It's not the BlackBerry. It's a whole 'nother thing. And I like that. But I do have to ask you, because this is interesting. You mentioned iPhone. iPhone's mostly proprietary. So, in these machine learning foundational models, >> Yeah. >> you're starting to see proprietary hardware, bolt-on, acceleration, bundled together, for faster uptake. And now you got open source emerging, as two things. It's almost iPhone-Android situation happening. >> Yeah. >> So what's your view on that? Because there's pros and cons for either one. You're seeing a lot of these machine learning laws are very proprietary, but they work, and do you care, right? >> Yeah. >> And then you got open source, which is like, "Okay, let's get some upsource code, and let people verify it, and then build with that." Is it a balance? >> Yes, I think- >> Is it mutually exclusive? What's your view? >> I think it's going to be, markets will drive the proportion of both, and I think, for a certain use case, you'll end up with more proprietary offerings. With certain use cases, I guess the fundamental infrastructure for ChatGPT-like, let's say, large-language models and all the use cases running on top of it, that's likely going to be more platform-oriented and open source, and will allow innovation. Think of it as the equivalent of iPhone apps or Android apps running on top of those platforms, as in AI apps. So we'll have a lot of that. Now, when you start going a little bit more into the guts, the lower layers, then it's clear that, for performance reasons, in particular, for certain use cases, we'll end up with more proprietary offerings, whether it's advanced silicon, such as some of the silicon that emerged from entrepreneurs who have left Google, around TensorFlow, and all the silicon that powers that. You'll see a lot of innovation in that area as well. It hopefully intends to improve the cost efficiency of running large AI-oriented workloads, both in inference and in learning stages. >> I got to ask you, because this has come up a lot around Azure and Microsoft. Microsoft, pretty good move getting into the ChatGPT >> Yep. >> and the open AI, because I was talking to someone who's a hardcore Amazon developer, and they said, they swore they would never use Azure, right? One of those types. And they're spinning up Azure servers to get access to the API. So, the developers are flocking, as you mentioned. The YC class is all doing large data things, because you can now program with data, which is amazing, which is amazing. So, what's your take on, I know you got to be kind of neutral 'cause you're an investor, but you got, Amazon has to respond, Google, essentially, did all the work, so they have to have a solution. So, I'm expecting Google to have something very compelling, but Microsoft, right now, is going to just, might run the table on developers, this new wave of data developers. What's your take on the cloud responses to this? What's Amazon, what do you think AWS is going to do? What should Google be doing? What's your take? >> So, each of them is coming from a slightly different angle, of course. I'll say, Google, I think, has massive assets in the AI space, and their underlying cloud platform, I think, has been designed to support such complicated workloads, but they have yet to go as far as opening it up the same way ChatGPT is now in that Microsoft partnership, and Azure. Good question regarding Amazon. AWS has had a significant investment in AI-related infrastructure. Seeing it through my startups, through other lens as well. How will they respond to that higher layer, above and beyond the low level, if you will, AI-enabling apparatuses? How do they elevate to at least one or two layers above, and get to the same ChatGPT layer, good question. Is there an acquisition that will make sense for them to accelerate it, maybe. Is there an in-house development that they can reapply from a different domain towards that, possibly. But I do suspect we'll end up with acquisitions as the arms race around the next level of cloud wars emerges, and it's going to be no longer just about the basic tooling for basic cloud-based applications, and the infrastructure, and the cost management, but rather, faster time to deliver AI in data-heavy applications. Once again, each one of those cloud suppliers, their vendor is coming with different assets, and different pros and cons. All of them will need to just elevate the level of the fight, if you will, in this case, to the AI layer. >> It's going to be very interesting, the different stacks on the data infrastructure, like I mentioned, analytics, data lake, AI, all happening. It's going to be interesting to see how this turns into this AI cloud, like data clouds, data operating systems. So, super fascinating area. Opher, thank you for coming on and sharing your expertise with us. Great to see you, and congratulations on the work. I'll give you the final word here. Give a plugin for what you're looking for for startup seats, pre-seeds. What's the kind of profile that gets your attention, from a seed, pre-seed candidate or entrepreneur? >> Cool, first of all, it's my pleasure. Enjoy our chats, as always. Hopefully the next one's not going to be in nine years. As to what I'm looking for, ideally, smart data entrepreneurs, who have come from a particular domain problem, or problem domain, that they understand, they felt it in their own 10 fingers, or millions of neurons in their brains, and they figured out a way to solve it. Whether it's a data infrastructure play, a cloud infrastructure play, or a very, very smart application that takes advantage of data at scale. These are the things I'm looking for. >> One final, final question I have to ask you, because you're a seasoned entrepreneur, and now coach. What's different about the current entrepreneurial environment right now, vis-a-vis, the past decade? What's new? Is it different, highly accelerated? What advice do you give entrepreneurs out there who are putting together their plan? Obviously, a global resource pool now of engineering. It might not be yesterday's formula for success to putting a venture together to get to that product-market fit. What's new and different, and what's your advice to the folks out there about what's different about the current environment for being an entrepreneur? >> Fantastic, so I think it's a great question. So I think there's a few axes of difference, compared to, let's say, five years ago, 10 years ago, 15 years ago. First and foremost, given the amount of infrastructure out there, the amount of open-source technologies, amount of developer toolkits and frameworks, trying to develop an application, at least at the application layer, is much faster than ever. So, it's faster and cheaper, to the most part, unless you're building very fundamental, core, deep tech, where you still have a big technology challenge to deal with. And absent that, the challenge shifts more to how do you manage my resources, to product-market fit, how are you integrating the GTM lens, the go-to-market lens, as early as possible in the product-market fit cycle, such that you reach from pre-seed to seed, from seed to A, from A to B, with an optimal amount of velocity, and a minimal amount of resources. One big difference, specifically as of, let's say, beginning of this year, late last year, is that money is no longer free for entrepreneurs, which means that you need to operate and build startup in an environment with a lot more constraints. And in my mind, some of the best startups that have ever been built, and some of the big market-changing, generational-changing, if you will, technology startups, in their respective industry verticals, have actually emerged from these times. And these tend to be the smartest, best startups that emerge because they operate with a lot less money. Money is not as available for them, which means that they need to make tough decisions, and make verticals every day. What you don't need to do, you can kick the cow down the road. When you have plenty of money, and it cushions for a lot of mistakes, you don't have that cushion. And hopefully we'll end up with companies with a more agile, more, if you will, resilience, and better cultures in making those tough decisions that startups need to make every day. Which is why I'm super, super excited to see the next batch of amazing unicorns, true unicorns, not just valuation, market rising with the water type unicorns that emerged from this particular era, which we're in the beginning of. And very much enjoy working with entrepreneurs during this difficult time, the times we're in. >> The next 24 months will be the next wave, like you said, best time to do a company. Remember, Airbnb's pitch was, "We'll rent cots in apartments, and sell cereal." Boy, a lot of people passed on that deal, in that last down market, that turned out to be a game-changer. So the crazy ideas might not be that bad. So it's all about the entrepreneurs, and >> 100%. >> this is a big wave, and it's certainly happening. Opher, thank you for sharing. Obviously, data is going to change all the markets. Refactoring, security, FinTech, user experience, applications are going to be changed by data, data operating system. Thanks for coming on, and thanks for sharing. Appreciate it. >> My pleasure. Have a good one. >> Okay, more coverage for the CloudNativeSecurityCon inaugural event. Data will be the key for cybersecurity. theCUBE's coverage continues after this break. (uplifting music)